EXHIBIT 10.11
OPTION AGREEMENT
(MKC-442)
Mitsubishi Chemical Corporation
Triangle Pharmaceuticals, Inc.
* Certain confidential portions of this Exhibit were omitted by means of
marking such portions with an asterick (the "▇▇▇▇"). This Exhibit has been
filed separately with the Secretary of the Commission without the ▇▇▇▇
pursuant to the Company's Application Requesting Confidential Treatment under
Rule 406 under the Securities Act.
OPTION AGREEMENT
--------------------------------
This Agreement made as of this 20th day of December, 1995, by and between
MITSUBISHI CHEMICAL CORPORATION, with its principal office at ▇-▇, ▇▇▇▇▇▇▇▇▇▇
▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇ (hereinafter referred to as "MITSUBISHI") and
TRIANGLE PHARMACEUTICALS, INC. with its principal office at ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, U. S. A. (hereinafter referred to as
"TRIANGLE").
WITNESSETH:
WHEREAS, MITSUBISHI has developed a certain compound coded as MKC-442
(hereinafter referred to as "COMPOUND" and defined more specifically
hereinbelow);
WHEREAS, as the result of the preliminary evaluation pursuant to the Secrecy
Agreement dated August 21, 1995, TRIANGLE is desirous of carrying out further
evaluation and development works including the pre-clinical and Phase I and
Phase IIa clinical studies and obtaining an option to decide whether or not
TRIANGLE enters into a license agreement for subsequent development works and
commercialization of PRODUCT (as hereinafter defined); and
WHEREAS, MITSUBISHI is willing to meet with such TRIANGLE's desire under the
terms and conditions herein below set forth.
NOW, THEREFORE, the parties hereto agree as follows.
ARTICLE I. DEFINITIONS
--------------------------
Unless the context hereof clearly indicates otherwise, the following terms used
herein shall have the meanings respectively assigned thereto as set forth below.
1.1 COMPOUND shall mean a compound coded as MKC-442 and its salts and esters.
MKC-442 is chemically identified as follows:
6-Benzyl-1-(ethoxy methyl)-5-isopropyl uracil
1.2 PRODUCT shall mean COMPOUND in any and all dosage form ready for human
therapy, either alone or in combination with any other active ingredient.
1.3 BULK MATERIAL shall mean COMPOUND to be formulated into PRODUCT.
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1.4 TECHNICAL INFORMATION shall mean information on COMPOUND including, but not
limited to, data relating to its physical, chemical, pharmacological,
toxicological and clinical characteristics, product forms and formulations
now or hereafter possessed by MITSUBISHI and made available by MITSUBISHI
to TRIANGLE hereunder which MITSUBISHI considers to be necessary or useful
for TRIANGLE for fulfilling the purpose of this Agreement.
1.5 TERRITORY shall mean all countries of the world except East Asia, being
those countries in the area bounded by, and including, Japan, Korea, China,
Burma, Indonesia, and the Philippines; provided, however, that Hong Kong,
Taiwan and Thailand are included in TERRITORY.
1.6 EFFECTIVE DATE shall mean the date of execution of this Agreement by both
parties.
1.7 OPTION PERIOD shall mean a period of two (2) years from EFFECTIVE DATE or
any extension thereof
1.8 DEVELOPMENT WORK shall mean such pre-clinical studies, Phase I and Phase
IIa studies of PRODUCT as set forth in Appendix A attached hereto and made
a part hereof, which are necessary for TRIANGLE to decide whether to
exercise the option with respect to PRODUCT.
1.9 LICENSE AGREEMENT shall mean a license agreement for further development
and commercialization of PRODUCT in TERRITORY, an outline of which is set
forth in Appendix B attached hereto and made a part hereof.
ARTICLE II. DISCLOSURE OF TECHNICAL INFORMATION
--------------------------------------------------
Within 30 days from the EFFECTIVE DATE, MITSUBISHI shall disclose to
TRIANGLE in English TECHNICAL INFORMATION which is possessed by
MITSUBISHI at the EFFECTIVE DATE and has not been disclosed theretofore to
TRIANGLE. Any additional TECHNICAL INFORMATION developed by
MITSUBISHI subsequent to the EFFECTIVE DATE shall be disclosed in English to
TRIANGLE as soon as reasonably possible.
ARTICLE III. GRANT OF OPTION
------------------------------
3.1 MITSUBISHI grants to TRIANGLE an exclusive option to decide within OPTION
PERIOD whether or not TRIANGLE wishes to enter into LICENSE AGREEMENT.
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3.2 If during OPTION PERIOD TRIANGLE demonstrates in writing to MITSUBISHI's
reasonable satisfaction that, despite TRIANGLE's best efforts, TRIANGLE has
not been able to complete DEVELOPMENT WORK, OPTION PERIOD may be extended
for an additional period or periods by mutual agreement by the parties,
which additional period shall not be less than six (6) months.
