Exhibit 10.76

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

 

COLLABORATION AGREEMENT

 

 

by and among

 

 

GILEAD SCIENCES, INC.,

 

GILEAD HOLDINGS, LLC,

 

 

BRISTOL-MYERS SQUIBB COMPANY,

 

E.R. SQUIBB & SONS, L.L.C.,

 

and

 

BRISTOL-MYERS SQUIBB & GILEAD SCIENCES, LLC

 

 

Dated as of December 17, 2004

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

SECTION 1.

DEFINITIONS

 

SECTION 2.

COLLABORATION MANAGEMENT

 

2.1

General

 

2.2

Role of the Joint Executive Committee

 

2.3 [a05-1830_1ex10d76.htm#a2_3_212121]

Joint Development Committee [a05-1830_1ex10d76.htm#a2_3_212121]

 

2.4 [a05-1830_1ex10d76.htm#a2_4_223433]

Joint Commercialization Committee [a05-1830_1ex10d76.htm#a2_4_223433]

 

2.5 [a05-1830_1ex10d76.htm#a2_5_223441]

Joint Finance Committee [a05-1830_1ex10d76.htm#a2_5_223441]

 

2.6 [a05-1830_1ex10d76.htm#a2_6_223448]

Procedural Rules of the Operating Committees [a05-1830_1ex10d76.htm#a2_6_223448]

 

2.7 [a05-1830_1ex10d76.htm#a2_7_212502]

Alliance Managers [a05-1830_1ex10d76.htm#a2_7_212502]

 

2.8 [a05-1830_1ex10d76.htm#a2_8_212457]

Dispute Resolution [a05-1830_1ex10d76.htm#a2_8_212457]

 

2.9 [a05-1830_1ex10d76.htm#a2_9_212641]

Collaboration Principles [a05-1830_1ex10d76.htm#a2_9_212641]

 

2.10 [a05-1830_1ex10d76.htm#a2_10_212646]

Commercialization Budget/Plan Deadlocks [a05-1830_1ex10d76.htm#a2_10_212646]

 

2.11 [a05-1830_1ex10d76.htm#a2_11_212735]

Expenses [a05-1830_1ex10d76.htm#a2_11_212735]

 

SECTION 3. [a05-1830_1ex10d76.htm#Section3__212738]

DEVELOPMENT ACTIVITIES [a05-1830_1ex10d76.htm#Section3__212738]

 

3.1 [a05-1830_1ex10d76.htm#a3_1_212740]

General [a05-1830_1ex10d76.htm#a3_1_212740]

 

3.2 [a05-1830_1ex10d76.htm#a3_2_212743]

Clinical Development [a05-1830_1ex10d76.htm#a3_2_212743]

 

3.3 [a05-1830_1ex10d76.htm#a3_3_212820]

Formulation and CMC Data [a05-1830_1ex10d76.htm#a3_3_212820]

 

3.4 [a05-1830_1ex10d76.htm#a3_4_212829]

Regulatory Matters [a05-1830_1ex10d76.htm#a3_4_212829]

 

3.5 [a05-1830_1ex10d76.htm#a3_5_212913]

Performance; Subcontracting [a05-1830_1ex10d76.htm#a3_5_212913]

 

3.6 [a05-1830_1ex10d76.htm#a3_6_212914]

Records [a05-1830_1ex10d76.htm#a3_6_212914]

 

3.7 [a05-1830_1ex10d76.htm#a3_7_213000]

Updates to Development Plan and Development Budget
[a05-1830_1ex10d76.htm#a3_7_213000]

 

3.8 [a05-1830_1ex10d76.htm#a3_8_213002]

Development Expenses [a05-1830_1ex10d76.htm#a3_8_213002]

 

3.9 [a05-1830_1ex10d76.htm#a3_9_213003]

Reports [a05-1830_1ex10d76.htm#a3_9_213003]

 

3.10 [a05-1830_1ex10d76.htm#a3_10_213005]

New Products [a05-1830_1ex10d76.htm#a3_10_213005]

 

3.11 [a05-1830_1ex10d76.htm#a3_11_213007]

Publication [a05-1830_1ex10d76.htm#a3_11_213007]

 

3.12 [a05-1830_1ex10d76.htm#a3_12_213051]

Certain Inspections [a05-1830_1ex10d76.htm#a3_12_213051]

 

3.13 [a05-1830_1ex10d76.htm#a3_13_213110]

Medical Affairs and Medical Communications [a05-1830_1ex10d76.htm#a3_13_213110]

 

SECTION 4. [a05-1830_1ex10d76.htm#Section4_213114]

MANUFACTURING AND SUPPLY [a05-1830_1ex10d76.htm#Section4_213114]

 

4.1 [a05-1830_1ex10d76.htm#a4_1_213116]

Clinical Supply [a05-1830_1ex10d76.htm#a4_1_213116]

 

4.2 [a05-1830_1ex10d76.htm#a4_2_213135]

Commercial Supply [a05-1830_1ex10d76.htm#a4_2_213135]

 

SECTION 5. [a05-1830_1ex10d76.htm#Section5__213143]

COMMERCIALIZATION ACTIVITIES [a05-1830_1ex10d76.htm#Section5__213143]

 

5.1 [a05-1830_1ex10d76.htm#a5_1_213148]

Co-Promotion Obligations [a05-1830_1ex10d76.htm#a5_1_213148]

 

5.2 [a05-1830_1ex10d76.htm#a5_2_213230]

Distribution Obligations [a05-1830_1ex10d76.htm#a5_2_213230]

 

5.3 [a05-1830_1ex10d76.htm#a5_3_213253]

Pricing of Combination Product [a05-1830_1ex10d76.htm#a5_3_213253]

 

5.4 [a05-1830_1ex10d76.htm#a5_4_213404]

National Accounts [a05-1830_1ex10d76.htm#a5_4_213404]

 

5.5 [a05-1830_1ex10d76.htm#a5_5_213405]

Performance; Subcontracting [a05-1830_1ex10d76.htm#a5_5_213405]

 

5.6 [a05-1830_1ex10d76.htm#a5_6_213407]

Conflict Avoidance [a05-1830_1ex10d76.htm#a5_6_213407]

 

5.7 [a05-1830_1ex10d76.htm#a5_7_213409]

Marketing Materials [a05-1830_1ex10d76.htm#a5_7_213409]

 

5.8 [a05-1830_1ex10d76.htm#a5_8DevelopmentAndUseOfTrademarks_204953]

Development and Use of Trademarks
[a05-1830_1ex10d76.htm#a5_8DevelopmentAndUseOfTrademarks_204953]

 

5.9 [a05-1830_1ex10d76.htm#a5_9Insurance_204958]

Insurance [a05-1830_1ex10d76.htm#a5_9Insurance_204958]

 

5.10 [a05-1830_1ex10d76.htm#a5_10Records__205001]

Records [a05-1830_1ex10d76.htm#a5_10Records__205001]

 

5.11 [a05-1830_1ex10d76.htm#a5_11CommercializationPlanAndBudg_205626]

Commercialization Plan and Budget
[a05-1830_1ex10d76.htm#a5_11CommercializationPlanAndBudg_205626]

 

5.12 [a05-1830_1ex10d76.htm#a5_12CommercializationExpenses_205635]

Commercialization Expenses
[a05-1830_1ex10d76.htm#a5_12CommercializationExpenses_205635]

 

 

i

--------------------------------------------------------------------------------

 

5.13 [a05-1830_1ex10d76.htm#a5_13Reports_205651]

Reports [a05-1830_1ex10d76.htm#a5_13Reports_205651]

SECTION 6. [a05-1830_1ex10d76.htm#Section6_LicenseGrants_210607]

LICENSE GRANTS [a05-1830_1ex10d76.htm#Section6_LicenseGrants_210607]

6.1 [a05-1830_1ex10d76.htm#a6_1TechnologyLicensesByMemberPar_205702]

Technology Licenses by Member Parties to the JV
[a05-1830_1ex10d76.htm#a6_1TechnologyLicensesByMemberPar_205702]

6.2 [a05-1830_1ex10d76.htm#a6_2LicensesAndSublicensesByTheJv_205723]

Licenses and Sublicenses by the JV to Member Parties
[a05-1830_1ex10d76.htm#a6_2LicensesAndSublicensesByTheJv_205723]

6.3 [a05-1830_1ex10d76.htm#a6_3LicensesAndRightsOfReferenceB_205803]

Licenses and Rights of Reference Between Member Parties
[a05-1830_1ex10d76.htm#a6_3LicensesAndRightsOfReferenceB_205803]

6.4 [a05-1830_1ex10d76.htm#a6_4RightsOfReferenceToAndFromThe_205806]

Rights of Reference to and from the JV and Related Matters
[a05-1830_1ex10d76.htm#a6_4RightsOfReferenceToAndFromThe_205806]

6.5 [a05-1830_1ex10d76.htm#a6_5OtherSublicenses_205834]

Other Sublicenses [a05-1830_1ex10d76.htm#a6_5OtherSublicenses_205834]

6.6 [a05-1830_1ex10d76.htm#a6_6TrademarkLicensesByMemberPart_205836]

Trademark Licenses by Member Parties to the JV
[a05-1830_1ex10d76.htm#a6_6TrademarkLicensesByMemberPart_205836]

6.7 [a05-1830_1ex10d76.htm#a6_7TrademarkLicenseByTheJvToGile_205920]

Trademark License by the JV to Gilead
[a05-1830_1ex10d76.htm#a6_7TrademarkLicenseByTheJvToGile_205920]

6.8 [a05-1830_1ex10d76.htm#a6_8RetainedRights_210006]

Retained Rights [a05-1830_1ex10d76.htm#a6_8RetainedRights_210006]

6.9 [a05-1830_1ex10d76.htm#a6_9CombinationProductSalesForOut_210015]

Combination Product Sales for Outside the Territory, Canada and Europe
[a05-1830_1ex10d76.htm#a6_9CombinationProductSalesForOut_210015]

6.10 [a05-1830_1ex10d76.htm#a6_10CombinationProductSalesForEu_210049]

Combination Product Sales for Europe
[a05-1830_1ex10d76.htm#a6_10CombinationProductSalesForEu_210049]

6.11 [a05-1830_1ex10d76.htm#a6_11EfvLicenseAgreement_210052]

EFV License Agreement [a05-1830_1ex10d76.htm#a6_11EfvLicenseAgreement_210052]

6.12 [a05-1830_1ex10d76.htm#a6_12JvObligationsAsSublicensee_210056]

JV Obligations as Sublicensee
[a05-1830_1ex10d76.htm#a6_12JvObligationsAsSublicensee_210056]

SECTION 7. [a05-1830_1ex10d76.htm#Section7_PaymentsAndThirdPartyRoy_210626]

PAYMENTS AND THIRD PARTY ROYALTIES
[a05-1830_1ex10d76.htm#Section7_PaymentsAndThirdPartyRoy_210626]

7.1 [a05-1830_1ex10d76.htm#a7_1PaymentsToMemberParties__210112]

Payments to Member Parties
[a05-1830_1ex10d76.htm#a7_1PaymentsToMemberParties__210112]

7.2 [a05-1830_1ex10d76.htm#a7_2RoyaltyPaymentsToThirdParties_210245]

Royalty Payments to Third Parties
[a05-1830_1ex10d76.htm#a7_2RoyaltyPaymentsToThirdParties_210245]

7.3 [a05-1830_1ex10d76.htm#a7_3AuthorizedExpensesModeAndTimi_210328]

Authorized Other Expenses; Mode and Timing of Payment
[a05-1830_1ex10d76.htm#a7_3AuthorizedExpensesModeAndTimi_210328]

7.4 [a05-1830_1ex10d76.htm#a7_4Taxes_210450]

Taxes [a05-1830_1ex10d76.htm#a7_4Taxes_210450]

SECTION 8. [a05-1830_1ex10d76.htm#Section8_FinancialRecords_210548]

FINANCIAL RECORDS [a05-1830_1ex10d76.htm#Section8_FinancialRecords_210548]

8.1 [a05-1830_1ex10d76.htm#a8_1FinancialRecords_210638]

Financial Records [a05-1830_1ex10d76.htm#a8_1FinancialRecords_210638]

8.2 [a05-1830_1ex10d76.htm#a8_2AuditOfRecords_210643]

Audit of Records [a05-1830_1ex10d76.htm#a8_2AuditOfRecords_210643]

8.3 [a05-1830_1ex10d76.htm#a8_3CertainReports_210709]

Certain Reports [a05-1830_1ex10d76.htm#a8_3CertainReports_210709]

SECTION 9. [a05-1830_1ex10d76.htm#Section9_AdverseEventAndOtherInfo_210711]

ADVERSE EVENT AND OTHER INFORMATION EXCHANGE
[a05-1830_1ex10d76.htm#Section9_AdverseEventAndOtherInfo_210711]

9.1 [a05-1830_1ex10d76.htm#a9_1Pharmacovigilance_210728]

Pharmacovigilance [a05-1830_1ex10d76.htm#a9_1Pharmacovigilance_210728]

9.2 [a05-1830_1ex10d76.htm#a9_2MaterialCommunications_210735]

Material Communications
[a05-1830_1ex10d76.htm#a9_2MaterialCommunications_210735]

SECTION 10. [a05-1830_1ex10d76.htm#Section10_ProductRecall_210747]

PRODUCT RECALL [a05-1830_1ex10d76.htm#Section10_ProductRecall_210747]

10.1 [a05-1830_1ex10d76.htm#a10_1NotificationAndRecall__210749]

Notification and Recall
[a05-1830_1ex10d76.htm#a10_1NotificationAndRecall__210749]

10.2 [a05-1830_1ex10d76.htm#a10_2RecallExpenses_210805]

Recall Expenses [a05-1830_1ex10d76.htm#a10_2RecallExpenses_210805]

SECTION 11. [a05-1830_1ex10d76.htm#Section11_IntellectualPropertyRig_210811]

INTELLECTUAL PROPERTY RIGHTS
[a05-1830_1ex10d76.htm#Section11_IntellectualPropertyRig_210811]

11.1 [a05-1830_1ex10d76.htm#a11_1OwnershipOfIntellectualPrope_210815]

Ownership of Intellectual Property
[a05-1830_1ex10d76.htm#a11_1OwnershipOfIntellectualPrope_210815]

11.2 [a05-1830_1ex10d76.htm#a11_2ProsecutionOfPatents__210829]

Prosecution of Patents [a05-1830_1ex10d76.htm#a11_2ProsecutionOfPatents__210829]

11.3 [a05-1830_1ex10d76.htm#a11_3EnforcementOfPatents__210844]

Enforcement of Patents [a05-1830_1ex10d76.htm#a11_3EnforcementOfPatents__210844]

11.4 [a05-1830_1ex10d76.htm#a11_4InfringementOfThirdPartyRigh_211104]

Infringement of Third Party Rights
[a05-1830_1ex10d76.htm#a11_4InfringementOfThirdPartyRigh_211104]

11.5 [a05-1830_1ex10d76.htm#a11_5Trademarks__223328]

Trademarks [a05-1830_1ex10d76.htm#a11_5Trademarks__223328]

SECTION 12. [a05-1830_1ex10d76.htm#Section12_Confidentiality_211211]

CONFIDENTIALITY [a05-1830_1ex10d76.htm#Section12_Confidentiality_211211]

12.1 [a05-1830_1ex10d76.htm#a12_1TreatmentOfConfidentialInfor_211216]

Treatment of Confidential Information
[a05-1830_1ex10d76.htm#a12_1TreatmentOfConfidentialInfor_211216]

12.2 [a05-1830_1ex10d76.htm#a12_2PermittedDisclosure_211221]

Permitted Disclosure [a05-1830_1ex10d76.htm#a12_2PermittedDisclosure_211221]

12.3 [a05-1830_1ex10d76.htm#a12_3ConfidentialInformation__211328]

Confidential Information.
[a05-1830_1ex10d76.htm#a12_3ConfidentialInformation__211328]

12.4 [a05-1830_1ex10d76.htm#a12_4UseOfName__211434]

Use of Name [a05-1830_1ex10d76.htm#a12_4UseOfName__211434]

12.5 [a05-1830_1ex10d76.htm#a12_5PublicityTermsOfAgreement__211935]

Publicity; Terms of Agreement
[a05-1830_1ex10d76.htm#a12_5PublicityTermsOfAgreement__211935]

12.6 [a05-1830_1ex10d76.htm#a12_6Notification_211944]

Notification [a05-1830_1ex10d76.htm#a12_6Notification_211944]

12.7 [a05-1830_1ex10d76.htm#a12_7PermittedUses_211949]

Permitted Uses [a05-1830_1ex10d76.htm#a12_7PermittedUses_211949]

12.8 [a05-1830_1ex10d76.htm#a12_8Remedies_211955]

Remedies [a05-1830_1ex10d76.htm#a12_8Remedies_211955]

SECTION 13. [a05-1830_1ex10d76.htm#Section13_WarrantiesIndemnities_212101]

WARRANTIES; INDEMNITIES
[a05-1830_1ex10d76.htm#Section13_WarrantiesIndemnities_212101]

13.1 [a05-1830_1ex10d76.htm#a13_1RepresentationsWarrantiesAnd_212105]

Representations, Warranties and Covenants
[a05-1830_1ex10d76.htm#a13_1RepresentationsWarrantiesAnd_212105]

 

ii

--------------------------------------------------------------------------------

 

13.2 [a05-1830_1ex10d76.htm#a13_2AdditionalRepresentationsWar_212138]

Additional Representations, Warranties and Covenants of BMS
[a05-1830_1ex10d76.htm#a13_2AdditionalRepresentationsWar_212138]

 

13.3 [a05-1830_1ex10d76.htm#a13_3AdditionalRepresentationsWar_212218]

Additional Representations, Warranties and Covenants of Gilead
[a05-1830_1ex10d76.htm#a13_3AdditionalRepresentationsWar_212218]

 

13.4 [a05-1830_1ex10d76.htm#a13_4Disclaimer_212255]

Disclaimer [a05-1830_1ex10d76.htm#a13_4Disclaimer_212255]

 

13.5 [a05-1830_1ex10d76.htm#a13_5IndemnificationByTheJv_212259]

Indemnification by the JV
[a05-1830_1ex10d76.htm#a13_5IndemnificationByTheJv_212259]

 

13.6 [a05-1830_1ex10d76.htm#a13_6IndemnificationByTheMemberPa_212428]

Indemnification by the Member Parties in General
[a05-1830_1ex10d76.htm#a13_6IndemnificationByTheMemberPa_212428]

 

13.7 [a05-1830_1ex10d76.htm#a13_7IndemnificationForCertainPro_212435]

Indemnification for Certain Product Liability Related Matters
[a05-1830_1ex10d76.htm#a13_7IndemnificationForCertainPro_212435]

 

13.8 [a05-1830_1ex10d76.htm#a13_8IndemnificationProcedure__212515]

Indemnification Procedure
[a05-1830_1ex10d76.htm#a13_8IndemnificationProcedure__212515]

 

13.9 [a05-1830_1ex10d76.htm#a13_9LimitationOnDamages_212606]

Limitation on Damages [a05-1830_1ex10d76.htm#a13_9LimitationOnDamages_212606]

 

13.10 [a05-1830_1ex10d76.htm#a13_10AncillaryAgreements_212611]

Ancillary Agreements [a05-1830_1ex10d76.htm#a13_10AncillaryAgreements_212611]

 

13.11 [a05-1830_1ex10d76.htm#a13_11Employees_212621]

Employees [a05-1830_1ex10d76.htm#a13_11Employees_212621]

 

SECTION 14. [a05-1830_1ex10d76.htm#Section14_TermAndTermination_212627]

TERM AND TERMINATION [a05-1830_1ex10d76.htm#Section14_TermAndTermination_212627]

 

14.1 [a05-1830_1ex10d76.htm#a14_1Term_212631]

Term [a05-1830_1ex10d76.htm#a14_1Term_212631]

 

14.2 [a05-1830_1ex10d76.htm#a14_2CertainLitigation_212634]

Certain Litigation [a05-1830_1ex10d76.htm#a14_2CertainLitigation_212634]

 

14.3 [a05-1830_1ex10d76.htm#a14_3TerminationForNdaFilingDelay_212655]

Termination for NDA Filing Delay
[a05-1830_1ex10d76.htm#a14_3TerminationForNdaFilingDelay_212655]

 

14.4 [a05-1830_1ex10d76.htm#a14_4MaterialDefault__212657]

Material Default [a05-1830_1ex10d76.htm#a14_4MaterialDefault__212657]

 

14.5 [a05-1830_1ex10d76.htm#a14_5TerminationUponGenericLaunch_212716]

Termination Upon Generic Launch
[a05-1830_1ex10d76.htm#a14_5TerminationUponGenericLaunch_212716]

 

14.6 [a05-1830_1ex10d76.htm#a14_6ConsequencesOfTermination__212720]

Consequences of Termination
[a05-1830_1ex10d76.htm#a14_6ConsequencesOfTermination__212720]

 

14.7 [a05-1830_1ex10d76.htm#a14_7RightsInBankruptcy_212856]

Rights in Bankruptcy [a05-1830_1ex10d76.htm#a14_7RightsInBankruptcy_212856]

 

14.8 [a05-1830_1ex10d76.htm#a14_8AccruedRightsSurvivingObliga_212902]

Accrued Rights; Surviving Obligations
[a05-1830_1ex10d76.htm#a14_8AccruedRightsSurvivingObliga_212902]

 

SECTION 15. [a05-1830_1ex10d76.htm#Section15_GeneralProvisions_212926]

GENERAL PROVISIONS [a05-1830_1ex10d76.htm#Section15_GeneralProvisions_212926]

 

15.1 [a05-1830_1ex10d76.htm#a15_1ForceMajeure_212932]

Force Majeure [a05-1830_1ex10d76.htm#a15_1ForceMajeure_212932]

 

15.2 [a05-1830_1ex10d76.htm#a15_2Notice_212937]

Notice [a05-1830_1ex10d76.htm#a15_2Notice_212937]

 

15.3 [a05-1830_1ex10d76.htm#a15_3FurtherAssurances_213109]

Further Assurances [a05-1830_1ex10d76.htm#a15_3FurtherAssurances_213109]

 

15.4 [a05-1830_1ex10d76.htm#a15_4SuccessorsAndAssigns__213112]

Successors and Assigns [a05-1830_1ex10d76.htm#a15_4SuccessorsAndAssigns__213112]

 

15.5 [a05-1830_1ex10d76.htm#a15_5GoverningLaw_213141]

Governing Law [a05-1830_1ex10d76.htm#a15_5GoverningLaw_213141]

 

15.6 [a05-1830_1ex10d76.htm#a15_6Arbitration__213143]

Arbitration [a05-1830_1ex10d76.htm#a15_6Arbitration__213143]

 

15.7 [a05-1830_1ex10d76.htm#a15_7Waiver_213222]

Waiver [a05-1830_1ex10d76.htm#a15_7Waiver_213222]

 

15.8 [a05-1830_1ex10d76.htm#a15_8Severability_213225]

Severability [a05-1830_1ex10d76.htm#a15_8Severability_213225]

 

15.9 [a05-1830_1ex10d76.htm#a15_9Counterparts_213230]

Counterparts [a05-1830_1ex10d76.htm#a15_9Counterparts_213230]

 

15.10 [a05-1830_1ex10d76.htm#a15_10Construction_213234]

Construction [a05-1830_1ex10d76.htm#a15_10Construction_213234]

 

15.11 [a05-1830_1ex10d76.htm#a15_11StatusOfTheParties_213244]

Status of the Parties [a05-1830_1ex10d76.htm#a15_11StatusOfTheParties_213244]

 

15.12 [a05-1830_1ex10d76.htm#a15_12Standstill_213307]

Standstill [a05-1830_1ex10d76.htm#a15_12Standstill_213307]

 

15.13 [a05-1830_1ex10d76.htm#a15_13NonsolicitationOfEmployees_213343]

Nonsolicitation of Employees
[a05-1830_1ex10d76.htm#a15_13NonsolicitationOfEmployees_213343]

 

15.14 [a05-1830_1ex10d76.htm#a15_14EntireAgreement_213348]

Entire Agreement [a05-1830_1ex10d76.htm#a15_14EntireAgreement_213348]

 

15.15 [a05-1830_1ex10d76.htm#a15_15ConsentToJurisdiction_213352]

Consent to Jurisdiction
[a05-1830_1ex10d76.htm#a15_15ConsentToJurisdiction_213352]

 

15.16 [a05-1830_1ex10d76.htm#a15_16ThirdParties_213422]

Third Parties [a05-1830_1ex10d76.htm#a15_16ThirdParties_213422]

 

 

iii

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Annexes:

 

Annex A – Initial Committee Members and Alliance Managers

 

Annex B – Development Plan and Development Budget as of Effective Date

 

Annex C – Commercialization Plan and Commercialization Budget as of Effective
Date

 

Annex D – BMS Patents

 

Annex E – Gilead Patents

 

Annex F – Gilead Licensed Trademarks

 

Annex G – BMS Licensed Trademarks

 

Annex H – Quarterly Detail Report

 

Annex I – Manner of Calculation of Net Selling Price

 

Annex J – Calculation of Cost of Goods

 

Annex K – Calculation of Transfer Price

 

Annex L – Joint Press Release

 

Annex M – Certain Financial Data

 

Annex N – Data to be Provided to Independent Accounting Expert Pursuant to
Section 7.1

 

Annex O – JV Obligations as Sublicensee

 

Annex P – Key Terms of Services Agreement

 

Annex Q – Pricing [*]

 

Annex R – List of Countries Comprising the Developing World

 

iv

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THIS COLLABORATION AGREEMENT (this “Agreement”) is made as of December 17, 2004
(the “Effective Date”), by and among Gilead Sciences, Inc., a corporation
organized and existing under the laws of the State of Delaware and having its
principal place of business at 333 Lakeside Drive, Foster City, CA 94404
(“Gilead Parent”), Gilead Holdings, LLC, a Delaware limited liability company
and wholly-owned subsidiary of Gilead Parent (“Gilead Sub” and, collectively
with Gilead Parent, “Gilead”), Bristol-Myers Squibb Company, a corporation
organized and existing under the laws of the State of Delaware and having its
principal place of business at 345 Park Avenue, New York, NY 10154 (“BMS
Parent”), E.R. Squibb & Sons, L.L.C., a Delaware limited liability company and
wholly-owned subsidiary of BMS Parent (“BMS Sub” and, collectively with BMS
Parent, “BMS”), and Bristol-Myers Squibb & Gilead Sciences, LLC, a limited
liability company organized and existing under the laws of the State of
Delaware  and having its principal place of business at 333 Lakeside Drive,
Foster City, CA 94404 (the “JV”) (Gilead, BMS and the JV, collectively, the
“Parties” and each a “Party”).

 

RECITALS

 

WHEREAS, Gilead has developed and is marketing a proprietary nucleotide reverse
transcriptase inhibitor, Viread® (known under the generic name of tenofovir
disoproxil fumarate (“TDF”)), a proprietary nucleoside reverse transcriptase
inhibitor, Emtriva® (known under the generic name of emtricitabine (“FTC”)), and
a fixed-dose co-formulated product containing TDF and FTC as its only active
pharmaceutical ingredients, Truvada®, for the treatment of HIV infection in
adults;

 

WHEREAS, BMS has developed and is marketing a proprietary non-nucleoside reverse
transcriptase inhibitor, Sustiva® (known under the generic name of efavirenz
(“EFV”)) for the treatment of HIV infection in adults;

 

WHEREAS, Gilead and BMS desire to develop and commercialize in the United
States, through a joint venture entity, a fixed-dose, co-formulated combination
product containing TDF, FTC and EFV as its only active pharmaceutical
ingredients;

 

WHEREAS, for that purpose, Gilead and BMS have formed the JV pursuant to that
certain Operating Agreement entered into as of the Effective Date by and between
Gilead Sub and BMS Sub (the “Operating Agreement”);

 

WHEREAS, the Parties wish to allocate among themselves certain rights and duties
relating to the development and commercialization of such a combination product,
upon the terms and conditions of this Agreement, the Operating Agreement and the
Ancillary Agreements (as defined below); and

 

WHEREAS, pursuant to the BMS Guarantee Agreement and the Gilead Guarantee
Agreement (as such terms are defined below), each dated as of the Effective
Date, BMS Parent and Gilead Parent are guaranteeing the performance of all of
the obligations of

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

1

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BMS Sub and Gilead Sub, respectively, under this Agreement, the Operating
Agreement and all Ancillary Agreements to which the applicable Affiliate (as
defined below) is or becomes a party;

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
below and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:

 

SECTION 1.
DEFINITIONS

 

1.1                                 “ACT” SHALL MEAN THE UNITED STATES FOOD,
DRUG AND COSMETIC ACT, AS AMENDED.

 

1.2                                 “ACTUAL BMS PERCENTAGE” SHALL MEAN, FOR EACH
CALENDAR YEAR, THE PERCENTAGE APPLICABLE TO BMS FOR SUCH CALENDAR YEAR BASED ON
HISTORICAL DATA AND DETERMINED PURSUANT TO SECTION 7.1(B).

 

1.3                                 “ACTUAL GILEAD PERCENTAGE” SHALL MEAN, FOR
EACH CALENDAR YEAR, THE PERCENTAGE APPLICABLE TO GILEAD FOR SUCH CALENDAR YEAR
BASED ON HISTORICAL DATA AND DETERMINED PURSUANT TO SECTION 7.1(B).

 

1.4                                 “ACTUAL PERCENTAGE” SHALL MEAN, WITH RESPECT
TO BMS, THE ACTUAL BMS PERCENTAGE AND, WITH RESPECT TO GILEAD, THE ACTUAL GILEAD
PERCENTAGE.

 

1.5                                 “ACTUAL YIELD” SHALL HAVE THE MEANING SET
FORTH IN ANNEX K.

 

1.6                                 “AFFILIATE” OF A PERSON SHALL MEAN ANY OTHER
PERSON THAT, DIRECTLY OR INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES,
CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH SUCH PERSON.  FOR
PURPOSES OF THIS DEFINITION ONLY, “CONTROL” AND, WITH CORRELATIVE MEANINGS, THE
TERMS “CONTROLLED BY” AND “UNDER COMMON CONTROL WITH” SHALL MEAN (A) THE
POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT THE MANAGEMENT OR
POLICIES OF A PERSON, WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES OR BY
CONTRACT RELATING TO VOTING RIGHTS OR CORPORATE GOVERNANCE, OR (B) THE
OWNERSHIP, DIRECTLY OR INDIRECTLY, OF MORE THAN FIFTY PERCENT (50%) OF THE
VOTING SECURITIES OR OTHER OWNERSHIP INTEREST OF A PERSON; PROVIDED, HOWEVER,
THAT IF LOCAL LAW RESTRICTS FOREIGN OWNERSHIP, CONTROL SHALL BE ESTABLISHED BY
DIRECT OR INDIRECT OWNERSHIP OF THE MAXIMUM OWNERSHIP PERCENTAGE THAT MAY, UNDER
SUCH LOCAL LAW, BE OWNED BY FOREIGN INTERESTS.  FOR PURPOSES OF THIS AGREEMENT,
THE OPERATING AGREEMENT AND THE ANCILLARY AGREEMENTS, THE JV SHALL NOT BE DEEMED
TO BE AN AFFILIATE OF EITHER GILEAD OR BMS.

