EXHIBIT
10.42


 


 


AMENDED
AND RESTATED PROMOTION AGREEMENT


 


 


BETWEEN


 


 


NOVARTIS
PHARMACEUTICALS CORPORATION


 


 


AND


 


 


RELIANT
PHARMACEUTICALS, INC.


 

















 


TABLE OF
CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II
  TERM

  	
  7

  
	
   

  	
   

  
	
  ARTICLE III
  GRANT

  	
  7

  
	
   

  	
   

  
	
  ARTICLE IV
  SERVICES OF RELIANT

  	
  10

  
	
   

  	
   

  
	
  ARTICLE V
  ADDITIONAL AGREEMENTS OF NOVARTIS

  	
  17

  
	
   

  	
   

  
	
  ARTICLE VI
  COMPENSATION

  	
  21

  
	
   

  	
   

  
	
  ARTICLE VII
  TERMINATION

  	
  26

  
	
   

  	
   

  
	
  ARTICLE VIII
  WARRANTIES, REPRESENTATIONS AND COVENANTS

  	
  29

  
	
   

  	
   

  
	
  ARTICLE IX
  INTELLECTUAL PROPERTY

  	
  33

  
	
   

  	
   

  
	
  ARTICLE X
  INDEMNITIES

  	
  35

  
	
   

  	
   

  
	
  ARTICLE XI
  CONFIDENTIALITY

  	
  37

  
	
   

  	
   

  
	
  ARTICLE XII
  NOTICES

  	
  38

  
	
   

  	
   

  
	
  ARTICLE XIII
  PUBLICITY

  	
  39

  
	
   

  	
   

  
	
  ARTICLE XIV
  INSURANCE

  	
  40

  
	
   

  	
   

  
	
  ARTICLE XV
  MISCELLANEOUS

  	
  40

  



 

















 


AMENDED
AND RESTATED PROMOTION AGREEMENT


 


This AMENDED AND RESTATED PROMOTION AGREEMENT, dated
and effective the      day of April, 2005 (this “Agreement”), is made by and between
Novartis Pharmaceuticals Corporation, a Delaware corporation, having offices at
59 Route 10, East Hanover, New Jersey 07936 (hereinafter “Novartis”) and Reliant Pharmaceuticals,
Inc., a Delaware corporation (f/k/a Reliant Pharmaceuticals, LLC), having
offices at 110 Allen Road, Liberty Corner, New Jersey 07938 (hereinafter “Reliant”).


 


WHEREAS, on November 16, 2000, Novartis and Reliant
entered into a Promotion Agreement (as previously amended by letter agreement
dated August 23, 2001, Amendment No. 2 to Promotion Agreement dated February
22, 2002, and letter agreement dated February 22, 2002; as so amended, the “Original Promotion Agreement”), pursuant to which Novartis
granted to Reliant certain rights to promote the Product in the Territory (as
such terms are hereinafter defined) on the terms and conditions set forth in
the Original Promotion Agreement; and


 


WHEREAS, Novartis and Reliant desire to amend and restate
the Original Promotion Agreement as set forth herein.


 


NOW, THEREFORE, in consideration of the following
mutual promises and obligations, the parties hereby agree that Original
Promotion Agreement is hereby amended and restated in its entirety as follows:


 


ARTICLE I



DEFINITIONS


 


As used in this Agreement, the following terms shall
be defined as follows:


 


1.1           “Act” shall mean the Federal Food, Drug and
Cosmetic Act, 21 U.S.C. 301, as it may be amended from time to time, and the
regulations promulgated thereunder.


 


1.2           “Affiliate” shall mean all corporations or
business entities which, directly or indirectly, are controlled by, control, or
are under common control with Novartis or Reliant, as the case may be. For this
purpose, control shall mean direct or indirect ownership of at least fifty
percent (50%) of the voting shares or interest of such corporation or business
entity.


 


1.3           “Agreement Half Year” shall mean each six
(6) month period beginning either on January 1 or July 1 of any
Agreement Year including Agreement Year 2005.


 


1.4           “Agreement Year” shall mean each twelve (12)
month period of the Term of this Agreement beginning on the first day of the
calendar year, including “Agreement Year 2005”,
which shall mean the period commencing on January 1, 2005 and ending on
December 31, 2005.


 


1.5           “Alternate Sales Channels” shall mean
promotional services such as telemarketing, peer meetings, medical symposia and
direct mail.


 





















 


1.6           “ANDA” shall mean an Abbreviated New Drug
Application as defined in the Act.


 


1.7           “Annual Net Sales Baseline” shall mean the
Annual Net Sales Baseline for Agreement Year 2005 as set forth on Exhibit 1 attached hereto, as
adjusted from time to time in accordance with this Agreement.


 


1.8           “Annual Net Sales Forecast” shall mean the
Annual Net Sales Forecast for Agreement Year 2005 as set forth on Exhibit 1 attached hereto.


 


1.9           Intentionally
Omitted.


 


1.10         “Change of Control” shall mean any
transaction or series of related transactions in which  (i)(x) Reliant merges or consolidates
with another party, (y) equity interests of Reliant are acquired by
another party, or (z) Reliant enters into any other business combination
transaction with another party, and immediately following any such transaction
the equityholders of Reliant immediately prior to the consummation of such
transaction do not own at least a majority of the shares or other equity
interest of the surviving entity immediately following such transaction, or
(ii) all or substantially all of Reliant’s assets are acquired by another
party.


 


1.11         “Competitor” shall mean any entity other
than Novartis and its Affiliates which, (a) 
alone or together with its Affiliates, is commercially selling or
promoting a Statin Product and (b) generates, together with its Subsidiaries,
annual ethical pharmaceutical sales in the Territory of more than $[***] in the
branded and generic market, as reported under United States generally accepted
accounting principles or, in  the event
that such entity does not use United States generally accepted accounting
principles, the International Accounting Standards, in each case with respect
to the then most recently ended fiscal year for which such financial
information is available.


 


1.12         “Coordinator” shall have the meaning ascribed in
Article 3.5(a) hereof.


 


1.13         “Detail” and “Detailing” shall mean an interactive face-to-face contact by a
Sales Representative with a Professional, during which a promotional message
involving the Product is given in accordance with the terms of this Agreement.


 


1.14         “Effective Date” shall mean November 16,
2000.


 


1.15         “Expert” shall have the meaning ascribed in
Article 6.6(a) hereof.


 


1.16         “FDA” shall mean the United States Food and
Drug Administration or any successor agency performing comparable functions.


 










[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


2





















 


1.17         “Field of Use” shall mean the approved
indications for the Product set forth in an NDA as of the Effective Date and as
may be approved by the FDA subsequent to the Effective Date.


 


1.18         “First Position Detail” shall mean a Detail
in which the Product is the first product discussed and the primary focus of
such Detail.


 


1.19         “Liability” or “Liabilities”
shall have the meaning ascribed in Article 10.1 hereof.


 


1.20         “Make Whole Amount” shall have the meaning
ascribed in Article 7.8 hereof.


 


1.21         “Marketing Committee” shall have the meaning
ascribed in Article 3.5(b) hereof.


 


1.22         “Marketing Plan” shall have the meaning
ascribed in Article 4.7 hereof.


 


1.23         “Maximum Quarterly Reserve Account Balance” shall have the
meaning ascribed in Article 6.3(b)(ii) hereof.


 


1.24         “Month” shall mean a calendar month.


 


1.25         “Monthly Payment” shall have the meaning ascribed in
Article 6.2(a) hereof.


 


1.26         “Monthly Payment Amount” shall have the meaning ascribed in
Article 6.3(a) hereof.


 


1.27         “NDA” shall mean the following approved New
Drug Applications (a) 20-261 [Lescol]
and (b) 21-192 [Lescol XL],
each as filed by Novartis, and all subsequent submissions, supplements and/or
amendments thereto, in each case as approved by FDA.


 


1.28         “Negotiation Termination Date” shall have the meaning
ascribed in Article 6.6(a) hereof.


 


1.29         “Net Sales” shall mean the gross invoice
price of Product sold by or on behalf of Novartis to independent,
non-Affiliated, third party customers in bona fide, arm’s-length transaction,
less the following deductions in respect of the Product, if not previously
deducted in the amount invoiced or received:


 


(a)           quantity
and/or cash discounts actually allowed or taken;


 


(b)           freight,
postage and shipping insurance invoiced to the customer;


 


(c)           customs
duties and taxes, if any, directly related to the sale;


 


(d)           amounts
repaid or credited by reason of rejections, return of goods, in each case
specifically identifiable as relating to Product;


 


(e)           amounts
incurred resulting from governmental (or an agency thereof) mandated rebate
programs;


 


3





















 


(f)            third
party rebates and chargebacks clearly and directly related to the sale of
Product during the Term to the extent actually allowed;


 


(g)           rebates
related to the Novartis discount card programs similar to the Novartis CareCardSM
discount program; and


 


(h)           as
agreed by the parties in writing, any other specifically identifiable amounts
included in Product’s gross sales that were or ultimately will be credited and
that are substantially similar to those listed hereinabove;


 


1.30         “New Effective Date” shall mean the date first shown above.


 


1.31         “Nonparticipating Party” shall have the meaning ascribed in
Article 9.7 hereof.


 


1.32         “Notice of Termination” shall have the meaning ascribed in
Article 7.1 hereof.


 


1.33         “Novartis Claims”
shall have the meaning ascribed in Article 8.1(i) hereof.


 


1.34         “Novartis Indemnified Claims” shall have the meaning ascribed
in Article 9.3 hereof.


 


1.35         “Novartis Indemnified Party” or “Novartis
Indemnified Parties” shall have the meaning ascribed in
Article 10.2 hereof.


 


1.36         “Novartis Infringement Indemnitees” shall have the meaning
ascribed in Article 9.4 hereof.


 


1.37         “Novartis IP” shall have the meaning ascribed in
Article 8.1(g) hereof.


 


1.38         “Original Promotion Agreement” shall have the meaning
ascribed in the Recitals hereto.


 


1.39         “OTC Product” shall mean any pharmaceutical
product for therapeutic use in humans containing fluvastatin as the sole
pharmaceutically active substance or in combination with one or more active substances
that can lawfully be sold to customers and/or patients without being prescribed
by Professionals.


 


1.40         “Patents” shall mean those patents relating
to the Product owned by or licensed to Novartis or its Affiliates set forth on Schedule 1.40 hereto, including,
without limitation, reissues and extensions thereof.


 


1.41         “PDMA” shall have the meaning ascribed in Article 4.14
hereof.


 


1.42         “Primary Detail Equivalent” shall mean
either (i) a First Position Detail or (ii) two and one-half (2.5) Second Position
Details.


 


1.43         “Product” shall mean any dosage form covered
by the NDA containing fluvastatin sodium as the sole pharmaceutically active
substance, which is not an OTC Product.


 


4





















 


1.44         “Professionals” shall mean physicians and
other health care practitioners who are permitted by law to prescribe Product.


 


1.45         “Promotional Materials” shall have the
meaning ascribed in Article 4.4 hereof.


 


1.46         “Promotion Effort” shall have the meaning ascribed in Article 4.1
hereof.


 


1.47         “Proprietary Information” shall mean any
proprietary or confidential information communicated from one party to the
other in connection or relating to this Agreement, which is identified as
confidential or proprietary, or which the other party knows or has reason to
know is confidential or proprietary, including, without limitation, financial,
marketing, business, technical and scientific information or data, whether
communicated in writing, orally or electronically.


 


1.48         “PSME” shall mean promotional, selling and
marketing expenses including, but not limited to, clinical studies, market
research, product samples, advertising, promotion and costs of and associated
with the training of the Sales Force, but excluding costs to hire and manage
the Sales Force.


 


1.49         “Quarter” shall mean a calendar quarter.


 


1.50         “Quarterly Payment Amount” shall have the meaning ascribed in
Article 6.3(b) hereof.


 


1.51         “Quarterly Reserve Account” shall have the meaning ascribed
in Article 6.3(b)(i) hereof.


 


1.52         “Quarterly Shortfall Payment Amount” shall
have the meaning ascribed in Article 6.3(b) hereof.


 


1.53         “Quarterly Total Net Compensation” shall
have the meaning ascribed in Article 6.3(b) hereof.


 


1.54         “Reliant Claims”
shall have the meaning ascribed in Article 8.2(h) hereof.


 


1.55         “Reliant Indemnified Claims” shall have the meaning ascribed
in Article 9.4 hereof.


 


1.56         “Reliant Indemnified Party” or “Reliant
Indemnified Parties” shall have the meaning ascribed in
Article 10.1 hereof.


 


1.57         “Reliant Infringement Indemnitees” shall have the meaning
ascribed in Article 9.3 hereof.


 


1.58         “Reliant Promotion Techniques” shall have
the meaning ascribed in Article 9.3 hereof.


 


1.59         “Reliant Split Percentage” shall have the meaning ascribed in
Article 6.3(a) hereof.


 


1.60         “Sales Calls” shall mean any office visits
to Professionals made by Sales Representatives for the purpose of Detailing the
Product.


 


5





















 


1.61         “Sales Force” shall mean Reliant’s field
force of Sales Representatives and any additional personnel (full and/or
part-time) hired by or on behalf of Reliant for the same purpose before or
during the Term.


 


1.62         “Sales Representatives” shall mean sales
representatives employed directly or indirectly by or under contract to Reliant
who make Sales Calls, and who have been trained and equipped to make Sales
Calls.


 


1.63         “Seasonalized Net Sales Baselines” shall
mean the Seasonalized Net Sales Baselines for Agreement Year 2005 as set forth
on Exhibit 2 attached
hereto.


 


1.64         “Second Position Detail” shall mean a Detail
in which the Product is the second product discussed and the secondary focus of
such Detail.


 


1.65         “Staffing Baseline” shall have the meaning ascribed in
Article 4.3(a) hereof.


 


1.66         “Statin Product” shall mean a pharmaceutical
product not sold by Novartis or any of its Affiliates which contains an HMG CoA
reductase inhibitor (as the sole pharmaceutically active substance or in
combination with one or more other pharmaceutically active substances).


 


1.67         “Term” shall have the meaning ascribed in
Article II hereof.


 


1.68         “Termination Date” shall have the meaning ascribed in
Article 6.3(c) hereof.


 


1.69         “Termination Payment Amount” shall have the
meaning ascribed in Article 6.3(c) hereof.


 


1.70         “Termination Shortfall Payment Amount” shall
have the meaning ascribed in Article 6.3(c) hereof.


 


1.71         “Territory” shall mean the United States of
America, and its territories and possessions, including without limitation, the
Commonwealth of Puerto Rico.


 


1.72         “Third Party Infringement” shall have the meaning ascribed in
Article 9.7 hereof.


 


1.73         “Trademarks” shall mean Lescol®
and/or such other trademarks as Novartis or an Affiliate of Novartis shall duly
register with the United States Patent and Trademark Office which are utilized
by Novartis and/or its Affiliates in the Territory to identify the Product,
including, without limitation, the trademarks set forth on Schedule 1.73 hereto, and all trade
names used by Novartis in the Territory to identify the Product.


 


1.74         “VA” shall mean the U.S. Department of
Veterans Affairs.


 


6





















 


1.75         “VA Adjustment Factor” shall mean $[***] per
capsule and per tablet of the Product, which amount may be increased by
Novartis every Agreement Half Year commencing July 1, 2005, in Novartis’ good
faith and in its sole and reasonable discretion, to reflect Novartis’ material
increased costs relating to the manufacture of the Product, including, without
limitation, inflation, exchange rate fluctuations, material increases in the
cost of raw materials or Product components and proportional changes in the
utilization among the three dosage forms of the Product; provided, however that
any increase in the Adjustment Factor shall not be greater than [***] percent
([***]%) in any given twelve (12) month period. Any proposed increase to the
Adjustment Factor in excess of [***] percent ([***]%)  in any given twelve (12) month period shall
require the prior written consent of Reliant following review of applicable
documentation submitted by Novartis in support of such proposed adjustment.


 


1.76         “VA Contract” shall mean the letter
agreement, dated July 28, 2003, between VA and Novartis, a copy of which is
attached hereto as Schedule 1.76.


 


1.77         “VA Net Sales” shall mean the gross invoice
price of Product sold by or on behalf of Novartis to the VA under the VA
Contract, less the following deductions in respect of the Product, if not
previously deducted in the amount invoiced or received:


 


(a)           the
VA Adjustment Factor, as adjusted from time to time; and


 


(b)           the
items described in subsections (a), (b) and (f) of the definition of Net Sales
in Article 1.29 hereof.


 


ARTICLE II



TERM


 


The term of this Agreement (the “Term”) shall be the period commencing on
the New Effective Date and terminating on December 31, 2007, unless
terminated earlier pursuant to the provisions herein. Notwithstanding the
above, Reliant shall have the right, upon written notice to Novartis prior to
October 1, 2007, to elect to extend the Term for one (1) additional Agreement
Year terminating on December 31, 2008. If Reliant elects to extend the Term for
an additional Agreement Year, the parties will in good faith negotiate staffing
levels, number of Details, PSME, compensation and any other material terms not
otherwise addressed herein for Agreement Year 2008.


