<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
JUNE 2, 1999
(Date of Report - earliest event reported)
TRIANGLE PHARMACEUTICALS, INC.
(Exact name of registrant as specified in charter)
DELAWARE 000-21589 56-1930728
(State of incorporation or organization) (Commission (IRS Employer
File Number) Identification No.)
4 University Place, 4611 University Drive, Durham, North Carolina 27707
Registrant's telephone number, including area code: (919)493-5980
NONE
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. OTHER EVENTS.
ALLIANCE AGREEMENTS
On June 2, 1999, Triangle Pharmaceuticals, Inc. ("Triangle") and
Abbott Laboratories ("Abbott") executed a Collaboration Agreement (the
"Collaboration Agreement"), a Co-Promotion Agreement (the "Co-Promotion
Agreement"), a Common Stock Purchase Agreement (the "Stock Purchase Agreement"),
and a Stockholder Rights Agreement (the "Stockholder Agreement") (collectively,
the "Alliance Agreements"). The closing of each of the Alliance Agreements is
subject to the satisfaction of several conditions, including the closing of each
of the other Alliance Agreements, Hart-Scott-Rodino antitrust clearance, the
negotiation of a manufacturing agreement between the parties, as well as the
satisfaction or waiver of various other closing conditions under the various
Alliance Agreements.
The purpose of the Alliance Agreements is to establish a
world-wide strategic alliance between Triangle and Abbott for six antiviral
compounds. Pursuant to the terms of the Alliance Agreements, Triangle and Abbott
will collaborate with respect to the clinical development, registration,
distribution and marketing of various proprietary pharmaceutical products for
the prevention and treatment of human immunodeficiency virus ("HIV") and
hepatitis B virus. In the United States, Triangle and Abbott will co-promote
four Triangle products currently in active development for HIV and/or hepatitis
B, Coactinon-TM-, Coviracil-TM-, DAPD and L-FMAU, and Abbott's two HIV protease
inhibitors, Norvir-Registered Trademark- (ritonavir), approved in 1996, and
ABT-378, currently in Phase III development. Outside the United States, Abbott
will have exclusive sales and marketing rights for the four Triangle antiviral
compounds. Triangle and Abbott will share profits and losses for all Triangle
drug candidates. Triangle will receive detailing fees and commissions on
incremental sales they generate for Abbott's protease inhibitors. In addition,
Abbott will have the right of first discussion to market future Triangle
compounds.
The Collaboration Agreement provides for non-contingent research
funding of $31.7 million and up to $185 million of contingent development
milestone payments and the sharing of future commercialization costs. In
addition pursuant to the terms of the Stock Purchase Agreement, Abbott will
purchase approximately 6.57 million shares of Triangle common stock (the
"Shares") at $18 per share.
Subject to various conditions and restrictions, the Stockholder
Agreement provides for registration and board representation rights in
connection with the Shares, as well as additional rights under Triangle's
current Rights Agreement (defined below), as amended and further discussed
below. The Stockholder Agreement also restricts the transfer of the Shares and
subjects Abbott to certain standstill requirements, subject to various terms and
conditions.
The foregoing description of the Alliance Agreements does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Alliance Agreements and of the press release filed herewith or
referenced as Exhibits 2.1 through 2.4, 4.1 and 99.1 and incorporated herein by
this reference.
2
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RIGHTS AGREEMENT
In connection with the Alliance Agreements, the Board of Directors
of Triangle approved an amendment (the "Amendment"), dated as of June 2, 1999 to
the Rights Agreement, dated February 1, 1999, by and between Triangle and
American Stock Transfer & Trust Company, as Rights Agent (the "Rights
Agreement"). All capitalized terms below and not defined herein have the
meanings given them in the Rights Agreement, as amended.
The Amendment provides that (i) from the Effective Date (as such
term is defined in the Collaboration Agreement) up until such time as Abbott
holds less than the Minimum Purchaser Interest (as such term is defined in the
Stockholder Agreement), neither Abbott nor its U.S. wholly-owned subsidiaries
shall be deemed to be an Acquiring Person, that the Distribution Date will not
be deemed to occur and that the Rights will not separate from the Common Stock
as a result of entering into the Alliance Agreements or the consummation of the
transactions contemplated thereby (other than any purchases permitted under
Section 5.3 of the Stockholder Agreement or otherwise which cause Abbott's
Beneficial Ownership (as the term "Beneficial Ownership" is defined in the
Stockholder Agreement) of shares of Triangle's Common Stock to exceed 21% of the
total shares of Common Stock of Triangle outstanding from time to time
hereafter) or as a result of the acquisition by Abbott of Beneficial Ownership
(as defined in the Stockholder Agreement) of shares of Common Stock of Triangle
not exceeding twenty-one percent (21%) of the total shares of Common Stock of
Triangle outstanding from time to time hereafter, and (ii) for the period
commencing as of the date of the Stockholder Agreement and ending on the earlier
of (x) the Effective Date and (y) termination of the Stockholder Agreement (the
"Interim Period"), neither Abbott nor its U.S. wholly-owned subsidiaries shall
be deemed to be an Acquiring Person, that the Distribution Date will not be
deemed to occur and that the Rights will not separate from the Common Stock as a
result solely of Abbott entering into the Stockholder Agreement and being deemed
the Beneficial Owner of the Shares (as defined in the Stock Purchase Agreement);
provided that Abbott does not become the Beneficial Owner (as defined in the
Stockholder Agreement) of any securities of Triangle in addition to the Shares
during the Interim Period.
The foregoing description of the Amendment does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Amendment filed herewith as Exhibit 4.1 and incorporated herein by this
reference.
Item 7. EXHIBITS.
* 2.1 Collaboration Agreement, dated as of June 2, 1999 by and
between Triangle Pharmaceuticals, Inc. and Abbott Laboratories.
* 2.2 Co-Promotion Agreement, dated as of June 2, 1999 by and between
Triangle Pharmaceuticals, Inc. and Abbott Laboratories.
+ 2.3 Triangle Pharmaceuticals, Inc. Common Stock Purchase Agreement,
dated as of June 2, 1999 by and between Triangle
Pharmaceuticals, Inc. and Abbott Laboratories.
<PAGE>
+ 2.4 Triangle Pharmaceuticals, Inc. Stockholder Rights Agreement,
dated as of June 2, 1999 by and between Triangle
Pharmaceuticals, Inc. and Abbott Laboratories.
4.1 Amendment to Rights Agreement, dated as of June 2, 1999 by and
between Triangle Pharmaceuticals, Inc. and Abbott Laboratories.
+ 99.1 Press Release dated June 3, 1999.
* Certain confidential portions of this Exhibit were omitted by
means of marking such portions with an asterisk (the "Mark").
This Exhibit has been filed with the Secretary of the
Commission without the Mark pursuant to the Company's
application requesting confidential treatment under Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
+ Filed as an exhibit to Abbott Laboratories' Schedule 13D filed
with the Securities and Exchange Commission on June 11, 1999
and incorporated herein by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRIANGLE PHARMACEUTICALS, INC.
DATE: June 18, 1999 By: /s/ James A. Klein, Jr.
-----------------------------------
Name: James A. Klein, Jr.
Title: Chief Financial Officer and Treasurer
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TRIANGLE PHARMACEUTICALS, INC.
FORM 8-K
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DOCUMENT DESCRIPTION
NUMBER --------------------
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<S> <C>
* 2.1 Collaboration Agreement, dated as of June 2, 1999 by and
between Triangle Pharmaceuticals, Inc. and Abbott
Laboratories.
* 2.2 Co-Promotion Agreement, dated as of June 2, 1999 by and
between Triangle Pharmaceuticals, Inc. and Abbott
Laboratories.
+ 2.3 Triangle Pharmaceuticals, Inc. Common Stock Purchase
Agreement, dated as of June 2, 1999 by and between Triangle
Pharmaceuticals, Inc. and Abbott Laboratories.
+ 2.4 Triangle Pharmaceuticals, Inc. Stockholder Rights Agreement,
dated as of June 2, 1999 by and between Triangle
Pharmaceuticals, Inc. and Abbott Laboratories.
4.1 Amendment to Rights Agreement, dated as of June 2, 1999 by
and between Triangle Pharmaceuticals, Inc. and Abbott
Laboratories.
+ 99.1 Press Release dated June 3, 1999.
* Certain confidential portions of this Exhibit were omitted by
means of marking such portions with an asterisk (the "Mark").
This Exhibit has been filed with the Secretary of the
Commission without the Mark pursuant to the Company's
application requesting confidential treatment under Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
+ Filed as an exhibit to Abbott Laboratories' Schedule 13D
filed with the Securities and Exchange Commission on June
11, 1999 and incorporated herein by reference.
</TABLE>
<PAGE>
EXHIBIT 2.1
COLLABORATION AGREEMENT
This Collaboration Agreement (the "Agreement") is made as of
June 2, 1999 by and between Triangle Pharmaceuticals, Inc., a Delaware
corporation ("Triangle"), with its principal offices at 4 University Place, 4611
University Drive, Durham, North Carolina 27707, and Abbott Laboratories, an
Illinois corporation ("Abbott"), with its principal offices at 100 Abbott Park
Road, Abbott Park, Illinois 60064.
WITNESSETH
WHEREAS, Triangle is developing and seeking regulatory
approval for various proprietary drugs for the prevention and treatment of HIV,
HBV and any other indications;
WHEREAS, Triangle desires to collaborate with another
pharmaceutical company with respect to the clinical development, registration,
distribution and marketing of such products throughout the world;
WHEREAS, Abbott desires to collaborate with Triangle with
respect to such products;
WHEREAS, of even date herewith, Abbott and Triangle shall
enter into three other agreements in support of their collaboration: (i) a
Co-Promotion Agreement pursuant to which Abbott will grant Triangle the right to
co-promote certain Abbott HIV drugs in the United States (the "Co-Promotion
Agreement"); (ii) a Stock Purchase Agreement pursuant to which Abbott shall
purchase an equity interest in Triangle's common stock (the "Stock Purchase
Agreement"); and (iii) a Stockholder Rights Agreement setting forth Abbott's
rights as a Triangle shareholder (the "Stockholder Rights Agreement"); and
WHEREAS, Abbott and Triangle shall in good faith negotiate a
Manufacturing and Supply Agreement (the "Supply Agreement") regarding the supply
of a portion of the bulk drug and/or finished products for the Products.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and undertakings contained herein, the parties hereto hereby
agree as follows:
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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ARTICLE 1
DEFINITIONS
In addition to the other terms defined elsewhere herein, the
following terms shall have the following meanings when used in this Agreement
(and any term defined in the singular shall have the same meaning when used in
the plural, and vice versa, unless stated otherwise):
1.1 "Abbott Cost of Goods" shall mean (i) with respect to
the Net Units of Product Sold in the U.S. Territory, the *** paid by Abbott
to Triangle for the Net Units of Product Sold in the U.S. Territory during
the given calendar quarter or year; (ii) with respect to the Net Units of
Product Sold in the International Territory, (A) to the extent that the
Compound or Product is sourced from the same Abbott manufacturing facilities
used under the Supply Agreement, the *** for the sale of such goods to
Triangle in the U.S. Territory during the given calendar quarter or year, (B)
to the extent that the Compound or Product is sourced from a different Abbott
manufacturing facility than those used under the Supply Agreement, the ***
and *** of *** and *** such goods during the given calendar quarter or year
and (C) to the extent that the Compound or Product is sourced from a Third
Party manufacturer, the *** for the *** of such goods during the given
calendar quarter or year; and (iii) with respect to the Territories, *** of
(A) *** during the given calendar quarter or year, (B) *** on the Compounds
and Products during the given calendar quarter or year, and (C) *** and ***
in the finished cost of the Products during the given calendar quarter or
year. Abbott's Cost of Goods shall be calculated separately for the U.S.
Territory and the International Territory.
1.2 "Abbott Distribution Expenses" shall mean (i) for the
U.S. Territory, *** of Abbott Net Sales in the U.S. Territory during the
given calendar quarter or year and (ii) for the International Territory, the
lesser of (A) *** of *** in the International Territory during the given
calendar quarter or year and (B) a percentage calculated by dividing the ***
for all *** products during the given calendar quarter or year by the *** of
such products by the *** during the given calendar quarter or year. The
Abbott Distribution Expenses shall be calculated separately for the U.S.
Territory and the International Territory.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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1.3 "Abbott Distribution Margin" shall mean the *** (i)
*** and (ii) *** for the given calendar quarter or year. The Abbott
Distribution Margin shall be calculated separately for the U.S. Territory and
the International Territory.
1.4 "Abbott International Profit Amount" shall have the
meaning set forth in Section 6.5(c).
1.5 "Abbott Net Sales" shall mean the total gross sales of the
Products (as set forth on the invoice for such Products) by Abbott and permitted
sublicensees to Third Parties in the given calendar quarter or year, plus, if
applicable, the value of all properties and services received in consideration
of a Sale of Products by Abbott and permitted sublicensees to Third Parties
during such calendar quarter or year, less the following deductions directly
paid or incurred by Abbott or its permitted sublicensees with respect to the
Sale of the Products in such calendar quarter or year:
(i) with respect to the U.S. Territory, ***;
(ii) with respect to the International Territory,
***; and
(iii) with respect to the Territories (A)*** and (B) ***.
Abbott's Net Sales shall be calculated separately for the U.S. Territory and the
International Territory.
1.6 "Abbott Operating Margin" shall mean the *** for the
given calendar quarter or year. The Abbott Operating Margin shall be
calculated separately for the U.S. Territory and the International Territory.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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1.7 "Abbott Patents" shall mean (a) all of Abbott's rights
in any patents conceived, developed or owned by or otherwise licensed to or
controlled by Abbott ***, which include claims covering or potentially
covering the manufacture, use or sale of the Compounds or Products and (b)
all substitutions, extensions, divisionals, continuations,
continuations-in-part, reissues, reexaminations, renewals, supplementary
protection certificates or foreign counterparts of such patents and patent
applications identified in sub-part (a).
1.8 "Abbott SG&A" shall mean (i) the costs and expenses
permitted under Sections 4.2 and 4.3 which are incurred by Abbott and/or its
permitted sublicensees in the *** of the Products and, to the extent
permitted under Section 4.4, the Marketing Studies for the Products during
the given calendar quarter or year, in the categories set forth in Exhibit
1.8, (ii) *** costs and expenses incurred by Abbott in connection with claims
instituted by Abbott pursuant to Section 9.5 or 9.6 or, to the extent
reimbursed by Abbott pursuant to Section 9.8, by Triangle, (iii) the ***
costs and expenses of *** , (iv) the *** with respect to the *** for the
given calendar quarter or year and (v) such other costs and expenses
specifically included in Abbott SG&A pursuant to the terms of this Agreement.
The Abbott SG&A shall be calculated separately for the U.S. Territory and the
International Territory.
1.9 "Abbott Technology" shall mean all technical
information, inventions, discoveries, trade secrets, information, experience,
data, formulas, procedures, processes, know-how and results which are
necessary for the development, registration, manufacture, use or sale of the
Compounds or Products and which are owned by or otherwise licensed to or
controlled by Abbott *** during the Term.
1.10 "Abbott U.S. Profit Amount" shall have the meaning set
forth in Section 6.4(c).
1.11 "Affiliate" shall mean any corporation or
non-corporate business entity which controls, is controlled by, or is under
common control with a Party. A corporation or non-corporate business entity
shall be regarded as in control of another corporation or non-corporate
business entity if it owns, or directly or indirectly controls, at least ***
of the voting stock of the other corporation, or (a) in the absence of the
ownership of at least *** of the voting stock of a corporation or (b) in the
case of a non-corporate business entity, if it possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation or non-corporate business entity, as applicable.
For purposes of this Agreement, *** and its subsidiaries, which
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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comprise Abbott's *** , are not Affiliates of Abbott; provided that neither
*** nor any of its subsidiaries may sell, Promote or Co-Promote the Compounds
or Products.
1.12 "Annual Reporting Period" shall mean a calendar year
with respect to the U.S. Territory and a fiscal year beginning December 1 and
ending November 30 for the International Territory.
1.13 "Co-Promote" or "Co-Promotion" shall mean the joint
activities of the Parties to Promote the Products under the Triangle
Trademarks in the U.S. Territory.
1.14 "Compounds" shall mean MKC-442, FTC, L-FMAU and DAPD.
1.15 "Confidential Information" shall have the meaning set
forth in Section 13.1.
1.16 "DAPD" shall mean *** of the formula set forth on
Exhibit 1.16 wherein *** , including all *** and *** thereof. DAPD is
exclusively licensed to Triangle by Emory University and the University of
Georgia Research Foundation, Inc., pursuant to a License Agreement dated
March 31, 1996 (the "DAPD License Agreement") for use as a pharmaceutical
product in the prevention and treatment of HIV and HBV throughout the entire
world.
1.17 "Detail" shall mean a face-to-face sales presentation
by a Sales Representative during which one or more of the Products is
marketed and promoted to a licensed medical physician, but not a resident or
intern or other health care professional, unless such individual has the
authority to write prescriptions for the Products pursuant to state statutes.
Attendance at meetings with managed care entities, conventions and
participation in continuing education programs shall not constitute a Detail.
1.18 "Detailing" shall mean the act of marketing and
promoting the Products through Details.
1.19 "Detailing Commitment" shall have the meaning set
forth in Section 4.2(c).
1.20 "Discretionary Funds" shall mean the miscellaneous
costs and expenses which represent that portion of the U.S. Co-Promotion
Budget that are used by the Sales Representatives in support of their
Detailing and marketing activity for the Products.
1.21 "Dollars" and "$" means United States dollars.
1.22 "Effective Date" shall mean the date upon which this
Agreement becomes effective upon the fulfillment of the conditions set forth
in Section 16.8.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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1.23 "FDA" shall mean the U.S. Food and Drug Administration
or any successor entity thereto.
1.24 "FTC" shall mean: (i) the *** with the chemical name:
*** ; (ii) any mixture of the *** described in Subsection 1.24(i) and the ***
with the chemical name: *** , in which the ratio of such *** is equal to or
greater than ***; or (iii) any *** of any of the foregoing. FTC is
exclusively licensed to Triangle by Emory University pursuant to a License
Agreement dated April 17, 1996, as amended as of May 6, 1999 (the "FTC
License Agreement") for use as a pharmaceutical product in the prevention and
treatment of HIV and HBV throughout the entire world.
1.25 "Field of Use" shall mean the following: (i) for MKC-442,
all pharmaceutical uses; (ii) for FTC and DAPD, the prevention and treatment of
HIV and HBV; (iii) for L-FMAU, all human antiviral applications and uses; and
(iv) any other uses for the Compounds to which Triangle obtains rights from the
Triangle Licensors.
1.26 "Final Payment" shall have the meaning set forth in
Section 6.6.
1.27 "Fixed-Dose Combination Collaboration" shall mean an
arrangement with a Third Party relating to the manufacture, development,
inspection, use or sale of a Fixed-Dose Combination Product.
1.28 "Fixed-Dose Combination Product" shall mean a product
which contains one or more Compounds and one or more additional active
pharmaceutical compounds which are not Compound(s).
1.29 "HBV" shall mean the hepatitis B virus.
1.30 "HIV" shall mean the human immunodeficiency virus.
1.31 "IND" shall mean, with respect to a given Compound and/or
Product, the Investigational New Drug Application filed by or on behalf of
Triangle with the FDA and all subsequent submissions thereto.
1.32 "International Adjustment Amount" shall have the meaning
set forth in Section 6.5(d).
1.33 "International Marketing Board" shall have the meaning
set forth in Section 4.3 and applies to the Promotion of the Products in the
International Territory.
1.34 "International Product Profit" shall mean the
following: (i) with respect to the first calendar quarter of each year, the
*** in the International Territory; and (ii) with
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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respect to the second, third and fourth calendar quarters of each year, the
total of the *** in the International Territory for such calendar quarter and
all previous calendar quarters during such year.
1.35 "International Promotional Materials" shall mean all
electronic and computer managed information (including the Internet), all
written, printed or graphic materials, brochures, sales aids and other
promotional items relating to a Product approved for use in the International
Territory.
1.36 "International Promotion Budget" shall have the meaning
set forth in Section 4.3.
1.37 "International Promotion Plan" shall have the meaning set
forth in Section 4.3.
1.38 "International Territory" shall mean all areas of the
world outside the U.S. Territory, except that the International Territory shall
not include Japan for MKC-442 and shall not include Korea for L-FMAU.
1.39 "L-FMAU" shall mean the compound known as L-FMAU, with
the chemical name: *** thereof. L-FMAU is exclusively licensed to Triangle by
Bukwang Pharm. Ind. Co., Ltd. pursuant to a License Agreement dated February
27, 1998, as amended on April 1, 1999 (the "L-FMAU License Agreement"), for
use as a pharmaceutical product in all human antiviral applications and uses
for the entire world, excluding Korea.
1.40 "Launch" shall mean the date upon which the first
commercial sale of a Product (as evidenced by the invoice date for such sale)
occurs in each of the Territories.
1.41 "Legal Requirements" shall mean any and all federal,
state, local, national, supranational laws, regulations, ordinances, orders
and requirements applicable to the Parties and their Affiliates in
performance of this Agreement, including without limitation, the Securities
Exchange Act of 1934, as amended, and the Foreign Corrupt Practices Act, as
well as such laws, regulations, ordinances, orders and requirements
applicable to the sale, marketing, promotion, Detailing, and distribution of
the Products, including without limitation, the following within the U.S.
Territory: the Prescription Drug Marketing Act of 1987, the Federal Food,
Drug and Cosmetic Act, and all regulations and other requirements of the FDA.
1.42 "Losses" shall mean any liabilities, costs, damages,
judgments, settlements and other reasonable out-of-pocket expenses (including
legal expenses).
1.43 "MKC-442" shall mean the compound known as MKC-442,
with the chemical name *** thereof. MKC-442 is exclusively licensed to
Triangle by Mitsubishi Chemical Corporation pursuant to a License Agreement
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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dated June 17, 1997 (the "MKC-442 License Agreement") for use as a
pharmaceutical product in the entire world, excluding Japan.
1.44 "Major Country" shall mean *** for HIV and shall mean
*** for HBV.
1.45 "Major European Countries" shall mean *** .
1.46 "Marketing Studies" are those clinical trials and
studies which are performed essentially for marketing purposes and expressly
excludes all clinical studies and trials which are required to pursue,
obtain, and maintain Product Approval in the Territories.
1.47 "NDA" shall mean, in respect of each commercially
launched Product, an approved New Drug Application filed by Triangle with the
FDA and all subsequent submissions thereto.
1.48 "Net Units of Product Sold" shall mean the total
number of units of Product which are Sold by Abbott and permitted
sublicensees to Third Parties during the given calendar quarter or year less
*** or any *** for which *** has been *** . For any given period, the Net
Units of Product Sold shall *** for the same period. The Net Units of Product
Sold shall be calculated separately for the U.S. Territory and the
International Territory.
1.49 "Neutral" shall have the meaning set forth in Exhibit
20.3.
1.50 "Pan-European Submission" shall have the meaning set
forth in Section 3.6(b).
1.51 "Party" shall mean Abbott Laboratories or Triangle
Pharmaceuticals, Inc., and "Parties" shall mean Abbott Laboratories and
Triangle Pharmaceuticals, Inc., except as provided in Section 20.2.
1.52 "Person" shall mean a natural person, a corporation, a
partnership, a trust, a joint venture, any governmental authority, and any
other entity or organization.
1.53 " *** " shall mean the completion of *** of the *** of
those *** which Triangle considers reasonably necessary for the purpose of
inclusion in *** in the *** . As used in the preceding sentence, " *** "
shall mean those *** sponsored by Triangle, the primary objective of which is
to ascertain additional *** regarding the *** of a *** and *** regarding ***.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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1.54 "Primary Details" shall mean a Detail in which the
Product being Detailed is the product most emphasized, and the first product
presented, during such Detail.
1.55 "Primary Enforcement Party" shall mean ***.
1.56 "Product Approval" shall mean (i) receipt of approval
from the FDA to market a Product in the United States and (ii) with respect to
the International Territory, the governmental approval required to market a
Product in a given country (including any pricing and reimbursement
authorization required in such country).
1.57 "Product Development Committee" shall have the meaning
set forth in Section 4.4.
1.58 "Product Patents" shall mean (a) the patents and patent
applications licensed to Triangle under the Triangle License Agreements; (b) any
patents and patent applications owned by or otherwise licensed to or controlled
by (to the extent sublicensing is permissible) Triangle during the Term which
contain claims covering or potentially covering the development, registration,
manufacture, use and sale of the Compounds or the Products (including any
intermediates or formulations thereof) within the Field of Use; and (c) all
substitutions, extensions, divisionals, continuations, continuations-in-part,
reissues, reexaminations, renewals, supplementary protection certificates or
foreign counterparts of such patents and patent applications identified in
sub-parts (a) and (b).
1.59 "Product Technology" shall mean the technical
information, inventions, discoveries, trade secrets, information, experience,
data, formulas, procedures, processes, know-how and results which (a) are
licensed to Triangle under the Triangle License Agreements; or (b) are owned
by or otherwise licensed to or controlled by Triangle (to the extent
sublicensing is permissible) during the Term which are necessary for the
development, registration, manufacture, use or sale of the Compounds or
Products within the Field of Use.
1.60 "Products" shall mean any pharmaceutical products
containing one or more Compounds as active ingredients, alone or in combination
with other active ingredients, within their respective Field of Use.
1.61 "Promote" or "Promotion" shall mean the act of
Detailing or otherwise advertising, marketing and promoting sales of the
Products and conducting any necessary Marketing Studies.
1.62 "Quarterly Reporting Period" shall mean a calendar
quarter with respect to the U.S. Territory and a fiscal quarter ending on the
final day of February, May, August, and November (as the case may be) for the
International Territory.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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1.63 "Reasonable Best Efforts" shall mean ***. Each Party
shall be entitled to exercise *** in fulfilling its obligation to exercise
its Reasonable Best Efforts under this Agreement.
1.64 "Reconciliation Amount" shall have the meaning set
forth in Section 6.7.
1.65 "Reimbursement Account" shall have the meaning set
forth in Section 6.6(b).
1.66 "Sales Forecast" shall have the meaning set forth in
Section 8.2.
1.67 "Sales Representative" shall mean, with respect to
each Party, an individual: (i) who is regularly employed by such Party on a
full-time or part-time basis as a member of one of its sales forces or as a
medical liaison representative or, with the written consent of the other
Party, is retained on a contractual basis to act as a part of its sales
force; and (ii) who is appropriately qualified and experienced in
pharmaceutical product promotion to make effective sales presentations for
the Products.
1.68 "Sample Pack" shall mean a packaged and labeled
container of Product for distribution to Third Parties as samples.
1.69 "Secondary Detail" shall mean a Detail in which the
Product being Detailed is the second most emphasized product, and the second
product presented, during such Detail.
1.70 "Secondary Enforcement Party" shall mean Abbott in the
U.S. Territory and Triangle in the International Territory.
1.71 "Sold" or "Sale" shall mean the sale, transfer,
exchange or other disposition of Products whether by gift, or otherwise,
subsequent to Regulatory Approval in a given country (if such Regulatory
Approval is required) by Abbott or its permitted sublicensees. Sales of
Product shall be deemed consummated upon the first to occur of: (a) *** ; (b)
*** ; (c) *** ; or (d) ***. Notwithstanding the foregoing definition of Sale,
to the extent that, with the prior consent of Triangle, Abbott *** (it being
understood that no such distribution will be made without Triangle's
consent), and such distribution is at a *** , such amount shall be deemed
part of Abbott Net Sales; provided, however, that such distribution shall not
be deemed a Product Approval of such Product. The distribution of Sample
Packs shall not be deemed a Sale.
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1.72 "Supplemental Clinical Studies" shall have the meaning
set forth in Section 3.1.
1.73 "Supply Agreement" shall have the meaning set forth in
the introductory recitals to this Agreement.
1.74 "Term" shall have the meaning set forth in Section 16.1.
1.75 "Territories" shall mean the U.S. Territory and the
International Territory.
1.76 "Third Party" shall mean any Person that is not a Party
or an Affiliate of a Party.
1.77 "Transfer Price" shall mean the price for the sale of
Product by Triangle to Abbott for the U.S. Territory as determined pursuant to
Section 8.4.
1.78 "Transfer WAC" shall mean, with respect to each Product,
the *** for such Product in the U.S. Territory pursuant to
Section 8.4.
1.79 "Triangle-Abbott Alliance Agreements" shall mean this
Agreement and the following agreements entered into between the Parties of
even date herewith: (i) the Co-Promotion Agreement; (ii) the Stock Purchase
Agreement; and (iii) the Stockholder Rights Agreement. Upon negotiation, due
execution and delivery, the Supply Agreement shall also be considered one of
the Triangle-Abbott Alliance Agreements.
1.80 "Triangle's Cash" shall have the meaning set forth in
Section 6.6(b).
1.81 "Triangle Cost of Goods" shall mean the *** of *** and
*** the Net Units of Product Sold during the given calendar quarter or year,
including the *** , if any, incurred by Triangle during the given calendar
quarter or year for (i) the *** of the Compounds and Products; (ii) any ***
on the Compounds and Products, and (iii) *** and *** in the finished cost of
the Products. The Triangle Cost of Goods shall be calculated separately for
the U.S. Territory and the International Territory. All Triangle Cost of
Goods with respect to the International Territory shall be includable in
Abbott SG&A and be subject to reimbursement as provided in Section 7.9.
1.82 "Triangle Distribution Margin" shall mean, with
respect to the U.S. Territory, the *** and the *** with respect to the U.S.
Territory for the given calendar quarter or year. The Triangle Distribution
Margin shall be calculated only for the U.S. Territory.
1.83 "Triangle International Profit Amount" shall have the
meaning set forth in Section 6.5(c).
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1.84 "Triangle License Agreements" shall mean the MKC-442
License Agreement, the FTC License Agreement, the DAPD License Agreement and the
L-FMAU License Agreement.
1.85 "Triangle Licensors" shall mean Mitsubishi Chemical
Corporation with respect to MKC-442, Emory University with respect to FTC, Emory
University and the University of Georgia Research Foundation, Inc. with respect
to DAPD, and Bukwang Pharm. Ind. Co., Ltd. with respect to L-FMAU.
1.86 "Triangle Operating Margin" shall mean, with respect to
the U.S. Territory, the *** for the given calendar quarter
or year. The Triangle Operating Margin shall be calculated only for the U.S.
Territory.
1.87 "Triangle Product Sales" shall mean, with respect to the
U.S. Territory, the total aggregate Transfer Price received by Triangle from
Abbott for the Net Units of Products Sold in the U.S. Territory during the given
calendar quarter or year. The Triangle Product Sales shall be calculated only
for the U.S. Territory.
1.88 "Triangle SG&A" shall mean, with respect to the U.S.
Territory during the given calendar quarter or year, (i) the costs and
expenses permitted under Section 4.2 which are incurred by Triangle *** and,
to the extent permitted under Section 4.4, the Marketing Studies for the
Products during the given calendar quarter or year, in the categories set
forth in Exhibit 1.8, (ii) *** costs and expenses incurred by Triangle in
connection with claims instituted by Triangle pursuant to Section 9.5 or 9.6
in the U.S. Territory, (iii) the *** costs and expenses of ***, and (iv) such
other costs and expenses specifically included in Triangle SG&A pursuant to
the terms of this Agreement. The Triangle SG&A shall be calculated only for
the U.S. Territory.
1.89 "Triangle Third Party Royalties" shall mean the following
royalties paid or escrowed by Triangle with respect to the Products during a
given calendar quarter or year: (i) the Third Party royalties listed in Exhibit
1.89 which are due and payable under the Triangle License Agreements and (ii)
*** . The Triangle Third Party Royalties shall be
calculated separately for the U.S. Territory and the International Territory and
shall be paid *** .
1.90 "Triangle Trademarks" shall have the meaning set forth in
Section 14.1.
1.91 "Triangle U.S. Profit Amount" shall have the meaning set
forth in Section 6.4(c).
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1.92 "U.S. Adjustment Amount" shall have the meaning set forth
in Section 6.4(d).
1.93 "U.S. Co-Promotion Budget" shall have the meaning set
forth in Section 4.2.
1.94 "U.S. Co-Promotion Plan" shall have the meaning set forth
in Section 4.2.
1.95 "U.S. Marketing Board" shall have the meaning set forth
in Section 4.2 and applies to the Co-Promotion of the Products in the U.S.
Territory.