 

1.7                                 “AGREEMENT” SHALL HAVE THE MEANING SET FORTH
IN THE FIRST PARAGRAPH ABOVE.

 

1.8                                 “ALLIANCE MANAGER” SHALL HAVE THE MEANING
SET FORTH IN SECTION 2.7(A).

 

1.9                                 “ALLOCATED COSTS” SHALL HAVE THE MEANING SET
FORTH IN SECTION 5.12.

 

1.10                           “AMP” SHALL HAVE THE MEANING SET FORTH IN ANNEX
Q.

 

2

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1.11                           “ANCILLARY AGREEMENTS” SHALL MEAN, COLLECTIVELY,
THE BMS SUPPLY AGREEMENT, THE GILEAD SUPPLY AGREEMENT, THE SERVICES AGREEMENT
AND THE SDEA.

 

1.12                           “[*]” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.1(F).

 

1.13                           “APPLICABLE EFV TERRITORY” SHALL MEAN (A) WITH
RESPECT TO ANY BMS TECHNOLOGY LICENSED TO BMS BY THE EFV LICENSOR OR LICENSED TO
THE EFV LICENSOR BY BMS, IN EACH CASE UNDER THE EFV LICENSE AGREEMENT, THE EFV
LICENSE AGREEMENT TERRITORY, AND (B) WITH RESPECT TO ALL OTHER BMS TECHNOLOGY,
WORLDWIDE.

 

1.14                           “APPLICABLE LAW” SHALL MEAN THE APPLICABLE LAWS,
RULES, AND REGULATIONS, INCLUDING, WITHOUT LIMITATION, ANY RULES, REGULATIONS,
GUIDELINES OR OTHER REQUIREMENTS OF THE REGULATORY AUTHORITIES, THAT MAY BE IN
EFFECT FROM TIME TO TIME IN THE TERRITORY.

 

1.15                           “APPROVALS” SHALL MEAN, COLLECTIVELY, THE
APPROVALS GRANTED BY THE REGULATORY AUTHORITIES FOR THE MANUFACTURE, MARKETING,
SALE AND/OR USE OF THE COMBINATION PRODUCT IN THE FIELD IN THE TERRITORY,
INCLUDING, WITHOUT LIMITATION, PRICING AND REIMBURSEMENT APPROVALS (IF ANY).

 

1.16                           “APPROVED MARKETING MATERIALS” SHALL HAVE THE
MEANING SET FORTH IN SECTION 5.7(A).

 

1.17                           “[*] REPRESENTATIVE” SHALL HAVE THE MEANING SET
FORTH IN SECTION 5.3(B).

 

1.18                           “AUTHORIZED COMMERCIALIZATION EXPENSES” SHALL
HAVE THE MEANING SET FORTH IN SECTION 5.12.

 

1.19                           “AUTHORIZED DEVELOPMENT EXPENSES” SHALL HAVE THE
MEANING SET FORTH IN SECTION 3.8.

 

1.20                           “AUTHORIZED EXPENSES” SHALL MEAN, COLLECTIVELY,
THE AUTHORIZED COMMERCIALIZATION EXPENSES, AUTHORIZED DEVELOPMENT EXPENSES AND
AUTHORIZED OTHER EXPENSES.

 

1.21                           “AUTHORIZED OTHER EXPENSES” SHALL MEAN ALL JV
EXPENSES EXPRESSLY STATED IN THIS AGREEMENT OR THE OPERATING AGREEMENT OR ANY
ANCILLARY AGREEMENT TO BE AUTHORIZED OTHER EXPENSES OR AGREED BY THE JEC TO BE
AUTHORIZED OTHER EXPENSES.

 

1.22                           “AWP” SHALL HAVE THE MEANING SET FORTH IN ANNEX
Q.

 

1.23                           “BMS” SHALL HAVE THE MEANING SET FORTH IN THE
FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.24                           “BMS CORE IMPROVEMENT” SHALL MEAN ANY IMPROVEMENT
PERTAINING SPECIFICALLY TO BMS CORE TECHNOLOGY, WHICH IMPROVEMENT IS CONCEIVED,
DISCOVERED, DEVELOPED, OR OTHERWISE MADE, AS NECESSARY TO ESTABLISH AUTHORSHIP
OR INVENTORSHIP UNDER UNITED STATES COPYRIGHT OR PATENT LAW, AS THE CASE MAY BE,
SOLELY OR JOINTLY, BY OR ON BEHALF OF GILEAD OR ITS AFFILIATES OR THE JV IN THE
COURSE OF, AS A RESULT OF, OR IN CONNECTION WITH THE PROJECT ACTIVITIES

 

3

--------------------------------------------------------------------------------

 

CONDUCTED PURSUANT TO THE DEVELOPMENT PLAN OR IN CONNECTION WITH CO-FUNDED
CLINICAL TRIALS; PROVIDED, HOWEVER, THAT BMS CORE IMPROVEMENTS SHALL NOT INCLUDE
ANY DUAL IMPROVEMENTS.

 

1.25                           “BMS CORE TECHNOLOGY” SHALL MEAN ALL BMS
PROPRIETARY TECHNOLOGIES RELATING SPECIFICALLY TO THE EXPLOITATION OF EFV.

 

1.26                           “BMS GUARANTEE AGREEMENT” SHALL MEAN THE
GUARANTEE AGREEMENT EXECUTED BY BMS PARENT IN FAVOR OF GILEAD AND THE JV, DATED
AS OF THE EFFECTIVE DATE, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME.

 

1.27                           “BMS INDEMNIFIED PARTY” SHALL MEAN BMS SUB, BMS
PARENT AND ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS AND EMPLOYEES.

 

1.28                           “BMS INVENTIONS” SHALL MEAN ANY INFORMATION AND
INVENTIONS (WHETHER OR NOT PATENTABLE; AND IMPROVEMENTS THERETO, INCLUDING
GILEAD CORE IMPROVEMENTS TO THE EXTENT OWNED BY BMS) CONCEIVED, DISCOVERED,
DEVELOPED OR OTHERWISE MADE, AS NECESSARY TO ESTABLISH AUTHORSHIP OR
INVENTORSHIP UNDER UNITED STATES COPYRIGHT OR PATENT LAW, AS THE CASE MAY BE,
SOLELY (OR, IN THE CASE OF GILEAD CORE IMPROVEMENTS, SOLELY OR JOINTLY) BY OR ON
BEHALF OF BMS OR ITS AFFILIATES, IN THE COURSE OF, AS A RESULT OF OR IN
CONNECTION WITH THE PROJECT ACTIVITIES CONDUCTED PURSUANT TO THE DEVELOPMENT
PLAN OR IN CONNECTION WITH CO-FUNDED CLINICAL TRIALS, BUT EXCLUDING ANY JOINT
INVENTIONS.

 

1.29                           “BMS KNOW-HOW” SHALL MEAN ANY AND ALL INFORMATION
AND INVENTIONS UNDER THE CONTROL OF BMS OR ITS AFFILIATES AS OF THE EFFECTIVE
DATE OR AT ANY TIME DURING THE TERM OF THIS AGREEMENT THAT ARE NECESSARY OR
REASONABLY USEFUL FOR THE EXPLOITATION OF THE COMBINATION PRODUCT AND ARE NOT
GENERALLY KNOWN, BUT EXCLUDING ANY AND ALL (A) SUCH INFORMATION AND INVENTIONS
TO THE EXTENT CLAIMED BY THE BMS PATENTS AND (B) JOINT KNOW-HOW.

 

1.30                           “BMS LICENSED TRADEMARKS” SHALL HAVE THE MEANING
SET FORTH IN SECTION 6.6(B).

 

1.31                           “BMS PARENT” SHALL HAVE THE MEANING SET FORTH IN
THE FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.32                           “BMS PATENTS” SHALL MEAN ALL OF THE PATENTS THAT
BMS OR ITS AFFILIATES CONTROL AS OF THE EFFECTIVE DATE OR AT ANY TIME DURING THE
TERM OF THIS AGREEMENT THAT WOULD, IN THE ABSENCE OF THE LICENSE GRANTED BY BMS
IN SECTION 6.1(B) AND ASSUMING THAT THE EFV ACTIVE PHARMACEUTICAL INGREDIENT
THEREIN WAS NOT PURCHASED FROM BMS, BE INFRINGED BY THE EXPLOITATION OF THE
COMBINATION PRODUCT BY THE JV IN ANY COUNTRY IN THE WORLD.  A LIST OF THE BMS
PATENTS IN THE TERRITORY AS OF THE EFFECTIVE DATE IS ATTACHED HERETO AS ANNEX D.

 

1.33                           “BMS REGULATORY DOCUMENTATION” SHALL MEAN ALL
REGULATORY DOCUMENTATION APPLICABLE TO SUSTIVA (OR EFV) BUT NOT SUSTIVA (OR EFV)
IN CO-FORMULATION WITH VIREAD (OR TDF), EMTRIVA (OR FTC), OR TRUVADA (OR TDF AND
FTC), THAT IS OR WAS DEVELOPED BY OR ON BEHALF OF BMS OR ANY OF ITS AFFILIATES
OR SUBLICENSEES PRIOR TO THE EFFECTIVE DATE OR DURING THE TERM OF THIS
AGREEMENT.

 

4

--------------------------------------------------------------------------------

 

1.34                           “BMS SUB” SHALL HAVE THE MEANING SET FORTH IN THE
FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.35                           “BMS SUPPLY AGREEMENT” SHALL MEAN THE SUPPLY
AGREEMENT ENTERED INTO BETWEEN BMS SUB AND THE JV CONCURRENTLY WITH THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, AS SUCH AGREEMENT MAY BE AMENDED FROM
TIME TO TIME.

 

1.36                           “BMS TECHNOLOGY” SHALL MEAN, COLLECTIVELY, THE
BMS KNOW-HOW AND THE BMS PATENTS.

 

1.37                           “BMS TRANSFER PRICE” SHALL HAVE THE MEANING SET
FORTH IN SECTION 7.1(A).

 

1.38                           “BREACHING MEMBER PARTY” SHALL HAVE THE MEANING
SET FORTH IN SECTION 14.4(A).

 

1.39                           “BUSINESS DAY” SHALL MEAN A DAY THAT IS NOT A
SATURDAY, SUNDAY OR DAY ON WHICH BANKING INSTITUTIONS IN NEW YORK, NEW YORK OR
SAN FRANCISCO, CALIFORNIA ARE REQUIRED BY LAW TO REMAIN CLOSED.

 

1.40                           “[*] REPRESENTATIVE” SHALL HAVE THE MEANING SET
FORTH IN SECTION 5.3(B).

 

1.41                           “CALENDAR QUARTER” SHALL MEAN A PERIOD OF THREE
(3) CONSECUTIVE CALENDAR MONTHS ENDING ON MARCH 31, JUNE 30, SEPTEMBER 30 OR
DECEMBER 31.

 

1.42                           “CALENDAR YEAR” SHALL MEAN A PERIOD OF TWELVE
(12) CONSECUTIVE CALENDAR MONTHS COMMENCING ON JANUARY 1 AND ENDING ON
DECEMBER 31.

 

1.43                           “CHANGE OF CONTROL” SHALL MEAN, WITH RESPECT TO A
PERSON, ANY OF THE FOLLOWING TRANSACTIONS WITH A THIRD PARTY (A “THIRD PARTY
ACQUIRER”): (A) A MERGER OR CONSOLIDATION OF SUCH PERSON WITH THE THIRD PARTY
ACQUIRER WHICH RESULTS IN THE HOLDERS OF THE VOTING SECURITIES OF SUCH PERSON
OUTSTANDING IMMEDIATELY PRIOR THERETO (OTHER THAN THE THIRD PARTY ACQUIRER, ITS
“AFFILIATES” AND “ASSOCIATES” (AS SUCH TERMS ARE USED IN THE EXCHANGE ACT))
CEASING TO REPRESENT AT LEAST FIFTY PERCENT (50%) OF THE COMBINED VOTING POWER
OF THE SURVIVING ENTITY (OR, IF APPLICABLE, ITS PARENT COMPANY) IMMEDIATELY
AFTER SUCH MERGER OR CONSOLIDATION; (B) THE SALE TO THE THIRD PARTY ACQUIRER OF
ALL OR SUBSTANTIALLY ALL OF THE BUSINESS OF SUCH PERSON TO WHICH THIS AGREEMENT
RELATES (WHETHER BY MERGER, CONSOLIDATION, SALE OF STOCK, SALE OF ASSETS OR
OTHER SIMILAR TRANSACTION); OR (C) THE THIRD PARTY ACQUIRER (WHICH SHALL NOT BE
ANY TRUSTEE OR OTHER FIDUCIARY HOLDING SECURITIES UNDER AN EMPLOYEE BENEFIT PLAN
OF SUCH PERSON, OR ANY CORPORATION OWNED DIRECTLY OR INDIRECTLY BY THE
STOCKHOLDERS OF SUCH PERSON, IN SUBSTANTIALLY THE SAME PROPORTION AS THEIR
OWNERSHIP OF STOCK OF SUCH PERSON), TOGETHER WITH ANY OF THE THIRD PARTY
ACQUIRER’S “AFFILIATES” OR “ASSOCIATES”, AS SUCH TERMS ARE USED IN THE EXCHANGE
ACT, BECOMING THE BENEFICIAL OWNER OF FIFTY PERCENT (50%) OR MORE OF THE
COMBINED VOTING POWER OF THE OUTSTANDING SECURITIES OF SUCH PERSON OR BY
CONTRACT OR OTHERWISE HAVING THE RIGHT TO CONTROL THE BOARD OF DIRECTORS OR
EQUIVALENT GOVERNING BODY OF SUCH PERSON OR THE ABILITY TO CAUSE THE DIRECTION
OF MANAGEMENT OF SUCH PERSON.

 

1.44                           “CLINICAL DATA” SHALL MEAN ANY AND ALL DATA
(TOGETHER WITH THE RESULTS OF ANALYSIS THEREOF) DERIVED OR GENERATED FROM ANY
CLINICAL TRIAL OF A PHARMACEUTICAL PRODUCT OR FROM

 

5

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TESTING OR ANALYSIS OF SUBJECTS OR SAMPLES FROM SUCH A CLINICAL TRIAL (E.G. IN
VITRO TESTING OF TISSUE SAMPLES FROM SUBJECTS ENROLLED IN SUCH A CLINICAL
TRIAL), IN EACH CASE WHERE SUCH CLINICAL TRIAL INVOLVES EITHER OR BOTH OF (I)
ANY SINGLE AGENT PRODUCT OR DOUBLE AGENT PRODUCT, WHETHER ALONE OR IN
COMBINATION WITH ANY OTHER PRODUCT, AND (II) THE COMBINATION PRODUCT, WHETHER
ALONE OR IN COMBINATION WITH ANY OTHER PRODUCT.

 

1.45                           “CLINICAL TRIAL REGISTRY” SHALL HAVE THE MEANING
SET FORTH IN SECTION 3.11(B).

 

1.46                           “CLINICAL TRIAL RESULTS DATABASE” SHALL HAVE THE
MEANING SET FORTH IN SECTION 3.11(B).

 

1.47                           “CMC DATA” SHALL MEAN ANY AND ALL INFORMATION
CONTAINED IN, AS WELL AS DATA SUPPORTING, THE “CHEMISTRY, MANUFACTURING AND
CONTROL” AND FACILITIES SECTIONS (OR SECTIONS CORRESPONDING THERETO) OF AN NDA,
INCLUDING, WITHOUT LIMITATION, ANY DRUG MASTER FILES REFERENCED IN THE NDA.

 

1.48                           “CO-FUNDED CLINICAL TRIAL” SHALL HAVE THE MEANING
SET FORTH IN SECTION 3.2(B).

 

1.49                           “COLLABORATION PRINCIPLES” SHALL HAVE THE MEANING
SET FORTH IN SECTION 2.9.

 

1.50                           “COMBINATION PRODUCT” SHALL MEAN THE FIXED-DOSE
CO-FORMULATED PRODUCT DEVELOPED PURSUANT TO THIS AGREEMENT CONTAINING, AS ITS
ONLY ACTIVE PHARMACEUTICAL INGREDIENTS PER SINGLE DAILY DOSE, 300 MG TDF, 200 MG
FTC AND 600 MG EFV.

 

1.51                           “COMBINATION PRODUCT REGULATORY DOCUMENTATION”
SHALL MEAN ALL REGULATORY DOCUMENTATION APPLICABLE TO THE COMBINATION PRODUCT
THAT IS DEVELOPED BY OR ON BEHALF OF ANY PARTY PURSUANT TO, AND DURING THE TERM
OF, THIS AGREEMENT, BUT EXCLUDING ALL BMS REGULATORY DOCUMENTATION AND ALL
GILEAD REGULATORY DOCUMENTATION.

 

1.52                           “COMBINATION PRODUCT TRADEMARKS” SHALL MEAN THE
TRADEMARK OR TRADEMARKS SELECTED BY THE JCC FOR THE COMBINATION PRODUCT, ALL
PACKAGING DESIGNS AND OTHER TRADE DRESS USED IN CONNECTION WITH THE COMBINATION
PRODUCT, OTHER TRADEMARKS RELATING THERETO AND ANY REGISTRATIONS THEREOF OR ANY
PENDING APPLICATIONS RELATING THERETO.  FOR THE AVOIDANCE OF DOUBT, THE
FOLLOWING SHALL NOT BE CONSIDERED COMBINATION PRODUCT TRADEMARKS: (A) BMS
LICENSED TRADEMARKS, (B) GILEAD LICENSED TRADEMARKS AND (C) THE NAMES, LOGOS AND
OTHER TRADEMARKS OF THE MEMBER PARTIES.

 

1.53                           “COMMERCIALIZATION ACTIVITIES” SHALL MEAN
MARKETING AND OTHER ACTIVITIES FOR THE COMMERCIALIZATION OF THE COMBINATION
PRODUCT INCLUDING THOSE SET FORTH IN THE COMMERCIALIZATION PLAN AND ANY OTHER OF
THE FOLLOWING CONDUCTED FOR THE COMBINATION PRODUCT:  EXECUTION OF PRODUCT
POSITIONING, PREPARATION OF PROMOTIONAL AND MARKETING MATERIALS, MARKET RESEARCH
AND ADVERTISING ACTIVITIES, PROMOTION, ADVOCACY, NATIONAL ACCOUNTS, GOVERNMENT
RELATIONS ACTIVITIES, PRICING, REIMBURSEMENT AND PATIENT ASSISTANCE PROGRAMS.

 

1.54                           “COMMERCIALIZATION BUDGET” SHALL HAVE THE MEANING
SET FORTH IN SECTION 5.11(B).  THE INITIAL COMMERCIALIZATION BUDGET IS ATTACHED
HERETO AS ANNEX C.

 

6

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1.55                           “COMMERCIALIZATION BUDGET DEADLOCK” SHALL HAVE
THE MEANING SET FORTH IN SECTION 2.10(D).

 

1.56                           “COMMERCIALIZATION PLAN” SHALL MEAN THE PLAN FOR
MARKETING AND OTHERWISE COMMERCIALIZING THE COMBINATION PRODUCT AS DESCRIBED IN
SECTION 5.11(B), AS UPDATED FROM TIME TO TIME PURSUANT TO SECTION 5.11(C).  THE
INITIAL COMMERCIALIZATION PLAN IS ATTACHED HERETO AS ANNEX C.

 

1.57                           “COMMERCIALIZATION PLAN DEADLOCK” SHALL HAVE THE
MEANING SET FORTH IN SECTION 2.10(D).

 

1.58                           “COMMERCIALLY REASONABLE EFFORTS” SHALL MEAN,
WITH RESPECT TO (A) THE DEVELOPMENT ACTIVITIES THAT A MEMBER PARTY IS REQUIRED
TO PERFORM WITH RESPECT TO THE COMBINATION PRODUCT PURSUANT TO THE DEVELOPMENT
PLAN, OR (B) THE COMMERCIALIZATION ACTIVITIES THAT A MEMBER PARTY IS REQUIRED TO
PERFORM WITH RESPECT TO THE COMBINATION PRODUCT PURSUANT TO THE
COMMERCIALIZATION PLAN, AS THE CASE MAY BE, THE LEVEL OF EFFORT THAT WOULD
GENERALLY BE USED BY A MEMBER PARTY TO CONDUCT SUCH DEVELOPMENT OR
COMMERCIALIZATION ACTIVITIES IN A MANNER CONSISTENT WITH THE MINIMUM LEVEL OF
EXPENDITURE CONTEMPLATED FOR SUCH ACTIVITIES BY THE DEVELOPMENT BUDGET OR
COMMERCIALIZATION BUDGET, AS THE CASE MAY BE, FOR A PRODUCT OR COMPOUND OWNED BY
IT OR TO WHICH IT HAS RIGHTS, WHICH IS OF COMPARABLE MARKET POTENTIAL, PROFIT
POTENTIAL OR STRATEGIC VALUE TO SUCH MEMBER PARTY AND IS AT A SIMILAR STAGE IN
ITS DEVELOPMENT OR PRODUCT LIFE, TAKING INTO ACCOUNT, WITHOUT LIMITATION, ISSUES
OF SAFETY AND EFFICACY, PRODUCT PROFILE, THE PROPRIETARY POSITION, THE
THEN-CURRENT COMPETITIVE ENVIRONMENT FOR SUCH PRODUCT OR COMPOUND (AND ANY
INDIVIDUAL AGENT COMPRISING PART OF SUCH PRODUCT OR COMPOUND), THE LIKELY TIMING
OF THE PRODUCT’S OR COMPOUND’S (AND ANY SUCH INDIVIDUAL AGENT’S) ENTRY INTO THE
MARKET, THE THEN-CURRENT MARKET PENETRATION, THE RETURN ON INVESTMENT POTENTIAL
OF SUCH PRODUCT (AND ANY INDIVIDUAL AGENT COMPRISING PART OF SUCH PRODUCT), THE
REGULATORY ENVIRONMENT AND STATUS OF THE PRODUCT (AND ANY INDIVIDUAL AGENT
COMPRISING PART OF SUCH PRODUCT), AND OTHER RELEVANT SCIENTIFIC, TECHNICAL AND
COMMERCIAL FACTORS, IN EACH CASE AS MEASURED BY THE FACTS AND CIRCUMSTANCES AT
THE TIME SUCH EFFORTS ARE DUE.

 

1.59                           “COMMERCIAL RECORD REQUEST” SHALL HAVE THE
MEANING SET FORTH IN SECTION 5.10(B).

 

1.60                           “COMPETING PRODUCT” SHALL MEAN (A) IN THE CASE OF
GILEAD AS THE ASSIGNING MEMBER PARTY, A [*], AND (B) IN THE CASE OF BMS AS THE
ASSIGNING MEMBER PARTY, A [*].

 

1.61                           “CONFIDENTIAL INFORMATION” SHALL HAVE THE MEANING
SET FORTH IN SECTION 12.3(A).

 

1.62                           “CONTINUING MEMBER PARTY” SHALL MEAN A MEMBER
PARTY AS SO DESIGNATED PURSUANT TO SECTION 14.5.

 

1.63                           “CONTROL” OR “CONTROLLED” SHALL MEAN, WITH
RESPECT TO ANY ITEM OF INFORMATION AND INVENTIONS, PATENTS OR OTHER INTELLECTUAL
PROPERTY RIGHTS, THE RIGHT, WHETHER BY OWNERSHIP, LICENSE OR OTHERWISE, TO GRANT
A LICENSE, SUBLICENSE OR OTHER RIGHT TO OR UNDER SUCH ITEM, PATENT OR RIGHT AS
PROVIDED FOR IN THIS AGREEMENT WITHOUT VIOLATING THE TERMS OF ANY AGREEMENT OR
OTHER BINDING ARRANGEMENT WITH ANY THIRD PARTY.  FOR PURPOSES OF THIS
SECTION 1.63,

 

7

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THE CONSENT REFERRED TO IN SECTION 6.12 SHALL BE DEEMED TO HAVE BEEN OBTAINED AS
OF THE EFFECTIVE DATE.

 

1.64                           “CORE TECHNOLOGY” SHALL MEAN THE BMS CORE
TECHNOLOGY OR THE GILEAD CORE TECHNOLOGY, AS THE CASE MAY BE.

 

1.65                           “COST ALLOCATION PROPOSAL” SHALL HAVE THE MEANING
SET FORTH IN SECTION 5.12.

 

1.66                           “COST OF GOODS” SHALL HAVE THE MEANING SET FORTH
IN ANNEX J HERETO.

 

1.67                           “COURT” SHALL HAVE THE MEANING SET FORTH IN
SECTION 15.15.

 

1.68                           “DETAIL” SHALL MEAN AN IN-PERSON PRESENTATION TO
A HEALTH CARE PROVIDER SPECIALIZING IN TREATMENT OF HIV INFECTION OR AIDS, AND
WHO HAS PRESCRIBING AUTHORITY, BY A SALES REPRESENTATIVE WHO IS FULLY EQUIPPED
WITH KNOWLEDGE OF, AND (SUBJECT TO SECTION 5.7) APPROVED MARKETING MATERIALS AND
PRODUCT LABELS AND INSERTS WITH RESPECT TO, THE COMBINATION PRODUCT, IN WHICH
THE CHARACTERISTICS OF THE COMBINATION PRODUCT ARE DESCRIBED BY SUCH SALES
REPRESENTATIVE IN A FAIR AND BALANCED MANNER CONSISTENT WITH THE REQUIREMENTS OF
APPLICABLE LAW AND OF THIS AGREEMENT, AND IN A MANNER THAT IS CUSTOMARY IN THE
INDUSTRY FOR THE PURPOSE OF PROMOTING A PRESCRIPTION PHARMACEUTICAL PRODUCT, BUT
WITHOUT REGARD TO THE POSITION OF THE PRESENTATION WITHIN A CALL TO THE HEALTH
CARE PROVIDER.  FOR THE AVOIDANCE OF DOUBT, A PROMOTIONAL MATERIAL DROP OR
PRODUCT REMINDER SHALL NOT CONSTITUTE A DETAIL.  WHEN USED AS A VERB, TO
“DETAIL” SHALL MEAN TO ENGAGE IN A DETAIL.

 

1.69                           “DETAIL EQUIVALENT AMOUNT” SHALL MEAN, FOR THE
2005 CALENDAR YEAR AND THE 2006 CALENDAR YEAR, [*], AND FOR EACH SUCCESSIVE
CALENDAR YEAR THEREAFTER, SUCH AMOUNT AS ADJUSTED BY THE [*] FOR EACH SUCH
CALENDAR YEAR.

 

1.70                           “DEVELOPING WORLD” SHALL MEAN THE TERRITORY
COMPRISING THE COUNTRIES LISTED IN ANNEX R AND ANY ADDITIONAL COUNTRIES OUTSIDE
THE TERRITORY, CANADA AND EUROPE THAT GILEAD INCLUDES IN ITS GILEAD ACCESS
PROGRAM, AS INDICATED AT THE WEBSITE FOR THE PROGRAM, WWW.GILEADACCESS.ORG.

 

1.71                           “DEVELOPMENT ACTIVITIES” SHALL MEAN THE
ACTIVITIES SET FORTH IN THE DEVELOPMENT PLAN, AS UPDATED FROM TIME TO TIME
PURSUANT TO SECTION 3.7 AND, ONLY WITH RESPECT TO PERIODS PRIOR TO THE EFFECTIVE
DATE, ACTIVITIES PURSUANT TO THE MTTA.

 

1.72                           “DEVELOPMENT BUDGET” SHALL MEAN THE BUDGET WITH
RESPECT TO ANY EXPENSES RELATING TO DEVELOPMENT ACTIVITIES FOR THE COMBINATION
PRODUCT THAT ARE CHARGEABLE TO THE JV, AS UPDATED FROM TIME TO TIME PURSUANT TO
SECTION 3.7.  THE INITIAL DEVELOPMENT BUDGET IS ATTACHED HERETO AS ANNEX B.

 

1.73                           “DEVELOPMENT PLAN” SHALL MEAN THE PLAN FOR THE
REGULATORY, CLINICAL, FORMULATION, MANUFACTURING PROCESS AND CMC DATA
DEVELOPMENT ACTIVITIES TO BE CONDUCTED FOR THE COMBINATION PRODUCT, INCLUDING
ANY PHASE IV CLINICAL STUDIES AND MEDICAL INFORMATION AND MEDICAL EDUCATION
PROGRAMS, AS UPDATED FROM TIME TO TIME PURSUANT TO SECTION 3.7.  THE INITIAL 
DEVELOPMENT PLAN IS ATTACHED HERETO AS ANNEX B.

 

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1.74                           “DEVELOPMENT RECORD REQUEST” SHALL HAVE THE
MEANING SET FORTH IN SECTION 3.6(B).

 

1.75                           “DISCLOSING PARTY” SHALL HAVE THE MEANING SET
FORTH IN SECTION 12.1.

 

1.76                           “[*]” SHALL HAVE THE MEANING SET FORTH IN ANNEX
Q.

 

1.77                           “DOUBLE AGENT PRODUCT” SHALL MEAN TRUVADA, THE
CO-FORMULATED PRODUCT DEVELOPED BY GILEAD CONTAINING, AS ITS ONLY ACTIVE
PHARMACEUTICAL INGREDIENTS, TDF AND FTC.