 


ARTICLE III



GRANT


 


3.1           Grant
of Promotion Rights. During the Term, subject to the terms of this
Agreement, and subject to rights specifically retained by Novartis hereunder to
promote, market, Detail 


 










[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


7





















 


and sell the
Product, Novartis hereby grants Reliant the exclusive right to promote, market
and Detail (but not to sublicense, subcontract or otherwise transfer or
delegate its obligation to promote, market and Detail except as may be
authorized by the Marketing Plan, as set forth on Schedule 3.1 attached hereto or as provided in
Article 15.9 below) the Product in the Field of Use under the Trademarks
through its Sales Force or Alternate Sales Channels to Professionals in the
Territory. Subject to the last sentence of this Article 3.1, Novartis
(i) reserves the exclusive right, upon prior written notice to Reliant, to
enter into any agreements with managed care entities and institutional
customers (e.g., mail order houses, pharmacy benefit management companies and
the U.S. Government, including but not limited to, the VA program) with regard
to the Product, (ii) retains the right, upon prior written notice to
Reliant, to conduct Phase IV development for the Product; provided that Reliant
shall only be obligated to fund any such Phase IV development projects as are
approved in advance and in writing by the Marketing Committee,
(iii) retains the right to promote, market and detail the Product at its
own cost and expense, (iv) retains all other rights in and to the Product,
including, but not limited to, the NDA, all pre-clinical and clinical data, the
Drug Master File and all manufacturing, patent and trademark rights and
(v) retains the right to institute, administer and maintain discount
programs of the type described in Article 1.29(g) above, and except as
(a) required to comply with its obligations hereunder and (b) may be
agreed to by the parties, nothing herein shall give Reliant the right to use or
reference the NDA or to market the Product as anything other than a Novartis
product, or to use or reference the NDA to market a similar product. The
foregoing notwithstanding, Novartis shall (A) coordinate with Reliant the
exercise of the rights that Novartis has retained hereunder, including, without
limitation, the rights enumerated in clauses (i), (ii), (iii), (iv) and (v) of
this Article 3.1, (B) provide Reliant with reasonable prior written
notice of Novartis’ intention to exercise such retained rights (or any of
them), (C) permit Reliant to have an active role in the exercise of such
retained rights, including without limitation, allowing Reliant to actively
participate in Novartis’ relationships with managed care entities and
institutional customers and (D) only exercise such rights in a manner
consistent with the Marketing Plan, as in effect from time to time.


 


3.2           Non-compete.
During the Term and for any period after the Term in which Novartis is
obligated to compensate Reliant pursuant to Article 6.2(b), except for the
Product in accordance with this Agreement and except as otherwise agreed by the
parties, Reliant shall not market, promote, Detail, advertise or otherwise sell
any product containing fluvastatin.


 


3.3           Retention
of Rights. Except as otherwise provided herein, nothing in this Agreement
shall, during or after the Term hereof, give Reliant any of Novartis’ rights in
or to the Product, including, but not limited to, Novartis’ rights in or to
trademarks, copyrights, the NDAs, ANDAs, Drug Master Files, patent rights,
preclinical or clinical data, manufacturing rights relating to the Product, or
any supply of the Product or the active ingredient thereof. Novartis may, in
its sole discretion or as required by applicable laws, on reasonable prior
written notice to Reliant, supplement the NDA, or change package inserts at any
time during the Term or thereafter. Reliant recognizes Novartis’ title to the
Trademarks, and shall not at any time, during or after the Term, do or
knowingly suffer to be done any act or thing which will in any way impair the
rights of Novartis in or to said 


 


8





















 


Trademarks. Notwithstanding
the foregoing, Novartis hereby grants to Reliant the exclusive right and
license (except as to Novartis and its Affiliates) to use said Trademarks in
connection with the promotion, marketing and Detailing of the Product during
the Term, or as required by law and to discharge its obligations under this
Agreement, in accordance with the terms hereof. It is understood that Reliant
shall not acquire and shall not claim any title to said Trademarks adverse to
Novartis by virtue of the rights granted under this Agreement or through
Reliant’s use of the Trademarks, it being the intention of the parties that all
goodwill and improved reputation generated by Reliant and use of the Trademarks
shall inure to the benefit of Novartis and any use of the Trademarks by Reliant
shall cease at the end of the Term hereof.


 


3.4           OTC
Products. Novartis retains the right, at its sole discretion, to
commercialize or to have commercialized any OTC Product during Agreement Year
2005 without any payment obligation to Reliant for such commercialization,
except as expressly set forth in this Agreement. Thereafter, as provided in
Article 5.11, there shall be no restriction on Novartis’ right to commercialize
or have commercialized any product, whether such product would constitute a
Product, an OTC Product or otherwise.


 


3.5           Cooperation
Structure.


 


(a)           Coordinator.
Each Party shall appoint an authorized representative (“Coordinator”) for the exchange of all
communications related to the promotion, marketing, Detailing and selling of
the Product.


 


(b)           Marketing
Committee. The Coordinators shall establish a Marketing Committee (the “Marketing Committee”) directed and chaired
by Novartis and consisting of equal number of representatives from each party
which will meet at least once per Quarter, to formulate, coordinate, and
implement the Marketing Plan. The Marketing Committee shall act based on the
agreement of a majority of the members of the full Marketing Committee
regardless of the number present when voting occurs. Any component of the
Marketing Plan may be amended during the relevant Agreement Year by agreement
of a majority of the members of the Marketing Committee and with the approval of
the Steering Committee.


 


(c)           Steering
Committee. In addition to the Marketing Committee, a Steering Committee
consisting of three (3) members of senior management from each of Novartis and
Reliant shall meet at least twice annually for the purposes of approving,
discussing and, if necessary, modifying the Marketing Plan.


 


(d)           Disputes.
The parties will use their commercially reasonable efforts to resolve any
disputes arising with respect to issues directly related to the Marketing Plan
by good-faith negotiation and mutual discussion. Upon written request of either
party, a Reliant senior executive shall meet with a senior executive from
Novartis to attempt to resolve any such disputes. In the event the parties fail
to resolve their dispute by the foregoing methods and such dispute relates to
issues which, in the reasonable opinion of counsel to Novartis, (i) could
reasonably present (A) material legal issues that adversely impact the NDA
or have an adverse effect 


 


9





















 


on Novartis or (B)
material regulatory compliance issues or (ii) could reasonably give rise
to a material liability of Novartis, then in such instances, Novartis shall
retain the right to ultimately decide disputes escalated to this level.


 


3.6           Reliant
Intellectual Property. Except as expressly set forth herein, nothing in
this Agreement shall be deemed to grant Novartis any rights in or to, and
Novartis shall have no rights in or to, any trademarks, trade names, trade
dress, service marks, service names, logos, designs or other intellectual
property of Reliant, including, without limitation, right in the trademarks “Reliant
Pharmaceuticals,” “Reliant” or any variations thereof.


 


ARTICLE IV



SERVICES OF RELIANT


 


4.1           Product
Promotion. In accordance with the Marketing Plan, and subject to the Act
and any applicable state laws and regulations, as well as the provisions of
this Agreement, Reliant shall, at its sole expense (as between Reliant and
Novartis), use its commercially reasonable efforts to promote the Product to
Professionals, and to persuade such Professionals to prescribe and use the
Product, through the use of verbal, graphic, written and promotional materials.
All such statements, core selling messages and materials to be utilized by
Reliant to promote the Product shall be consistent with the annual Marketing
Plan jointly developed by Reliant and Novartis and, if applicable, shall be
subject to the prior approval of the FDA in accordance with Article 4.8 below. Prior
to January 1 of each of Agreement Years 2006 and 2007, Novartis shall provide
to Reliant a list of Professionals to whom to promote the Product; provided,
however, that Novartis shall have the right, in its sole discretion, to revise
such list no more than two times during each of Agreement Years 2006 and 2007
by providing a revised list to Reliant prior to May 1 and/or November 1 of each
such Agreement Year. In performing its obligations pursuant to this Agreement,
Reliant will exercise the same diligence it employs with respect to the other
products it promotes in the Territory (“Promotion
Effort”). Reliant will cause the Sales Force and Reliant employees
and agents acting on Reliant’s behalf to comply with this Agreement and all
applicable state and federal laws and regulations in connection with the
promotion, marketing and Detailing of the Product. It is understood, and
Reliant agrees, that it will be accountable for any act or omission of the
Sales Force to comply with Reliant’s obligations under this Agreement.


 


4.2           Representations
to Customers. Reliant will not make any false or misleading representations
to customers or others regarding Novartis or the Product and will not make any
representations, warranties or guarantees with respect to the specifications,
features or capabilities of the Product that are not consistent with the
applicable current FDA approved labeling, package insert or other documentation
accompanying or describing the Product, including Novartis’ standard limited
warranty and disclaimers, and that has been provided to Reliant by Novartis or
otherwise approved by Novartis pursuant to Article 4.8. Reliant shall not
make any negative statements about any other Novartis products in an effort to
promote the Product; provided that Reliant, may, in compliance with applicable
law promote and market products competitive with products of Novartis other
than the Product.


 


10





















 


4.3           Staffing.


 


(a)           Agreement
Year 2005. During Agreement Year 2005, subject to Article 6.6(a), the
Sales Force will be staffed with a total number of Sales Representatives representing
at least [***] full time equivalents, of which an appropriate number (as
reasonably determined by Reliant) will be field managers. Except as otherwise
set forth herein, at no time during Agreement Year 2005 will the Sales Force be
staffed with less than [***] percent ([***]%) of [***] full time equivalent
Sales Representatives (the “Staffing Baseline”),
whereby [***] Sales Representatives detailing the Product full-time in the
second position shall equal [***] Sales Representative detailing the Product
full time in the first position. For the avoidance of doubt, no less than [***]
percent ([***]%) of the promotional effort will be provided by First Position
Details. The ratio of Sales Representatives working part time shall at no time
exceed [***]percent ([***]%). Reliant shall use commercially reasonable efforts
to promptly fill all vacant positions within the Sales Force resulting from
terminations or resignations. In the event that Reliant fails to maintain the
Staffing Baseline and Novartis provides Reliant with written notice of such
failure to comply which failure is uncured by Reliant after sixty (60) days of
receipt of Novartis’ written notice, Reliant’s share of incremental profit
above the Annual Net Sales Baseline for Agreement Year 2005 will be reduced by
the amount equal to the difference between (a) the amount that would have
been expended by Reliant had Reliant maintained the Staffing Baseline during Agreement
Year 2005 and (b) the amount actually expended by Reliant to provide the
actual level of Sales Force staffing in Agreement Year 2005, in each case using
a cost per Sales Representative of [***]dollars ($[***]). Such reduction of
Reliant’s share of the incremental profit over the Annual Net Sales Baseline
will be in the form of a payment from Reliant to Novartis within ninety (90)
days of receipt of Novartis’ written notice referred to in the preceding
sentence and will not be subject to limitations applicable to payments by
Reliant to Novartis under Article 6.3. Such reduction in Reliant’s share
of the incremental profit over the Annual Net Sales Baseline shall be Novartis’
exclusive remedy for breach by Reliant of its obligation to maintain the
Staffing Baseline, provided, however that this limitation shall not apply in
the event that the Reliant’s full time equivalent Sales Representatives for
Agreement Year 2005 is less than [***] percent ([***]%).


 


(b)           Primary
Detail Equivalents. Subject to Article 6.6, in each Agreement Year
commencing with Agreement Year 2006, Reliant Sales Representatives shall make
not less than [***]  and not more
than [***] Primary Detail Equivalents for each such Agreement Year, with at
least [***] ([***]%) of all such Primary Detail Equivalents in each Agreement
Year being First Position Details. For Agreement Years 2006 and 2007 only, Novartis shall reimburse Reliant on a monthly
basis for each Primary Detail Equivalent that occurred during such 


 










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Month at a rate of
[***] dollars [***] ($[***]) per Primary
Detail Equivalent for Agreement Year 2006 and [***] dollars [***]
($[***]) per Primary Detail Equivalent for
Agreement Year 2007. Notwithstanding the above, Novartis shall not reimburse
Reliant for any Primary Detail Equivalents in excess of the aggregate maximum
Primary Detail Equivalents established for the applicable Agreement Year. Such reimbursement shall to be made within
thirty (30) days following the receipt by Novartis of an invoice
therefor, including satisfactory documentation of such Primary Detail
Equivalents.


 


4.4           Promotional
Materials. In addition to Reliant’s obligations pursuant to Articles 4.1
and 4.2 hereunder, and except as otherwise provided in this Agreement, Reliant,
at its sole expense, will create, develop, produce or otherwise obtain, and
utilize promotional, marketing, educational and training materials (“Promotional Materials”) which are necessary
to support fully the Promotion Effort for the Product. Such Promotional
Materials shall include, by way of example, Detailing aids; leave items;
journal advertising; educational programs; formulary binders; appropriate
reprints and reprint carriers; product monographs; patient support kits;
materials to support the handling of physician requests; convention exhibit
materials; direct mail; market research survey and analysis; training materials
(except as set forth in Article 5.3 hereunder); and scripts for
telemarketing and teleconferences. At a minimum, such Promotional Materials
shall include at least one Detailing aid and one leave item. Subject to
Article 3.6 above, Novartis shall own all right, title and interest in and
to any Promotional Materials produced by Reliant pursuant to this
Article 4.4 including applicable copyrights and, if applicable, trademarks.
Reliant shall provide assistance, as reasonably requested by Novartis, in
connection with the filing by Novartis, at Novartis’ expense, of appropriate
copyright and trademark applications with respect to the Promotional Materials.
Novartis hereby grants to Reliant the exclusive right (except as to Novartis),
during the Term, to use in the Territory all Promotional Materials produced by
Novartis or Reliant with respect to the Product, subject to Novartis’ prior
approval (which approval will not be unreasonably withheld, conditioned or
delayed) of said Promotional Materials pursuant to Article 4.8 below. Subject
to Article 4.8 and to applicable law, Reliant shall have the right to use
Reliant’s trademarks, and include the name “Reliant” or any variation thereof
on the Promotional Materials developed by Reliant subsequent to the Effective
Date and on Product labels and packaging. In order to assist Reliant in
adapting Novartis-produced material for promotion, marketing and Detailing of
the Product to Professionals, Novartis shall provide Reliant with timely access
to and use of Novartis’ relevant mechanicals and print production materials,
which, subject to the approval of Novartis (which approval will not be
unreasonably withheld conditioned or delayed), Reliant may duplicate or have
duplicated at its own cost. Alternatively, at Reliant’s request, Novartis may
agree to have duplicated such materials for Reliant at Reliant’s cost. Following
final approval by Novartis of all Promotional Materials, as described above,
Reliant shall provide Novartis, consistent with Reliant’s obligations under
Articles 4.11 and 5.3 hereof, with the requisite 


 










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number of copies
so as to allow Novartis to satisfy its obligation to file same with the FDA
simultaneously with their first use by Reliant.


 


4.5           PSME.


 


(a)           Agreement
Year 2005. For Agreement Year 2005, subject to Article 6.6(a), Reliant
will contractually commit PSME of no less than twenty five million dollars
($25,000,000), and during the first Agreement Half Year of Agreement Year 2005,
Reliant will contractually commit PSME of no less than [***] dollars ($[***]). In
the event that the PSME commitment for Agreement Year 2005 falls more than
[***] percent ([***]%) below twenty five million dollars ($25,000,000) and
Novartis provides Reliant with written notice of such failure to comply with
the terms of this Article 4.5(a), which failure is uncured by Reliant,
Reliant’s share of the incremental profit over the Annual Net Sales Baseline
for Agreement Year 2005 will be reduced by the amount equal to the difference
between (a) the amount that would have been expended by Reliant had
Reliant complied with its obligations under this Article 4.5(a) during
Agreement Year 2005 and (b) the amount actually expended by Reliant in
connection with this Article 4.5(a) (the “PSME Shortfall Amount”). Such reduction of Reliant’s share of
the incremental profit over the Annual Net Sales Baseline will be in the form
of a payment from Reliant to Novartis within ninety (90) days of receipt of
Novartis’ written notice referred to in the preceding sentence and will not be
subject to limitations applicable to payments by Reliant to Novartis under
Article 6.3. Such reduction shall be Novartis’ exclusive remedy for breach
by Reliant of its obligations under this Article 4.5(a); provided, however
that this limitation shall not apply in the event that (i) the
contractually committed PSME in the first Agreement Half Year of Agreement Year
2005 (January 1 through June 30) is less than [***] dollars ($[***])
and/or (ii) the PSME Shortfall Amount is greater than [***] dollars
($[***]). Novartis shall have no obligation to reimburse Reliant for PSME for
Agreement Year 2005.


 


(b)           Agreements
Years 2006 and 2007. For each Quarter during Agreement Years 2006 and 2007,
Novartis, after consultation with Reliant, will determine and advise Reliant in writing of the appropriate required
PSME amount for the Product, which shall be subject to adjustment pursuant to
Article 6.6. It is currently anticipated that the total annual required PSME
amount for each such Agreement Year will be twenty five million dollars
($25,000,000). Novartis shall reimburse
Reliant on a monthly basis for all PSME actually expended by Reliant during
Agreement Years 2006 and 2007 which
does not exceed in the aggregate the required PSME amount established by
Novartis for the applicable period, such reimbursement to be made within ten
(10) days following the receipt by Novartis of a monthly non-personal
PSME report.


 






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4.6           Requests
for Information.


 


(a)           Requests
from Professionals. The parties acknowledge that each may receive requests
for medical information concerning the Product from medical professionals. The
parties agree to coordinate all professional services activities through
Novartis, who shall be the responsible party for responding to all such
requests. Novartis shall promptly provide Reliant with (i) copies of all
written materials and (ii) written summaries of all oral advice, provided
by Novartis in response to such inquiries.


 


(b)           Requests
from Others. The parties also agree to establish a working group of
representatives from each party who will discuss procedures to address medical
inquiries relating to managed healthcare customers, trade relations, customer
service and indigent patients, but Novartis shall have sole responsibility for
taking or not taking any such recommended actions at Novartis’ expense.