ARTICLE IV. DEVELOPMENT WORK
------------------------------
4.1 During the OPTION PERIOD, TRIANGLE shall diligently conduct DEVELOPMENT
WORK in TERRITORY. Before commencement of DEVELOPMENT WORK, a protocol
including timetable of DEVELOPMENT WORK shall be submitted in writing by
TRIANGLE to MITSUBISHI and shall be approved by MITSUBISHI which approval
shall not be unreasonably withheld. TRIANGLE may appoint as a Contract
Research Organization a third party who shall be approved by MITSUBISHI in
advance which approval shall not be unreasonably withheld (hereinafter
referred to as "AUTHORIZED CRO") to perform DEVELOPMENT WORK. Upon request
of MITSUBISHI before its approval, TRIANGLE shall disclose to MITSUBISHI
the contents of a contract to be executed with a potential AUTHORIZED CRO
and shall properly consider such comments as MITSUBISHI may make.
Notwithstanding the foregoing, TRIANGLE shall file by itself IND and CTX
and contact the relevant governmental agencies.
TRIANGLE shall consult with MITSUBISHI in determining the expected efficacy
and safety level in the Phase I and Phase IIa studies as set forth in
Appendix A.
4.2 MITSUBISHI agrees to bear the out-of-pocket costs incurred by TRIANGLE in
engaging AUTHORIZED CRO to perform DEVELOPMENT WORK in accordance with the
approved protocol. MITSUBISHI shall pay to TRIANGLE such costs within
thirty (30) days from presentation by TRIANGLE of each invoice for such
work provided that MITSUBISHI's payment of such costs shall not exceed One
Million Six Hundred Thousand U.S. Dollars ($1,600,000) in total. TRIANGLE
agrees to bear any other costs and expenses incurred by it in connection
with performance of DEVELOPMENT WORK.
4.3 MITSUBISHI shall supply TRIANGLE, without charge, with amounts of BULK
MATERIAL or clinical trial material as reasonably demonstrated by TRIANGLE
to be necessary for DEVELOPMENT WORK. BULK MATERIAL or clinical trial
material supplied by MITSUBISHI shall meet the specifications to be
mutually agreed upon. In the event that a lot of BULK MATERIAL or clinical
trial material supplied by MITSUBISHI does not meet such specifications,
TRIANGLE shall so notify MITSUBISHI within thirty (30) days from the
receipt of such BULK MATERIAL or clinical trial material and return it to
MITSUBISHI
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with documentation of the failure to meet specifications. MITSUBISHI shall
replace such defective BULK MATERIAL or clinical trial material and pay for
all shipping costs for such defective BULK MATERIAL or clinical trial
material.
4.4 TRIANGLE shall give MITSUBISHI written reports on the progress of
DEVELOPMENT WORK for each [ * ] and within reasonable period after the end
of each [ * ] period, TRIANGLE shall disclose to MITSUBISHI all data and
information obtained through DEVELOPMENT WORK during the preceding [ * ]
period. In reviewing the reports by TRIANGLE, MITSUBISHI may comment on the
progress of DEVELOPMENT WORK and TRIANGLE shall properly consider such
comments.
4.5 TRIANGLE shall hold MITSUBISHI harmless from any claim, loss, damages or
liabilities caused by it or incurred in connection with performance of
DEVELOPMENT WORK except for any claim, loss, damages or liabilities
attributable to a defect in BULK MATERIAL or clinical trial material
supplied by MITSUBISHI, attributable to an error in the TECHNICAL
INFORMATION supplied by MITSUBISHI or resulting from the negligence or
willful misconduct of MITSUBISHI or its agents or employees. MITSUBISHI
agrees to give TRIANGLE prompt written notice of any matter for which it
intends to seek indemnification, to allow TRIANGLE to control the defense
and settlement of such matter and to cooperate with TRIANGLE in the
investigation and defense of such matter.
4.6 TRIANGLE agrees that MITSUBISHI shall have the right, without any
compensation to TRIANGLE, to use all data and information obtained by
TRIANGLE through the evaluation and DEVELOPMENT WORK hereunder, whether
patentable or not, for purpose of development, registration and
commercialization of PRODUCT outside TERRITORY together with the right of
sublicense to a third party. It is, however, understood that upon
termination of this Agreement without the execution of LICENSE AGREEMENT,
TRIANGLE agrees to assign all the title and ownership to such data and
information to MITSUBISHI, without charge.
ARTICLE V. EXERCISE OF OPTION
---------------------------------
5.1 Prior to the expiration of OPTION PERIOD, TRIANGLE shall notify MITSUBISHI
in writing whether or not it intends to enter into LICENSE AGREEMENT.