 

1.78                           “DUAL IMPROVEMENT” SHALL MEAN AN IMPROVEMENT THAT
CONSTITUTES BOTH AN IMPROVEMENT PERTAINING SPECIFICALLY TO THE GILEAD CORE
TECHNOLOGY AND AN IMPROVEMENT PERTAINING SPECIFICALLY TO THE BMS CORE
TECHNOLOGY, WHICH IMPROVEMENT IS CONCEIVED, DISCOVERED, DEVELOPED, OR OTHERWISE
MADE, AS NECESSARY TO ESTABLISH AUTHORSHIP OR INVENTORSHIP UNDER UNITED STATES
COPYRIGHT OR PATENT LAW, AS THE CASE MAY BE, SOLELY OR JOINTLY, BY OR ON BEHALF
OF BMS OR ITS AFFILIATES, GILEAD OR ITS AFFILIATES, THE JV OR JOINTLY ANY
COMBINATION OF THEM, IN THE COURSE OF, AS A RESULT OF, OR IN CONNECTION WITH THE
PROJECT ACTIVITIES CONDUCTED PURSUANT TO THE DEVELOPMENT PLAN OR IN CONNECTION
WITH CO-FUNDED CLINICAL TRIALS.  ANY DUAL IMPROVEMENT SHALL CONSTITUTE A JOINT
INVENTION.

 

1.79                           “EFFECTIVE DATE” SHALL HAVE THE MEANING SET FORTH
IN THE FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.80                           “EFV” SHALL HAVE THE MEANING SET FORTH IN THE
RECITALS TO THIS AGREEMENT.

 

1.81                           “EFV LICENSE AGREEMENT” SHALL MEAN THAT CERTAIN
LICENSE AGREEMENT, DATED AS OF SEPTEMBER 1, 1994, AS AMENDED, BETWEEN THE EFV
LICENSOR AND E.R. SQUIBB & SONS, L.L.C., AS SUCCESSOR IN INTEREST TO DUPONT
PHARMACEUTICALS COMPANY (FORMERLY NAMED THE DUPONT MERCK PHARMACEUTICAL
COMPANY).

 

1.82                           “EFV LICENSE AGREEMENT TERRITORY” SHALL MEAN BMS’
TERRITORY UNDER THE EFV LICENSE AGREEMENT, WHICH, AS OF THE EFFECTIVE DATE,
CONSISTS OF THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS),
CANADA, FRANCE (CONTINENTAL AREA), GERMANY, ITALY, SPAIN, UNITED KINGDOM AND THE
REPUBLIC OF IRELAND, PROVIDED, HOWEVER, THAT (A) SHOULD THE EFV LICENSE
AGREEMENT BE AMENDED TO EXPAND BMS’ TERRITORY, THEN EFV LICENSE AGREEMENT
TERRITORY SHALL FORTHWITH MEAN BMS’ TERRITORY AS SO EXPANDED; AND (B) SHOULD THE
EFV LICENSE AGREEMENT BE TERMINATED AS A RESULT OF BMS’ ACQUISITION OF ALL THE
RIGHTS OF THE EFV LICENSOR THEREUNDER, THEN EFV LICENSE AGREEMENT TERRITORY
SHALL FORTHWITH MEAN ALL COUNTRIES IN THE WORLD.

 

1.83                           “EFV LICENSOR” SHALL MEAN, COLLECTIVELY, MERCK &
CO., INC., A NEW JERSEY CORPORATION, AND MERCK AND COMPANY INCORPORATED, A
DELAWARE CORPORATION, AND THEIR RESPECTIVE SUCCESSORS IN INTEREST.

 

1.84                           “ESTIMATED NET SELLING PRICE” SHALL HAVE THE
MEANING SET FORTH IN SECTION 7.1(C)(II).

 

1.85                           “EXCHANGE ACT” SHALL HAVE THE MEANING SET FORTH
IN SECTION 15.12(B).

 

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1.86                           “EXPLOITATION” SHALL MEAN THE MAKING, HAVING
MADE, IMPORTATION, USE, SALE, OFFERING FOR SALE OR DISPOSITION OF A PRODUCT OR
PROCESS, INCLUDING, WITHOUT LIMITATION, THE RESEARCH, DEVELOPMENT, REGISTRATION,
MODIFICATION, ENHANCEMENT, IMPROVEMENT, MANUFACTURING, STORAGE, FORMULATION,
OPTIMIZATION, IMPORT, EXPORT, TRANSPORT, DISTRIBUTION, PROMOTION OR MARKETING OF
A PRODUCT OR PROCESS.  WHEN USED AS A VERB, “EXPLOIT” SHALL MEAN TO ENGAGE IN
ANY OF THE FOREGOING ACTIVITIES.

 

1.87                           “EUROPE” SHALL MEAN ALL COUNTRIES COMPRISING THE
EUROPEAN UNION AS IT MAY BE CONSTITUTED FROM TIME TO TIME.

 

1.88                           “FDA” SHALL MEAN THE UNITED STATES FOOD AND DRUG
ADMINISTRATION AND ANY SUCCESSOR AGENCY THERETO.

 

1.89                           “FIELD” SHALL MEAN THE TREATMENT OF HIV INFECTION
IN ADULT HUMANS.

 

1.90                           “FIELD FORCE” SHALL MEAN SALES REPRESENTATIVES,
AND REGIONAL OR OTHER SUBNATIONAL MANAGERS OF THE FOREGOING.

 

1.91                           “FINAL INVOICE DATE” SHALL HAVE THE MEANING SET
FORTH IN SECTION 7.3(A).

 

1.92                           “FINISHED PRODUCT MANUFACTURING DATA” SHALL MEAN
ANY AND ALL DATA AND INFORMATION NECESSARY OR USEFUL FOR THE MANUFACTURE OF A
FINISHED PRODUCT, PACKAGED AND LABELED, FROM THE ACTIVE PHARMACEUTICAL
INGREDIENTS THEREOF, IN TABLET, CAPSULE OR OTHER FORM (BUT EXPRESSLY EXCLUDING
THE MANUFACTURE OF SUCH ACTIVE PHARMACEUTICAL INGREDIENTS), THAT IS NOT INCLUDED
IN ANY CMC DATA FOR SUCH FINISHED PRODUCT.

 

1.93                           “[*] CUSTOMERS” SHALL HAVE THE MEANING SET FORTH
IN ANNEX Q.

 

1.94                           “FTC” SHALL HAVE THE MEANING SET FORTH IN THE
RECITALS TO THIS AGREEMENT.

 

1.95                           “GAAP” SHALL MEAN UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES AS IN EFFECT FROM TIME TO TIME, AS CONSISTENTLY
APPLIED.

 

1.96                           “GENERIC VERSION” SHALL MEAN, WITH RESPECT TO THE
COMBINATION PRODUCT OR A SINGLE AGENT PRODUCT OR DOUBLE AGENT PRODUCT, A PRODUCT
CONTAINING THE SAME ACTIVE PHARMACEUTICAL INGREDIENTS AS THE COMBINATION PRODUCT
OR THE SINGLE AGENT PRODUCT OR DOUBLE AGENT PRODUCT, AS THE CASE MAY BE, WITH
THOSE BEING THE ONLY ACTIVE PHARMACEUTICAL INGREDIENTS IN SUCH PRODUCT, AND
WHICH PRODUCT IS APPROVED IN THE UNITED STATES UNDER AN ABBREVIATED NEW DRUG
APPLICATION (I.E., AN ANDA).

 

1.97                           “GENERIC VERSION LAUNCH” SHALL HAVE THE MEANING
SET FORTH IN SECTION 14.5.

 

1.98                           “GILEAD” SHALL HAVE THE MEANING SET FORTH IN THE
FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.99                           “GILEAD CORE IMPROVEMENT” SHALL MEAN ANY
IMPROVEMENT PERTAINING SPECIFICALLY TO GILEAD CORE TECHNOLOGY, WHICH IMPROVEMENT
IS CONCEIVED, DISCOVERED,

 

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DEVELOPED, OR OTHERWISE MADE, AS NECESSARY TO ESTABLISH AUTHORSHIP OR
INVENTORSHIP UNDER UNITED STATES COPYRIGHT OR PATENT LAW, AS THE CASE MAY BE,
SOLELY OR JOINTLY, BY OR ON BEHALF OF BMS OR ITS AFFILIATES OR THE JV IN THE
COURSE OF, AS A RESULT OF, OR IN CONNECTION WITH THE PROJECT ACTIVITIES
CONDUCTED PURSUANT TO THE DEVELOPMENT PLAN OR IN CONNECTION WITH CO-FUNDED
CLINICAL TRIALS;  PROVIDED, HOWEVER, THAT GILEAD CORE IMPROVEMENTS SHALL NOT
INCLUDE ANY DUAL IMPROVEMENTS.

 

1.100                     “GILEAD CORE TECHNOLOGY” SHALL MEAN ALL GILEAD
PROPRIETARY TECHNOLOGIES RELATING SPECIFICALLY TO THE EXPLOITATION OF FTC, TDF,
OR ANY COMBINATION OF FTC AND TDF (INCLUDING, WITHOUT LIMITATION, THE DOUBLE
AGENT PRODUCT, BUT EXCLUDING THE COMBINATION PRODUCT).

 

1.101                     “GILEAD GUARANTEE AGREEMENT” SHALL MEAN THE GUARANTEE
AGREEMENT EXECUTED BY GILEAD PARENT IN FAVOR OF BMS AND THE JV, DATED AS OF THE
EFFECTIVE DATE, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME.

 

1.102                     “GILEAD INDEMNIFIED PARTY” SHALL MEAN GILEAD SUB,
GILEAD PARENT AND ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS AND EMPLOYEES.

 

1.103                     “GILEAD INVENTIONS” SHALL MEAN ANY INFORMATION AND
INVENTIONS (WHETHER OR NOT PATENTABLE; AND IMPROVEMENTS THERETO, INCLUDING BMS
CORE IMPROVEMENTS TO THE EXTENT OWNED BY GILEAD) CONCEIVED, DISCOVERED,
DEVELOPED OR OTHERWISE MADE, AS NECESSARY TO ESTABLISH AUTHORSHIP OR
INVENTORSHIP UNDER UNITED STATES COPYRIGHT OR PATENT LAW, AS THE CASE MAY BE,
SOLELY (OR, IN THE CASE OF BMS CORE IMPROVEMENTS, SOLELY OR JOINTLY) BY OR ON
BEHALF OF GILEAD OR ITS AFFILIATES, IN THE COURSE OF, AS A RESULT OF OR IN
CONNECTION WITH THE PROJECT ACTIVITIES CONDUCTED PURSUANT TO THE DEVELOPMENT
PLAN OR IN CONNECTION WITH CO-FUNDED CLINICAL TRIALS, BUT EXCLUDING ANY JOINT
INVENTIONS.

 

1.104                     “GILEAD KNOW-HOW” SHALL MEAN ANY AND ALL INFORMATION
AND INVENTIONS UNDER THE CONTROL OF GILEAD OR ITS AFFILIATES AS OF THE EFFECTIVE
DATE OR AT ANY TIME DURING THE TERM OF THIS AGREEMENT THAT ARE NECESSARY OR
REASONABLY USEFUL FOR THE EXPLOITATION OF THE COMBINATION PRODUCT AND ARE NOT
GENERALLY KNOWN, BUT EXCLUDING ANY AND ALL (A) SUCH INFORMATION AND INVENTIONS
TO THE EXTENT CLAIMED BY THE GILEAD PATENTS AND (B) JOINT KNOW-HOW.

 

1.105                     “GILEAD LICENSED TRADEMARKS” SHALL HAVE THE MEANING
SET FORTH IN SECTION 6.6(A).

 

1.106                     “GILEAD PARENT” SHALL HAVE THE MEANING SET FORTH IN
THE FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.107                     “GILEAD PATENTS” SHALL MEAN ALL OF THE PATENTS THAT
GILEAD OR ITS AFFILIATES CONTROL AS OF THE EFFECTIVE DATE OR AT ANY TIME DURING
THE TERM OF THIS AGREEMENT THAT WOULD, IN THE ABSENCE OF THE LICENSE GRANTED BY
GILEAD IN SECTION 6.1(A) AND ASSUMING THAT THE TDF AND FTC ACTIVE PHARMACEUTICAL
INGREDIENTS THEREIN WERE NOT PURCHASED FROM GILEAD, BE INFRINGED BY THE
EXPLOITATION OF THE COMBINATION PRODUCT BY THE JV IN ANY COUNTRY IN THE WORLD. 
A LIST OF THE GILEAD PATENTS IN THE TERRITORY AS OF THE EFFECTIVE DATE IS
ATTACHED HERETO AS ANNEX E.

 

1.108                     “GILEAD REGULATORY DOCUMENTATION” SHALL MEAN ALL
REGULATORY DOCUMENTATION APPLICABLE TO VIREAD (OR TDF), EMTRIVA (OR FTC), OR
TRUVADA (OR TDF IN CO-

 

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FORMULATION WITH FTC) BUT NOT VIREAD (OR TDF), EMTRIVA (OR FTC) OR TRUVADA (OR
TDF AND FTC) IN CO-FORMULATION WITH SUSTIVA (OR EFV), THAT IS OR WAS DEVELOPED
BY OR ON BEHALF OF GILEAD OR ANY OF ITS AFFILIATES OR SUBLICENSEES PRIOR TO THE
EFFECTIVE DATE OR DURING THE TERM OF THIS AGREEMENT.

 

1.109                     “GILEAD SUB” SHALL HAVE THE MEANING SET FORTH IN THE
FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.110                     “GILEAD SUPPLY AGREEMENT” SHALL MEAN THE SUPPLY
AGREEMENT ENTERED INTO BETWEEN GILEAD PARENT AND THE JV CONCURRENTLY WITH THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, AS SUCH AGREEMENT MAY BE AMENDED FROM
TIME TO TIME.

 

1.111                     “GILEAD TECHNOLOGY” SHALL MEAN, COLLECTIVELY, THE
GILEAD KNOW-HOW AND THE GILEAD PATENTS.

 

1.112                     “GILEAD TRANSFER PRICE” SHALL HAVE THE MEANING SET
FORTH IN SECTION 7.1(A).

 

1.113                     “[*]” SHALL HAVE THE MEANING SET FORTH IN [*].

 

1.114                     “[*]” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.3(D).

 

1.115                     “GOOD CLINICAL PRACTICE” OR “GCP” SHALL MEAN THE
THEN-CURRENT STANDARDS FOR CLINICAL TRIALS FOR PHARMACEUTICAL PRODUCTS, AS SET
FORTH IN THE ACT AND APPLICABLE REGULATIONS PROMULGATED THEREUNDER, AS THE SAME
MAY BE AMENDED FROM TIME TO TIME.

 

1.116                     “GOOD LABORATORY PRACTICE” OR “GLP” SHALL MEAN THE
THEN-CURRENT STANDARDS FOR LABORATORY ACTIVITIES FOR PHARMACEUTICAL PRODUCTS, AS
SET FORTH IN THE ACT AND APPLICABLE REGULATIONS PROMULGATED THEREUNDER, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME.

 

1.117                     “GOOD MANUFACTURING PRACTICE” OR “GMP” SHALL MEAN THE
REGULATORY REQUIREMENTS FOR CURRENT GOOD MANUFACTURING PRACTICES FOR
PHARMACEUTICAL PRODUCTS PROMULGATED BY THE FDA, INCLUDING AS SET FORTH IN U.S.
FOOD, DRUG AND COSMETIC ACT, 21 C.F.R. (PARTS 210, 211, 600 AND 610), AS THE
SAME MAY BE AMENDED FROM TIME TO TIME.

 

1.118                     “IMPROVEMENT” SHALL MEAN ANY MODIFICATION TO A
COMPOUND, COMPOSITION, PRODUCT OR TECHNOLOGY OR TO ANY DISCOVERY, DEVICE,
PROCESS OR FORMULATION RELATED TO SUCH COMPOUND, COMPOSITION, PRODUCT OR
TECHNOLOGY, WHETHER OR NOT PATENTED OR PATENTABLE, INCLUDING, WITHOUT
LIMITATION, ANY ENHANCEMENT IN THE EFFICIENCY, OPERATION, MANUFACTURE,
INGREDIENTS, PREPARATION, PRESENTATION, FORMULATION, MEANS OF DELIVERY,
PACKAGING OR DOSAGE OF A COMPOUND, COMPOSITION, PRODUCT OR TECHNOLOGY, OR OF ANY
DISCOVERY, DEVICE, PROCESS OR FORMULATION RELATED THERETO; ANY DISCOVERY OR
DEVELOPMENT OF ANY NEW OR EXPANDED INDICATIONS OR APPLICATIONS FOR A COMPOUND,
COMPOSITION, PRODUCT OR TECHNOLOGY; ANY DISCOVERY OR DEVELOPMENT THAT IMPROVES
THE STABILITY, SAFETY OR EFFICACY OF A COMPOUND, COMPOSITION, PRODUCT OR
TECHNOLOGY; OR ANY DISCOVERY OR DEVELOPMENT OF A NEW DOSAGE REGIMEN FOR A
PRODUCT OR METHOD OF USE OR ADMINISTRATION FOR A COMPOUND, COMPOSITION, PRODUCT
OR TECHNOLOGY.

 

1.119                     “IND” SHALL MEAN AN INVESTIGATIONAL NEW DRUG
APPLICATION TO BE FILED WITH THE FDA IN ACCORDANCE WITH APPLICABLE LAW.

 

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1.120                     “INDEMNIFIED PARTY” SHALL MEAN A PERSON SEEKING
INDEMNIFICATION FOR LOSSES PURSUANT TO SECTION 13.8.

 

1.121                     “INDEMNIFYING MEMBER PARTY” SHALL HAVE THE MEANING SET
FORTH IN SECTION 13.6.

 

1.122                     “INDEMNIFYING PARTY” SHALL MEAN A PARTY FROM WHICH
INDEMNIFICATION IS SOUGHT PURSUANT TO SECTION 13.8.

 

1.123                     “INDEPENDENT ACCOUNTING EXPERT” SHALL HAVE THE MEANING
SET FORTH IN SECTION 7.1(D).

 

1.124                     “INFORMATION AND INVENTIONS” SHALL MEAN ALL TECHNICAL,
SCIENTIFIC AND OTHER KNOW-HOW AND INFORMATION, TRADE SECRETS, KNOWLEDGE,
TECHNOLOGY, MEANS, METHODS, PROCESSES, PRACTICES, FORMULAS, INSTRUCTIONS,
SKILLS, TECHNIQUES, PROCEDURES, EXPERIENCES, IDEAS, TECHNICAL ASSISTANCE,
DESIGNS, DRAWINGS, ASSEMBLY PROCEDURES, COMPUTER PROGRAMS, APPARATUSES,
SPECIFICATIONS, DATA, RESULTS AND OTHER MATERIAL, INCLUDING, WITHOUT LIMITATION,
PRE-CLINICAL AND CLINICAL TRIAL RESULTS, MANUFACTURING PROCEDURES, TEST
PROCEDURES, AND PURIFICATION AND ISOLATION TECHNIQUES, (WHETHER OR NOT
CONFIDENTIAL, PROPRIETARY, PATENTED OR PATENTABLE) IN WRITTEN, ELECTRONIC OR ANY
OTHER FORM NOW KNOWN OR HEREAFTER DEVELOPED, AND ALL IMPROVEMENTS, WHETHER TO
THE FOREGOING OR OTHERWISE, AND ALL OTHER DISCOVERIES, DEVELOPMENTS, INVENTIONS
(WHETHER OR NOT CONFIDENTIAL, PROPRIETARY, PATENTED OR PATENTABLE), AND TANGIBLE
EMBODIMENTS OF ANY OF THE FOREGOING.

 

1.125                     “INFRINGEMENT” SHALL HAVE THE MEANING SET FORTH IN
SECTION 11.3(A).

 

1.126                     “INFRINGING COMBINATION PRODUCT” SHALL HAVE THE
MEANING SET FORTH IN SECTION 11.3(A).

 

1.127                     “INITIAL LAUNCH PERIOD” SHALL MEAN THE FIRST [*]
COMMENCING WITH THE LAUNCH OF THE COMBINATION PRODUCT IN THE TERRITORY.

 

1.128                     “INITIATING MEMBER” SHALL HAVE THE MEANING SET FORTH
IN SECTION 7.1(E).

 

1.129                     “INTERIM BMS UNIT TRANSFER PRICE” SHALL HAVE THE
MEANING SET FORTH IN SECTION 7.1(A).

 

1.130                     “INTERIM GILEAD UNIT TRANSFER PRICE” SHALL HAVE THE
MEANING SET FORTH IN SECTION 7.1(A).

 

1.131                     “INTERIM UNIT TRANSFER PRICE” SHALL MEAN, FOR EACH
CALENDAR YEAR, WITH RESPECT TO BMS, THE INTERIM BMS UNIT TRANSFER PRICE AND WITH
RESPECT TO GILEAD, THE INTERIM GILEAD UNIT TRANSFER PRICE.

 

1.132                     “JOINT COMMERCIALIZATION COMMITTEE” OR “JCC” SHALL
HAVE THE MEANING SET FORTH IN SECTION 2.4(A).

 

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1.133                     “JOINT DEVELOPMENT COMMITTEE” OR “JDC” SHALL HAVE THE
MEANING SET FORTH IN SECTION 2.3(A).

 

1.134                     “JOINT EXECUTIVE COMMITTEE” OR “JEC” SHALL HAVE THE
MEANING SET FORTH IN SECTION 6.1 OF THE OPERATING AGREEMENT.

 

1.135                     “JOINT FINANCE COMMITTEE” OR “JFC” SHALL HAVE THE
MEANING SET FORTH IN SECTION 2.5(A).

 

1.136                     “JOINT INVENTIONS” SHALL MEAN (A) ANY AND ALL
INFORMATION AND INVENTIONS PERTAINING SPECIFICALLY TO THE COMBINATION PRODUCT
(WHETHER OR NOT PATENTABLE; AND IMPROVEMENTS THERETO) CONCEIVED, DISCOVERED,
DEVELOPED OR OTHERWISE MADE, AS NECESSARY TO ESTABLISH AUTHORSHIP OR
INVENTORSHIP UNDER UNITED STATES COPYRIGHT OR PATENT LAW, AS THE CASE MAY BE, BY
OR ON BEHALF OF BMS OR ITS AFFILIATES, GILEAD OR ITS AFFILIATES, THE JV, OR
JOINTLY ANY COMBINATION OF THEM, IN THE COURSE OF, AS A RESULT OF OR IN
CONNECTION WITH THE PROJECT ACTIVITIES CONDUCTED PURSUANT TO THE DEVELOPMENT
PLAN OR IN CONNECTION WITH CO-FUNDED CLINICAL TRIALS; AND (B) ANY DUAL
IMPROVEMENT.

 

1.137                     “JOINT KNOW-HOW” MEANS ALL INFORMATION AND INVENTIONS
INCLUDED IN THE JOINT INVENTIONS THAT ARE NOT GENERALLY KNOWN, BUT EXCLUDING ANY
INFORMATION AND INVENTIONS TO THE EXTENT CLAIMED BY THE JOINT PATENTS.  FOR THE
AVOIDANCE OF DOUBT, “JOINT KNOW-HOW” SHALL INCLUDE ALL CLINICAL DATA FROM THE
PROPOSED BIOEQUIVALENCE STUDY CONTEMPLATED BY THE DEVELOPMENT PLAN.

 

1.138                     “JOINT PATENTS” SHALL MEAN ANY PATENTS TO THE EXTENT
THAT SUCH PATENTS CLAIM JOINT INVENTIONS.

 

1.139                     “JOINT TECHNOLOGY” SHALL MEAN, COLLECTIVELY, THE JOINT
KNOW-HOW AND THE JOINT PATENTS.

 

1.140                     “JV” SHALL HAVE THE MEANING SET FORTH IN THE FIRST
PARAGRAPH OF THIS AGREEMENT.

 

1.141                     “JV EXPENSES” SHALL MEAN ALL DIRECT, OUT-OF-POCKET
EXPENSES THAT GILEAD OR BMS MAY INCUR (OR CAUSE THEIR AFFILIATES TO INCUR) IN
PERFORMING THE PROJECT ACTIVITIES ON BEHALF OF THE JV.  FOR THE AVOIDANCE OF
DOUBT, WITH RESPECT TO ANY JV EXPENSES INCURRED BY A MEMBER PARTY (OR ITS
AFFILIATES), SUCH EXPENSES ARE CHARGEABLE TO THE JV BY SUCH MEMBER PARTY ONLY IF
SUCH EXPENSES CONSTITUTE AUTHORIZED EXPENSES.

 

1.142                     “KEY REGULATORY SUBMISSIONS” SHALL HAVE THE MEANING
SET FORTH IN SECTION 3.4(A).

 

1.143                     “LAUNCH” SHALL MEAN, WITH RESPECT TO THE TERRITORY,
EITHER (A) THE DATE ON WHICH THE COMBINATION PRODUCT IS FIRST SHIPPED BY OR ON
BEHALF OF THE JV FOR COMMERCIAL SALE TO THIRD PARTIES OR (B) FOR ANY GENERIC
VERSION PRODUCT REFERRED TO IN SECTION 14.5, THE DATE ON WHICH IT IS FIRST
AVAILABLE FOR COMMERCIAL SALE AND PURCHASE, AS THE CASE MAY BE.

 

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1.144                     “LOSSES” SHALL MEAN JUDGMENTS, FINES, AMOUNTS PAID IN
SETTLEMENT, AND OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES)
REASONABLY INCURRED BY A PARTY (OR OTHER INDEMNITEE AS PROVIDED IN SECTION 13)
IN A PROCEEDING.

 

1.145                     “[*]” SHALL HAVE THE MEANING SET FORTH IN ANNEX Q.

 

1.146                     “MANUFACTURE” OR “MANUFACTURING” MEANS, WITH RESPECT
TO A PRODUCT OR COMPOUND, THE MANUFACTURING, PROCESSING, FORMULATING, PACKAGING,
LABELING, HOLDING, AND QUALITY CONTROL TESTING OF SUCH PRODUCT OR COMPOUND.

 

1.147                     “MANUFACTURING PROCESS” SHALL MEAN ANY PROCESS OR STEP
THEREOF THAT IS NECESSARY OR USEFUL FOR MANUFACTURING THE COMBINATION PRODUCT
FROM BULK ACTIVE PHARMACEUTICAL INGREDIENTS, ANY IMPROVEMENTS THERETO OR ANY
INTERMEDIATE OF THE FOREGOING.

 

1.148                     “MARKET” OR “MARKETING” SHALL MEAN ALL PROGRAMS AND
ACTIVITIES RELATING TO THE PROMOTION AND SALE AND OTHER COMMERCIALIZATION OF THE
COMBINATION PRODUCT IN THE TERRITORY, INCLUDING, WITHOUT LIMITATION, DETAILING
AND ADVERTISING, AS WELL AS SELLING, CONTRACTING FOR SALE OF, AND DISTRIBUTING
THE COMBINATION PRODUCT.

 

1.149                     “MATERIAL DEFAULT” SHALL HAVE THE MEANING SET FORTH IN
SECTION 14.4(A).

 

1.150                     “MEMBER PARTIES” SHALL MEAN, COLLECTIVELY, GILEAD AND
BMS.

 

1.151                     “MEMBERS” SHALL MEAN, COLLECTIVELY, GILEAD SUB AND BMS
SUB.

 

1.152                     “MEMBER VOTE” SHALL HAVE THE MEANING SET FORTH IN
SECTION 2.6(F).

 

1.153                     “[*]” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.1(F).

 

1.154                     “[*]” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.1(F).

 

1.155                     “MTTA” SHALL HAVE THE MEANING SET FORTH IN
SECTION 15.14.

 

1.156                     “NDA” SHALL MEAN A NEW DRUG APPLICATION TO BE FILED
WITH THE FDA IN ACCORDANCE WITH APPLICABLE LAW FOR THE PURPOSE OF OBTAINING
MARKETING APPROVAL FOR A PHARMACEUTICAL PRODUCT IN THE UNITED STATES.

 

1.157                     “[*]” SHALL HAVE THE MEANING SET FORTH IN ANNEX Q.

 

1.158                     “NET SALES” SHALL MEAN, WITH RESPECT TO A PRODUCT FOR
ANY PERIOD, THE GROSS AMOUNT INVOICED FOR COMMERCIAL SALES OF THAT PRODUCT IN
SUCH PERIOD BY OR ON BEHALF OF THE SELLING PARTY TO THIRD PARTIES (PROVIDED THAT
AMOUNTS INVOICED FOR PRODUCT SOLD OR PROVIDED FOR USE IN THE DEVELOPING WORLD,
IF ANY, SHALL NOT BE INCLUDED), LESS DEDUCTIONS FOR:  (A) NORMAL AND CUSTOMARY
QUANTITY AND/OR CASH DISCOUNTS AND SALES RETURNS AND ALLOWANCES, INCLUDING,
WITHOUT LIMITATION, THOSE GRANTED ON ACCOUNT OF PRICE ADJUSTMENTS, BILLING
ERRORS, REJECTED GOODS, DAMAGED GOODS, RETURNS, REBATES, ADMINISTRATIVE OR OTHER
FEES OR REIMBURSEMENTS OR SIMILAR PAYMENTS TO WHOLESALERS OR OTHER DISTRIBUTORS
(INCLUDING WITHOUT LIMITATION PURSUANT TO INVENTORY MANAGEMENT AGREEMENTS),
BUYING GROUPS, AIDS DRUG ASSISTANCE PROGRAMS, PHARMACY BENEFIT MANAGEMENT

 

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ORGANIZATIONS, HEALTH CARE INSURANCE CARRIERS OR OTHER INSTITUTIONS, ALLOWANCES,
REBATES, FEES PAID TO DISTRIBUTORS AND CHARGEBACKS ACTUALLY ALLOWED OR GIVEN;
(B) FREIGHT, POSTAGE, SHIPPING AND INSURANCE EXPENSES (IF SEPARATELY IDENTIFIED
IN SUCH INVOICE); (C) CUSTOMS OR EXCISE DUTIES OR OTHER DUTIES RELATED TO THE
SALES MAKING UP THE GROSS INVOICE AMOUNT (IF SEPARATELY IDENTIFIED IN SUCH
INVOICE); (D) ANY REBATES OR SIMILAR PAYMENTS ACCRUED WITH RESPECT TO SALES PAID
FOR BY ANY GOVERNMENTAL OR REGULATORY AUTHORITY SUCH AS, BY WAY OF ILLUSTRATION
AND NOT IN LIMITATION OF THE FOREGOING IN THIS CLAUSE (D), UNITED STATES FEDERAL
OR STATE MEDICAID, MEDICARE OR SIMILAR STATE PROGRAM OR ANY GOVERNMENT IMPOSED
RETROACTIVE PRICE REDUCTION; AND (E) SALES AND OTHER TAXES AND DUTIES DIRECTLY
RELATED TO THE SALE, TO THE EXTENT THAT SUCH ITEMS ARE INCLUDED IN THE GROSS
INVOICE PRICE (BUT NOT INCLUDING TAXES ASSESSED AGAINST THE INCOME DERIVED FROM
SUCH SALE).  ANY OF THE DEDUCTIONS LISTED ABOVE THAT INVOLVES A PAYMENT BY SUCH
PARTY SHALL NOT BE TAKEN AS A DEDUCTION PRIOR TO THE DATE ACCRUED IN ACCORDANCE
WITH GAAP AS CONSISTENTLY APPLIED IN SUCH PARTY’S AUDITED FINANCIAL STATEMENTS. 
FOR PURPOSES OF DETERMINING NET SALES PURSUANT TO SECTION 14.6(B)(II), THE
COMBINATION PRODUCT SHALL BE DEEMED TO BE SOLD WHEN INVOICED.