 


4.7           Marketing
Plan. At a time consistent with the Novartis business planning process of
each Agreement Year, Reliant and Novartis shall prepare the marketing plan for
the upcoming Agreement Year (the “Marketing
Plan”) in accordance with the process set forth in Article 3.5
hereof. Novartis shall provide Reliant with timelines for development of
business plans and the Marketing Plan for the following Agreement Year no later
than January 31 of then current Agreement Year. The Marketing Plan shall
be in sufficient detail to allow Novartis to evaluate Reliant’s strategy and
tactics for promotion of the Product and to allow Novartis to reasonably
determine that Reliant intends (i) to support fully its Promotion Effort
as required by this Article IV and (ii) to otherwise comply with its
obligations pursuant to this Article IV. Each Marketing Plan will include,
without limitation, a mutually agreed framework for dealing with managed care
accounts.


 


4.8           Promotional
Material Review Process. Reliant will submit all Promotional Materials
developed pursuant to Article 4.4 to the Novartis promotional review core
team for review, comment and approval at least ten (10) working days prior to
scheduled core team meetings to finalize such materials. Reliant shall not use
any such materials not approved by Novartis, and, if applicable, the FDA. Reliant’s
obligation hereunder applies regardless of the intended usage or audience of
the materials. Novartis shall provide its comments and its determination to
Reliant within three (3) weeks of Novartis’ receipt of each such item of
promotional material, unless otherwise agreed. If such comments or
determination is not received by Reliant within such three (3) week period, the
Promotional Materials shall be deemed approved by Novartis and Reliant shall be
authorized to finalize and use same, subject to any required approval by FDA. To
facilitate such review and approval process, upon execution of this Agreement,
Novartis shall appoint its Coordinator as Reliant’s contact for this purpose. The
parties also agree to attempt to facilitate the review process through the use
of teleconferencing and videoconferencing, where appropriate.


 


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4.9           Intentionally
Omitted.


 


4.10         Reporting
Requirements.


 


(a)           Agreement
Year 2005. Within forty-five (45) days after the close of each six (6)
month period of Agreement Year 2005, appropriate representatives of Reliant
shall meet with appropriate representatives of Novartis. At least five (5) days
before such meeting, Reliant will present to Novartis a written status report
summarizing Reliant’s activities pursuant to this Agreement for that prior six
(6) month period, including (a) Sales Representative and field manager
turnover, (b) the total number of Sales Calls, (c) the number of days
in the field per Sales Representative, (d) the number of calls per day per
Sales Representative, (e) the number of Details per Sales Call, (f) the
ratio of Sales Calls to targeted Professionals compared to total Sales Calls,
(g) the percentage of targeted Professionals actually Detailed  and (h) if applicable, a summary of all other
Alternative Sales Channels activities engaged in by Reliant in order to support
fully the Promotion Effort pursuant to this Article IV.


 


(b)           Agreement
Years 2006 and 2007.


 


(i)            Within
twenty-five (25) days after the close of each Month of Agreement Years 2006 and
2007, Reliant shall provide Novartis with a status report in electronic format
in the form attached hereto as Schedule 4.10(b)(i),
which status report will summarize Reliant’s activities pursuant to this
Agreement for such prior Month and on an Agreement Year-to-date basis,
including (a) the amount of PSME spent to date, (b) the total number
of Sales Calls, (c) the number of days in the field per Sales
Representative, (d) the number of Sales Calls per day to targeted
Professionals, (d) the number of Sales Calls which resulted in an actual
Detail of a targeted Professional, including (i) the number of times each
targeted Professional is actually Detailed and (ii) the percentage of
targeted Professionals actually Detailed, in each case providing separate
numbers for First Position Details and Second Position Details, (f) a
comprehensive summary of the Sales Representative vacancy rate for the
Territory, including the number of days and specific dates in which each sales
territory has been vacant, (g) information pertaining to the Sales
Representatives including (A) the number of Sales Representatives, (B) a
breakout of sales teams and (C) the Sales Representative turnover (including
the number of reassignments) and (h) if applicable, a summary of all other
Alternative Sales Channels activities engaged in by Reliant in order to support
fully the Promotion Effort pursuant to this Article IV.


 


(ii)           Within
the later of (A) forty-five (45) days after the close of each Month of
Agreement Years 2006 and 2007 or (B) promptly following receipt by Reliant of
the applicable data from the vendor, Reliant shall provide Novartis with
physician level data in electronic AFCII flat file format as specified on Schedule 4.10(b)(ii) attached
hereto.


 


(c)           Call
Reports. During the Term, in addition to Reliant’s reporting requirements
in Articles 4.10(a) and (b), Reliant will provide Novartis with call activity
reports on a Monthly and Agreement Year-to-date basis.


 


15





















 


(d)           Retention
of Records. Reliant shall maintain full and accurate records of call
reports and other promotional activities for no less than three (3) years after
the end of each Agreement Year. Reliant shall permit Novartis to have such
records examined by an independent auditor retained by Novartis and acceptable
to Reliant during regular business hours and upon reasonable advance notice,
but not later than three (3) years following the rendering of any such reports,
and no more often than twice per Agreement Year during the Term or calendar
year thereafter. Such independent auditor shall keep confidential any
information obtained during such examination, shall report to Novartis only the
results of the audit of the items listed in clauses (a) through (h) of Articles
4.10(a) and (b) and the amount of PSME incurred pursuant to Article 4.5
and shall not unreasonably interfere with Reliant’s operations. Any such
information so reviewed and any such information reported to Novartis shall be
considered the Proprietary Information of Reliant. The fees and expenses
relating to the services of the said independent auditor in accordance with
this Article 4.10(d) shall be borne by Novartis, provided, however, that
Reliant shall reimburse Novartis for such fees and expenses in the event the
audit reveals an error equal to or exceeding five percent (5%) of (i) any
of the items listed in clauses (a) through (h) of Article 4.10(a) or (b), as
applicable, and/or (ii) the amount of PSME incurred pursuant to
Article 4.5 (so long as the magnitude of the error with respect to such
amount of PSME exceeds fifty thousand dollars ($50,000)).


 


4.11         Assistance.
Each party agrees to provide to the other all reasonable assistance and take
all actions reasonably requested by the other party that are necessary to
enable the other party to comply with any law or regulation applicable to the
Product, including, but not limited to, Novartis meeting its reporting and
other obligations under Article 5.3. Such assistance and actions shall
include, among other things: (a) both parties promptly reporting to the
other adverse drug reactions of which it becomes aware, so as to permit
Novartis to meet its FDA reporting and other obligations in a timely fashion;
and, in this regard, Novartis will provide Reliant with all applicable internal
procedures, reporting forms and contacts to allow Reliant to promptly report to
Novartis any adverse drug reactions, (b) each party carrying out any
FDA-mandated notifications relating to the Product, (c) Reliant timely
transmitting to the appropriate Novartis personnel copies of all Promotional
Materials required to be filed with the FDA, so as to permit Novartis to meet
its FDA reporting and other obligations in a timely fashion, (d) each
party immediately notifying the other of any material inquiry or other contact
by the FDA or any other governmental agency or authority with such party or its
Affiliates relating to the Product, except that Novartis will notify Reliant of
all such inquiries or contacts which, in the reasonable opinion of counsel to
Novartis, may affect or impact Reliant’s rights and/or obligations under this
Agreement and (e) Novartis promptly notifying Reliant of any regulatory
action with respect to the Product.


 


4.12         Sales
Tax Reporting Requirements. Reliant shall provide to Novartis a periodic
accounting (but not more than twice per year) of the distribution of
Promotional Materials on a state-by-state basis for the purpose of Novartis
complying with its state sales tax reporting requirements.


 


16





















 


4.13         Compliance.
Reliant, through its Sales Force and Alternate Sales Channels or otherwise,
shall make no statements, claims or undertakings to any person with whom they
discuss or promote the Product that are inconsistent with the Marketing Plan,
Promotional Materials and the FDA approved labeling for the Product. Reliant,
its employees, representatives and agents shall not offer, pay, solicit or
receive any remuneration to or from Professionals, in order to induce referrals
of or purchase of the Product. The Sales Force shall have no direct contact
with, nor shall the Sales Force be involved with the delivery of Product to
patients of Professionals, other than delivery of samples directly to
Professionals authorized to prescribe the Product. The Sales Force shall be
trained in connection with compliance with Sec. 1128B(b) of the Social
Security Act and the AMA Guidelines on Gifts to Physicians from Industry, prior
to engaging in promotion of the Product.


 


4.14         Compliance
with PDMA. Reliant shall require all Sales Representatives to comply with
applicable Sections of the Prescription Drug Marketing Act of 1987, as amended,
the applicable regulations promulgated thereunder (“PDMA”), state laws and regulations governing the storage and
distribution of pharmaceutical samples. Sales Representatives shall also comply
with the Sample Accountability Policies and Procedures of Novartis including
those set forth in Schedule 4.14.
All such policies in effect as of the New Effective Date are attached to this
Agreement as Schedule 4.14,
and any modifications thereto shall be delivered to Reliant promptly, and in
any event not less than seven (7) days prior to effectiveness of such
modifications.


 


ARTICLE V



ADDITIONAL AGREEMENTS OF NOVARTIS


 


5.1           Obligations
of Novartis. In accordance with the provisions of this Agreement and all
applicable laws and regulations, Novartis shall, at its cost and expense,
(a) use commercially reasonable efforts to perform or cause to be
performed all Product manufacture, labeling, packaging, warehousing,
distribution, order entry, customer services and all other activities to supply
and distribute the Product in order to fill all orders generated by Reliant
activities hereunder in a timely and efficient manner, and (b) maintain
Product inventory at levels sufficient to satisfy at least one hundred percent
(100%) of the annual Net Sales forecast set forth on Exhibit 1 for Agreement Year 2005 and
the annual Net Sales forecasts developed by Novartis for each Agreement Year
thereafter, plus a “safety stock” at levels comparable to other Novartis
products, but in any event no less than a [***] supply based on the then
current Net Sales forecast. Prior to Agreement Year 2006, should demand for the
Product either fall short of or exceed the parties’ joint forecast, neither
party will be responsible to compensate the other in any way for such shortfall
or excess, except as provided in Article VI. From and after Agreement Year
2006 should demand for the Product either fall short of or exceed the then
current Net Sales forecast, neither party will be responsible to compensate the
other 


 










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in any way for
such shortfall or excess, except as provided in Article VI. However,
should Novartis encounter supply problems which cause the Product to remain on
backorder for [***], upon written notice from Reliant, the Term shall be
extended for a period of time equal to the period of sustained backorder and
Reliant shall not be responsible for any shortfall which may arise during the
period of sustained backorder or as a direct result thereof. Novartis shall
accept all orders for the Product in conformity with the pricing determined by
Novartis pursuant to Article 5.6, subject to Novartis’ standard sales term
and conditions. Such standard sales terms and conditions in effect as of the
Effective Date are attached to this Agreement as Schedule 5.1, and any modifications thereto shall be
delivered to Reliant promptly, and in any event not less than fifteen (15) days
prior to effectiveness of such modifications. Novartis shall promptly provide
Reliant with written notice in the event that its supply of “safety stock” of
the Product falls below the levels required by this Article 5.1.


 


5.2           Manufacturing
Activities. The Product to be manufactured by or for Novartis for sale in
the Territory shall be manufactured to meet all specifications for the Product
in accordance with the NDA, cGMP’s and in compliance with all other applicable
federal, state and local laws, rules, regulations and requirements of the
Territory and at the time of shipment shall not be adulterated or misbranded
within the meaning of the Act. It is understood, and Novartis agrees, that it
will be accountable for any act or omission of any third party acting for or on
behalf of Novartis to comply with Novartis’ obligations under this Agreement.


 


5.3           Compliance
with Regulatory Requirements. Unless otherwise required by law, Novartis
will retain exclusive authority and responsibility for complying with all
regulatory requirements and maintaining all government agency contacts relating
to the Product, including, but not limited to, maintaining and updating of the
NDA, the development and submission of applications for new indications (if
any, and at its sole discretion based on its reasonable business judgment), the
reporting of any adverse drug reactions to the FDA, the compliance of
Promotional Materials with FDA rules and regulations, the filing of Promotional
Materials with the FDA, and payment of Medicaid and other governmental rebates
which in Novartis’ sole judgment are due and owing. Novartis shall comply in a
timely manner with all of its obligations hereunder, including the filing of
all necessary reports and other required documentation with the FDA. Nothing
herein shall obligate Novartis to seek FDA approval for additional Product
indications. Nothing herein shall relieve Reliant of its obligations pursuant
to this Agreement, including, but not limited to, Article 4.10.


 


5.4           Intentionally
Omitted.


 


5.5           Training.
During the Term, Novartis will have no obligation to train the Sales Force;
provided, however, that from time to time Novartis may request that Reliant’s
training and/or Promotional Materials be updated within sixty (60) days of such
request to reflect new developments in connection with the Product, and Reliant’s
consent to make any 


 










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such updates shall
not be unreasonably withheld or delayed. Reliant may request Novartis’
assistance in training on new developments in connection with the Product. Any
such request shall be made with reasonable notice to Novartis, and any
additional training pursuant to this Article 5.5 shall be entirely at
Reliant’s expense. Novartis shall use commercially reasonable efforts to comply
with any such request by Reliant.


 


5.6           Sales;
Pricing. Novartis shall book all sales of the Product in the Territory, and
shall be responsible for the pricing of the Product, including, but not limited
to, the timing of pricing changes and any discounting, shall be at Novartis’
sole discretion; provided, however, that in establishing the price of the
Product, Novartis will attempt to price the Product in such a way as to ensure
that it remains competitive in the marketplace; and provided, further, that the
Product will not be bundled or integrated with other products or services in a
way which does not result in the Product being sold for its fair arm’s length
market value. Reliant will be notified by Novartis of any price changes prior
to such changes becoming effective. During the Term, Novartis will notify
Reliant promptly, but in any event at least seven (7) business days prior to
the effective date of any new pricing for the Product. With regard to managed
care/institutional contracting, Novartis’ obligation under the preceding
sentence shall be discharged when Novartis provides to the Marketing Committee
the range of discounted pricing that its National Account Managers are
authorized to provide to managed care and other institutional customers.


 


5.7           Sales
Reports. During the Term, Novartis shall provide Reliant with the following
reports:


 


(a)           A
Monthly update of Net Sales in Novartis’ standard accounting format (a sample
of which is attached hereto as Schedule 5.7(a)),
as it becomes available to Novartis’ employees with responsibility for the
Product and this Agreement in the normal course of business, but in no event
later than the 7th
day of the Month immediately following the Month in which the Net Sales that
are the subject of the update were booked;


 


(b)           No
later than seven (7) days after
the close of each Month, Novartis shall provide Reliant with a report in
electronic format in the forms attached hereto as Schedules 5.7(b), which reports will summarize
instances in which the Product has remained on backorder for at least [***]
successive weeks;


 


(c)           No
later than seven (7) days after
the close of each Month, Novartis shall provide Reliant with a report in
electronic format in the forms attached hereto as Schedules 5.7(c), which reports will set forth (i)
the net sales price per tablet for the Product during the immediately preceding
Month and (ii) the shipments and Net Sales by SKU for the Product during the
immediately preceding Month; and


 










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(d)           No
later than one (1) business day following each day on which Novartis books
sales of the Product, Novartis shall provide Reliant with a report in
electronic format in the form attached hereto as Schedule 5.7(d), which report will set for the Net
Sales for the immediately preceding day.


 


5.8           Intentionally
Omitted.


 


5.9           Sales
Force. Reliant shall select the name and the logo for the Sales Force and
shall own all title and interest in and to such name and/or logo.


 


5.10         Samples.
Novartis will provide Product samples to Reliant at the net costs set forth on Exhibit 3 attached hereto. Novartis
will ship, at Reliant’s cost, samples to a warehouse facility designated by
Reliant upon receipt of a purchase order from Reliant. A batch quantity of
Product samples will be the minimum requirement specified on each purchase
order. For the purposes of this Article 5.10 batch quantities shall mean
the following: (i) 20 mg — [***] capsules, (ii) 40 mg — [***]
capsules and (iii) 80 mg XL — [***] tablets.


 


5.11         Exclusivity.
During Agreement Year 2005 and in the event that this Agreement is terminated
by Reliant during Agreement Year 2005 pursuant to Articles 7.1, 7.2, 7.3, 7.4,
7.5 or 7.7, for a period of two (2) years from such termination (the “Exclusivity Period”), other than with respect to the OTC
Product and the Product (which during the Term shall be limited to the extent
required and/or permitted under this Agreement), Novartis shall not, directly
or indirectly, develop, seek to develop, manufacture, cause to manufacture, market,
promote or otherwise sell in the Territory, any product containing fluvastatin
nor during such period shall any successor to Novartis or any business
enterprise acquired by Novartis after the Effective Date (whether by merger or
asset acquisition or otherwise) develop, seek to develop, manufacture, cause to
manufacture or market in the Territory any product containing fluvastatin not
approved by the FDA as of the date of the merger or acquisition. In the event
that any Affiliate of, or successor to Novartis takes any action during the
Exclusivity Period that is prohibited by the foregoing (other than with respect
to the development, manufacture or marketing of any non-branded product) it
shall constitute a breach of this Agreement to the same extent as if Novartis
had taken such action itself. From and after the end of the Exclusivity Period,
Novartis, itself or through any of its Affiliates or any third party within and
without the Territory, shall have the right to develop, seek to develop,
manufacture, cause to manufacture, market, promote or otherwise sell products
containing fluvastatin, and Reliant shall have no rights with respect to any
such products other than the rights of Reliant specifically provided herein
with respect to the Product.


