exv10w2



 




Exhibit 10.2


FIRST AMENDMENT TO SERVICE AGREEMENT




     This
First Amendment (the “Amendment”) is made effective
as of December 30, 2005 (the
“Effective Date”), by and between VENTIV COMMERCIAL SERVICES, LLC, a New Jersey limited liability
company (formerly known as Ventiv Pharma Services, LLC) (“Ventiv”), and CONNETICS CORPORATION, a
Delaware corporation, having an office at 3160 Porter Drive, Palo Alto, California 94304
(“Connetics”). Ventiv and Connetics may each be referred to herein as a “Party” and collectively,
the “Parties”.



W I T N E S S E T H:




     WHEREAS, Ventiv and Connetics are parties to a Service Agreement dated as of March 1, 2005
(the “Agreement”).



     WHEREAS, Ventiv and Connetics desire to supplement and amend the Agreement as set forth
herein.



     NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, it is agreed as follows:



     1. Except as provided in this Amendment, the terms and conditions set forth in the Agreement
shall remain unaffected by execution of this Amendment. To the extent any provisions or terms set
forth in this Amendment conflict with the terms set forth in the Agreement, the terms set forth in
this Amendment shall govern and control. Terms not otherwise defined herein, shall have the
meanings set forth in the Agreement.



     2. From
January 1, 2006 to and including [**] (the “Revised Fee Period”), the Parties
agree that all compensation and cost amounts set forth in Section I (Daily Rate), Section II
(Pass-Through Costs) and Section III (Incentive Fee) of Exhibit A of the Agreement shall not apply
and the only compensation and cost amounts to be paid by Connetics during the Revised Fee Period in
connection with the performance of Services by Ventiv shall be:



**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.





 









 





          (a)
Monthly Fee. A fixed monthly fee in the amount of [**], payable by Connetics to Ventiv upon receipt of an invoice from Ventiv.




          (b) Shared Revenue.




               (i) [**] Connetics shall determine and provide a detailed calculation of Net
Product Revenues for the period January 1, 2006 through
[**] no later than fifty (50)
days after [**]. Connetics shall remit any amounts owed to Ventiv hereunder within ten
(10) days of such determination.



        
       (ii) [**] Connetics shall determine and
provide a detailed calculation of Net Product Revenues for the period
[**] no later than fifty (50) days after
[**]. Connetics shall remit any amounts owed
to Ventiv hereunder within ten (10) days of such determination.



          Connetics will provide Ventiv with doctor/NDC Health data within fifty (50) days of the end of
each month of the Revised Fee Period. For the purpose of calculating Net Product Revenues pursuant
to this Amendment, the total number of doctors listed in the Call
Audience may not exceed [**]; provided, however, the Call Audience may include: (i) any doctors
(targets) included in the Call Audience for the period March 1, 2005 through December 31, 2005,
and/or (ii) any doctors (targets) included in the Revised Call Audience (as defined below) listed
on Exhibit A of this Amendment, and/or (iii) any doctors (targets) added to the Revised Call
Audience pursuant to this Amendment. The Parties agree that



**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.


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in no event will the net sales price used as the multiplier of
 TRxs during the Revised Fee
Period be
[**]. Such minimum net
sale prices shall be valid only during the Revised Fee Period. If the Parties elect to continue
their relationship pursuant to Section 8(c)(ii) of this Amendment, new minimum net sale prices
shall be agreed to by the Parties for such continued period.




          (c) Promotional Budget. Notwithstanding either the first sentence of this Section 2
or Section 3 of the Agreement to the contrary, Connetics shall directly support the Product Team
during the Revised Fee Period by providing, including the cost of shipment, both physician
validation and acquisition of NDC data, and Product Literature, Product samples and promotional
material (collectively, the “Support Materials”). The fully-burdened value of Support Materials
shall be determined by Connetics in its sole discretion. Connetics agrees to provide, and Ventiv
agrees to accept, [**] (both quarterly amounts are each individually referred to as a “Quarterly Promotional
Budget”). During the Revised Fee Period, the Parties may negotiate in good faith and mutually
agree in writing to a reduced Quarterly Promotional Budget (such reduced amount is referred to as
the “Reduced Quarterly Promotional Budget”). If the fully-burdened value of Support Materials
actually provided by Connetics during either calendar quarter of the
Revised Fee Period [**]. Ventiv’s apportioned amount for
either quarter is referred to as the “Ventiv Support Reconciliation.” Within thirty (30) days of
the end of each calendar quarter during the Revised Fee Period,



**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.



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Connetics shall submit a statement to Ventiv of the fully-burdened value of Support Materials
provided during the applicable quarter. Connetics shall remit the Ventiv Support Reconciliation
(if any) to Ventiv within ten (10) days of the issuance of such quarterly statement.