 

For purposes of calculating Net Sales, sales between or among a Party and/or
Affiliates shall be excluded from the computation of Net Sales, but sales by
such Party and its Affiliates to Third Parties shall be included in the
computation of Net Sales.

 

1.159                     “NET SELLING PRICE” SHALL MEAN THE PRICE OF A
PHARMACEUTICAL PRODUCT AS CALCULATED IN ACCORDANCE WITH ANNEX I HERETO.

 

1.160                     “NON-BREACHING MEMBER PARTY” SHALL HAVE THE MEANING
SET FORTH IN SECTION 14.4(A).

 

1.161                     “OPERATING AGREEMENT” SHALL HAVE THE MEANING SET FORTH
IN THE RECITALS TO THIS AGREEMENT.

 

1.162                     “OPERATING COMMITTEES” SHALL MEAN, COLLECTIVELY, THE
JCC, THE JDC AND THE JFC.

 

1.163                     “OPTIONAL UPDATE” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.7(D).

 

1.164                     “PARAGRAPH (IV) CERTIFICATION” SHALL HAVE THE MEANING
SET FORTH IN SECTION 11.3(A).

 

1.165                     “PARTY” AND “PARTIES” SHALL HAVE THE MEANINGS SET
FORTH IN THE FIRST PARAGRAPH OF THIS AGREEMENT.

 

1.166                     “PATENTS” SHALL MEAN (A) ALL PATENTS AND PATENT
APPLICATIONS (INCLUDING, WITHOUT LIMITATION, PROVISIONAL APPLICATIONS), (B) ANY
SUBSTITUTIONS, DIVISIONS, CONTINUATIONS, CONTINUATIONS-IN-PART, REISSUES,
RENEWALS, REGISTRATIONS, CONFIRMATIONS, RE-EXAMINATIONS, EXTENSIONS,
SUPPLEMENTARY PROTECTION CERTIFICATES AND THE LIKE, AND (C) ANY FOREIGN OR
INTERNATIONAL EQUIVALENTS OF ANY OF THE FOREGOING.

 

1.167                     “PCT” SHALL MEAN THE PATENT COOPERATION TREATY, OPENED
FOR SIGNATURE JUNE 19, 1970, 58 U.S.T. 7645.

 

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1.168                     “PERMITTED ASSIGNEE” SHALL HAVE THE MEANING SET FORTH
IN SECTION 15.4(A).

 

1.169                     “PERSON” SHALL MEAN AN INDIVIDUAL, SOLE
PROPRIETORSHIP, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABILITY PARTNERSHIP,
CORPORATION, LIMITED LIABILITY COMPANY, BUSINESS TRUST, JOINT STOCK COMPANY,
TRUST, UNINCORPORATED ASSOCIATION, JOINT VENTURE OR OTHER SIMILAR ENTITY OR
ORGANIZATION, INCLUDING, WITHOUT LIMITATION, A GOVERNMENT OR POLITICAL
SUBDIVISION, DEPARTMENT OR AGENCY OF A GOVERNMENT.

 

1.170                     “PRESCRIPTION DRUG MARKETING ACT” OR “PDMA” SHALL HAVE
THE MEANING SET FORTH IN SECTION 5.1(D).

 

1.171                     “PRICING COMMITTEE” SHALL HAVE THE MEANING SET FORTH
IN SECTION 5.3(B).

 

1.172                     “PRICING INFORMATION” SHALL HAVE THE MEANING SET FORTH
IN SECTION 5.3(H).

 

1.173                     “PROCEEDING” SHALL MEAN A CIVIL, CRIMINAL,
ADMINISTRATIVE OR INVESTIGATIVE PROCEEDING BROUGHT BY OR A DEMAND MADE BY A
THIRD PARTY.

 

1.174                     “PRODUCT DETAIL PERIOD” SHALL HAVE THE MEANING SET
FORTH IN SECTION 5.1(E).

 

1.175                     “PRODUCT EFV YIELD” SHALL HAVE THE MEANING SET FORTH
IN ANNEX K.

 

1.176                     “PRODUCT FTC YIELD” SHALL HAVE THE MEANING SET FORTH
IN ANNEX K.

 

1.177                     “PRODUCT TDF YIELD” SHALL HAVE THE MEANING SET FORTH
IN ANNEX K.

 

1.178                     “PROJECT ACTIVITIES” SHALL MEAN ANY AND ALL ACTIVITIES
UNDERTAKEN OR PERFORMED BY OR ON BEHALF OF ANY OF THE PARTIES, PURSUANT TO THIS
AGREEMENT OR THE MTTA, IN THE COURSE OF, AS A RESULT OF OR IN CONNECTION WITH
THE RESEARCH, DEVELOPMENT, MARKETING, SALE OR USE OF THE COMBINATION PRODUCT,
INCLUDING, WITHOUT LIMITATION, THE DEVELOPMENT ACTIVITIES AND THE
COMMERCIALIZATION ACTIVITIES;  PROVIDED, HOWEVER, THAT PROJECT ACTIVITIES SHALL
NOT INCLUDE ANY ACTIVITIES UNDERTAKEN OR PERFORMED BY OR ON BEHALF OF EITHER
MEMBER PARTY OR ITS AFFILIATES OR SUBLICENSEES TO THE EXTENT THAT THEY ARISE IN
THE COURSE OF, AS A RESULT OF OR IN CONNECTION WITH THE EXPLOITATION OF THE
COMBINATION PRODUCT FOR USE OUTSIDE THE TERRITORY (INCLUDING, WITHOUT
LIMITATION, ANY ACTIVITIES UNDERTAKEN OR PERFORMED BY GILEAD IN THE EXERCISE OF
ITS RIGHTS UNDER THE LICENSE GRANTED IN SECTION 6.2(D)).

 

1.179                     “PROMOTION” SHALL MEAN THE CONDUCT OF ACTIVITIES
NORMALLY UNDERTAKEN BY A PHARMACEUTICAL COMPANY’S FIELD FORCE TO IMPLEMENT PLANS
AND STRATEGIES FOR MARKETING AND OTHER COMMERCIALIZATION AIMED AT ENCOURAGING
THE APPROVED USE OF A PHARMACEUTICAL PRODUCT, INCLUDING BUT NOT LIMITED TO
DETAILING.  WHEN USED AS A VERB, “PROMOTE” SHALL MEAN TO ENGAGE IN ANY OF THE
FOREGOING ACTIVITIES.

 

1.180                     “PSUR” MEANS A PERIODIC SAFETY UPDATE REPORT REQUIRED
TO BE SUBMITTED TO THE FDA.

 

1.181                     “PUBLICATION STANDARDS” SHALL HAVE THE MEANING SET
FORTH IN SECTION 3.11(A).

 

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1.182                     “[*]” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.1(F).

 

1.183                     “RECALCULATED TRANSFER PRICE” SHALL HAVE THE MEANING
SET FORTH IN SECTION 7.1(C)(III).

 

1.184                     “RECEIVING PARTY” SHALL HAVE THE MEANING SET FORTH IN
SECTION 12.1.

 

1.185                     “REGULATORY AUTHORITIES” SHALL MEAN ANY APPLICABLE
SUPRA-NATIONAL, FEDERAL, NATIONAL, REGIONAL, STATE, PROVINCIAL OR LOCAL
REGULATORY AGENCIES, DEPARTMENTS, BUREAUS, COMMISSIONS, COUNCILS OR OTHER
GOVERNMENT ENTITIES, INCLUDING, WITHOUT LIMITATION, THE FDA, OR OTHER ENTITY
EXERCISING REGULATORY AUTHORITY WITH RESPECT TO THE EXPLOITATION OF THE
COMBINATION PRODUCT IN THE TERRITORY.

 

1.186                     “REGULATORY DOCUMENTATION” SHALL MEAN ALL SUBMISSIONS
TO REGULATORY AUTHORITIES IN THE TERRITORY, INCLUDING, WITHOUT LIMITATION, ALL
INDS, NDAS, SNDAS, CMC DATA, DRUG MASTER FILES, CORRESPONDENCE WITH REGULATORY
AGENCIES (REGISTRATIONS AND LICENSES, REGULATORY DRUG LISTS, ADVERTISING AND
PROMOTION DOCUMENTS), PSURS, ADVERSE EVENT FILES, COMPLAINT FILES AND
MANUFACTURING RECORDS.

 

1.187                     “RELEVANT EXPERIENCE INFORMATION” SHALL MEAN ADVERSE
EXPERIENCE REPORTS, REPORTS BASED ON MARKETING DATA AND OTHER DOCUMENTATION OF
RELEVANT DRUG EXPERIENCE.

 

1.188                     “REQUESTING MEMBER” SHALL HAVE THE MEANING SET FORTH
IN SECTION 5.3(G).

 

1.189                     “REQUIRED UPDATE” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.7(B).

 

1.190                     “RESPECTIVE PERCENTAGE” SHALL MEAN, WITH RESPECT TO
GILEAD, THE ACTUAL GILEAD PERCENTAGE, AND WITH RESPECT TO BMS, THE ACTUAL BMS
PERCENTAGE; PROVIDED, HOWEVER, THAT WHENEVER THIS AGREEMENT PROVIDES THAT AN
AMOUNT SHALL BE ALLOCATED BETWEEN THE MEMBER PARTIES BASED ON THEIR RESPECTIVE
PERCENTAGES, SUCH ALLOCATION SHALL FIRST BE MADE ON THE BASIS OF THE MEMBER
PARTIES’ RESPECTIVE WORKING PERCENTAGES AT THE TIME OF THE RELEVANT EVENT, WHICH
ALLOCATION SHALL THEN BE ADJUSTED, IF APPLICABLE, AFTER THE DETERMINATION OF THE
MEMBER PARTIES’ RESPECTIVE ACTUAL PERCENTAGES FOR THE CALENDAR YEAR IN WHICH THE
RELEVANT EVENT OCCURS, WHICH ADJUSTMENTS SHALL OCCUR NO LATER THAN APRIL 1 OF
THE NEXT CALENDAR YEAR UNLESS OTHERWISE PROVIDED IN THIS AGREEMENT OR THE
OPERATING AGREEMENT, OR OTHERWISE AGREED IN WRITING BY THE MEMBER PARTIES.

 

1.191                     “RIGHT OF REFERENCE” SHALL HAVE THE MEANING SET FORTH
IN 21 C.F.R. § 314.3(B) OR ALTERNATIVELY SHALL MEAN EQUIVALENTS THERETO IN
JURISDICTIONS OUTSIDE THE TERRITORY.  FOR THE AVOIDANCE OF DOUBT, AS USED IN
THIS AGREEMENT “RIGHT OF REFERENCE” SHALL REFER TO THE RIGHT OF REGULATORY
AUTHORITIES TO RELY UPON AND OTHERWISE USE THE APPLICABLE INFORMATION, BUT SHALL
NOT CONFER ON THE MEMBER PARTY TO WHICH SUCH RIGHT OF REFERENCE IS GRANTED ANY
RIGHT TO RECEIVE OR ACCESS SUCH INFORMATION.

 

1.192                     “[*]” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.3(A).

 

1.193                     “SDEA” OR “SAFETY DATA EXCHANGE AGREEMENT” SHALL HAVE
THE MEANING SET FORTH IN SECTION 9.1.

 

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1.194                     “SELECTED PRODUCT LIABILITY CLAIM” SHALL HAVE THE
MEANING SET FORTH IN SECTION 13.7(C).

 

1.195                     “SERVICES AGREEMENT” SHALL MEAN THE DISTRIBUTION
SERVICES AGREEMENT TO BE ENTERED INTO BETWEEN GILEAD PARENT AND THE JV AFTER THE
EFFECTIVE DATE, THE KEY TERMS OF WHICH ARE OUTLINED IN ANNEX P HERETO, AS SUCH
AGREEMENT MAY BE AMENDED FROM TIME TO TIME.

 

1.196                     “SINGLE AGENT PRODUCT” SHALL MEAN EACH OF VIREAD,
EMTRIVA, AND SUSTIVA.

 

1.197                     “STUDY 934” SHALL MEAN THE CLINICAL STUDY INITIATED BY
GILEAD PRIOR TO THE EFFECTIVE DATE UNDER GILEAD’S CLINICAL STUDY PROTOCOL
ENTITLED “A PHASE 3, RANDOMIZED, OPEN-LABEL, MULTICENTER STUDY OF THE TREATMENT
OF ANTIRETROVIRAL-NAÏVE, HIV-1-INFECTED SUBJECTS COMPARING TENOFOVIR DISOPROXIL
FUMARATE AND EMTRICITABINE IN COMBINATION WITH EFAVIRENZ VERSUS COMBIVIR®
(LAMIVUDINE/ZIDOVUDINE) AND EFAVIRENZ” (AS SUCH PROTOCOL MAY BE REVISED AND SUCH
STUDY MAY BE EXTENDED OR EXPANDED FROM TIME TO TIME, IN EACH CASE BY GILEAD). 
FOR THE AVOIDANCE OF DOUBT, THE CONDUCT OF STUDY 934 SHALL NOT BE DEEMED A
DEVELOPMENT ACTIVITY OR PROJECT ACTIVITY FOR PURPOSES OF THIS AGREEMENT, AND
CLINICAL DATA DERIVED OR GENERATED FROM STUDY 934 OR FROM TESTING OR ANALYSIS OF
SUBJECTS OR SAMPLES FROM STUDY 934 SHALL BE GILEAD KNOW-HOW, NOT JOINT KNOW-HOW.

 

1.198                     “SUBSEQUENT LAUNCH PERIOD” SHALL MEAN THE [*] AFTER
THE LAUNCH OF THE COMBINATION PRODUCT IN THE TERRITORY.

 

1.199                     “SUPPLIER” SHALL MEAN EACH PERSON SELECTED AS A
COMMERCIAL SUPPLIER OF THE COMBINATION PRODUCT PURSUANT TO SECTION 4.2(A).

 

1.200                     “SUPPLY AGREEMENTS” SHALL MEAN, COLLECTIVELY, THE BMS
SUPPLY AGREEMENT AND THE GILEAD SUPPLY AGREEMENT.

 

1.201                     “SUPPLY PARTY” SHALL MEAN, WITH RESPECT TO ANY
SUPPLIER, (A) IF A MEMBER PARTY IS THE SUPPLIER, SUCH MEMBER PARTY, OR (B) IF A
THIRD PARTY IS THE SUPPLIER, THE MEMBER PARTY THAT IS DESIGNATED PURSUANT TO
SECTION 4.2(A) TO MANAGE THE RELATIONSHIP WITH SUCH SUPPLIER.

 

1.202                     “TDF” SHALL HAVE THE MEANING SET FORTH IN THE RECITALS
TO THIS AGREEMENT.

 

1.203                     “TECHNOLOGY” SHALL MEAN THE BMS TECHNOLOGY OR THE
GILEAD TECHNOLOGY, AS THE CASE MAY BE.

 

1.204                     “TERMINATED MEMBER PARTY” SHALL MEAN A MEMBER PARTY AS
SO DESIGNATED PURSUANT TO SECTION 14.5.

 

1.205                     “TERRITORY” SHALL MEAN THE UNITED STATES, THE
COMMONWEALTH OF PUERTO RICO AND ANY OTHER TERRITORIES AND POSSESSIONS OF THE
UNITED STATES.

 

1.206                     “THIRD PARTY” SHALL MEAN ANY PERSON OTHER THAN GILEAD,
BMS, THE JV AND THEIR RESPECTIVE AFFILIATES.

 

1.207                     “THIRD PARTY ACQUIRER” SHALL HAVE THE MEANING SET
FORTH IN SECTION 1.43.

 

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1.208                     “TRADEMARK” SHALL INCLUDE ANY WORD, NAME, SYMBOL,
COLOR, DESIGNATION OR DEVICE OR ANY COMBINATION THEREOF, INCLUDING, WITHOUT
LIMITATION, ANY TRADEMARK, TRADE DRESS, SERVICE MARK, SERVICE NAME, BRAND MARK,
TRADE NAME, BRAND NAME, LOGO OR BUSINESS SYMBOL.

 

1.209                     “TRANSFER PRICE” SHALL MEAN THE BMS TRANSFER PRICE OR
THE GILEAD TRANSFER PRICE, AS THE CASE MAY BE.

 

1.210                     “TRANSFERRING MEMBER PARTY” SHALL HAVE THE MEANING SET
FORTH IN SECTION 15.4(B).

 

1.211                     “[*]” SHALL HAVE THE MEANING SET FORTH IN
SECTION 5.3(D).

 

1.212                     “WAC” SHALL HAVE THE MEANING SET FORTH IN ANNEX Q.

 

1.213                     “WORKING BMS PERCENTAGE” SHALL MEAN, FOR EACH CALENDAR
YEAR, THE PRELIMINARY PERCENTAGE APPLICABLE TO BMS FOR SUCH CALENDAR YEAR
DETERMINED PURSUANT TO SECTION 7.1(C)(I).

 

1.214                     “WORKING GILEAD PERCENTAGE” SHALL MEAN, FOR EACH
CALENDAR YEAR, THE PRELIMINARY PERCENTAGE APPLICABLE TO GILEAD FOR SUCH CALENDAR
YEAR DETERMINED PURSUANT TO SECTION 7.1(C)(I).

 

1.215                     “WORKING PERCENTAGE” SHALL MEAN, WITH RESPECT TO BMS,
THE WORKING BMS PERCENTAGE AND, WITH RESPECT TO GILEAD, THE WORKING GILEAD
PERCENTAGE.

 

SECTION 2.
COLLABORATION MANAGEMENT

 

2.1                                 GENERAL.  AS SET FORTH IN THIS AGREEMENT AND
IN THE OPERATING AGREEMENT, THE MEMBER PARTIES DESIRE TO ESTABLISH A JOINT
EXECUTIVE COMMITTEE WHICH SHALL OVERSEE THE MEMBER PARTIES’ COLLABORATION UNDER
THIS AGREEMENT AND FACILITATE COMMUNICATIONS BETWEEN THE MEMBER PARTIES WITH
RESPECT TO THE DEVELOPMENT, APPROVAL, MANUFACTURING AND COMMERCIALIZATION OF THE
COMBINATION PRODUCT IN THE TERRITORY.  SUBJECT TO THE FOREGOING, THE MEMBER
PARTIES ALSO DESIRE TO ESTABLISH SPECIALIZED COMMITTEES TO FOCUS MORE CLOSELY ON
THE PARTIES’ DEVELOPMENT ACTIVITIES, COMMERCIALIZATION ACTIVITIES AND FINANCE
ACTIVITIES HEREUNDER.  EACH SUCH COMMITTEE SHALL HAVE ONLY THE RESPONSIBILITIES
AND AUTHORITY DELEGATED TO OR VESTED IN SUCH COMMITTEE IN THIS SECTION 2 OR
ELSEWHERE IN THIS AGREEMENT AND THE OPERATING AGREEMENT.

 

2.2                                 Role of the Joint Executive Committee.  The
establishment, composition, governance, powers and limitations on powers of the
Joint Executive Committee (or “JEC”) are governed by Section 6 of the Operating
Agreement and by this Section 2.2.  The initial JEC members are identified in
Annex A hereto.  The JEC shall have overall authority and responsibility with
respect to the Development Activities and Commercialization Activities for the
Combination Product (except for those matters reserved to the Member Parties
pursuant to this Agreement or the Operating Agreement).  Without limitation of
the foregoing, the JEC shall have the following powers and duties:

 

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(I)                                     TO OVERSEE THE WORK OF THE OPERATING
COMMITTEES AND, IF POSSIBLE, RESOLVE DISPUTES REFERRED TO IT BY THE ALLIANCE
MANAGERS PURSUANT TO SECTION 2.8;

 

(ii)                                  to oversee the activities of Gilead in
keeping the JV’s books and records pursuant to Section 8.1;

 

(iii)                               to adopt guidelines for compliance by the
Parties with antitrust laws in connection with the JV activities;

 

(iv)                              to approve the initial Capital Contributions
(as defined in the Operating Agreement) of the Members, to approve each Capital
Contribution planning schedule, and to issue certain requests for additional
Capital Contributions, in each case pursuant to Section 4.1 of the Operating
Agreement;

 

(v)                                 to approve (x) each annual update of the
Development Plan and the Development Budget and (y) any interim update of the
Development Plan or Development Budget, as the case may be, as to which the JDC
is unable to reach agreement;

 

(vi)                              to approve (x) each annual update of the
Commercialization Plan and the Commercialization Budget and (y) any interim
update of the Commercialization Plan or Commercialization Budget, as the case
may be, as to which the JCC is unable to reach agreement;

 

(vii)                           to approve unit volume forecasts as to which the
JCC is unable to reach agreement for use in preparation of Commercialization
Plans and Commercialization Budgets and (regardless of whether there is a
Commercialization Plan or Commercialization Budget) for use in planning for
Manufacture of the Combination Product,  planning for Commercialization
Activities and for the Member Parties’ own financial planning purposes;

 

(viii)                        to approve Cost Allocation Proposals;

 

(ix)                                to approve the JFC’s reports on financial
matters that the JEC determines to be reasonably necessary or appropriate for
the implementation of the financial aspects of the JV;

 

(x)                                   to review recommendations of the JFC with
respect to, and approve, one or more means of reconciling, one to the other, the
internal reporting and accounting standards of each of the Member Parties where
reasonably necessary, and methods of charging costs and expenses of each of the
Member Parties;

 

(xi)                                to review and, if applicable, recommend to
the Member Parties changes to the [*] pursuant to Section 5.3(i);

 

(xii)                             to resolve disputes within the JDC with
respect to (A) any required approval of publications or presentations pursuant
to Section 3.11(a), and (B) a Member Party’s obligation under Section 3.6(b), if
any, to provide the other Member Party with access to certain of such Member
Party’s records, documentation and data;

 

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(xiii)                          to resolve disputes within the JCC with respect
to (A) the initially proposed marketing materials for the Combination Product
for the Territory, and thereafter, updates of any Approved Marketing Materials,
(B) a Member Party’s obligation, if any, pursuant to Section 5.10 to provide the
other Member Party with access to certain of such Member Party’s records,
documentation and data, (C) issues relating to the patient assistance programs
arising under Section 2.4(b)(vii) and (D) issues relating to Suppliers and
alternate suppliers arising under Section 2.4(b)(ix);

 

(xiv)                         to decide major strategic issues and any other
matters relating to the JV that are not (i) within the purview of the Operating
Committees or (ii) reserved to the Member Parties pursuant to this Agreement or
the Operating Agreement; and

 

(xv)                            to take such other actions as are reserved to
the JEC in this Agreement or the Operating Agreement or as the Parties may
mutually agree in writing, except that the JEC may not amend or take any action
that would conflict with any provision of this Agreement, the Operating
Agreement or any Ancillary Agreement and may not resolve any issue regarding
termination of this Agreement for a potential or actual Material Default.

 

2.3                                 JOINT DEVELOPMENT COMMITTEE.

 

(A)                                  EACH MEMBER SHALL APPOINT FOUR (4) MEMBERS
OF A JOINT DEVELOPMENT OVERSIGHT AND MANAGEMENT COMMITTEE (THE “JOINT
DEVELOPMENT COMMITTEE” OR “JDC”).  GILEAD SUB SHALL APPOINT ONE (1) OF THE
MEMBERS DESIGNATED BY GILEAD SUB, TO SERVE AS CHAIRPERSON OF THE JDC THROUGH THE
FIRST ANNIVERSARY OF THE EFFECTIVE DATE.  THEREAFTER A MEMBER DESIGNATED BY BMS
SUB AND THEN A MEMBER DESIGNATED BY GILEAD SUB SHALL SERVE ALTERNATELY AS
CHAIRPERSON, ON A ROTATING ANNUAL BASIS FROM EACH ANNIVERSARY OF THE EFFECTIVE
DATE.  THE INITIAL JDC MEMBERS AND THE CHAIRPERSON ARE IDENTIFIED IN ANNEX A
HERETO.

 

(B)                                 SUBJECT TO THE OVERSIGHT OF THE JEC, THE JDC
SHALL HAVE THE FOLLOWING POWERS AND DUTIES:

 

(I)                                     TO (X) REVIEW AND PROPOSE TO THE JEC FOR
ITS APPROVAL EACH ANNUAL UPDATE OF THE DEVELOPMENT PLAN AND DEVELOPMENT BUDGET
AND (Y) REVIEW AND APPROVE EACH INTERIM UPDATE OF THE DEVELOPMENT PLAN AND
DEVELOPMENT BUDGET, IN EACH CASE PROPOSED PURSUANT TO SECTION 3.7;

 

(II)                                  TO OVERSEE AND COORDINATE THE PARTIES’
ACTIVITIES UNDER THE DEVELOPMENT PLAN;

 

(III)                               TO OVERSEE AND MANAGE MATTERS RELATING TO
CLINICAL SUPPLY OF THE COMBINATION PRODUCT, INCLUDING, WITHOUT LIMITATION,
MANUFACTURING REQUIREMENTS, INVENTORY PROJECTIONS AND INVENTORY CONTROL;

 

(IV)                              WITH THE ALLIANCE MANAGERS, (X) TO ASSIST IN
COORDINATING SCIENTIFIC INTERACTIONS BETWEEN THE PARTIES DURING THE COURSE OF
IMPLEMENTING THE DEVELOPMENT PLAN AND (Y) TO FACILITATE THE EXCHANGE AMONG THE
PARTIES OF DATA, INFORMATION, MATERIALS AND RESULTS RELATING TO CLINICAL
MANUFACTURING, CLINICAL TRIALS, AND COMMUNICATIONS AND FILINGS WITH REGULATORY
AUTHORITIES FOR THE COMBINATION PRODUCT (IN EACH CASE SOLELY TO THE EXTENT THAT
SUCH

 

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DATA, INFORMATION AND MATERIALS ARE REQUIRED TO BE EXCHANGED AMONG THE PARTIES,
OR WITH RESPECT TO WHICH ONE MEMBER PARTY HAS THE RIGHT TO GAIN ACCESS FROM THE
OTHER MEMBER PARTY OR THE JV, PURSUANT TO THIS AGREEMENT OR THE OPERATING
AGREEMENT);

 

(V)                                 TO OVERSEE REGULATORY MATTERS FOR THE JV,
INCLUDING, WITHOUT LIMITATION, APPROVING ALL COMBINATION PRODUCT REGULATORY
DOCUMENTATION TO THE EXTENT REQUIRED PURSUANT TO SECTION 3.4, OVERSEEING
GILEAD’S ACTIVITIES AS THE JV’S LIAISON WITH REGULATORY AUTHORITIES IN THE
TERRITORY, AND OVERSEEING THE ACTIVITIES CONDUCTED PURSUANT TO THE SDEA AND
OTHER PHARMACOVIGILANCE AND SAFETY REPORTING;

 

(VI)                              TO OVERSEE THE MEMBER PARTIES’ ACTIVITIES
PURSUANT TO THEIR RESPECTIVE SUPPLY AGREEMENTS AND TO OVERSEE AND COORDINATE
WITH THE JCC WITH RESPECT TO MATTERS RELATING TO THE MONITORING OF MANUFACTURING
CAPACITY, FORECASTS AND ORDERS FOR THE ACTIVE PHARMACEUTICAL INGREDIENTS OF THE
COMBINATION PRODUCT;

 

(VII)                           TO RESOLVE  DISPUTES BETWEEN THE MEMBER PARTIES
WITH RESPECT TO (A) ANY REQUIRED APPROVAL OF PUBLICATIONS OR PRESENTATIONS
PURSUANT TO SECTION 3.11(A), AND (B) A MEMBER PARTY’S OBLIGATION UNDER
SECTION 3.6(B), IF ANY, TO PROVIDE THE OTHER MEMBER PARTY WITH ACCESS TO CERTAIN
OF SUCH MEMBER PARTY’S RECORDS, DOCUMENTATION AND DATA;

 

(VIII)                        TO OVERSEE MEDICAL AFFAIRS AND MEDICAL
COMMUNICATIONS ACTIVITIES;

 

(IX)                                TO REVIEW AND APPROVE OR REJECT PROPOSALS
FOR PHASE IV CLINICAL STUDIES OF THE COMBINATION PRODUCT;

 

(X)                                   TO PROVIDE UPDATES ON THE JDC’S ACTIVITIES
AND ACHIEVEMENTS TO THE JEC EACH CALENDAR QUARTER;  AND

 

(XI)                                TO PERFORM SUCH OTHER FUNCTIONS AS THE
MEMBER PARTIES MAY MUTUALLY AGREE IN WRITING FROM TIME TO TIME.

 

2.4                                 JOINT COMMERCIALIZATION COMMITTEE.

 

(A)                                  EACH MEMBER SHALL APPOINT FOUR (4) MEMBERS
OF A JOINT COMMERCIALIZATION OVERSIGHT AND MANAGEMENT COMMITTEE (THE “JOINT
COMMERCIALIZATION COMMITTEE” OR “JCC”).  BMS SUB SHALL APPOINT ONE (1) OF THE
MEMBERS DESIGNATED BY BMS SUB, TO SERVE AS CHAIRPERSON OF THE JCC THROUGH THE
FIRST ANNIVERSARY OF THE EFFECTIVE DATE.  THEREAFTER A MEMBER DESIGNATED BY
GILEAD SUB AND THEN A MEMBER DESIGNATED BY BMS SUB SHALL SERVE ALTERNATELY AS
CHAIRPERSON, ON A ROTATING ANNUAL BASIS FROM EACH ANNIVERSARY OF THE EFFECTIVE
DATE.  THE INITIAL JCC MEMBERS AND THE CHAIRPERSON ARE IDENTIFIED IN ANNEX A
HERETO.