 










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ARTICLE VI



COMPENSATION


 


6.1           Intentionally
Omitted.


 


6.2           Compensation
to Reliant.


 


(a)           Agreement
Year 2005. For Agreement Year 2005, subject to Article 6.2(b), Reliant
shall be compensated based upon a percentage of incremental Net Sales achieved
above a pre-set and fixed Annual Net Sales Baseline. Exhibit 1 outlines the Annual Net
Sales Baseline for Agreement Year 2005 and the agreed percentage of Net Sales
above the baseline that will be paid to Reliant by Novartis for Agreement Year
2005. Exhibit 2
presents a Seasonalized Net Sales Baseline on a Monthly basis for Agreement
Year 2005. During Agreement Year 2005, Reliant will be compensated on a Monthly
basis for Net Sales above the Seasonalized Net Sales Baseline using the annual
percentages outlined in Exhibit 1
(each a “Monthly Payment”), as
further described in Article 6.3 hereof.


 


(b)           After
Agreement Year 2005 and/or Termination. From and after the earlier to occur
of the date of the termination of this Agreement (subject to the last sentence
of this Article 6.2(b)) or December 31, 2005, Novartis shall continue to
compensate Reliant at the rate of twenty percent (20%) of Net Sales in the
first twelve (12) months after such date and ten percent (10%) of Net Sales in
the subsequent twelve (12) months after such date. For purposes of calculating
the compensation to Reliant payable pursuant to this Article 6.2(b), Net Sales
shall include VA Net Sales. Payment of such compensation for all such periods
shall be made within thirty (30) days following the end of each Month during
such periods by wire transfer of immediately available funds to an account
designated by Reliant. Thereafter, Novartis will not be obligated to further
compensate Reliant, except as otherwise set forth herein. The foregoing
notwithstanding, (i) in the event that this Agreement is terminated by Novartis
under Article 7.5 or 15.7 hereof prior to December 31, 2005, the compensation
amounts due to Reliant under this Article 6.2(b) shall be calculated by
multiplying the amount otherwise due under this Article 6.2(b) by a
fraction the numerator of which equals the number of months elapsed since the
Effective Date as of the date of termination and the denominator of which
equals sixty (60) and (ii) Reliant shall not be entitled to any compensation
under this Article 6.2(b) following the termination of this Agreement
prior to December 31, 2005 in the event that prior to December 31, 2005 (A)
Reliant has not performed all material duties and obligations under this
Agreement or (B) this Agreement was terminated by Novartis pursuant to
Article 7.1, 7.2 or 7.4 or by either party pursuant to Article 7.3
hereof.


 


(c)           VA
Net Sales. Until the earlier to occur of the date of the termination of
this Agreement or December 31, 2005, unless the VA Contract is earlier
terminated, 


 


21





















 


Reliant shall
receive additional compensation in an amount equal to [***] percent ([***]%) of
VA Net Sales. For the avoidance of doubt, other than with respect to Article
6.2(b) above, the amount of VA Net Sales will be excluded from the calculation
of Net Sales and will not entitle Reliant to receive any other compensation
pursuant to this Article VI. Payment of such compensation shall be made
within thirty (30) days following the end of each Month during the Term by wire
transfer of immediately available funds to an account designated by Reliant. Such
monthly payments shall be calculated based on the VA claims made during the
applicable Month, with a “true-up” to occur, for a period of six (6) months
following the earlier of the termination of the VA Agreement or the expiration
of the Term, with respect to each such Month to account for any lag in
chargeback submissions. Any such “true-up” amounts due hereunder shall be paid
by Reliant to Novartis within thirty (30) days following invoice by Novartis. The
parties acknowledge that Reliant owes Novartis an amount equal to $[***] with
respect to VA Net Sales for periods prior to March 1, 2005, as provided on Schedule 6.2(c) attached hereto. Novartis
shall have the right to offset said amount against any Monthly Payment Amount
calculated and payable following the New Effective Date pursuant to Article
6.3(a) below. Such offset by Novartis shall be the sole recourse by Novartis in
respect of such $[***] unless this Agreement is terminated before such amount
is offset in full, in which event the unpaid balance of such amount shall be
payable in full by Reliant within thirty (30) days following the date of
invoice by Novartis.


 


6.3           Payment
in Agreement Year 2005.


 


(a)           For
the first two Months of each Quarter during Agreement Year 2005, the Monthly
Payment will be calculated according to the following formula:  [***] (the “Reliant
Split Percentage”)} = the “Monthly
Payment Amount”. If the Monthly Payment Amount is negative, no
Monthly Payment Amount will be paid to Reliant or Novartis. Each Monthly
Payment Amount will be paid by Novartis to Reliant within thirty (30) days of
the last day of each Month.


 


(b)           Within
fifteen (15) days of the last day of each Quarter of Agreement Year 2005, a
quarterly reconciliation will be calculated according to the following
formula:  [***] (the “Quarterly Total Net Compensation”) less
(the sum of Monthly Payment Amounts 


 










[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


22





















 


paid by Novartis
to Reliant with respect to the first two Months of the relevant Quarter) (the “Quarterly Payment Amount”). The Quarterly
Payment will be made by Novartis to Reliant, if the Quarterly Payment Amount is
greater than zero ($0.00). The Quarterly Payment Amount will be paid by Reliant
to Novartis, if the Quarterly Payment Amount is less than zero ($0.00) (the “Quarterly Shortfall Payment Amount”),
provided that such Quarterly Shortfall Payment Amount, which shall be deemed to
be a positive number, will be capped at an amount equal to the sum of
(i) the Monthly Payment Amounts paid by Novartis to Reliant with respect
to the first two Months of the relevant Quarter, if any, and (ii) the
Quarterly Reserve Account balance (as defined below) as of the beginning of the
relevant Quarter. Any Quarterly Payment Amount or Quarterly Shortfall Payment
Amount due hereunder shall be paid within thirty (30) days of the last day of
the relevant Quarter.


 


(i)            Creation
of the Quarterly Reserve Account. In the first Quarter of 2002, Reliant
will create a notional reserve account (the “Quarterly
Reserve Account”) to be used for purposes of determining the payment
obligation, if any, to Novartis in subsequent Quarters as a result of the
Quarterly Payment Amount calculation yielding an amount less than zero ($0.00).
As of the end of the first Quarter of 2002, the Quarterly Reserve Account will
be deemed to have an initial balance equal to the lesser of (i) $[***],
and (ii) [***]


 


(ii)           Mechanism
for Adjusting the Quarterly Reserve Account Balance. At the end of the
second Quarter of 2002, and at the end of each Quarter thereafter, the maximum
possible balance in the Quarterly Reserve Account (the “Maximum Quarterly Reserve Account Balance”)
will be equal to the greater of (i) $[***]and (ii) [***]


 


Beginning with the second Quarter of 2002, and in each
Quarter thereafter, in the event the balance in the Quarterly Reserve Account
at the beginning of the relevant Quarter is less than the Maximum Quarterly
Reserve Account Balance as updated at the end of such Quarter, the balance in
the Quarterly Reserve Account will be increased at the end of such Quarter by
an amount equal to the lesser of (a) the Quarterly Total Net Compensation
due to Reliant for the relevant Quarter, if a positive number, otherwise $0.00,
and (b) an amount equal to the difference between the Maximum Quarterly
Reserve Account Balance as updated at the end of such Quarter and the Quarterly
Reserve Account balance at the beginning of such Quarter. Any compensation due
Reliant in the relevant Quarter in excess of the amount required to increase
the balance in the Quarterly Reserve Account to the Maximum Quarterly Reserve
Account Balance will be irrevocably earned by Reliant.


 


Beginning with the
second Quarter of 2002, and in each Quarter thereafter, to the extent a
Quarterly Shortfall Payment Amount is due from Reliant to Novartis, the
Quarterly Reserve Account balance as of the beginning of the relevant Quarter
will be reduced at the end of such Quarter by the amount by which the Quarterly
Shortfall Payment Amount exceeds the sum of Monthly Payment Amounts paid by
Novartis to Reliant during the first two months of such Quarter, if any;
provided, 


 










[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


23





















 


however, that in
no event shall the balance in the Quarterly Reserve Account at the end of such
Quarter be less than zero ($0.00).


 


(c)           Within
thirty (30) days after the earlier of December 31, 2005 or the last day of the
Month in which this Agreement is terminated, a final reconciliation will be
calculated according to the following formula: 
{[(Net Sales for the Quarter in which such expiration or termination
occurs up to and including the date of such expiration or termination (the “Termination Date”)) [***] less (the sum of
the Monthly Payment Amounts paid by Novartis to Reliant in the relevant
Quarter) (the “Termination Payment Amount”).
The Seasonalized Net Sales Baseline for the Month in which the Termination Date
occurs will be prorated for the number of days in the Month in which the
Termination Date occurs. The Termination Payment Amount will be paid by
Novartis to Reliant, if the Termination Payment Amount is greater than zero
($0.00). The Termination Payment Amount will be paid by Reliant to Novartis, if
the Termination Payment Amount is less than zero ($0.00) (the “Termination Shortfall Payment Amount”),
provided that such Termination Shortfall Payment Amount, which shall be deemed
to be a positive number, will be capped at an amount equal to the sum of
(i) the Monthly Payment Amounts paid by Novartis to Reliant with respect to
the first two Months of the relevant Quarter, if any, and (ii) the
Quarterly Reserve Account balance as of the beginning of such Quarter. Any
Termination Payment Amount or Termination Shortfall Payment Amount due
hereunder shall be paid within forty-five (45) days of the last day of such
Quarter.


 


6.4           Record
Keeping. Novartis shall keep full and accurate books, records and invoices
with respect to Net Sales and the amount of compensation payable to Reliant
hereunder for no less than three (3) years after the end of the last year in
which compensation is payable pursuant to this Article VI. Novartis shall
permit Reliant, at Reliant’s expense, to have such books and records examined
by an independent auditor retained by Reliant and acceptable to Novartis,
during regular business hours and upon reasonable advance notice, but no later
three (3) years following the rendering of such reports, accounting and
payments, and no more often than two (2) times per Agreement Year during the
Term or calendar year thereafter. Such independent auditor shall keep
confidential any information obtained during such examination, shall report to
Reliant only the Net Sales and the amounts of compensation that the independent
auditor believes to be due and payable thereunder and shall not unreasonably
interfere with Novartis’ operations. Any such information so reviewed and any
such information reported to Reliant shall be considered the Proprietary
Information of Novartis. The fees and expenses relating to the services of the
said independent auditor in accordance with this Article 6.4 shall be
borne by Reliant, provided however that Novartis shall reimburse Reliant, for
such fees and expenses in the event the audit reveals an error equal to or
exceeding five percent (5%) of Net Sales or amounts of compensation due to
Reliant, so long as the amount of the error exceeds fifty thousand dollars
($50,000).


 










[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


24





















 


6.5           Intentionally
Omitted.


 


6.6           Adjustment.


 


(a)           Upon
the occurrence of any of the events set forth in clauses (i) through (vii) of
this Article 6.6(a), and upon Reliant’s request therefor, members of
senior management of each of Reliant and Novartis will convene without undue
delay to assess in good faith the impact of such event and, if deemed
necessary, attempt to agree on equitable adjustments to the Annual Net Sales
Baseline for Agreement Year 2005, compensation to Reliant in respect of Net Sales,
PSME levels, the Staffing Baseline and/or required Details provided for in
Articles 4.3 and 4.5, commensurate with the parties’ projected assessment
of such impact. In the event that Reliant and Novartis are unable to reach
agreement with respect to such equitable adjustments (including, without
limitation, whether any such adjustments are necessary) within ten (10)
business days of Reliant’s request for a meeting pursuant to this
Article 6.6(a), then the matters still in dispute shall, not later than twenty
(20) business days after the first date on which one of the parties
affirmatively terminates discussions in writing with respect to such equitable
adjustments (the “Negotiation Termination
Date”), be submitted for resolution to one of the entities listed on
Schedule 6.6(a)
attached hereto as selected by Novartis (the “Expert”)
who, acting as an expert and not as an arbitrator, shall resolve the matters
still in dispute. Any reference to the Expert shall be deemed to include a
reference to any member or employee thereof that such firm may designate as the
Expert to act on its behalf. In the event that Novartis fails to notify Reliant
in writing of its selection of Expert from the choices set forth in this
Article 6.6(a) within five (5) business days following the Negotiation
Termination Date, then Reliant shall select the Expert by written notice to
Novartis. The Expert’s resolution of the matters in dispute shall be final and
binding on the parties. The Expert shall make a determination as soon as practicable
and in any event within thirty (30) days (or such other time as the parties
hereto shall agree in writing) after its engagement. The fees and expenses of
the Expert shall be divided equally between Reliant and Novartis. Reliant and
Novartis shall each make readily available to the Expert all relevant books and
records requested by the Expert and shall otherwise cooperate with the Expert
in connection with the resolution of any matters in dispute arising under this
Article 6.6(a). In the event that the Expert shall be unable or unwilling
to perform the services called for under this Article 6.6(a), the Expert
shall be selected in accordance with the commercial rules of the American
Arbitration Association.


 


(i)            Any
contracts of the type described in Article 3.1(i) to which Novartis
is a party on the New Effective Date are (A) terminated by Novartis,
(B) terminated by any other party to such contract due to a breach by
Novartis of such contract or (C) not renewed by Novartis in accordance
with their terms;


 


(ii)           An
OTC Product is commercialized by or on behalf of Novartis or pursuant to a
license to the Patents granted by Novartis;


 


25





















 


(iii)          Clinical studies are published by or on
behalf of Novartis that reveal results materially different from the data
submitted to the FDA in support of the NDA;


 


(iv)          An
amendment to the Product label required by the FDA and involving a so-called
Black Box Warning;


 


(v)           Novartis
materially increases or expands its discounting practices with respect to the
Product;


 


(vi)          Novartis
elects to reduce the price (Wholesale Acquisition Cost [WAC]) of the Product
below a price equal to the price for such Product on the Effective Date;


 


(vii)         Novartis bundles or integrates the Product with
other products in a way that results in the Product being sold a price which is
less than its fair arm’s length market value.


 


(b)           In
the event that, at any time during the Term, Reliant or Novartis develops a
good faith belief that the requirements for staffing, Primary Detail
Equivalents and/or PSME commitments pursuant to Articles 4.3 and 4.5
should be adjusted downward in order to optimize (right-size) Reliant’s
promotional effort for the Product, then upon such party’s request, members of
senior management of each of Reliant and Novartis will convene without undue
delay to assess in good faith such party’s belief and attempt to agree on
appropriate adjustments to any or all of the requirements for staffing, Primary
Detail Equivalents and/or PSME commitments pursuant to Articles 4.3 and
4.5. In the event that Reliant and Novartis are unable to reach agreement with
respect to such downward adjustments (including, without limitation, whether
any such adjustments are necessary) within ten (10) business days of the
request for a meeting pursuant to this Article 6.6(b), then Novartis shall
retain the right to ultimately determine whether any such adjustments shall be
made and the extent of such adjustments.


 


ARTICLE VII



TERMINATION


 


7.1           Termination
for Material Breach. Either party may terminate this Agreement in the event
that the other party materially breaches or materially fails to perform any
material covenants, duties or obligations under this Agreement, where such
breach remains uncured, or such failure to perform continues, for at least
sixty (60) days after the aggrieved party shall have given written notice of
the breach or failure to perform to the other party. If, after the sixty (60)
day period for cure and/or performance, such breach remains uncured or such
failure to perform continues, the aggrieved party may provide written notice to
the other party of termination of this Agreement (“Notice of Termination”). Such termination shall be effective
seven (7) days from receipt of said Notice of Termination.


 


26





















 


7.2           Termination
for Failure to Make Payments. Either party may terminate this Agreement in
the event that the other party fails or refuses to pay amounts due to such
other party as and when due, which failure or refusal to pay is not cured
within thirty (30) days after the other party gives written notice of
non-payment to the defaulting party.


 


7.3           Termination
for Withdrawal. Each party agrees to notify the other immediately of any
pending or threatened event of which the party is aware, which may lead to
withdrawal of the Product from the market, including without limitation:
(a) actual or threatened regulatory action by the FDA or other
governmental entity; (b) safety concerns relating to the Product; or
(c) entry of an injunction or other court order prohibiting or enjoining
Novartis or Reliant from marketing the Product in the Territory. The final
decision as to whether to withdraw the Product shall be within Novartis’ sole
discretion, although Reliant may make recommendations regarding any such
proposed action. This Agreement may be terminated at any time with written
notice by either party if the Product is withdrawn from the market in the
Territory, but, in any such event, settlement of any amounts owed by either
party to the other shall be promptly made. Any such withdrawal and/or
termination shall not impact on either party’s rights and/or remedies accrued
prior thereto.


 


7.4           Termination
for Breach of Warranty. Either party may terminate if any representation or
warranty made herein by the other party proves to be materially false or
misleading when made.


 


7.5           Termination
for Insolvency, etc. Either party may terminate this Agreement effective
immediately upon written notice in the event (a) a court of competent
jurisdiction enters a decree or order of relief appointing a receiver,
liquidator, assignee, trustee or similar official of the other party or any
substantial part of its assets and such decree or order is consented to by the other
party or continues unstayed and in effect for a period of seventy five (75)
days, (b) the other party files a voluntary petition or acquiesces in or
commences a case, proceeding or other action or fails to contest an involuntary
petition, case, proceeding or other action under any bankruptcy, insolvency,
reorganization or similar law, (c) an insolvency petition, case,
proceeding or other action is filed against the other party under any
bankruptcy, insolvency, reorganization or similar law which is not dismissed
within seventy five (75) days, (d) the other party makes a general
assignment for the benefit of its creditors or (e) the other party is
dissolved or liquidated.