5.2 If TRIANGLE notifies MITSUBISHI of its intention to enter into LICENSE
AGREEMENT, both parties shall, within [ * ] from the date of said
notification by TRIANGLE, negotiate diligently and in good faith the
detailed terms and conditions of LICENSE AGREEMENT in accordance with the
terms
* CONFIDENTIAL TREATMENT REQUESTED
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outlined in Appendix B hereto and enter into LICENSE AGREEMENT. However,
if the negotiations referred to in this Paragraph 5.2 have not resulted in
execution of LICENSE AGREEMENT by the expiration of said [ * ] period, the
parties shall submit to an independent third party mutually acceptable to
TRIANGLE and MITSUBISHI and experienced in the licensing and pharmaceuticals
products on an international basis (the "Arbitrator") any issues upon which
the parties shall be unable to agree. Such Arbitrator, within [ * ] of the
end of the [ * ] period, shall hear the positions of each of TRIANGLE and
MITSUBISHI as to any disputed issues and, based upon terms that are usual
and customary in transactions of this kind, shall determine the disputed
provisions. Promptly thereafter, the parties shall execute LICENSE
AGREEMENT containing the provisions to which they have mutually agreed
as well as any other provisions which have been stipulated by the
Arbitrator.
5.3 If TRIANGLE decides not to enter into LICENSE AGREEMENT, TRIANGLE shall
notify MITSUBISHI without delay of such decision and reasons therefor in
writing and in such case, the option granted to TRIANGLE shall become null
and void.
ARTICLE VI. CONFIDENTIALITY
------------------------------
6.1 TRIANGLE shall keep secret and confidential any and all TECHNICAL
INFORMATION disclosed to TRIANGLE by MITSUBISHI hereunder and any and all
data and technical information acquired by TRIANGLE through its evaluation
and performance of DEVELOPMENT WORK hereunder (hereinafter referred to as
"Confidential Information") and shall not use the Confidential Information
for any purposes other than to carry out the evaluation or performance of
DEVELOPMENT WORK hereunder, provided, however, the said obligation shall
not be applied to information which TRIANGLE can prove:
(a) by written record, is in its possession at the time of disclosure
thereof, and was not previously acquired by TRIANGLE from MITSUBISHI
under secrecy obligation;
(b) is public knowledge at the time of disclosure thereof;
(c) becomes public knowledge after the time of disclosure through no fault
of TRIANGLE;
(d) is received by TRIANGLE from a third party under no obligation of
secrecy to MITSUBISHI; or
(e) is required to be disclosed by a competent registration body in order
for TRIANGLE to file IND and CTX.
* CONFIDENTIAL TREATMENT REQUESTED
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6.2 It is understood that any specific information contained in the Confidential
Information shall not deemed to fall in (a), (b), (c), (d) or (e) merely
because it is embraced by more general information within one of said
exceptions.
6.3 TRIANGLE shall not, without MITSUBISHI's prior written approval:
(a) use BULK MATERIAL or clinical trial material supplied by MITSUBISHI
for any purposes other than to carry out DEVELOPMENT WORK as set forth
in Article 4 hereof; and
(b) transfer or furnish any quantity of such BULK MATERIAL or clinical
trial material to any third party.
6.4 Notwithstanding the foregoing, TRIANGLE may disclose, to the reasonably
required extent, any TECHNICAL INFORMATION and BULK MATERIAL or clinical
trial material which is subject to the confidentiality obligations set
forth in this Article VI to AUTHORIZED CRO, consultant or any other
subcontractor, provided, however, that TRIANGLE shall cause AUTHORIZED CRO,
consultant or any other subcontractor to execute a written confidentiality
and non-use agreement with respect to any TECHNICAL INFORMATION, the
results of entrusted studies and BULK MATERIAL or clinical trial material
at least as strict as set forth in this Article VI.
6.5 The obligation of confidentiality and non-use of TRIANGLE pursuant to this
Article VI shall remain in force and effect for a period of [ * ] years
from the EFFECTIVE DATE.
6.6 During the term of this Agreement, MITSUBISHI shall not reveal the
TECHNICAL INFORMATION or transfer the BULK MATERIAL or clinical trial
material to any third party in the TERRITORY other than TRIANGLE and shall
keep confidential any data and information obtained by TRIANGLE through the
evaluation and DEVELOPMENT WORK hereunder and shall not use such
information for any purposes other than to carry out its own evaluation of
the DEVELOPMENT WORK hereunder, subject to the exercise of the right which
MITSUBISHI has pursuant to Paragraph 4.6 and the exceptions set forth in
subparagraphs (a), (b), (c), (d) and (e) of Paragraph 6.1.
ARTICLE VII. TERM AND TERMINATION
-----------------------------------
7.1 This Agreement shall come into effect on the EFFECTIVE DATE and, unless
earlier terminated, shall continue to be in effect until the date of
execution of LICENSE AGREEMENT.
7.2 When the option granted to TRIANGLE becomes null and void, this Agreement
shall be automatically terminated.
* CONFIDENTIAL TREATMENT REQUESTED
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7.3 This Agreement may be terminated by the written agreement of the parties.
7.4 TRIANGLE may, after careful evaluation and after having consulted with
MITSUBISHI, discontinue due to scientific or clinical reasons DEVELOPMENT
WORK and terminate this Agreement at any time. TRIANGLE shall notify
MITSUBISHI of its intent to terminate this Agreement three (3) months
prior to stopping any ongoing study to allow MITSUBISHI to take
responsibility for and continue such study at MITSUBISHI's sole expense;
provided, however, that such prior notice shall not be required if
TRIANGLE determines that safety of patients will be at risk if the study
is continued.