 

(B)                                 SUBJECT TO THE OVERSIGHT OF THE JEC, THE JCC
SHALL HAVE THE FOLLOWING POWERS AND DUTIES:

 

(I)                                     TO OVERSEE AND COORDINATE THE PARTIES
ACTIVITIES UNDER THE COMMERCIALIZATION PLAN;

 

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(II)                                  TO (X) REVIEW AND PROPOSE TO THE JEC FOR
ITS APPROVAL EACH ANNUAL UPDATE OF THE COMMERCIALIZATION PLAN AND
COMMERCIALIZATION BUDGET AND (Y) REVIEW AND APPROVE EACH INTERIM UPDATE OF THE
COMMERCIALIZATION PLAN AND COMMERCIALIZATION BUDGET, IN EACH CASE PROPOSED
PURSUANT TO SECTION 5.11(C);

 

(III)                               TO OVERSEE GILEAD’S ACTIVITIES PURSUANT TO
THE SERVICES AGREEMENT;

 

(IV)                              TO DEVELOP AND APPROVE (X) INITIAL MARKETING
MATERIALS FOR THE COMBINATION PRODUCT FOR THE TERRITORY, AND (Y) UPDATES TO SUCH
MATERIALS FROM TIME TO TIME AS MAY BE REASONABLY NECESSARY OR APPROPRIATE, ALL
IN ACCORDANCE WITH SECTION 5.7;

 

(V)                                 TO DEVELOP AND APPROVE UNIT VOLUME FORECASTS
FOR USE IN PREPARATION OF COMMERCIALIZATION PLANS AND COMMERCIALIZATION BUDGETS
AND (REGARDLESS OF WHETHER THERE IS A COMMERCIALIZATION PLAN OR
COMMERCIALIZATION BUDGET) FOR USE IN PLANNING FOR MANUFACTURE OF THE COMBINATION
PRODUCT, PLANNING FOR COMMERCIALIZATION ACTIVITIES AND FOR THE MEMBER PARTIES’
OWN FINANCIAL PLANNING PURPOSES;

 

(VI)                              TO COORDINATE WITH THE JDC WITH RESPECT TO
MANUFACTURING AND LABELING MATTERS;

 

(VII)                           TO (X) DETERMINE HOW THE JV WILL RESPOND TO
REQUESTS FROM HEALTH CARE PROVIDERS OR FROM INDIVIDUAL PATIENTS WHO HAVE OR MAY
OBTAIN PRESCRIPTIONS FOR THE COMBINATION PRODUCT BUT ARE UNABLE TO AFFORD IT,
AND (Y) TO ESTABLISH THE APPROPRIATE PROCEDURES AND RESPONSE TIMES THAT SHALL
APPLY IN RESPONDING TO SUCH REQUESTS, IN EACH CASE ((X) AND (Y)) IN ACCORDANCE
WITH SECTION 5.2(A);

 

(VIII)                        TO MAKE RECOMMENDATIONS TO THE JEC WITH RESPECT TO
COST ALLOCATION PROPOSALS;

 

(IX)                                TO MAINTAIN ONE SUPPLIER AND ONE OR MORE
ALTERNATE SUPPLIERS PURSUANT TO SECTION 4.2(A) FOR MANUFACTURE OF COMMERCIAL
SUPPLIES OF THE COMBINATION PRODUCT;

 

(X)                                   OVERSEE AND COORDINATE WITH THE JDC WITH
RESPECT TO MATTERS RELATING TO THE MANUFACTURING AND LABELING OF THE COMBINATION
PRODUCT FOR COMMERCIAL SUPPLY, INCLUDING, IN THE CASE OF MANUFACTURING, WITH
RESPECT TO QUALITY CONTROL MATTERS, AND THE MONITORING OF MANUFACTURING
CAPACITY, FORECASTS AND ORDERS FOR THE COMBINATION PRODUCT TO ENSURE ADEQUATE
COMMERCIAL SUPPLY TO MEET THE DEMAND THEREFOR IN THE TERRITORY AS PROJECTED BY
THE JCC AND APPROVED BY THE JEC;

 

(XI)                                TO RESOLVE DISPUTES BETWEEN THE MEMBER
PARTIES WITH RESPECT TO A MEMBER PARTY’S OBLIGATION, IF ANY, PURSUANT TO
SECTION 5.10 TO PROVIDE THE OTHER MEMBER PARTY WITH ACCESS TO CERTAIN OF SUCH
MEMBER PARTY’S RECORDS, DOCUMENTATION AND DATA;

 

(XII)                             TO PROVIDE UPDATES ON THE JCC’S ACTIVITIES AND
ACHIEVEMENTS TO THE JEC EACH CALENDAR QUARTER; AND

 

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(XIII)                          TO PERFORM SUCH OTHER FUNCTIONS AS THE MEMBER
PARTIES MAY MUTUALLY AGREE IN WRITING FROM TIME TO TIME.

 

2.5                                 JOINT FINANCE COMMITTEE.

 

(A)                                  EACH MEMBER SHALL APPOINT TWO (2) MEMBERS
OF A JOINT FINANCE COMMITTEE TO SUPPORT THE JEC, THE JDC AND THE JCC (THE “JOINT
FINANCE COMMITTEE” OR “JFC”).  GILEAD SUB SHALL APPOINT ONE (1) OF THE MEMBERS
DESIGNATED BY GILEAD SUB, TO SERVE AS CHAIRPERSON OF THE JFC THROUGH THE FIRST
ANNIVERSARY OF THE EFFECTIVE DATE. THEREAFTER A MEMBER DESIGNATED BY BMS SUB AND
THEN A MEMBER DESIGNATED BY GILEAD SUB SHALL SERVE ALTERNATELY AS CHAIRPERSON,
ON A ROTATING ANNUAL BASIS FROM EACH ANNIVERSARY OF THE EFFECTIVE DATE.  THE
INITIAL JFC MEMBERS AND THE CHAIRPERSON ARE IDENTIFIED IN ANNEX A HERETO.

 

(B)                                 SUBJECT TO THE OVERSIGHT OF THE JEC, THE JFC
SHALL HAVE THE FOLLOWING POWERS AND DUTIES:

 

(I)                                     TO WORK WITH THE JEC AND THE OTHER
OPERATING COMMITTEES TO ASSIST IN FINANCIAL, BUDGETING AND PLANNING MATTERS AS
REQUIRED, INCLUDING ASSISTING IN THE PREPARATION OF BUDGETS AND ANNUAL AND
LONG-TERM PLANS;

 

(II)                                  TO RECOMMEND, FOR APPROVAL BY THE JEC,
PROCEDURES, FORMATS AND TIMELINES CONSISTENT WITH THIS AGREEMENT FOR REPORTING
FINANCIAL DATA AS WELL AS ADDITIONAL OR ALTERNATIVE REPORTING PROCEDURES
CONCERNING FINANCIAL ASPECTS OF THE JV;

 

(III)                               TO PREPARE SUCH REPORTS ON FINANCIAL MATTERS
AS ARE APPROVED BY THE JEC FOR THE IMPLEMENTATION OF THE FINANCIAL ASPECTS OF
THE JV;

 

(IV)                              TO COORDINATE AUDITS OF FINANCIAL DATA WHERE
APPROPRIATE AND REQUIRED OR ALLOWED BY THIS AGREEMENT;

 

(V)                                 TO ADDRESS ISSUES OF IMPLEMENTATION RELATING
TO THE FINANCIAL MECHANICS AND CALCULATIONS UNDER THIS AGREEMENT AND THE
OPERATING AGREEMENT;

 

(VI)                              TO RECOMMEND, FOR APPROVAL BY THE JEC, A MEANS
OF RECONCILING, ONE TO THE OTHER, THE INTERNAL REPORTING AND ACCOUNTING
STANDARDS OF EACH OF THE MEMBER PARTIES WHERE NECESSARY AND METHODS OF CHARGING
COSTS AND EXPENSES OF EACH OF THE MEMBER PARTIES;

 

(VII)                           TO REVIEW THE APPROPRIATE ALLOCATION OF COSTS
AND EXPENSES WITH RESPECT TO AUTHORIZED EXPENSES;

 

(VIII)                        TO CALCULATE OR CAUSE TO BE CALCULATED, AS THE
CASE MAY BE, THOSE MATTERS EXPRESSLY REQUIRED TO BE CALCULATED (OR CAUSED TO BE
CALCULATED) BY THE JFC PURSUANT TO THIS AGREEMENT, INCLUDING SECTIONS 7.1(C) AND
7.1(D), AND PURSUANT TO THE OPERATING AGREEMENT, AND TO ADDRESS ISSUES OF
IMPLEMENTATION RELATING TO THE CASH NETTING PROCEDURES SET FORTH IN
SECTION 4.1(C) OF THE OPERATING AGREEMENT;

 

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(IX)                                TO DEVELOP AND RECOMMEND TO THE JEC FOR
APPROVAL THE INITIAL CAPITAL CONTRIBUTIONS (AS DEFINED IN THE OPERATING
AGREEMENT) OF THE MEMBERS AND EACH CAPITAL CONTRIBUTION PLANNING SCHEDULE, AND
TO RECOMMEND TO THE JEC CERTAIN REQUESTS FOR ADDITIONAL CAPITAL CONTRIBUTIONS,
IN EACH CASE PURSUANT TO SECTION 4.1 OF THE OPERATING AGREEMENT;

 

(X)                                   TO PROVIDE UPDATES ON THE JFC’S ACTIVITIES
AND ACHIEVEMENTS TO THE JEC EACH CALENDAR QUARTER; AND

 

(XI)                                TO PERFORM SUCH OTHER FUNCTIONS AS THE
MEMBER PARTIES MAY MUTUALLY AGREE IN WRITING FROM TIME TO TIME.

 

2.6                                 PROCEDURAL RULES OF THE OPERATING
COMMITTEES.

 

(A)                                  EACH OF BMS SUB AND GILEAD SUB SHALL
DESIGNATE REPRESENTATIVES WITH APPROPRIATE EXPERTISE TO SERVE AS MEMBERS OF EACH
OPERATING COMMITTEE, AND EACH REPRESENTATIVE MAY SERVE ON MORE THAN ONE (1)
OPERATING COMMITTEE (AND/OR THE JEC) AS APPROPRIATE IN VIEW OF THE INDIVIDUAL’S
EXPERTISE.  THE MEMBERS SHALL ENDEAVOR TO MATCH THEIR RESPECTIVE REPRESENTATION
ON EACH OPERATING COMMITTEE, IN TERMS OF FUNCTIONAL AREAS AND MANAGEMENT LEVEL.

 

(B)                                 A MEMBER OF AN OPERATING COMMITTEE MAY BE
REMOVED OR REPLACED AT ANY TIME, WITH OR WITHOUT CAUSE, BY THE MEMBER THAT
APPOINTED SUCH COMMITTEE MEMBER.  SUCH ACTION SHALL BE ACCOMPLISHED BY WRITTEN
NOTICE TO THE OTHER MEMBER.  EACH MEMBER OF AN OPERATING COMMITTEE SHALL SERVE
UNTIL A SUCCESSOR IS NAMED BY THE MEMBER THAT APPOINTED SUCH COMMITTEE MEMBER
(OR UNTIL HIS OR HER EARLIER RESIGNATION OR REMOVAL).

 

(C)                                  THE JFC SHALL MEET AT LEAST ONE (1) TIME
PER CALENDAR QUARTER DURING THE TERM OF THIS AGREEMENT.  THE JDC SHALL MEET AT
LEAST ONE (1) TIME PER CALENDAR QUARTER UNTIL THE FIRST ANNIVERSARY OF THE
LAUNCH OF THE COMBINATION PRODUCT, AND THEREAFTER AT LEAST SEMIANNUALLY (OR ON
SUCH OTHER SCHEDULE AS MAY BE DETERMINED BY THE JDC).  THE JCC SHALL MEET AT
LEAST ONE (1) TIME PER CALENDAR QUARTER UNTIL THE SECOND ANNIVERSARY OF THE
LAUNCH OF THE COMBINATION PRODUCT, AND THEREAFTER AT LEAST SEMIANNUALLY (OR ON
SUCH OTHER SCHEDULE AS MAY BE DETERMINED BY THE JCC).  EACH OPERATING COMMITTEE
SHALL MEET AT TIMES AND PLACES IN THE UNITED STATES MUTUALLY AGREED BY BMS SUB
AND GILEAD SUB.  THE RESPECTIVE OPERATING COMMITTEES SHALL MEET TO DISCUSS THE
OVERALL PROGRESS OF THE DEVELOPMENT ACTIVITIES IN THE DEVELOPMENT PLAN OR
COMMERCIALIZATION ACTIVITIES IN THE COMMERCIALIZATION PLAN, OR THE FINANCIAL
ASPECTS OF THE JV, AS THE CASE MAY BE, AND ANY PROBLEMS ARISING IN THE COURSE OF
SUCH ACTIVITIES; THE STATUS OF THE DEVELOPMENT PLAN AND DEVELOPMENT BUDGET, THE
COMMERCIALIZATION PLAN AND COMMERCIALIZATION BUDGET, OR OTHER FINANCIAL ASPECTS
OF THE JV, AS THE CASE MAY BE; AND ANY OTHER MATTER THAT A MEMBER OF SUCH
OPERATING COMMITTEE MAY REASONABLY REQUEST.  EACH OPERATING COMMITTEE SHALL KEEP
ACCURATE AND COMPLETE MINUTES OF ITS MEETINGS TO RECORD ALL PROPOSALS,
RECOMMENDATIONS AND ACTIONS TAKEN.  ALL SUCH MINUTES AND OTHER RECORDS OF EACH
OPERATING COMMITTEE SHALL BE AVAILABLE TO EACH MEMBER PARTY.

 

(D)                                 THE CHAIRPERSON SHALL ORGANIZE COMMITTEE
MEETINGS, PREPARE THE MEETING AGENDA BASED ON ITEMS SUBMITTED BY COMMITTEE
MEMBERS, TAKE OR CAUSE TO BE TAKEN

 

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ACCURATE MINUTES OF MEETINGS, CIRCULATE DRAFT MINUTES WITHIN SEVEN (7) DAYS
AFTER THE MEETING FOR APPROVAL BY THE OTHER MEMBER’S COMMITTEE MEMBERS, AND
CIRCULATE FINAL MINUTES TO THE COMMITTEE MEMBERS PROMPTLY FOLLOWING SUCH
APPROVAL.  NOTICE OF, AND THE AGENDA FOR, EACH MEETING (AND ANY ACCOMPANYING
MATERIALS) SHALL BE CIRCULATED TO THE MEMBERS OF THE APPLICABLE OPERATING
COMMITTEE SUFFICIENTLY IN ADVANCE SO THAT IN THE NORMAL COURSE SUCH MATERIALS
WILL BE RECEIVED AT LEAST FIVE (5) BUSINESS DAYS IN ADVANCE OF SUCH MEETING;
PROVIDED, HOWEVER, THAT UNDER REASONABLE CIRCUMSTANCES SUCH MATERIALS MAY BE
CIRCULATED WITHIN A LESSER PERIOD OF TIME IN ADVANCE OF THE MEETING, SO LONG AS
EACH MEMBER AGREES TO THE INCLUSION ON SUCH AGENDA OF ANY ITEMS PROPOSED FOR
CONSIDERATION BY THE OTHER MEMBER.  ANY MEMBER OF AN OPERATING COMMITTEE MAY
WAIVE NOTICE OF A MEETING THEREOF, AND SHALL BE DEEMED TO WAIVE SUCH NOTICE (BUT
NOT, IF APPLICABLE, HIS OR HER RIGHT TO OBJECT TO THE INCLUSION OF A PARTICULAR
AGENDA ITEM OR ITEMS AS SET FORTH IN THE PROVISO TO THE PREVIOUS SENTENCE) IF HE
OR SHE ATTENDS THE MEETING AND DOES NOT OBJECT TO THE MEETING BECAUSE OF A LACK
OF NOTICE PRIOR TO ITS COMMENCEMENT.

 

(E)                                  AT LEAST TWO (2) MEMBERS APPOINTED BY
GILEAD SUB AND TWO (2) MEMBERS APPOINTED BY BMS SUB MUST BE IN ATTENDANCE AT A
MEETING OF AN OPERATING COMMITTEE TO ESTABLISH A QUORUM FOR THE CONDUCT OF
BUSINESS.  COMMITTEE MEMBERS MAY ATTEND MEETINGS IN PERSON OR, AS LONG AS EACH
ATTENDEE IS ABLE TO HEAR THE OTHERS, BY TELEPHONE OR BY VIDEO CONFERENCE
EQUIPMENT; PROVIDED, HOWEVER, THAT AT LEAST TWO (2) MEETINGS PER CALENDAR YEAR
OF EACH OPERATING COMMITTEE SHALL BE HELD IN PERSON UNTIL THE LAUNCH OF THE
COMBINATION PRODUCT, AND THEREAFTER AT LEAST ONE (1) MEETING PER CALENDAR YEAR
OF EACH OPERATING COMMITTEE SHALL BE HELD IN PERSON.  EACH OPERATING COMMITTEE
MAY ALSO ACT BY UNANIMOUS WRITTEN CONSENT OF ITS MEMBERS WITHOUT A MEETING.

 

(F)                                    AT EACH MEETING OF AN OPERATING
COMMITTEE, EACH MEMBER’S DESIGNEES ON SUCH OPERATING COMMITTEE SHALL,
COLLECTIVELY, HAVE ONE (1) VOTE ON ALL MATTERS TO BE ACTED UPON (THE “MEMBER
VOTE”).  EACH OPERATING COMMITTEE SHALL TAKE ACTION BY UNANIMOUS MEMBER VOTE. 
IF AN OPERATING COMMITTEE IS UNABLE TO REACH AGREEMENT ON A MATTER PROPERLY
PRESENTED TO SUCH OPERATING COMMITTEE FOR ITS CONSIDERATION, THE MATTER SHALL BE
RESOLVED BY THE PROCEDURE SET FORTH IN SECTION 2.8 (EXCEPT AS OTHERWISE PROVIDED
THEREIN).

 

(G)                                 EACH OPERATING COMMITTEE MAY, AS IT DEEMS
APPROPRIATE, DELEGATE ITS DECISION-MAKING AUTHORITY FOR SPECIFIC MATTERS OR
TYPES OF MATTERS (OTHER THAN, AS APPLICABLE IN THE CASE OF THE JDC AND JCC,
APPROVAL OF UPDATES OF THE DEVELOPMENT PLAN, COMMERCIALIZATION PLAN, DEVELOPMENT
BUDGET OR COMMERCIALIZATION BUDGET FOR WHICH THAT OPERATING COMMITTEE IS
RESPONSIBLE, OR AS PROVIDED IN SECTION 3.4) TO SUBCOMMITTEES OR SPECIFIC GROUPS,
EACH WITH REPRESENTATIVES FROM BOTH MEMBERS, WHICH SHALL MAKE SUCH DECISIONS BY
CONSENSUS.  IF SUCH SUBCOMMITTEES OR GROUPS DO NOT REACH CONSENSUS ON A MATTER,
EITHER MEMBER MAY REFER SUCH MATTERS BACK TO SUCH OPERATING COMMITTEE FOR
RESOLUTION.

 

(H)                                 NOTWITHSTANDING THE ENUMERATED AUTHORITY OF
THE JEC IN THIS AGREEMENT AND THE OPERATING AGREEMENT AND THE EXPRESS
RESERVATION TO THE DECISION-MAKING AUTHORITY OF THE MEMBER PARTIES OF CERTAIN
MATTERS HEREIN AND THEREIN:  IN THE EVENT THAT THE JEC, ACTING (I) BY UNANIMOUS
AFFIRMATIVE MEMBER VOTES (AS DEFINED IN THE OPERATING AGREEMENT) PURSUANT TO
SECTION 6.5(D) OF THE OPERATING AGREEMENT, OR (II) BY UNANIMOUS WRITTEN CONSENT
PURSUANT TO SECTION 6.5(C) OF THE OPERATING AGREEMENT, TAKES ACTION ON A MATTER
RELATING TO THE EXPLOITATION OF THE COMBINATION PRODUCT, BUT WITH RESPECT TO
WHICH MATTER AUTHORITY AND

 

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RESPONSIBILITY HAVE NOT BEEN DELEGATED TO OR VESTED IN THE JEC, THE MEMBER
PARTIES SHALL BE DEEMED TO WAIVE ANY OBJECTION TO THE EFFECT THAT THE JEC ACTED
BEYOND THE SCOPE OF ITS AUTHORITY OR RESPONSIBILITY, AND THE RESOLUTION OF SUCH
MATTER SHALL BE BINDING ON THE MEMBER PARTIES FOR PURPOSES OF THIS AGREEMENT AND
THE OPERATING AGREEMENT.

 

2.7                                 ALLIANCE MANAGERS.

 

(A)                                  GILEAD AND BMS SHALL EACH DESIGNATE WITHIN
THEIR RESPECTIVE ORGANIZATIONS AN ALLIANCE MANAGER (AN “ALLIANCE MANAGER”) WITH
RESPONSIBILITY FOR FACILITATING THE INTERACTION AND COOPERATION BETWEEN GILEAD
AND BMS WITH RESPECT TO THE JV AND THE EXPLOITATION OF THE COMBINATION PRODUCT
IN THE TERRITORY.  THE INITIAL ALLIANCE MANAGERS ARE IDENTIFIED IN ANNEX A
HERETO.  EACH MEMBER PARTY MAY CHANGE ITS ALLIANCE MANAGER FROM TIME TO TIME
UPON WRITTEN NOTICE TO THE OTHER MEMBER PARTY.

 

(B)                                 THE ALLIANCE MANAGERS SHALL ATTEND ALL
MEETINGS OF THE JEC AND EACH OPERATING COMMITTEE (OTHER THAN THE JFC) AND
SUPPORT THE CHAIRPERSONS OF THE JEC AND EACH OPERATING COMMITTEE IN THE
DISCHARGE OF THEIR RESPONSIBILITIES.  THE ALLIANCE MANAGERS SHALL BE NONVOTING
PARTICIPANTS IN SUCH MEETINGS, UNLESS THEY ARE ALSO APPOINTED MEMBERS OF THE
APPLICABLE COMMITTEE(S).  EACH ALLIANCE MANAGER SHALL ENDEAVOR TO CREATE AND
MAINTAIN A COLLABORATIVE WORK ENVIRONMENT WITHIN AND AMONG THE JEC AND THE
OPERATING COMMITTEES.  IN ADDITION, EACH ALLIANCE MANAGER: (I) SHALL BE THE
POINT OF FIRST REFERRAL IN CERTAIN MATTERS SUBJECT TO DISPUTE RESOLUTION AS
PROVIDED IN SECTION 2.8; (II) SHALL COORDINATE THE RELEVANT FUNCTIONAL
REPRESENTATIVES OF THE MEMBER PARTIES; (III) SHALL PROVIDE A SINGLE POINT OF
COMMUNICATION FOR SEEKING CONSENSUS BOTH INTERNALLY WITHIN THE RESPECTIVE MEMBER
PARTIES’ ORGANIZATIONS AND BETWEEN THE MEMBER PARTIES; (IV) SHALL IDENTIFY AND
BRING DISPUTES TO THE ATTENTION OF THE JEC OR AN OPERATING COMMITTEE AS
APPROPRIATE IN A TIMELY MANNER; (V) SHALL PLAN AND COORDINATE COOPERATIVE
EFFORTS AND INTERNAL AND EXTERNAL COMMUNICATIONS; AND (VI) SHALL TAKE
RESPONSIBILITY FOR ENSURING THAT GOVERNANCE ACTIVITIES, SUCH AS THE CONDUCT OF
REQUIRED JEC AND OPERATING COMMITTEE MEETINGS AND PRODUCTION OF MEETING MINUTES,
OCCUR AS SET FORTH IN THIS AGREEMENT AND IN THE OPERATING AGREEMENT AND THAT
RELEVANT ACTION ITEMS AGREED UPON AT SUCH MEETINGS ARE APPROPRIATELY CARRIED OUT
OR OTHERWISE ADDRESSED.

 

(C)                                  NOTICES GIVEN BY A MEMBER PARTY TO THE
OTHER MEMBER PARTY WITH RESPECT TO DEVELOPMENT ACTIVITIES, COMBINATION PRODUCT
OR EFV, TDF OR FTC BULK ACTIVE PHARMACEUTICAL INGREDIENT MANUFACTURING AND
COMMERCIALIZATION ACTIVITIES SHALL BE MADE TO THE OTHER MEMBER PARTY’S ALLIANCE
MANAGER AND TO SUCH OTHER OPERATING COMMITTEE OR JEC MEMBER OF SUCH OTHER MEMBER
PARTY AS IS MOST DIRECTLY INVOLVED IN OR INFORMED OF THE RELEVANT ACTIVITY,
EXCEPT THAT IF GILEAD OR BMS IS SELECTED AS THE SUPPLIER PURSUANT TO
SECTION 4.2(A), IT SHALL NOT BE REQUIRED TO PROVIDE SUCH NOTICE TO THE OTHER
MEMBER PARTY’S ALLIANCE MANAGER WITH RESPECT TO ITS TOLL MANUFACTURING
ACTIVITIES.

 

2.8                                 DISPUTE RESOLUTION.

 

(A)                                  DISPUTES MAY BE REFERRED TO THE JEC FOR
RESOLUTION, AS FOLLOWS:  (I) IF AN OPERATING COMMITTEE IS UNABLE TO REACH
AGREEMENT ON A MATTER PROPERLY PRESENTED TO SUCH OPERATING COMMITTEE FOR ITS
DECISION, THE OPERATING COMMITTEE SHALL REFER THE MATTER TO THE ALLIANCE
MANAGERS FOR GILEAD AND BMS, AND IF THE ALLIANCE MANAGERS ARE UNABLE TO RESOLVE
THE

 

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DISPUTE WITHIN [*] AFTER SUCH REFERRAL, THEN THE MATTER SHALL BE REFERRED TO THE
JEC;  AND (II) EITHER MEMBER PARTY MAY REFER TO THE JEC ANY ISSUE ARISING UNDER
THIS AGREEMENT OR THE OPERATING AGREEMENT AND NOT OTHERWISE COVERED BY CLAUSE
(I).

 

(B)                                 IF THE JEC IS UNABLE TO RESOLVE A DISPUTE
REFERRED TO IT BY THE ALLIANCE MANAGERS OR BY A MEMBER PARTY PURSUANT TO
SECTION 2.8(A) WITHIN [*] AFTER SUCH REFERRAL, OR IN THE EVENT THAT THE JEC IS
UNABLE TO RESOLVE A DISPUTE ARISING WITHIN THE JEC, THEN THE DISPUTE SHALL BE
REFERRED FOR RESOLUTION TO THE CHIEF EXECUTIVE OFFICER OF GILEAD PARENT AND, FOR
BMS, THE CHIEF EXECUTIVE OFFICER OF BMS PARENT OR ANY DIRECT REPORT DESIGNATED
BY THE CHIEF EXECUTIVE OFFICER OF BMS PARENT (WHO SHALL NOT BE A MEMBER OF THE
JEC OR ANY OPERATING COMMITTEE).

 

(C)                                  IF THE CHIEF EXECUTIVE OFFICER OF GILEAD
PARENT AND CHIEF EXECUTIVE OFFICER (OR DESIGNEE, AS APPLICABLE) OF BMS PARENT
ARE UNABLE TO REACH AGREEMENT ON A DISPUTED MATTER REFERRED TO THEM PURSUANT TO
SECTION 2.8(B) WITHIN [*] AFTER SUCH REFERRAL, THEN EITHER GILEAD OR BMS MAY
REFER THE DISPUTED MATTER TO BINDING ARBITRATION PURSUANT TO SECTION 15.6 IF AND
ONLY IF, AND TO THE EXTENT THAT (A) THE DISPUTED MATTER RELATES TO OR ARISES OUT
OF THE VALIDITY, INTERPRETATION OR CONSTRUCTION OF, OR THE COMPLIANCE WITH OR
BREACH OF, THIS AGREEMENT, THE OPERATING AGREEMENT, ANY ANCILLARY AGREEMENT, OR
ANY OTHER AGREEMENT CONTEMPLATED BY THIS AGREEMENT TO WHICH A MEMBER PARTY (OR
ITS AFFILIATES) AND THE JV AND/OR THE OTHER MEMBER PARTY (OR ITS AFFILIATES) ARE
PARTIES; (B) THE DISPUTED MATTER CAME BEFORE THE JEC PURSUANT TO SECTION [*] OR
SECTION [*] (PROVIDED THAT ANY DISPUTE RELATING TO THE [*] MAY BE SUBMITTED TO
ARBITRATION ONLY WITH RESPECT TO THE ISSUE OF WHETHER SPECIFIC [*] ARE [*], ANY
DISPUTE RELATING TO [*] PURSUANT TO [*] MAY BE SUBMITTED TO ARBITRATION ONLY
WITH RESPECT TO THE ISSUE OF [*], ANY DISPUTE RELATING TO [*] MAY BE SUBMITTED
TO ARBITRATION ONLY WITH RESPECT TO MATTERS ARISING PURSUANT TO [*], AND ANY
DISPUTE RELATING TO [*] MAY BE SUBMITTED TO ARBITRATION ONLY WITH RESPECT TO
MATTERS ARISING PURSUANT TO [*]; OR (C) THERE IS A DISPUTE AS TO WHETHER THE [*]
ARE SATISFIED WITH RESPECT TO A MATTER.

 

(D)                                 FOR THE AVOIDANCE OF DOUBT, THE DISPUTE
RESOLUTION PROCEDURES SET FORTH IN SECTIONS 2.8(A), 2.8(B) AND 2.8(C) SHALL NOT
APPLY TO ANY DEADLOCK WITHIN THE JEC OR ANY OPERATING COMMITTEE RESULTING FROM A
PROPOSAL BY ONE MEMBER’S COMMITTEE MEMBERS TO REVERSE OR MODIFY A DECISION OF
THE JEC OR SUCH OPERATING COMMITTEE WITH RESPECT TO A MATTER PREVIOUSLY
PRESENTED TO IT FOR DECISION AND APPROVED BY UNANIMOUS MEMBER VOTE OR UNANIMOUS
WRITTEN CONSENT OF ITS MEMBERS, UNLESS ALL OF THE FOLLOWING CONDITIONS ARE
SATISFIED:  (I) SUCH PROPOSAL IS [*] THE APPLICABLE JEC OR OPERATING COMMITTEE
DECISION;  (II) THE DEADLOCK INVOLVES [*]; AND (III) THE APPLICABLE JEC OR
OPERATING COMMITTEE DECISION, IF NOT REVERSED OR MODIFIED, WOULD [*] PURSUANT TO
THIS AGREEMENT (IT BEING UNDERSTOOD THAT IF ONLY CERTAIN ASPECTS OF THE
APPLICABLE JEC OR OPERATING COMMITTEE DECISION PRODUCE THESE RESULTS, ONLY THEY
SHALL BE SUBJECT TO THE DISPUTE RESOLUTION PROCEDURES SET FORTH IN SECTIONS
2.8(A), 2.8(B) AND 2.8(C), AND THE BALANCE OF SUCH DECISION SHALL REMAIN IN
EFFECT);  PROVIDED, HOWEVER, THAT THIS SECTION 2.8(D) SHALL NOT APPLY TO THE
DELIBERATIONS AND DECISIONS OF THE JCC PURSUANT TO SECTIONS [*], AND
DELIBERATIONS AND DECISIONS OF THE JEC WITH RESPECT TO ANY DISPUTES THAT ARISE
WITHIN THE JCC WITH RESPECT THERETO;  AND PROVIDED, FURTHER, THAT THE JCC’S AND
THE JEC’S RECONSIDERATION OF PRIOR DECISIONS WITH RESPECT TO THE MATTERS COVERED
BY THE PRECEDING PROVISO SHALL BE GOVERNED BY [*], RESPECTIVELY, AND IN THE
EVENT OF ANY SUCH RECONSIDERATION (AND ANY DISPUTE RESOLUTION AND ARBITRATION IN
CONNECTION THEREWITH), THE PRIOR DECISION IN FORCE AT THE TIME OF
RECONSIDERATION SHALL REMAIN IN FORCE AND

 

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CONTINUE TO APPLY UNTIL SUCH TIME, IF ANY, AS A MODIFIED POSITION MAY BE AGREED
BY THE JCC OR THE JEC, OR ADOPTED BY THE ARBITRATOR(S), AS THE CASE MAY BE.