1.96 "U.S. Product Profit" shall mean the following: (i)
with respect to the first calendar quarter of each year, the total of the ***
and the *** for such calendar quarter and (ii) for the second, third and
fourth calendar quarters of each year, the total, for the subject calendar
quarter and each previous calendar quarter during such calendar year, of the
*** and the *** .
1.97 "U.S. Promotional Materials" shall mean all electronic
and computer managed information (including the Internet), all written, printed
or graphic materials, brochures, sales aids and other promotional items relating
to a Product approved for use in the U.S. Territory.
1.98 "U.S. Territory" shall mean the United States of America,
*** .
1.99 "Valid Claim" shall mean (a) an issued claim of any
unexpired patent including among the Product Patents, or (b) a pending claim of
any pending patent application included among the Product Patents, which has not
been held unenforceable, unpatentable or invalid by a decision of a court or
governmental body of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, which has not been rendered unenforceable through
disclaimer or otherwise or which has not been lost through an interference
proceeding.
1.100 "WAC" shall have the meaning set forth in Section 8.4.
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ARTICLE 2
DISTRIBUTION AND PROMOTION
2.1 EXCLUSIVE DISTRIBUTOR. Except as and to the extent
otherwise specified in this Agreement, Triangle hereby appoints Abbott, and
Abbott hereby accepts appointment, as the exclusive distributor of the
Products in the U.S. Territory and the International Territory, with the sole
and exclusive right to commercially sell and distribute the Products to Third
Parties within the U.S. Territory and the International Territory. Abbott
shall *** of the Products in the *** . Subject to Section 2.4, Abbott may ***
in the ***.
2.2 PROMOTION. Except as and to the extent otherwise specified
in this Agreement, Triangle hereby grants to Abbott, and Abbott hereby accepts,
(i) the exclusive right to Co-Promote the Products in the U.S. Territory jointly
with Triangle and (ii) the exclusive right to Promote the Products in the
International Territory. Neither Abbott nor Triangle shall appoint any Third
Party to act on its behalf with respect to the Detailing of the Products in the
U.S. Territory. Subject to Section 2.4, Abbott may appoint Third Parties to
Promote in the International Territory.
2.3 LICENSE.
(a) Subject to the terms of this Agreement, Triangle
hereby grants Abbott a license *** to utilize the Product
Patents and the Product Technology to offer to sell and sell
the Products within the Field of Use in the U.S. Territory and
to otherwise perform any duties and obligations that Abbott is
required or permitted to perform under this Agreement in the
U.S. Territory. Such license shall be co-exclusive with
Triangle except as to (i) *** specified in the *** (as defined
in the ***), (iii) rights contemplated in Sections 2.6 and
3.6, and (iv) any rights of the U.S. Government described in
the Triangle License Agreements.
(b) Subject to the terms of this Agreement, Triangle
hereby grants Abbott a license *** to utilize the Product
Patents and the Product Technology to import, use, offer to
sell, sell and, subject to the negotiation and execution of
the Supply Agreement, to make and have made, the Compounds and
Products within the Field of Use in the International
Territory and to otherwise perform any duties and obligations
that Abbott is required or permitted to perform under this
Agreement in the International
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Territory. Such license shall be exclusive except as to (i)
Triangle and its Third Party manufacturers so as to perform
any obligations or activities that Triangle is required or
permitted to perform under this Agreement, (ii) *** as
specified in the *** (as defined in the *** ), (iii) rights
contemplated in Sections 2.6 and 3.6, and (iv) any rights of
the U.S. Government described in the Triangle License
Agreements.
(c) Abbott hereby grants Triangle *** (other than *** )
right and license to utilize the Abbott Technology and Abbott
Patents to make, have made, import, use, offer to sell and
sell the Compounds and Products within the Field of Use. In
the case of *** , such license shall apply only to (i)
countries outside of the Territories and (ii) any country in
which the *** .
2.4 USE OF THIRD PARTIES. Except as provided in this
Sections 2.4 and 20.2, Abbott shall not have the right to grant sublicenses
without the prior express consent of Triangle, *** , and, to the extent
required, the applicable Triangle Licensor, in which event Triangle shall ***
with Abbott in its efforts to obtain the consent of the applicable Triangle
Licensor. Notwithstanding the prior sentence, Abbott shall have the right,
*** , to enter into agreements concerning the distribution and/or Promotion
of the Products to the extent that sales or other activities by such a Person
would not be included for purposes of calculating Triangle Third Party
Royalties pursuant to the terms of the applicable Triangle License Agreement.
No sublicense granted by Abbott shall relieve it of any obligation hereunder.
2.5 RIGHTS TO ADDITIONAL PRODUCTS. Triangle hereby grants
to Abbott, and Abbott hereby accepts, a right of first discussion with
respect to all pharmaceutical compounds, which are licensed to or developed
by Triangle (regardless of their stage of development) up until December 31,
2005. If Triangle desires to sell the rights to or out-license such compound,
*** , as the case may be, *** such compound, subject to the *** as provided
in this Section 2.5. Otherwise, such right shall include the *** as provided
in this Section 2.5. At the *** for such compound, or earlier *** , or from
time to time ***
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for the same or a similar proposed transaction), Triangle shall prepare and
submit to Abbott *** , which shall consist of all *** , including (to the
extent available) *** and ***. Within *** after the receipt of the *** it is
*** If *** , the Parties shall, *** under the general conditions set forth in
this Section 2.5. In the event that *** shall be free to commercialize the
compound itself or to grant rights covered by such right of first discussion
to any Third Party. If *** but the Parties are *** , within *** from the
delivery of such notice, then until *** (i) *** or (ii) *** from the delivery
of such notice, *** . If *** pursuant to the immediately preceding sentence,
then *** . Any information regarding any compound offered to Abbott under
this Section 2.5 shall be subject to the confidentiality and nondisclosure
obligations set forth in Article 13. *** in accordance with the provisions of
this Section 2.5. Notwithstanding Section 20.2, references in this Section
2.5 to Abbott shall be deemed to refer only to Abbott Laboratories.
2.6 COMBINATION PRODUCTS.
(a) *** , and ***, and it is each Party's intent to ***
of *** . Triangle agrees to keep Abbott fully apprised of its
activities with any Third Party concerning the development of
*** , and Abbott shall have the right
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to provide input with respect to these activities and, to the
extent reasonably possible, the right to participate in
meetings with such Third Party regarding such activities.
(b) Triangle may enter into any Fixed-Dose Combination
Collaboration without Abbott's prior written consent if each
of the following conditions is met: (i) the relevant
Fixed-Dose Combination Product would be *** in accordance with
the terms of the Triangle-Abbott Alliance Agreements ( *** )
contained in the Fixed-Dose Combination Product are supplied
by a Third Party); (ii) all of the *** received by the Parties
on account of the Compound(s) contained in the Fixed-Dose
Combination Collaboration are ***; and (iii) the rights set
forth in clause (i) above apply throughout the Territories or
substantially all of the Territories (i.e., *** of the unit
market for the Fixed-Dose Combination Product) in the
Territories, (iv) the *** , and (v) the *** of the *** therein
when *** (or *** ), all determined on *** .
(c) *** enter into a Fixed-Dose Combination Collaboration
which does not satisfy each of the conditions set forth in
Section 2.6(b) *** .
(d) Nothing in this Section 2.6 shall in any way restrict
Triangle from entering into discussions with Third Parties
regarding the viability of one or more Fixed-Dose Combination
Collaborations including, but not limited to, exchanging data
and information (e.g., Product Technology) regarding the
potential Fixed-Dose Combination Product and undertaking
feasibility studies relating to the such Fixed-Dose
Combination Product. All reasonable and necessary expenses
incurred by Triangle relating to the viability of such
Fixed-Dose Combination Collaboration shall be *** , unless
such Fixed-Dose Combination Collaboration is entered into
pursuant to Section 2.6(b) or (c) or otherwise with Abbott's
consent,
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in which case, upon the execution of the Fixed-Dose
Combination Collaboration agreement by Triangle, Abbott shall
reimburse Triangle for *** of all reasonable and necessary
expenses incurred by Triangle. All expenses incurred after any
Fixed-Dose Combination Collaboration is entered into pursuant
to Section 2.6(b) or (c) or otherwise with Abbott's consent
*** . Other than as permitted pursuant to this Section 2.6,
neither Party shall have the right to enter into a Fixed-Dose
Combination Collaboration.
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ARTICLE 3
CLINICAL DEVELOPMENT, PRODUCT APPROVAL AND LAUNCH
3.1 CLINICAL DEVELOPMENT. Subject to the terms of this
Agreement, Triangle shall exercise its Reasonable Best Efforts to pursue, and
shall bear the full cost and expense of, the clinical development of the
Products for the U.S. Territory and the International Territory, including
exercising its Reasonable Best Efforts to (i) perform all clinical studies
and trials, (ii) generate all safety, toxicology and efficacy data required
to pursue, obtain and maintain Product Approval in the U.S. Territory and the
International Territory and (iii) obtain, as promptly as practicable after
Product Approval in the United States, *** for each Product in the U.S.,
subject, however, to limitations on the shelf life because of the particular
characteristics of each such Product. Notwithstanding the preceding sentence,
if the performance of clinical studies or trials or the generation of safety,
toxicology and efficacy data is required to pursue, obtain and maintain
Product Approval in a country in the International Territory which is not a
Major Country, which studies, trials or data are not also required to pursue,
obtain and maintain Product Approval in the U.S. Territory or a Major Country
(a "Supplemental Clinical Study"), then, if Abbott determines to proceed with
Product Approval in such country, the costs and expenses of any such
Supplemental Clinical Study shall be *** and excluded from both *** .
Triangle shall keep Abbott fully apprised with respect to its clinical
development activities and shall provide Abbott with the opportunity for
input regarding these activities, including *** relating to all clinical
studies. Triangle shall control all decisions regarding such clinical
development activities in the Territories. Triangle shall use its Reasonable
Best Efforts to provide, on an on-going basis, appropriate primary documents
(in English) to Abbott in connection with Abbott's efforts to pursue, obtain
and maintain Product Approval in each Major Country and such other countries
within the International Territory *** , including providing certificates of
free sale to Abbott and other legal documents, certificates, Product samples,
study reports, regulatory overviews, statistical overviews, and other
regulatory documents as prepared.
3.2 U.S. PRODUCT APPROVAL. Triangle shall exercise its
Reasonable Best Efforts to file, obtain and maintain Product Approval for the
Products in the United States, and shall bear the full cost and expense
thereof. Triangle shall keep Abbott fully apprised with respect to its
Product Approval activity in the United States. Specifically, Triangle shall
(i) ***, (ii) to the extent reasonably practicable, provide *** and consider,
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at Triangle's sole discretion, Abbott's *** , and (iii) allow *** , to the
extent permitted by the *** . Triangle shall control all decisions regarding
its regulatory activities in the United States, including, without
limitation, decisions regarding the filing, obtaining and maintaining of
Product Approval for the Products in the United States.
3.3 INTERNATIONAL PRODUCT APPROVAL. Abbott shall exercise
its Reasonable Best Efforts to file, obtain and maintain Product Approval for
the Products in the International Territory, and shall bear the full cost and
expense thereof. Abbott shall use its Reasonable Best Efforts to pursue the
filing, obtaining and maintaining of Product Approval in all Major Countries
and such other countries within the International Territory as ***
appropriate. Abbott shall keep Triangle fully apprised with respect to its
Product Approval activities in the International Territory and shall provide
Triangle with the opportunity for input with respect to such international
Product Approval activities. Specifically, Abbott shall (i) provide Triangle
with a copy of the *** and, upon Triangle's reasonable request on a
country-by-country basis, a copy of filings, documents, and correspondence
with regulatory authorities concerning the Compounds or Products *** ,
(ii) to the extent reasonably practical, provide *** with regulatory
authorities in the Major Countries in which strategies, approval issues or
major scientific issues may be reviewed concerning the Compounds or Products
and consider, ***, and (iii) for Compounds or Products sourced from Abbott
under the Supply Agreement, provide Triangle with a copy of any inspection
reports relating to Abbott's, its Affiliates' or any Third Party's
manufacture of Compound or Product and allow *** manufacturing facilities, to
the extent permitted by the *** . Abbott shall control all decisions
regarding such regulatory activities in the International Territory.
3.4 REASONABLE COOPERATION. Each Party shall provide the other
Party with all reasonable assistance requested by the other Party with respect
to the foregoing clinical development and regulatory activities. The Party
providing such assistance shall be reimbursed by the other Party for its
reasonable out-of-pocket costs and expenses.
3.5 LAUNCH. The Parties shall use their Reasonable Best
Efforts to Launch and Co-Promote each Product in the U.S. Territory within
*** from the date of Product Approval in the United
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States. Abbott shall use its Reasonable Best Efforts to Launch and Promote
each Product in each country of the International Territory within *** from
the date of Product Approval in such country.
3.6 TRIANGLE ASSUMPTION RIGHTS.
(a) Once a Product has been Launched in the U.S.
Territory, if Abbott determines not to Launch such Product in
a given country in the International Territory or otherwise
fails to Launch such Product within *** after receipt of
Product Approval in such country, then Triangle may elect, by
*** prior written notice to Abbott, to terminate (unless
Abbott Launches the Product in such country during such ***
notice period) Abbott's rights under this Agreement to Promote
such Product in such country (including a termination of the
license granted to Abbott hereunder with respect to such
Product in such country), in which event Triangle may itself,
or through one or more Third Parties, Launch and Promote such
Product in such country outside of the scope of this
Agreement; *** (i) the *** if any, in any country that is now
or may be in the future a member of the European Union, or
(ii) in the event that Abbott has not obtained Product
Approval in any country in the European Union, the *** of the
*** in the *** with the *** of such Product or, if there are
fewer than *** countries in which there is Product Approval
for such Product, the *** ; provided, further, that if Abbott
subsequently obtains Product Approval for such Product in a
country in the European Union, Triangle shall use its
Reasonable Best Efforts to *** of the Product in such country
to the level provided in clause (i) above. Notwithstanding the
foregoing, if Abbott is in the process of *** with the
applicable regulatory authorities in such country, Abbott may
request, prior to the expiration of the above-referenced ***
period, an extension of up to an additional *** , subject to
the consent of Triangle, not to be unreasonably withheld, as
well as an additional *** , subject to Triangle's consent (i)
at its sole discretion if a non-Major Country or (ii) in its
reasonable discretion if a Major Country; provided that either
such extension shall automatically terminate upon *** . At the
request of Triangle, Abbott shall promptly provide ***
requested by Triangle.
(b) With respect to any Major Country in the International
Territory, Triangle will notify Abbott when Triangle reasonably
determines that Triangle has delivered to Abbott a set of primary
documents in respect of a given Product which is sufficiently
complete to enable Abbott
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to prepare a submission for Product Approval in such Major
Country. Abbott shall have *** from the date of receipt of the
Triangle notice referred to in the immediately preceding
sentence in which to determine whether such primary documents
are sufficiently complete.
(i) If Abbott determines that such primary documents
are sufficiently complete, subject to the provisions set
forth below, Abbott shall have *** within which to
prepare and make a Product Approval submission for such
Product for all Major European Countries (the
"Pan-European Submission") and *** to prepare and make
submissions in a non-European Major Country. Failure by
Abbott to notify Triangle of a deficiency within such ***
period shall be deemed to constitute notice that such
primary documents are sufficiently complete.
(ii) If Abbott determines, in good faith, within
such *** period that such primary documents are not
sufficiently complete, it shall notify Triangle to this
effect, which notice shall specify the deficiency. The
*** and *** time periods specified in clause (i) above
shall not commence until such time as Triangle cures the
deficiency. In the event the Parties disagree as to
whether a deficiency exists, they shall attempt to
resolve the dispute and any unresolved dispute shall be
subject to Section 20.3.
(iii) The periods set forth in clause (i) shall be
tolled if the applicable regulatory authority determines
there exists a material deficiency in the primary documents
or Product Approval submission, as applicable (and the
deficiency did not arise as a result of Abbott's failure to
perform its obligations hereunder), and shall be restarted
when such deficiency is cured; provided, however, that
Abbott shall be entitled to a reasonable period of time to
complete such submission, which period shall be mutually
agreed upon by the Parties. Abbott shall promptly notify
Triangle in the event Abbott receives notice of deficiency
from any regulatory authority, including the specific
details thereof.
(iv) In the event Abbott fails to make a Product
Approval submission within the time allowed therefor
pursuant to this Section 3.6(b), *** The foregoing ***.
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(c) Notwithstanding the foregoing provisions of this Section
3.6, Abbott shall not be deemed to have failed to Launch a
Product pursuant to paragraph (a) or to have failed to file for
Product Approval in paragraph (b), if such failure resulted from
an event of Force Majeure pursuant to Article 19.
3.7 EXCUSED PERFORMANCE. The Parties acknowledge and
understand that the development, registration and marketing of the Products, as
with any pharmaceutical product, is subject to certain inherent risks including
that (a) the Products will be ineffective, toxic, or will not receive Product
Approval; (b) the Products will be too expensive to manufacture or market or
will not achieve broad market acceptance; (c) Third Parties will hold
proprietary rights that will preclude the marketing and sale of the Product; or
(d) Third Parties will market equivalent or superior products. Neither Party
makes any representation or warranty that the Products (i) will be successfully
developed; (ii) will receive all necessary Product Approvals; (iii) will be
Launched; or (iv) will be commercially successful. The respective obligations of
the Parties under this Article, and Articles 4 and 5 with respect to any
Product, are expressly conditioned upon the safety, efficacy and commercial
feasibility of such Product, and a Party's obligation hereunder shall be delayed
or suspended for so long as any condition or event exists which reasonably
causes a Party to question the safety, efficacy or commercial feasibility of any
Product. Furthermore, Abbott's obligation to market and Promote the Products in
a country in the International Territory shall not apply if Abbott has not
commenced or has ceased marketing such Product in such country substantially due
to adverse business or financial conditions, including those caused by the
regulatory authorities or other governmental authorities of such country, which
would cause the marketing of such Product in such country to be contrary to the
financial best interest of the Parties, including not commencing marketing in a
country where the regulatory authorities or other governmental authorities have
price approval or reimbursement authority and the price approved or proposed or
the reimbursement granted is unacceptable to Abbott in its reasonable commercial
judgment. Each Party shall promptly notify the other Party in the event any
material issue arises as to the safety, efficacy, commercial feasibility, or
adverse business or financial conditions with respect to any Product.
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ARTICLE 4
CO-PROMOTION AND PROMOTION
4.1 MARKETING EFFORT. Abbott and Triangle shall use their
Reasonable Best Efforts to Co-Promote the Products in the U.S. Territory, and
Abbott shall use its Reasonable Best Efforts to Promote the Products in the
International Territory. Triangle shall be the lead Party for implementation of,
and shall make tactical decisions with regard to, Co-Promotion in the U.S.
Territory, consistent with the terms of this Agreement, the then current U.S.
Co-Promotion Plan and U.S. Promotional Materials and any applicable direction
provided by the U.S. Marketing Board. Abbott shall use its Reasonable Best
Efforts to implement, and shall make tactical decisions with regard to,
Promotion in the International Territory, consistent with the terms of this
Agreement, the then current International Promotion Plan and International
Promotional Materials and any applicable direction provided by the International
Marketing Board.
4.2 U.S. TERRITORY
(a) U.S. MARKETING BOARD. Abbott and Triangle shall work
together to Co-Promote the Products in the U.S. Territory and
shall present their views on the Co-Promotion of each Product
through a committee (the "U.S. Marketing Board") which shall
oversee and direct the Co-Promotion of the Products in the U.S.
Territory. The U.S. Marketing Board shall review and approve
strategies for the Co-Promotion of the Products and undertake the
activities necessary to implement those strategies in accordance
with a U.S. Co-Promotion Plan and U.S. Promotional Materials
(including by coordinating the Parties' Detailing messages and
methodologies, physician, trade and managed care targeting and
call programs and efforts). The U.S. Marketing Board shall
observe the following rules:
(i) The U.S. Marketing Board, consisting of a total
of not more than *** , shall include an equal number of
representatives from Abbott and Triangle and shall be
permanently chaired by a Triangle representative. Each
Party's representatives on the U.S. Marketing Board shall
be full-time employees of such Party. Each party shall be
permitted to have an additional non-voting observer from
the International Marketing Board participate in any
meeting. Abbott shall designate a lead representative on
the U.S. Marketing Board, who shall be authorized by
Abbott to communicate with the Triangle chairperson
between meetings of the U.S. Marketing Board, to make
decisions as needed. Each Party shall have the right, at
any time, to
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designate by written notice to the other Party, a
replacement, on a permanent or temporary basis, for any of
such Party's members on the U.S. Marketing Board, including
the chairperson.
(ii) Except for (A) the establishment of the U.S.
Co-Promotion Budget which is reserved for the mutual
agreement of the Parties, (B) the pricing of the Products to
the Third Party customers, which shall be determined
pursuant to Section 8.4, and (C) the location of the Abbott
Sales Representatives, which shall be determined by Abbott,
Triangle shall be responsible for making all final decisions
related to the Co-Promotion of the Products in the U.S.
Territory. The U.S. Marketing Board shall endeavor to work
by consensus; provided that the decisions of the chairperson
shall be deemed the final decisions of the Board in all
circumstances. Each Party shall use Reasonable Best Efforts
to implement the final decisions of the U.S. Marketing
Board.
(iii) In addition to the members of the U.S. Marketing
Board, it is understood that from time to time additional
personnel having specialized experience and training shall
be requested to assist the U.S. Marketing Board, including
finance, legal, and regulatory affairs. Such additional
personnel may be added to a U.S. Marketing Board meeting by
invitation of the chairperson; provided, however, that if
the chairperson invites one or more specialists from one
Party, it shall extend a like invitation to similar
specialists from the other Party.
(iv) The U.S. Marketing Board shall meet as
necessary, but such committee shall meet at least *** .
The site for such meetings shall alternate between
Durham, North Carolina, and Abbott Park, Illinois, or
such other location agreed to by the Parties. Meetings
may also take place by telephonic or video conference.
The chairperson shall send to the members of the U.S.
Marketing Board a notice of each meeting at least ten
(10) business days prior to the date of such meeting. The
chairperson shall endeavor to coordinate the timing and
place of scheduled meetings of the U.S. Marketing Board
with those of the International Marketing Board.
(v) Any member of the U.S. Marketing Board may send to
the chairperson, at least seven (7) business days before a
meeting date, proposed topics to be discussed at such
meeting. At least five (5) business days before the meeting
date, the chairperson shall prepare and distribute an Agenda
for such meeting of the topics to be discussed at such
meeting and a list of any non-member specialists who have
been invited to such
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meeting. Within ten (10) business days after such meeting,
the chairperson shall prepare and distribute draft action
steps and decisions of the meeting to all members of the
U.S. Marketing Board. Within five (5) business days of the
date on which the action steps and decisions were
distributed, the members shall either note their approval or
submit proposed revisions to the draft. Not more than five
(5) business days after the receipt of all approvals or
proposed revisions, the chairperson shall issue the final
action steps and decisions of the U.S. Marketing Board.
(vi) Each Party shall bear its own costs, including
travel costs, for its personnel serving on the U.S.
Marketing Board or attending any meeting of the U.S.
Marketing Board.
(b) U.S. CO-PROMOTION BUDGET. Each year the Parties shall
reach written agreement on an annual budget for each Product
(the "U.S. Co-Promotion Budget"), which shall set forth in
appropriate detail, the costs and expenses to be incurred
pursuant to subpart (i) of Section 1.8 (Abbott SG&A) and
subpart (i) of Section 1.88 (Triangle SG&A). The initial U.S.
Co-Promotion Budget shall be approved within *** of the
Effective Date and each subsequent annual U.S. Co-Promotion
Budget shall be approved by *** for the following Annual
Reporting Period for the U.S. Territory. The U.S. Co-Promotion
Budget shall be expended consistent with the strategies
outlined in the U.S. Co-Promotion Plan, allowing for
management discretion in the implementation of specific
tactical components. The approved U.S. Co-Promotion Budget for
a Product may be adjusted at any time upon the written
agreement of the Parties.
(c) U.S. CO-PROMOTION PLAN. With input from the U.S.
Marketing Board, Triangle will use its Reasonable Best Efforts to
prepare and implement an annual plan (the "U.S. Co-Promotion
Plan") for the Co-Promotion of the Products in the U.S.
Territory. The U.S. Marketing Board shall review and approve, and
oversee the implementation of, the U.S. Co-Promotion Plan;
provided that Triangle shall be responsible for making all final
decisions relating to the implementation of the U.S. Co-Promotion
Plan. The U.S. Co-Promotion Plan shall specify for each Product
the number and type of Details (i.e., Primary Details and
Secondary Details) to be performed by each Party's Sales
Representatives which are included in such Party's SG&A account
hereunder (the "Detailing Commitment"), the sampling program for
the Products, the Discretionary Funds available to the Sales
Representatives, any Marketing Studies for the Product, medical
education programs and special marketing incentive programs;
provided, however, that,
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unless expressly agreed otherwise by the Parties, the Abbott
Sales Representatives and the Triangle Sales Representatives
shall be treated in a like and equal manner such that: (i) ***
shall be the same for both Parties; (ii) *** per Sales
Representative shall be identical for both sales forces; (iii)
*** per Sales Representative shall be the same for both
Parties; and (iv) *** per Sales Representative shall be
identical for both sales forces. In preparing the U.S.
Co-Promotion Plan, the U.S. Marketing Board shall use its
Reasonable Best Efforts to coordinate its activities with the
Co-Promotion Committee (as defined in the Co-Promotion
Agreement) with respect to its preparation of the Co-Promotion
Plan (as defined in the Co-Promotion Agreement).
(d) U.S. SALES REPRESENTATIVES.
(i) Under the U.S. Co-Promotion Budget and the U.S.
Co-Promotion Plan, Abbott shall maintain *** Sales
Representatives to Co-Promote hereunder (measured on a full
time equivalent basis), except as provided in Section
4.2(d)(ii), and Triangle shall be authorized to maintain
*** Sales Representatives to Co-Promote hereunder (measured on
a full time equivalent basis). *** shall be authorized to ***
), as part of the *** ; provided, that to the extent that
either ***. The U.S. Marketing Board may not reduce the number
of Abbott's Sales Representatives Co-Promoting the Products
below *** full time equivalents without the written consent of
Abbott. Each Party may dedicate more than *** Sales
Representatives (measured on a full time equivalent basis) to
Co-Promote the Products in the U.S. Territory, but may not
include any of the costs and expenses attributable thereto in
the Abbott SG&A or the Triangle SG&A, except as provided in
Section 4.2(d)(ii). Each of Abbott and Triangle shall be
authorized to account for no more than *** , on a fully
allocated cost per full time equivalent basis, as part of the
Abbott SG&A and Triangle SG&A, respectively.
(ii) Following the *** full calendar year after the
Launch of the first Product in the U.S. Territory, Abbott may,
with ***
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written notice to Triangle prior to the commencement of
any calendar year, elect to *** its sales force commitment
below *** Sales Representatives (measured on a full time
equivalent basis) in whole increments of *** , which election
shall be effective for such calendar year; provided that
Triangle may thereafter *** from time to time the number of
its Sales Representatives Co-Promoting hereunder (measured on
a full time equivalent basis) to the extent that the aggregate
number of Triangle and Abbott Sales Representatives
Co-Promoting hereunder does not *** Sales Representatives
(measured on a full time equivalent basis). Abbott may, with
*** written notice to Triangle prior to the commencement of
any subsequent calendar year, elect to *** its sales force
commitment in whole increments of *** Sales Representatives
(measured on a full time equivalent basis); provided that such
*** shall be permitted only to the extent that the aggregate
number of Triangle and Abbott Sales Representatives
Co-Promoting hereunder does not *** Sales Representatives
(measured on a full time equivalent basis), including any ***
Sales Representatives *** by Triangle in accordance with the
prior sentence. In the event that Abbott *** the number of its
Sales Representatives Co-Promoting hereunder (measured on a
full time equivalent basis) *** , Triangle may, with *** prior
written notice to Abbott, elect to assume the exclusive right
to Promote the Products hereunder in the U.S. Territory. In
the event Triangle *** its Sales Representatives or assumes
the Promotion of the Products as provided in this Section
4.2(d)(ii), the costs and expenses of its *** Sales
Representatives (to the extent that the aggregate number of
Abbott Sales Representatives and Triangle Sales
Representatives does not *** measured on a full time
equivalent obasis) shall be included in Triangle SG&A.
(iii) Each Party shall be responsible for staffing,
selling skills training, supervising, and compensating
(including incentives) its own Sales Representatives.
With respect to training, Triangle shall make available
to Abbott, *** , the same kinds and amounts of
Product-specific training materials that it provides for
its own Sales Representatives. Both Parties shall
re-train their personnel in the promotion of the Products
from time to time as set forth in the U.S. Co-Promotion
Plan. Each Party shall reward its Sales Representatives (
*** ) for promoting the Products through an
incentive-based compensation system. For Abbott
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such system shall be ***. For Triangle, its system shall
be ***. Each Party shall have full control over and be
responsible for the salary, incentives, benefits and
other employment matters related to its Sales
Representatives.
(e) U.S. CO-PROMOTION EFFORT. Each Party shall use its
Reasonable Best Efforts to perform those tasks and
responsibilities assigned to such Party in the U.S.
Co-Promotion Plan, including performing at least their
respective Detailing Commitments, and each Party shall use its
Reasonable Best Efforts to support the Co-Promotion of the
Products in the U.S. Territory. The Detailing of a Product
shall commence upon the Launch of such Product. Each Party may
perform Details throughout the U.S. Territory. The U.S.
Marketing Board shall coordinate the Parties' Detailing
activities so as to maximize Product sales by maximizing
geographic coverage, ensuring that the geographic disbursement
of the Details is not unduly burdensome on either Party,
eliminating unnecessary duplication, and ensuring that the
potential for a proportionate number of prescriptions shall be
generated by the respective sales forces. The U.S. Marketing
Board shall also coordinate the managed care efforts of the
Parties in the U.S. Territory as outlined in the U.S.
Co-Promotion Plan so as to maximize Product sales *** . In
connection with the Co-Promotion of the Products in the U.S.
Territory, both Parties shall participate in conventions, and
continuing educational programs for health care professionals,
and the effort of the Parties in this regard shall be
coordinated by the U.S. Marketing Board.
(f) U.S. SAMPLING. As part of the Co-Promotion of the
Products in the U.S. Territory, each Party may distribute Sample
Packs free of charge to health care professionals on an ongoing
basis in accordance with the sampling program as outlined in the
U.S. Co-Promotion Plan and approved by the U.S. Marketing Board
and all Legal Requirements. Each Party shall maintain all records
required pursuant to the Prescription Drug Marketing Act of 1987,
including maintenance of written requests and delivery receipts
for any Sample Packs delivered to its sales force for so long as
required by such Act. Abbott shall promptly report to Triangle
any thefts of
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Sample Packs or any losses of Sample Packs. Triangle shall be
responsible for providing to both sales forces the quantities of
Sample Packs set forth in the U.S. Co-Promotion Plan.
(g) U.S. PROMOTIONAL MATERIALS. Triangle shall internally
review the U.S. Promotional Materials from a medical and legal
perspective and shall prepare and provide the quantity and types
of U.S. Promotional Materials set forth in the U.S. Co-Promotion
Plan. The Parties shall disseminate in the U.S. Territory only
those promotional and advertising materials which have been
approved for use by the U.S. Marketing Board. All such materials
shall be consistent with the U.S. Co-Promotion Plan approved by
the U.S. Marketing Board. Abbott shall not be required to use
U.S. Promotional Materials which are prohibited under applicable
FDA regulations. Abbott and Triangle shall use the same U.S.
Promotional Materials in connection with the Co-Promotion of the
Products.
(h) COMPLIANCE WITH LAW. Each Party shall cause its sales
force, and all other employees and approved agents and
representatives, to comply with all applicable laws, regulations
and guidelines in connection with the Co-Promotion of the
Products in the U.S. Territory, including, without limitation,
the Prescription Drug Marketing Act and the Federal Anti-Kickback
Statute. Each Party shall cause its sales force, in the course of
its Co-Promotion of the Products, to (i) limit its claims of
efficacy and safety for Products to those which are consistent
with the U.S. Marketing Board's then approved product circular
for the Products or as otherwise approved by the U.S. Marketing
Board consistent with Legal Requirements, (ii) not delete or
modify claims of efficacy and safety in the Co-Promotion of
Products so that they are different in any way from those which
are contained in the U.S. Marketing Board's then approved product
circular for the Products, or make any changes in promotional
materials and literature provided by the U.S. Marketing Board,
and (iii) not knowingly or recklessly do anything which will
jeopardize the goodwill or reputation of the Products or the
other Party. In addition, each Party shall exercise its
Reasonable Best Efforts to conduct the Co-Promotion of the
Products in adherence to the American Medical Association Gifts
to Physicians From Industry Guidelines.