In the event TRIANGLE decides to discontinue its activities hereunder, and
subject to the notice period above, this Agreement shall be terminated and
MITSUBISHI shall bear all final costs and expenses of the AUTHORIZED CRO if
the study is continued by MITSUBISHI.
7.5 MITSUBISHI may, after careful evaluation and after having consulted with
TRIANGLE, discontinue due to scientific or clinical reasons to be a sponsor
to support the costs for DEVELOPMENT WORK hereunder and terminate this
Agreement at any time. MITSUBISHI shall notify TRIANGLE of its intent to
terminate this Agreement three (3) months prior to stopping any ongoing
study.
In the event MITSUBISHI decides to discontinue to be a sponsor to support
the costs for DEVELOPMENT WORK hereunder, and subject to the notice period
above, this Agreement shall be terminated and MITSUBISHI shall bear all
costs and expenses of the AUTHORIZED CRO which have accrued before the date
of the termination.
7.6 If TRIANGLE defaults in the performance of or fails to be in compliance
with any material agreement, condition or covenant of this Agreement,
MITSUBISHI may terminate this Agreement if such default or failure shall
not have been remedied within thirty (30) days after receipt by TRIANGLE
of a written notice thereof from MITSUBISHI.
7.7 To the extent permitted by law, if either party shall become insolvent or
shall make assignment for the benefit of creditors, or proceedings in
voluntary bankruptcy shall be instituted on behalf of or against a party or
a receiver or trustee of all, or substantially all of the property of a
party shall be appointed, the other party shall be entitled to terminate
this Agreement by giving written notice to this effect to the first party
whereupon this Agreement shall terminate.
7.8 Notwithstanding the foregoing, MITSUBISHI's right granted pursuant to
Paragraph 4.5, MITSUBISHI's obligation under Paragraphs 7.4 and 7.5 and
TRIANGLE's obligations pursuant to Article VI shall survive the termination
of this Agreement.
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7.9 In case of termination of this Agreement without the execution of LICENSE
AGREEMENT, TRIANGLE shall promptly return all tangible TECHNICAL
INFORMATION and all data and information obtained by TRIANGLE through its
evaluation and DEVELOPMENT WORK hereunder including all copies thereof as
well as unused BULK MATERIAL, if any. It is, however understood that
TRIANGLE may retain one copy of such tangible TECHNICAL INFORMATION, data
and information only for the purpose of determining its obligations
hereunder.
VIII. NOTICE
----------------
Any notice or report required or permitted to be given under this Agreement
by one of the parties to the other party shall be deemed to have been
sufficiently given for all purposes hereof if delivered in person or
transmitted by facsimile or mailed by first class mail, postage prepaid,
addressed to such party at its address indicated below or to such address
as shall hereafter be furnished by such party by written notice. Both
parties agree to acknowledge in writing the receipt of any notice delivered
in person or telex or facsimile.
If to MITSUBISHI:
Mitsubishi Chemical Corporation
▇-▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
Att: General Manager, International Operations Department
Pharmaceuticals and Diagnostics Company
Fax: ▇-▇▇▇▇-▇▇▇▇
If to TRIANGLE:
TRIANGLE PHARMACEUTICALS, INC.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, U. S. A.
Att: Company Secretary
Fax:
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have
been given on the date of delivery if personally delivered; upon
transmission if sent by facsimile transmission with confirmation mailed in
accordance with these notice terms; and on the fifth business day after the
date when sent if sent by mail.
ARTICLE IX. GENERAL LEGAL PROVISIONS
---------------------------------------
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9.1 This Agreement is personal in its nature and neither party hereto shall
assign this Agreement or any right or obligation hereunder without the
prior written consent of the other party.
9.2 The parties shall use their best endeavors to resolve between themselves
any disagreement which may arise under this Agreement. Any such
disagreement shall be adjudicated by arbitration in accordance with the
UNCITRAL Arbitration Rules in force as of the EFFECTIVE DATE.
The appointing authority shall be the London Court of Arbitration. Either
party may initiate arbitration by notice to the other party as required the
UNCITRAL Arbitration Rules. There will be three arbitrators, one selected
by MITSUBISHI, and one selected by TRIANGLE. The third arbitrator will be
selected by the first two arbitrators and will be of a different
nationality than the first two arbitrators and the parties. The third
arbitrator will serve as presiding arbitrator of the tribunal.
Arbitrator shall be governed by the following rules:
a. The forum shall be in London, England, the language for proceedings
shall be English, and the applicable substantive law shall be the law
prevailing in the State of New York, USA.
b. Hearing shall commences no later than [ * ] days after initial notice
by one party to the other requesting arbitration, and shall continue
from day to day thereafter until completed unless adjourned by mutual
consent.