 

(E)                                  NOTHING IN THIS SECTION 2.8 SHALL AFFECT
THE RIGHT OF A MEMBER PARTY TO EXERCISE ITS RIGHTS UNDER SECTION 14.4 WITH
RESPECT TO A MATERIAL DEFAULT BY THE OTHER MEMBER PARTY, CONCURRENTLY WITH THE
EXERCISE OF ITS RIGHTS UNDER THIS SECTION 2.8.  IN THE EVENT THAT, AT ANY TIME
PRIOR TO COMPLETION OF THE DISPUTE RESOLUTION PROCEDURES SET FORTH IN THIS
SECTION 2.8, THE NON-BREACHING MEMBER PARTY DELIVERS A NOTICE OF MATERIAL
DEFAULT TO THE BREACHING MEMBER PARTY, THE SIXTY (60) DAY CURE PERIOD REFERRED
TO IN SECTION 14.4(A) SHALL BEGIN TO RUN UPON THE RECEIPT OF SUCH NOTICE AND
SHALL RUN CONCURRENTLY WITH THE PROCEDURES SET FORTH IN THIS SECTION 2.8.

 

2.9                                 COLLABORATION PRINCIPLES.  THE PARTIES AGREE
TO ABIDE BY THE FOLLOWING PRINCIPLES (“COLLABORATION PRINCIPLES”) IN THEIR
CONDUCT OF THE DEVELOPMENT ACTIVITIES AND THE COMMERCIALIZATION ACTIVITIES, AND
TO CAUSE THEIR REPRESENTATIVES ON THE JEC AND THE OPERATING COMMITTEES TO
OBSERVE THESE PRINCIPLES IN CONNECTION WITH THEIR COMMITTEE-RELATED ACTIVITIES:

 

(A)                                  SUBJECT TO SECTIONS 2.9(B) AND (C), THE
PURPOSES OF THE JV ARE (I) TO DEVELOP, MANUFACTURE, AND COMMERCIALIZE THE
COMBINATION PRODUCT FOR USE WITHIN THE TERRITORY, AND (II) TO OPTIMIZE THE
COMMERCIAL POTENTIAL OF THE COMBINATION PRODUCT WITHIN THE COMMERCIALIZATION
PLAN, SUBJECT TO THE COMMERCIALIZATION BUDGET.  FOR THE AVOIDANCE OF DOUBT,
NOTHING IN THIS AGREEMENT OR IN THE OPERATING AGREEMENT SHALL BE DEEMED TO
RESTRICT OR PROHIBIT EITHER MEMBER PARTY OR ANY OF ITS AFFILIATES FROM (X)
COMMERCIALIZING ITS SINGLE AGENT PRODUCT(S) AND/OR DOUBLE AGENT PRODUCT AS
APPLICABLE, (Y) SUBJECT TO SECTIONS 3.10 AND 5.6, DEVELOPING, MANUFACTURING AND
COMMERCIALIZING COMBINATION PRODUCTS (OTHER THAN THE COMBINATION PRODUCT) FOR
THE TREATMENT OF HIV INFECTION OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY
PRODUCT CONTAINING SUCH PARTY’S SINGLE AGENT PRODUCT(S) AND/OR DOUBLE AGENT
PRODUCT OR (Z) CONDUCTING CLINICAL STUDIES INVOLVING ONE OR MORE OF EFV, FTC AND
TDF, OR ANY COMBINATION THEREOF (INCLUDING THE COMBINATION PRODUCT).

 

(B)                                 SUBJECT TO SECTION 5.7, EACH PARTY’S
PROMOTION OF THE COMBINATION PRODUCT IN THE TERRITORY SHALL BE IN ACCORDANCE
WITH THE APPROVED MARKETING MATERIALS, THE FDA-APPROVED LABEL AND THE PACKAGE
INSERT FOR THE COMBINATION PRODUCT; PROVIDED, HOWEVER, THAT SUBJECT TO THE
FOREGOING, EACH PARTY SHALL HAVE A RIGHT TO POSITION THE COMBINATION PRODUCT
WITHIN ITS HIV PRODUCT PORTFOLIO IN ITS SOLE DISCRETION.

 

(C)                                  EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN
THIS AGREEMENT (OR IN THE OPERATING AGREEMENT OR ANY ANCILLARY AGREEMENT) AND
NOTWITHSTANDING THE POWERS AND AUTHORITY DELEGATED TO A PARTY, THE JEC OR AN
OPERATING COMMITTEE, NEITHER PARTY SHALL HAVE ANY OBLIGATION (I) TO CONDUCT
ACTIVITIES IN SUPPORT OR FURTHERANCE OF THE EXPLOITATION OF THE COMBINATION
PRODUCT, UNLESS MUTUALLY AGREED IN WRITING BY THE PARTIES OR EXPRESSLY SET FORTH
IN THIS AGREEMENT, THE COMMERCIALIZATION PLAN OR DEVELOPMENT PLAN, OR (II) TO
MAKE PAYMENTS OR INCUR EXPENSES OR LIABILITIES IN SUPPORT OR FURTHERANCE OF THE
EXPLOITATION OF THE COMBINATION PRODUCT UNLESS MUTUALLY AGREED IN WRITING BY THE
PARTIES OR EXPRESSLY SET FORTH IN THE COMMERCIALIZATION BUDGET OR THE
DEVELOPMENT BUDGET.

 

2.10                           COMMERCIALIZATION BUDGET/PLAN DEADLOCKS.  IN THE
EVENT OF A COMMERCIALIZATION BUDGET DEADLOCK OR A COMMERCIALIZATION PLAN
DEADLOCK (AS SUCH TERMS ARE

 

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DEFINED BELOW) WITH RESPECT TO ANY PORTION OF THE PERIOD FROM THE EFFECTIVE DATE
THROUGH THE END OF THE SUBSEQUENT LAUNCH PERIOD, THEN IN LIEU OF ANY OTHER
DISPUTE RESOLUTION PROCEDURES SET FORTH IN THIS AGREEMENT OR IN THE OPERATING
AGREEMENT, THE PARTIES AGREE THAT THE DISPUTE SHALL BE CONCLUSIVELY RESOLVED AS
FOLLOWS:

 

(A)                                  IF A COMMERCIALIZATION BUDGET DEADLOCK
RELATES TO ANY CALENDAR YEAR (OR PART THEREOF) DURING THE PERIOD FROM THE
EFFECTIVE DATE THROUGH THE END OF THE INITIAL LAUNCH PERIOD, THE LEVEL OF
AGGREGATE EXPENDITURE FOR THE CALENDAR YEAR (OR PART THEREOF) IN DISPUTE SHALL
BE FIXED, UPON NOTICE GIVEN BY A MEMBER PARTY TO THE OTHER MEMBER PARTY, AT (I)
IN THE CASE OF DISPUTES ON ANNUAL UPDATES, THE LEVEL FOR THE CALENDAR YEAR IN
DISPUTE PROVIDED FOR IN THE INITIAL VERSION OF THE COMMERCIALIZATION BUDGET
INCLUDED IN ANNEX C HERETO (AS MOST RECENTLY UPDATED, IF APPLICABLE), OR (II) IN
THE CASE OF DISPUTES ON INTERIM UPDATES, THE LEVEL THEN IN EFFECT FOR THE
RELEVANT PART OF THE CURRENT CALENDAR YEAR.

 

(B)                                 IF A COMMERCIALIZATION BUDGET DEADLOCK
RELATES TO ANY CALENDAR YEAR (OR PART THEREOF) DURING THE SUBSEQUENT LAUNCH
PERIOD, (I) THE LEVEL OF AGGREGATE EXPENDITURE FOR THE CALENDAR YEAR (OR PART
THEREOF) IN DISPUTE SHALL BE FIXED, UPON NOTICE GIVEN BY A MEMBER PARTY TO THE
OTHER MEMBER PARTY,  AT (A) IN THE CASE OF DISPUTES ON ANNUAL UPDATES, [*] OF
THE LEVEL (AS MOST RECENTLY UPDATED) BUDGETED FOR THE CALENDAR YEAR IMMEDIATELY
PRECEDING THE CALENDAR YEAR IN DISPUTE UNLESS BOTH MEMBERS, THROUGH THEIR
RESPECTIVE REPRESENTATIVES ON THE JEC HAVE PROPOSED LEVELS OF AGGREGATE
EXPENDITURE BOTH OF WHICH ARE LOWER THAN THE AFORESAID [*] LEVEL, IN WHICH CASE
THE LEVEL OF AGGREGATE EXPENDITURE FOR THE CALENDAR YEAR IN DISPUTE SHALL
INSTEAD BE FIXED AT THE [*] OF THE [*] BY THE MEMBERS THROUGH THEIR RESPECTIVE
REPRESENTATIVES ON THE JEC, OR (B) IN THE CASE OF DISPUTES ON INTERIM UPDATES,
THE LEVEL THEN IN EFFECT FOR THE RELEVANT PART OF THE CURRENT CALENDAR YEAR, AND
(II) IF THERE IS A DISPUTE REGARDING THE LEVEL OF AGGREGATE EXPENDITURE PROVIDED
FOR IN A SUBSEQUENT ANNUAL UPDATE TO THE COMMERCIALIZATION BUDGET COVERED BY THE
FOREGOING CLAUSE (A), SUCH LEVEL SHALL BE FIXED, UPON NOTICE GIVEN BY A MEMBER
PARTY TO THE OTHER MEMBER PARTY, AT THE AMOUNT [*] WHICH IS THE [*] OF THE [*]
BY THE MEMBERS THROUGH THEIR RESPECTIVE REPRESENTATIVES ON THE JEC.

 

(C)                                  IF A COMMERCIALIZATION PLAN DEADLOCK
RELATES TO ANY CALENDAR YEAR (OR PART THEREOF) DURING THE INITIAL LAUNCH PERIOD,
THE [*] FOR THE CALENDAR YEAR (OR PART THEREOF) IN DISPUTE SHALL BE FIXED, UPON
NOTICE GIVEN BY A MEMBER PARTY TO THE OTHER MEMBER PARTY, AT (I) IN THE CASE OF
DISPUTES ON ANNUAL UPDATES, THE LEVEL FOR THE CALENDAR YEAR IN DISPUTE PROVIDED
FOR IN THE INITIAL VERSION OF THE COMMERCIALIZATION PLAN INCLUDED IN ANNEX C
HERETO (AS MOST RECENTLY UPDATED, IF APPLICABLE), OR (II) IN THE CASE OF
DISPUTES ON INTERIM UPDATES, THE LEVEL THEN IN EFFECT FOR THE RELEVANT PART OF
THE CURRENT CALENDAR YEAR.

 

(D)                                 IF A COMMERCIALIZATION PLAN DEADLOCK RELATES
TO ANY CALENDAR YEAR (OR PART THEREOF) DURING THE SUBSEQUENT LAUNCH PERIOD, (I)
THE [*] FOR THE CALENDAR YEAR (OR PART THEREOF) IN DISPUTE SHALL BE FIXED, UPON
NOTICE GIVEN BY A MEMBER PARTY TO THE OTHER MEMBER PARTY, AT (A) IN THE CASE OF
DISPUTES ON ANNUAL UPDATES, [*] OF THE LEVEL (AS MOST RECENTLY UPDATED) IN
EFFECT FOR THE CALENDAR YEAR IMMEDIATELY PRECEDING THE  CALENDAR YEAR IN
DISPUTE, UNLESS BOTH MEMBERS, THROUGH THEIR RESPECTIVE REPRESENTATIVES ON THE
JEC, HAVE PROPOSED [*] BOTH OF WHICH ARE LOWER THAN THE AFORESAID [*] LEVEL, IN
WHICH CASE THE [*] FOR THE PRODUCT YEAR IN DISPUTE SHALL INSTEAD BE FIXED AT THE
[*] OF THE [*] BY THE MEMBERS THROUGH THEIR RESPECTIVE REPRESENTATIVES ON THE
JEC, OR (B) IN THE CASE OF DISPUTES ON INTERIM UPDATES, THE LEVEL THEN IN EFFECT
FOR THE RELEVANT

 

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PART OF THE CURRENT CALENDAR YEAR, AND (II) IF THERE IS A DISPUTE REGARDING THE
[*] PROVIDED FOR IN A SUBSEQUENT ANNUAL UPDATE TO THE COMMERCIALIZATION PLAN
COVERED BY THE FOREGOING CLAUSE (A), SUCH LEVEL SHALL BE FIXED, UPON NOTICE
GIVEN BY A MEMBER PARTY TO THE OTHER MEMBER PARTY, AT THE AMOUNT [*] WHICH IS
THE [*] OF THE [*] BY THE MEMBERS THROUGH THEIR RESPECTIVE REPRESENTATIVES ON
THE JEC.

 

For Calendar Years (or any part thereof) commencing after the Subsequent Launch
Period, any aggregate expenditures in a Commercialization Budget, and any [*] in
a Commercialization Plan, shall be decided by the mutual agreement in writing of
the Member Parties; failure to reach agreement thereon shall not be subject to
dispute resolution hereunder.  As used in this Agreement, (x) a
“Commercialization Budget Deadlock” shall mean that the JEC is unable to reach
agreement, by unanimous Member Vote (as defined in the Operating Agreement) or
unanimous written consent of the members of the JEC, on the level of aggregate
expenditure in any annual or (in the case of clause (y) of Section 2.2(vi))
interim update to the Commercialization Budget covering all or any portion of
the period from the Effective Date through the end of the Initial Launch Period
or all or any portion of the Subsequent Launch Period and (y) a
“Commercialization Plan Deadlock” shall mean that the JEC is unable to reach
agreement, by unanimous Member Vote or unanimous written consent of the members
of the JEC, on the [*] to be conducted in any annual or (in the case of clause
(y) of Section 2.2(vi)) interim update to the Commercialization Plan covering
all or any portion of the Initial Launch Period or the Subsequent Launch Period.

 

2.11                           EXPENSES.  GILEAD AND BMS SHALL EACH BEAR THEIR
OWN EXPENSES RELATED TO THE MANAGEMENT OF THE JV, INCLUDING WITHOUT LIMITATION
ALL EXPENSES RELATING TO THE MEETINGS OF THE JEC AND THE OPERATING COMMITTEES,
THE PARTICIPATION OF THE MEMBERS’ REPRESENTATIVES IN SUCH MEETINGS,
COMMUNICATIONS WITH THE OTHER MEMBER IN CONNECTION WITH SUCH MEETINGS OR MATTERS
WITHIN THE AUTHORITY OF THE COMMITTEES, AND TRAVEL TO AND FROM SUCH MEETINGS,
AND SUCH EXPENSES SHALL NOT BE DEEMED JV EXPENSES OR AUTHORIZED OTHER EXPENSES.

 

SECTION 3.
DEVELOPMENT ACTIVITIES

 

3.1                                 GENERAL.  UNDER THE OVERSIGHT OF THE JDC,
GILEAD AND BMS SHALL EACH PERFORM, OR CAUSE ITS AFFILIATES TO PERFORM, ON BEHALF
OF AND IN THE NAME OF THE JV, THE DEVELOPMENT ACTIVITIES DESIGNATED FOR SUCH
MEMBER PARTY IN THE DEVELOPMENT PLAN, IN EACH CASE IN ACCORDANCE WITH THE
TIMELINE SET FORTH IN THE DEVELOPMENT PLAN.  FOR THE AVOIDANCE OF DOUBT, GILEAD,
ON ITS OWN BEHALF AND IN ITS OWN NAME, SHALL HAVE THE SOLE RIGHT TO [*] IN ITS
SOLE DISCRETION AND WITHOUT OVERSIGHT BY THE JDC OR THE JEC, BUT SHALL [*] WITH
RESPECT TO [*] SUCH [*].

 

3.2                                 CLINICAL DEVELOPMENT.

 

(A)                                  WITHOUT LIMITATION OF SECTION 3.1, GILEAD,
UNDER THE OVERSIGHT OF THE JDC, SHALL HAVE PRIMARY RESPONSIBILITY FOR THE
DEVELOPMENT OF THE COMBINATION PRODUCT AND THE CONDUCT OF ANY CLINICAL TRIALS
AND BIOEQUIVALENCE STUDIES REQUIRED FOR OBTAINING APPROVAL OF AN NDA FOR THE
COMBINATION PRODUCT IN THE TERRITORY IN THE FIELD, IN EACH CASE ONLY AS SET
FORTH IN THE DEVELOPMENT PLAN OR OTHERWISE MUTUALLY AGREED UPON BY THE MEMBER
PARTIES.

 

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(B)                                 IN THE EVENT THAT EITHER MEMBER PARTY
DESIRES (I) TO CONDUCT OR SPONSOR, OR CAUSE TO BE CONDUCTED OR SPONSORED,
JOINTLY WITH THE OTHER MEMBER PARTY, OR IN THE NAME OF THE JV, A CLINICAL TRIAL
OF THE COMBINATION PRODUCT (WHETHER SUCH CLINICAL TRIAL WOULD INVOLVE THE
COMBINATION PRODUCT ALONE, OR WITH ONE OR MORE OTHER PRODUCTS) OTHER THAN ANY
CLINICAL TRIAL CONTEMPLATED BY THE DEVELOPMENT PLAN, INCLUDING, WITHOUT
LIMITATION, AN EXPANDED ACCESS PROGRAM OR PHASE IIIB/IV STUDY, OR (II) TO
SUPPORT JOINTLY WITH THE OTHER MEMBER PARTY (EITHER ON THEIR OWN BEHALF OR IN
THE NAME OF THE JV) ANY SUCH CLINICAL TRIAL SPONSORED BY AN INVESTIGATOR, SUCH
MEMBER PARTY SHALL SO NOTIFY THE OTHER MEMBER PARTY.  THE MEMBER PARTIES SHALL
THEN DISCUSS THE PARTICULARS OF THE PROPOSED CLINICAL TRIAL.  IN THE EVENT THAT
THE MEMBER PARTIES, EACH IN ITS SOLE DISCRETION, AGREE TO CONDUCT JOINTLY OR
SPONSOR JOINTLY SUCH CLINICAL TRIAL (EITHER ON THEIR OWN BEHALF OR IN THE NAME
OF THE JV), THE JDC REPRESENTATIVES SHALL PREPARE AND AGREE UPON A TRIAL
PROTOCOL AND DESIGNATE A MEMBER PARTY TO TAKE THE LEAD IN CONDUCTING OR
SUPERVISING SUCH CLINICAL TRIAL AND NEGOTIATING ANY NECESSARY CLINICAL TRIAL
AGREEMENTS, AS THE CASE MAY BE, AND THE EXTERNAL, OUT-OF-POCKET COSTS OF THE
MEMBER PARTIES, IF ANY, WITHOUT ANY MARKUP, RELATING TO SUCH CLINICAL TRIAL
SHALL BE TREATED AS AUTHORIZED DEVELOPMENT EXPENSES.  IN THE EVENT THAT THE
MEMBER PARTIES, EACH IN ITS SOLE DISCRETION, AGREE TO SUPPORT JOINTLY (EITHER ON
THEIR OWN BEHALF OR IN THE NAME OF THE JV) ANY INVESTIGATOR-SPONSORED CLINICAL
TRIAL, THE MEMBER PARTIES SHALL COORDINATE WITH THE INVESTIGATOR SEEKING TO
CONDUCT SUCH CLINICAL TRIAL AND AGREE UPON AN APPROPRIATE GRANT OF SUPPORT
(INCLUDING, WITHOUT LIMITATION, SUPPORT IN THE FORM OF FUNDING OR THE
CONTRIBUTION OF DRUG PRODUCT), AND THE EXTERNAL, OUT-OF-POCKET COSTS OF THE
MEMBER PARTIES, IF ANY, WITHOUT ANY MARK UP, WITH RESPECT TO SUCH CLINICAL TRIAL
SHALL BE TREATED AS AUTHORIZED DEVELOPMENT EXPENSES.  EACH CLINICAL TRIAL THAT
THE MEMBER PARTIES SHALL DETERMINE TO CONDUCT, SPONSOR OR SUPPORT JOINTLY
PURSUANT TO THE PRECEDING TWO SENTENCES SHALL BE REFERRED TO AS A “CO-FUNDED
CLINICAL TRIAL.”  THE CLINICAL DATA WITH RESPECT TO ANY CO-FUNDED CLINICAL TRIAL
SHALL BE DEEMED TO BE JOINT KNOW-HOW; PROVIDED, HOWEVER, THAT, IN THE CASE OF
ANY INVESTIGATOR-SPONSORED CLINICAL TRIAL, THE CLINICAL DATA RESULTING FROM ANY
SUCH CO-FUNDED CLINICAL TRIAL SHALL BE DEEMED TO BE JOINT KNOW-HOW ONLY IF AND
TO THE EXTENT THAT THE JV OR EITHER OR BOTH MEMBER PARTIES OBTAINS ANY RIGHT,
TITLE AND INTEREST IN AND TO SUCH CLINICAL DATA.

 

FOR THE AVOIDANCE OF DOUBT, NOTHING CONTAINED IN THIS SECTION 3.2 IS INTENDED,
OR SHALL BE CONSTRUED, TO RESTRICT OR PROHIBIT EITHER MEMBER PARTY FROM
CONDUCTING INDEPENDENTLY OR TOGETHER WITH ONE OR MORE THIRD PARTIES, ANY
CLINICAL TRIAL OF THE COMBINATION PRODUCT (WHETHER SUCH CLINICAL TRIAL WOULD
INVOLVE THE COMBINATION PRODUCT ALONE, OR WITH ONE OR MORE OTHER PRODUCTS). 
PRIOR TO A MEMBER PARTY’S COMMENCING ANY SUCH CLINICAL TRIAL SPONSORED BY SUCH
MEMBER PARTY, WHETHER INDEPENDENTLY OR TOGETHER WITH ONE OR MORE THIRD PARTIES,
THE APPLICABLE MEMBER PARTY SHALL PROVIDE A BRIEF SUMMARY OF THE PROTOCOLS TO
THE OTHER MEMBER PARTY’S REPRESENTATIVES ON THE JDC (IT BEING UNDERSTOOD THAT
NEITHER SUCH REPRESENTATIVES NOR THE JDC SHALL HAVE ANY APPROVAL RIGHTS WITH
RESPECT TO SUCH STUDY OR PROTOCOLS), PROVIDED THAT (A) EACH SUCH SUMMARY SHALL
CONSTITUTE CONFIDENTIAL INFORMATION OF THE DISCLOSING MEMBER PARTY TO THE EXTENT
THAT THE INFORMATION PROVIDED IN SUCH SUMMARY SATISFIES THE CRITERIA SET FORTH
IN SECTION 12.3, (B) THE RECEIVING MEMBER PARTY’S REPRESENTATIVES SHALL NOT USE
SUCH SUMMARY FOR ANY PURPOSE OTHER THAN PROVIDING COMMENTS THEREON TO THE
DISCLOSING MEMBER PARTY (WHICH COMMENTS MAY BE ACCEPTED OR REJECTED BY THE
DISCLOSING MEMBER PARTY IN ITS SOLE DISCRETION), AND (C) THE RECEIVING MEMBER
PARTY’S REPRESENTATIVES SHALL NOT DISCLOSE SUCH SUMMARY TO ANY PERSONS OTHER
THAN EMPLOYEES OF SUCH MEMBER PARTY WHO HAVE AN OBLIGATION (X) NOT TO FURTHER
DISCLOSE SUCH SUMMARY AND (Y) TO USE SUCH SUMMARY SOLELY IN ORDER TO ASSIST SUCH
MEMBER PARTY’S REPRESENTATIVES IN PROVIDING COMMENTS THEREON.  FOR THE AVOIDANCE
OF DOUBT, A MEMBER

 

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PARTY’S PROVIDING SUCH SUMMARY WITH RESPECT TO ANY SUCH CLINICAL TRIAL PURSUANT
TO THIS AGREEMENT SHALL NOT BE CONSTRUED TO HAVE THE EFFECT OF CAUSING THE
ACTIVITIES WITH RESPECT TO SUCH CLINICAL TRIAL TO BE DEEMED TO BE PROJECT
ACTIVITIES FOR PURPOSES OF THIS AGREEMENT.

 

(C)                                  IN THE EVENT THAT THE MEMBER PARTIES
DETERMINE  TO CONDUCT ADDITIONAL DEVELOPMENT ACTIVITIES FOR AN ALTERNATIVE
FORMULATION OR PRESENTATION OF THE COMBINATION PRODUCT, AND CONDUCT OR CAUSE TO
BE CONDUCTED SUCH ADDITIONAL ACTIVITIES, THE EXTERNAL, OUT-OF-POCKET COSTS OF
THE MEMBER PARTIES, IF ANY, WITHOUT ANY MARKUP, WITH RESPECT TO SUCH ACTIVITIES
SHALL BE TREATED AS AUTHORIZED DEVELOPMENT EXPENSES.

 

3.3                                 FORMULATION AND CMC DATA.  WITHOUT
LIMITATION OF SECTION 3.1, GILEAD, UNDER THE OVERSIGHT OF THE JDC, SHALL HAVE
PRIMARY RESPONSIBILITY FOR FORMULATION AND MANUFACTURING PROCESS DEVELOPMENT
FOR, AND PREPARATION OF THE CMC DATA RELATING TO, THE COMBINATION PRODUCT AS
CONTEMPLATED BY THE DEVELOPMENT PLAN.  FORMULATION DEVELOPMENT SHALL INCLUDE,
WITHOUT LIMITATION, CONDUCTING THE FORMULATION SCREENING, OPTIMIZATION, SCALE-UP
AND TECHNOLOGY TRANSFER FOR THE COMBINATION PRODUCT IN THE FIELD.

 

3.4                                 REGULATORY MATTERS.

 

(A)                                  WITHOUT LIMITATION OF SECTION 3.1, GILEAD,
UNDER THE OVERSIGHT OF THE JDC AND WITH THE PARTICIPATION OF BMS AS DESCRIBED IN
THIS SECTION 3.4, SHALL HAVE PRIMARY RESPONSIBILITY FOR PREPARING AND FILING ALL
NECESSARY REGULATORY DOCUMENTATION AND FOR ACTING AS LIAISON ON BEHALF OF THE JV
FOR ALL COMMUNICATIONS WITH THE REGULATORY AUTHORITIES IN THE TERRITORY RELATING
TO THE OBTAINING OF APPROVAL OF THE COMBINATION PRODUCT IN THE FIELD UNDER AN
NDA SEPARATE FROM THE RESPECTIVE NDAS FOR SUSTIVA, VIREAD, EMTRIVA AND TRUVADA. 
GILEAD SHALL PREPARE AND FILE ALL COMBINATION PRODUCT REGULATORY DOCUMENTATION
WITH REGULATORY AUTHORITIES IN THE TERRITORY IN THE NAME OF THE JV.  ALL
SUBMISSIONS OF COMBINATION PRODUCT REGULATORY DOCUMENTATION CONSISTING OF ANY
INDS, NDAS, SNDAS, CMC DATA, DRUG MASTER FILES AND PSURS (COLLECTIVELY, THE “KEY
REGULATORY SUBMISSIONS”) SHALL BE APPROVED IN ADVANCE BY THE JDC (WHICH SHALL
NOT DELEGATE SUCH APPROVAL TO ANY SUBCOMMITTEES OR GROUPS REFERRED TO IN
SECTION 2.6(G)).  IF PERMITTED BY APPLICABLE LAW, THE LABEL FOR THE COMBINATION
PRODUCT SHALL LIST THE AGENTS IN THE FOLLOWING ORDER:  [*].