4.3 INTERNATIONAL TERRITORY.
(a) INTERNATIONAL MARKETING BOARD. Abbott and Triangle shall
work together to develop a plan for the Promotion of the Products
by Abbott in the International Territory through a committee (the
"International Marketing Board") which shall oversee and direct
the Promotion of the Products in the International Territory. The
International Marketing Board shall review and approve strategies
for the Promotion of the Products and undertake the activities
necessary to
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implement those strategies in accordance with an International
Promotion Plan and International Promotional Materials. The
International Marketing Board shall follow the rules established
by Section 4.2(a)(i) through (vi) for the U.S. Marketing Board,
except that (i) an Abbott representative shall permanently chair
the International Marketing Board, (ii) Abbott shall be
responsible for making all final decisions relating to the
implementation of the International Promotion Plan, (iii)
Triangle shall designate a lead representative on the
International Marketing Board, who shall be authorized by
Triangle to communicate with the Abbott chairperson between
meetings of the International Marketing Board, to make decisions
as needed, (iv) in all instances references to the U.S.
Co-Promotion Budget shall mean the International Promotion
Budget, and (v) in all instances references to "U.S." and
"International" shall be reversed.
(b) INTERNATIONAL PROMOTION BUDGET. Each year the Parties
shall reach written agreement on an annual budget for each
Product (the "International Promotion Budget"), which shall
set forth the costs and expenses to be incurred in the cost
categories set forth in subpart (i) of Section 1.8 (Abbott
SG&A). The initial International Promotion Budget shall be
approved within *** after the Effective Date and each
subsequent annual International Promotion Budget shall be
approved by *** for the following Annual Reporting Period for
the International Territory. The International Promotion
Budget shall be expended consistent with the strategies
outlined in the International Promotion Plan, allowing for
management discretion in the implementation of specific
tactical components. The approved International Promotion
Budget for a Product may be adjusted at any time upon the
written agreement of the Parties.
(c) INTERNATIONAL PROMOTION. Abbott shall use its Reasonable
Best Efforts to Promote the Products in the International
Territory in accordance with the International Promotion Plan
and, to the extent possible, coordinate its promotional
activities and methods in the International Territory with those
used by the Parties in the U.S. Territory. With input from the
International Marketing Board, Abbott will exercise its
Reasonable Best Efforts to prepare and implement an annual plan
(the "International Promotion Plan") for the Promotion of the
Products in the International Territory. The International
Marketing Board shall review and approve the International
Promotion Plan. Abbott shall cause its sales force, and all other
employees and approved agents and representatives, to comply with
all applicable laws, regulations and guidelines in connection
with the Promotion of the Products in the International
Territory. Abbott shall not make any claims or representations in
respect of the Products which are inconsistent with
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Legal Requirements and the core package and other regulatory
materials shall be approved pursuant to Abbott's then current
product approval procedures.
4.4 PRODUCT DEVELOPMENT COMMITTEE. The Parties shall also form
a Product Development Committee which shall be responsible for developing
worldwide strategies for Marketing Studies that build value for the Products and
shall act in an advisory capacity with respect to (i) the clinical development
and Product Approval of the Products in the Territories and (ii) potential
combination therapies using the Products, the products to be co-promoted by the
Parties under the Co-Promotion Agreement, and/or one or more other
pharmaceutical products. The Product Development Committee shall include an
equal number of representatives from Abbott and Triangle and shall be chaired by
a Triangle representative. It shall generally follow the rules established by
Section 4.2(a)(i) through (vi) for the U.S. Marketing Board, except that final
decisions with respect to Marketing Studies shall be made by Triangle with
respect to Marketing Studies proposed or requested by the U.S. Marketing Board
and by Abbott with respect to Marketing Studies proposed or requested by the
International Marketing Board, irrespective of the country or countries in which
such Marketing Studies are conducted.
4.5 NAMES. While the configuration and placement of the Abbott
name and the Triangle name shall be decided by the U.S. Marketing Board in the
U.S. Territory and by Abbott for the International Territory, it is agreed that
the Abbott name and the Triangle name shall appear and be equally prominent on
all Products, Sample Packs and U.S. Promotional Materials in the U.S. Territory.
The Product's N.D.C. number shall be in Triangle's name. The Products will
utilize an Abbott List Number in the U.S. Territory. To the extent permitted by
the local laws of the countries of the International Territory, Abbott shall
include the phrase "under license from Triangle Pharmaceuticals" on all
Products, Sample Packs and Promotional Materials in the International Territory.
4.6 INDIGENT PROGRAMS. In addition to the Promotion activities
covered under this Agreement, the U.S. Marketing Board in the U.S. Territory and
the International Marketing Board in the International Territory may establish
and operate an indigent program for distribution of Products and/or Sample Packs
to needy individuals and/or the physicians and other providers serving such
needy individuals and an expanded access program. *** ,
as the case may be.
ARTICLE 5
MILESTONE PAYMENTS FOR PAST R & D
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5.1 R & D PAYMENTS. In consideration of past research and
development performed by Triangle, Abbott shall make the following milestone
payments to Triangle, which payments shall be due and payable upon the dates
specified in Subsections (a) and (b) and within *** after the achievement of
the events specified in Subsections (c) through (m):
(a) *** Dollars ($ *** ) on or before *** ;
(b) *** Dollars ($ *** ) on or before *** ;
(c) *** Dollars ($ *** upon *** (in addition to any
other payments payable pursuant to this Section 5.1);
(d) *** Dollars ($ *** ) upon *** (in addition to
any other payments payable pursuant to this Section 5.1);
(e) *** Dollars ($ *** ) upon *** ;
(f) *** Dollars ($ *** ) upon *** ;
(g) *** Dollars ($ *** ) upon the *** ;
(h) *** Dollars ($ *** ) upon the earlier to occur of
(i) the *** or (ii) *** ;
(i) *** Dollars ($ *** ) upon *** ;
(j) *** Dollars ($ *** ) upon *** ;
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(k) *** Dollars ($ *** ) upon the *** ;
(l) *** Dollars ($ *** ) upon the earlier to occur of
(i) the *** or (ii) ***;
(m) *** Dollars ($ *** ), at Triangle's election,
upon the occurrence of either: (i) *** or (ii)*** ;
provided that only *** will be payable under this
Subsection (m).
5.2 SINGLE PAYMENT OBLIGATION. Each of the foregoing
milestones shall only be paid once ***.
5.3 NOTICE. Triangle shall promptly notify Abbott of the
***. Abbott shall promptly notify Triangle of the ***.
ARTICLE 6
PROFIT SHARING
6.1 REPORTS BY ABBOTT. Within *** from
the end of each calendar quarter starting with the first calendar quarter for
which the Parties have budgeted expenditures under Article 4, or as otherwise
necessary, Abbott shall deliver to Triangle a true and accurate written report
showing whichever of the following are applicable for such calendar quarter:
(a) the Abbott Net Sales and Net Units of Product Sold
in: (i) the U.S. Territory; and (ii) the International
Territory (each in the aggregate and on a
Product-by-Product, country-by-country basis), a summary of
Abbott gross sales of and discounts from the Products in the
U.S. Territory, and any changes in the WAC for the U.S.
Territory;
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(b) the Abbott Distribution Margin *** for: (i)
the U.S. Territory; and (ii) the International Territory;
(c) the Abbott Operating Margin *** for: (i) the
U.S. Territory; and (ii) the International Territory;
(d) any updated information regarding Abbott Net Sales,
Abbott Distribution Margin and Abbott Operating Margin for
any prior calendar quarter(s);
(e) the exchange rates, if any, used in determining the
amount of Dollars calculated pursuant to Section 7.3;
(f) any such other information reasonably required by
Triangle to comply with its reporting obligations under the
Triangle License Agreements; and
(g) A report in electronic format showing the number of
Details performed by Abbott in the U.S. Territory, broken
down by Abbott product Detail codes and by Physicians
(including the physician name, address, AMA Education Number
and AMA specialty), during such calendar quarter and such
calendar year to date, the date of such presentation, and a
flag indicating whether such presentation was a Primary
Detail or a Secondary Detail.
The Divisional Vice President, Controller for the Pharmaceutical Products
Division of Abbott and the Divisional Vice President, Controller of the
International Division of Abbott shall jointly certify in writing the
correctness and completeness of each report submitted by Abbott pursuant to this
Section 6.1. In addition, Abbott's ***.
6.2 REPORTS BY TRIANGLE. Within *** from the end of each
calendar quarter starting with the first calendar quarter for which the
Parties have budgeted expenditures under Article 4, or as otherwise
necessary, provided that Abbott has timely delivered the report referenced in
Section 6.1, Triangle shall deliver to Abbott a true and accurate written
report showing whichever of the following are applicable for such calendar
quarter:
(a) the Triangle Product Sales in the U.S. Territory;
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(b) the Triangle Distribution Margin for the U.S.
Territory *** ;
(c) the Triangle Operating Margin for the U.S.
Territory *** ;
(d) the U.S. Product Profit;
(e) the International Product Profit and the Triangle
Third Party Royalties in the International Territory;
(f) the balance in the Reimbursement Account, any
accrued but unpaid interest thereon, and Triangle's Cash;
(g) the Abbott U.S. Profit Amount, the Triangle U.S.
Profit Amount, the Abbott International Profit Amount and
the Triangle International Profit Amount;
(h) the U.S. Adjustment Amounts for each Party and the
International Adjustment Amount;
(i) the Final Payment due to either Abbott or Triangle
pursuant to Section 6.6;
(j) any updated information regarding Triangle Product
Sales, Triangle Distribution Margin, Triangle Operating
Margin and Triangle Third Party Royalties for any prior
calendar quarter(s) and the U.S. Product Profit, the
International Product Profit, the Abbott U.S. Profit Amount,
the Triangle U.S. Profit Amount, the Abbott International
Profit Amount, the Triangle International Profit Amount, the
U.S. Adjustment Amount, the International Adjustment Amount
and the Final Payment for any prior calendar year(s); and
(k) a report in electronic format showing the number of
Details performed by Triangle in the U.S. Territory, broken
down by Triangle product Detail codes, and by Physician
(including the Physician name and address, AMA Educational
Number and AMA specialty) during such calendar quarter and
such calendar year to date, the date of such presentation
and a flag indicating whether such presentation was a
Primary Detail or a Secondary Detail.
The Chief Financial Officer and/or Treasurer of Triangle shall certify in
writing the correctness and completeness of each report submitted by Triangle
pursuant to this Section 6.2. In addition, Triangle's
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***.
6.3 NET LOSS. Net losses shall be allocated between the
Parties in accordance with the allocation provisions set forth in Sections 6.4
and 6.5. The Parties understand that the U.S. Product Profit, the International
Product Profit, the Abbott U.S. Profit Amount, the Triangle U.S. Profit Amount,
the Abbott International Profit Amount and the Triangle International Profit
Amount can each be a negative number and represent a net loss.
6.4 U.S. PROFIT SPLIT. The U.S. Product Profit for each
calendar year (or portion thereof for less than a full calendar year) shall be
shared between the Parties as follows:
(a) The following table represents the percentage split of
U.S. Product Profit, the calculation of which is set forth in
Section 6.4(b):
<TABLE>
<CAPTION>
Annual Abbott Net Sales
In the U.S. Territory Percent of Product Profit
----------------------- -------------------------
Abbott Triangle
------ --------
<S> <C>
*** ***
*** ***
</TABLE>
(b) The sharing of the U.S. Product Profit shall be
determined on an aggregate basis for all Products as follows:
(i) If the Abbott Net Sales in the U.S. Territory
for the given calendar year (or portion thereof for less
than a full calendar year) is less than *** Dollars ($
*** ), the U.S. Product Profit shall be split *** to
Abbott and *** to Triangle; and
(ii) If the Abbott Net Sales in the U.S. Territory
for the given calendar year (or portion thereof for less
than a full calendar year) is equal to or greater than
*** Dollars ($ *** ), the U.S. Product Profit shall be
split *** to Abbott and *** to Triangle from the first
dollar of sales.
(c) The allocation of U.S. Product Profit (whether a
positive (profit) amount or a negative (loss) amount) between
Abbott and Triangle pursuant to Sections 6.4(a) and (b) as of the
end of the applicable calendar quarter or year shall be called
the "Abbott U.S. Profit Amount" and
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the "Triangle U.S. Profit Amount," respectively, which together
shall equal the U.S. Product Profit as of the end of such period.
(d) With respect to the U.S. Territory, for the first
calendar quarter of each calendar year, the "U.S. Adjustment
Amount" shall be determined for *** and shall be determined
for Triangle by subtracting the *** . For the second, third
and fourth calendar quarters of each calendar year, the U.S.
Adjustment Amount shall be determined, with respect to such
calendar quarter (i) for *** (A) the *** for *** quarter and
(B) the Abbott U.S. Profit Amount as of the end of the
immediately preceding *** (ii) for *** (A) the *** (B) the
***. If the U.S. Adjustment Amount is positive for Abbott and
negative for Triangle, then Abbott shall owe such positive
amount to Triangle. If the U.S. Adjustment Amount is negative
for Abbott and positive for Triangle, then Triangle shall owe
such positive amount to Abbott.
(e) In the event that the *** for any Product falls below
the *** at any time during the applicable period or any prior
calendar quarter or year, the Parties shall *** in the *** the
*** was utilized to *** the Products in the United States,
based on the Net Units of Product Sold in the U.S. Territory
for such period(s).
(f) The payment of amounts identified in this Section 6.4
shall be made in accordance with Section 6.6.
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6.5 INTERNATIONAL PROFIT SPLIT. The International Product
Profit for each calendar year (or portion thereof for less than a full calendar
year) shall be shared between the Parties as follows:
(a) The following table represents the percentage split of
International Product Profit, the calculation of which is set
forth in 6.5(b):
<TABLE>
<CAPTION>
Annual Abbott Net Sales
In the International Territory Percent of Product Profit
------------------------------ ----------------------------------------------------
Abbott Triangle
------------------------ ------------------------
<S> <C> <C>
*** *** ***
*** *** ***
*** *** ***
</TABLE>
(b) The sharing of the International Product Profit shall be
determined on an aggregate basis for all Products as follows:
(i) If the Abbott Net Sales in the International
Territory for the given calendar year (or portion thereof
for less than a full calendar year) is less than ***
Dollars ($ *** ), the International Product Profit shall
be split *** to Abbott and *** to Triangle;
(ii) If the Abbott Net Sales in the International
Territory for the given calendar year (or portion thereof
for less than a full calendar year) is equal to or
greater than *** Dollars ($ *** ) but is less than ***
Dollars ($ *** ), "X%" of the International Product
Profit shall be split *** to Abbott and *** to Triangle,
and "Y%" of the International Product Profit shall be
split *** to Abbott and *** to Triangle. "X%" shall be
determined by dividing *** Dollars ($ *** ) by the *** in
the International Territory for such calendar year (or
portion thereof for less than a full calendar year), and
"Y%" shall be calculated by *** *** ; and
(iii) If the Abbott Net Sales in the International
Territory for the given calendar year (or portion thereof
for less than a full calendar year) is equal to or greater
than *** Dollars ($ *** ), "X%" of the
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International Product Profit shall be split *** to Abbott
and *** to Triangle; "Y%" of the International Product
Profit shall be *** ; and "Z%" of the International
Product Profit shall be split *** to Abbott and *** to
Triangle. "X%" shall be determined by dividing ***
Dollars ($ *** ) by the *** for such calendar year (or
portion thereof for less than a full calendar year). "Y%"
shall be determined by dividing *** Dollars ($ *** ) by
the *** in the International Territory for such calendar
year (or portion thereof for less than a full calendar
year). "Z%" shall be determined by *** .
(c) The allocation of International Product Profit (whether
a positive (profit) amount or a negative (loss) amount) between
Abbott and Triangle pursuant to Sections 6.5(a) and (b) as of the
end of the applicable calendar quarter or year shall be called
the "Abbott International Profit Amount" and the "Triangle
International Profit Amount," respectively, which together shall
equal the International Product Profit as of the end of such
period.
(d) With respect to the International Territory, for the
first calendar quarter of each calendar year, the
"International Adjustment Amount" shall be determined by
subtracting the *** . For the second, third and fourth
calendar quarters of each calendar year, the International
Adjustment Amount shall be determined, with respect to such
calendar quarter, by ***. If the International Adjustment
Amount is positive, then Abbott shall owe such amount to
Triangle. If the International Adjustment Amount is negative,
then Triangle shall owe such amount to Abbott, subject to
Section 6.6(b).
(e) The payment of amounts identified in this Section 6.5
shall be made in accordance with Section 6.6.
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6.6 PAYMENTS.
(a) THIRD PARTY ROYALTIES FOR THE INTERNATIONAL TERRITORY.
Abbott shall pay to Triangle the Third Party Royalties for the
International Territory, in the manner provided in Section
6.6(c).
(b) PAYMENT DEFERRAL. With respect to each calendar
quarter, if the International Adjustment Amount is negative
for such quarter (i.e. Triangle owes such amount to Abbott),
Triangle shall be permitted to defer payment of such
International Adjustment Amount to the extent, and only to the
extent, that Triangle's cash, cash equivalents, short term and
long term investments (at the end of the calendar quarter, as
defined in the footnotes to Triangle's consolidated financial
statements, hereinafter "Triangle's Cash") is or would be less
than $ *** after such payment. Any amounts deferred pursuant
to the immediately preceding sentence shall be added to a
"Reimbursement Account" maintained for Triangle, which shall
initially *** . The Reimbursement Account shall bear *** on
the amount, if any, from time to time in the Reimbursement
Account. With respect to each subsequent calendar quarter, if
the International Adjustment Amount is positive for such
quarter and there is a balance in the Reimbursement Account
(plus any accrued but unpaid interest), Abbott shall be
permitted to offset payment of such International Adjustment
Amount (otherwise owing to Triangle) to the extent, and only
to the extent, of the current balance in the Reimbursement
Account. If Triangle's Cash exceeds $ *** when there is a
balance in the Reimbursement Account (plus any accrued but
unpaid interest), Triangle shall apply such excess to pay down
the amount of such balance in connection with the applicable
Final Payment. In addition, if Abbott is obligated to make any
payment(s) to Triangle pursuant to Section 5 at any time when
there is a balance in the Reimbursement Account, Abbott shall
be permitted to offset a portion of such payment to the
extent, and only to the extent, that Triangle's Cash would
exceed $*** after such payment. The balance in the
Reimbursement Account (including any accrued but unpaid
interest) shall be correspondingly reduced by the amount of
any Triangle payment or Abbott offset under this Section
6.6(b). Triangle shall promptly provide to Abbott upon its
reasonable request a written report indicating Triangle's Cash
to permit Abbott to determine Triangle's obligations under
this Section 6.6(b). Triangle may at its option elect to pay
down the Reimbursement Account (including any accrued but
unpaid interest) when Triangle's Cash is less than $ ***.
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(c) FINAL PAYMENT. After each calendar quarter, the U.S.
Adjustment Amount (payable pursuant to Section 6.4), the
International Adjustment Amount (payable pursuant to Section
6.5, except to the extent deferred or offset pursuant to
Section 6.6(b)), any Third Party Royalties due Triangle for
the International Territory pursuant to Section 6.6(a), and
any other payment by Triangle to Abbott pursuant to Section
6.6(b) shall be netted, and the net amount (the "Final
Payment") shall be paid by the owing Party to the other Party.
If the Final Payment for each calendar quarter is due to
Abbott from Triangle, it shall be paid upon the delivery of
the Triangle report submitted pursuant to Section 6.2. If the
Final Payment is due to Triangle from Abbott, it shall be paid
within *** of Abbott's receipt of Triangle's report under
Section 6.2.
6.7 YEAR-END RECONCILIATION. Within *** after the end of
each calendar year starting with the first calendar year for which the
Parties have budgeted expenditures under Article 4, or as otherwise
necessary, the Product Profit split between the Parties pursuant to Sections
6.4 and 6.5, as well as the Reimbursement Account, for such calendar year
shall be recalculated (the "Reconciliation Amount") to reflect any amended
information (such as amended sales data, product returns or chargebacks)
relevant to the calculation of the Reconciliation Amount for such calendar
year. Within *** after any such recalculation, Abbott shall pay to Triangle,
or Triangle shall pay to Abbott, as the case may be, an amount equal to the
difference between the most recent prior calculation of the Final Payment or
the Reconciliation Amount and the latest Reconciliation Amount.
6.8 PERFORMANCE ADJUSTMENTS.
(a) FAILURE TO ACHIEVE U.S. *** . If for any calendar
year, either Party fails to achieve at least *** of such
Party's *** for such calendar year in the U.S. Territory, such
Party's share of the split of U.S. Product Profits pursuant to
Sections 6.4(a) and (b) for such calendar year shall be ***
for each *** from the *** . For example, if a Party fulfills
only *** of its *** and it is entitled to *** of the U.S.
Product Profits, such Party's share of the U.S. Product
Profits for such calendar year shall be reduced to *** and the
other Party's share of the U.S. Product Profit shall be *** .
In no event shall the adjustment to U.S. Product Profits
exceed *** . For example, if a Party would otherwise be
entitled to a *** profit split, such Party's profit split
could not fall below *** as a result of this Section 6.8(a).
Notwithstanding the foregoing, neither Party shall
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be deemed to have failed to achieve the required percentage of
its *** if such failure resulted from an event of Force
Majeure pursuant to Article 19. The calculations in this
Section 6.8(a) of a Party's achievement of its *** shall be
made on an aggregate basis across all Products and any
reduction in the split of U.S. Product Profit shall apply to
all Products for such calendar year.
(b) FAILURE TO ACHIEVE INTERNATIONAL PERFORMANCE
COMMITMENT. If for any calendar year, Abbott fails to *** of
the *** for such calendar year with respect to the
International Territory, Abbott's share of the split of
International Product Profits pursuant to Sections 6.5(a) and
(b) shall be reduced by *** for each *** from the ***
commitment level. For example, if Abbott has outlays equal to
only *** of *** and it is entitled to *** of the International
Product Profits, Abbott's share of the International Product
Profits shall be reduced to *** and Triangle's share of the
International Product Profit shall be increased to *** . In no
event shall the adjustment to International Product Profits
exceed *** . For example, if Abbott would otherwise be
entitled to a *** , Abbott's profit split could not fall below
*** as a result of this Section 6.8(b). Notwithstanding the
foregoing, Abbott shall not be deemed to have failed to
achieve the required percentage of its commitment if such
failure resulted from an event of Force Majeure pursuant to
Article 19.
6.9 EXAMPLES. Exhibit 6.9 sets forth various examples of the
calculations of the profit split required by this Article 6.
ARTICLE 7
METHOD OF PAYMENTS
7.1 PAYMENT PROCEDURE. All payments due under this Agreement
shall be paid in Dollars by wire transfer or by such other means agreed upon by
the Parties, in each case at the expense of the payor, for value no later than
the due date thereof (with twenty four 24 hours advance notice of each wire
transfer) to the following bank accounts or such other bank accounts as the
payee shall designate in writing within a reasonable period of time prior to
such due date:
If to Abbott:
Account Name: Abbott Laboratories
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Account Number: ***
Bank: ***.
***
ABA Number: ***
If to Triangle:
Account Name: Triangle Pharmaceuticals, Inc.
Account Number: ***
Bank: ***
Reference: ***
ABA Number: ***
7.2 INTEREST CHARGE. Without limiting either Party's rights
to pursue any other remedies at law or in equity, if any Party underpays or
otherwise fails to pay any payment required under this Agreement within ***
of the due date thereof, then, unless such discrepancy resulted from the
failure of the other Party to supply accurate or complete information, such
other Party shall pay annually *** until the date such payment is paid in
full.
7.3 FOREIGN CURRENCY EXCHANGE. All payments and reports
shall be made in Dollars. With respect to (i) sales of Products invoiced in a
currency other than Dollars; (ii) costs and expenses paid or incurred in a
currency other than Dollars; or (iii) any other instance when an item
required to be accounted for under this Agreement is expressed in a currency
other than Dollars, such amounts shall first be determined in the currency of
the country in which they are earned, paid or incurred and then converted
into Dollars using the *** ; provided, however, that in the event of rapidly
changing exchange rates, Abbott shall consult with Triangle and the Parties
shall agree on a mechanism to assure that exchange rates are calculated to
reflect fair market values on an ongoing basis. In the event that Abbott Net
Sales are accrued in a country where the local currency is blocked and cannot
be removed from the country, Abbott shall not be relieved from its obligation
to make payments hereunder or, subject to applicable Legal Requirements, the
timing of such payments.
7.4 REPORTING PERIOD. Whenever in this Agreement Abbott is
required to report or account for any financial matter on a calendar quarter or
calendar year basis, such reference shall be deemed to be a reference to a
Quarterly Reporting Period or Annual Reporting Period, unless Abbott switches
its financial
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reporting in the International Territory to a calendar year basis, in which case
all reporting and accounting shall be on a calendar quarter or calendar year
basis.
7.5 TAXES. Where any sum due to be paid to either Party
hereunder is subject to any withholding or similar tax, the Parties shall use
their best efforts to do all such acts and things and to sign all such documents
as will enable them to take advantage of any applicable double taxation
agreement or treaty. In the event there is no applicable double taxation
agreement or treaty, or if an applicable double taxation agreement or treaty
reduces but does not eliminate such withholding or similar tax, the payor shall
pay such withholding or similar tax to the appropriate government authority,
deduct the amount paid from the amount due the payee and secure and send to the
payor the best available evidence of such payment.
7.6 NO DOUBLE COUNTING OF COSTS. For the purpose of
determining any cost or expense which is shared by the Parties under this
Agreement or otherwise invoiced by one Party to another under this Agreement,
any cost or expense allocated by either Party to a particular cost category
shall be consistent with the terms of this Agreement and shall not also be
allocated to another category. In the event a cost or expense might arguably
fall into more than one category, the Parties shall mutually determine which
category such cost or expense most appropriately falls into.
7.7 SALES BY PERMITTED SUBLICENSEES. In the event Abbott
enters into an agreement with a Third Party to distribute or sell the Products
as an Abbott sublicensee in accordance with Section 2.4, such arrangements shall
***.
7.8 BOOKS AND RECORDS. Each Party shall keep full, true and
accurate books of account and records in accordance with generally accepted
United States accounting principles, consistently applied, containing all
particulars and reasonable supporting documentation as may be necessary for
the purpose of (i) determining the payments required by Article 6 and (ii)
such Party's compliance in other respects with its obligations under this
Agreement, including the number and types of Details performed by each party
in the U.S. Territory. All such books of account, records and supporting
documentation shall be open for inspection at a time mutually acceptable to
the Parties, during normal business hours no more frequently than *** by the
other Party and each Triangle Licensor, for *** following the end of each
calendar year to which they apply, by any independent certified public
accountant retained by the other Party (or by a Triangle Licensor)
(reasonably acceptable to the Party to be audited) on behalf of such other
Party (or by a Triangle Licensor) for the purpose of verifying the audited
Party's reports and/or compliance in other respects with obligations under
this Agreement. If such audit discloses an underpayment or overpayment, the
owing Party shall promptly pay to the other Party the amount of such
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underpayment or refund the amount of any overpayment, as the case may be,
plus interest charges calculated in accordance with Section 7.2. The costs
and expenses of performing such audits shall be borne by the auditing Party
and excluded from the auditing Party's SG&A; provided, however, that if the
amount of an underpayment by the audited Party is *** or more of the amount
actually due, then the reasonable out-of-pocket costs of such audit shall be
borne solely by the audited Party and excluded from such Party's SG&A.
7.9 INTERNATIONAL EXPENSES INCLUDABLE IN SG&A. Triangle
shall invoice Abbott for costs and expenses incurred by Triangle with respect
to the International Territory which, pursuant to the terms of this
Agreement, are includable in Abbott SG&A (other than Triangle Third Party
Royalties which shall be reimbursed pursuant to Section 6.6), and Abbott
shall pay to Triangle the amount invoiced within *** of the invoice date.
ARTICLE 8
PRODUCT SUPPLY AND DISTRIBUTION
8.1 PRODUCT DISTRIBUTION. Except as and to the extent
provided in this Agreement, Abbott shall exclusively distribute the Products
in the Territories to Third Party customers, including all activities
ancillary thereto (including, without limitation, warehousing and shipping).
Abbott shall use efforts *** to distribute Products in the Territories.
Abbott shall keep Triangle fully apprised with respect to its distribution
activities and shall provide Triangle with the input regarding these
activities. Subject to the terms of this Agreement, *** .
8.2 PRODUCT SUPPLY. In the U.S. Territory, Abbott shall
exclusively purchase from Triangle or from its designated Third Party
manufacturers, and Triangle or its designated Third Party manufacturers shall
exclusively supply to Abbott, Abbott's requirements for the Products in the
U.S. Territory. Product supply with respect to the International Territory
shall be dictated as provided in the Supply Agreement. To the extent that any
Product is sourced from Triangle or its designated Third Party manufacturers,
the sales forecast procedures set forth in this Sections 8.2 and 8.3 shall
apply thereto, except as otherwise provided in the Supply Agreement. The
Parties will cooperate to determine manufacturing strategy and objectives for
the supply of Compounds and Products, consistent with the terms of this
Agreement and any Third Party manufacture and supply chain agreements.
(a) SALES FORECAST. Within *** prior to the Launch of any
Product in the U.S. Territory (except for *** such period
shall be *** ), the U.S. Marketing
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Board shall establish a Sales Forecast for such Product
specifying anticipated requirements of each Product in the
U.S. Territory for the *** period commencing approximately ***
prior to the anticipated date of Launch (the "Sales
Forecast"). The U.S. Marketing Board shall be responsible for
establishing, preparing and updating the Sales Forecast for
the U.S. Territory.
(b) ROLLING FORECASTS. Such Sales Forecasts for the U.S.
Territory shall be updated *** so that at the beginning of
each *** , Triangle shall have been provided with a rolling
Sales Forecast for the *** period commencing with the ***
quarter after the date on which such Sales Forecast is
submitted (i.e. approximately *** ). By way of example only,
at the end of the *** (assuming a Product has been Launched),
the U.S. Marketing Board shall provide Triangle with a Sales
Forecast of the anticipated requirements of Product for the
*** consisting of the *** .
(c) COMMERCIAL SCALE-UP AND DEVELOPMENT. Except as and to
the extent otherwise specified in this Agreement, Triangle
shall exercise its Reasonable Best Efforts to pursue the
process development of the Products. The Parties will
cooperate to determine process development strategy and
objectives for the production of Products, consistent with the
terms of this Agreement and any Third Party manufacture and
supply agreements; provided that Triangle shall have control
of all final decisions regarding process development. *** ,
provided that the costs and expenses of producing validation
batches of the Products shall be included in *** , as
applicable, to the extent that the Product from such
validation batches are ultimately Sold.
(d) TRIANGLE THIRD PARTY MANUFACTURERS. In the event that
*** .
8.3 PRODUCT ORDERING AND DELIVERY. Abbott shall purchase the
Products and Triangle will deliver the Products in accordance with the following
procedures:
(a) Abbott shall purchase Products at the applicable
Transfer Price by means of purchase orders submitted to Triangle
at least *** in advance of the requested
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delivery date. Each purchase order shall be governed by the terms
of this Agreement and none of the terms or conditions of Abbott's
purchase orders, Triangle's acknowledgment forms or any other
forms exchanged by the parties shall be applicable, except those,
to the extent consistent with the terms set forth herein,
specifying quantity ordered, delivery locations and delivery
schedule and invoice information;
(b) All purchase orders for delivery during a calendar
month that do not exceed *** of the latest Sales Forecast
covering such month (excluding any amendments subsequent to
the original date of such Sales Forecast) shall be *** .
Triangle shall use its Reasonable Best Efforts to supply
Abbott with any Product in *** of such Sales Forecast. All
other purchase orders must be accepted or rejected by
Triangle, in writing, by facsimile or air courier, within ***
after receipt from Abbott. If Triangle does not provide such
notice of acceptance or rejection within *** , it shall be
deemed to have accepted such purchase orders in full.
(c) All Products shall be delivered *** as identified by
Triangle;
(d) Abbott shall arrange and pay for shipping from the
*** point to Abbott's distribution centers *** , and the
risk of loss shall pass from Triangle to Abbott when the
Products are delivered to the carrier at the *** ; and
(e) Triangle shall invoice Abbott at the Transfer Prices for
all Products delivered, and Abbott shall pay to Triangle the
amount invoiced within *** of the invoice date.