 


7.6           Termination
Without Cause. Either party may terminate this Agreement without cause as
of January 1, 2006 or any date thereafter during the Term upon at least ninety
(90) days prior written notice specifying the date of termination, which notice
may be given prior to January 1, 2006.


 


7.7           Additional
Termination Rights. This Agreement may be terminated by Reliant upon the
occurrence of any one or more of the following:


 


(a)           Novartis’
rights to use the Trademarks (or any of them if there are more than one) is
lost, diminished, limited or restricted in any way and such loss, diminution,
limitation or restriction is materially detrimental to Reliant;


 


27





















 


(b)           Novartis
is enjoined, prohibited or restricted from making, using or selling a Product
or granting Reliant the rights granted to it by Novartis hereunder, in any such
case, pursuant to an award, judgment, decree or other order of any court or
other governmental, administrative or regulatory authority;


 


(c)           Reliant
is enjoined or prohibited from marketing the Product in the Territory (and such
injunction or prohibition was not caused by an action or omission of Reliant);


 


(d)           One
or more patents issue in the United States that prohibit, limit or otherwise
adversely impact the Net Sales of the Product;


 


(e)           Novartis
is (i) unwilling or (ii) unable (other than as a result of an event
that qualifies as a force majeure event under Article 15.7 hereof), to
perform its obligations under Article 5.1(a) and or (b) hereof (which
is not cured within fifteen (15) days following written notice thereof by Reliant
to Novartis); provided that for the purposes of this Article 7.7, Novartis’
obligation shall not be qualified by “commercially reasonable efforts”; and/or


 


(f)            Novartis
or an Affiliate of Novartis fails to take reasonable action within a reasonable
period of time to abate the infringement by a third party of any Patent and/or
any Trademark, and such failure is materially detrimental to Reliant’s exercise
of its rights or performance of its obligations under this Agreement.


 


Reliant shall provide written notice to Novartis of
its intent to terminate under this Article 7.7, which termination shall become
effective thirty (30) days after delivery of such notice; provided that such
notice delivered in connection with Article 7.7(e) shall become effective fifteen
(15) days after delivery of such notice.


 


7.8           Effect
of Reliant Termination. In the event Reliant elects to terminate this
Agreement prior to December 31, 2005 pursuant to Article 7.1, 7.4 or 7.7,
Novartis shall, upon demand, pay to Reliant (a) all amounts due to Reliant
under Article VI hereof and (b) the Make Whole Amount. For the
purposes of this Article 7.8, the “Make
Whole Amount” means an amount equal to [***] dollars ($[***])
multiplied by a fraction the numerator of which equals the number of months
left in the period from the date of termination through December 31, 2005,
including the month in which the termination occurs and the denominator of
which equals sixty (60).


 


7.9           Obligations
Upon Termination or Expiration. Upon termination or expiration of this
Agreement, the mutual rights and obligations of the parties hereunder shall
forthwith terminate; provided, however, that (a) no such expiration or
termination shall terminate or otherwise affect any right or obligation
accruing hereunder prior to such expiration or termination, or accruing
thereafter in respect of any event occurring prior thereto and (b) except
if this Agreement is terminated by Novartis pursuant to Article 7.1, 7.2 or
7.4, 


 










[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


28





















 


Reliant shall have
the right to sell to Novartis and Novartis shall purchase from Reliant, at
Reliant’s cost, Reliant’s existing inventory of sample Product (including
sample Product ordered prior to termination but delivered after termination). Upon
termination of this Agreement, Reliant shall deliver to Novartis all Promotional
Materials developed pursuant to this Agreement.


 


7.10         Ownership
of Name of Sales Force. Upon termination or expiration of this Agreement,
Reliant shall retain ownership of the name and logo of the Sales Force.


 


ARTICLE VIII



WARRANTIES, REPRESENTATIONS AND COVENANTS


 


8.1           Representations
and Warranties of Novartis. Novartis hereby represents and warrants to
Reliant as of the New Effective Date as follows:


 


(a)           Organization.
Novartis is (i) a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, and (ii) has
all necessary corporate power and corporate authority to own its properties and
to conduct its business, as currently conducted.


 


(b)           Authorization.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby are within the corporate power of Novartis,
have been duly authorized by all necessary corporate proceedings of Novartis,
and this Agreement has been duly executed and delivered by Novartis.


 


(c)           Execution
and Delivery. Neither the execution of this Agreement nor the consummation
of the transactions contemplated herein: 
(i) requires Novartis to obtain any material approval, consent or
withholding of objections on the part of any regulatory or governmental body or
any other third party (including, without limitation, any Affiliate of
Novartis), other than those already obtained by Novartis; (ii) will result
in any violation or breach of any term or provision of Novartis’ Certificate of
Incorporation, Bylaws or similar charter documents; (iii) will constitute
a breach or default under any material indenture, mortgage, deed of trust,
license agreement or other contract or agreement to which Novartis or any
Affiliate of Novartis may be subject, which breach or default would have a
material adverse effect on the Product, the Novartis IP or Reliant’s ability to
exploit the rights granted to it under this Agreement; or (iv) will
violate any provision of any judicial, governmental or administrative order,
writ, injunction, award, judgment or decree applicable to Novartis or any
Affiliate of Novartis.


 


(d)           Binding
Obligation. This Agreement constitutes the valid and binding obligation of
Novartis, enforceable against Novartis in accordance with its terms, subject to
bankruptcy, reorganization, insolvency and other similar laws affecting the
enforcement of creditors’ rights in general and to general principles of equity
(regardless of whether considered in a proceeding in equity or an action at
law).


 


29





















 


(e)           Broker.
Neither Novartis nor any officer, director or agent of Novartis has employed
any broker, finder, or agent with respect to this Agreement or the transactions
contemplated hereby.


 


(f)            Patents
and Trademarks. The trademark Lescol is the only Trademark under which the
Product is being marketed, promoted, detailed or sold in the Territory. The
Lescol Trademarks are currently being used commercially by Novartis, and with
the exception of any trade names included in the definition of Trademarks have
been properly filed and registered with the U.S. Patent and Trademark Office
and are valid and in full force and effect. The Patents that cover or the
Products and, to Novartis’ knowledge, the other Patents that relate to the
Products are valid and in full force and effect.


 


(g)           Product
Related Intellectual Property. (i) Novartis owns or possesses adequate
licenses or other valid rights to use all Patents, patent applications, patent
rights, Trademarks, trademark rights, trade names, trade dress, trade name
rights, copyrights and copyright registrations and applications, copyright
rights, service marks, trade secrets, applications for trademarks and for
service marks, know-how and other proprietary rights and information used or
held for use in connection with the Products that are necessary to permit
Novartis to discharge its obligations under this Agreement with respect to the
Products, including, without limitation, granting the rights and licenses
granted to Reliant under this Agreement (collectively, the “Novartis IP”), free and clear of  any liens, licenses, obligations, transfer
agreements, transfer restrictions, enforceable claims, royalties or
encumbrances that would prevent Novartis from discharging its obligations under
this Agreement for the Products, and (ii) Novartis is unaware of any
assertion or claim challenging the ownership, use or validity of any of the
foregoing. Any licenses associated with the Novartis IP are valid and binding
and are enforceable in accordance with their respective terms, and there are no
material breaches or defaults thereunder. To the extent that any of the Patents
and Trademarks are not owned by Novartis, such Patents and Trademarks are owned
by an Affiliate of Novartis, and Novartis licenses or has the right to use such
Patents and Trademarks from such Affiliate of Novartis. Novartis will not take
any action to terminate, and Novartis will prevent its Affiliates from taking
any action to terminate, any license or grants of rights from an Affiliate of
Novartis to Novartis with respect to the Patents and Trademarks. Novartis has
the right to grant to Reliant all of the rights and licenses granted to Reliant
under this Agreement.


 


(h)           No
Infringement. The manufacture, use or sale of the Product by Novartis or
the use of the Trademarks and any other Novartis IP used to promote the Product
in the Territory for the sale of the Product do not and to Novartis’ knowledge
will not infringe any valid rights of any third party including inter  alia
intellectual property rights (other than such rights as to which Novartis is
directly or indirectly licensed). To Novartis’ knowledge, at the New Effective
Date, Novartis is unaware of any third party infringement of the Patents,
Trademarks or other intellectual property 
rights relating to the Product.


 


30





















 


(i)            Adverse
Drug Experiences. Novartis has informed Reliant of all relevant adverse
drug experiences related to the Product of which it has knowledge.


 


(j)            Litigation.
Except as set forth on Schedule 8.1(j),
there is no litigation, arbitration proceeding, governmental investigation,
action or claims of any kind, pending or, to the knowledge of Novartis,
threatened, (collectively “Novartis Claims”),
by or against Novartis or any of its Affiliates relating to the Product,
including, without limitation, any Claims regarding breach of express or
implied warranty or representation or failure to warn or relating to personal
injury, property damage or other liability arising from or caused by the
Product which would in anyway impede, impair, restrict or interfere with the
rights granted Reliant hereunder or the ability of Reliant or Novartis to
perform their respective obligations hereunder.


 


(k)           Promotional
Materials. All Promotional Materials relating to the Product supplied by
Novartis are in material compliance with all applicable laws and regulations.


 


(l)            Regulatory
Approvals. Novartis has obtained and will obtain all material regulatory
approvals, licenses and permits which are required to be obtained for in order
to permit (i) sales of the Product in the Territory and (ii) Novartis
to discharge its obligations hereunder.


 


8.2           Representations
and Warranties of Reliant. Reliant hereby represents and warrants to
Novartis as of New Effective Date as follows:


 


(a)           Organization
and Conversion. Reliant is (i) a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and (ii) has all necessary corporate power and corporate authority to own
its properties and to conduct its business, as currently conducted. Following
the conversion of Reliant from a limited liability company to a corporation,
the equityholders of Reliant immediately prior to such conversion held shares
in the resulting corporation in approximately the same relative proportions as
they did in the pre-conversion entity.


 


(b)           Authority.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby are within the corporate power of Reliant,
have been duly authorized by all necessary corporate proceedings of Reliant,
and this Agreement has been duly executed and delivered by Reliant.


 


(c)           Execution
and Delivery. Neither the execution of this Agreement nor the consummation
of the transactions contemplated hereby: 
(i) requires Reliant to obtain the approval, consent or withholding
of objection on the part of any regulatory or governmental body or any other
third party (including, without limitation, any Affiliate of Reliant);  (ii) will result in any violation or
breach of any term or provision of Reliant’s Certificate of Incorporation,
Bylaws or similar charter documents; (iii) will constitute a default under
any material indenture, 


 


31





















 


mortgage, deed of
trust, license agreement, or other contract or agreement to which Reliant is a
party, which breach or default would have a material adverse effect on Reliant’s
ability to perform its obligations under this Agreement; or (iv) will
violate any provision of any judicial, governmental or administrative order,
writ, injunction, award, judgment or decree applicable to Reliant.


 


(d)           Binding
Obligation. This Agreement constitutes the valid and binding obligation of
Reliant, enforceable against Reliant in accordance with its terms, subject to
bankruptcy reorganization, insolvency and other similar laws affecting the
enforcement of creditors’ rights in general and to general principles of equity
(regardless of whether considered in a proceeding in equity or an action at
law).


 


(e)           Broker.
Neither Reliant nor any officer, director or agent of Reliant, has employed any
broker or finder with respect to this Agreement or the transactions
contemplated hereby.


 


(f)            Adverse
Drug Experiences. Reliant has informed Novartis of all relevant adverse
drug experiences related to the Product of which it has knowledge.


 


(g)           Litigation.
Except as set forth on Schedule 8.2(g),
there is no litigation, arbitration proceeding, governmental investigation,
action or claims of any kind, pending or, to the knowledge of Reliant,
threatened, (collectively “Reliant Claims”),
by or against Reliant or any of its Affiliates relating to the Product,
including, without limitation, any Reliant Claims regarding breach of express
or implied warranty or representation or failure to warn or relating to
personal injury, property damage or other liability arising from or caused by
the Product.


 


8.3           Covenants.


 


(a)           Compliance
with Laws. Each party covenants to the other that it will comply with all
applicable local, state and federal laws and regulations in carrying out its
obligations pursuant to this Agreement.


 


(b)           Quality
Control. Novartis covenants that the Product to be manufactured, packaged,
distributed and sold by Novartis will, at the time of shipment by or on behalf
of Novartis, not be misbranded or adulterated under the terms of the Act.


 


(c)           Cooperation.
Each party covenants that it will use its commercially reasonable efforts,
consistent with applicable law, to maximize Net Sales by supporting and
cooperating with the other party in its efforts under this Agreement. Novartis
further agrees that in the event Novartis elects to (i) stop or slow
shipping of Product, (ii) ”load” sales of the Product, (iii) encourage
or require customers to “buy in” Product, in each case, during the fourth
Quarter of any Agreement Year in a manner that could reasonably be expected to
have the effect of reducing or increasing Net Sales and thereby disadvantage
Reliant under this Agreement, then for the purposes of this Agreement, such
reduced or increased sales will be deemed booked by Novartis in a manner that
does not so detriment Reliant.


 


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(d)           Compliance
with Certain Agreements. Novartis shall comply with, and shall cause its
Affiliates to comply in all material respects with the terms of any agreements
through which Novartis or its Affiliates are granted rights or licenses
relating to the Novartis IP, except where the failure to so comply with such
agreements could not reasonably be expected to adversely effect Reliant’s
ability to perform its obligations under this Agreement. Novartis shall use
commercially reasonable efforts to (i) cause the counterparty to any such agreements
to perform under such agreements and (ii) retain its rights to the
Novartis IP to the extent necessary to discharge its obligations under this
Agreement with respect to the Products, including, without limitation, granting
the rights and licenses granted to Reliant under this Agreement.


 


8.4           Novartis
Disclaimer. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, NOVARTIS DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH
REGARD TO THE PRODUCT, INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF
MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.


 


8.5           Reliant
Disclaimer. EXCEPT AS EXPRESSLY PROVIDED
HEREIN, RELIANT DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED.


 


ARTICLE IX



INTELLECTUAL PROPERTY


 


9.1           Maintenance.
Novartis shall be responsible for and promptly pay when due, all fees necessary
to maintain the Patents and Trademarks in full force and effect during the Term.
Novartis shall promptly inform Reliant of any re-examination, reissue, term
extension or other proceeding of similar force and effect relating to the
Patents or Trademarks.


 


9.2           Notice
of Infringement. If either party shall learn of a claim or assertion that
the manufacture, use or sale of the Product in the Territory infringes or
otherwise violates the intellectual or industrial property rights of any third
party, or that any third party violates the intellectual or industrial property
rights of Novartis in the Product in the Territory, then the party becoming so
informed shall promptly, but in all events within fifteen (15) business days
thereof, notify the other party to this Agreement of the claim or assertion.


 


9.3           Infringement
of Third Party Intellectual Property by Novartis. In the event a claim of
infringement of a third party’s intellectual property right arising out of (i) the
promotion, marketing, Detailing, manufacture, distribution, use or sale of
Product by Novartis, its Affiliates or Agents (other than Reliant, its
Affiliates and agents) or (ii) to the extent such claim arises as a result
of the fact that Reliant, its Affiliates or agents are promoting, marketing or
Detailing the Product or using the Novartis IP (but expressly excluding claims
arising from the techniques or systems not included in the Novartis IP that are
used to promote, market or Detail the Product (“Reliant Promotion Techniques”)) is brought by a third party
against either party (together, “Novartis
Indemnified Claims”)), 


 


33





















 


Novartis shall
defend such action at its own cost and expense and, at its own cost and
expense, indemnify and hold harmless Reliant, its Affiliates, officers,
managers, employees, representatives, consultants and agents (the “Reliant Infringement Indemnitees”) as set
forth in Article 9.5 below.


 


9.4           Infringement
of Third Party Intellectual Property by Reliant. In the event a claim of
infringement of a third party’s intellectual property right arising out of the
promotion, marketing and Detailing of Product by Reliant is brought by a third
party against either party to the extent arising on account of Reliant’s, its
Affiliate’s or agents (other than Novartis, its Affiliates and agents) use of
Reliant Promotion Techniques (“Reliant
Indemnified Claims”), Reliant shall defend such action at its own
cost and expense and, at its own cost and expense, indemnify and hold harmless
Novartis, its Affiliates, officers, managers, employees, representatives,
consultants and agents (the “Novartis
Infringement Indemnitees”) as set forth in Article 9.6 below.


 


9.5           Infringement
Indemnification by Novartis. Notwithstanding any other provisions of this
Agreement, but subject to Article 10.4, Novartis will defend, indemnify
and hold harmless the Reliant Infringement Indemnitees from and against any and
all liabilities, losses, damages, actions, claims and expenses suffered or
incurred by Reliant Infringement Indemnitees (including reasonable attorneys’
fees, court costs and expert witnesses’ fees) resulting from any Novartis
Indemnified Claims so long as any such claim does not arise from Reliant’s
breach of this Agreement, violation of law or its negligent or intentionally
wrongful conduct (it being expressly understood that Reliant’s reasonable
exercise of its rights hereunder in accordance with this Agreement shall not be
deemed a violation of law or its negligent or intentional wrongful conduct as
pertaining to violation of another party’s intellectual property rights).