The arbitration panel shall render its decision in writing within
thirty days following conclusion of hearings.
c. Arbitration may proceed in the absence of any party if [ * ] notice has
been given to that party. A decision agreed on by at least two of the
arbitrators shall be the decision of the arbitration panel. Each party
shall bear its own costs and attorney's fee. Costs of the arbitration
panel shall be shared equally by the parties.
9.3 The validity, interpretation and performance of this Agreement shall be
governed by the laws of the State of New York and of the United States.
9.4 All amendments or alteration hereof shall be made in writing and shall be
of no force or effect unless signed by the duly authorized representatives
of each party.
9.5. This Agreement including Appendix A and Appendix B attached hereto and made
a part hereof embodies the entire understanding between parties, and
* CONFIDENTIAL TREATMENT REQUESTED
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all prior representations, warranties or agreements relating hereto are
hereby superseded and shall be of no force or effect whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
MITSUBISHI CHEMICAL CORPORATION
By /s/ Yousuke Ariyoshi
------------------------------------
Yousuke Ariyoshi
Managing Director
President, Pharmaceuticals and
Title Diagnostics Company
----------------------------------
TRIANGLE PHARMACEUTICALS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title Chairman and CEO
----------------------------------
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APPENDIX A
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DEVELOPMENT WORK
-----------------------------------
1. PRECLINICAL STUDIES
------------------------
[ * ] toxicology studies in [ * ], if required by regulatory authorities
2. CLINICAL STUDIES:
----------------------
PHASE Ia [ * ] ADMINISTRATION
Purpose: - Determine [ * ] of [ * ]
- Establish [ * ]
Design: - [ * ]
Patient number: - [ * ]
Starting dose: - To be determined likely to be [ * ]
Dose escalations: - [ * ] increase per cohort
Duration: - [ * ]
PHASE Ib [ * ] IN DOSING FOR IIa STUDY
Purpose: - Establish possible drug interactions with [ * ]
- Bridging study Ia to IIa trial
Design: - Determine [ * ]
* CONFIDENTIAL TREATMENT REQUESTED
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Patient number: - [ * ]
Dosing regimens: - [ * ] dose or doses to be determined form phase la
study
- [ * ]
Duration - [ * ]
PHASE IIa PILOT [ * ] - [ * ] DURATION, WITH
POSSIBLE EXTENSION
Purpose: - Determine [ * ]
Design: - Randomize patients to receive [ * ]
Patient number: - [ * ]
- Number of patients depends on [ * ]
Dosing regimens: - To be determined from [ * ]
- [ * ]
Duration - [ * ] (provided regulatory authorities allow
continuation past [ * ])
* CONFIDENTIAL TREATMENT REQUESTED
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▇▇▇▇▇▇▇▇ ▇
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OUTLINE OF LICENSE AGREEMENT (MITSUBISHI-442)
---------------------------------------------
I. PARTIES
MITSUBISHI CHEMICAL CORPORATION ("MITSUBISHI")
TRIANGLE PHARMACEUTICALS, INC. ("TRIANGLE")
II. DEFINITIONS
(1) The terms "COMPOUND", "PRODUCT", "BULK MATERIAL", "TECHNICAL
INFORMATION" and "TERRITORY" as defined in the Option Agreement shall
have the same meanings when used herein as are attributable to them in
the Option Agreement.
(2) MAJOR COUNTRIES shall mean the Federal Republic of Germany, United
Kingdom, France and the United States of America.
(3) PATENT RIGHT shall mean the patents and patent applications, including
patents to be granted thereon, any division or continuation-in-part
thereof, now or hereafter owned by MITSUBISHI in TERRITORY which
relates to COMPOUND or PRODUCT.
(4) APPROVAL shall mean an approval to market PRODUCT issued by the
competent governmental authorities and any other governmental
authorizations necessary for marketing of PRODUCT including final
labeling, price approval for reimbursement where applicable,
importation of COMPOUND and manufacture of PRODUCT.
(5) AFFILIATE with respect to a party shall mean any corporation,
partnership, association or other entity as to which the party (i)
own, directly or indirectly, one-half (1/2) or more of the voting
securities of such corporation (or entity), or (ii) has the power to
direct or cause the direction of the management and policies of such
corporation (or entity) by contract or otherwise.
(6) NET SALES shall mean the gross sales price of the PRODUCT sold by
TRIANGLE or its sublicensees to independent third parties less the
following: transportation charges, transport insurance, sales and
other taxes, refunds, rebates, allowances for returned or rejected
goods or for retroactive price reductions and normal and customary
trade and cash discounts. NET SALES of combination product shall be
mutually agreed upon by the parties.
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(7) EFFECTIVE DATE shall mean the date of execution of this Agreement by
both parties.
III. DISCLOSURE OF TECHNICAL INFORMATION
----------------------------------------
(1) Within 30 days from the EFFECTIVE DATE, MITSUBISHI shall disclose to
TRIANGLE in English TECHNICAL INFORMATION which is possessed by
MITSUBISHI at the EFFECTIVE DATE and has not been disclosed
theretofore to TRIANGLE.