8.4 PRICING
(a) U.S. TERRITORY. *** shall establish the *** (" *** ")
for each Product sold by Abbott to wholesalers and other Third
Party customers, provided that in *** .
(b) TRANSFER PRICING IN THE U.S. TERRITORY. With respect
to products to be sold for use in the U.S. Territory, *** (the
" *** "). The ***; provided that (i) ***
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and (ii) *** shall be promptly ***. If the Parties *** of
such *** . The *** shall be the *** ; provided, that such ***
not affect the right of *** pursuant to the notice and other
provisions set forth ***. Triangle shall deliver a letter to
*** for the Products to establish ***.
(c) INTERNATIONAL TERRITORY. *** shall *** for each
Product sold by *** to wholesalers and other Third Party
customers for use in the International Territory; provided,
however, that *** , as applicable, shall *** in a given
country consistent with the practices and methodologies it
uses in *** for *** in the same *** in such country having ***.
8.5 INVENTORIES.
(a) Subject to the receipt of Product from Triangle in
accordance with this Article 8, Abbott shall use its Reasonable
Best Efforts to maintain adequate inventories of the Products in
the Territories to meet the needs of its customers on a timely
basis based upon, among other factors, the Sales Forecast,
previous demand histories and seasonal trends, and any customers'
contractual commitments.
(b) In the event of Product shortages, available supplies
shall be allocated first to permit any ongoing pre-clinical or
clinical trials or other product development activities to
continue on schedule. Supplies remaining available after that
initial allocation shall be allocated on a country-by-country
basis, pro rata based upon historical demand or some other
mechanism to be mutually agreed upon by the Parties.
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8.7 CUSTOMER RELATIONS. With respect to customer complaints
relating to the Promotion or distribution of the Products, each Party shall act
promptly to remedy such complaints. All Product-related inquiries and Product
complaints shall be addressed as provided in Section 10.3. Without limiting the
generality of the foregoing, in the U.S. Territory, each Party shall be
responsible for responding to all customer complaints relating to such Party's
Co-Promotion and distribution of the Products under this Agreement and, in the
International Territory, Abbott shall respond to all such customer complaints,
with Triangle providing reasonable assistance requested by Abbott. Each Party
shall keep the other Party fully and promptly apprised of its receipt of any
such significant complaints in the Territories.
8.8 QUALITY CONTROLS. Both Parties shall institute quality
controls in accordance with generally accepted industry standards for the
storage, shipment, handling and distribution of the Products and shall define
responsibilities for key quality systems and a quality manual agreed to by both
Parties (including without limitation, Sample Packs) and shall comply with all
Legal Requirements relating to the storage, shipment, handling and distribution
of the Products. Triangle and Abbott shall institute quality controls in
accordance with generally accepted industry standards for the manufacture of
Products. Each Party shall have the right to audit all facilities used by the
other Party to fulfill their obligations under this Agreement (including any
Third Party manufacturing facilities, in accordance with the terms of the
underlying manufacturing agreement).
8.9 U.S. PRODUCT CHARACTERISTICS.
(a) Abbott shall not be obligated to accept from Triangle
any Product with less than the greater of (i) *** of approved
shelf life for such Product in the United States or (ii) ***
of remaining shelf life; provided, however, that a Product may
be shipped with a shorter shelf life of not less than *** if
that is the limit approved by the FDA upon Launch.
(b) Triangle shall provide Abbott with a certificate of
analysis with respect to each shipment of the Products to Abbott.
Full batch documentation, including batch production records, and
manufacturing and analytical records shall be available for
review by Abbott on site at the manufacturing facility used by
Triangle, during regular business hours and upon reasonable
advance written notice from Abbott.
(c) Abbott shall notify Triangle in writing of any
shortage in the quantity of any shipment of Product no later
than *** following receipt of the Product. In the event of any
such shortage, Triangle shall make up the shortage if
replacement stock is available
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in the next shipment of Product, but in any case no later than
twenty (20) days or, if no such replacement stock is available,
as soon as reasonably practical after receiving such notice, at
no additional cost to Abbott.
(d) Abbott recognizes that, except for that portion of the
Product supply manufactured by Abbott or its permitted
sublicensees, all Product supply will be manufactured by Third
Parties under agreement with Triangle, and that, while Triangle
will use its Reasonable Best Efforts, there can be no assurance
that the Product supplied by such Third Parties will be
sufficient to meet demand.
(e) With respect to all Triangle Third Party
manufacturers of finished Product, Triangle shall *** *** .
With respect to Product manufactured by Abbott or its
permitted sublicensees, Abbott shall ***.
(f) Abbott shall be entitled to *** for any Product that
Abbott returns or rejects because such Product does not
conform to the Product specifications or the Product
characteristics referenced in this Section 8.9.
ARTICLE 9
LICENSE AND PATENT MATTERS
9.1 *** . In the event that, as a result of *** in any of
the *** , becomes or is, as of the Effective Date, *** , with respect to ***
(including *** or other *** ) or any *** with respect to *** in addition to
*** shall be entitled to include such *** as a *** against the *** from time
to time in its sole discretion; provided, however, that *** shall only be
permitted to include as *** in any period that amount of *** which would
result in *** ( *** as a *** as defined in the *** ) *** as follows:
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<TABLE>
<CAPTION>
***
***
*** PER ANNUAL REPORTING PERIOD
---------------------------
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
By way of example only, if the current *** subsequently *** , then *** , at
its discretion, would be able to include up to *** , resulting in ***. The
balance of any *** not includable in *** a given Annual Reporting Year may be
carried forward to subsequent Annual Reporting Years, subject to the
applicable limitation for such periods. Again, by way of example only, if ***
would be able, at its discretion, to *** ), but would be able to carry
forward any excess/unamortized amounts into subsequent periods, subject to
the applicable limitation for such periods. *** shall be permitted to include
within the above-referenced *** pursuant to this Section 9.1, (i) *** in ***
collectively for *** from time to time between the *** sole discretion
(including *** ) and (ii) with respect to *** as defined in section *** .
Nothing in this Agreement shall be deemed to be ***.
9.2 CONSENTS. Triangle shall use its Reasonable Best
Efforts to obtain the consent or approval from each of the Triangle Licensors
( *** ) to enter into and perform this Agreement and the Triangle-Abbott
Alliance Agreements. Such consent or approval shall be in substantially the
form attached hereto as Exhibit 9.2.
9.3 TRIANGLE COVENANTS. Triangle covenants that during the
Term, it will:
(a) fulfill all of its obligations under each of the
Triangle License Agreements, including, but not limited to, any
royalty, milestone or other monetary obligations set forth
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therein, except for any obligations which Abbott or its
Affiliates assumes hereunder as a Triangle sublicensee;
(b) take no action or omit to take any action which would
cause it to be in breach of any provision of any of the Triangle
License Agreements which would or could otherwise trigger
termination of any such Agreements (e.g., bankruptcy, change of
control in whole or with respect to any part of the Territories)
or which would or could cause the conversion of any Triangle
License Agreement from an exclusive to nonexclusive agreement, in
whole or with respect to any part of the Territories;
(c) notify Abbott in the event that, and within ***
after, Triangle receives notice from any Triangle Licensor
that Triangle is in default under any Triangle License
Agreement or that any Triangle Licensor has terminated or
intends to terminate any Triangle License Agreement in whole
or with respect to any part of the Territories or convert any
Triangle License Agreement from an exclusive to non-exclusive
agreement in whole or with respect to any part of the
Territories. In the event of any default of the type described
in this Section 9.3(c), Triangle agrees that if it fails or
does not intend to cure such default, Abbott may, at Abbott's
option and to the extent permitted under the applicable
license agreement, do so and *** ; provided, however, that if
any portion of such expenses would have otherwise been
included as part of Third Party Royalties, Abbott and Triangle
shall account for such portion of expense as a Triangle Third
Party Royalty; and provided, further, that if such default
relates to any activity which, as between the Parties, Abbott
is obligated to perform independently with Triangle under this
Agreement, Abbott's cost of curing such default shall *** but
shall be accounted for as otherwise permitted by this
Agreement;
(d) notify Abbott in the event that, and within ***
after, Triangle receives any notice required under Section
3.13(iii) of the FTC License Agreement. In the event of any
default of the type described in Section 3.13(iii) of the FTC
License Agreement, Triangle agrees that if it and the Triangle
Licensor under the FTC License Agreement fail or do not intend
to cure such default, Abbott may, at Abbott's option and to
the extent permitted under the applicable license
agreement(s), do so and *** in curing such
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default; provided, however, that if any portion of such
expenses would have otherwise been part of Third Party
Royalties or act as a credit against Third Party Royalties,
Abbott and Triangle shall account for such portion of that
expense as part of Third Party Royalties; and provided,
further, that if such default relates to any activity which,
as between the Parties, Abbott is obligated to perform
independently with Triangle under this Agreement, Abbott's
cost of curing such default shall *** but shall be accounted
for as otherwise permitted by this Agreement;
(e) notify Abbott in the event that, and within ***
after, Triangle receives any notice from a Triangle Licensor
required under Section 2.6 of the FTC License Agreement or
Section 2.6 of the DAPD License Agreement. Triangle shall
consult with Abbott prior to making its decision regarding the
acquisition of any sublicense pursuant to such sections.
(f) provide Abbott with a copy of any reports,
correspondence or notice within *** from the submission to or
receipt from any Triangle Licensor under or relating to any
Triangle License Agreement, Compound or Product;
(g) notify Abbott if and when ( *** ) it decides to
abandon or allow to lapse any patent application or patent or
not to initiate or take any other patent prosecution activity
that it has under the Triangle License Agreements or with
respect to any Product Patent. In such event, Triangle agrees
that Abbott may assume any such patent prosecution activity in
connection therewith, and Triangle shall reasonably cooperate
with Abbott in connection with any such patent prosecution
activity and, if requested by Abbott, shall reasonably seek
the cooperation of the applicable Triangle Licensor; and
(h) take no action or omit to take any action which would
result in derogation of the Product Patents in any existing or
future litigation or interference with any Third Parties or
future oppositions to foreign patents of any Third Parties.
9.4 ABBOTT COVENANTS.
(a) Abbott covenants and agrees that during the Term, on its
behalf and on behalf of each of its permitted sublicensees, to:
(i) take no action or omit to take any action which
would result in derogation of the Product Patents in any
existing or future litigation or interference with any Third
Parties or future oppositions to foreign patents of any
Third Parties;
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(ii) abide by all of the applicable terms and
conditions of the Triangle License Agreements which apply to
it in its capacity as a sublicensee pursuant to Section 2.3
of this Agreement; and
(iii) process all communications with any Triangle
Licensor through a Triangle representative to be identified
by Triangle after the Effective Date, except for those
communications specifically contemplated herein.
(b) Abbott hereby covenants and agrees to the extent that
there is a conflict between the Triangle-Abbott Alliance
Agreements and the applicable Triangle License Agreement, the
terms and provisions of the Triangle License Agreement shall
control.
(c) To the extent that Abbott incurs out-of-pocket costs in
connection with its obligation(s) to abide by the applicable
terms of the Triangle License Agreements, which costs are not
otherwise included in Abbott SG&A and which do not result from
Abbott's performance of its other obligations or exercise of its
rights identified elsewhere in this Agreement or reasonably
ancillary thereto, such costs shall be included in Abbott SG&A in
the appropriate territory; provided, that if either Party
determines or believes that such a cost may be incurred, such
Party shall provide reasonable advance notice, to the extent
possible, to the other and the Parties shall meet at a mutually
agreed time and place to discuss the obligations leading to such
costs.
9.5 THIRD PARTY INFRINGEMENT. If Abbott or Triangle become
aware of any activity that such Party believes infringes a Valid Claim of a
Product Patent, such Party shall promptly notify the other Party of all
relevant facts and circumstances pertaining to the potential infringement.
The Primary Enforcement Party shall have the right to enforce any rights
within the Product Patents against such infringement, *** ; provided,
however, with respect to *** alternative provisions apply, as specified in
the applicable Triangle License Agreement or the GW License Agreement (as
defined in the first amendment to the FTC License Agreement), as applicable,
and the Parties recognize that only if such Triangle Licensor fails or
declines to enforce such patent rights shall the Parties, to the extent
permitted by the terms of the applicable Triangle License Agreement, have
enforcement rights provided by this Section 9.5 and Section 9.6. The other
Party, at its own expense, shall cooperate with the Primary Enforcement Party
in such effort, including being joined as a party to such action if
necessary, and Triangle shall reasonably seek the cooperation of the
applicable Triangle Licensor. Any damage award or settlement in excess of the
cost and expense of prosecuting such infringement action *** of any such
award and settlement shall be added to the U.S.
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Product Profit and/or the International Product Profit, as the case may be, and
*** the Parties as set forth in this Agreement.
9.6 SECONDARY ENFORCEMENT PARTY'S RIGHT TO PURSUE THIRD
PARTY INFRINGERS. If the Primary Enforcement Party shall fail, within the
lesser of (i) *** of the notice of infringement required by Section 9.5 or
(ii) *** under the applicable Triangle License Agreement, to either (A)
terminate such infringement or (B) institute an action seeking to prevent
continuation thereof, and thereafter to diligently prosecute such action, or
if the Primary Enforcement Party sooner notifies the other Party that it does
not plan to terminate the infringement or institute such action, then the
Secondary Enforcement Party shall have the right to do so *** . The other
Party, *** , shall cooperate in such effort, including being joined as a
party to such action, and Triangle shall reasonably seek the cooperation of
the applicable Triangle Licensor. Any damage award or settlement in excess of
the cost and expense of prosecuting such infringement action shall *** of any
such award and settlement shall be added to the U.S. Product Profit and/or
the International Product Profit, as the case may be, and *** the Parties as
set forth in this Agreement.
9.7 TRIANGLE'S LICENSOR'S RIGHT TO PURSUE THIRD PARTY
INFRINGEMENT. If both Triangle and Abbott shall fail within *** of the notice
of infringement required by Section 9.5 or such shorter period of time
prescribed by the applicable Triangle License Agreement, to either (i)
terminate such infringement or (ii) institute an action to prevent
continuation thereof, and diligently prosecute such action, or if Triangle
sooner notifies such Triangle Licensor that Triangle and Abbott do not plan
to terminate the infringement or institute such action, then the Parties
recognize that the Triangle Licensor of such Product or Compound will have
the right to do so under the Triangle License Agreement. The Parties, at
their respective expense, shall cooperate with the Triangle Licensor in such
effort, including being joined as a party to such action. The portion, if
any, of a damage award or settlement which is shared by the Triangle Licensor
with Triangle shall be added to U.S. Product Profit and/or the International
Product Profit, as the case may be, and *** the Parties as set forth in this
Agreement.
9.8 INTERNATIONAL PATENT ENFORCEMENT COSTS AND EXPENSES ***
. Abbott shall reimburse Triangle for patent enforcement costs and expenses
incurred with respect to the International Territory by Triangle pursuant to
Sections 9.5 and 9.6 which, pursuant to the terms of this Agreement, are ***
and subject to reimbursement as provided in Section 7.9.
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ARTICLE 10
ADVERSE EVENTS, RECALLS AND OTHER REGULATORY MATTERS
10.1 ADVERSE REACTION REPORTING. Each Party shall keep the other Party
informed of information in or coming into its possession or control
concerning side effects, injury, toxicity or sensitivity reaction and
incidents of severity thereof associated with commercial and clinical uses,
studies, investigations or tests of each Product in the Territories, whether
or not determined to be attributable to the Product. Triangle shall be
responsible for filing with the FDA, as required, any adverse reaction
reports that it receives. Abbott shall be responsible for filing with the
appropriate regulatory authorities in the International Territory ***, as
required, adverse reaction reports that it receives. The responsibilities of
the Parties with respect to (i) notification of adverse events from the
receiving Party to the other Party and (ii) the reporting of adverse drug
experiences to the regulatory authorities shall all be performed in
accordance with a procedure to be mutually agreed by the Parties after the
Effective Date, giving due consideration to the applicable regulatory
requirements in the Territories.
10.2 SAFETY ISSUES. In order to ensure that both Parties are provided
with an adequate opportunity to review safety matters, the Parties shall
mutually agree after the Effective Date on procedures with respect to (i)
regulatory reporting requirements, (ii) the review of Product labeling, (iii)
maintenance of a safety database and (iv) other safety issues.
10.3 PRODUCT COMPLAINTS AND INQUIRIES.
(a) Any medical or technical Product-related inquiries from
consumers, physicians or other Third Party customers who reside in the
(i) U.S. Territory shall be handled by Triangle and (ii) International
Territory shall be handled by Abbott. Triangle shall supply Abbott with
copies of its standard response information for the Products as well as
any updates thereto. Abbott shall use such information to respond to any
such inquiries from the International Territory. Information concerning
any such inquiries in the U.S. Territory received by Abbott's
Pharmacovigilance Department shall be forwarded to Triangle's Regulatory
Affairs Department within one business day of Abbott's receipt of the
request. Information concerning any such inquiries in the International
Territory received by Triangle shall be forwarded to Abbott's
Pharmacovigilance Department within one business day of Triangle's
receipt of the request. Each Party shall prepare and maintain a database
containing responses to such inquiries from consumers, physicians or
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other Third Party customers who reside in the territory for which it is
responsible, and shall make the contents available to the other Party
promptly from time to time upon request.
(b) Each Party shall maintain a record of all complaints or
reports of an actual or potential failure of any Product to meet the
standards set forth in regulatory filings or in agreements among the
Parties. Such failure may involve the finished Product or one of its
intermediate stages. The responsibilities of the Parties with respect to
(a) notification of the Product Complaint from the receiving Party to the
other Party and (b) the handling of Product Complaints shall all be
performed in accordance with a procedure to be mutually agreed by the
Parties after the Effective Date.
10.4 PRODUCT RECALL. In the event that either Party determines that an
event, incident or circumstance has occurred which may result in the need for
a recall or other removal of any Product, or any lot or lots thereof, from
the market, such Party shall advise the other and the Parties shall consult
with respect thereto. Triangle shall have the sole authority to decide
whether to commence, and the sole responsibility for the handling and
disposition of, a recall or other removal of such Product in the U.S.
Territory, and Abbott shall have the sole authority to decide whether to
commence, and the sole responsibility for the handling and disposition of, a
recall or other removal of such Product in the International Territory. Any
such recall or other removal, by either Party, shall occur pursuant to a
procedure to be mutually agreed by the Parties after the Effective Date.
Except as provided below, if a Product (or any lot or lots thereof) is
recalled or otherwise removed from the market, the costs and expenses of such
recall or removal, including, without limitation, expenses and other costs or
obligations to Third Parties, the cost and expense of notifying customers and
the costs and expenses associated with shipment of the recalled Product and
the cost and expense of destroying the Product removed from the market, if
necessary, except as provided below shall be (i) *** and (ii) ***. In the
event that such recall or removal costs, expenses or obligations result from
one Party's: (i) improper or negligent manufacturing, distribution, storage
or shipment of the Product; (ii) improper sampling practices or mishandling
of Sample Packs; (iii) Co-Promotion or Promotion of the Product in a manner
inconsistent with the Product's labeling; or (iv) violation of this
Agreement, such costs, expenses and obligations ***. In the event of a
recall, each Party shall promptly meet and discuss in good faith whether the
Parties' Detailing obligations should be reduced or redirected to another
Product.
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10.5 PROCEDURES. Within *** after the Effective Date, representatives
of each Party shall meet to establish procedures to accomplish the
obligations set forth in Sections 10.1, 10.2, 10.3, 10.4 and 10.6.
10.6 GOVERNMENTAL CONTACT REPORTING. Each Party shall promptly notify the
other Party upon being contacted by the FDA or any other federal, state or local
governmental agency in the Territories for any material regulatory purpose
pertaining to this Agreement or to the Products. Neither Party shall respond to
the FDA or such governmental agency before consulting with the other Party,
unless under the circumstances pursuant to which FDA or such other federal,
state, local, national or supranational governmental agency contacts such Party,
it is not practical or lawful for the contacted Party to give the other Party
advance notice, in which event the contacted Party shall inform the other Party
of such contact as soon as practical and lawful. In addition, each Party shall
keep the other Party advised with respect to information concerning the safety
or efficacy of the Products. On the other Party's written request with respect
to any Product, each Party shall supply detailed information regarding such
safety, efficacy and medical information issues, including, if requested, copies
of safety reports filed with the FDA or any other governmental agency.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 ABBOTT REPRESENTATIONS AND WARRANTIES. Abbott hereby represents and
warrants to Triangle as follows:
(a) Abbott is a corporation duly organized and validly existing in
good standing under the laws of its state of incorporation, with all
requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted
and as proposed to be conducted;
(b) Abbott has all requisite corporate right, power and authority
to enter into this Agreement and the other Triangle-Abbott Alliance
Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the other
Triangle-Abbott Alliance Agreements by Abbott and the consummation by
Abbott of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on Abbott's behalf. This
Agreement and the other Triangle-Abbott Alliance Agreements constitute
legal, valid and binding obligations of Abbott, enforceable against
Abbott in accordance with the terms hereof and thereof;
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(c) subject to compliance with the HSR Act and such filings as may
be required pursuant to federal and state securities laws, the execution,
delivery and performance by Abbott of this Agreement and each of the
other Triangle-Abbott Alliance Agreements and Abbott's compliance with
the terms and provisions hereof and thereof will not, result in any
violation of, or default under (with or without notice or lapse of time,
or both), or give rise to a right of termination, cancellation or
acceleration of any obligation pursuant to, or a loss of benefits under,
any provision of Abbott's Articles of Incorporation or By-laws, or any
mortgage, indenture, lease or other agreement or instrument, license,
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Abbott, its properties or assets; and
(d) no consent, approval or authorization of, or designation,
declaration or filing with any governmental authority is required in
connection with the valid execution, delivery or performance of this
Agreement and the other Triangle-Abbott Alliance Agreements by Abbott or
the consummation by Abbott of the transactions contemplated hereby or
thereby, except the filing of such forms with the United States
Department of Justice and the Federal Trade Commission as shall be
required by the HSR Act and the expiration or termination of any waiting
periods thereunder and such filings, as may be required to be made with
the SEC, any national securities exchange and any state securities
commission. Upon their execution and delivery, and assuming the valid
execution thereof by Triangle, this Agreement and the other
Triangle-Abbott Alliance Agreements will constitute valid and binding
obligations of Abbott, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and except to the extent that the indemnification agreements of
in Section 15 hereof may be legally unenforceable.
11.2 TRIANGLE REPRESENTATIONS AND WARRANTIES. Triangle hereby represents
and warrants to Abbott as follows:
(a) Triangle is a corporation duly organized and validly existing
in good standing under the laws of its state of incorporation, with all
requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted
and as proposed to be conducted;
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(b) Triangle has all requisite corporate right, power and
authority to enter into this Agreement and the other Triangle-Abbott
Alliance Agreements and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and the
other Triangle-Abbott Alliance Agreements by Triangle and the
consummation by Triangle of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on
Triangle's behalf. This Agreement and the other Triangle-Abbott Alliance
Agreements constitute legal, valid and binding obligations of Triangle,
enforceable against Triangle in accordance with the terms hereof and
thereof;
(c) subject to compliance with the HSR Act and such filings as may
be required pursuant to federal and state securities laws and except for
the consents from the Triangle Licensors required by Section 9.2, the
execution, delivery and performance by Triangle of this Agreement and
each of the other Triangle-Abbott Alliance Agreements and Triangle's
compliance with the terms and provisions hereof and thereof will not,
result in any violation of, or default under (with or without notice or
lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation pursuant to, or a loss of
benefits under, any provision of its Certificate of Incorporation or
By-laws, or any mortgage, indenture, lease or other agreement or
instrument, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Triangle or Triangle's properties or
assets;
(d) no consent, approval or authorization of, or designation,
declaration or filing with any governmental authority is required in
connection with the valid execution, delivery or performance of this
Agreement and the other Triangle-Abbott Alliance Agreements by Triangle
or the consummation by Triangle of the transactions contemplated hereby
or thereby, except the filing of such forms with the United States
Department of Justice and the Federal Trade Commission as shall be
required by the HSR Act and the expiration or termination of any waiting
periods thereunder and such filings, as may be required to be made with
the SEC, the NASD, any national securities exchange and any state
securities commission. Upon their execution and delivery, and assuming
the valid execution thereof by Triangle, this Agreement and the other
Triangle-Abbott Alliance Agreements will constitute valid and binding
obligations of Triangle, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
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equity or at law) and except to the extent that the indemnification
agreements of in Section 15 hereof may be legally unenforceable;
(e) Except as specifically disclosed in Exhibit 11.2(e), in
Triangle's Annual Report on Form 10-K for the year ending December 31,
1998 or in Triangle's Quarterly Report on Form 10-Q for the period ending
March 31, 1999:
(i) to its knowledge and information, there are no patents,
trademarks or other proprietary rights which are valid and which
would be infringed by making, having made, using, selling,
offering for sale or importing Products in the Territories in
accordance with the terms of this Agreement;
(ii) Triangle is not aware of sales of any products
containing one or more Compounds that would constitute an
infringement by a Third Party of the Product Patents; and
(iii) Triangle is aware of no pending interference or
opposition proceeding or litigation or any communication which
threatens an interference or opposition proceeding or litigation
before any patent and trademark office, court, or any other
governmental entity or court in any jurisdiction in regard to the
Product Patents;
(f) The execution, delivery and performance of this Agreement and
the other Triangle-Abbott Alliance Agreements is not required to be
submitted for a vote or other approval of the stockholders of Triangle
under Section 271 of the Delaware General Corporation Law. The issuance
and sale by Triangle of the Minimum Shares (as defined in the Stock
Purchase Agreement) does not require approval of the stockholders of
Triangle under any applicable federal or state laws or regulations or
under the rules and regulations of the National Association of Securities
Dealers (including the designation or maintenance criteria of the Nasdaq
National Market) or any other self-regulatory organization applicable to
Triangle;
(g) Triangle has provided to Abbott a complete and accurate copy
of each of the Triangle License Agreements;
(h) to its knowledge, there are no material facts which Triangle
has not disclosed to Abbott regarding the manufacture, use or sale of any
Product or the practice of any inventions included in the Product Patents
or the use of the Product Technology by Abbott, including without
limitation any material facts regarding the possibility that such
manufacture, use, sale or
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practice might infringe any Third Party's know-how, patent rights or
other intellectual property in the Territories;
(i) at no time during the Term shall Triangle enter into any
transaction providing for debt financing which by its terms (A) imposes a
lien, license, security interest or other encumbrance upon or (B)
transfers any of the Product Patents or the Product Technology, except to
the extent permitted by this Agreement; and
(j) With respect to each of the Compounds, (A) Triangle has
obtained and is in substantial compliance with all applicable
registrations, applications, licenses, requests for exemption, permits or
other regulatory authorizations with the FDA, or any state or local
regulatory body necessary to conduct its business activities to date; and
(B) to the extent any Compound is intended for export from the United
States, and to the extent applicable, the Company is in compliance in all
material respects with either all FDA requirements for marketing or as
set forth in 21 U.S.C. ss.381(e) or 382; (ii) to the knowledge of
Triangle, all manufacturing operations performed by or on behalf of
Triangle have been and are being conducted in substantial compliance with
the current good manufacturing practices issued by the FDA to the extent
applicable; (iii) to the knowledge of Triangle, all nonclinical
laboratory studies, as described in 21 C.F.R. ss.58.3(d), sponsored by
Triangle have been and are being conducted in substantial compliance with
the good laboratory practice regulations set forth in C.F.R. Part 58;
except, in the preceding clauses (i) through (iii), where such failures
to obtain or noncompliance, individually or in the aggregate, would not
have a material adverse effect on Triangle's business activities with
respect to such Compound.
(k) Notwithstanding anything to the contrary in this Section 11.2
or anything in any of the other Triangle-Abbott Alliance Agreements,
*** (as defined in the Stock Purchase Agreement).
11.3 NO OTHER WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, EACH PARTY MAKES NO OTHER WARRANTIES OR REPRESENTATIONS, INCLUDING
FITNESS FOR PURPOSE INTENDED OR MERCHANTABILITY, WHETHER EXPRESS OR IMPLIED.
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ARTICLE 12
LIMITATION ON LIABILITY
EXCEPT AS OTHERWISE PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL LOSSES ARISING OUT OF OR RELATING TO THIS
AGREEMENT; PROVIDED HOWEVER, THIS LIMITATION SHALL NOT APPLY TO LOSSES ARISING
FROM THIRD PARTY CLAIMS FOR WHICH A PARTY IS INDEMNIFIED UNDER THE TERMS OF THIS
AGREEMENT.
ARTICLE 13
CONFIDENTIALITY AND NONDISCLOSURE
13.1 CONFIDENTIALITY OBLIGATION. Each of Abbott and Triangle (the
"Receiving Party") shall keep strictly confidential any information disclosed in
writing, orally, visually or in any other manner by the other Party (the
"Disclosing Party") or otherwise made available to the Receiving Party which the
Disclosing Party considers to be and treats as proprietary or confidential
("Confidential Information"). Without limiting the generality of the foregoing,
all proprietary information concerning the Disclosing Party's business,
operations, suppliers, products, product manufacture, sale, marketing or
distribution, trade secrets and intellectual property shall be considered
Confidential Information by the Receiving Party. Any data or other information
relating to or resulting from the clinical trials of the Products shall be
deemed to be Confidential Information of Triangle. The Disclosing Party shall
use commercially reasonable efforts to designate any written Confidential
Information disclosed to the other Party as Confidential Information by
prominently marking it "confidential", "proprietary" or the like, provided, that
the failure to so mark shall not exclude such written information from the
provisions of this Section 13. "Confidential Information" shall not include
information:
(a) which is or becomes generally available to the public other
than as a result of disclosure thereof by the Receiving Party;
(b) which is lawfully received by the Receiving Party on a
nonconfidential basis from a Third Party that is not itself under any
obligation of confidentiality or nondisclosure to the Disclosing Party or
any other Person with respect to such information;
(c) which by written evidence can be shown by the Receiving Party
to have been independently developed by or for the Receiving Party; or
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(d) which the Receiving Party establishes by competent proof was
in its possession at the time of disclosure by the other Party and was
not acquired, directly or indirectly from the other Party.
All information, data and other materials disclosed by one Party to the other
pursuant to the Confidentiality Agreement, dated October 28, 1998, shall be
deemed to have been disclosed by the disclosing Party under this Agreement.
13.2 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Receiving Party shall
use Confidential Information solely for the purposes of this Agreement and shall
not disclose or disseminate any Confidential Information to any Third Party at
any time without the Disclosing Party's prior written consent, except for
disclosure to those of its directors, officers, employees, accountants,
attorneys, advisers, permitted sublicensees, and agents whose duties reasonably
require them to have access to such Confidential Information and, in the case of
Triangle, disclosure to the Triangle Licensors, provided that such directors,
officers, employees, accountants, attorneys, advisers, agents and Triangle
Licensors are required to use the Confidential Information solely for purposes
of this Agreement and maintain the confidentiality of such Confidential
Information to the same extent as if they were Parties hereto.
13.3 EXCEPTION. The foregoing confidentiality and nondisclosure
obligations shall not apply to information which is required to be disclosed by
law or by regulation; provided, that (i) the Receiving Party gives the
Disclosing Party reasonable advance notice of the disclosure, to the extent
reasonably practicable and legally permissible; (ii) the Receiving Party uses
reasonable efforts to resist disclosing the Confidential Information; (iii) the
Receiving Party reasonably cooperates with the Disclosing Party on request to
obtain a protective order or otherwise limit the disclosure; and (iv) upon the
reasonable request of the Disclosing Party, the Receiving Party shall provide a
letter from its counsel confirming that the Confidential Information is, in
fact, required to be disclosed.
13.4 INJUNCTIVE RELIEF. The Parties acknowledge that either Party's
breach of this Article 13 may cause the other Party irreparable injury for which
it would not have an adequate remedy at law. In the event of a breach, the
non-breaching Party shall be entitled to injunctive relief in addition to any
other remedies it may have at law or in equity.
13.5 SCIENTIFIC AND OTHER PUBLICATIONS. Notwithstanding anything herein
to the contrary, it is the understanding of each Party that scientific,
scholarly and other related publications or presentations concerning the
development of the Compounds and the Products, including their pre-clinical and
clinical development, shall emanate solely from Triangle and the trials and
studies sponsored by Triangle and that,
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as against Abbott, Triangle shall have full control over the preparation, review
and approval of such publications and presentations, which publications and
presentations shall not be restricted hereunder; provided that, with respect to
joint Marketing Studies, as well as Supplemental Clinical Studies conducted by
Abbott or any studies involving any Abbott pharmaceutical products, any
resulting publication or presentation of data therefrom shall be jointly
reviewed and approved by Triangle and Abbott.