 


9.6           Infringement
Indemnification by Reliant. Notwithstanding any other provisions of this
Agreement, but subject to Article 10.4, Reliant will defend, indemnify and
hold harmless the Novartis Infringement Indemnitees from and against any and
all liabilities, losses, damages, actions, claims and expenses suffered or
incurred by Novartis Infringement Indemnitees (including reasonable attorneys’
fees, court costs and expert witnesses’ fees) resulting from any Reliant
Indemnified Claims so long as any such claim does not arise from Novartis’
breach of this Agreement, violation of law or its negligent or intentionally
wrongful conduct (it being expressly understood that Novartis’ reasonable
exercise of its rights hereunder with respect to the use of any Reliant
intellectual property in accordance with this Agreement shall not be deemed a
violation of law or its negligent or intentional wrongful conduct as pertaining
to violation of another party’s intellectual property rights).


 


9.7           Third
Party Infringement. In the event either party believes that a third party
is infringing or otherwise violating Novartis’ intellectual or industrial
property rights in the Product (a “Third
Party Infringement”), Novartis and Reliant shall consult with each
other and their respective counsel in order to develop a strategy for
addressing the Third Party Infringement. In the event the parties agree to take
legal action to stop the Third Party Infringement, they shall agree upon legal
counsel to prosecute such action. Unless the parties agree upon a different
formula for sharing the expenses (including attorney and 


 


34





















 


expert fees) of
such action and for sharing any award or settlement, they shall share them
equally. In the event that one of the parties does not desire to participate in
the action (the “Nonparticipating Party”),
the other shall be free to bring the action in its own name, at its own expense
and retain any award or settlement in its entirety. If necessary, the
Nonparticipating Party shall join as a party to the suit but shall be under no
obligation to participate except to the extent that such participation is
required as the result of being a named party to the suit. The Nonparticipating
Party shall offer reasonable assistance in connection therewith at no charge to
the other party except for reimbursement of reasonable out-of-pocket expenses
including reasonable attorney’s fees. If either party desires to retain counsel
independently, at its own expense, the party may do so, but it shall not
relieve the party of its obligations under this Article.


 


ARTICLE X



INDEMNITIES


 


10.1         Indemnification
of Reliant. Novartis will defend, indemnify and hold harmless Reliant and
its Affiliates, officers, directors, agents, representatives, consultants and
employees (individually, a “Reliant
Indemnified Party,” and collectively, the “Reliant Indemnified Parties”), from and
against any and all liabilities, losses, damages, actions, claims and expenses,
including reasonable attorneys’ fees, court costs and expert witnesses’ fees,
(individually, a “Liability,” and
collectively, the “Liabilities”)
suffered or incurred by the Reliant Indemnified Parties that result from, or
arise out of: (a) the manufacture, storage, packaging, production,
transportation, distribution, sale or other disposition of the Product by
Novartis, including, without limitation, liability related to or arising out of
product liability and/or product tampering claims; (b) the acts or
omissions of Novartis or any of its affiliates with respect to the manufacture
or quality of the Product supplied by Novartis and/or its affiliates;
(c) breach by Novartis of any representation, warranty, covenant or
agreement contained in this Agreement; (d) any recall of the Product, or
any seizure of the Product by any governmental agency, in either case, arising
out of, relating to, or occurring as a result of, any failure of Novartis to
manufacture or package the Product in accordance with any applicable government
regulation or current Good Manufacturing Practices (cGMP’s); (e) Novartis’
failure to comply with any applicable law or regulation and (f) Novartis’
intentionally wrongful or negligent act, except to the extent any such
Liability arises from (i) Reliant’s intentional malfeasance or negligence,
(ii) Reliant’s breach of this Agreement or (iii) Reliant’s violation
of any applicable law or regulation. The foregoing right of indemnification
will not limit Novartis’ rights under Articles 9.6 and 10.2.


 


10.2         Indemnification
of Novartis. Reliant will defend, indemnify and hold harmless Novartis and
its Affiliates, directors, officers, agents, representatives, consultants and
employees (individually, a “Novartis
Indemnified Party,” and collectively, the “Novartis Indemnified Parties”), from and
against any and all Liabilities suffered or incurred by the Novartis
Indemnified Parties that result from or arise out of (a) breach by Reliant
of any representation, warranty, covenant or agreement contained in this
Agreement; (b) Reliant’s failure to comply with any applicable law or
regulation or (c) Reliant’s intentionally wrongful or negligent act,
except to the extent any such Liability arises from 


 


35





















 


(i) Novartis’
intentional malfeasance or negligence, (ii) Novartis’ breach of this
Agreement or (iii) Novartis’ violation of any applicable law or regulation.
The foregoing right of indemnification will not limit Reliant’s rights under
Articles 9.5 and 10.1.


 


10.3         Conditions
of Indemnification. The obligations of Novartis and Reliant under this
Article X shall be subject to the following terms and conditions:


 


(a)           The
party claiming a right to indemnification shall, within ten (10) business days
of receipt of any claim, charge, suit or other action, give, in accordance with
Article XII, written notice to the indemnifying party, of any such claim,
charge, suit or other action received from a third party which is governed by
the indemnity obligations of this Agreement;


 


(b)           The
indemnifying party shall conduct, at its own expense, but in consultation with
the other party, the defense of any and all such claims, charges, suits or
other actions by a third party;


 


(c)           Neither
party shall settle or admit liability with respect to any such claims, charges,
suits or other actions which could result in liability to the other party
without the prior written consent of the other party, which consent shall not
be unreasonably withheld or delayed;


 


(d)           If
the indemnifying party does not take the steps necessary against any such
claims, charges, suits or other action by a third party, the party claiming
indemnification may defend against or settle such claims, charges, suits or
other action provided that that party may not settle such claims, charges,
suits or other action without the prior written consent of the indemnifying
party which consent shall not be unreasonably withheld or delayed; however, the
defense and/or settlement under this Article 10.3(d) shall not act as a
waiver of rights to indemnification under this Agreement, or any other rights
or remedies of a party claiming indemnification and shall not excuse the
indemnifying party from its obligations hereunder and all reasonable costs and
expenses incurred by the party claiming indemnification shall be subject to
indemnity by the indemnifying party; and


 


(e)           Each
party will offer reasonable assistance to the other party in defending or
settling the claim, at the expense of the indemnifying party.


 


10.4         Consequential
Damages. Neither Reliant nor Novartis (which for the purposes of this
Article 10.4 shall include their respective Affiliates, directors,
managers, officers, employees, consultants, equity holders, representatives and
agents) shall have any liability to the other for any punitive damages,
special, incidental, consequential or indirect damages, relating to or arising
from the loss of commercial or business opportunity, revenue or profit, in
connection with or arising out of this Agreement, even if such damages may have
been foreseeable; provided that such limitation shall not apply in the case of
(a) fraud, (b) intentional misconduct and (c) any damages
(including, 


 


36





















 


without
limitation, the types enumerated in this Article 10.4) claimed by or paid
to a third party in a third party action.


 


ARTICLE XI



CONFIDENTIALITY


 


11.1         Proprietary
Information. Pursuant to this Agreement, a party receiving Proprietary
Information from the other, directly or indirectly, will treat such Proprietary
Information as confidential, will use such Proprietary Information only for the
purposes of this Agreement and will not disclose, and will take all reasonable
precautions to prevent disclosure of, such Proprietary Information to third
parties or to any of its officers, directors, managers, equity holders,
employees, agents, representatives, Affiliates or consultants who are not
required to know such Proprietary Information or who are not bound by a like
obligation of confidentiality.


 


11.2         Exemptions.
Nothing contained herein will in any way restrict or impair each party’s right
to use, disclose or otherwise deal with any information deemed by the other
party to be Proprietary Information which:


 


(a)           at
the time of disclosure is publicly available or in the public knowledge;


 


(b)           after
disclosure, lawfully becomes part of the public knowledge through publication
or otherwise, but through no fault of either party;


 


(c)           the
receiving party possesses at the time of disclosure by the other party and
which was not acquired, directly or indirectly, from the other party;


 


(d)           is
acquired by the receiving party from a third party who has a right to disclose
such Proprietary Information;


 


(e)           as
evidenced by written records, is independently developed by the receiving party
without use of the Proprietary Information; or


 


(f)            is
compelled to be disclosed by legal process, provided the party so compelled
shall notify the other party and cooperate in any judicial proceeding initiated
to contest compelling such disclosure.


 


11.3         Return
of Proprietary Information. Each party agrees, at the request of the other
party, at the end of the Term to either:


 


(a)           return
to the other party all originals and copies of the other party’s Proprietary
Information; or,


 


(b)           at
the other party’s option, destroy all originals and copies of the other party’s
Proprietary Information and to certify in writing such destruction to the other
party.


 


37





















 


11.4         Maintenance
of Copies. Each party may maintain one (1) copy of any document containing
Proprietary Information in its Law Department or with its outside legal counsel
solely for archival purposes.


 


11.5         Expiration.
The obligations of this Article XI shall expire ten (10) years after the
end of the Term.


 


ARTICLE XII



NOTICES


 


12.1         Notices.
All notices required or permitted hereunder shall be given in writing and sent
by facsimile transmission, or mailed postage prepaid by certified or registered
mail (return receipt requested), or sent by a nationally recognized express
courier service, or hand-delivered at the following address:


 


Novartis Pharmaceuticals
Corporation

59 Route 10

East Hanover, New Jersey  07936

ATTN:  Larry Perlow, Senior Vice
President and General Manager


 


With a copy to:



Novartis Pharmaceuticals Corporation

59 Route 10

East Hanover, New Jersey  07936

ATTN:  General Counsel


 


Reliant Pharmaceuticals,
Inc.

110 Allen Road

Liberty Corner, New Jersey  07938

ATTN:  Chief Operating Officer


 


With a copy to:



Latham & Watkins LLP

Sears Tower, Suite 5800

Chicago, Illinois  60606

ATTN:  Michael A. Pucker


 


All notices shall be deemed made upon receipt by the
addressee as evidenced by the applicable written receipt.


 


38

















 


ARTICLE XIII



PUBLICITY


 


13.1         Disclosure
of Agreement Terms. Novartis and Reliant agree not to issue any press
releases or public announcements concerning this Agreement without the prior
consent of the other party to the form, timing and content of any such release
or announcement, except as such release or announcement may be required by law.
A party who desires to issue a press release or make any other public
disclosure relating to this Agreement shall notify the other in writing at
least ten (10) business days (or such shorter period where legally required)
before the time of the proposed release. Such notice shall include the exact
text of the proposed release and the time and manner of the release. The
non-disclosing party shall respond promptly to the disclosing party with
respect to such press release or other disclosure, and neither party shall
unreasonably withhold its consent to any such press release or disclosure. This
Article 13.1 applies to all disclosures concerning this Agreement
including, without limitation, by way of the following: press releases,
educational and scientific conferences, governmental filings, discussions with
investment bankers (except for either party’s financial advisors who are
obligated to keep the information confidential) public officials and the media.
Novartis and Reliant recognize that disclosure of the terms of this Agreement
to the IRS and other tax authorities may be required, and Novartis and Reliant
each waives the requirements of this Article 13.1 with respect to
disclosure to such entities. In disclosing any information covered by this
Article 13.1 pursuant to a requirement of law, each party will use its
reasonable efforts to secure confidential treatment from the applicable
governmental authority when requested by either party.


 


13.2         Disclosure
of Financial Terms. Except (i) as required by law, (ii) subject
to the next sentence of this Article 13.2, to another Person in connection
with a proposed merger, acquisition, or sale of all or substantially all of the
assets of the disclosing party, and/or (iii) subject to the next sentence
of this Article 13.2, to investment bankers and/or financing sources in
connection with bona fide financing transactions involving Reliant or an
Affiliate, neither party shall disclose to any third party, whether publicly or
otherwise, any financial terms of this Agreement which have not been previously
disclosed publicly pursuant to this Article 13.2 without the prior written
consent of the other party, which consent shall not be unreasonably withheld or
delayed. Notwithstanding anything to the contrary in this Agreement, under no
circumstances shall Reliant directly or indirectly disclose any financial terms
of this Agreement, which have not been previously disclosed publicly pursuant
to this Article 13.2, (A) to any Competitor, or (B) to any
pharmaceutical contract sales force organization. In disclosing any information
covered by this Article 13.2(a) pursuant to a requirement of law, whether
in connection with an Approved Transaction or otherwise, each party will notify
the other of the proposed disclosure and each party will use its reasonable
efforts to secure confidential treatment from the applicable governmental
authority when requested by such other party and (b) in connection with
disclosure permitted by clauses (ii) and/or (iii) of this
Article 13.2, Reliant will require the party to whom it discloses such
information to enter into a confidentiality agreement including terms with
respect to disclosure of the financial terms of this Agreement not less strict
than those set forth in 


 


39





















 


Schedule 13.2
attached hereto for a period ending not earlier than termination or expiration
of the Term. Reliant will use reasonable commercial efforts to enforce its
rights under any such confidentiality agreement.


 


ARTICLE XIV



INSURANCE


 


14.1         Insurance.
Reliant and Novartis shall each at its own expense obtain and maintain insurance
of the type and amount described in Article 14.2. Neither party shall do
or omit to do any act, matter or thing which could prejudice or render voidable
any such insurance. The insurance obligations hereunder may be met by a program
of self-insurance.


 


14.2         Amount
of Insurance. The parties agree that each will maintain during the
performance of this Agreement the following insurance in amounts no less than
that specified for each type:


 


(a)           General
liability insurance with combined limits of one million dollars ($1,000,000)
per occurrence and one million dollars ($1,000,000) per accident for bodily
injury, including death and property damage;


 


(b)           Worker’s
Compensation and disability insurance in the amount required by the law of the
State in which the Reliant employees are located and employers liability
insurance with limits of one million dollars ($1,000,000) per occurrence;


 


(c)           Auto
liability insurance with combined limits of 
one million dollars ($1,000,000) per occurrence and one million dollars
($1,000,000) per accident for bodily injury, including death and property
damage; and


 


(d)           Excess
liability insurance with combined limits of five million dollars ($5,000,000)
per occurrence and five million dollars ($5,000,000) per accident for bodily injury,
including death and property damage.


 


14.3         Evidence
of Insurance. Each party will provide to the other party reasonable
evidence of its insurance and thirty (30) days prior written notice of any
cancellation of its coverage or reduction in coverage from the minimum
requirements stated herein.


 


ARTICLE XV



MISCELLANEOUS


 


15.1         Headings.
The titles, headings or captions and paragraphs in this Agreement are for
convenience only and do not define, limit, extend, explain or describe the
scope or extent of this Agreement or any of its terms or conditions and
therefore shall not be considered in the interpretation, construction or
application of this Agreement.


 


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15.2         Invalid
Provisions. Whenever possible, each provision or condition of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision or condition of this Agreement
should be prohibited or invalid under applicable law, such provision or condition
shall be considered separate and severable from this Agreement to the extent of
such prohibition or invalidity without invalidating the remaining provisions
and conditions of this Agreement, so long as the remaining Agreement reflects
the economic intentions of the parties as evidenced by this Agreement as a
whole.


 


15.3         Entire
Agreement. Subject to the last sentence of this Article 15.3, this
Agreement (including all schedules and exhibits attached hereto, which are
incorporated herein by this reference) sets forth the entire agreement between
the parties hereto pertaining to the subject matter hereof and supersedes the
Original Promotion Agreement and all negotiations, preliminary agreements,
memoranda or letters of proposal or intent, discussions and understandings of
the parties hereto in connection with the subject matter hereof. Subject to the
last sentence of this Article 15.3, all discussions between the parties have
been merged into this Agreement and neither party shall be bound by any definition,
condition, understanding, representation, warranty, covenant or provision other
than as expressly stated in or contemplated by this Agreement or as
subsequently shall be set forth in writing and executed by a duly authorized
representative of the party to be bound thereby. Notwithstanding anything in
this Agreement, (i) all of the terms and provisions of the Original Promotion
Agreement shall continue to apply with respect to any period prior to the New
Effective Date and (ii) nothing herein shall relieve either party for failure
to comply with the Original Promotion Agreement prior to the New Effective
Date.


 


15.4         Amendments.
No amendment, change or modification of any of the terms, provisions or
conditions of this Agreement shall be effective unless made in writing and
signed on behalf of the parties hereto by their duly authorized
representatives.


 


15.5         Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original document, but all such separate counterparts shall
constitute only one and the same instrument.


 


15.6         Waiver.
No waiver of any term, provision, or condition of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such or other term,
provision, or condition of this Agreement.


 


15.7         Force
Majeure. Neither party shall be liable hereunder to the other party nor
shall be in breach for failure to perform its obligations caused by circumstances
beyond the control of either party, including, but not limited to, acts of God;
fires; earthquakes; floods; riots; wars; civil disturbances; sabotage;
accidents; labor disputes; shortages; government actions (including, but not
limited to, priorities, requisitions, allocations and price adjustment
restrictions). In the case of any such event, the affected party shall promptly
notify the other party, and shall keep the other party informed of the efforts
to resume performance. After sixty (60) days of such inability to perform, the
parties agree to meet 


 


41





















 


and in good faith
discuss how to proceed. In the event that the affected party is prevented from
performing its obligations pursuant to this Article 15.7 for a period of
six (6) months, the other party shall have the right to terminate this
Agreement.


 


15.8         Successors
and Assigns. Subject to Article 15.9, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns permitted under this Agreement.