(2) Furthermore, MITSUBISHI shall disclose to TRIANGLE from time to time
and as soon as reasonably possible during the term of this Agreement
all data and information as a part of TECHNICAL INFORMATION, to the
extent they are legally available to MITSUBISHI, as the result of
development work and commercial operation by it of PRODUCT outside of
TERRITORY.
IV. GRANT OF LICENSE
---------------------
(1) MITSUBISHI shall grant to TRIANGLE an exclusive and non-transferable
license under PATENT RIGHT and TECHNICAL INFORMATION to develop,
manufacture, use and sell PRODUCT in TERRITORY together with the right
to sublicense to third parties who shall be approved by MITSUBISHI in
advance which approval shall not be unreasonably withheld. Said
license shall not include the right to manufacture BULK MATERIAL.
(2) TRIANGLE shall have the right to assign the license granted hereunder
to TRIANGLE's AFFILIATES subject to the following conditions:
(a) TRIANGLE shall notify MITSUBISHI in advance in writing of the
assignment of the license to any of TRIANGLE's AFFILIATE.
(b) TRIANGLE shall control DEVELOPMENT WORK to be conducted by such
TRIANGLE's AFFILIATE and shall be responsible for compliance with
all obligations hereunder by such TRIANGLE's AFFILIATE.
(c) The assignment may be made from time to time on a country-by-
country basis.
V. DEVELOPMENT WORK
---------------------
(1) TRIANGLE shall diligently conduct, at its own expense, all necessary
development work to obtain the data and information necessary for
APPROVAL and future business operation of manufacturing and selling of
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PRODUCT in TERRITORY including all necessary pre-clinical and clinical
studies regarding PRODUCT ("DEVELOPMENT WORK"). Before commencement
of DEVELOPMENT WORK, a protocol including timetable of DEVELOPMENT
WORK shall be submitted in writing by TRIANGLE to MITSUBISHI for
MITSUBISHI's review. TRIANGLE shall properly consider 'Mitsubishi's
comments or advice on the protocol. TRIANGLE may appoint as a
Contract Research Organization a third party who shall be approved by
MITSUBISHI in advance which approval shall not be unreasonably
withheld to perform DEVELOPMENT WORK.
The protocol shall be developed so that TRIANGLE may be ready for the
application of APPROVAL prior to the expiration of the period set
forth in Paragraph VI(1).
(2) MITSUBISHI shall supply to TRIANGLE reasonable amounts of BULK
MATERIAL necessary for DEVELOPMENT WORK free of charge.
(3) TRIANGLE shall give MITSUBISHI written reports on the progress of
DEVELOPMENT WORK at the end of each [ * ] and within reasonable period
after the end of each [ * ]. TRIANGLE shall allow MITSUBISHI to have
access to all data and information obtained through DEVELOPMENT WORK.
In reviewing the reports by TRIANGLE, MITSUBISHI may comment on the
progress of DEVELOPMENT WORK and TRIANGLE shall properly consider such
comments.
VI. APPROVAL AND COMMENCEMENT OF SALE
--------------------------------------
(1) TRIANGLE shall use its best efforts to apply for APPROVAL in at least
one of the MAJOR COUNTRIES within [ * ] from the EFFECTIVE DATE and in
all remaining MAJOR COUNTRIES within [ * ] from the EFFECTIVE DATE.
(2) TRIANGLE shall make its best efforts to obtain APPROVAL in each MAJOR
COUNTRY within [ * ] from the date of regulatory filing for APPROVAL
in such MAJOR COUNTRY and shall report quarterly to MITSUBISHI in
writing the progress status of the APPROVAL process.
(3) After acquisition of APPROVAL in each country in TERRITORY and if
commercially feasible in such country, TRIANGLE shall commence with
reasonable promptness the sale of PRODUCT in such country. TRIANGLE
shall immediately notify MITSUBISHI of the commencement date of sale
of PRODUCT in each country in TERRITORY. Should TRIANGLE fail to
commence the sale of PRODUCT within [ * ] from the date of acquisition
of APPROVAL in a certain country in TERRITORY, MITSUBISHI shall be
entitled to terminate this Agreement with respect to such country and
* CONFIDENTIAL TREATMENT REQUESTED
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TRIANGLE shall promptly transfer APPROVAL or any other registration
right pertaining to PRODUCT in such country to MITSUBISHI or its
nominee without charge.