13.6 SURVIVAL. The confidentiality and nondisclosure obligations of
this Article 13 shall survive the expiration or termination of this Agreement
and remain in effect for a period of *** following the expiration or
termination of this Agreement.
ARTICLE 14
TRADEMARKS
14.1 TRIANGLE TRADEMARKS. Triangle shall be *** for each Product in
the Territories (the "Triangle Trademarks"). Triangle shall keep *** with
respect to its trademark activities and shall consult with Abbott through the
U.S. Marketing Board and/or the International Marketing Board, as applicable,
regarding the selection of trademarks for the Territories. Triangle shall
control all final decisions regarding its trademark activities. All
reasonable out-of-pocket costs and expenses associated with the selection,
filing, registration and maintenance of the trademarks for Products (i) in
the U.S. Territory shall be *** and (ii) in the International Territory shall
be ***. With respect to the International Territory, Triangle shall invoice
Abbott for all such costs and expenses, and Abbott shall pay to Triangle the
amount invoiced *** of the invoice date.
14.2 LIMITED TRADEMARK LICENSE.
(a) GRANT TO ABBOTT. Subject to the terms of this Agreement,
Triangle hereby grants to Abbott (i) a nonexclusive limited license in
the Territories to use Triangle's name and logo, (ii) a nonexclusive
limited license in the U.S. Territory to use the Triangle Trademarks and
(iii) an exclusive license in the International Territory to use the
Triangle Trademarks, in each instance solely for the purpose of promoting
distributing and selling the Products in the Territories in accordance
with the terms and conditions of this Agreement. Abbott shall promote the
Products in the Territories only under the Triangle Trademarks.
(b) GRANT TO TRIANGLE. Abbott hereby grants to Triangle a
nonexclusive limited license to use the Abbott name and logo solely for
the purpose of promoting, distributing
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and selling each Product in the Territories in accordance with the terms
and conditions of this Agreement. Triangle shall promote the Products in
the Territories only under the Triangle Trademarks.
14.3 USE OF TRADE NAMES AND TRADEMARKS. Each Party recognizes that the
name and logo of each of the Parties and the Triangle Trademarks represents a
valuable asset of such entity and that substantial recognition and goodwill are
associated with each Party's name and logo and the Triangle Trademarks. Each
Party hereby agrees that, without prior written authorization of the other
Party, it shall not use the name and logo of the other Party for any purpose
other than the promotion, distribution and sale of the Products solely to the
extent required to fulfill its obligations under this Agreement. Abbott hereby
agrees that, without prior written authorization of Triangle, it shall not use
the Triangle Trademarks for any purpose other than the promotion, distribution
and sale of the Products solely to the extent required to fulfill its
obligations under this Agreement. In addition, Triangle shall only use the
Abbott name and logo in the form, manner and logotype approved in writing by
Abbott, and Abbott shall only use the Triangle name and logo and the Triangle
Trademarks in the form, manner and logotype approved in writing by Triangle.
Except for the limited licenses granted in Section 14.2, nothing in this
Agreement shall be construed as an assignment by Triangle to Abbott of any
right, title or interest in or to the Triangle name or logo or the Triangle
Trademarks, or an assignment by Abbott to Triangle of any right, title or
interest in or to the Abbott name or logo; it being understood that all right,
title and interest (including the goodwill associated therewith) in and to the
Triangle name and logo and the Triangle Trademarks is expressly reserved by
Triangle, and all right, title and interest (including the goodwill associated
therewith) in and to the Abbott name and logo is expressly reserved by Abbott.
14.4 QUALITY MAINTENANCE. Each Party (a "licensed Party") agrees to
cooperate with the other Party (the "licensing Party") in facilitating the
licensing Party's quality assurance responsibilities by permitting reasonable
inspection of the licensed Party's operations as they pertain to the
licensing Party's trademarks and supplying licensing Party with specimens of
use of such trademarks upon reasonable request, but in any case no more often
than *** each calendar year. Each Party agrees to comply with all applicable
laws and regulations and obtain all government approvals pertaining to the
sale, distribution and advertising of Products offered in the Territories
under the Triangle Trademarks and covered by this Agreement.
14.5 INJUNCTIVE RELIEF. Each Party acknowledges that a violation of this
Article 14 would cause irreparable harm to the other Party for which no adequate
remedy at law exists, and each Party therefore agrees that, in addition to any
other remedies available, and notwithstanding any other provision
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in this Agreement, the aggrieved Party shall be entitled to injunctive relief to
enforce the terms of this Article 14. If either Party prevails in any such
action, it shall be entitled to recover all costs and expenses, including
reasonable attorney's fees incurred because of any legal action arising in
relation to this Article 14.
14.6 NOTIFICATION OF INFRINGEMENT AND ENFORCEMENT. Each Party shall
notify the other Party of any infringement or misuse of Triangle's Trademarks of
which such Party becomes aware. Triangle shall be solely responsible to
prosecute any infringement of the Triangle Trademarks. Any damage award or
settlement, in excess of Triangle's cost and expenses of enforcement, shall be
added to the U.S. Product Profit and/or the International Product Profit, as the
case may be, and shared between the Parties as set forth in this Agreement.
14.7 TERMINATION OF TRADEMARK LICENSE. In the event that, pursuant to the
terms of this Agreement, Abbott forfeits its rights to Promote a Product in any
country, then its license under Section 14.2(a) shall automatically and
immediately terminate with respect to such country.
ARTICLE 15
INDEMNIFICATION
15.1 INDEMNIFICATION
(a) INDEMNIFICATION BY TRIANGLE. Except as may be otherwise
provided herein, Triangle shall defend, indemnify and hold Abbott, all of
its directors, officers and employees, and Abbott Sales Representatives
(collectively the "Abbott Indemnitees") harmless from and against all
Losses incurred in connection with any Third Party suits, claims or
causes of action arising out of or resulting from:
(i) Triangle's breach of any representation, warranty,
covenant, or other obligation provided for in this Agreement;
(ii) An infringement claim arising from Abbott's use of the
Triangle name or logo or a Triangle Trademark in connection with
the promotion or sale of the Products, provided Abbott's use is in
compliance with the terms of this Agreement;
(iii) The negligence, recklessness or willful misconduct
of Triangle and its directors, officers or employees or
Triangle Sales Representatives, ***, its directors, officers or
employees, or Triangle Sales Representatives; or
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(v) Any patent infringement claim arising from the
manufacture, importation, use or sale of a Product, to the extent
***.
Provided, however, that Triangle shall not be required to indemnify the
Abbott Indemnitees to the extent that any Losses arise out of or result
from: (A) the negligence, recklessness or willful misconduct of any of
the Abbott Indemnitees, including, but not limited to, out-of label
promotion of the Products, (B) utilization of process technology for the
manufacture of Products which has not been approved by Triangle, (C)
continued Promotion in a country after receipt of notice from Triangle
indicating that the sale or Promotion of such Product in such country
should be terminated because such further sale or Promotion would
constitute willful infringement of a valid and issued patent in such
country and/or (D) any breach by Abbott of this Agreement. Abbott shall
not be considered negligent for purposes of this Section 15.1 if such
claim arises solely with respect to the content of the Promotional
Materials, Product labeling or other materials provided to Abbott by
Triangle as long as Abbott has distributed or employed such Promotional
Materials or other such materials as directed herein.
(b) INDEMNIFICATION BY ABBOTT. Except as may be otherwise provided
herein, Abbott shall defend, indemnify and hold Triangle, its directors,
officers and employees, and Triangle Sales Representatives and the
Triangle Licensors (collectively the "Triangle Indemnitees") harmless
from and against all Losses incurred in connection with any Third Party
suits, claims or causes of action arising out of or resulting from:
(i) Abbott's breach of any representation, warranty,
covenant, or other obligation provided for in this Agreement;
(ii) An infringement claim arising from Triangle's use of
the Abbott name or logo in connection with the promotion or sale
of the Products, provided Triangle's use is in compliance with the
terms of this Agreement;
(iii) The gross negligence, recklessness or willful
misconduct of Abbott, its directors, officers or employees or
Abbott Sales Representatives, including, ***,
its Affiliates, their directors, officers or employees, or Abbott
Sales Representatives; or
(iv) Any patent infringement claim arising from Abbott's or
its Affiliates or permitted sublicensee's (A) utilization of
process technology for the manufacture of
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Products which has not been approved by Triangle or (B) continued
Promotion in a country after receipt of notice from Triangle
indicating that the sale or Promotion of such Product in such
country should be terminated because such further sale or
Promotion would constitute willful infringement of a valid and
issued patent in such country.
Provided, however, that Abbott shall not be required to indemnify the
Triangle Indemnitees to the extent that any Losses arise out of or
result from: (A) the negligence, recklessness or willful misconduct of
any Triangle Indemnitee including, but not limited to, out-of label
promotion of the Products; and/or (B) any breach by Triangle of this
Agreement.
15.2 INDEMNIFICATION PROCEDURE. Any Abbott Indemnitee or Triangle
Indemnitee, as the case may be, shall notify Triangle or Abbott (the
"Indemnifying Party") promptly in writing of an indemnifiable claim or cause of
action under Section 15.1(a) or 15.1(b) upon receiving notice or being informed
of the existence thereof. The Indemnifying Party shall assume, at its cost and
expense, the sole defense of such claim or cause of action through counsel
selected by the Indemnifying Party and reasonably acceptable to the other Party.
The Indemnifying Party shall maintain control of such defense, including any
decision as to settlement; provided that, in the event that the Indemnifying
Party does not diligently defend such claim or cause of action on a timely
basis, then, without prejudice to any other rights and remedies available to the
other Party under this Agreement, the other Party may take over such defense
with counsel of its choosing at the Indemnifying Party's cost and expense. The
other Party may, at its option and expense, participate in the Indemnifying
Party's defense, and if the other Party so participates, the Parties shall
cooperate with one another in such defense. The Indemnifying Party shall bear
the total costs of any court award or settlement of such claim or cause of
action and all other costs, fees and expenses related to the resolution thereof
(including reasonable attorneys' fees except for attorneys' fees for which the
other Party is responsible in the event that the other Party participates in the
Indemnifying Party's defense of such claim or cause of action). The
indemnification obligations herein shall apply on a first dollar basis without
limitation or reduction due to any deductible or self-insured retention which
Triangle or Abbott respectively may have under their respective insurance
coverage.
15.3 PRODUCT LIABILITY. In the event of a product liability claim with
respect to a Product which is not covered by the foregoing indemnity provisions
in this Article 15, the Parties shall bear equally the amount of any awards or
other losses and costs attributable directly thereto. Abbott shall maintain
control of the defense of any such product liability claim with respect to the
International Territory and Triangle shall maintain control of the defense of
any such product liability claim with respect to the U.S. Territory.
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ARTICLE 16
TERM AND TERMINATION
16.1 TERM. The term of this Agreement shall commence on the Effective
Date and shall continue, unless terminated sooner in accordance with this
Article 16, until December 31, 2030 (the "Term").
16.2 TERMINATION UPON PATENT EXPIRATION. Unless sooner terminated in
accordance with this Article 16, upon *** prior written notice, Abbott may
terminate this Agreement on a *** basis upon the expiration of the last to
expire patent covering such Product.
16.3 TERMINATION FOR MATERIAL BREACH. It is the Parties' express
intent that consideration shall first and foremost be given to remedying any
breach of this Agreement through the payment of monetary damages or such
other legal or equitable remedies as shall be appropriate under the
circumstances and that there shall only be a limited right to terminate this
Agreement under the following circumstances as a matter of last resort. In
the event that the Neutral, in accordance with the procedures set forth in
Exhibit 20.3, has rendered a ruling that a Party has materially breached this
Agreement, which ruling specified the remedies imposed on such breaching
Party for such breach (the "Adverse Ruling"), and the breaching Party has
failed to comply with the terms of the Adverse Ruling within the time period
specified therein for compliance, or if such compliance cannot be fully
achieved by such date, the breaching Party has failed to commence compliance
and/or has failed to use diligent efforts to achieve full compliance as soon
thereafter as is reasonably possible (but in any event within ***), then the
non-breaching Party shall have the following rights:
(a) where Abbott is the breaching Party that failed to comply with
the Adverse Ruling and where the basis for such breach is Abbott's
failure to abide by a material obligation under this Agreement, Triangle
may terminate this Agreement and/or Abbott's license rights hereunder by
delivering written notice to Abbott after the expiration of the period to
comply; and
(b) where Triangle is the breaching party that failed to comply
with the Adverse Ruling and where the basis for such breach is Triangle's
failure to abide by a material obligation under this Agreement, Abbott
may terminate this Agreement and/or Triangle's license rights hereunder
by delivering written notice to Triangle after the expiration of the
period to comply.
16.4 EFFECT OF EXPIRATION UNDER SECTION 16.1 OR TERMINATION UNDER SECTION
16.2. Upon the expiration of this Agreement under Section 16.1 or the
termination of this Agreement with respect to a particular Product or Products
under Section 16.2, unless instructed otherwise by Triangle in writing,
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Abbott shall continue to distribute such Product or Products for a period of
*** (the "Phase-Out Period"), unless such period is terminated earlier in
writing by Triangle. During such Phase-Out Period, Abbott shall continue to
fill all outstanding orders for the terminated Product or Products and refer
any new orders for such Product or Products to Triangle. During the Phase-Out
Period, Abbott shall not be required to perform any Details for the
terminated Product or Products and Abbott shall receive its share of the
Product Profits for the terminated Product or Products, unless Abbott was
terminated hereunder for its material breach of this Agreement. Abbott shall
promptly return all Promotional Materials and Sample Packs for the terminated
Product or Products to Triangle and shall delete the terminated Product or
Products from its catalogues and price lists as soon as reasonably practical.
In the event of any problems relating to the terminated Product or Products
or customer relations issue during the Phase-Out Period, Abbott shall
cooperate fully with Triangle to ensure customer satisfaction and compliance
with all Legal Requirements. Triangle shall be allowed to continue to
distribute Promotional materials and Sample Packs with the Abbott name in
accordance with Article 14 for up to *** after the termination or expiration
of this Agreement.
16.5 EFFECT OF TERMINATION UNDER SECTION 16.3.
(a) If this Agreement is terminated as a result of Abbott's breach
(i) Abbott shall use its best efforts to destroy all data, writings and
other documents and tangible materials supplied to Abbott by Triangle or
the Triangle Licensors; and (ii) Abbott shall further, upon Triangle's
request and with no need for additional consideration, grant Triangle a
nonexclusive, royalty free (other than subject to royalty obligations
payable to Third Parties) license (with the right to sublicense) to all
Abbott Patents and Abbott Technology. Abbott shall further provide
Triangle with full and complete copies of all toxicity, efficacy, and
other data generated by Abbott or its permitted sublicensees, contractors
or agents in the course of Abbott's efforts to obtain governmental
approval for the sale of the Products, including but not limited to any
registration filings or other documents filed with any government
authority. Triangle and the Triangle Licensors shall be authorized to
cross-reference any such registration filings made in the International
Territory where permitted by law. Triangle and the Triangle Licensees
shall be authorized to provide data pertaining to such patents and
technology to any Third Party with a bona fide interest in licensing such
technology. Such data shall be provided on a confidential basis;
provided, however, that if such Third Party enters into a license with
Triangle and the Triangle Licensees, such Third Party shall be free to
use such data for all purposes, including to obtain government approvals
to sell Products containing any Compound. Abbott shall cooperate
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reasonably (at no unreimbursed expense to Abbott) with any Third Party
licensee of Triangle or the Triangle Licensors in pursuing governmental
approval to sell any Product containing any Compound, including but not
limited to, permitting such Third Parties to cross-reference any
regulatory filings filed with or any Product Approval obtained in any
foreign countries; provided that any expenses incurred at the request of
Triangle are reimbursed).
(b) If this Agreement is terminated as a result of Abbott's
breach, Triangle shall have the right, in its sole option, to
terminate each or any of (i) the Co-Promotion Agreement; (ii) the
Stock Purchase Agreement, to the extent that there are any
continuing obligations thereunder; (iii) the Stockholder Rights
Agreement (provided that the provisions contained in sections ***
thereof shall survive such termination); and (iv) subject to its
negotiation and due execution and delivery, the Supply Agreement.
(c) If this Agreement is terminated as a result of Triangle's
breach, Abbott shall have the right, in its sole option, to
terminate each or any of (i) the Co-Promotion Agreement; (ii) the
provisions of sections *** of the Stockholder Rights Agreement; and
(iii) subject to its negotiation and due execution and delivery, the
Supply Agreement.
16.6 SURVIVAL. All rights granted and obligations undertaken by the
Parties hereunder shall terminate immediately upon the event of any termination
or expiration of this Agreement, except for the following which shall survive
according to their terms:
(a) The obligation of each Party to pay to the other Party any and
all payments accrued under this Agreement prior to such termination or
expiration;
(b) The provisions of Sections 6.1 and 6.2, which shall survive
with respect to any reports required after the Term and any accrued or
continuing payment obligations;
(c) The limitations on liability of Article 12;
(d) The confidentiality and nondisclosure obligations of Article
13;
(e) The indemnification obligations of Article 15 with respect to
events occurring during the term of the Agreement;
(f) The insurance obligations of Article 18; and
(g) The provisions of Sections 4.2(f) (as well as Section 4.3 as
its relates to Section 4.2(f) with respect to the International
Territory), 7.5, 7.8, 16.4 through 16.7, 20.12, 20.3 and Section 20.11.
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Any termination of rights with respect to a particular Product shall only result
in the termination of rights and obligations hereunder as they relate to that
Product. In addition, expiration or termination of this Agreement shall not
affect the remedies of the Parties otherwise available at law or in equity in
relation to any rights accrued under this Agreement prior to expiration or
termination.
16.7 NONEXCLUSIVE RIGHTS AND REMEDIES. Except as otherwise set forth in
this Agreement, all rights and remedies of the Parties provided under this
Agreement are not exclusive and are in addition to any other rights and remedies
provided by law or under this Agreement.
16.8 CONDITIONS TO EFFECTIVENESS. The Effective Date shall be the date on
which the following conditions have been satisfied:
(a) The obligations of Abbott and Triangle shall be subject to the
satisfaction of the following conditions:
(i) No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order shall have been
enacted, entered, promulgated or enforced by any court of
competent jurisdiction or governmental or regulatory authority
that prohibits the execution, delivery or performance of any of
the Triangle-Abbott Alliance Agreements, and no proceeding by any
governmental or regulatory authority or instrumentality shall be
pending or threatened, which seeks to prohibit or declare illegal
the execution, delivery or performance of any of the
Triangle-Abbott Alliance Agreements;
(ii) All filings under the HSR Act and other laws of any
jurisdiction applicable to the transactions contemplated in the
Triangle-Abbott Alliance Agreements shall have been made and any
required waiting period under such laws shall have expired or been
earlier terminated;
(iii) The "Closing" as such term is defined in the Stock
Purchase Agreement shall have occurred or shall be occurring
simultaneously; and
(iv) The Supply Agreement shall be duly executed and
delivered prior to or contemporaneously with the Closing.
(b) CONDITIONS TO OBLIGATIONS OF ABBOTT. The obligations of Abbott
shall be further subject to the satisfaction of the following conditions:
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(i) All corporate and other proceedings taken or to be
taken in conjunction with the transactions contemplated in the
Triangle-Abbott Alliance Agreements, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to
Abbott;
(ii) ***;
(iii) The representations and warranties of Triangle
contained herein and in the other Triangle-Abbott Alliance
Agreements that are qualified as to materiality shall be true and
correct at and as of the Effective Date as though restated on and
as of the Effective Date and the representations and warranties of
Triangle contained herein and in the other Triangle-Abbott
Alliance Agreements that are not qualified as to materiality shall
be true and correct in all material respects at and as of the
Effective Date as though restated on and as of the Effective Date;
(iv) Abbott shall have received from ***
(v) Abbott shall have received from Triangle a copy of the
executed consent identified in Section 9.2 and a certificate
signed by an appropriate officer as to Triangle's compliance with
the conditions set forth in clauses (i) and (iii) of this Section
16.8(b).
(c) CONDITIONS TO OBLIGATIONS OF TRIANGLE. The obligations of
Triangle shall be further subject to the satisfaction of the following
conditions:
(i) All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated in the
Triangle-Abbott Alliance Agreements, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to
Triangle;
(ii) The representations and warranties of Abbott contained
herein and in the other Triangle-Abbott Alliance Agreements that
are qualified as to materiality shall be true and correct at and
as of the Effective Date as though restated on and as of the
Effective Date and the representations and warranties of Abbott
contained herein and in the other Triangle-Abbott Alliance
Agreements that are not qualified as to materiality shall be true
and correct in all material respects at and as of the Effective
Date as though restated on and as of the Effective Date;
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(iii) Triangle shall have received from ***;
(iv) Triangle shall have received from ***;
(v) ***
(vi) Triangle shall have received from Abbott a certificate
signed by an appropriate officer as to Abbott's compliance with
the conditions set forth in clauses (i) and (ii) of this Section
16.8(c).
(d) NON-FULFILLMENT OF CONDITIONS. The non-fulfillment of any of
the conditions described in this Section 16.8 (whether or not the
Effective Date occurs) shall not result in any liability to any Party
unless such non-fulfillment is a result of a breach of this Agreement or
any of the other Triangle-Abbott Alliance Agreements by such Party.
(e) OUTSIDE DATE. If the Effective Date has not occurred within
*** from the execution date hereof (other than
through the failure of the Party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement or any of the
other Triangle-Abbott Alliance Agreements) or such later date as the
Parties may agree, either Party may terminate this Agreement by written
notice to the other Party.
ARTICLE 17
TRANSFER OF TECHNOLOGY
17.1 TRANSFER BY TRIANGLE. Within *** following the Effective Date and
as far as it has not previously done so, Triangle shall supply Abbott with
all Product Technology necessary for the manufacture of the Products in
Triangle's possession. With respect to any Product Technology subsequently
developed or obtained by Triangle during the Term of this Agreement, such
disclosure will be made at least on a quarterly basis or sooner, if
practicable.
17.2 TECHNICAL ASSISTANCE.
(a) Triangle shall, upon request by Abbott, provide Abbott with
reasonable cooperation and assistance, consistent with the other
provisions hereof, in connection with the transfer of Product Technology.
Such assistance may include, but is not limited to, development
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of the formulations of the Products; procurement of supplies and raw
materials; initial development and production batch manufacturing runs;
process, specification and analytical methodology design and improvement;
and, in general, such other reasonable assistance as may contribute to
the efficient application by Abbott of the Product Technology. In this
regard, Triangle agrees to make appropriate employees of Triangle
reasonably available to assist Abbott, and Triangle agrees to provide
reasonable numbers of appropriate Abbott personnel with access during
normal business hours to the appropriate personnel and operations of
Triangle for such periods of time as may be reasonable in order to
familiarize Abbott personnel with the Product Technology as applied by
Triangle. At Abbott's reasonable request, such assistance shall be
furnished at Abbott's or its subcontractors' or permitted sublicensees'
facilities in the Territories, subject to a mutually agreed upon
schedule. Such technical assistance shall include but not be limited to
the following:
(i) Triangle shall: (A) provide Abbott with access to any
and all Drug Master File(s) or counterparts thereof in any
countries of the Territories ("DMF") of Triangle relating to the
manufacture of the Compounds existing as of the Effective Date;
(B) provide Triangle with letters of authorization to the FDA and
other applicable government authorities in other countries of the
Territories to refer to Triangle's DMF's; and (C) reasonably
cooperate with Abbott in obtaining access to and letters of
authorization to refer to the DMF's of Triangle's subcontractors
which are, or will be, supplying any Compounds or Products; and
(ii) Within *** after the Effective
Date, Triangle shall provide Abbott with copies of all
documentation in Triangle's possession, including all
correspondence between Triangle and its subcontractors, regarding
the manufacture of the Compounds or Products which would be
necessary or useful to assist Abbott in the commercial production
of the Compounds or Products or to support Product Approval.
(b) During the period prior to the ***; (i) Triangle shall
provide up to *** of such technical assistance during each year of
such period at Triangle's sole expense and (ii) subsequent to such
*** of technical assistance, Triangle shall provide such additional
technical assistance as may be reasonably requested by Abbott;
provided, that all reasonable out-of-pocket travel costs and
expenses incurred by Triangle in rendering technical assistance
pursuant to this Section 17.2(b) in excess of such *** per year
shall be reimbursed to Triangle by Abbott. Technical
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assistance furnished pursuant to this Section 17.2(b) shall continue
only until the *** of the Effective Date of this Agreement.
17.3 TRANSFER BY ABBOTT. Abbott shall supply Triangle with any Abbott
Technology as developed during the Term on at least a quarterly basis or sooner,
if practicable.
17.4 LANGUAGE OF DISCLOSURES. All disclosure pursuant to this Agreement
will be in English.
ARTICLE 18
INSURANCE
On or before the Execution Date, each Party shall obtain, and each
Party shall maintain throughout the Term and each Phase-Out Period and for a
period of *** thereafter, insurance issued by independent insurers reasonably
selected by such Party providing the coverage and limits described in Exhibit
18. Each of the insurance policies for the types of coverage listed in
Exhibit 18, except statutory workers' compensation coverage, shall provide
that it may not be terminated, canceled or significantly modified unless the
other Party is given *** prior written notice by the insurance carrier. Each
Party's insurance coverage must be primary coverage without right of
contribution from any insurance of the other Party. On or before the date(s)
set forth in Exhibit 18, and each year thereafter for as long as this
Agreement, or any Phase-Out Period, is in effect, each Party shall provide
the other Party certificates of insurance evidencing the coverage and limits
required by this Article 18.
ARTICLE 19
FORCE MAJEURE
If any circumstance beyond the reasonable control of either Party
occurs which delays or renders impossible the performance of certain of that
Party's obligations under this Agreement on the dates herein provided (a
"Force Majeure"), such obligations shall be postponed for such time as such
performance necessarily has had to be suspended or delayed on account
thereof, provided such Party shall notify the other Party in writing as soon
as practicable, but in no event more than *** after the occurrence of such
event of Force Majeure, which notice shall reasonably attempt to identify
such obligations under this Agreement and the extent to which performance
thereof will be affected. In such event, the Parties shall meet promptly to
determine an equitable solution to the effects of any such event, provided
that such Party who fails because of an event of Force Majeure to perform its
obligations hereunder shall upon the cessation of the Force Majeure event
take all reasonable steps within its power to resume with the least possible
delay compliance with its obligations. Events of Force Majeure shall include,
without limitation, war, revolution, invasion, insurrection, riots, mob
violence, sabotage or other
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civil disorders, acts of God, limitations imposed by exchange control
regulations or foreign investment regulations or similar regulations, laws,
regulations or rules of any government or governmental agency, any inordinate
and unanticipated delays in the regulatory review or governmental approval
process that are within the sole control of such government or governmental
agency, any delay or failure in manufacture, production or supply by Third
Parties of any goods or services, any withdrawal or recall of a Product at the
direction of any governmental authority and any failure of a computer system.
ARTICLE 20
MISCELLANEOUS
20.1 RELATIONSHIP OF THE PARTIES. Each of the Parties shall be furnishing
its services hereunder as an independent contractor, and nothing herein shall
create any association, partnership or joint venture between the Parties or any
employer-employee relationship. No agent, employee or servant of either Party
shall be or shall be deemed to be the employee, agent or servant of the other
Party, and each Party shall be solely and entirely responsible for its acts and
the acts of its employees.
20.2 RELATIONSHIP WITH AFFILIATES. Unless the context otherwise
indicates, (i) any reference to a Party herein shall include the Affiliates of
such Party (including, without limitation, references to Abbott in Sections 1.5,
1.7, 1.9, 1.48 and 2.3(c) and references to Triangle in Sections 1.58, 1.59,
2.1, 2.2, 2.3(a), 2.3(b) and 2.5) and (ii) each Party may utilize the services
of its Affiliates to perform services, activities and/or obligations permitted
or required under this Agreement to the same extent as if such Affiliate were a
party to this Agreement; provided that any such services, activities or
obligations under this Agreement permitted or required to be performed by such
Party relating to the U.S. Territory will be performed only by such Party or a
wholly-owned U.S. subsidiary of such Party. Any Affiliates so utilized shall be
subject to all the terms and conditions applicable to such Party under this
Agreement, including but not limited to provisions establishing standards for
performance. With respect to the International Territory, Abbott may use its
Affiliates as set forth in this Section 20.2; provided that Abbott shall make
all payments required and provide all reports required under this Agreement. The
use of any Affiliates as set forth in this Section 20.2 shall in no way relieve
the applicable Party of any of its obligations or liabilities hereunder and each
Party shall be liable for the actions of its Affiliates under this Agreement and
the indemnification provisions of Article 15 shall apply with respect to all
actions of a Party's Affiliates under this Agreement.
20.3 DISPUTE RESOLUTION.
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(a) GENERAL. The parties recognize that a bona fide dispute as to
certain matters may arise from time to time during the term of this
Agreement which may relate to either Party's rights and/or obligations
hereunder. The Parties agree that they shall use all reasonable efforts
to resolve any dispute which may arise in an amicable manner.
(b) MANAGEMENT RESOLUTION. If the Parties are unable to resolve
such a dispute within ***, either Party may, by notice to the other
Party, have such dispute referred to the respective officers of the
Parties designated below. Such officers shall attempt to resolve the
referred dispute by good faith negotiations within *** after such
notice is received. The said designated officers are as follows: For
Abbott, Senior Vice President, Pharmaceutical Operations, for the U.S.
Territory and Senior Vice President, International Operations for the
International Territory, and for Triangle, Chief Executive Officer.
(c) ALTERNATIVE DISPUTE RESOLUTION. The Parties agree that any
dispute that arises in connection with this Agreement, which cannot be
amicably resolved by such management discussions shall be resolved by
binding Alternative Dispute Resolution ("ADR") in the manner described in
Exhibit 20.3; provided, however, that the resolution of matters for which
one Party to the exclusion of the other has the authority, under the
terms of this Agreement, to control the decisions or the final decisions
shall not be determined by ADR; provided, further, that either Party may
seek judicial relief or enforcement to pursue a claim of fraudulent or
otherwise inequitable treatment under the ADR proceedings or to otherwise
enforce a judgment under the ADR proceedings (including without
limitation a judgment for specific performance or injunctive relief).
20.4 COUNTERPARTS. The Agreement may be executed simultaneously in any
number of counterparts and may be executed by facsimile. All counterparts shall
collectively constitute one and the same Agreement.
20.5 NOTICES. In any case where any notice or other communication is
required or permitted to be given hereunder, such notice or communication shall
be in writing, and sent by overnight express or registered or certified mail
(with return receipt requested) and shall be sent to the following address (or
such other address as either Party may designate from time to time in writing):
If to Triangle:
Triangle Pharmaceuticals, Inc.
4 University Place
4611 University Drive
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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<PAGE>
Durham, North Carolina 27707
Telephone: (919) 493-5980
Telefax: (919) 493-5925
Attention: Chief Executive Officer
Copy to: General Counsel
If to Abbott:
Abbott Laboratories
Dept. 309; Bldg. AP30
200 Abbott Park Road
Abbott Park, IL 60064
Telephone: (847) 938-6863
Telefax: (847) 938-5383
Attention: Senior Vice President, Pharmaceutical Operations
and Senior Vice President, International
Operations
Copy to:
General Counsel
Abbott Laboratories
Dept. 364; Bldg. AP6D
100 Abbott Park Road
Abbott Park, IL 60064
Telephone: (847) 937-8906
Telefax: (847) 938-6277
20.6 BINDING EFFECT; ASSIGNMENT. This Agreement may not be assigned, in
whole or in part, by either Party without the prior written consent of the other
Party, and any attempted assignment without such consent shall be null and void;
provided that no prior written consent shall be required in the event that a
Third Party acquires substantially all of the assets or outstanding shares of,
or merges with, the assigning Party, but only so long as such Third Party agrees
to be bound by all of the assigning Party's responsibilities and obligations
hereunder. No assignment of this Agreement or of any rights hereunder shall
relieve the assigning party of any of its obligations or liability hereunder.
This Agreement shall inure to the benefit of and be binding upon each of the
Parties hereto and their respective successors and permitted assigns.