          (d) Termination Expenses. During the Revised Fee Period, Section IV (Termination
Expenses) of Exhibit A of the Agreement shall only apply as follows:




               (i) If the Agreement is terminated pursuant to Section 8(a) of this Amendment, Ventiv shall
provide to Connetics a detailed calculation (calculated as of the date of termination) of all
Termination Expenses as soon as Ventiv is able to complete such detailed calculation. Connetics
shall pay up to but no more than [**] of such Termination Expenses
within ten (10) days of receipt by Connetics of such calculation.



               (ii) If the Agreement is terminated pursuant to Section 8(b), 8(c) or 8(d) of this Amendment,
Ventiv shall provide to Connetics a detailed calculation (calculated as of the date of termination)
of all Termination Expenses as soon as Ventiv is able to complete such detailed calculation.
Connetics shall pay up to but no more than
[**] of such
Termination Expenses within ten (10) days of receipt by Connetics of such calculation.



          (e) Other Costs and Expenses. During the Revised Fee Period, Ventiv shall be
responsible for all other costs and expenses incurred by Ventiv not specifically set forth in this
Amendment.




     3. Ventiv shall keep full and accurate sales call activity reports (and all other records
required to be kept or provided by Ventiv in connection with the Agreement) pursuant to Section
1(c) of the Agreement (“Reports and Records”). Both Parties shall maintain all Reports and Records
and any other documentation used to calculate Net Product Revenues in sufficient detail to permit
the accurate determination of Net Product Revenues and to verify the Ventiv Support




**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.



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Reconciliation (if any). Each Party or its designated representative, at its sole cost and
expense, shall have the right at any time during the Revised Fee Period, and for sixty (60) days
thereafter, to inspect and verify all Reports and Records or other calculations as it pertains to
this Amendment.



     4. Notwithstanding anything in the Agreement to the contrary, the Parties have agreed to a
revised Call Audience as of the Effective Date (“Revised Call Audience”). The Revised Call
Audience is attached hereto as Exhibit A. At no time during the Revised Fee Period shall
the total number of doctors listed in the Revised Call Audience
exceed [**] Ventiv may change up to but not more than ten percent (10%) of the total
number of doctors listed in the Revised Call Audience during each calendar quarter of the Revised
Fee Period without the prior consent of Connetics; provided, however, Ventiv shall use best efforts
to add a doctor to the Revised Call Audience for each doctor so deleted.



     5. [**]



     6. During the Revised Fee Period, Connetics shall not either:



          (a) Conduct either a Selective Hiring or a Block Conversion (as set forth in Section 8 of the
Agreement); or




          (b) Terminate the Agreement pursuant to Section 11 (d) of the Agreement; provided, however,
Ventiv shall retain the right to terminate the Agreement pursuant to Section



**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.


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11(a) of the Agreement and either Party shall retain the right to terminate the Agreement
pursuant to Sections 11(b) and 11(c) of the Agreement.




     7. Section 11(e) of the Agreement is hereby deleted in its entirety.



     8. Notwithstanding Section 6(b) of this Amendment to the contrary, from and after January 1,
2006, the Agreement may be terminated as follows:



[**]



**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.


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[**]




     9. Except for Termination Expenses set forth in Section 2(d) of this Amendment, Ventiv shall
not be entitled to any additional compensation or remuneration except as set forth herein upon
termination of the Agreement.



     10. This Amendment may be executed simultaneously in multiple counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute one and the same
instrument. Execution and delivery of this Amendment by exchange of facsimile copies bearing the
facsimile signature of a party hereto shall constitute a valid and binding execution and delivery
of this Amendment by such party. Such facsimile copies shall constitute enforceable original
documents.



**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.

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     11. The terms of this Amendment are intended by the Parties to be the final expression of
their agreement with respect to the subject matter hereof and may not be contradicted by evidence
of any prior or contemporaneous agreement. The Parties further intend that this Amendment
constitute the complete and exclusive statement of its terms and shall supersede any prior
agreement with respect to the subject matter hereof.



[Remainder of Page Intentionally Left Blank]




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WHEREFORE, the Parties hereto have caused this Amendment to be executed by their duly authorized
representatives as of the Effective Date.




	 	 	 	 	 
	 	VENTIV COMMERCIAL SERVICES, LLC

 	 
	 	By:  	/s/Terrell G. Herring
 	 
	 	 	Name:  	Terrell G. Herring 	 
	 	 	Title:  	President and Chief Operating Officer 	 
	 
	 	CONNETICS CORPORATION

 	 
	 	By:  	/s/ Greg Vontz
 	 
	 	 	Name:  	Greg Vontz 	 
	 	 	Title:  	President 	 
	 




 









 





Exhibit A




Revised Call Audience




[**]




 




**Portions of this exhibit have been omitted and filed separately with the SEC.
Confidential treatment has been requested with respect to the omitted
portions.