 

(B)                                 GILEAD SHALL NOTIFY BMS AS EARLY AS
REASONABLY PRACTICABLE IN ADVANCE OF ALL MEETINGS (WHETHER FACE TO FACE OR BY
TELECONFERENCE) AND COMMUNICATIONS WITH REPRESENTATIVES OF THE REGULATORY
AUTHORITIES IN THE TERRITORY CONCERNING THE COMBINATION PRODUCT AND IN ORDER TO
PROVIDE BMS WITH AN OPPORTUNITY TO BE PRESENT AT SUCH MEETINGS AND TO REVIEW AND
COMMENT ON SUCH COMMUNICATIONS; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL
GILEAD, AFTER USING REASONABLE EFFORTS TO PROVIDE BMS WITH AN OPPORTUNITY TO BE
PRESENT AT ANY SUCH MEETING OR TO REVIEW AND COMMENT ON SUCH COMMUNICATIONS, BE
REQUIRED TO POSTPONE ANY SUCH MEETING TO ENSURE THAT BMS ATTENDS SUCH MEETING OR
TO POSTPONE ANY SUCH COMMUNICATION IN ORDER TO ENSURE THAT BMS’ COMMENTS ARE
RECEIVED BY GILEAD IN ADVANCE OF ITS SUBMISSION TO REGULATORY AUTHORITIES, AS
THE CASE MAY BE.  IN ORDER TO ENHANCE THE EFFICIENCY OF THE MEMBER PARTIES’
COORDINATION ON REGULATORY MATTERS CONCERNING THE COMBINATION PRODUCT, AND
INCREASE THE LIKELIHOOD THAT BMS WILL HAVE A MEANINGFUL OPPORTUNITY TO
PARTICIPATE IN SUCH ACTIVITIES, DURING THE TERM OF THIS AGREEMENT, BMS WILL
CAUSE ONE OF ITS EMPLOYEES WITH THE NECESSARY REGULATORY EXPERTISE AND
DECISION-MAKING AUTHORITY TO BE DEDICATED ON A FULL-TIME BASIS TO SERVING

 

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AS A CONDUIT FOR BMS’ PARTICIPATION IN SUCH ACTIVITIES.  GILEAD SHALL PROMPTLY
FORWARD TO BMS IN ADVANCE OF ANY SUCH MEETING COPIES OF ALL DOCUMENTS AND OTHER
RELEVANT INFORMATION RELATING TO SUCH MEETING.  NOTWITHSTANDING ANYTHING
CONTAINED IN THIS AGREEMENT TO THE CONTRARY, (I) AT ANY SUCH MEETING WITH, OR
ANY SUCH COMMUNICATION TO, THE REGULATORY AUTHORITIES IN THE TERRITORY
CONCERNING THE COMBINATION PRODUCT, AT WHICH BMS AND GILEAD ARE PRESENT OR IN
WHICH BOTH MEMBER PARTIES PARTICIPATE, EACH MEMBER PARTY SHALL TAKE THE LEAD ON
MATTERS RELATING TO ITS RESPECTIVE SINGLE AGENT PRODUCT(S) OR DOUBLE AGENT
PRODUCT AND (II) AT ANY SUCH MEETING WITH, OR ANY SUCH COMMUNICATION TO, SUCH
REGULATORY AUTHORITIES CONCERNING THE COMBINATION PRODUCT, AT WHICH ONLY ONE
MEMBER PARTY MEETS OR IN WHICH COMMUNICATION ONLY ONE MEMBER PARTY PARTICIPATES
(WITHOUT THE OTHER MEMBER PARTY’S PRESENCE OR PARTICIPATION), SUCH MEMBER PARTY
SHALL NOT ENGAGE IN ANY SUBSTANTIVE DISCUSSIONS PERTAINING TO THE OTHER MEMBER
PARTY’S SINGLE AGENT PRODUCT(S) OR DOUBLE AGENT PRODUCT, AS THE CASE MAY BE,
INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO API CONSISTING OF EFV, TDF OR
FTC, AS THE CASE MAY BE, AS IT RELATES TO THE COMBINATION PRODUCT.

 

(C)                                  EACH MEMBER PARTY SHALL PROMPTLY FORWARD TO
THE OTHER MEMBER PARTY ANY WRITTEN COMMUNICATIONS RECEIVED FROM REPRESENTATIVES
OF THE REGULATORY AUTHORITIES RELATING TO THE COMBINATION PRODUCT.  BMS SHALL
PROVIDE GILEAD WITH FULL ACCESS TO AND COPIES (INCLUDING ELECTRONIC COPIES IF
REQUESTED) OF THE BMS REGULATORY DOCUMENTATION, INCLUDING WITHOUT LIMITATION THE
NDA FOR SUSTIVA, AS GILEAD MAY REASONABLY REQUEST IN CONNECTION WITH (AND SOLELY
FOR THE PURPOSE OF) THE PERFORMANCE OF ITS DUTIES UNDER THIS SECTION 3.4.

 

(D)                                 NOTHING IN THIS SECTION 3.4 SHALL PROHIBIT
OR RESTRICT EITHER MEMBER PARTY FROM COMMUNICATING WITH THE REGULATORY
AUTHORITIES ON MATTERS RELATING TO THE EXPLOITATION OF ANY OF ITS RESPECTIVE
SINGLE AGENT PRODUCT(S), DOUBLE AGENT PRODUCT OR OTHER PHARMACEUTICAL PRODUCTS. 
EACH MEMBER PARTY SHALL PROMPTLY NOTIFY THE OTHER MEMBER PARTY OF ANY LABEL
CHANGE FOR THE FIRST MEMBER PARTY’S RESPECTIVE SINGLE AGENT PRODUCT(S) OR DOUBLE
AGENT PRODUCT THAT MAY RESULT IN A LABEL CHANGE FOR THE COMBINATION PRODUCT.  IF
ANY COMMUNICATIONS FROM REGULATORY AUTHORITIES REGARDING POTENTIAL LABEL CHANGES
FOR THE COMBINATION PRODUCT ARE REASONABLY EXPECTED TO LEAD TO A LABEL CHANGE
FOR A MEMBER PARTY’S SINGLE AGENT PRODUCT OR DOUBLE AGENT PRODUCT, THEN,
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE AFFECTED MEMBER
PARTY SHALL TAKE THE LEAD IN DEALING WITH THE REGULATORY AUTHORITIES ON SUCH
MATTER.

 

3.5                                 PERFORMANCE; SUBCONTRACTING.  GILEAD AND BMS
EACH SHALL PERFORM ITS RESPECTIVE DEVELOPMENT ACTIVITIES IN MATERIAL COMPLIANCE
WITH GCP, GLP, AND GMP, IN EACH CASE TO THE EXTENT APPLICABLE, AND THE
REQUIREMENTS OF APPLICABLE LAW, AND SO LONG AS THERE IS A DEVELOPMENT PLAN IN
EFFECT, SHALL USE COMMERCIALLY REASONABLE EFFORTS TO PERFORM ITS DEVELOPMENT
ACTIVITIES UNDER THE DEVELOPMENT PLAN EFFICIENTLY AND EXPEDITIOUSLY, SUBJECT TO
THE DEVELOPMENT BUDGET.  EITHER MEMBER PARTY MAY SUBCONTRACT THE PERFORMANCE OF
ITS RESPECTIVE DEVELOPMENT ACTIVITIES; PROVIDED, HOWEVER, THAT THE
SUBCONTRACTING MEMBER PARTY SHALL OVERSEE THE PERFORMANCE BY ITS SUBCONTRACTORS
OF THE SUBCONTRACTED DEVELOPMENT ACTIVITIES IN A MANNER THAT WOULD BE REASONABLY
EXPECTED TO RESULT IN THEIR TIMELY AND SUCCESSFUL COMPLETION AND SHALL REMAIN
RESPONSIBLE FOR THE PERFORMANCE OF SUCH DEVELOPMENT ACTIVITIES IN ACCORDANCE
WITH THIS AGREEMENT AND THE DEVELOPMENT PLAN.

 

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3.6                                 RECORDS.

 

(A)                                  MAINTENANCE OF RECORDS.  GILEAD AND BMS
EACH SHALL SEVERALLY (IN ACCORDANCE WITH THEIR RESPECTIVE ALLOCATIONS OF
RESPONSIBILITIES WITH RESPECT TO PROJECT ACTIVITIES) MAINTAIN, OR CAUSE TO BE
MAINTAINED, ALL COMBINATION PRODUCT REGULATORY DOCUMENTATION AND FINAL
SUPPORTING RECORDS AND DOCUMENTATION THEREFOR (BUT NOT DRAFT RECORDS OR
DOCUMENTATION THEREFOR EXCEPT AS OTHERWISE REQUIRED BY APPLICABLE LAW), IN
SUFFICIENT DETAIL AND IN MATERIAL COMPLIANCE WITH GCP, GLP, AND GMP, IN EACH
CASE TO THE EXTENT APPLICABLE.  SUCH RECORDS SHALL BE COMPLETE AND ACCURATE AND
SHALL FULLY AND PROPERLY REFLECT ALL WORK DONE AND RESULTS ACHIEVED IN THE
PERFORMANCE OF ITS RESPECTIVE DEVELOPMENT ACTIVITIES IN A MANNER APPROPRIATE FOR
ANY REGULATORY PURPOSE AND, WHEN APPLICABLE, FOR USE IN CONNECTION WITH PATENT
FILINGS, PROSECUTION AND MAINTENANCE.  SUCH DOCUMENTATION AND RECORDS SHALL BE
RETAINED FOR AT LEAST (I) THREE (3) YEARS OR (II) SUCH LONGER PERIOD AS MAY BE
REQUIRED BY APPLICABLE LAW.

 

(B)                                 ACCESS TO RECORDS.  EACH MEMBER PARTY SHALL
HAVE THE RIGHT, DURING NORMAL BUSINESS HOURS AND UPON REASONABLE NOTICE, TO
INSPECT AND COPY ANY COMBINATION PRODUCT REGULATORY DOCUMENTATION AND FINAL
SUPPORTING RECORDS AND DOCUMENTATION THEREFOR GENERATED OR MAINTAINED BY THE
OTHER MEMBER PARTY, FOR USE BY THE RECEIVING MEMBER PARTY SOLELY IN CONNECTION
WITH THE PERFORMANCE OF ITS DEVELOPMENT ACTIVITIES IN A MANNER CONSISTENT WITH
THE DEVELOPMENT PLAN.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
SECTION 3.6(B), EACH MEMBER PARTY SHALL ALSO HAVE THE RIGHT, DURING NORMAL
BUSINESS HOURS AND UPON REASONABLE NOTICE, TO OBTAIN FROM THE OTHER MEMBER PARTY
ACCESS TO OR COPIES OF SCIENTIFIC, REGULATORY AND TECHNICAL RECORDS,
DOCUMENTATION AND DATA SOLELY TO THE EXTENT RELATING TO THE COMBINATION PRODUCT
OR SUCH OTHER MEMBER PARTY’S SINGLE AGENT PRODUCT(S) AND/OR DOUBLE AGENT
PRODUCT, AS THE CASE MAY BE, AND SOLELY TO THE EXTENT (I) NECESSARY IN ORDER FOR
THE RECEIVING MEMBER PARTY TO PERFORM ITS OBLIGATIONS WITH RESPECT TO
DEVELOPMENT ACTIVITIES IN A MANNER CONSISTENT WITH THE DEVELOPMENT PLAN, (II)
NECESSARY FOR THE RECEIVING MEMBER PARTY TO CONFIRM COMPLIANCE WITH AND/OR TO
COMPLY WITH GLP, GCP AND GMP (TO THE EXTENT APPLICABLE), AND OTHER APPLICABLE
LAW, AS IT RELATES TO PROJECT ACTIVITIES, AND/OR (III) NECESSARY TO ENABLE THE
RECEIVING MEMBER PARTY TO CONDUCT REASONABLE DILIGENCE ON MATTERS POTENTIALLY
GIVING RISE TO LIABILITY ON THE PART OF THE JV AND/OR SUCH RECEIVING MEMBER
PARTY, OR TO CONDUCT A DEFENSE OF ITSELF AND/OR THE JV WITH RESPECT TO ANY SUCH
LIABILITY, IF AND TO THE EXTENT THAT A FACT, CIRCUMSTANCE OR EVENT HAS ARISEN
THAT GIVES THE RECEIVING MEMBER PARTY A REASONABLE BASIS TO BELIEVE THAT IT OR
THE JV HAS OR MAY INCUR SUCH LIABILITY, IN EACH CASE FOR USE BY THE RECEIVING
MEMBER PARTY FOR THE PURPOSE SET FORTH IN CLAUSE (I), (II) OR  (III) ABOVE, AS
THE CASE MAY BE.  CLAUSE (III) OF THE IMMEDIATELY PRECEDING SENTENCE SHALL NOT
REQUIRE ANY PARTY TO PROVIDE SUCH DATA, DOCUMENTATION OR RECORDS IN THE EVENT
THAT THE PARTIES’ INTERESTS IN SUCH MATTER ARE OR MAY BE [*], IN WHICH CASE [*],
SHALL APPLY.  EACH SUCH REQUEST SHALL BE MADE IN WRITING AND SHALL STATE THE
REASON(S) THEREFOR (EACH A “DEVELOPMENT RECORD REQUEST”).  THE MEMBER PARTY FROM
WHICH SUCH RECORDS, DOCUMENTATION OR DATA ARE REQUESTED SHALL HAVE THE RIGHT TO
RAISE REASONABLE OBJECTIONS IN WRITING IN RESPONSE TO SUCH DEVELOPMENT RECORD
REQUEST, INCLUDING, WITHOUT LIMITATION, BASED ON SUCH MEMBER PARTY’S INTERESTS
IN PROTECTING FROM DISCLOSURE TO THE REQUESTING MEMBER PARTY TRADE SECRETS OR
OTHER COMPETITIVE BUSINESS INFORMATION.  UPON ANY SUCH OBJECTION BEING ASSERTED,
THE MEMBER PARTIES SHALL PROMPTLY CONFER IN AN ATTEMPT TO ADDRESS EACH MEMBER
PARTY’S CONCERNS AND REACH A RESOLUTION WITH RESPECT TO THE MATTER, AND IN THE
EVENT THAT THE MEMBER PARTIES ARE UNABLE TO AGREE UPON A MUTUALLY AGREEABLE
RESOLUTION, EITHER MEMBER PARTY SHALL HAVE THE RIGHT TO REFER THE MATTER TO THE
JDC.  IN THE EVENT THAT ANY SUCH DISPUTE IS ULTIMATELY [*] DETERMINE AS A
THRESHOLD MATTER WHETHER AND TO WHAT EXTENT ONE OR MORE CRITERIA SET FORTH IN
CLAUSES (I), (II) AND/OR (III) ABOVE HAVE BEEN SATISFIED BY THE REQUESTING
MEMBER PARTY, AND, IF SO, SHALL MAKE A DETERMINATION WITH

 

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RESPECT TO WHETHER AND TO WHAT EXTENT THE DISCLOSURE OF SUCH INFORMATION SHALL
BE REQUIRED BY [*], AND [*].  IN MAKING SUCH DETERMINATION, [*] TO THE FACTS AND
ARGUMENTS SET FORTH IN THE DEVELOPMENT RECORD REQUEST AND THE OTHER MEMBER
PARTY’S WRITTEN RESPONSE THERETO, AND (Y) SHALL HAVE THE RIGHT TO REQUIRE THE
RECEIVING MEMBER PARTY TO ABIDE BY TERMS AND CONDITIONS FOR THE HANDLING, USE
AND NON-DISCLOSURE (EITHER WITHIN SUCH MEMBER PARTY’S ORGANIZATION AND/OR TO
THIRD PARTIES) OF SUCH INFORMATION AS MAY BE REASONABLE UNDER THE
CIRCUMSTANCES.  EXCEPT AS PROVIDED IN THIS SECTION 3.6, A MEMBER PARTY SHALL NOT
HAVE THE RIGHT TO OBTAIN FROM THE OTHER MEMBER PARTY ACCESS TO OR COPIES OF THE
OTHER MEMBER PARTY’S RECORDS, DOCUMENTATION AND DATA DESCRIBED ABOVE, UNLESS
OTHERWISE EXPRESSLY PERMITTED PURSUANT TO THIS AGREEMENT OR THE OTHER MEMBER
PARTY GIVES ITS CONSENT IN ITS SOLE DISCRETION.

 

3.7                                 UPDATES TO DEVELOPMENT PLAN AND DEVELOPMENT
BUDGET.  GILEAD SHALL PREPARE AND SUBMIT TO EACH OF THE JDC AND JFC (I) NOT LESS
THAN [*] PRIOR TO THE START OF EACH CALENDAR YEAR, A PROPOSED UPDATE TO THE
DEVELOPMENT PLAN AND THE DEVELOPMENT BUDGET FOR SUCH CALENDAR YEAR AND (II) NOT
LESS THAN [*] PRIOR TO THE START OF EACH CALENDAR YEAR, A PRELIMINARY UPDATE TO
SUCH DEVELOPMENT BUDGET (WHICH MAY ADDRESS BUDGET ISSUES AT A GENERAL LEVEL, MAY
BE INCOMPLETE AND IS SUBJECT TO CHANGE).  IN ADDITION, EITHER MEMBER PARTY,
DIRECTLY OR THROUGH ITS REPRESENTATIVES ON THE JDC, MAY PROPOSE UPDATES TO THE
DEVELOPMENT PLAN AND THE DEVELOPMENT BUDGET TO THE JDC FROM TIME TO TIME AS
APPROPRIATE IN LIGHT OF CHANGED CIRCUMSTANCES.  SUCH CHANGES AND UPDATES SHALL
BE SUBJECT TO APPROVAL BY THE JDC AS SET FORTH IN SECTION 2.6(F), WITH ANNUAL
UPDATES TO BE APPROVED AT LEAST [*] PRIOR TO THE START OF SUCH CALENDAR YEAR. 
IF AN ANNUAL OR INTERIM UPDATE TO THE DEVELOPMENT PLAN OR THE DEVELOPMENT BUDGET
IS NOT APPROVED BY THE JDC, THEN, SUBJECT TO SECTIONS 2.2(V) AND 2.8 AS
APPLICABLE, THE DEVELOPMENT PLAN OR DEVELOPMENT BUDGET, AS THE CASE MAY BE,
SHALL CONTINUE IN EFFECT AS APPROVED AND MOST RECENTLY UPDATED PURSUANT TO THIS
SECTION 3.7.  UPDATED DEVELOPMENT PLANS SHALL NOT COVER ITEMS OTHER THAN THOSE
INCLUDED IN THE INITIAL DEVELOPMENT PLAN UNLESS MUTUALLY AGREED BY THE MEMBER
PARTIES.

 

3.8                                 DEVELOPMENT EXPENSES.  [*] SHALL BE [*]
RESPONSIBLE FOR ALL COSTS THAT IT INCURS (A) IN ITS SOLE DISCRETION, IN
CONNECTION WITH THE [*] OR (B) IN THE PERFORMANCE OF [*] DEVELOPMENT ACTIVITIES
AS SET OUT IN THE INITIAL DEVELOPMENT PLAN.  THE PARTIES AGREE THAT THE JV SHALL
BEAR ALL JV EXPENSES INCURRED BY GILEAD OR BMS IN CONNECTION WITH THE
PERFORMANCE OF ITS RESPECTIVE DEVELOPMENT ACTIVITIES TO THE EXTENT MEETING ALL
OF THE FOLLOWING CRITERIA (“AUTHORIZED DEVELOPMENT EXPENSES”):  (I) SUCH
DEVELOPMENT ACTIVITIES ARE CONDUCTED PURSUANT TO THE DEVELOPMENT PLAN AND ARE
WITHIN AN AREA OF RESPONSIBILITY FOR THE RELEVANT MEMBER PARTY LISTED IN THE
DEVELOPMENT BUDGET AS BEING CHARGEABLE TO THE JV; (II) THE TOTAL EXPENSES FOR
THAT AREA OF RESPONSIBILITY FOR THAT MEMBER PARTY FOR THE RELEVANT PERIOD TO THE
EXTENT THAT THEY DO NOT EXCEED THE CORRESPONDING BUDGETED AMOUNT FOR THAT AREA
IN THAT PERIOD BY MORE THAN [*] UNLESS APPROVED BY THE JDC; (III) THE EXPENSES
ARE EXTERNAL, OUT-OF-POCKET COSTS OF GILEAD OR BMS, WITHOUT ANY MARKUP; AND (IV)
THE EXPENSES ARE NOT [*] COSTS OF [*] REFERRED TO IN THE [*].

 

3.9                                 REPORTS.  GILEAD AND BMS SHALL EACH PRESENT
TO THE OTHER, AT A MEETING OF THE JDC AT LEAST ONCE PER CALENDAR QUARTER UNTIL
THE FIRST ANNIVERSARY OF THE LAUNCH OF THE COMBINATION PRODUCT, AND, THEREAFTER,
AT A MEETING OF THE JDC, AT LEAST SEMIANNUALLY, A REPORT (ORAL AND WRITTEN,
WHICH WRITTEN REPORT SHALL NOT BE REQUIRED TO CONTAIN MORE DETAIL THAN THAT
TYPICALLY INCLUDED IN AN EXECUTIVE SUMMARY) DESCRIBING (I) THE DEVELOPMENT
ACTIVITIES IT HAS PERFORMED, OR CAUSED TO BE PERFORMED, SINCE THE PRECEDING
MEETING AT WHICH SUCH A REPORT WAS

 

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PRESENTED (OR, IN THE CASE OF THE FIRST MEETING OF THE JDC, PRIOR TO SUCH
MEETING) AND ON A CALENDAR YEAR-TO DATE BASIS, EVALUATING THE WORK PERFORMED IN
RELATION TO THE GOALS AND TIMELINE OF THE DEVELOPMENT PLAN, (II) ITS DEVELOPMENT
ACTIVITIES IN PROCESS AND THE FUTURE ACTIVITIES IT EXPECTS TO INITIATE DURING
THE THEN-CURRENT CALENDAR YEAR, AS COMPARED TO THE DEVELOPMENT PLAN, AND (III)
IN THE CASE OF THE WRITTEN REPORT THE AUTHORIZED DEVELOPMENT EXPENSES INCURRED,
AND EXPECTED TO BE INCURRED, BY SUCH MEMBER PARTY FOR THE THEN-CURRENT CALENDAR
YEAR, AS COMPARED TO THE DEVELOPMENT BUDGET.  IN ADDITION, GILEAD AND BMS SHALL
REPORT PROMPTLY TO THE JDC THROUGH THEIR RESPECTIVE COMMITTEE MEMBERS ANY
MATERIAL DEVELOPMENTS WITH RESPECT TO DEVELOPMENT ACTIVITIES THAT THEY ARE
RESPONSIBLE FOR PERFORMING UNDER THE DEVELOPMENT PLAN.  NOTWITHSTANDING ANYTHING
CONTAINED IN THIS SECTION 3.9 TO THE CONTRARY, EACH MEMBER PARTY’S REPORTING
OBLIGATIONS UNDER THIS SECTION 3.9 SHALL AUTOMATICALLY BE DEEMED TO TERMINATE
WITH RESPECT TO ANY PERIOD IN WHICH THERE IS NOT THEN IN EFFECT A DEVELOPMENT
PLAN AND DEVELOPMENT BUDGET.

 

3.10                           NEW PRODUCTS.  DURING THE PERIOD FROM THE DATE OF
THIS AGREEMENT THROUGH THE [*] ANNIVERSARY OF THE EFFECTIVE DATE, THE MEMBER
PARTIES AGREE TO USE COMMERCIALLY REASONABLE EFFORTS TO EVALUATE AND PURSUE AN
ARRANGEMENT WITH EACH OTHER FOR THE CO-DEVELOPMENT AND CO-COMMERCIALIZATION OF
[*] PRODUCT COMPRISING [*]; PROVIDED, HOWEVER, THAT THE MEMBER PARTIES MAY
TERMINATE SUCH EFFORTS BY MUTUAL WRITTEN AGREEMENT IF THEY DETERMINE THAT THE
PROPOSED PRODUCT IS NOT COMMERCIALLY OR TECHNICALLY FEASIBLE, WITH SUCH
AGREEMENT TO TERMINATE NOT TO BE UNREASONABLY WITHHELD.  IN FURTHERANCE OF THE
FOREGOING, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, DURING
THE PERIOD FROM THE EFFECTIVE DATE THROUGH THE [*] ANNIVERSARY OF THE EFFECTIVE
DATE (A) GILEAD SHALL NOT (AND SHALL CAUSE ITS AFFILIATES NOT TO) [*] AN [*]
WITH ANY [*] FOR [*] WITHIN THE TERRITORY OF ANY [*] THAT CONTAINS [*] WITH [*]
THAT IS (I) [*] TO THAT THIRD PARTY AND (II) [*] IN THE TERRITORY AS OF [*], AND
(B) BMS SHALL NOT (AND SHALL CAUSE ITS AFFILIATES NOT TO) [*] AN [*] WITH ANY
[*] FOR [*] WITHIN THE TERRITORY OF ANY [*] THAT CONTAINS [*] IN COMBINATION
WITH [*] THAT ARE (I) PROPRIETARY TO THAT THIRD PARTY AND (II) [*] IN THE
TERRITORY AS OF [*].

 

3.11                           PUBLICATION.

 

(A)                                  EITHER MEMBER PARTY SHALL HAVE THE RIGHT TO
PUBLISH OR PRESENT DATA AND FINDINGS RESULTING FROM PROJECT ACTIVITIES,
INCLUDING, WITHOUT LIMITATION, CO-FUNDED CLINICAL TRIALS, SUBJECT TO THE RIGHT
OF OBJECTION OR DEMAND FOR MODIFICATION BY THE OTHER MEMBER PARTY IN THE
INTEREST OF (I) PROTECTING THE CONFIDENTIAL INFORMATION OF SUCH OTHER MEMBER
PARTY, (II) PRESERVING THE INTELLECTUAL PROPERTY RIGHTS OF SUCH OTHER MEMBER
PARTY OR THE JV, AND/OR (III) ASSURING THAT THE PUBLICATION OR PRESENTATION
PRESENTS SUCH DATA AND FINDINGS IN A FAIR, ACCURATE AND BALANCED MANNER IN
ACCORDANCE WITH ETHICAL, MEDICAL AND/OR SCIENTIFIC STANDARDS.  DURING THE TERM
OF THIS AGREEMENT, EACH MEMBER PARTY SHALL PROVIDE TO THE OTHER MEMBER PARTY’S
REPRESENTATIVES ON THE JDC FOR REVIEW COPIES OF ALL ACADEMIC, SCIENTIFIC AND
MEDICAL PUBLICATIONS AND PRESENTATIONS SPECIFICALLY RELATING TO THE COMBINATION
PRODUCT (OR OTHERWISE RELATING TO THE COMBINED USE OF EFV, FTC AND TDF) THAT THE
MEMBER PARTY PROPOSES TO SUBMIT FOR PUBLICATION OR PRESENTATION AND THAT RESULT
FROM PROJECT ACTIVITIES; PROVIDED, HOWEVER, THAT NOTWITHSTANDING ANYTHING
CONTAINED IN THIS SECTION 3.11 TO THE CONTRARY, THE TERMS AND CONDITIONS OF THIS
SECTION 3.11 SHALL NOT APPLY TO ANY PUBLICATIONS AND PRESENTATIONS RESULTING
DIRECTLY OR INDIRECTLY FROM STUDY 934.  REVIEW OF SUCH PUBLICATIONS AND
PRESENTATIONS SHALL BE CONDUCTED ONLY FOR PURPOSES OF CONSIDERING COMPLIANCE
WITH THE STANDARDS SET FORTH IN CLAUSES (I), (II) AND (III) ABOVE (THE

 

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“PUBLICATION STANDARDS”) AND SHALL CONSIDER WHETHER ANY PORTION OF ANY SUCH
PUBLICATION OR PRESENTATION SHOULD BE MODIFIED OR DELETED IN ORDER TO CONFORM TO
THE PUBLICATION STANDARDS.  IN ADDITION, IN THE CASE OF ANY SUCH PUBLICATION OR
PRESENTATION RESULTING FROM A CO-FUNDED CLINICAL TRIAL, THE MEMBER PARTY THAT
PROPOSES TO SUBMIT SUCH PUBLICATION OR PRESENTATION SHALL HAVE THE RIGHT TO DO
SO ONLY IF THE OTHER MEMBER PARTY AGREES THAT SUCH PUBLICATION OR PRESENTATION,
AS MAY BE MODIFIED, CONFORMS TO THE PUBLICATION STANDARDS, WHICH AGREEMENT SHALL
NOT BE UNREASONABLY WITHHELD OR DELAYED.  SUCH MEMBER PARTY SHALL CONSIDER IN
GOOD FAITH ANY COMMENTS PROVIDED TO IT BY SUCH OTHER MEMBER PARTY WITH RESPECT
TO SUCH PUBLICATION OR PRESENTATION, INCLUDING, WITHOUT LIMITATION, ANY COMMENTS
OF A SCIENTIFIC OR MEDICAL NATURE.  IN THE CASE OF ANY SUCH PUBLICATION OR
PRESENTATION RESULTING FROM OTHER PROJECT ACTIVITIES, THE OTHER MEMBER PARTY
SHALL HAVE A RIGHT TO COMMENT ON SUCH PUBLICATION OR PRESENTATION, PROVIDED THAT
THE MEMBER PARTY PROPOSING SUCH PUBLICATION OR PRESENTATION SHALL BE UNDER NO
OBLIGATION TO ACCEPT SUCH COMMENTS (EXCEPT TO THE EXTENT NECESSARY TO PRESERVE
THE INTELLECTUAL PROPERTY RIGHTS OF SUCH OTHER MEMBER PARTY OR THE JV) AND SHALL
BE FREE TO PUBLISH OR PRESENT, AS THE CASE MAY BE.  WRITTEN COPIES OF EACH
PROPOSED PUBLICATION OR PRESENTATION REQUIRED TO BE PROVIDED FOR REVIEW SHALL BE
PROVIDED TO THE OTHER MEMBER PARTY’S REPRESENTATIVES ON THE JDC NO LATER THAN
[*] BEFORE SUBMISSION FOR PUBLICATION OR PRESENTATION, EXCEPT THAT (A) IN THE
CASE OF AN ABSTRACT, A COPY OF THE ABSTRACT SHALL BE PROVIDED AS SOON AS
REASONABLY PRACTICABLE IN ADVANCE OF THE SUBMISSION OF SUCH ABSTRACT TO A THIRD
PARTY (WHICH PERIOD MAY BE LESS THAN [*] AND (B) IF THE DEADLINE FOR SUBMISSION
OF SUCH PUBLICATION OR PRESENTATION IS LESS THAN [*] FROM THE DATE OF COMPLETION
OF THAT PUBLICATION OR PRESENTATION, COPIES WILL BE PROVIDED AS SOON AS
REASONABLY PRACTICABLE IN ADVANCE OF SUCH SUBMISSION DEADLINE.  IN THE CASE OF
ANY PROPOSED PUBLICATION OR PRESENTATION OF A MEMBER PARTY THAT IS REQUIRED TO
BE REVIEWED BY THE OTHER MEMBER PARTY, IN THE EVENT THAT THE MEMBER PARTIES FAIL
TO REACH AGREEMENT, IF APPLICABLE, ON SUCH PUBLICATION OR PRESENTATION BY THE
CONCLUSION OF THE APPLICABLE REVIEW PERIOD, AND AS A RESULT THERE IS A DISPUTE
BETWEEN THE MEMBER PARTIES WITH RESPECT TO SUCH PUBLICATION OR PRESENTATION,
SUCH DISPUTE MAY BE REFERRED BY EITHER MEMBER PARTY TO THE JDC.  THE MEMBER
PARTIES SHALL COMPLY IN ANY PUBLICATIONS MADE PURSUANT TO THIS SECTION 3.11 WITH
STANDARD ACADEMIC PRACTICE REGARDING AUTHORSHIP OF SCIENTIFIC PUBLICATIONS AND
RECOGNITION OF CONTRIBUTION OF PARTIES.  FOR THE AVOIDANCE OF DOUBT, NOTHING
CONTAINED IN THIS SECTION 3.11 SHALL ALTER OR AFFECT A MEMBER PARTY’S
CONFIDENTIALITY OBLIGATIONS PURSUANT TO SECTION 12.