20.7 ENTIRE AGREEMENT. The terms and conditions contained herein and in
the other Triangle-Abbott Alliance Agreements constitute the entire agreement
between the Parties relating to the subject matter of hereof and thereof and
shall supersede all previous communications between the Parties with respect to
the subject matter hereof and thereof, respectively. Neither Party has entered
into this Agreement in reliance upon any representation, warranty, covenant or
undertaking of the other Party that
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is not set out or referred to in this Agreement. In addition, upon the request
of either Party, the Parties will discuss whether they desire to enter into an
agreement regarding the tax treatment of their activities under this Agreement.
If the Parties mutually agree that such an agreement is necessary or desirable,
they will each bear their own expenses incurred in connection with the
preparation of such an agreement, and (unless the Parties otherwise agree in the
future), any mutually agreed out-of-pocket costs incurred in connection with the
development of tax information pursuant to such an agreement shall be shared
equally. If only one Party believes that such an agreement is necessary or
desirable, that Party shall bear the costs of preparing such an agreement, and
shall bear the out-of-pocket costs of developing tax information pursuant to
such an agreement. In any event, each Party shall bear its own internal expenses
in connection with the negotiation and preparation of any such tax agreement and
the preparation of its own tax returns.
20.8 AMENDMENT. The Agreement may be varied, amended or extended only by
the written agreement of the Parties through their duly authorized officers or
representatives, specifically referring to this Agreement.
20.9 SEVERABILITY. In case any one or more of the provisions contained
herein shall, for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated herein to be impossible and provided that the performance required
by this Agreement with such clause deleted remains substantially consistent with
the intent of the Parties.
20.10 COMPANY EMPLOYEES. Each Party shall not, directly or indirectly
solicit for employment, any employee of the other Party who has been directly
involved in the performance of this Agreement during the Term and for one year
after the earlier of the termination or expiration of this Agreement or the
termination of such individual's employment, with the other Party. It shall not
be a violation of this provision if any employee responds to a Party's general
advertisement of an open position.
20.11 PUBLICITY. Except as otherwise provided herein, each Party shall
maintain the confidentiality of all provisions of this Agreement and this
Agreement itself and, without the prior written consent of both Parties, neither
Party shall make any press release or other public announcement of or otherwise
disclose to any Third Party this Agreement or any of its provisions except: (i)
for disclosure to those of its directors, officers, employees, accountants,
attorneys, advisers and agents whose duties
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reasonably require them to have access to the Agreement and, in the case of
Triangle, disclosure to the Triangle Licensors, provided that such directors,
officers, employees, accountants, attorneys, advisers, agents and licensors are
required to maintain the confidentiality of the Agreement to the same extent as
if they were Parties hereto, and (ii) except for such disclosures as may be
required by Legal Requirements, in which case the disclosing Party shall provide
the nondisclosing Party with prompt advance notice of such disclosure so that
the nondisclosing Party shall have the opportunity if it so desires to seek a
protective order or other appropriate remedy and, in connection with any
disclosure to the Securities and Exchange Commission, the disclosing Party shall
use reasonable efforts to obtain confidential treatment for such disclosure.
Promptly following the execution of each of the Triangle-Abbott Alliance
Agreements, the Parties shall issue a mutually acceptable press release, a copy
of which is attached hereto as Exhibit 20.11.
20.12 APPLICABLE LAW. The Agreement shall be governed by the laws of the
State of Delaware applicable to contracts made and to be performed entirely
within such jurisdiction and without giving effect to its choice or conflict of
laws rules or principles. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements, in
addition to any other relief to which the party may be entitled.
20.13 MILLENNIAL COMPLIANCE. Each Party hereby covenants and agrees that
it will use Reasonable Best Efforts to ensure that there will be no failure or
erroneous receipt, storage, processing or production of data as a consequence of
the inability to receive, store, process or output date information regardless
of the date(s) utilized (including, without limitation, relating to the change
of century) in any computer software, computer hardware, automation systems or
other devices owned, licensed or otherwise used by such Party, its permitted
sublicensees or suppliers that would result in the inability of such Party to
either (i) comply with its obligations hereunder with respect to any
Confidential Information or any other data or information of other Party, or
(ii) successfully perform its obligations hereunder. At either Party's request,
the other Party agrees to disclose in reasonable detail its millennial
compliance plan and procedures, including but not limited to the applicable
testing results concerning its hardware and software systems.
20.14 HEADINGS. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
20.15 INTERPRETATION.
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(a) Wherever any provision of this Agreement uses the term
"including" (or "includes"), such term shall be deemed to mean "including
without limitation" and "including but not limited to" (or "includes
without limitation" and "includes but is not limited to") regardless of
whether the words "without limitation" or "but not limited to" actually
follow the term "including" (or "includes").
(b) Wherever any provision of this Agreement provides that a
Party's consent shall not be unreasonably withheld, such provision shall
be deemed to provide that such consent shall in addition not be
unreasonably delayed.
(c) The recitals set forth at the start of this Agreement, along
with the Exhibits to this Agreement, and the terms and conditions
incorporated in such recitals and Exhibits shall be deemed integral parts
of this Agreement and all references in this Agreement to this Agreement
shall encompass such recitals and Exhibits and the terms and conditions
incorporated in such recitals and Exhibits.
(d) In the event of any conflict between the terms and conditions
of this Agreement and any terms and conditions that may be set forth on
any order, invoice, verbal agreement or otherwise, the terms and
conditions of this Agreement shall govern.
(e) Unless otherwise explicitly stated, in the event of any
conflict between the terms of this Agreement and the terms and conditions
of any of the Exhibits hereto, the terms of this Agreement shall prevail.
(f) The Agreement shall be construed as if both Parties drafted it
jointly, and shall not be construed against either Party as principal
drafter.
(g) Unless otherwise provided, all references to Sections,
Articles and Exhibits in this Agreement are to Sections, Articles and
Exhibits of and to this Agreement.
20.16 NO WAIVER OF RIGHTS. No failure or delay on the part of either
Party in the exercise of any power or right hereunder shall operate as a waiver
thereof. No single or partial exercise of any right or power hereunder shall
operate as a waiver of such right or of any other right or power. The waiver by
either Party of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any other or subsequent breach hereunder.
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[Signatures appear on the following page]
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<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
TRIANGLE PHARMACEUTICALS, INC.
By: /S/ DAVID W. BARRY
----------------------------------------------
Name: DAVID W. BARRY
----------------------------------------------
Title: CHAIRMAN AND CHIEF EXECUTIVE OFFICER
----------------------------------------------
ABBOTT LABORATORIES
By: /S/ ARTHUR HIGGINS
----------------------------------------------
Name: ARTHUR HIGGINS
----------------------------------------------
Title: SENIOR VICE PRESIDENT
PHARMACEUTICAL OPERATIONS
----------------------------------------------
<PAGE>
EXHIBIT 1.8A
U.S. SG&A - EXPENSE DEFINITIONS
***
- -----------
* Not included in budget pursuant to ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 1.8B
U.S. TERRITORY - SG&A * - VARIABLE SALES FORCE EXPENSE
VARIABLE SALES FORCE EXPENSE
Base expense shall be set at $***/Representative adjusted
with an annual cost of living index using the Consumer Price Index (CPI). Such
expense may be reviewed and adjusted as necessary by ***.
This expense includes the following items:
o ***
o ***
o ***
o ***
o ***
o ***
o ***
o ***
NOTES:
(a) ***
***
***
(b) *** Expense includes: ***
(c) *** includes: ***
* SG&A definition for this contract only. Party's definition for external
reporting may be different.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 1.8C
INTERNATIONAL TERRITORY - SG&A CREDIT ANALYSIS (1)
(A) MARKETING/SALES/ADMIN (PURSUANT TO SECTION 1.8(J))
Maximum costs (per product) excluding B&C below. These costs will
reflect similar expenses as outlined in Exhibit 1.8A, but will be
provided in aggregate not by line item. Expenses will also be
identified for Marketing Studies (permitted under Section 4.4) and
Expanded Access / Indigent Care (permitted under Section 4.6)
HIV PRODUCTS (2)(3)
***
***
***
HBV PRODUCTS (2)(3)
***
***
***
(B) R&D / REGULATORY:
***
***
(C) OTHER:
***
***
***
(1) SG&A definition for this contract only. The Parties' definition for
external reporting may be different.
(2) Amounts indexed for inflation. 1999 is the base year for the inflation
calculation.
(3) The amounts included are for illustrative purposes. Actual amounts will be
determined pursuant to Section 4.3(b). Expenses are Abbot's best estimates.
These estimates are subject to change based on clinical date and final
launch plans.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHBIIT 1.16
DAPD FORMULA
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 1.89
(PAGE 1 OF 4)
MKC-442 LICENSE AGREEMENT
EARNED ROYALTIES
o *** of Licensed Products(1)
ANNUAL ***
<TABLE>
<CAPTION>
Full Calendar Year Following First
FDA Approval of Licensed Products Annual ***
- ---------------------------------- --------------------------------
<S> <C>
***
***
***
</TABLE>
(1) As defined in the MKC-442 License Agreement
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 1.89
(PAGE 2 OF 4)
DAPD LICENSE AGREEMENT
Cumulative Net Selling Price of
<TABLE>
<CAPTION>
Earned Royalties Licensed Products (1) for
(% of Net Selling Price(1)) the HIV Indication
<S> <C>
***
***
***
</TABLE>
*** ROYALTIES FOR THE HIV INDICATION
<TABLE>
<CAPTION>
Calendar Year from First FDA Approval ***
Of a Licensed Product for HIV Indication Amount
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
<TABLE>
<CAPTION>
Cumulative Net Selling Price of
Earned Royalties Licensed Products(1) for
(% of Net Selling Price(1)) the HBV Indication
- ------------------------- ----------------------------------
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
*** FOR THE HBV INDICATION
<TABLE>
<CAPTION>
Calendar Year from First FDA Approval ***
Of a Licensed Product for HBV Indication Amount
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
(1) As defined in the DAPD License Agreement
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 1.89
(PAGE 3 OF 4)
FTC LICENSE AGREEMENT
<TABLE>
<CAPTION>
Annual Aggregate Net Selling Price
Earned Royalties of Licensed Products(1)
(% of Net Selling Price(1)) for HIV Indication
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
*** ROYALTIES FOR THE HIV INDICATION
<TABLE>
<CAPTION>
Calendar Year from First FDA Approval ***
Of a Licensed Product for HIV Indication AMOUNT
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
<TABLE>
<CAPTION>
Annual Aggregate Net Selling Price
Earned Royalties of Licensed Products(1)
(% of Net Selling Price(1)) for HBV Indication
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
*** ROYALTIES FOR THE HBV INDICATION
<TABLE>
<CAPTION>
Calendar Year for First FDA Approval ***
Of a Licensed Product for HBV Indication AMOUNT
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
(1) As defined in the FTC License Agreement
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 1.89
(PAGE 4 OF 4)
L-FMAU LICENSE AGREEMENT
Earned Royalties
*** of Licensed Products(1)
*** Royalties
<TABLE>
<CAPTION>
Full Calendar Year following First
FDA Approval of a Licensed Product ***
<S> <C>
*** ***
*** ***
*** ***
</TABLE>
(1) As defined in the L-FMAU License Agreement
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 2.6
COLLABORATION AGREEMENT
COMBINATION PRODUCTS
FINANCIAL ANALYSIS OF LONG-TERM FINANCIAL PLAN
Assumes satisfaction of all conditions required by Section 2.6(b) including the
Abbott and Triangle market on an exclusive basis in accordance with the terms of
the Triangle-Abbott Alliance Agreements.
<TABLE>
<S> <C>
ANALYSIS WITH COMBINATION PRODUCT:
***
***
***
ANALYSIS WITHOUT COMBINATION PRODUST (2):
***
***
***
</TABLE>
(1) ***
(2) ***
CONCLUSION:
Based on the above analysis the project would have an additive economic impact
and would satisfy the requirements of Section 2.6.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
U.S. PROFIT SHARING
1ST QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
U.S. PROFIT SHARING
2ND QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
U.S. PROFIT SHARING
3RD QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
U.S. PROFIT SHARING
4TH QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
INTERNATIONAL PROFIT SHARING
1ST QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
INTERNATIONAL PROFIT SHARING
2ND QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
INTERNATIONAL PROFIT SHARING
3RD QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
INTERNATIONAL PROFIT SHARING
4TH QUARTER
(MILLIONS)
<TABLE>
<CAPTION>
U.S. PROFIT SPLIT: ABBOT TRIANGLE
<S> <C> <C>
***
***
***
</TABLE>
ASSUMPTIONS:
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
INTERNATIONAL REIMBURSEMENT ACCOUNT EXAMPLE
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 6.9
INTERNATIONAL REIMBURSEMENT ACCOUNT EXAMPLE
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT 9.2
FORM OF
CONSENT AND AGREEMENT
This Consent and Agreement is made as of the date written below,
by and among [Licensor] ("Licensor"), Triangle Pharmaceuticals, Inc., a Delaware
corporation ("Triangle") and Abbott Laboratories, an Illinois corporation
("Abbott").
WHEREAS, Licensor and Triangle are parties to a certain License
Agreement dated ___________ [as amended __________] (the "License Agreement");
and
WHEREAS, Triangle desires to grant and Abbott desires to accept a
sublicense of certain rights under the License Agreement, with respect to a
collaboration (the "Collaboration") between Abbott and Triangle;
NOW, THEREFORE, the parties hereby agree as follows:
1. BRIEF DESCRIPTION
As part of the Collaboration, Triangle will sublicense to Abbott
and its affiliates (the "Abbott Parties") certain rights ("Rights") to utilize
certain patents and technology relating to the distribution, promotion,
manufacturing and sale of pharmaceutical products containing the Compound (as
defined in the License Agreement), including but not limited to:
o the exclusive right to commercially sell and distribute the
Compound and pharmaceutical products containing the Compound
throughout the world, [except for _______];
o the exclusive right to co-promote the Compound and pharmaceutical
products containing the Compound, along with Triangle, in the
United States;
o the exclusive right to promote the Compound and pharmaceutical
products containing the Compound outside the United States,
[except for _________]; and
o the exclusive right outside the United States, [except for
________, to utilize certain patents and technology to import,
use, offer to sell, sell, make and have made the Compounds and
pharmaceutical products containing the Compound within the [Field
of Use], with respect to which Abbott intends to use its
affiliates.
Triangle will retain control of and responsibility for the
clinical development of the Compound and pharmaceutical products containing the
Compound. Triangle will retain responsibility for the filing, obtaining and
maintaining of governmental approval of the Compound and pharmaceutical products
containing the Compound in the United States, and the Abbott Parties will have
responsibility for the filing, obtaining and maintaining of governmental
approval of the Compound and the pharmaceutical products containing the Compound
outside of the United States, [except for ________].
2. COVENANTS/UNDERTAKINGS
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
3. CONSENT AND AGREEMENT
Licensor hereby consents to the Collaboration, including the grant
to the Abbott Parties of a sublicense under the License Agreement pursuant to
the Collaboration.
Licensor agrees that the Abbott Parties, in their capacity as
sublicensees, shall have the right to perform Triangle's rights and obligations
under the License Agreement in the Abbott Parties' capacity as sublicensees.
4. CONFIDENTIALITY
Licensor acknowledges that the information contained herein and
all of the terms of the Collaboration are deemed confidential and proprietary
information under the License Agreement.
Dated:
LICENSOR
- -----------------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
TRIANGLE PHARMACEUTICALS, INC. ABBOTT LABORATORIES
By: By:
------------------------------ ----------------------------
Name: Name:
---------------------------- --------------------------
Title: Title:
--------------------------- -------------------------
<PAGE>
Collaboration Agreement
Exhibit 11.2(e)
Page 1 of 3
TRIANGLE PATENTS AND PATENT APPLICATIONS
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Collaboration Agreement
Exhibit 11.2(e)
Page 2 of 3
TRIANGLE PATENTS AND PATENT APPLICATIONS
INTER PARTES PROCEEDINGS
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Collaboration Agreement
Exhibit 11.2(e)
Pages 3 of 3
TRADEMARK ISSUES
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Exhibit 16.8(c)(iii)
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Exhibit 16.8(c)(iv)
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Collaboration Agreement
Exhibit 18
INSURANCE
to be delivered ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
COLLABORATION AGREEMENT
EXHIBIT 20.3
ALTERNATIVE DISPUTE RESOLUTION
The parties recognize that a bona fide dispute as to certain matters
may arise from time to time during the term of this Agreement which relates to
either party's rights and/or obligations. To have such a dispute resolved by
this Alternative Dispute Resolution ("ADR") provision, a party first must send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their
equivalents) of the affected subsidiaries, divisions, or business units within
*** after such notice is received (all references to "days"
in this ADR provision is to calendar days).
Any negotiations regarding a dispute shall be treated as settlement
negotiations for purposes of the Federal Rules of Evidence and any similar state
rules of evidence. Such negotiations shall not be admissible in any subsequent
ADR hearing.
If the matter has not been resolved within ***
of the notice of dispute, or if the parties fail to meet within such
*** either party may initiate an ADR proceeding as
provided herein. The parties shall have the right to be represented by
counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to
the other party of the issues to be resolved by ADR. Within ***
after its receipt of such notice, the other party may, by written
notice to the party initiating the ADR, add additional issues to be
resolved within the same ADR.
2. Within *** following receipt of the original ADR notice, the parties
shall select a mutually acceptable neutral (the "Neutral") to
preside in the resolution of any disputes in this ADR proceeding. If
the parties are unable to agree on a mutually acceptable neutral
within such period, the parties shall request the *** to select a
neutral pursuant to the following procedures:
(a) The CPR shall submit to the parties a list of not less than ***
candidates within *** after receipt of the request from the
parties, along with a Curriculum Vitae for each candidate. No
candidate shall be an employee, director, or shareholder of
either party or any of their subsidiaries or affiliates.
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(b) Such list shall include a statement of disclosure by each
candidate of any circumstances likely to affect his or her
impartiality.
(c) Each party shall number the candidates in order of preference
(with the number one (1) signifying the greatest preference)
and shall deliver the list to the CPR within *** following
receipt of the list of candidates. If a party believes a
conflict of interest exists regarding any of the candidates,
that party shall provide a written explanation of the conflict
to the CPR along with its list showing its order of preference
for the candidates. Any party failing to return a list of
preferences on time shall be deemed to have no order of
preference.
(d) If the parties collectively have identified fewer than ***
candidates deemed to have conflicts, the CPR immediately shall
designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference. If a tie
should result between two candidates, the CPR may designate
either candidate. If the parties collectively have identified
*** or *** candidates deemed to have conflicts, the CPR shall
review the explanations regarding conflicts and, in its sole
discretion, may either (i) immediately designate as the neutral
the candidate for whom the parties collectively have indicated
the greatest preference, or (ii) issue a new list of not less
than five (5) candidates, in which case the procedures set
forth in subparagraphs 2(a) - 2(d) shall be repeated.
3. No earlier than *** or later than *** after selection, the neutral
shall hold a hearing to resolve each of the issues identified by the
parties. The ADR proceeding shall take place at a location agreed
upon by the parties. If the parties cannot agree, the neutral shall
designate a location other than the principal place of business of
either party or any of their subsidiaries or affiliates.
4. At least *** prior to the hearing, each party shall submit the
following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely in any
oral or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the hearing,
and a short summary of the anticipated testimony of each witness;
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(c) a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each
issue. The proposed rulings and remedies shall not contain any
recitation of the facts or any legal arguments and shall not
exceed one (1) page per issue.
(d) a brief in support of such party's proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This
page limitation shall apply regardless of the number of issues
raised in the ADR proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery shall
be required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.
5. The hearing shall be conducted on *** and shall be governed by the
following rules:
(a) Each party shall be entitled to *** of hearing time to present
its case. The neutral shall determine whether each party has
had the *** to which it is entitled.
(b) Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or
other evidence, to cross-examine witnesses, and to make a closing
argument. Cross-examination of witnesses shall occur immediately
after their direct testimony, and cross-examination time shall be
charged against the party conducting the cross-examination.
(c) The party initiating the ADR shall begin the hearing and, if it
chooses to make an opening statement, shall address not only
issues it raised but also any issues raised by the responding
party. The responding party, if it chooses to make an opening
statement, also shall address all issues raised in the ADR.
Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in
the same sequence.
(d) Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.
(e) Settlement negotiations shall not be admissible under any
circumstances. Affidavits prepared for purposes of the ADR hearing
also shall not be
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admissible. As to all other matters, the neutral shall have sole
discretion regarding the admissibility of any evidence.
6. Within *** following completion of the hearing, each party may
submit to the other party and the neutral a post-hearing brief in
support of its proposed rulings and remedies (which may include
specific performance and/or injunctive relief), provided that such
brief shall not contain or discuss any new evidence and shall not
***. This page limitation shall apply regardless of the number of
issues raised in the ADR proceeding.
7. The neutral shall rule on each disputed issue within *** following
completion of the hearing. Such ruling shall adopt in its entirety
the proposed ruling and remedy of one of the parties on each
disputed issue but may adopt one party's proposed rulings and
remedies on some issues and the other party's proposed rulings and
remedies on other issues. The neutral shall not issue any written
opinion or otherwise explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees
and expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the
fees and expenses of a court reporter, and any expenses for a hearing
room, shall be paid as follows:
(a) If the neutral rules in favor of one party on all disputed issues
in the ADR, the losing party shall pay 100% of such fees and
expenses.
(b) If the neutral rules in favor of one party on some issues and the
other party on other issues, the neutral shall issue with the
rulings a written determination as to how such fees and expenses
shall be allocated between the parties. The neutral shall allocate
fees and expenses in a way that bears a reasonable relationship to
the outcome of the ADR, with the party prevailing on more issues,
or on issues of greater value or gravity, recovering a relatively
larger share of its legal fees and expenses.
9. The rulings of the neutral and the allocation of fees and expenses
shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgment in any court having jurisdiction.
10. Except as provided in paragraph 9 or as required by law, the existence
of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and
briefs), and the rulings shall be deemed Confidential Information. The
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neutral shall have the authority to impose sanctions for unauthorized
disclosure of Confidential Information.
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EXHIBIT 2.2
CO-PROMOTION AGREEMENT
This Co-Promotion Agreement (the "Agreement") is made as of June 2, 1999 by
and between Triangle Pharmaceuticals, Inc., a Delaware corporation ("Triangle"),
with its principal offices at 4 University Place, 4611 University Drive, Durham,
North Carolina 27707, and Abbott Laboratories, an Illinois corporation
("Abbott"), with its principal offices at 100 Abbott Park Road, Abbott Park,
Illinois 60064, each acting on behalf of itself and its Affiliates. As used
herein, any reference to a party shall include the Affiliates of such party.
WITNESSETH
WHEREAS, Abbott is marketing Norvir-Registered Trademark-, a protease
inhibitor for the treatment of HIV in the United States;
WHEREAS, Abbott has under development ABT-378, another protease inhibitor
for the treatment of HIV;
WHEREAS, Abbott desires, and Triangle is willing, to co-promote Norvir and
ABT-378, pursuant to the terms and conditions of this Agreement,
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and undertakings contained herein, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
In addition to the other terms defined elsewhere herein, the following
terms shall have the following meanings when used in this Agreement (and any
term defined in the singular shall have the same meaning when used in the
plural, and vice versa, unless stated otherwise):
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1.1 "ABT-378" shall mean the chemical compound known as ***, which
is being developed by Abbott as a pharmaceutical product *** for the
treatment of HIV.
1.2 "Abbott Net Sales" shall mean the total gross sales of each Product
(as set forth on the invoice for such Product) in the Territory by Abbott to
Third Parties during the given calendar quarter or year, less the following
deductions directly paid or incurred by Abbott with respect to the sale of such
Product in the United States during such calendar quarter or year:
(i) ***
(ii) *** or otherwise, imposed by government authorities;
(iii) *** where there are no direct shipments to such customers
by Abbott; and
(iv) the portion of any *** paid during the relevant time
period to *** that relate specifically to the sale of
the Products to such *** .
Abbott Net Sales shall be calculated separately for each Product.
1.3 "Abbott Trademarks" shall have the meaning set forth in
Section 11.1.
1.4 "Active Detailing Period" shall mean, with respect to each of Norvir
and ABT-378, a period of *** for such Product.
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1.5 "Affiliate" shall mean any corporation or non-corporate business
entity which controls, is controlled by, or is under common control with a
Party. A corporation or non-corporate business entity shall be regarded as in
control of another corporation or non-corporate business entity if it owns, or
directly or indirectly controls, at least *** of the voting stock of the
other corporation, or (a) in the absence of the ownership of at least ***
of the voting stock of a corporation or (b) in the case of a non-corporate
business entity, if it possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such corporation or
non-corporate business entity, as applicable. For purposes of this Agreement,
*** , which comprise Abbott's joint venture with *** , are not
Affiliates of Abbott.
1.6 "Average Script Size" shall mean with respect to each Product, the
number of Units of Product determined for a given Sales Year or Residual Year by
dividing (i) total number of Units of such Product dispensed during such year by
(ii) the total number of prescriptions of such Product during such year, with
items (i) and (ii) being determined from *** .
1.7 "Average Selling Price" shall mean, with respect to each Product,
the price per Unit of Product determined for a given Sales Year or Residual Year
by dividing the Net Sales of such Product for such year by the Net Units of such
Product for such year.
1.8 "Co-Promote" or "Co-Promotion" shall mean the joint activities of
the Parties to Promote the Products under the Abbott Trademarks in the
Territory.
1.9 "Co-Promotion Budget" shall have the meaning set forth in
Section 4.3.
1.10 "Co-Promotion Committee" shall have the meaning set forth in
Section 4.2.
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1.11 "Co-Promotion Date" shall mean, with respect to each Product, the
date on which the Parties begin to Co-Promote such Product.
1.12 " *** " shall mean the *** designated by the Parties
for each Sales Year as the *** from Triangle and Abbott shall be
*** . The *** shall be designated in writing by the Parties prior
to the start of each Sales Year. For each Residual Year, the *** shall
be those *** comprising the *** for the *** Sales Year
of the Active Detailing Period.
1.13 "Co-Promotion Plan" shall have the meaning set forth in Section 4.4.
1.14 "Condition" shall have the meaning set forth in Section 2.1.
1.15 "Confidential Information" shall have the meaning set forth in
Section 10.1.
1.16 "Detail" shall mean a face-to-face sales presentation by a Sales
Representative during which one or more of the Products is marketed and promoted
to a licensed medical physician, but not a resident or intern or other health
care professional, unless such individual has the authority to write
prescriptions for the Products pursuant to state statutes. Attendance at
meetings with managed care entities, conventions and participation in continuing
education programs shall not constitute a Detail.
1.17 "Detailing" shall mean the act of marketing and promoting the
Products through Details.
1.18 "Detailing Commission" shall have the meaning set forth in
Section 5.5.
1.19 "Detailing Fee" shall have the meaning set forth in Section 5.4.
1.20 "Dollars" means United States dollars.
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1.21 "Effective Date" shall mean the date upon which this Agreement
becomes effective upon the fulfillment of the conditions set forth in Section
13.5.
1.22 "FDA" shall mean the U.S. Food and Drug Administration or any
successor entity thereto.
1.23 "FTC" shall mean: (i) the *** with the chemical name:
*** ; (ii) any mixture of the *** described in Subsection 1.23(i)
and the (+) enantiomer with the chemical name: *** , in which the ratio
of such *** or greater than *** ; or (iii) any *** , and
*** of any of the foregoing. FTC is exclusively licensed to Triangle by
Emory University pursuant to a License Agreement dated April 17, 1996 as amended
on May 6, 1999 (the "FTC License Agreement") for use as a pharmaceutical product
in the prevention and treatment of HIV and HBV throughout the entire world.
1.24 "Field of Use" shall mean the prevention and treatment of HIV.
1.25 "HIV" shall mean the human immunodeficiency virus.
1.26 "Incremental Market Share" shall mean, with respect to each Product
during a given Sales Year or Residual Year, the positive difference, if any,
determined by the following formula:
*** ***
*** *** ***
*** ***
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1.27 "Initial Product Market Share" shall mean, with respect to each
Product, the market share for such product for each Physician Group, as
determined by the Co-Promotion Committee using *** for the ***
immediately preceding the first Sales Year for such Product. The Initial
Product Market Share shall be redetermined by the Co-Promotion Committee
whenever the Physician Groups are modified.
1.28 "Launch" shall mean the date upon which the first commercial sale of
ABT-378 (as evidenced by the invoice date for such sale) occurs in the
Territory.
1.29 "Legal Requirements" shall mean any and all federal, state and local
laws, regulations, ordinances, orders and requirements applicable to the Parties
and their Affiliates in performance of this Agreement, including without
limitation, the Securities and Exchange Act of 1934, as amended, as well as such
laws, regulations, ordinances, orders and requirements applicable to the sale,
marketing promotion, detailing, and distribution of the Product, including
without limitation, the following with the Territory: the Prescription Drug
Marketing Act of 1987, the Federal Food, Drug and Cosmetic Act, and all
regulations and other requirements of the FDA.
1.30 "Losses" shall mean any liabilities, costs, damages, judgments,
settlements and other reasonable out-of-pocket expenses (including legal
expenses).
1.31 "MKC-442" shall mean the product known as MKC-442, with the chemical
name *** thereof. MKC-442 is exclusively licensed to Triangle by
Mitsubishi Chemical Corporation pursuant to a License Agreement dated June 17,
1997 (the "MKC-442 License Agreement") for use as a pharmaceutical product in
the entire world, excluding Japan.
1.32 "Net Units" shall mean, with respect to each Product, the total
number of Units of Product which are sold by Abbott in the Territory to Third
Parties during a given Sales Year or
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Residual Year less any returned, recalled, or any other such Product for which
the customer has been credited the original sales price.
1.33 "Norvir" shall mean the chemical compound known as ritonavir, which
is sold by Abbott as a pharmaceutical product in the United States under the
trademark Norvir-Registered Trademark- for the treatment of HIV.
1.34 "Party" shall mean Abbott or Triangle, and "Parties" shall mean
Abbott and Triangle.
1.35 "Person" shall mean a natural person, a corporation, a partnership,
a trust, a joint venture, any governmental authority, and any other entity or
organization.
1.36 " *** " shall mean the *** the *** .
1.37 "Primary Details" shall mean a Detail in which the Product being
Detailed is the product most emphasized, and usually the first product
presented, during such Detail.
1.38 "Product Approval" shall mean receipt of approval from the FDA to
market a pharmaceutical product in the United States.
1.39 "Product Market Share" shall mean, with respect to each Product for
a given Sales Year or Residual Year, the percent amount determined in accordance
with the following formula:
*** *** ***
*** *** ***
***
The Product Market Share shall be calculated separately for the Co-Promotion
Physician Group and the Representative Physician Group.
1.40 "Product Patent" shall mean: (a) any patents and patent
applications owned by or licensed to Abbott which contain claims covering the
manufacturing, use and sale of the Products
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or the Products; and (b) all substitutions, extensions, divisionals,
continuations, continuations-in-part, renewals, supplementary protection
certificates or foreign counterparts of such patents and patent applications
identified in sub-part (a).
1.41 "Product Technology" shall mean the technical information, data,
inventions, discoveries, trade secrets, information, data, formulas, procedures,
know-how and results which are owned by or otherwise licensed to (with the right
to sublicense) Abbott during the Term which are useful for the development,
registration, manufacture, use or sale of the Compounds or Products.
1.42 "Products" shall mean the following pharmaceutical products within
the Field of Use: (i) Norvir; and (ii) ABT-378 subject to the fulfillment of
the Condition.
1.43 "Promote" or "Promotion" shall mean the act of Detailing or
otherwise advertising, marketing and promoting sales of the Products.
1.44 "Promotional Materials" shall mean all electronic and computer
managed information (including the Internet) and all written, printed or graphic
materials, brochures, sales aids and other promotional items relating to a
Product.
1.45 "Reasonable Best Efforts" shall mean *** . Each Party shall
be entitled to exercise prudent and justified business judgment in fulfilling
its obligations to exercise its Reasonable Best Efforts under this Agreement.
1.46 "Residual Commission" shall have the meaning set forth in Section
5.6.
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1.47 "Residual Period" shall mean, with respect to each Product, the
period beginning upon the expiration of the Active Detailing Period for such
Product and continuing until the *** of such date.
1.48 "Residual Year" shall mean, with respect to each Product, a fiscal
period of twelve (12) consecutive calendar months with the first Residual Year
commencing on the first day of the Residual Period and the second Residual Year
commencing on the first day after the end of the first Residual Year.
1.49 " *** " shall mean *** designated by the Parties for
each Sales Year as satisfying the following criteria: (i) they are *** ;
and (ii) they have *** as measured by *** . The ***
shall be designated in writing by the Parties prior to the start of each Sales
Year. For each Residual Year, the *** for the last Sales Year of the
Active Detailing Period.