VII. LICENSE FEE
----------------
(1) In consideration of the license granted by MITSUBISHI to TRIANGLE,
TRIANGLE shall pay to MITSUBISHI the following non-refundable license
fees:
(a) [ * ] within [ * ] from the EFFECTIVE DATE, provided, however,
that TRIANGLE may offset [ * ] of the out-of-pocket costs
incurred by TRIANGLE in engaging AUTHORIZED CRO to perform the
DEVELOPMENT WORK in excess of [ * ] and all of the out-of-pocket
costs incurred by TRIANGLE in engaging a contract toxicology
laboratory to perform toxicology study relating to the PRODUCT
required by the relevant governmental agencies, provided further
that such offset of the costs of AUTHORIZED CRO shall not exceed
[ * ] and such offset of the costs of AUTHORIZED CRO and the
costs of the contract toxicology laboratory in total shall not
exceed [ * ];
(b) [ * ] within [ * ] from the date when APPROVAL is obtained [ * ],
unless MITSUBISHI elects the option set forth in subparagraph (d)
below; and
(c) [ * ] within [ * ] from the date when the APPROVAL is obtained in
[ * ].
(d) It is, however, understood that MITSUBISHI may choose at its
discretion that the license fee payable under subparagraph (b)
above shall be replaced by and made in a combination of equity
and cash as follows;
(i) [ * ] in equity of TRIANGLE within [ * ] from the date when
the first application for APPROVAL in made in a country in
a MAJOR COUNTRY, and
(ii) [ * ] in cash and/or equity (to be mutually agreed upon by
the parties at the time of APPROVAL) within [ * ] from the
date when APPROVAL is obtained in the [ * ].
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TRIANGLE shall notify MITSUBISHI upon filing an application for
APPROVAL in the first MAJOR COUNTRY. Thereafter, MITSUBISHI
shall have [ * ] to elect to exercise the option set forth in
this subparagraph (d). In the event MITSUBISHI elects not to
exercise such option or fails to notify TRIANGLE of any election
within such [ * ] period, the provisions of subparagraph (b) shall
apply.
(2) In addition, TRIANGLE shall pay to MITSUBISHI running royalties equal
to [ * ] to be agreed upon by the parties within [ * ] after the end
of each [ * ], subject to the understanding that the combined cost of
the running royalties and price of BULK MATERIAL shall be equal to
[ * ]. If the total amount of running royalty and price of BULK
MATERIAL to be paid in any [ * ] after the APPROVAL is obtained in the
U.S. is less than the following amount, TRIANGLE shall pay the balance
with the payment of due for the [ * ].
[ * ]
VIII. BULK MATERIAL
-----------------------
(1) Upon request of TRIANGLE, MITSUBISHI shall supply BULK MATERIAL to
TRIANGLE under the Supply and Purchase Agreement to be separately
agreed upon.
(2) The supply price of BULK MATERIAL [ * ] shall be payable in U.S.
Dollars and expressed on a per kilogram basis in the Supply and
Purchase Agreement, subject to the understanding that the combined
cost of the running royalties and price of BULK MATERIAL shall equal
to [ * ]. Said price (the "BASE PRICE") shall be applicable for the
[ * ] of the EFFECTIVE DATE (the "BASE YEAR"). The price for later
[ * ] shall be adjusted as follows:
[ * ]
Notwithstanding the foregoing, if and when MITSUBISHI demonstrate to
the reasonable satisfaction to TRIANGLE that MITSUBISHI cannot earn
reasonable profit from supply of BULK MATERIAL to TRIANGLE under such
price, the parties shall discuss in good faith about revision of the
price taking into consideration (i) the sales price of PRODUCT, (ii)
the daily dose of
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PRODUCT and (iii) the manufacturing costs of BULK MATERIAL at
MITSUBISHI. Should the parties fail to agree on the revision of the
price within a reasonable period, MITSUBISHI shall be released from
its obligation to supply BULK MATERIAL to TRIANGLE and TRIANGLE may
purchase BULK MATERIAL from third party supplier.
(3) A single supply price shall be applied to all BULK MATERIAL to be used
by TRIANGLE for manufacture of PRODUCT to be sold in TERRITORY.
(4) All other terms and conditions for the supply of BULK MATERIAL from
MITSUBISHI to TRIANGLE including forecast, purchase order, quality,
purity of BULK MATERIAL, package specifications, transportation method
and all other technical related matters and payment method shall be
mutually agreed upon by the parties in the separate Supply and
Purchase Agreement at latest prior to need for TRIANGLE to commence
production of PRODUCT for commercial sales.
IX. GRANT-BACK
---------------
(1) TRIANGLE shall disclose to MITSUBISHI all technical data and
information, whether patentable or not, which is obtained by TRIANGLE
through DEVELOPMENT WORK and commercial manufacture, use or sale of
PRODUCT including but not limited to those relating to clinical
trials, side-effect, new indications regarding COMPOUND and PRODUCT,
when they are available (collectively "TRIANGLE's INFORMATION").
(2) TRIANGLE shall grant to MITSUBISHI a non-exclusive license to use
TRIANGLE's INFORMATION for development, manufacture, use and sale of
COMPOUND and PRODUCT. With respect to the use of TRIANGLE's
INFORMATION outside TERRITORY such license shall be without any
compensation to TRIANGLE and shall include the right to sublicense to
any third party. With respect to the use of TRIANGLE's INFORMATION in
TERRITORY MITSUBISHI shall be required to pay reasonable compensation
to TRIANGLE for the use of patented TRIANGLE's INFORMATION and shall
include the right to sublicense to any third party in the country in
TERRITORY where the license granted hereunder is terminated pursuant
to Paragraph X(2) or (3).