 


15.9         Assignment.
Except as expressly provided below, neither party may assign this Agreement or
delegate the performance of its obligations hereunder without the express prior
written consent of the other party, except to an Affiliate of the assigning
party, provided, however, that the assignor shall remain liable, together with
the assignee, for the fulfillment of any and all obligations assigned. Any
attempted assignment in violation of this provision shall be null and void. For
the purposes of this Agreement, none of the following transactions (each an “Approved Transaction”) shall constitute an
assignment or a delegation, but shall require prior written notice to
Novartis:  (a) issuance by Reliant
of securities in connection with any financing transaction or public offering,
(b) Reliant consummating a Change of Control transaction and/or
(c) assignment, transfer or delegation of this Agreement or Reliant’s
obligations hereunder to one or more of the following persons or entities:  (A) PharmBay Investors, LLC,
(B) Bay City Capital Fund II, L.P. or (C) any of the lineal
descendants of Nicholas J. Pritzker, deceased, trusts primarily for the benefit
of such lineal descendants, entities controlled by such lineal descendants
and/or trusts for their benefit, in each case described in clauses (a),
(b) and (c) so long as any such party agrees to be bound by all the terms and
conditions of this Agreement and Reliant also remains responsible to Novartis
for such party’s performance hereunder. During Agreement Year 2005, nothing
herein shall preclude Reliant from entering into agreements with third parties
to co-promote or assist Reliant in the marketing or promotion of the Product,
including, without limitation, engaging a contract sales organization; provided
that the foregoing shall not relieve Reliant of any of its obligations
hereunder.


 


15.10      Survival.
The provisions of Articles 3.2, 3.3, 3.4, 3.6, 4.10, 4.11, 4.12, 5.11, VI, VII,
IX, X, XI, XII, XIII, XIV and XV shall survive, and remain in effect, after
termination or expiration of this Agreement.


 


15.11       Construction. This Agreement has been
prepared jointly and shall not be strictly construed against either party.


 


15.12       Governing Law. This Agreement shall be
interpreted under and governed by the laws of the State of New Jersey, without
giving effect to the conflicts of laws provisions thereof.


 


15.13       Relationship Between Parties. In the
performances of the Services hereunder, Reliant shall be deemed to be and shall
be an independent contractor and, as such, Reliant employees shall not be
entitled to any benefits applicable to employees of Novartis. No provision of
this Agreement shall be deemed to create or imply any contract of employment
between Novartis and any employee of Reliant. None of the provisions of this
Agreement are intended (i) to be for the benefit of any creditor or other
person 


 


42





















 


(including any
employee of Reliant) to whom any debts, liabilities or obligations are owed by
any party hereto, or (ii) to create any debt, liability or obligation in
favor of any creditor or other person (including any employee of Reliant),
except the parties hereto. No such creditor or other person shall obtain any
benefit from the provisions of this Agreement or shall, by reason of any such
provisions, make any claims in respect of any debt, liability or obligation
against any of the parties hereto or the Affiliates of either of them. Nothing
contained in this Agreement shall be deemed to create any association,
partnership, joint venture, or other relationship of principal and agent or
master and servant between the parties to this Agreement or Affiliates thereof,
or to provide either party with the right, power or authority, whether express
or implied, to create any such duty or obligation on behalf of the other party.


 


15.14       Compliance with Laws. Reliant and
Novartis agree to undertake all their respective obligations under this
Agreement in material conformance with all applicable local, state and federal
laws and regulations, as amended, including the Food Drug and Cosmetics Act,
Section 1128B(b) of the Social Security Act, the Prescription Drug
Marketing Act and similar state laws. By entering into this Agreement, it is
not the intent of the parties to enter into any financial relationship or
arrangement prohibited under state or federal fraud or abuse regulations,
including but not limited to Sec. 1128B(b) of the Social Security Act, and
any regulations promulgated thereunder, nor do the parties hereto have any
belief that the relationship and compensation arrangement provided in this
Agreement is prohibited. Neither party shall assert against the other that the
compensation arrangement provided in this Agreement is grounds for voiding the
Agreement or rendering the Agreement unenforceable.


 


15.15       Dispute Resolution. Subject to
Articles 3.5(d) and 6.6(a), the parties will use their commercially
reasonable efforts to resolve any disputes arising from this Agreement by good
faith negotiation and mutual discussion for a period of thirty (30) days. Thereafter,
each party shall be entitled to seek any remedy with respect to such dispute,
whether pursuant to this Agreement, at law, equity or otherwise. During the
pendency of any bona fide dispute, the parties shall continue to perform their
respective obligations under this Agreement until such time as (i) the
matter in dispute is finally resolved or (ii) this Agreement is terminated
in accordance with its terms.


 


[Remainder of Page Intentionally Left Blank]


 


43

















 


IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed in duplicate on the day and year first above written.


 


	
  RELIANT PHARMACEUTICALS, INC.

  	
  NOVARTIS PHARMACEUTICALS

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


44














 


Exhibit 1:  Compensation to Reliant for Agreement Year
2005


 


	
  AGREEMENT YEAR

  	
   

  	
  Annual Net Sales Baseline

  ($ MILLIONS)

  	
   

  	
  Annual Net Sales Forecast

  ($ MILLIONS)

  	
   

  	
  Compensation to Reliant of Actual

  NET SALES ABOVE ANNUAL NET SALES

  BASELINE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  



 






[***]:  Certain
information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has
been requested with respect to the omitted portions.


 


1

















 


Exhibit 2:  Seasonalization of Baseline 


 


	
   

  	
   

  	
  Actual TRXs

  	
   

  	
  Actual Net Sales

  	
   

  
	
  Month

  	
   

  	
  2004
  (000’s)

  	
   

  	
  % of
  Total

  	
   

  	
  2003 +
  2004 (000’s)

  	
   

  	
  % of
  Total

  	
   

  
	
  JAN

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
   [***]

  	
   

  	
  [***]

  	
  %

  
	
  FEB

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
   [***]

  	
   

  	
  [***]

  	
  %

  
	
  MAR

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  APR

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  MAY

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  JUN

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  JUL

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  AUG

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  SEP

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  OCT

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  NOV

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
  DEC

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
  %

  



 


Annual Net Sales Baseline $ :


 


	
   

  	
   

  	
  2005

  	
   

  
	
   

  	
   

  	
  $

  	
  [***]

  	
   

  
					



 


	
  Month

  	
   

  	
   

  	
   

  
	
  JAN

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  FEB

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  MAR

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  APR

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  MAY

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  JUN

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  JUL

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  AUG

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  SEP

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  OCT

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  NOV

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  DEC

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  Total

  	
   

  	
  $

  	
  [***]

  	
   

  



 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


2

















 


Exhibit 3:  Sample Costs


 


Cost per unit of Product delivered to Reliant in 2005:


 




	
  Unit

  	
   

  	
  Cost per Unit

  	
   

  
	
  [***]

  	
   

  	
  $[***]

  	
   

  
	
  [***]

  	
   

  	
  $[***]

  	
   

  






 


Cost per unit of Product
delivered to Reliant in 2005 and in each subsequent Agreement Year will be [***]


 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


1

















 


Schedule
1.40


 


Patents


 


	
  Patent No.

  	
   

  	
  Inventor

  	
   

  	
  Assignee

  	
   

  	
  Date Filed

  	
   

  
	
  4,571,428

  	
   

  	
  Prasad K.
  Kapa

  	
   

  	
  Novartis
  Pharmaceuticals Corp.

  	
   

  	
  July 8, 1983

  	
   

  
	
  4,739,073

  	
   

  	
  Faizulla G.
  Kathawala

  	
   

  	
  Novartis
  Pharmaceuticals Corp.

  	
   

  	
  March 4,
  1985

  	
   

  
	
  5,118,853

  	
   

  	
  George T.
  Lee and Oljan Repic

  	
   

  	
  Novartis AG

  	
   

  	
  February 26,
  1991

  	
   

  
	
  5,189,164

  	
   

  	
  Prasad K.
  Kapa and Kau-Ming Chen

  	
   

  	
  Novartis AG

  	
   

  	
  February 20,
  1990

  	
   

  
	
  5,290,946

  	
   

  	
  George T.
  Lee, Prasad K. Kapa and Oljan Repic

  	
   

  	
  Novartis AG

  	
   

  	
  November 23,
  1992

  	
   

  
	
  5,354,772

  	
   

  	
  Faizulla G.
  Kathawala

  	
   

  	
  Novartis
  Pharmaceuticals Corp.

  	
   

  	
  November 24,
  1993

  	
   

  
	
  5,356,896

  	
   

  	
  Mohan B.
  Kabadi and Richard V. Vivilecchia

  	
   

  	
  Novartis AG

  	
   

  	
  December 22,
  1992

  	
   

  



 


1

















 


Schedule
1.73


 


Trademarks


 


	
  Word Mark

  	
   

  	
  Registrant

  	
   

  	
  Registration No.

  	
   

  	
  Filing Date

  	
   

  
	
  LESCOL

  	
   

  	
  Novartis AG

  	
   

  	
  1639501

  	
   

  	
  June 8, 1990

  	
   

  
	
  LESCOL (Stylized)

  	
   

  	
  Novartis AG

  	
   

  	
  2171358

  	
   

  	
  June 26,
  1997

  	
   

  



 


1

















 


Schedule 1.76


 


VA Contract


 


 


DEPARTMENT OF VETERANS AFFAIRS


Office of Acquisition and Material Management


National Acquisition Center


P.O. Box 76


Hines IL 60141


 


July 28, 2003


 


Serafina Oxner, Director


Novartis Pharmaceuticals Corporation


One Health Plaza


East Hanover, NJ  07936


 


Dear Ms. Oxner:


 


Your firm’s offer, dated June 30, 2003, in response to Solicitation No.
RFP-797-NC-03-0022, for Fluvastatin Capsules, and Final Proposal Revision
submission of July 16, 2003, are accepted. Contract number V797P-9110, has been
assigned. This contract has a total yearly estimated value of $[***], for the
base contract performance period of 8/7/03 – 8/6/04, and the contract includes
four one-year options. Below is a list of the bottle sizes for all strengths
and bottle prices that will be posted to the PPV and the field:


 


 


	
  20 mg, Caps, 100s

  	
   

  	
  00078-0176-05

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  20 mg, Caps, 30s

  	
   

  	
  00078-0176-15

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  40 mg, Caps, 100s

  	
   

  	
  00078-0234-05

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  40 mg, Caps, 30s

  	
   

  	
  00078-0234-15

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  80 mg, Caps, 100s

  	
   

  	
  00078-0354-05

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  80 mg, Caps, 30s

  	
   

  	
  00078-0354-15

  	
   

  	
  $

  	
  [***]

  	
   

  



 


 


These prices awarded in this National Contract apply to purchases made
by all facilities purchasing through the VA PPV Program:


 


a)             All
Department of Veterans Affairs (DVA) facilities


b)            All
Indian Health Service (IHS) Regions


c)             All
Bureau of Prisons (BOP) facilities


d)            Department
of Health & Human Service Supply Service Center at Perry Point (HHS)


e)             All
Option 2 State Veteran Homes (see paragraph 2.2 State Veteran Homes).


 






[***]:  Certain information on
this page has been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


1

















 


Upon mutual agreement between your company and the Government, other
Government entities (OGA), such as Immigration and Naturalization Services
(INS), may be added to the contract by contract modification. A list of the
facilities currently eligible for contract pricing can be accessed at the
following address http://www.va.gov/pa&mm/nac/pharm/pharmpv.htm.


 


As with your FSS contract, quarterly sales reports (form available
electronically), need to be submitted for the items purchased against this
national contract, 60 days after completion of the applicable quarter, however,
no IFF is collected on National Contract sales. The Government’s fiscal year is
October 1st through September 30th, therefore, your first
report will be for sales of August (4th Quarter of 2003), and is due no later
than October 31, 2003.


 


Please do not hesitate to call me if you have any questions regarding
this award.


 


Sincerely,


 


 


Pharmaceutical Team


National Contract Service (049A1N2PH)


 


2

















 


SOLICITATION/CONTRACT ORDER FOR COMMERCIAL
ITEMS


 


2.             Contract
No.: V797P-9110


 


3.             Award
Effective Date:


 


4.             Order
Number:


 


5.             Solicitation
Number:  RFP-797-NC-03-0022


 


a.             Solicitation
Issue Date:  6/2/03


 


7.             For Solicitation
Information Call:                  Name:  Deborah Koval


 


8.             Offer
Due Date Local Time:  7/2/03  4:00 PM


 


9.             Issued By:                                    Code:  797



VA National Acquisition Center, PO Box 76, Hines, IL  60141



Handcarried bids may be delivered to the front

desk of the location indicated in Block 16


 


10.           This Acquisition Is:                                                                                       SIC:  325412



Size Standard:  [***]


 


11.           Delivery
for FOB Destination Unless Block is Marked: 
See Schedule


 


12.           Discount
Terms:  None


 


13.           Deliver
to:                                         DVA
Pharmaceutical Prime Vender (See Attachment “A”)


 


16.           Administered By:                                                     VA
National Acquisition Center


National Contract Service (049AIN2PH)


1st Avenue, 1 Block North of Cermak Rd., Bldg 37


Hines, IL  60141


 


17A.        Contractor  Offeror:                                        DUNS
# 002147023


Novartis Pharmaceuticals Corporation


One Health Plaza


East Hanover, NJ  07936


 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


3

















 


18A.        Payment
Will Be Made By:                Pharmaceutical
Prime Vender


(See PPV Address – Attachment “A”)


 


	
  19.

  Item 

  No.

  	
   

  	
  20.

  Schedule of Supplies/Service

  	
   

  	
  21.

  Quantity

  	
   

  	
  22.

  Unit

  	
   

  	
  23.

  Unit Price

  	
   

  	
  24.

  Amount

  	
   

  
	
  1.

  	
   

  	
  Fluvastatin

  	
   

  	
  Weighted Avg.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1a.

  	
   

  	
  20 mg. Cap

  	
   

  	
  [***]

  	
  %

  	
  Tab. 100’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  30’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Package Sizes 100, 30

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NDC#s        00078-0176-05

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  00078-0176-15

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1b

  	
   

  	
  40 mg. Cap

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Package Sizes 100, 30

  	
   

  	
  [***]

  	
  %

  	
  Tab. 100’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  NDC#s        00078-0234-05

  	
   

  	
   

  	
   

  	
  30’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  00078-0234-15

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1c

  	
   

  	
  80 mg. XLTab.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Package Sizes: 100, 30

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NDC#         00078-0354-05

  	
   

  	
  [***]

  	
  %

  	
  Tab. 100’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  00078-0354-15

  	
   

  	
   

  	
   

  	
  30’s

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  



 


28.           Contractor
Is Required To Sign This Document and Return                        1              Copies


 


29.           Award
of Contract:   Reference Original Officer
Dated    6/30/03   and FPR dated 7/16/03


... is accepted as to items    1a,
1b, & 1c


 


 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


4

















 


Summary of Award


 


Page 1(a)


ADDENDA TO CONTRACT SF-1449


 


Company Name:  Novartis
Pharmaceuticals Corporation


Contract Number:  V797P-9110


 


The following are incorporated into and made a part of this Award:


 


1.             Standard
Form 1449 and Summary of Award


 


2.             Novartis’
Offer dated 6/30/03.


 


3.             Final
Proposal Revision dated 7/16/03


 


4.             Part
I – Continuation of Standard Form 1449


 


5.             Part
II – All Contract Terms and Conditions of Solicitation RFP-797-NC-03-0022,
whether in full or by reference


 


6.             Performance
Period of this contract shall be for one year, August 7, 2003, through August
6, 2004, plus 4 one-year option years.


 


7.             Novartis’
Company-wide Subcontracting Plan for the period of 10/1/02 – 9/30/03.


 


Contract Administrator(s):


 


Paul Hiley, Manager, Government Contracting


Novartis Pharmaceuticals Corporation


One Health Plaza


East Hanover, NJ  07936


 


5

















 


Schedule 4.10(b)(i)


 


Form of Reliant Status Report


 


	
  Summary Information

  Schedule 4.10(b)(i)

  	
   

  
	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  PSME Spend

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advertising and Promotion

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  # Sales Representative

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  # of Reps in Field

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Avg. Days in Field/Rep

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % Rep Turnover

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total # Territory

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Number Vacant

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  # of Days Vacant

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Territory 1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Territory 2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Territory 3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  etc...

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


1

















 


Lescol Sample Information Month XX


 


Lescol Actual Number of Samples


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Lescol Samples Planned


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


2

















Lescol Sample Information Month xx
(continued)


 


Lescol Sample % Achieved


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  	
  with P1 call

  	
   

  	
  with P2 call

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Samples

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3

















 


Lescol Physicians Reach


 


Schedule 4.10(b)(i)  (continued)


 


Lescol P1 Physicians Contacted


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  # P1 Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  %
  Achieved

  	
   

  	
  # P1
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  %
  Achieved

  	
   

  	
  # P1
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  %
  Achieved

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Number
  Contacted

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % Contacted
  Targets

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Lescol P2 Physicians Contacted


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  # P2
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  % Achieved

  	
   

  	
  # P2
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  % Achieved

  	
   

  	
  # P2
  Targets

  	
   

  	
  #
  Contacted

  	
   

  	
  % Achieved

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Number
  Contacted

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % Contacted
  Targets

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


4

















 


Lescol Frequency of Calls


 


Schedule 4.10(b)(i)  (continued)


 


Lescol Actual Number of Calls


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Calls

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Lescol Call Planned


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Calls

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


5

















Lescol Frequency of Calls (continued)


 


Lescol Plan Achieved


 


	
   

  	
   

  	
  Month

  	
   

  	
  QTD

  	
   

  	
  YTD

  	
   

  
	
  Decile

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  	
  P1

  	
   

  	
  P2

  	
   

  	
  P1E

  	
   

  
	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 (Non-Writer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Calls

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


6

















 


Schedule 4.10(b)(ii)


 


Form of Reliant Physician Level Data
Report


 


Physician Level Xponent Data with Call and Sample Information


Schedule 4.10(b)(ii)


 


	
  IMS # or ME Num

  	
   

  	
  Product
  {i} TRx by Month

  	
   

  	
  Product
  {i} NRx Month

  	
   

  	
  Lescol
  Calls P1 by Month

  	
   

  	
  Lescol
  Calls P2 by Month

  	
   

  	
  Lescol
  Samples by Month

  	
   

  
	
  Unique Physician identifier

  	
   

  	
  TRx for Competitive products (ex. Lipitor etc.) and
  Lescol

  	
   

  	
  NRx for Competitive products (ex. Lipitor etc.) and
  Lescol

  	
   

  	
  Lescol P1 Calls made by Sales Rep by month

  	
   

  	
  Lescol P2 Calls made by Sales Rep by month

  	
   

  	
  Lescol Samples by month

  	
   

  



 


1

















 


Schedule
4.14


 


Sample
Accountability


 


Practitioner Validation


If Novartis directs the
distribution to a select group or target of practitioners, Novartis will
pre-validate the licensing status of those practitioners.  If Novartis simply selects a specific
specialty or classification, then Reliant must validate practitioners
consistent with Novartis criteria.