1.50 "Sales Quarter" shall mean, with respect to each Product, a fiscal
period of three (3) consecutive calendar months starting on the first day of the
first, fourth, seventh and tenth month of each Sales Year.
1.51 "Sales Representative" shall mean, with respect to each Party, an
individual: (i) who is regularly employed by such Party on a full-time or
part-time basis as a member of one of its sales forces *** , with the
consent of the other Party is retained on a contractual basis to act as part of
its sales force; and (ii) who is appropriately
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qualified and experienced in pharmaceutical product promotion to make effective
sales presentations for the Products.
1.52 "Sales Year" shall mean, with respect to each Product, a fiscal
period of twelve (12) consecutive calendar months, with the first Sales Year
commencing on the first day of the calendar month in which the Co-Promotion Date
for each Product occurs, and each successive Sales Year commencing on the first
day after the end of the previous Sales Year.
1.53 "Sample Pack" shall mean a packaged and labeled container of Product
for distribution to Third Parties as samples.
1.54 "Secondary Detail" shall mean a Detail in which the Product being
Detailed is not the most emphasized product, and is not the first Product
presented, during such Detail.
1.55 "Term" shall have the meaning set forth in Section 13.1.
1.56 "Territory" shall mean the United States of America, *** .
1.57 "Third Party" shall mean any Person that is not a Party.
1.58 "Total Product Rx Market" shall mean, with respect to each Product
during a given Sales Year or Residual Year, the total number of prescriptions of
such Product during such year which are written by each Physician Group as
reported in *** . The Total Product Market shall be calculated
separately for the Co-Promotion Physician Group and the Representative Physician
Group.
1.59 "Total Protease Inhibitor Rx Market" shall mean the total number of
protease inhibitor prescriptions for each given Sales Year or Residual Year
which are written by each Physician Group as reported in *** . The
Total Protease Inhibitor Market shall be
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calculated separately for the Co-Promotion Physician Group and the
Representative Physician Group.
1.60 "Triangle-Abbott Alliance Agreements" shall mean this Agreement and
the following agreements between the Parties of even date herewith: (i) the
Collaboration Agreement; (ii) the Stock Purchase Agreement; and (iii) the
Stockholder Rights Agreement. Upon its execution and delivery, the Supply
Agreement shall also be considered one of the Triangle-Abbott Alliance
Agreements.
1.61 "Unit" shall mean the unit dosage form of such Product (i.e., a
tablet or a capsule or a milliliter of liquid).
1.62 "Valid Claim" shall mean (a) an issued claim of any unexpired patent
including among the Product Patents, or (b) a pending claim of any pending
patent application included among the Product Patents, which has not been held
unenforceable, unpatentable or invalid by a decision of a court or governmental
body of competent jurisdiction, unappealable or unappealed within the time
allowed for appeal, which has not been rendered unenforceable through disclaimer
or otherwise or which has not been lost through an interference proceeding.
ARTICLE 2
CO-PROMOTION
2.1 CO-PROMOTION. Subject to the terms and conditions of this
Agreement, Abbott hereby grants to Triangle, and Triangle hereby accepts, the
exclusive right to Co-Promote Norvir in the Territory jointly with Abbott during
the Active Detailing Period. Upon the Product Approval of ABT-378 in the
Territory, Abbott shall grant to Triangle, and Triangle hereby accepts, the
exclusive right to Co-Promote ABT-378 in the Territory jointly with Abbott
during the Active Detailing Period; provided, however, that such right is ***
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*** (i) *** or (ii) *** shall not appoint any Third Party
to act on its behalf with respect to the Co-Promotion of the Products in the
Territory.
2.2 LICENSE. Abbott hereby grants Triangle a license in the Territory to
utilize the Product Patents and Product Technology owned by or licensed to
Abbott solely for the purpose of fulfilling Triangle's duties and obligations
under this Agreement.
ARTICLE 3
CLINICAL DEVELOPMENT, PRODUCT APPROVAL AND LAUNCH
3.1 CLINICAL DEVELOPMENT. Abbott shall exercise its Reasonable Best
Efforts to pursue and shall bear the full cost and expense of the clinical
development of the ABT-378, including performing all clinical studies and trials
and generating all safety and toxicology data required to pursue Product
Approval of the Products in the Territory. Abbott shall keep Triangle generally
apprised with respect to the status of its clinical development activities.
Abbott shall control all decisions regarding such clinical development
activities.
3.2 PRODUCT APPROVAL. Within the Territory, Abbott shall exercise its
Reasonable Best Efforts to maintain Product Approval of Norvir and to file,
obtain and maintain Product Approval of ABT-378, and shall bear the full cost
and expense thereof Abbott shall keep Triangle generally apprised with respect
to its regulatory activities in the Territory. Abbott shall control all
decisions regarding its regulatory activities in the United States.
3.3 LAUNCH. Abbott shall use its Reasonable Best Efforts to Launch
ABT-378 in the Territory within *** from the date of Product Approval in
the United States.
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3.4 EXCUSED PERFORMANCE. The Parties acknowledge and understand that the
development, registration and marketing of the Products, as with any
pharmaceutical product, is subject to certain inherent risks including that
(a) the Products will be ineffective, toxic, or will not receive Product
Approval; (b) the Products will be too expensive to manufacture or market or
will not achieve broad market acceptance; (c) Third Parties will hold
proprietary rights that will preclude the marketing and sale of the Product; or
(d) Third Parties will market equivalent or superior products. Neither Party
makes any representation or warranty that the Products: (i) will be
successfully developed; (ii) will receive all necessary Product Approvals;
(iii) will be Launched; or (iv) will be commercially successful. The respective
obligations of the Parties under this Article and Article 4 with respect to any
Product, are expressly conditioned upon the safety, efficacy and commercial
feasibility of such Product, and a Party's obligation hereunder shall be delayed
or suspended for so long as any condition or event exists which reasonably
causes a Party to question the safety, efficacy or commercial feasibility of
either Product. Each Party shall promptly notify the other Party in the event
any issue arises as to the safety, efficacy, commercial feasibility, or adverse
business or financial conditions with respect to either Product.
3.5 *** . The Parties shall discuss in good faith the *** of
any *** with one or more other *** . In the event the Parties
cannot reach agreement on the *** , the Parties agree to negotiate in
good faith an amendment to this Agreement to take into account any anticipated
impact on the *** as a result of the exclusion of such *** .
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ARTICLE 4
CO-PROMOTION AND PROMOTION
4.1 MARKETING EFFORT. Abbott and Triangle shall use their Reasonable Best
Efforts to Co-Promote the Products in the Territory. The Co-Promotion Date for
Norvir shall be within *** from the date that Triangle notifies Abbott
that it intends to begin Co-Promoting Norvir; provided, however, in no event
shall the Co-Promotion Date be later than *** . The Co-Promotion Date
for ABT-378 shall be *** provided that the Condition has been satisfied
by such date. If the Condition is satisfied after *** ABT-378, the
Co-Promotion Date shall be within *** after the Condition has been
satisfied. Abbott shall be the lead Party for implementation of, and shall make
tactical decisions with regard to, Co-Promotion of the Products in the
Territory.
4.2 CO-PROMOTION COMMITTEE.
(a) Abbott and Triangle shall work together to Co-Promote the
Products in the Territory and shall present their views on the Co-Promotion
of each Product through a committee (the "Co-Promotion Committee") which
shall oversee and direct the Co-Promotion of the Products in the Territory.
The Co-Promotion Committee shall review and approve strategies for the
advertisement, marketing, Detailing and promotion of the Products and
Undertake the activities necessary to implement those strategies through a
Co-Promotion Plan and Promotional Materials (including by coordinating the
Parties' Detailing messages and methodologies, physician and call programs
and efforts).
(b) The Co-Promotion Committee, consisting of a total of not more
than *** , shall include an equal number of representatives from
Abbott and Triangle and shall be permanently chaired by an Abbott
representative. Each Party shall
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have the right, at any time, to designate by written notice to the other
Party, a replacement for any of such Party's members on the Co-Promotion
Committee, including the chairperson.
(c) The Co-Promotion Committee shall endeavor to work by consensus.
Where consensus cannot be reached, Abbott shall be responsible for making
all decisions of the Co-Promotion Committee; provided, however, that except
for the location of the Triangle Sales Representatives which shall be
solely determined by Triangle and except for the selection of the Physician
Groups, which shall be mutually agreed upon by the Parties.
(d) In addition to the members of the Co-Promotion Committee, it is
understood that from time to time additional personnel having specialized
experience and training shall be requested to assist the Co-Promotion
Committee, including finance, legal, and regulatory affairs. Such
additional personnel may be added to a Co-Promotion Committee Meeting by
invitation of the chairperson;
(e) The Co-Promotion Committee shall meet as necessary, but such
committee shall meet *** . The site for such meetings shall
alternate between Durham, North Carolina, and Abbott Park, Illinois, or
such other location agreed to by the Parties. Meetings may take place by
telephonic or video conference. The chairperson shall send to the members
of the Co-Promotion Committee a notice of and agenda for each meeting
*** prior to the date of such meeting.
(f) *** after such meeting, the chairperson shall prepare and
distribute, via facsimile to all members of the Co-Promotion Committee,
draft action steps and decisions of the meeting. *** of the date on
which the draft action steps and decisions were distributed, the members
shall either note
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their approval or provide revisions to the draft. Not more than five (5)
business days after the receipt of all approvals or proposed revisions to
the draft, the chairperson shall issue the final action steps and decisions
of the Co-Promotion Committee.
(g) Each Party shall bear its own costs, including travel costs, for
its personnel serving on the Co-Promotion Committee or attending any
meeting of the Co-Promotion Committee.
4.3 CO-PROMOTION BUDGET. Abbott shall manage and control, and shall bear
the full cost and expense of, all elements of the budget for the Co-Promotion of
the Products (the "Co-Promotion Budget"), including an amount of Discretionary
Funds of *** Dollars ($ *** ) per Sales Year and *** . The
Co-Promotion Budget shall not cover the compensation or operating cost of the
Triangle Sales Representatives (including base salary, incentives and benefits),
the costs of training the Triangle Sales Representatives; provided, however,
that the foregoing shall not limit Abbott's obligation to make the payments
required by Article 5.
4.4 CO-PROMOTION PLAN. The Co-Promotion Committee shall develop and
oversee the implementation of an annual plan (the "Co-Promotion Plan") for the
Co-Promotion of the Products in the Territory; provided that Abbott shall be
responsible for making all final decisions relating to the implementation of the
Co-Promotion Plan, and further provided that unless expressly agreed otherwise
by the Parties, the Abbott Sales Representatives and the Triangle Sales
Representatives shall be treated in a like and equal manner such that: (i) ***
well as the *** ; and (ii) ***
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*** . In preparing the Co-Promotion Plan, the Co-Promotion Committee
shall use its Reasonable Best Efforts to coordinate its activities with the U.S.
Marketing Board (as defined in the Collaboration Agreement) with respect to its
preparation of the U.S. Co-Promotion Plan (as defined in the Collaboration
Agreement).
4.5 SALES REPRESENTATIVES. Each Party shall be responsible for staffing,
selling skills training, supervising, and compensating (including incentives)
its own Sales Representatives. With respect to training, Abbott shall make
available to Triangle, at no charge, the same kinds and amounts of
Product-specific training materials that it provides for its own Sales
Representatives. Both Parties shall re-train their personnel in the promotion
of the Products from time to time as set forth in the Co-Promotion Plan. Each
Party shall reward its Sales Representatives ( *** ) for promoting the
Products through an incentive-based compensation system. For Abbott such system
shall be *** . For Triangle, its system shall be *** . Each
Party shall have full control over, and shall bear the full cost of, the salary,
incentives, benefits and other employment matters related to its Sales
Representatives. Triangle shall not have more than *** Detailing the
Products.
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4.6 CO-PROMOTION EFFORT. Each Party shall use its Reasonable Best Efforts
to perform those tasks and responsibilities assigned to such Party in the
Co-Promotion Plan, and each Party shall use its Reasonable Best Efforts to
support the Co-Promotion of the Products in the Territory. Each Party may
perform Details throughout the Territory. The Co-Promotion Committee shall
coordinate the Parties' Detailing activities so as to eliminate unnecessary
duplication. In connection with the Co-Promotion of the Products in the
Territory, both Parties shall participate in conventions, and continuing
educational programs for health care professionals and the effort of the Parties
in this regard shall be coordinated by the Co-Promotion Committee.
4.7 SAMPLING. As part of the Co-Promotion of the Products in the
Territory, each Party may distribute Sample Packs free of charge to health care
professionals on an ongoing basis in accordance with the sampling program as
outlined in by the Co-Promotion Plan and all Legal Requirements. Each Party
shall maintain all records required pursuant to the Prescription Drug Marketing
Act of 1987, including maintenance of written requests and delivery receipts for
any Sample Packs delivered to its sales force for so long as required by such
Act. Triangle shall promptly report to Abbott any thefts of Sample Packs or any
losses of Sample Packs. Abbott shall be responsible for and shall bear the full
cost of providing to both sales forces the quantities of Sample Packs set forth
in the Co-Promotion Plan.
4.8 PROMOTIONAL MATERIALS. Abbott shall prepare and provide the quantity
and types of Promotional Material set forth in the Co-Promotion Plan. The
Parties shall disseminate in the Territory only those promotional and
advertising materials which have been approved for use by the Co-Promotion
Committee. All such materials shall be consistent with the Co-Promotion Plan
approved by the Co-Promotion Committee. Triangle shall not be required to use
Promotional
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Materials which are prohibited under applicable FDA regulations. Abbott and
Triangle shall use the same Promotional Materials in connection with the
Co-Promotion of the Products.
4.9 PROGRAMS. In addition to the Co-Promotion activities covered under
this Agreement, Abbott may establish and operate an indigent program for
distribution of Products and/or Sample Packs to needy individuals and/or the
physicians and other providers serving such needy individuals and an expanded
access program.
4.10 PRICING. *** all prices and pricing strategies relating to the
Products in the Territory.
4.11 COMPLIANCE WITH LAW. Each Party shall cause its sales force, and
all other employees and approved agents and representatives, to comply with all
applicable laws, regulations and guidelines in connection with the Co-Promotion
of the Products in the Territory, including, without limitation, the
Prescription Drug Marketing Act and the Federal Anti-Kickback Statute. Each
Party shall cause its sales force, in the course of its Co-Promotion of the
Products, to (i) limit its claims of efficacy and safety for Products to those
which are consistent with the Co-Promotion Committee's then approved product
circular for the Products or as otherwise approved by the Co-Promotion Committee
consistent with Legal Requirements; (ii) not delete or modify claims of efficacy
and safety in the Co-Promotion of Products so that they are different in any way
from those which are contained in the Co-Promotion Committee's then approved
product circular for the Products, or make any changes in promotional materials
and literature provided by the Co-Promotion Committee; and (iii) not knowingly
or recklessly do anything which will jeopardize the goodwill or reputation of
the Products or the other Party. In addition, each Party shall exercise its
Reasonable Best Efforts to conduct the Co-Promotion of the Products in adherence
to the American Medical Association Gifts to Physicians From Industry
Guidelines.
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ARTICLE 5
REPORTS AND COMMISSIONS
5.1 REPORTS BY TRIANGLE. Within *** after the end of each Sales
Quarter after the Parties begin Co-Promoting Norvir in the Territory, Triangle
shall deliver to Abbott a true and accurate written report showing for such
Sales Quarter a report in electronic format showing the number of Details
performed by Triangle in the Territory by Triangle product Detail codes, and by
Physician (including the Physician name and address, AMA Educational Number and
AMA specialty) during such Sales Quarter and such Sales Year to date, the date
of such presentation and a flag indicating whether such presentation was a
Primary Detail or a Secondary Detail.
5.2 REPORTS BY ABBOTT. Within *** after the end of each Sales
Quarter, Abbott shall deliver to Triangle a true and accurate written report
showing the Detailing Fee due to Triangle for such Sales Quarter. Within
*** after the end of each Sales Year and each Residual Year, Abbott shall
deliver to Triangle a true and accurate written report showing for such Sales
Year or Residual Year:
(a) ***
(b) ***
(c) ***
(d) ***
(e) ***
(f) ***
(g) ***
(h) ***
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Any Detailing Fee and any portion of the Detailing Payment that exceeds the
Detailing Fees paid to Triangle for such Sales Year shall be paid to Triangle at
the time that the report for such payment is due.
5.3 CERTIFICATIONS. The Chief Financial Officer and/or Treasurer of
Triangle shall certify in writing the correctness and completeness of each
report submitted by Triangle pursuant to Section 5.1. The Divisional Vice
President, Controller for the Pharmaceutical Products Division of Abbott shall
certify in writing the correctness and completeness of each report submitted by
Abbott pursuant to Section 5.2.
5.4 DETAILING FEE. Abbott shall pay Triangle an amount equal to: (i)
*** ($ *** ) or each Primary Detail conducted by Triangle during the Active
Detailing Period; and (ii) *** ($ *** ) for each Secondary Detail
conducted by Triangle during the Active Detail Period (the "Detailing Fee");
provided, however, in no event shall the Detailing Fee paid for each Product
during any Sales Quarter during the Active Detailing Period exceed (i) ***
Dollars ($ *** ) if Triangle has *** or more Sales Representatives
Detailing the Products or (ii) *** Dollars ($ *** ) if Triangle has less
than *** Sales Representatives Detailing the Products.
5.5 DETAILING COMMISSION. At the end of each Sales Year during the Active
Detailing Period, Abbott shall pay a detailing commission (the "Detailing
Commission") to Triangle for each Product determined as follows:
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*** *** *** ***
*** *** *** ***
*** *** *** ***
*** ***
***
It being understood by the Parties that if the Incremental Market Share for a
Product during any Sales Year is not a positive number then no Detailing
Commission shall be due and payable to Triangle with respect to such Product and
such Sales Year.
5.6 DETAILING PAYMENT. The Detailing Payment for each Sales Year for
each Product shall be the *** (i) the *** (ii) *** .
5.7 RESIDUAL COMMISSION. At the end of each Residual Year during the
Residual Period, Abbott shall pay a residual commission (the "Residual
Commission") to Triangle for each Product determined as follows:
*** *** *** ***
*** *** *** ***
*** *** *** ***
*** ***
***
It being understood by the Parties that if the Incremental Market Share for any
Product during any Residual Year is not a positive number, then no Residual
Commission shall be due and payable to Triangle with respect to such Product for
such Residual Year; provided, however, that the Residual Commission shall never
*** , if any, for the last Sales Year in the Active Detailing Period for
such Product.
5.8 EXAMPLES. Exhibit 5.8 sets forth various examples of the
calculations of the Detailing Payment required by this Article 5.
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The Residual Commission shall never *** , if any, for the last Sales Year
in the Active Detailing Period for such Product.
5.8 EXAMPLES. Exhibit 5.8 sets forth various examples of the
calculations of the Detailing Payment required by this Article 5.
ARTICLE 6
METHOD OF PAYMENTS
6.1 PAYMENT PROCEDURE. All payments due under this Agreement shall be
paid in Dollars by wire transfer or by such other means agreed upon by the
Parties, in each case at the expense of the payor, for value no later than the
due date thereof (with twenty four [24] hours advance notice of each wire
transfer) to the following bank accounts or such other bank accounts as the
payee shall designate in writing within a reasonable period of time prior to
such due date:
If to Abbott:
Account Name: Abbott Laboratories
Account Number: ***
Bank: ***
***
ABA Number: ***
If to Triangle:
Account Name: Triangle Pharmaceuticals, Inc.
Account Number: ***
Bank: ***
Reference: ***
ABA Number: ***
6.2 INTEREST CHARGE. Without limiting either Party's rights to pursue
any other remedies at law or in equity, if any Party underpays or otherwise
fails to pay any payment required
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under this Agreement within *** of the due date thereof, then such other
Party shall pay *** .
6.3 TAXES. Where any sum due to be paid to either Party hereunder is
subject to any withholding or similar tax, the Parties shall use their best
efforts to do all such acts and things and to sign all such documents as will
enable them to take advantage of any applicable double taxation agreement or
treaty. In the event there is no applicable double taxation agreement or
treaty, or if an applicable double taxation agreement or treaty reduces but does
not eliminate such withholding or similar tax, the payor shall pay such
withholding or similar tax to the appropriate government authority, deduct the
amount paid from the amount due the payee and secure and send to the payor the
best available evidence of such payment.
6.4 BOOKS AND RECORDS. Each Party shall keep full, true and accurate
books of account and records containing all particulars and reasonable
supporting documentation as may be necessary for the purpose of (i) determining
the payments required by Article 6 and such Party's compliance in other respects
with its obligations under this Agreement, including the number and types of
Details performed by each Party in the Territory. All such books of account,
records and supporting documentation shall be located at the principal place of
business of each Party and shall be open for inspection at a time mutually
acceptable to the Parties, during normal business hours no more frequently than
*** following the end of each calendar year to which they apply by any
independent certified public accountant retained by the other Party (reasonably
acceptable to the Party to be audited) on behalf of such other Party for the
purpose of verifying the audited Party's reports and/or compliance in other
respects with obligations under this Agreement. If such audit discloses an
underpayment or overpayment, the
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audited Party shall promptly pay to the other Party the amount of such
underpayment or refund the amount of any overpayment, as the case may be, as
well as its reasonable cost of such audit after the receipt of a bill or invoice
for such audit provided that the amount of the underpayment is *** or
more of the amount actually due.
6.5 THIRD PARTY INFRINGEMENT. If Abbott or Triangle become aware of any
activity that such Party believes infringes a Valid Claim of a Product Patent,
such Party shall promptly notify the other Party of all relevant facts and
circumstances pertaining to the potential infringement. *** to enforce any
rights within the Product Patents against such infringement, at *** ,
shall reasonably cooperate *** in such effort, including being joined as a
party to such action if necessary. Any damage award or settlement in excess of
the cost and expense of prosecuting such infringement action shall be ***
in which such infringement existed.
ARTICLE 7
ADVERSE EVENTS, RECALLS AND OTHER REGULATORY MATTERS
7.1 ADVERSE REACTION REPORTING. Triangle shall keep Abbott informed of
information in or coming into its possession or control concerning side effects,
injury, toxicity or sensitivity reaction and incidents of severity thereof
associated with commercial and clinical uses, studies, investigations or tests
of each Product in the Territory, whether or not determined to be attributable
to the Product. Abbott shall be responsible for filing with the FDA, as
required, any adverse reaction report it receives.
7.2 PRODUCT INFORMATION REQUESTS. Information concerning any
complaints, medical inquiries and/or drug information requests from consumers,
physicians or other Third Parties
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received by Triangle regarding a Product in the Territory shall be forwarded to
Abbott's Pharmacovigilence Department within *** of Triangle's receipt of
the request. Abbott's Pharmacovigilence Department shall respond to such
complaints, inquiries and requests, if necessary, in accordance with such
Department's usual and customary procedures. Abbott shall supply Triangle, for
Triangle's information purposes only, with copies of its standard response
information for the Products as well as any updates thereto.
7.3 GOVERNMENT REPORTS. Abbott shall be responsible for filing with the
FDA any adverse reaction reports that it receives directly from Third Parties
and from Triangle in the Territory.
7.4 PRODUCT RECALL. In the event that either Party determines that an
event, incident or circumstance has occurred which may result in the need for a
recall or other removal of any Product, or any lot or lots thereof, from the
market, such Party shall advise the other and the Parties shall consult with
respect thereto. Abbott shall have the sole authority to decide whether a
recall or other removal of such Product shall be made in the Territory. Except
as provided below, if a Product (or any lot or lots thereof) is recalled or
otherwise removed from the market, Abbott shall bear all costs and expenses of
such recall or removal, including, without limitation, expenses and other costs
or obligations to Third Parties, the cost and expense of notifying customers and
the costs and expenses associated with shipment of the recalled Product and the
cost and expense of destroying the Product removed from the market, if
necessary. Any such recall or removal costs, expenses or obligations shall be
borne by Triangle only to the extent that the recall or removal results from
Triangle's: (i) improper sampling practices or mishandling of Sample Packs;
(ii) Co-Promotion of the Product in a manner inconsistent with the Product's
labeling; or (iii) violation of this Agreement. In the event of a recall, each
Party shall promptly meet and
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discuss in good faith whether the Parties' Detailing obligations should be
reduced or redirected to another Product.
7.5 PROCEDURES. *** after the Effective Date, representatives of
each Party shall meet to establish procedures to accomplish the obligations set
forth in Sections 7.1, 7.2, 7.3, 7.4 and 7.6.
7.6 GOVERNMENTAL CONTACT REPORTING. Triangle shall promptly notify
Abbott upon being contacted by the FDA or any other federal, state or local
governmental agency in the Territory for any regulatory purpose pertaining to
this Agreement or to the Products. Triangle shall not respond to the FDA or
such governmental agency before consulting with Abbott, unless under the
circumstances pursuant to which FDA or such other federal, state or local
governmental agency contacts Triangle, it is not practical or lawful for
Triangle to give Abbott advance notice, in which event Triangle shall inform
Abbott of such contact as soon as practical and lawful. In addition, each Party
shall keep the other Party advised with respect to information concerning the
safety or efficacy of the Products. On Triangle's written request with respect
to any Product, Abbott shall supply detailed information regarding such safety,
efficacy and medical information issues, including, if requested, copies of
safety reports filed with the FDA or any other governmental agency.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1 ABBOTT REPRESENTATIONS AND WARRANTIES. Abbott hereby represents and
warrants to Triangle as follows:
(a) Abbott is a corporation duly organized and validly existing in
good standing under the laws of its state of incorporation, with all
requisite corporate power
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and authority to own, lease and operate its properties and assets and to
carry on its business as presently conducted and as proposed to be
conducted;
(b) Abbott has all requisite corporate right, power and authority
to enter into this and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation by Abbott
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on its behalf This Agreement constitutes a
legal, valid and binding obligation of Abbott, enforceable against Abbott
in accordance with the terms hereof;
(c) subject to compliance with the HSR Act and such filings as may
be required pursuant to federal and state securities laws, the execution,
delivery and performance by Abbott of this Agreement and Abbott's
compliance with the terms and provisions hereof will not result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration
of any obligation pursuant to, or a loss of benefits under, any provision
of Abbott's Articles of Incorporation or By-laws, or any mortgage,
indenture, lease or other agreement or instrument, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Abbott, its properties or assets;
(d) no consent, approval or authorization of, or designation,
declaration or filing with any governmental authority is required in
connection with the valid execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby,
except the filing of such forms with the United States Department of
Justice and the Federal Trade Commission as shall be required by the HSR
Act and the expiration or termination of any waiting periods thereunder and
such filings, as may be
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required to be made with the SEC, any national securities exchange and any
state securities commission; and
(e) (i) to the best of Abbott's knowledge and information, there are no
patents, trademarks, licenses, sublicenses or other proprietary rights
which are valid and which would be infringed by making, having made, using,
selling, offering for sale or importing Products in the Territory in
accordance with the terms of this Agreement;
(ii) at no time prior to the termination of the last to terminate
of this Agreement shall Abbott enter into any transaction providing for
debt financing which would: (A) result in the imposition of a lien,
license, security interest or other encumbrance upon or transfer of any of
the Product Patents or the Product Technology; or (B) prohibit or
materially impair Abbott from fulfilling its obligations under this
Agreement; and
(iii) Abbott is not, and as a result of the execution and delivery
of this Agreement or the performance by Abbott hereunder, and Abbott will
not be in violation of or lose any rights to any Product Patents or Product
Technology (including, without limitation, pursuant to any license,
sublicense or other agreement to which Abbott is a party or is otherwise
bound);
(f) Abbott is not aware of any material facts which it has not
disclosed to Triangle regarding the manufacture, use or sale of any Product
or the practice of any inventions included in the Product Patents or the
use of the Product Technology by Triangle, including without limitation any
material facts regarding the possibility that such
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manufacture, use, sale or practice might infringe any Third Party's
know-how, patent rights or other intellectual property in the Territory;
(g) Abbott is aware of no Third Party using or infringing all or
any of the Product Patents in derogation of the rights granted pursuant to
this Agreement;
(h) Abbott is aware of no Third Party claim to any rights in the
Product Patents or the Product Technology with respect to the Product; and
(i) Abbott is aware of no pending interference or opposition
proceeding or litigation or any communication which threatens an
interference or opposition proceeding or litigation before any patent and
trademark office, court, or any other governmental entity or court in any
jurisdiction in regard to the Product Patents; and
8.2 TRIANGLE REPRESENTATIONS AND WARRANTIES. Triangle hereby represents
and warrants to Abbott as follows:
(a) Triangle is a corporation duly organized and validly existing
in good standing under the laws of its state of incorporation, with all
requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted
and as proposed to be conducted;
(b) Triangle has all requisite corporate right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation by Triangle of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on its behalf. This
Agreement constitutes a legal, valid and binding obligation of Triangle,
enforceable against Triangle in accordance with the terms hereof;
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(c) subject to compliance with the HSR Act and such filings as may
be required pursuant to federal and state securities laws, the execution,
delivery and performance by Triangle of this Agreement and Triangle's
compliance with the terms and provisions hereof will not result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration
of any obligation pursuant to, or a loss of benefits under, any provision
of Triangle's Certificate of Incorporation or By-laws, or any mortgage,
indenture, lease or other agreement or instrument, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Triangle, its properties or assets; and
(d) no consent, approval or authorization of, or designation,
declaration or filing with any governmental authority is required in
connection with the valid execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby
except the filing of such forms with the United States Department of
Justice and the Federal Trade Commission as shall be required by the HSR
Act and the expiration or termination of any waiting periods thereunder and
such filings, as may be required to be made with the SEC, the NASD, any
national securities exchange and any state securities commission.
8.3 NO OTHER WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, EACH PARTY MAKES NO OTHER WARRANTIES OR REPRESENTATIONS, INCLUDING
FITNESS FOR PURPOSE INTENDED OR MERCHANTABILITY, WHETHER EXPRESS OR IMPLIED.
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ARTICLE 9
LIMITATION ON LIABILITY
EXCEPT AS OTHERWISE PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL LOSSES ARISING OUT OF OR RELATING TO THIS
AGREEMENT; PROVIDED HOWEVER, THIS LIMITATION SHALL NOT APPLY TO LOSSES ARISING
FROM THIRD PARTY CLAIMS FOR WHICH A PARTY IS INDEMNIFIED UNDER THE TERMS OF THIS
AGREEMENT.
ARTICLE 10
CONFIDENTIALITY AND NONDISCLOSURE
10.1 CONFIDENTIALITY OBLIGATION. Each of Abbott and Triangle (the
"Receiving Party") shall keep strictly confidential any information disclosed in
writing, orally, visually or in any other manner by the other Party
(the "Disclosing Party") or otherwise made available to the Receiving Party
which the Disclosing Party considers to be and treats as proprietary or
confidential ("Confidential Information"). Without limiting the generality of
the foregoing, all proprietary information concerning the Disclosing Party's
business, operations, suppliers, products, product manufacture, sale, marketing
or distribution, trade secrets and intellectual property shall be considered
Confidential Information. Any data or other information relating to or
resulting from the clinical trials of the Products shall be deemed to be
Confidential Information of Abbott. The Disclosing Party shall use commercially
reasonable efforts to designate any written Confidential Information disclosed
to the other Party as Confidential Information by prominently marking it
"confidential," "proprietary" or the like. "Confidential Information" shall not
include information:
(a) which is or becomes generally available to the public other
than as a result of disclosure thereof by the Receiving Party;
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(b) which is lawfully received by the Receiving Party on a
nonconfidential basis from a Third Party that is not itself under any
obligation of confidentiality or nondisclosure to the Disclosing Party or
any other Person with respect to such information;
(c) which by written evidence can be shown by the Receiving Party
to have been independently developed by or for the Receiving Party; or
(d) which the Receiving Party establishes by competent proof was
in its possession at the time of disclosure by the other Party and was not
acquired, directly or indirectly from the other Party.
10.2 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Receiving Party
shall use Confidential Information solely for the purposes of this Agreement and
shall not disclose or disseminate any Confidential Information to any Third
Party at any time without the Disclosing Party's prior written consent, except
for disclosure to those of its directors, officers, employees, accountants,
attorneys, advisers and agents whose duties reasonably require them to have
access to such Confidential Information, provided that such directors, officers,
employees, accountants, attorneys, advisers, agents are required to use the
Confidential Information solely for purposes of this Agreement and maintain the
confidentiality of such Confidential Information to the same extent as if they
were Parties hereto.