X. TERM AND TERMINATION
-------------------------
(1) This Agreement shall come into effect on EFFECTIVE DATE and, unless
terminated pursuant to Paragraph X (2) and (4), shall continue in
effect in each country of the TERRITORY until the twentieth (20th)
anniversary of the commencement date of commercial sales of PRODUCT
in such country.
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Upon expiration of such period, TRIANGLE shall have a fully paid up
license. At such time as Generic Competition has occurred in a
country of TERRITORY, the royalty rate for the sale of PRODUCT in said
country shall thereafter be reduced to [ * ] of the applicable royalty
rate and minimum annual royalty total. For the purpose of this
paragraph, "Generic Competition" shall mean the lawful marketing and
sales by a third party in the relevant country of any product or
compound which (i) falls within the scope of original claims of PATENT
RIGHT on the chemical entity and (ii) is sold and/or used for the same
indication as that of PRODUCT in such country. Furthermore, in each
country of the TERRITORY, the royalty rate for the sale of PRODUCT in
the relevant country shall be reduced by [ * ] of the applicable rate
after the later of (i) the date of expiration of (10) year period
from the commencement date of commercial sale of PRODUCT or (ii) the
date of expiry of the last of the PATENT RIGHT. But, in no event shall
royalty rate be less than [ * ] of the original rate by any such
reduction.
(2) MITSUBISHI may terminate LICENSE AGREEMENT at its option, if (a)
TRIANGLE has not applied for APPROVAL in at least one of MAJOR
COUNTRIES within three (3) years from the EFFECTIVE DATE or in all
remaining MAJOR COUNTRIES within five (5) years from the EFFECTIVE
DATE pursuant to Paragraph VI (1) and TRIANGLE does not demonstrate
to MITSUBISHI's reasonable satisfaction that despite TRIANGLE's
reasonable efforts, the application was delayed by the reasons beyond
reasonable control of TRIANGLE, or (b) TRIANGLE cannot obtain
APPROVAL in each of the MAJOR COUNTRIES within two (2) years from the
date of regulatory filing for APPROVAL and TRIANGLE does not
demonstrate to MITSUBISHI's reasonable satisfaction that despite
TRIANGLE's reasonable efforts, the APPROVAL was delayed by the reasons
beyond reasonable control of TRIANGLE. Notwithstanding the foregoing,
to the extent that TRIANGLE meets the diligence obligations in this
Paragraph X (2) with respect to a given MAJOR COUNTRY, MITSUBISHI
shall not be entitled to terminate LICENSE AGREEMENT, pursuant to this
Paragraph X (2) in such MAJOR COUNTRY.
(3) If (a) TRIANGLE has not applied for APPROVAL in any country in
TERRITORY other than MAJOR COUNTRIES within seven (7) years from the
effective date of this Agreement pursuant to Paragraph VI (1), or
(b) TRIANGLE cannot obtain APPROVAL in any country in TERRITORY
other than MAJOR COUNTRIES within ten (10) years from the effective
date of this Agreement, the parties shall discuss in good faith and
agree upon the registration policy in such country.
(4) If either party fails to meet any of its obligations hereunder in any
material respect, the other party may, upon sixty (60) day written
notice, terminate this
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Agreement, provided, however, that if the defaulting party corrects
such default within said sixty (60) day period, the notice shall be
of no further force or effect.
(5) In case of termination of this Agreement pursuant to Paragraph X(2) or
in case of termination of this Agreement by MITSUBISHI pursuant to
Paragraph X(4), TRIANGLE shall immediately return to MITSUBISHI all
TECHNICAL INFORMATION and all data and information obtained by
TRIANGLE prior thereto through DEVELOPMENT WORK and commercial
manufacture, use or sale of PRODUCT and shall not use them for any
purpose thereafter. In such case, the right granted to MITSUBISHI
pursuant to Paragraph IX shall be extended to include TERRITORY.
XI. PATENT DISPUTE
-------------------
If TRIANGLE or its sublicensees (i) deem it necessary after consultation
with MITSUBISHI to pay royalties, license fees or milestones to any third
party in order to exercise its rights under the license from MITSUBISHI or
(ii) incur out-of-pocket expenses related to any patent infringement or
misappropriation claim or suit against it or them as a result of the
exercise of such rights, TRIANGLE may credit such amounts described in the
above (i) and (ii) against future royalties, fees or other amounts payable
to MITSUBISHI (except for the costs of BULK MATERIAL) up to [ * ] of such
royalties, fees or other amounts. Such credit shall apply only to
prospective not prior payments made to MITSUBISHI.
XIII. GENERAL LEGAL CLAUSES
-------------------------------
(confidentiality, assignment, arbitration, patent enforcement and
prosecution, etc.)
* CONFIDENTIAL TREATMENT REQUESTED
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