Product Shipments


Novartis will maintain
records of all BULK sample shipments and quantities sent to and received by
Reliant. It will be the responsibility of Reliant to ship samples to its representatives.
Novartis will NOT ship product directly to Reliant Sales Representatives.  Reliant will maintain sample shipment records
of each representative by account and territory number for the current year plus
3 previous years.  The information maintained
must include the following:


•               Product Code, Name & Strength


•               Lot/Batch # and Quantity Shipped


•               Shipment Date & Carrier


•               Proof of Delivery


Distribution to
Practitioners


Reliant will maintain
records of physician validation and sample fulfillment receipts.  Reliant will notify Novartis of any loss,
theft, violations, investigations of violations, convictions, etc. specific to
the Novartis Product.


Annual Physical
Inventories


Annually Reliant will
provide Novartis results of the annual physical inventory and reconciliation
relative to Novartis’ Product for Reliant Sales Representative.


Closing Inventories


At the completion of the
Agreement and after the generation of close-out reports, Reliant will provide
to Novartis the results of all close-out inventory with reconciliation’s and
discrepancies noted.  The status reports
will be generated and sorted by Reliant’s organizational levels, e.g.,
national, regional, districts and down to the individual Sales Representative
level.  Outstanding discrepancies will
require further investigation.


All outstanding samples
will be returned to Novartis.


Storage


Reliant’s procedures will
be consistent with the federal regulations that ensure proper storage of
Novartis Product.  Storage location
records will be judiciously maintained and Reliant will make them available to
Novartis immediately upon request.


Product Recalls and
Investigations


Novartis will be
responsible to implement any product recall and direct all agency
investigations involving Novartis products.


 


1

















 


Significant Loss or Theft


Novartis will be
immediately notified of any significant losses and all thefts experienced by
Reliant including FDA correspondence and police reports relative to the
Novartis sample Product.  Novartis will
define significant loss threshold.


Returns/Disposal


All returns of Product
samples will be returned to Novartis distribution facilities.  Reliant may not dispose of the Novartis
Product samples in any other manner unless previously agreed to by Novartis.


Documentation Storage


Reliant must maintain all
signed receipts and related documentation required by federal regulations for
three years plus current year regardless of contract status (active, expired or
previously terminated).  Such documents
include Practitioner Signature Forms, (documenting the distribution of Product
to customers), Rep Inventories, Transfers, Returns, Shipments and other
associated (e.g. theft/loss of product) forms. 
These forms and other reports (Reconciliation) will be made available to
Novartis upon request regardless of the contract status.


Document  Retrieval


Reliant agrees to
retrieve all Sample documents within 48 hours of Novartis request.  This survives the term of the contract by
three years plus the current year.


Audits


Novartis retains the right to
audit the Sample Accountability practices, procedures, and documentation of
Reliant at any time during the term of the Agreement.


 


 


2

















 


Schedule
5.1


 


Novartis’
Standard Sales Terms and Conditions


 


	
  WHOLESALER
  Cost prices

  	
   

  	
  a.) To sell
  to WHOLESALER and those of its divisions, branches and/or subsidiaries,
  [***].

  
	
   

  	
   

  	
   

  
	
  2% 30, net
  31 days, d.o.i.

  	
   

  	
  b.) To allow
  to WHOLESALER a discount of 2% of the invoice, 30 days from the date of
  invoice; Net 31 days, for all invoices in any given month. Invoices payable
  on a Saturday or Sunday for discount purposes become payable on the following
  Monday to be eligible for the 2% cash discount. Invoices payable for discount
  purposes on a Friday or Monday which is a national legal holiday shall become
  payable on the next regular working day to be eligible for the 2% cash
  discount.

  
	
   

  	
   

  	
   

  
	
  Recall
  Policy

  	
   

  	
  c.) Credit
  will be issued to the WHOLESALER at the [***].

  
	
   

  	
   

  	
   

  
	
  Freight
  prepaid

  	
   

  	
  d.) [***]:

  
	
   

  	
   

  	
   

  
	
  f.o.b.
  origin bases

  	
   

  	
  e.) To ship
  all merchandise f.o.b. origin. East Hanover, NJ, or whichever warehouse is
  the shipping origin selected by NOVARTIS. In all cases, title to merchandise
  shipped by NOVARTIS shall pass to WHOLESALER upon delivery by NOVARTIS to
  common carrier and delivery by NOVARTIS to the carrier shall constitute full
  and complete performance by NOVARTIS of its obligations to ship said goods to
  WHOLESALER.

  
	
   

  	
   

  	
   

  
	
  Drop
  shipments

  	
   

  	
  f.) [***].

  
	
   

  	
   

  	
   

  
	
  Extended
  terms, bonus goods, etc.

  	
   

  	
  g.) To
  notify WHOLESALER, in writing, from its East Hanover, NJ headquarters of any
  offer involving any extended or special terms, prices or discounts, bonus or
  sample merchandise, etc.

  
	
   

  	
   

  	
   

  
	
  Minimum
  quantities

  	
   

  	
  h.) To
  supply most products packaged as [***].

  
	
   

  	
   

  	
   

  
	
  Order
  filling and shipping

  	
   

  	
  i.) [***].

  
	
   

  	
   

  	
   

  
	
  Catastrophic
  Policy

  	
   

  	
  j.) May
  provide some protection for the uninsurable loss of a WHOLESALER'S inventory
  of NOVARTIS products destroyed in the event of a flood, cyclone, hurricane,
  or riot. Insurable losses, such as those due to fire, vandalism, etc. are not
  provided protection under this policy. Each claim will be handled on an
  individual basis.

  
	
   

  	
   

  	
   

  



 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


1

















 


	
  Warranty

  	
   

  	
  k.) [***].

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
           EXCEPT FOR THE ABOVE, NOVARTIS
  DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH REGARD TO
  THE NOVARTIS PRODUCTS PURCHASED BY WHOLESALER OR OTHER ENTITY PURSUANT TO THE
  AGREEMENT, INCLUDING THE WARRANTY OR MERCHANTABILITY AND THE WARRANTY OF
  FITNESS FOR A PARTICULAR PURPOSE. UNDER NO CIRCUMSTANCES SHALL NOVARTIS BE
  LIABLE TO BUYER FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES.

  
	
   

  	
   

  	
   

  



 


 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


2

















 


Schedule
5.7(a)

Standard Sales Reporting Format


 




	
  MONTHLY NET SALES

  	
   

  	
  200X

  Actual

  January

  	
   

  	
  200X

  Actual

  February

  	
   

  	
  200X

  Actual

  March

  	
   

  	
  200X

  Actual

  April

  	
   

  	
  200X

  Actual

  May

  	
   

  	
  200X

  Actual

  June

  	
   

  	
  200X

  Actual

  July

  	
   

  	
  200X

  Actual

  August

  	
   

  	
  200X

  Actual

  September

  	
   

  	
  200X

  Actual

  October

  	
   

  	
  200X

  Actual

  November

  	
   

  	
  200X

  Actual

  December

  	
   

  	
  Total

  Jan Dec

  	
   

  
	
  Lescol Net Sales 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $          0
  

  	
   

  
	
  Lescol XL Net
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $          0

  	
   

  
	
  Total
  Net Sales

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $          0

  	
   

  
	
  Contract Net
  Sales Baseline

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $          0

  	
   

  
	
  Net
  Sales Above Baseline

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $          0

  	
   

  
	
  Compensation Rate

  	
   

  	
  00

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  
	
  Compensation to
  Reliant

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $            0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $             0

  	
   

  	
  $          0

  	
   

  






 


1

















 


Schedules
5.7(b)

Example of Backorder Reporting Format


 


	
  SKU

  	
   

  	
  No. of Units

  	
   

  	
  Net Sales Value of Units

  	
   

  	
  Date of Back Order

  	
   

  	
  Estimated Fill Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


1

















 


Schedules
5.7(c)

Example of Monthly Sales Reporting Format


 


	
  MONTHLY NET SALES

  	
   

  	
  2005 Actual

  January

  	
   

  	
  2005 Actual

  February

  	
   

  	
  2005 Actual

  March

  	
   

  	
  2005 Actual

  April

  	
   

  	
  2005 Actual

  May

  	
   

  	
  2005 Actual

  June

  	
   

  	
  2005 Actual

  July

  	
   

  	
  2005 Actual

  August

  	
   

  
	
  Lescol

  	
   

  	
  Nets Sales

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lescol XL

  	
   

  	
  Net Sales

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Net
  Sales

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  	
  [***]

  	
  %

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *[***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


1

















 


Schedule
5.7(d)

Example of Daily Sales Reporting Format


 


 


Lescol/XL Net Sales - MTD
January 2005


 


	
   

  	
   

  	
  Lescol

  	
   

  	
  Lescol XL

  	
   

  
	
  1/3/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/4/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/5/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/6/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/7/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/8/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/9/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/10/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/11/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/12/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/13/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/14/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/15/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/16/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/17/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/18/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/19/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/20/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/21/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/22/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/23/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/24/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/25/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/26/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/27/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/28/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/29/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/30/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/31/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MTD

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 


	
  PL Profit Center

  	
   

  	
  LESCOL Total

  	
   

  	
  LESCOL XL Total

  	
   

  
	
  Posting date

  	
   

  	
  Balance Units

  	
   

  	
  Balance Units

  	
   

  
	
  1/3/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/4/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/5/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/6/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/7/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/10/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/11/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/12/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/13/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/14/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/17/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/18/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/19/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/20/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/21/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/24/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/25/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/26/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/27/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/28/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  1/31/2005

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Overall Result

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 


 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


1

















 


Schedule
6.2(c)


 


Amount
Owed by Reliant 

with Respect to VA Net Sales


 


	
  Agreement Year

  	
   

  	
  Total Reliant Compensation

  	
   

  	
  Revised Compensation

  with VA 

  adjustment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2003

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  2004

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  2005

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  



 


The above represents the agreed final one time
adjustment for VA Net Sales with respect to calendar years 2003, 2004, and
through February 28, 2005.


 






[***]:  Certain information on this page has been
omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


1

















 


Schedule
6.6(a)


 


Dispute
Resolution Experts


 




McKinsey & Co.


 


Boston Consulting Group (BCG)


 


Bain & Company


 


1

















 


Schedule
8.1(j)


 


Threatened
Claims by or Against Novartis

Relating to the Products


 


[***]


 






[***]:  Certain information on
this page has been omitted and filed separately with the Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


1

















 


Schedule
8.2(g)


 


Threatened
Claims by or Against Reliant

Relating to the Products


 


Reliant
Pharmaceuticals, Inc. v Rx Hope and Anthony Maris  Superior Court of New Jersey, Somerset
County Docket No. SOM-L-1363-04-Action to recover approximately $750,000 from
vendor in connection with Lescol Coupon Program. Matter has been settled,
subject to execution of settlement agreement, for $600,000 to be received prior
to July 15, 2005.  If defendant defaults
on settlement $750,000 judgment to be entered against Rx Hope.


 


2

















 


Schedule
13.2


 


Confidentiality
Provisions


 


In
order to allow you to evaluate a possible negotiated business transaction (a “Transaction”) involving Reliant
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), you have requested certain information concerning
the Company.


 


As a
condition to your being furnished such information, you agree to treat any
information concerning the Company, its affiliates and subsidiaries that has
been or is furnished to you by or on behalf of the Company, at any time or in
any form, together with all notes, interpretations, analyses, compilations,
studies or other documents prepared by you or any of your directors, officers,
employees, agents or advisors (including, without limitation, attorneys,
accountants, consultants, bankers, financial advisors and any representatives
of your advisors) (collectively, “Representatives”)
that contain or otherwise reflect or are based, in whole or in part, on such
information (collectively referred to as the “Evaluation
Material”), in accordance with the provisions of this agreement.
“Evaluation Material” does not include information that (a) was or becomes
generally available to the public other than as a result of a disclosure by you
or your Representatives or (b) was or becomes available to you on a
non-confidential basis from a source other than the Company, or its advisors,
provided that such source was not known by you to be bound by any agreement
with the Company to keep such information confidential or to be otherwise
prohibited from transmitting the information to you by a contractual, legal or
fiduciary obligation.


 


You
hereby agree that the Evaluation Material will be used solely for the purpose
of evaluating a possible Transaction and that such information will be kept
confidential. You and your Representatives shall not disclose any portion of
the Evaluation Material to any person in any manner whatsoever, except to the
extent that disclosure of such information is required by law, regulation,
supervisory authority or other applicable judicial or governmental order. You
may disclose the Evaluation Material to your representatives on a need to know
basis, however, they should be informed of and bound to this agreement, and you
agree to be responsible for any breach hereof on their part. You agree, at your
sole expense, to take all reasonable measures (including but not limited to
court proceedings) to restrain your Representatives from prohibited or
unauthorized disclosure or use of the Evaluation Material.


 


In
addition, without the prior written consent of the Company, you will not, and
will direct your Representatives not to, disclose to any person (i) that
the Evaluation Material has been made available to you or your Representatives,
(ii) that discussions or negotiations are taking place concerning a
possible transaction involving the Company and you, or (iii) any terms,
conditions or other facts with respect to any such possible Transaction,
including the status thereof. Such facts will be deemed to be included in the
Evaluation Material for all purposes of this agreement.


 


In the
event that you are requested or required by law, regulations or applicable
judicial or governmental order to disclose any Evaluation Material, you will
provide the Company with prompt written notice of such request or requirement.
If, failing the entry of a protective order, you are, in the reasonable opinion
of your counsel, legally compelled to disclose any portion of the Evaluation Material,
you may disclose to the entity compelling such 


 


i

















 


disclosure only that portion of the Evaluation
Material that your counsel advises that you are compelled to disclose, provided
that you will exercise reasonable efforts to obtain assurance that confidential
treatment will be accorded to that portion of the Evaluation Material that is
being disclosed and you will cooperate with any action by the Company to obtain
an appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Evaluation Material.


 


All
Evaluation Material disclosed by or on behalf of the Company shall be and shall
remain the property of the Company. As soon as reasonably practicable after being
so requested in writing by the Company, you shall return or destroy all
Evaluation Material, whether in printed or electronic form (and any copies
thereof). Any destruction of Evaluation Material shall be confirmed by you in
writing to the Company.


 


You
understand and acknowledge that any and all information contained in the
Evaluation Material is being provided without any representation or warranty,
express or implied, as to the accuracy or completeness of the Evaluation
Material, on the part of the Company. You agree that none of the Company or any
of its affiliates or representatives shall have any liability to you or any of
your Representatives. It is understood that the scope of any representations
and warranties to be given by the Company will be negotiated along with other
terms and conditions in arriving at a mutually acceptable form of definitive
agreement should discussions progress to such a point and only those
representations and warranties shall have any legal effect.


 


It is
understood and agreed that money damages would not be a sufficient remedy for
any breach of this agreement by you or your Representatives, that any such
breach would result in ongoing and irreparable harm to the Company and that the
Company shall be entitled to specific performance and injunctive or other
equitable relief as a remedy for any such breach and you further agree to waive
any requirement for the security or posting of any bond in connection with any
such remedy. Such remedy shall not be deemed to be the exclusive remedy for
breach of this agreement but shall be in addition to all other remedies
available at law or in equity to the Company. In the event of litigation
relating to this agreement, the prevailing party shall be entitled to be paid
by the other party all reasonable legal fees and other expenses such prevailing
party has incurred in connection with such litigation, including any appeal
therefrom.


 


This
agreement is governed by the laws of the State of [            ]
without regard to conflict of laws principles. You hereby irrevocably and
unconditionally consent to submit to the non-exclusive jurisdiction of the
courts of the State of [        ] and
the United States of America located in the State of New Jersey for any action,
suit or proceeding arising out of or relating to this letter agreement or the
transactions contemplated hereby.


 


This agreement may not be
amended except in writing signed by both parties hereto. No failure or delay by
the Company in exercising any right, power or privilege hereunder or any
partial exercise thereof shall operate as a waiver thereof or preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege hereunder. The invalidity or unenforceability of any provision of
this agreement shall not affect the validity or enforceability of any other
provisions of this agreement, which shall remain in full force and effect. For
purposes of this agreement, the term “person” shall be broadly interpreted to
include the media 


 


ii

















 


and any individual,
corporation, partnership, group or other entity. This agreement may be executed
in counterparts, each of which will be deemed to be an original, but all of
which constitute the same agreement. Please confirm that the foregoing is in
accordance with your understanding of our agreement by signing and returning to
us a copy of this letter. This agreement shall terminate and be of no further
force or effect from and after [     ] from the date
hereof.


 


iii