10.3 EXCEPTION. The foregoing confidentiality and nondisclosure
obligations shall not apply to information which is required to be disclosed by
law or by regulation; provided, that (i) the Receiving Party gives the
Disclosing Party reasonable notice of the disclosure; (ii) the Receiving Party
uses reasonable efforts to resist disclosing the Confidential Information;
(iii) the Receiving Party cooperates with the Disclosing Party on request to
obtain a protective order or otherwise limit the disclosure; and (iv) as soon as
reasonably possible, the Receiving Party shall
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provide a letter from its counsel to the Disclosing Party confirming that the
Confidential Information is, in fact, required to be disclosed.
10.4 INJUNCTIVE RELIEF. The Parties acknowledge that either Party's
breach of this Article 10 may cause the other Party irreparable injury for which
it would not have an adequate remedy at law. In the event of a breach, the
non-breaching Party shall be entitled to injunctive relief in addition to any
other remedies it may have at law or in equity.
10.5 SCIENTIFIC AND OTHER PUBLICATIONS. Notwithstanding anything herein
to the contrary, it is the understanding of each Party that scientific,
scholarly and other related publications or presentations concerning the
development of the Compounds and the Products, including their pre-clinical and
clinical development, shall emanate solely from Abbott and the trials and
studies sponsored by Abbott and that, as against Triangle, Abbott shall have
full control over the preparation, review and approval of such publications and
presentations, which publications and presentations shall not be restricted
hereunder; provided that, with respect to any studies done with Abbott Products
which include Triangle products, any resulting publication or presentation of
data therefrom shall be jointly reviewed and approved by Triangle and Abbott.
10.6 SURVIVAL. The confidentiality and nondisclosure obligations of this
Article 10 shall survive the expiration or termination of this Agreement and
remain in effect for a period of *** following the expiration or
termination of this Agreement.
ARTICLE 11
INTELLECTUAL PROPERTY
11.1 ABBOTT TRADEMARKS. Abbott shall be solely responsible, and shall
bear the full cost and expense, for the selection, filing, registering and
maintaining of the trademark for each Product in the Territory (the "Abbott
Trademarks"). Abbott shall keep Triangle generally
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apprised with respect to its trademark activities, and Abbott shall control all
final decisions regarding its trademark activities.
11.2 GRANT TO TRIANGLE. Abbott hereby grants to Triangle a nonexclusive
limited license to use Abbott's name and logo and the Abbott Trademarks solely
for the purpose of promoting distributing and selling each Product in the
Territory in accordance with the terms and conditions of this Agreement. Abbott
shall promote the Products in the Territory only under the Abbott Trademarks.
11.3 USE OF TRADE NAMES AND TRADEMARKS. Triangle recognizes that the
name and logo of Abbott and the Abbott Trademarks represents a valuable asset of
Abbott and that substantial recognition and goodwill are associated with
Abbott's name and logo and the Abbott Trademarks. Triangle hereby agrees that,
without prior written authorization of Abbott, it shall not use the name and
logo of Abbott or the Abbott Trademarks for any purpose other than the
promotion, distribution and sale of the Products solely to the extent required
to fulfill its obligations under this Agreement. In addition, Triangle shall
only use the Abbott name and logo and the Abbott Trademarks in the form, manner
and logotype approved in writing by Abbott. Except for the limited licenses
granted in Section 11.2, nothing in this Agreement shall be construed as an
assignment by Abbott to Triangle of any right, title or interest in or to the
Abbott name or logo or the Abbott Trademarks; it being understood that all
right, title and interest (including the goodwill associated therewith) in and
to the Abbott name and logo and the Abbott Trademarks is expressly reserved by
Abbott.
11.4 QUALITY MAINTENANCE. Triangle agrees to cooperate with Abbott in
facilitating Abbott's quality assurance responsibilities by permitting
reasonable inspection of Triangle's operations as they pertain to the Abbott
Trademarks and supplying Abbott with specimens of use
<PAGE>
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of such trademarks upon reasonable request, but in any case no more often than
*** calendar year.
11.5 INJUNCTIVE RELIEF. Triangle acknowledges that a violation of this
Article 11 would cause irreparable harm to Abbott for which no adequate remedy
at law exists, and Triangle therefore agrees that, in addition to any other
remedies available, and notwithstanding any other provision in this Agreement,
Abbott shall be entitled to injunctive relief to enforce the terms of this
Article 11. If Abbott prevails in any such action, it shall be entitled to
recover all costs and expenses, including reasonable attorney's fees incurred
because of any legal action arising in relation to this Article 11.
11.5 NOTIFICATION OF INFRINGEMENT AND ENFORCEMENT. Each Party shall
notify Abbott of any infringement or misuse of Abbott's Trademarks of which such
Party becomes aware. Abbott shall be solely responsible to prosecute any
infringement of the Abbott Trademarks. Any damage award or settlement, in
excess of Abbott's cost and expenses of enforcement, shall be added to Abbott
Net Sales for such Sales Year.
ARTICLE 12
INDEMNIFICATION
12.1 INDEMNIFICATION.
(a) INDEMNIFICATION BY ABBOTT. Except as may be otherwise
provided herein, Abbott shall defend, indemnify and hold Triangle, all of its
directors, officers and employees, and Triangle Sales Representatives
(collectively the "Triangle Indemnitees") harmless from and against all Losses
incurred in connection with any Third Party suits, claims or causes of action
arising out of or resulting from:
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(i) Abbott's breach of any representation, warranty, covenant, or
other obligation provided for in this Agreement;
(ii) An infringement claim arising from Triangle's use of the
Abbott name or logo or the Abbott Trademarks in connection with the
promotion or sale of the Products, provided Triangle's use is in compliance
with the terms of this Agreement;
(iii) The manufacture, promotion, marketing, sale or use of the
Products;
(iv) The negligence, recklessness or willful misconduct of Abbott
and its directors, officers or employees or Abbott Sales Representatives,
*** , its directors, officers or employees, or Abbott Sales
Representatives;
(v) Any patent infringement claim arising from the use or sale of
a Product.
Provided, however, that Abbott shall not be required to indemnify the Triangle
Indemnitees to the extent that any Losses arise out of or result from: (1) the
negligence, recklessness or willful misconduct of any of the Triangle
Indemnitees, including, but not limited to, out-of-label promotion of the
Products; and or (2) any breach by Triangle of this Agreement. Triangle shall
not be considered negligent for purposes of this Section 12.1 if such claim
arises with respect to the content of the Promotional Materials, Product
labeling or other materials provided to Triangle by Abbott as long as Triangle
has distributed or employed such Promotional Materials or other such materials
as directed herein.
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(b) INDEMNIFICATION BY TRIANGLE. Except as may be otherwise provided
herein, Triangle shall defend, indemnify and hold Abbott, its directors,
officers and employees, and Abbott Sales Representatives (collectively the
"Abbott Indemnitees") harmless from and against all Losses incurred in
connection with any Third Party suits, claims or causes of action arising out of
or resulting from:
(i) Triangle's breach of any representation, warranty, covenant,
or other obligation provided for in this Agreement; or
(ii) The negligence, recklessness or willful misconduct of
Triangle, its directors, officers or employees or Triangle Sales
Representatives, *** , their directors, officers or employees, or
Triangle Sales Representatives; provided, however, that Triangle shall not
be required to indemnify the Abbott Indemnitees to the extent that any
Losses arise out of or result from: (1) the negligence, recklessness or
willful misconduct of any Abbott Indemnitee including, but not limited to,
out-of label promotion of the Products; and/or (2) any breach by Abbott of
this Agreement.
12.2 INDEMNIFICATION PROCEDURE. Any Abbott Indemnitee or Triangle
Indemnitee, as the case may be, shall notify Abbott or Triangle (the
"Indemnifying Party") promptly in writing of an indemnifiable claim or cause of
action under Section 12.1(a) or 12.1(b) upon receiving notice or being informed
of the existence thereof. The Indemnifying Party shall assume, at its cost and
expense, the sole defense of such claim or cause of action through counsel
selected by the Indemnifying Party and reasonably acceptable to the other Party.
The Indemnifying Party shall diligently defend such claim or cause of action on
a timely basis, including any decision as to
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settlement; provided that, in the event that the Indemnifying Party does not
maintain control of such defense on a timely basis, then, without prejudice to
any other rights and remedies available to the other Party under this Agreement,
the other Party may take over such defense with counsel of its choosing at the
Indemnifying Party's cost and expense. The other Party may, at its option and
expense, participate in the Indemnifying Party's defense, and if the other Party
so participates, the Parties shall cooperate with one another in such defense.
The Indemnifying Party shall bear the total costs of any court award or
settlement of such claim or cause of action and all other costs, fees and
expenses related to the resolution thereof (including reasonable attorneys' fees
except for attorneys' fees for which the other Party is responsible in the event
that the other Party participates in the Indemnifying Party's defense of such
claim or cause of action). The indemnification obligations herein shall apply
on a first dollar basis without limitation or reduction due to any deductible or
self-insured retention which Triangle or Abbott respectively may have under
their respective insurance coverage.
ARTICLE 13
TERM AND TERMINATION
13.1 TERM. This Agreement shall commence on the Effective Date and shall
continue, unless terminated sooner in accordance with this Article 13, for the
Active Detailing Period for each Product (the "Term"); provided, the Parties can
extend the term upon mutual agreement.
13.2 TERMINATION NOTICE. Triangle may terminate this Agreement at any
time upon *** written notice to Abbott. Upon any such termination, *** .
13.3 TERMINATION FOR MATERIAL BREACH. It is the Parties' express intent
that consideration shall first and foremost be given to remedying any breach of
this Agreement through
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the payment of monetary damages or such other legal or equitable remedies as
shall be appropriate under the circumstances and that there shall only be a
limited right to terminate this Agreement under the following circumstances as a
matter of last resort. In the event that the Neutral, in accordance with the
procedures set forth in Section 19.3, has rendered a ruling that a Party has
materially breached this Agreement, which ruling specified the remedies imposed
on such breaching Party for such breach (the "Adverse Ruling"), and the
breaching Party has failed to comply with the terms of the Adverse Ruling within
the time period specified therein for compliance, or if such compliance cannot
be fully achieved by such date, the breaching Party has failed to commence
compliance and/or has failed to use diligent efforts to achieve full compliance
as soon thereafter as is reasonably possible, then the non-breaching Party shall
have the following rights:
(a) where Triangle is the breaching Party that failed to comply
with the Adverse Ruling and where the basis for such breach is Triangle's
failure to abide by a material obligation under this Agreement, Abbott may
terminate this Agreement and/or Triangle's license rights hereunder by
delivering written notice to Triangle after the expiration of the period to
comply;
(b) where Abbott is the breaching party that failed to comply with
the Adverse Ruling and where the basis for such breach is Abbott's failure
to abide by a material obligation under this Agreement, Triangle may
terminate this Agreement by delivering written notice to Abbott after the
expiration of the period to comply.
13.4 SURVIVAL. All rights granted and obligations undertaken by the
Parties hereunder shall terminate immediately upon the event of any termination
or expiration of this Agreement, except for the following which shall survive
according to their terms:
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(a) The obligation of each Party to pay to the other Party any and
all payments accrued under this Agreement prior to such termination or
expiration;
(b) The provisions of Section 5.6 (Residual Commission), which
shall survive for *** after the expiration or termination of this
Agreement, unless this Agreement is terminated pursuant to Section 13.2 or
Section 13.3 due to a material breach by Triangle or pursuant to Section
13.6;
(c) The provisions of Sections 5.1 and 5.2, which shall survive
with respect to any reports required after the Term and any accrued or
continuing payment obligations;
(d) The limitations on liability of Article 9;
(e) The confidentiality and nondisclosure obligations of
Article 10;
(f) The indemnification obligations of Article 12;
(g) The insurance obligations of Article 14; and
(h) The provisions of Article and Sections 4.7 (Sampling), 6.3
(Taxes), Section 6.4 (Books and Records), Section 13.4 (Survival),
Section 13.5 (Nonexclusive Rights and Remedies), Section 16.2 (Applicable
Law), Section 16.3 (Dispute Resolution) and Section 16.11 (Publicity).
In addition, expiration or termination of this Agreement shall not affect the
remedies of the Parties otherwise available at law or in equity in relation to
any rights accrued under this Agreement prior to expiration or termination.
13.5 NONEXCLUSIVE RIGHTS AND REMEDIES. Except as otherwise set forth in
this Agreement, all rights and remedies of the Parties provided under this
Agreement are not exclusive and are in addition to any other rights and remedies
provided by law or under this Agreement.
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13.6 CONDITIONS TO EFFECTIVENESS. The Effective Date shall be the date
on which the Collaboration Agreement becomes effective. If the Effective Date
has not occurred within *** from the execution date hereof or such later
date as the Parties may agree, either Party may terminate this Agreement by
written notice to the other Party.
ARTICLE 14
INSURANCE
On or before the Effective Date, each Party shall obtain, and each Party
shall maintain throughout the Term for a period of *** thereafter,
insurance issued by independent insurers reasonably selected by such Party
providing the coverage and limits described in Exhibit 14. Each of the
insurance policies listed in Exhibit 14, except statutory workers' compensation
coverage, shall provide that it may not be terminated, canceled or modified
unless the other Party is given *** prior written notice by the
insurance carrier. Each Party's insurance coverage must be primary coverage
without right of contribution from any insurance of the other Party. On or
before the Effective Date, and each year thereafter for as long as this
Agreement is in effect, each shall provide the other Party certificates of
insurance evidencing the coverage and limits required by this Article 14.
ARTICLE 15
FORCE MAJEURE
If any circumstance beyond the reasonable control of either Party occurs
which delays or renders impossible the performance of that Party's obligations
under this Agreement on the dates herein provided (a "Force Majeure"), such
obligation shall be postponed for such time as such performance necessarily has
had to be suspended or delayed on account thereof, provided such Party shall
notify the other Party in writing as soon as practicable, but in no event more
than ***
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*** after the occurrence of such event of Force Majeure, which notice shall
reasonably attempt to identify such obligations under this Agreement and the
extent to which performance will be affected. In such event, the Parties shall
meet promptly to determine an equitable solution to the effects of any such
event, provided that such Party who fails because of an event of Force Majeure
to perform its obligations hereunder shall upon the cessation of the Force
Majeure event take all reasonable steps within its power to resume with the
least possible delay compliance with its obligations. Events of Force Majeure
shall include, without limitation, war, revolution, invasion, insurrection,
riots, mob violence, sabotage or other civil disorders, acts of God, limitations
imposed by exchange control regulations or foreign investment regulations or
similar regulations, laws, regulations or rules of any government or
governmental agency, any inordinate and unanticipated delays in the regulatory
review or governmental approval process that are within the sole control of such
government or governmental agency, any delay or failure in manufacture,
production or supply by Third Parties of any goods or services, any withdrawal
or recall of a Product at the direction of the FDA, and any failure of a
computer system.
ARTICLE 16
MISCELLANEOUS
16.1 RELATIONSHIP OF THE PARTIES. Each of the Parties shall be
furnishing its services hereunder as an independent contractor, and nothing
herein shall create any association, partnership or joint venture between the
Parties or any employer-employee relationship. No agent, employee or servant of
either Party shall be or shall be deemed to be the employee, agent or servant of
the other Party, and each Party shall be solely and entirely responsible for its
acts and the acts of its employees.
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16.2 APPLICABLE LAW. The Agreement shall be governed by the laws of the
State of Delaware applicable to contracts made and to be performed entirely
within such jurisdiction and without giving effect to its choice or conflict of
laws rules or principles. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements, in
addition to any other relief to which the party may be entitled.
16.3 DISPUTE RESOLUTION.
(a) GENERAL. The parties recognize that a bonafide dispute as to
certain matters may arise from time to time during the term of this
Agreement which may relate to either Party's rights and/or obligations
hereunder. The Parties agree that they shall use all reasonable efforts to
resolve any dispute which may arise in an amicable manner.
(b) MANAGEMENT RESOLUTION. If the Parties are unable to resolve
such a dispute *** , either Party may, by notice to the other party,
have such dispute referred to the respective officers of the Parties
designated below. Such officers shall attempt to resolve the referred
dispute by good faith negotiations within *** after such notice is
received. The said designated officers are as follows: For Abbott, Senior
Vice President, Pharmaceutical Operations, and for Triangle, Chief
Executive Officer.
(c) ALTERNATIVE DISPUTE RESOLUTION. The Parties agree that any
dispute that arises in connection with this Agreement, which cannot be
amicably resolved by such management discussions shall be resolved by
binding Alternative Dispute Resolution ("ADR") in the manner described in
Exhibit 16.3; provided, further, that either Party may seek judicial relief
or enforcement to pursue equitable remedies not addressed by ADR, to
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pursue a claim of fraudulent or otherwise inequitable treatment under the
ADR proceedings or to otherwise enforce a judgment under th ADR proceedings
(including without limitation a judgment for specific performance or
injunctive relief.
16.4 COUNTERPARTS. The Agreement may be executed simultaneously in any
number of counterparts and may be executed by facsimile. All counterparts shall
collectively constitute one and the same Agreement.
16.5 NOTICES. In any case where any notice or other communication is
required or permitted to be given hereunder, such notice or communication shall
be in writing, and sent by overnight express or registered or certified mail
(with return receipt requested) and shall be sent to the following address (or
such other address as either Party may designate from time to time in writing):
If to Triangle:
Triangle Pharmaceuticals, Inc.
4 University Place
4611 University Drive
Durham, NC 27707
Telephone: (919) 493-5980
Telefax: (919) 493-5925
Attention: Chief Executive Officer
Copy to: General Counsel
If to Abbott:
Abbott Laboratories
Dept. 309; Bldg. AP30
200 Abbott Park Road
Abbott Park, EL 60064
Telephone: (847) 938-6863
Telefax: (847) 938-5383
Attention: Senior Vice President, Pharmaceutical Operations
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Copy to:
General Counsel
Abbott Laboratories
Dept. 364; Bldg. AP6D
100 Abbott Park Road
Abbott Park, EL 60064
Telephone: (847) 937-8906
Telefax: (847) 938-6277
16.6 BINDING EFFECT; ASSIGNMENT. This Agreement may not be assigned, in
whole or in part, by either Party without the prior written consent of the other
Party, and any attempted assignment without such consent shall be null and void.
This Agreement shall inure to the benefit of and be binding upon each of the
Parties hereto and their respective successors and permitted assigns.
16.7 ENTIRE AGREEMENT. The terms and conditions contained herein and in
the other Triangle-Abbott Alliance Agreements constitute the entire agreement
between the Parties relating to the subject matter of this Agreement and shall
supersede all previous communications between the Parties with respect to the
subject matter of this Agreement. Neither Party has entered into this Agreement
in reliance upon any representation, warranty, covenant or undertaking of the
other Party that is not set out or referred to in this Agreement.
16.8 AMENDMENT. The Agreement may be varied, amended or extended only by
the written agreement of the Parties through their duly authorized officers or
representatives, specifically referring to this Agreement.
16.9 SEVERABILITY. In case any one or more of the provisions contained
herein shall, for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall
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be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein unless the deletion of such provision
or provisions would result in such a material change as to cause completion of
the transactions contemplated herein to be impossible and provided that the
performance required by this Agreement with such clause deleted remains
substantially consistent with the intent of the Parties.
16.10 COMPANY EMPLOYEES. Each Party shall not, and shall cause its
Affiliates not to, directly or indirectly solicit for employment, any employee
of the other Party who has been directly involved in the performance of this
Agreement during the Term and for *** after the earlier of the
termination or expiration of this Agreement or the termination of such
individual's employment, with the other Party. It shall not be a violation of
this provision if any employee responds to a Party's general advertisement of an
open position.
16.11 PUBLICITY. Except as otherwise provided herein, each Party shall
maintain the confidentiality of all provisions of this Agreement and this
Agreement itself and, without the prior written consent of both Parties, neither
Party shall make any press release or other public announcement of or otherwise
disclose this Agreement or any of its provisions to any Third Party except:
(i) for disclosure to those of its directors, officers, employees, accountants,
attorneys, advisers and agents whose duties reasonably require them to have
access to the Agreement and, in the case of Triangle, disclosure to the Triangle
Licensors, provided that such directors, officers, employees, accountants,
attorneys, advisers, agents and licensors are required to maintain the
confidentiality of the Agreement to the same extent as if they were Parties
hereto, and (ii) except for such disclosures as may be required by Legal
Requirements, in which case the disclosing Party shall provide the
non-disclosing Party with prompt advance notice of such disclosure so that the
non-disclosing Party shall have the opportunity if it so desires to seek a
protective order or other
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appropriate remedy and, in connection with any disclosure to the Securities and
Exchange Commission, the disclosing Party shall use reasonable efforts to obtain
confidential treatment for such disclosure. Promptly following the Execution
Date, the Parties shall issue a mutually acceptable press release, a copy of
which is attached hereto as Exhibit 16.11.
16.12 HEADINGS. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
16.13 INTERPRETATION.
(a) Wherever any provision of this Agreement uses the term
"including" (or "includes"), such term shall be deemed to mean "including
without limitation" and "including but not limited to" (or "includes
without limitations" and "includes but is not limited to") regardless of
whether the words "without limitation" or "but not limited to" actually
follow the term "including" (or "includes").
(b) Wherever any provision of this Agreement provides that a
Party's consent shall not be unreasonably withheld, such provision shall be
deemed to provide that such consent shall in addition not be unreasonably
delayed.
(c) The recitals set forth at the start of this Agreement, along
with the Exhibits to this Agreement, and the terms and conditions
incorporated in such recitals and Exhibits shall be deemed integral parts
of this Agreement and all references in this Agreement to this Agreement
shall encompass such recitals and Exhibits and the terms and conditions
incorporated in such recitals and Exhibits.
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(d) In the event of any conflict between the terms and conditions
of this Agreement and any terms and conditions that may be set forth on any
order, invoice, verbal agreement or otherwise, the terms and conditions of
this Agreement shall govern.
(e) Unless otherwise explicitly stated, in the event of any
conflict between the terms of this Agreement and the terms and conditions
of any of the Exhibits hereto, the terms of this Agreement shall prevail.
(f) The Agreement shall be construed as if both Parties drafted it
jointly, and shall not be construed against either Party as principal
drafter.
(g) Unless otherwise provided, all references to Sections,
Articles and Exhibits in this Agreement are to Sections, Articles and
Exhibits of and to this Agreement.
16.14 NO WAIVER OF RIGHTS. No failure or delay on the part of either
Party in the exercise of any power or right hereunder shall operate as a waiver
thereof No single or partial exercise of any right or power hereunder shall
operate as a waiver of such right or of any other right or power. The waiver by
either Party of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any other or subsequent breach hereunder.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
TRIANGLE PHARMACEUTICALS, INC.
By: /s/ David W. Barry
------------------------------
Name: DAVID W. BARRY
------------------------------
Title: CHAIRMAN & CHIEF EXECUTIVE OFFICER
------------------------------
ABBOTT LABORATORIES
By: /s/ Arthur Higgins
------------------------------
Name: ARTHUR HIGGINS
------------------------------
Title: SENIOR VICE PRESIDENT, PHARMACEUTICAL OPERATIONS
------------------------------
<PAGE>
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EXHIBIT 5.8
EXAMPLE OF PAYMENT CALCULATION
<TABLE>
<CAPTION>
Co-Promotion Representative
Physician Group Physician Group
----------------------------------
<S> <C> <C>
*** *** ***
</TABLE>
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<PAGE>
EXHIBIT 4.1
AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT (the "Amendment"), is entered into as of June 2, 1999,
by and between TRIANGLE PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as Rights Agent (the
"Rights Agent").
RECITALS
A. The Company and the Rights Agent are parties to a Rights
Agreement dated as of February 1, 1999 (the "Rights Agreement").
B. Abbott Laboratories, an Illinois corporation ("Abbott"), and the
Company have entered into a Collaboration Agreement made as of June 2, 1999 (the
"Collaboration Agreement"), pursuant to which the parties shall collaborate with
respect to the clinical development, registration, distribution and marketing of
various drugs.
C. In connection with the Collaboration Agreement, Abbott and the
Company have entered into, among other agreements, (i) a Common Stock Purchase
Agreement, made as of June 2, 1999 (the "Abbott Stock Purchase Agreement"),
pursuant to which Abbott is to purchase the Shares (as such term is defined in
Section 1.4 of the Abbott Stock Purchase Agreement) and (ii) a Stockholder
Rights Agreement made as of June 2, 1999 (the "Abbott Rights Agreement").
D. Pursuant to Section 3.9 of the Abbott Stock Purchase Agreement
and Section 7.1 of the Abbott Rights Agreement, the Board of Directors of the
Company has determined that an amendment to the Rights Agreement as set forth
herein is necessary and desirable to reflect the foregoing and certain other
matters and the Company and the Rights Agent desire to evidence such amendment
in writing.
Accordingly, the parties agree that:
1. AMENDMENT TO DEFINITION OF "ACQUIRING PERSON" SET FORTH IN SECTION
1(a). The definition of "Acquiring Person" set forth in Section 1(a) of the
Rights Agreement is amended to read in its entirety as follows:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the shares of
Common Stock of the Company then outstanding but shall not include (1) the
Company, any Subsidiary (as such term is hereinafter defined) of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding shares of Common Stock for or pursuant to
the terms of any such plan, (2) during the Interim Period (as defined
below), Abbott Laboratories, an Illinois corporation (the "Permitted
Investor"), or any U.S. wholly-owned subsidiaries of Abbott (collectively
with the Permitted Investor, the
<PAGE>
"Investor Group") but only to the extent that the Permitted Investor may be
deemed a Beneficial Owner of the Shares (as defined below) as a result of
the Permitted Investor entering into the Abbott Stock Purchase Agreement
(as defined below), unless the Permitted Investor becomes the Beneficial
Owner (as defined in the Abbott Rights Agreement (as defined below)) of any
additional securities of the Company other than the Shares during the
Interim Period, or (3) during the Threshold Period (as hereinafter
defined), the Investor Group. For purposes of this Agreement, the "Interim
Period" shall mean such period commencing as of the date of the Abbott
Stock Purchase Agreement and ending on the earlier of (x) the "Effective
Date" as such term is defined in the Collaboration Agreement (as defined
below) and (y) termination of the Abbott Stock Purchase Agreement. For
purposes of this Agreement, the "Threshold Period" shall mean such period
commencing as of the Effective Date under the Collaboration Agreement and
ending on the earlier of (xx) such time as the Permitted Investor holds
less than the Minimum Purchaser Interest in the Company (as defined in
Section 1.11 of the Abbott Rights Agreement), (yy) such time as the
Investor Group's Beneficial Ownership (as the term Beneficial Ownership is
defined in the Abbott Rights Agreement) exceeds the Beneficial Ownership
Limitation (as defined in Section 5.2(a) of the Abbott Rights Agreement),
and (zz) such time as the Permitted Investor's rights under Section 7.1 of
the Abbott Rights Agreement have terminated pursuant to the terms of the
Abbott Rights Agreement. Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person" as the result
of an acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, (a) increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the
shares of Common Stock of the Company then outstanding, or, (b) in the case
of the Investor Group during the Interim Period, increases the
proportionate number of shares which may be deemed beneficially owned by
the Investor Group, unless the Permitted Investor becomes the Beneficial
Owner (as defined in the Abbott Rights Agreement) of any additional
securities of the Company other than the Shares during the Interim Period,
or, (c) in the case of the Investor Group during the Threshold Period,
increases the proportionate number of shares Beneficially Owned (as defined
in the Abbott Rights Agreement) by the Investor Group to more than the
Beneficial Ownership Limitation; provided, however, that if by reason of
share purchases by the Company, (1) a Person shall become the Beneficial
Owner of 15% or more of the shares of Common Stock of the Company then
outstanding or, (2) in the case of the Investor Group, the Investor Group's
ownership increases the Investor Group's Beneficial Ownership (as defined
in the Abbott Rights Agreement) by any amount during the Interim Period or
results in the Investor Group's Beneficial Ownership (as defined in the
Abbott Rights Agreement) to exceed the Beneficial Ownership Limitation at
any time during the Threshold Period, and, in the case of (1) or (2) above,
such Person or Investor Group shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares of Common
Stock of the Company, then such Person, including the Investor Group, shall
be deemed to be an "Acquiring Person" hereunder; and
(ii) if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring Person" as defined
pursuant to the
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foregoing provisions of this paragraph (a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an "Acquiring
Person" (as defined pursuant to the foregoing provisions of this paragraph
(a)), then such Person shall not be deemed to be an "Acquiring Person" for
any purpose of this Agreement."
2. AMENDMENT TO DEFINITION OF "TRIGGERING EVENT" SET FORTH IN SECTION
1(oo). The definition of "Triggering Event" set forth in Section 1 (oo) of the
Rights Agreement is amended to add the following sentence to the end thereof:
"Notwithstanding anything in this Rights Agreement to the contrary, a
Triggering Event shall not be deemed to have occurred by virtue of the
Abbott Stock Purchase Agreement and the Related Agreements (as such term is
defined in the Abbott Stock Purchase Agreement) or by virtue of any of the
transactions contemplated thereby (excluding during the Interim Period, any
purchases which result in the Permitted Investor becoming the Beneficial
Owner (as defined in the Abbott Rights Agreement) of any securities of the
Company in addition to the Shares and excluding, during the Threshold
Period, any purchases permitted by Section 5.3 of the Abbott Rights
Agreement or otherwise which cause the Permitted Investor's Beneficial
Ownership (as defined in Section 5.4 of the Abbott Rights Agreement) of
shares of Common Stock to exceed 21% of the then total outstanding shares
of Common Stock of the Company)."
3. AMENDMENT TO SECTION 1. The following definitions are hereby added to
the end of Section 1 as Sections 1(pp), 1(qq), 1(rr) and 1(ss):
"(pp) "Abbott Rights Agreement" shall mean that certain Stockholder
Rights Agreement made as of June 2, 1999, by and between the Company and
Abbott Laboratories.
(qq) "Abbott Stock Purchase Agreement" shall mean that certain Common
Stock Purchase Agreement made as of June 2, 1999, by and between the
Company and Abbott Laboratories.
(rr) "Collaboration Agreement" shall mean that certain Collaboration
Agreement made as of June 2, 1999, by and between the Company and Abbott
Laboratories.
(ss) "Shares" shall have the meaning assigned to such term in the Abbott
Stock Purchase Agreement."
4. AMENDMENT OF SECTION 3(A). The first sentence of Section 3(a) of the
Rights Agreement is amended to read in its entirety as follows:
"Until the earlier of (i) the Close of Business on the Shares
Acquisition Date and (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the
Company's Board of Directors prior to such time as any Person becomes
an Acquiring Person and of which the Company will give the Rights
Agent prompt written notice) after the date that a tender or exchange
offer
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by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding shares of Common Stock for or pursuant to the terms of
any such plan) is first published or sent or given within the meaning of
Rule 14d-4(a) of the Exchange Act Regulations or any successor rule or of
the first public announcement of the intention of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer, if upon consummation thereof such
Person would be the Beneficial Owner of 15% or more of the shares of
Company Common Stock then outstanding, or, in the case of the Investor
Group during the Interim Period, the Investor Group purchases any
securities of the Company which result in the Permitted Investor becoming
the Beneficial Owner (as defined in the Abbott Rights Agreement) of any
securities of the Company in addition to the Shares, or in the case of the
Investor Group during the Threshold Period, the Permitted Investor's
Beneficial Ownership (as defined in the Abbott Rights Agreement) would
exceed the Beneficial Ownership Limitation (as defined in the Abbott Rights
Agreement), (the earlier of (i) and (ii) above being the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for shares of Common Stock
registered in the names of the holders thereof (which certificates shall
also be deemed to be Rights Certificates) and not by separate Rights
Certificates, and (y) the right to receive Rights Certificates will be
transferable only in connection with the transfer of shares of Common
Stock."
5. MISCELLANEOUS. This Amendment shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
This Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. If
any term, provision, covenant or restriction of this Amendment is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
ATTEST: TRIANGLE PHARMACEUTICALS, INC.
By: /s/ Chris A. Rallis By: /s/ David Barry
------------------------------ -------------------------------
Name: Chris A. Rallis Name: David Barry
---------------------- ------------------------
Title: General Counsel Title: Chief Executive Officer
---------------------- -------------------------
ATTEST: AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Barry S. Rosenthal By: /s/ Herbert J. Lemmer
-------------------------------- ---------------------------------
Name: Barry S. Rosenthal Name: Herbert J. Lemmer
------------------------- --------------------------
Title: Vice President Title: Vice President
----------------------- -------------------------
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