 

(B)                                 SUBJECT TO COMPLIANCE WITH SECTION 3.11(A),
NOTHING IN THIS AGREEMENT SHALL RESTRICT EITHER MEMBER PARTY FROM PROVIDING
INFORMATION ON CO-FUNDED CLINICAL TRIALS CONDUCTED BY THE OTHER MEMBER PARTY TO
ANY CLINICAL TRIALS REGISTRY OR CLINICAL TRIALS RESULTS DATABASE, IN ACCORDANCE
WITH APPLICABLE LAW AND INDUSTRY PRACTICE.  FOR PURPOSES OF THIS
SECTION 3.11(B), (I) “CLINICAL TRIAL REGISTRY” MEANS ANY LISTING OF CLINICAL
TRIALS WHICH HAVE BEEN INITIATED, WHETHER MAINTAINED BY THE U.S. FEDERAL
GOVERNMENT (E.G., WWW.CLINICALTRIALS.ORG) OR AN INDEPENDENT ORGANIZATION (E.G.,
PHRMA) AND (II) “CLINICAL TRIALS RESULTS DATABASE” MEANS ANY DATABASE WHICH
PROVIDES ACCESS TO CLINICAL TRIAL RESULTS TO PHYSICIANS, PATIENTS AND THE
GENERAL PUBLIC, WHETHER MAINTAINED BY ANY GOVERNMENT, REGULATORY AUTHORITY OR
INDEPENDENT ORGANIZATION (E.G., PHRMA).

 

3.12                           CERTAIN INSPECTIONS.  EACH MEMBER PARTY SHALL
INVOLVE THE OTHER MEMBER PARTY, TO THE EXTENT FEASIBLE, IN ITS GCP, GLP AND GMP
AUDIT PROCESS FOR ANY FACILITIES USED IN THE PERFORMANCE OF DEVELOPMENT
ACTIVITIES FOR THE COMBINATION PRODUCT (INCLUDING THE FACILITIES OF ANY
SUBCONTRACTORS TO THE EXTENT PERMITTED PURSUANT TO THE TERMS OF THE APPLICABLE
SUBCONTRACT OR

 

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OTHERWISE PERMITTED BY THE APPLICABLE SUBCONTRACTOR) AND SHALL CONSIDER IN GOOD
FAITH ANY ISSUES CONCERNING SUCH COMPLIANCE OR ANY SAFETY AND EFFICACY ISSUES
WITH RESPECT TO THE COMBINATION PRODUCT OR THE ACTIVE PHARMACEUTICAL
INGREDIENT(S) OF THE OTHER MEMBER PARTY’S SINGLE AGENT PRODUCT(S) OR DOUBLE
AGENT PRODUCT, AS APPLICABLE, THAT ARE RAISED BY THE OTHER MEMBER PARTY ON A
REASONABLE BASIS AS A RESULT OF SUCH AUDITS.  EACH MEMBER PARTY SHALL ALSO HAVE
THE RIGHT, DURING NORMAL BUSINESS HOURS AND UPON REASONABLE NOTICE, TO INSPECT
THE OTHER MEMBER PARTY’S FACILITIES (OR THE FACILITIES OF ANY SUBCONTRACTOR TO
THE EXTENT PERMITTED PURSUANT TO THE TERMS OF THE APPLICABLE SUBCONTRACT OR
OTHERWISE PERMITTED BY THE APPLICABLE SUBCONTRACTOR), USED IN THE PERFORMANCE OF
DEVELOPMENT ACTIVITIES FOR THE COMBINATION PRODUCT, IF THE MEMBER PARTY DESIRING
SUCH INSPECTION HAS A REASONABLE BASIS ON WHICH TO RAISE IN GOOD FAITH ANY SUCH
COMPLIANCE, SAFETY OR EFFICACY ISSUES APART FROM THE AFOREMENTIONED AUDIT
INSPECTIONS.  ANY AUDIT REFERRED TO IN THIS SECTION 3.12 SHALL BE SUBJECT TO
REASONABLE RESTRICTIONS ON ACCESS TO CONFIDENTIAL INFORMATION AND TRADE SECRETS
BY THE INSPECTING MEMBER PARTY TO THE EXTENT SUCH CONFIDENTIAL INFORMATION AND
TRADE SECRETS ARE NOT EXPRESSLY REQUIRED TO BE DISCLOSED BY SUCH MEMBER PARTY TO
THE OTHER MEMBER PARTY PURSUANT TO THIS AGREEMENT.

 

3.13         MEDICAL AFFAIRS AND MEDICAL COMMUNICATIONS.

 

(A)                                  GILEAD AND BMS SHALL DETERMINE
INDEPENDENTLY HOW TO UTILIZE AND DEPLOY THEIR RESPECTIVE MEDICAL SCIENCE
LIAISONS FOR ACTIVITIES RELATING TO THE COMBINATION PRODUCT.  THE JDC SHALL
DEVELOP AND APPROVE PRESENTATION MATERIALS FOR USE BY EACH MEMBER PARTY’S
MEDICAL SCIENCE LIAISONS WHEN ENGAGING IN ACTIVITIES TO SUPPORT PROMOTION OF THE
COMBINATION PRODUCT, AND THE MEDICAL SCIENCE LIAISONS SHALL USE ONLY SUCH
APPROVED PRESENTATION MATERIALS IN SUCH ACTIVITIES.  THE JDC SHALL DEVELOP, AND
THE MEMBER PARTIES SHALL IMPLEMENT, PROCEDURES TO COORDINATE THE TRAINING OF
EACH MEMBER PARTY’S MEDICAL SCIENCE LIAISONS ON ANY APPROVED PRESENTATION
MATERIALS.

 

(B)                                 THE JDC SHALL DEVELOP GUIDELINES AND
PROCEDURES FOR DETERMINING AND PROVIDING APPROPRIATE RESPONSES TO MEDICAL
INQUIRIES ABOUT THE COMBINATION PRODUCT, INCLUDING ASSIGNING RESPONSIBILITIES
FOR MEDICAL COMMUNICATIONS.  THE PARTIES SHALL DEVELOP A SET OF STANDARD
RESPONSE DOCUMENTS FOR THE MEMBER PARTIES TO USE IN RESPONDING TO MEDICAL
INQUIRIES ABOUT THE COMBINATION PRODUCT, AS FOLLOWS:  (I) EACH MEMBER PARTY
SHALL DEVELOP STANDARD RESPONSE DOCUMENTS RELATING TO THEIR RESPECTIVE SINGLE
AGENT PRODUCT(S) AND DOUBLE AGENT PRODUCT AS INCORPORATED IN THE COMBINATION
PRODUCT, AND (II) GILEAD SHALL DEVELOP DRAFT STANDARD RESPONSE DOCUMENTS
RELATING TO THE COMBINATION PRODUCT AS A WHOLE (SUBSTANTIALLY INCORPORATING THAT
DEVELOPED BY EACH MEMBER PARTY FOR ITS SINGLE AGENT PRODUCT(S) AND/OR DOUBLE
AGENT PRODUCT), FOR REVIEW, COMMENT AND APPROVAL BY THE JDC.

 

SECTION 4.
MANUFACTURING AND SUPPLY

 

4.1                                 CLINICAL SUPPLY.  GILEAD SHALL MANUFACTURE
OR HAVE MANUFACTURED THROUGH A SUBCONTRACTOR, ON BEHALF OF THE JV, CLINICAL
SUPPLIES OF THE COMBINATION PRODUCT IN SUCH QUANTITIES AS MAY BE NEEDED FOR THE
CLINICAL TRIALS AND STUDIES REQUIRED TO OBTAIN INITIAL APPROVALS OF AN NDA.  IN
CONNECTION WITH SUCH MANUFACTURE, GILEAD AND BMS EACH SHALL DONATE TO THE JV
QUANTITIES OF FTC AND TDF, IN THE CASE OF GILEAD, AND EFV, IN THE CASE OF BMS. 
EACH MEMBER

 

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PARTY’S COST OF GOODS OF SUCH SUPPLY, AS WELL AS GILEAD’S COST OF GOODS FOR
MANUFACTURE OF THE CLINICAL SUPPLIES OF THE COMBINATION PRODUCT, SHALL NOT BE
CHARGEABLE TO THE JV.

 

4.2           COMMERCIAL SUPPLY.

 

(A)                                  THE INITIAL DEVELOPMENT PLAN DESIGNATES THE
INITIAL COMMERCIAL SUPPLIER OF THE COMBINATION PRODUCT, WHICH SUPPLIER SHALL BE
THE SOURCE OF COMBINATION PRODUCT SUPPLY FOR PURPOSES OF THE NDA FILING AND
LAUNCH IN THE TERRITORY.  WITHIN [*] AFTER THE EFFECTIVE DATE, THE JCC SHALL
DETERMINE THE MOST COST-EFFICIENT MANNER IN WHICH TO SOURCE THE COMMERCIAL
SUPPLY OF THE COMBINATION PRODUCT, INCLUDING, WITHOUT LIMITATION, ONE OR MORE
ALTERNATE SUPPLIERS.  THEREAFTER, DURING THE TERM OF THIS AGREEMENT, THE JCC
SHALL REVIEW ANNUALLY THE APPROPRIATE SOURCE(S) OF COMMERCIAL SUPPLY OF THE
COMBINATION PRODUCT AFTER LAUNCH AND AGREE UPON APPROPRIATE CHANGES.  EACH
MEMBER PARTY MAY PROPOSE INTERIM CHANGES WITH RESPECT THERETO FROM TIME TO TIME
BETWEEN SUCH REVIEWS, WHICH CHANGES THE JCC SHALL ADOPT IF FAILURE TO DO SO
WOULD BE LIKELY TO HAVE A MATERIAL ADVERSE EFFECT ON THE COMBINATION PRODUCT
BUSINESS.  IF GILEAD OR BMS DESIRES TO BE CONSIDERED AS A POSSIBLE SUPPLIER OF
THE COMBINATION PRODUCT, IT SHALL SUBMIT A CONFIDENTIAL WRITTEN PROPOSAL TO THE
JV FOR CONSIDERATION BY THE JCC ALONGSIDE WRITTEN PROPOSALS SUBMITTED BY
RECOGNIZED, RELIABLE AND SUFFICIENTLY CAPITALIZED THIRD PARTIES AND/OR THE
SUPPLY TERMS PERTAINING TO THE INITIAL SUPPLIER.  ANY PROPOSAL SUBMITTED BY A
POSSIBLE SUPPLIER SHALL INCLUDE AN OFFER TO PERFORM ANY REQUIRED TABLETING,
BLISTERING, PACKAGING, LABELING, ANALYTICAL TESTING AND STORAGE ACTIVITIES WITH
RESPECT TO COMMERCIAL SUPPLIES OF THE COMBINATION PRODUCT.  THE JCC SHALL SELECT
A PERSON TO SUPPLY THE JV WITH COMMERCIAL SUPPLIES OF THE COMBINATION PRODUCT ON
THE BASIS OF PRICE, QUALITY, RELIABILITY, GMP COMPLIANCE, SECURITY OF SUPPLY AND
OTHER RELEVANT COMMERCIAL CONSIDERATIONS.  IF A THIRD PARTY IS SELECTED AS A
SUPPLIER, THE JCC SHALL DESIGNATE A MEMBER PARTY TO MANAGE THE RELATIONSHIP WITH
THAT SUPPLIER. ANY SUPPLY CONTRACT BETWEEN THE JV AND GILEAD OR BMS AS SUPPLIER
SHALL BE NEGOTIATED ON AN ARM’S-LENGTH BASIS AND SHALL CONTAIN SUCH TERMS AND
CONDITIONS AS ARE CUSTOMARY IN THE PHARMACEUTICAL INDUSTRY, MODIFIED AS
APPROPRIATE FOR THE COMBINATION PRODUCT.

 

(B)                                 THE JCC, DIRECTLY OR THROUGH A DESIGNATED
MEMBER PARTY, AND IN COORDINATION WITH THE JDC, SHALL MONITOR MANUFACTURING
CAPACITY OF, AND FORECASTS AND ORDERS FOR, THE COMBINATION PRODUCT SUBMITTED TO
THE RELEVANT SUPPLIER(S) TO ENSURE THAT ADEQUATE COMMERCIAL SUPPLIES OF THE
COMBINATION PRODUCT WILL BE AVAILABLE TO MEET THE DEMAND THEREFOR AS PROJECTED
BY THE JCC IN COMMERCIAL UNIT VOLUME FORECASTS.  THE JCC SHALL PREPARE [*]
ROLLING UNIT VOLUME FORECASTS AT LEAST [*] BEFORE THE COMMENCEMENT OF EACH
FORECAST PERIOD, AND SHALL UPDATE SUCH UNIT VOLUME FORECASTS ON A [*] BASIS, OR
AS THE JCC DEEMS NECESSARY AND APPROPRIATE.

 

(C)                                  IN CONNECTION WITH THE MANUFACTURE BY THE
SUPPLIER OF THE COMMERCIAL SUPPLY OF THE COMBINATION PRODUCT FOR THE JV, GILEAD
AND BMS EACH SHALL SUPPLY TO THE JV QUANTITIES OF FTC AND TDF, IN THE CASE OF
GILEAD, AND EFV, IN THE CASE OF BMS, AND IN EACH CASE IN THE FORM OF BULK ACTIVE
PHARMACEUTICAL INGREDIENT, PURSUANT TO AND IN ACCORDANCE WITH THEIR RESPECTIVE
SUPPLY AGREEMENTS.  IN CONSIDERATION OF SUCH SUPPLY, THE JV SHALL PAY TO GILEAD
AND BMS, RESPECTIVELY, THE GILEAD TRANSFER PRICE AND THE BMS TRANSFER PRICE. 
THE JDC SHALL MONITOR ORDERS UNDER THE RESPECTIVE SUPPLY AGREEMENTS TO ASSURE
CONSISTENCY IN THE QUANTITIES OF FTC, TDF AND EFV ORDERED BY THE JV THEREUNDER.

 

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SECTION 5.
COMMERCIALIZATION ACTIVITIES

 

5.1                                 CO-PROMOTION OBLIGATIONS.

 

(A)                                  GILEAD AND BMS EACH SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO PERFORM IN THE TERRITORY THE COMMERCIALIZATION ACTIVITIES
THAT SUCH MEMBER PARTY IS REQUIRED TO PERFORM UNDER THE COMMERCIALIZATION PLAN
IN ACCORDANCE WITH THE COMMERCIALIZATION BUDGET AS APPLICABLE TO SUCH
ACTIVITIES, FOR SO LONG AS THERE IS A COMMERCIALIZATION PLAN IN EFFECT.  EACH
MEMBER PARTY SHALL BE REQUIRED, DURING THE INITIAL LAUNCH PERIOD AND (TO THE
EXTENT THERE IS A [*] APPLICABLE THERETO) THE SUBSEQUENT LAUNCH PERIOD, TO [*]
PER CALENDAR QUARTER, AND TAKE THE OTHER ACTIONS, APPLICABLE TO IT AS SPECIFIED
IN THE COMMERCIALIZATION PLAN.  SUBJECT TO SECTION 2.10, [*] SHALL APPLY (I)
DURING THE SUBSEQUENT LAUNCH PERIOD UNLESS APPROVED BY THE JEC OR JCC AS
APPLICABLE, AS PART OF A COMMERCIALIZATION PLAN UPDATE PURSUANT TO
SECTION 5.11(C), AND (II) AFTER THE SUBSEQUENT LAUNCH PERIOD UNLESS APPROVED BY
THE MEMBER PARTIES.  EACH MEMBER PARTY SHALL BE FREE TO ENGAGE IN [*], AND TO
ENGAGE IN [*] WHEN THERE IS NO LONGER A COMMERCIALIZATION PLAN IN EFFECT, IN
EACH CASE IN ITS SOLE DISCRETION.

 

(B)                                 GILEAD AND BMS SHALL SELECT INDEPENDENTLY
THE TARGET PRESCRIBERS TO WHICH EACH SHALL PROMOTE THE COMBINATION PRODUCT.

 

(C)                                  IN ACCORDANCE WITH SECTION 2.9(B), GILEAD
AND BMS SHALL EACH CAUSE ITS FIELD FORCE TO USE ONLY THE FDA-APPROVED PRODUCT
LABELS AND INSERTS AND, SUBJECT TO SECTION 5.7, THE APPROVED MARKETING MATERIALS
IN PROMOTING THE COMBINATION PRODUCT, AND TO MAKE ONLY SUCH STATEMENTS AND
CLAIMS REGARDING THE COMBINATION PRODUCT AS ARE CONSISTENT WITH APPLICABLE LAW
AND FDA-APPROVED PRODUCT LABELS AND INSERTS.  GILEAD AND BMS SHALL NOT PROVIDE
OR GIVE ACCESS TO SAMPLES OF THE COMBINATION PRODUCT TO HEALTH CARE
PRACTITIONERS OR PATIENTS IN CONNECTION WITH PROMOTION OF THE COMBINATION
PRODUCT.

 

(D)                                 GILEAD AND BMS SHALL EACH DETAIL THE
COMBINATION PRODUCT AND PERFORM ITS OTHER PROMOTIONAL ACTIVITIES UNDER THIS
AGREEMENT IN THE TERRITORY IN STRICT ADHERENCE TO REGULATORY AND PROFESSIONAL
REQUIREMENTS, AND TO ALL APPLICABLE LAW, INCLUDING, TO THE EXTENT APPLICABLE,
THE ACT; THE FDA GUIDANCE FOR INDUSTRY-SUPPORTED SCIENTIFIC AND EDUCATIONAL
ACTIVITIES; THE PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA CODE ON
INTERACTIONS WITH HEALTHCARE PROFESSIONALS; THE OFFICE OF INSPECTOR GENERAL
COMPLIANCE PROGRAM GUIDANCE FOR PHARMACEUTICAL MANUFACTURERS; THE AMERICAN
MEDICAL ASSOCIATION GUIDELINES ON GIFTS TO PHYSICIANS FROM INDUSTRY; THE
PHARMACEUTICAL MARKETING RESEARCH GROUP GUIDELINES ON MARKET RESEARCH
ACTIVITIES; THE PRESCRIPTION DRUG MARKETING ACT OF 1987, AS AMENDED (“PDMA”);
AND ALL FEDERAL, STATE AND LOCAL “FRAUD AND ABUSE,” CONSUMER PROTECTION AND
FALSE CLAIMS STATUTES AND REGULATIONS, INCLUDING BUT NOT LIMITED TO THE MEDICARE
AND STATE HEALTH PROGRAMS ANTI-FRAUD AND ABUSE AMENDMENTS OF THE SOCIAL SECURITY
ACT, THE “SAFE HARBOR REGULATIONS” FOUND AT 42 C.F.R. §1001.952 ET SEQ.  AS
AMONG THE PARTIES, EACH MEMBER PARTY SHALL TREAT ITS SALES REPRESENTATIVES
ENGAGED IN DETAILING THE COMBINATION PRODUCT AS ITS (OR ITS AFFILIATE’S) OWN
EMPLOYEES FOR ALL PURPOSES, INCLUDING, WITHOUT LIMITATION, FEDERAL, STATE AND
LOCAL TAX AND EMPLOYMENT LAWS.

 

(E)                                  WITHIN [*] AFTER THE END OF EACH CALENDAR
QUARTER (OR PART THEREOF) FALLING WITHIN (I) THE INITIAL LAUNCH PERIOD, (II) (TO
THE EXTENT THERE IS A [*] APPLICABLE THERETO) THE

 

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SUBSEQUENT LAUNCH PERIOD, OR (III) ANY PERIOD COMMENCING AFTER THE SUBSEQUENT
LAUNCH PERIOD IF MUTUALLY AGREED BY THE MEMBER PARTIES PURSUANT TO SECTION 2.10
(CLAUSES (I), (II) AND (III) BEING REFERRED TO HEREIN COLLECTIVELY AS THE
“PRODUCT DETAIL PERIOD”), GILEAD AND BMS SHALL EACH FURNISH THE OTHER PARTIES
WITH A WRITTEN REPORT, IN THE FORM SET FORTH IN ANNEX H ATTACHED HERETO, SETTING
OUT THE NUMBER OF DETAILS THAT IT HAS CONDUCTED DURING SUCH CALENDAR QUARTER (OR
PART THEREOF) IN THE TERRITORY.  THE NUMBER SO REPORTED SHALL BE DETERMINED IN
ACCORDANCE WITH APPLICABLE SELF-REPORTING PROCEDURES FOR DETAILS CUSTOMARILY
EMPLOYED BY SUCH MEMBER PARTY IN THE TERRITORY FOR OTHER SIMILARLY DETAILED AND
SIMILARLY REPORTED HIV PRODUCTS TO THE TARGET HEALTH CARE AUDIENCE, CONSISTENTLY
APPLIED.

 

(F)                                    IN EACH CALENDAR YEAR (OR PART THEREOF)
FALLING WITHIN THE PRODUCT DETAIL PERIOD, SUBJECT TO THE TERMS OF THIS
SECTION 5.1(F), EACH MEMBER PARTY SHALL [*] TO CONDUCT (X) THE [*] FOR EACH
CALENDAR QUARTER (OR PART THEREOF) SPECIFIED IN THE COMMERCIALIZATION PLAN (THE
“[*]”) AND (Y) THE [*] FOR SUCH CALENDAR YEAR (OR PART THEREOF) SPECIFIED IN THE
COMMERCIALIZATION PLAN (I.E., THE [*]) (THE “[*]”).  TO THE EXTENT THAT THE
PRODUCT DETAIL PERIOD INCLUDES PART BUT NOT ALL OF A  CALENDAR QUARTER, THEN THE
[*] FOR SUCH CALENDAR QUARTER SHALL BE [*].  IF, IN ANY CALENDAR QUARTER DURING
THE APPLICABLE CALENDAR YEAR, THE [*] OF DETAILS CONDUCTED BY A MEMBER PARTY IS
[*] FOR SUCH CALENDAR QUARTER (SUCH [*] BEING A[ *]”), SUCH MEMBER PARTY MAY [*]
OF DETAILS IT CONDUCTS [*], IF ANY, DURING THE [*], AND IN [*], IN EACH CASE IN
ORDER TO [*] SOME OR ALL OF THE [*].  SUBJECT TO SECTION 5.1(G), IF, IN ANY
CALENDAR YEAR, THE [*] OF DETAILS CONDUCTED BY A MEMBER PARTY IS [*] THE [*] FOR
SUCH CALENDAR YEAR (SUCH [*] BEING A[*]), THEN NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, (I) THE OTHER MEMBER PARTY SHALL [*] TO SUCH [*], AND
(II) ANY FAILURE BY A MEMBER TO COMPLY WITH THIS SECTION 5.1(F) WHICH RESULTS IN
SUCH [*] SHALL NOT BE SUBJECT TO THE [*].

 

(G)                                 IF, DURING ANY CALENDAR QUARTER, A MEMBER
PARTY EXPECTS THAT IT WILL EXPERIENCE A [*] FOR THE SUCCEEDING CALENDAR QUARTER
(OR PART THEREOF), IT SHALL INFORM THE OTHER MEMBER PARTY OF THE ANTICIPATED [*]
BY WRITTEN NOTICE AS PROMPTLY AS PRACTICABLE BUT NO LATER THAN THE DUE DATE OF
THE REPORT REFERRED TO IN SECTION 5.1(E).  THE OTHER MEMBER PARTY SHALL HAVE THE
RIGHT TO [*] IN SUCH SUCCEEDING CALENDAR QUARTER (OR PART THEREOF) BY UP TO THE
ANTICIPATED [*] FOR SUCH SUCCEEDING CALENDAR QUARTER (OR PART THEREOF)  BY
GIVING NOTICE TO THE FIRST MEMBER PARTY OF ITS INTENT TO DO SO WITHIN [*] OF
RECEIVING THE NOTICE.  FOR THE AVOIDANCE OF DOUBT, IF THE OTHER MEMBER PARTY
GIVES SUCH NOTICE AND SO [*], THE FIRST MEMBER PARTY SHALL [*] TO THE OTHER
MEMBER PARTY AN AMOUNT EQUAL TO THE PRODUCT OF [*] MULTIPLIED BY THE [*]
MULTIPLIED BY THE [*].  IN ANY SUCH CASE, THE [*] OF THE [*], IF ANY, UNDER [*]
SHALL BE [*].

 

5.2                                 DISTRIBUTION OBLIGATIONS.

 

(A)                                  GILEAD SHALL HAVE THE SOLE RESPONSIBILITY
AND RIGHT TO FILL ORDERS WITH RESPECT TO THE COMBINATION PRODUCT ON BEHALF OF
THE JV.  IF FOR ANY REASON BMS RECEIVES SALES ORDERS FOR THE COMBINATION
PRODUCT, IT SHALL PROMPTLY FORWARD SUCH ORDER TO GILEAD.  AN ORDER FOR THE
COMBINATION PRODUCT MAY BE REJECTED BY GILEAD ONLY IF SUCH REJECTION IS
COMMERCIALLY REASONABLE UNDER THE CIRCUMSTANCES.  THE JCC SHALL DETERMINE HOW
THE JV SHALL RESPOND TO REQUESTS FROM INDIVIDUAL PATIENTS WHO HAVE OR MAY OBTAIN
PRESCRIPTIONS FOR THE COMBINATION PRODUCT BUT MAY BE UNABLE TO AFFORD IT, AND
FROM HEALTH CARE PROVIDERS ON BEHALF OF SUCH PATIENTS, INCLUDING, WITHOUT
LIMITATION, ESTABLISHING APPROPRIATE PROCEDURES AND RESPONSE TIMES THAT SHALL
APPLY IN RESPONDING TO SUCH REQUESTS; PROVIDED, HOWEVER, THAT THE JCC SHALL

 

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STRUCTURE THE APPLICABLE PROGRAM IN A MANNER THAT WILL MAKE EVIDENT TO SUCH
HEALTH CARE PROVIDERS AND PATIENTS THE PARTICIPATION OF THE JV (AND, AS
APPROPRIATE, EACH OF ITS MEMBER PARTIES) IN SUCH PROGRAM AND SHALL ENSURE THAT
THE PROCEDURES AND RESPONSE TIMES ARE NO LESS FAVORABLE TO PATIENTS THAN THE
MOST FAVORABLE OF EITHER MEMBER PARTY’S PATIENT ASSISTANCE PROGRAMS FOR ITS
SINGLE AGENT PRODUCT(S) AND/OR DOUBLE AGENT PRODUCT AS OF THE EFFECTIVE DATE. 
THE JCC SHALL REVIEW THE ARRANGEMENTS FOR THE PATIENT ASSISTANCE PROGRAM
ANNUALLY AND AGREE UPON APPROPRIATE CHANGES.  EACH MEMBER PARTY MAY PROPOSE
INTERIM CHANGES WITH RESPECT THERETO FROM TIME TO TIME BETWEEN SUCH REVIEWS,
WHICH CHANGES THE JCC SHALL ADOPT IF FAILURE TO DO SO WOULD BE LIKELY TO HAVE A
MATERIAL ADVERSE EFFECT ON THE COMBINATION PRODUCT BUSINESS.

 

(B)                                 WITHOUT LIMITATION OF THE FOREGOING, GILEAD
SHALL PERFORM ALL THE FUNCTIONS OF A DISTRIBUTOR WITH RESPECT TO SALES OF THE
COMBINATION PRODUCT ON BEHALF OF THE JV, INCLUDING, WITHOUT LIMITATION,
INVENTORY MANAGEMENT AND CONTROL, WAREHOUSING AND DISTRIBUTION, INVOICING,
COLLECTION OF SALES PROCEEDS, PREPARATION OF SALES RECORDS AND REPORTS, CUSTOMER
RELATIONS AND SERVICES, AND HANDLING OF RETURNS, IN ACCORDANCE WITH CUSTOMARY
PRACTICE IN THE BIOPHARMACEUTICAL INDUSTRY, PURSUANT TO A SEPARATE SERVICES
AGREEMENT TO BE ENTERED INTO BY THE PARTIES WITHIN [*] OF THE EFFECTIVE DATE
SUBSTANTIALLY ON THE TERMS OUTLINED IN ANNEX P.

 

(C)                                  GILEAD’S RELATIONSHIPS WITH WHOLESALE
DISTRIBUTORS FOR THE COMBINATION PRODUCT SHALL BE GOVERNED BY INVENTORY
MANAGEMENT AGREEMENTS TO REDUCE INVENTORY FLUCTUATIONS TO THE EXTENT
COMMERCIALLY FEASIBLE, AND IF SUCH AGREEMENTS DO NOT ALSO COVER GILEAD’S OTHER
PRODUCTS IN THE FIELD, THEY SHALL BE COMMERCIALLY REASONABLE AND [*].  FOR ANY
[*] IN RESPECT OF [*] RELATING THERETO, GILEAD SHALL ENSURE EITHER THAT (I) SUCH
[*] ARE [*] FOR [*] ON A [*] AS FOR [*], OR (II) IF SUCH [*] ARE NOT [*] ON A
[*] BASIS, SUCH [*] ARE [*] AMONG [*]. GILEAD SHALL USE COMMERCIALLY REASONABLE
EFFORTS TO KEEP INVENTORY LEVELS OF THE COMBINATION PRODUCT AT WHOLESALE
DISTRIBUTORS AT [*], SUBJECT TO FLUCTUATIONS EXPECTED DURING THE LAUNCH PERIOD
FOR THE COMBINATION PRODUCT.

 

5.3                                 PRICING OF COMBINATION PRODUCT.

 

(A)                                  GILEAD SHALL HAVE SOLE RESPONSIBILITY TO
ACT AS AGENT FOR SELLING THE COMBINATION PRODUCT ON BEHALF OF THE JV AT PRICES
THAT [*] WITH THE [*] (AS DEFINED BELOW) MADE PURSUANT TO THE PROVISIONS OF THIS
SECTION 5.3 AND THE [*] SET FORTH ON ANNEX Q (THE “[*]”).

 

(B)                                 GILEAD AND BMS SHALL EACH APPOINT TWO (2)
MEMBERS OF A PRICING COMMITTEE FOR THE JV (THE “PRICING COMMITTEE”).  ONE (1)
REPRESENTATIVE FROM EACH MEMBER PARTY (THE “[*] REPRESENTATIVE”) SHALL BE AN
EMPLOYEE OF THAT MEMBER PARTY WHO IS NOT AT THE TIME OF HIS OR HER APPOINTMENT,
OR AT ANY TIME DURING HIS OR HER SERVICE ON THE PRICING COMMITTEE, OTHERWISE
INVOLVED, DIRECTLY OR INDIRECTLY, IN THE [*] OF SUCH MEMBER PARTY’S (OR ANY OF
ITS AFFILIATES’) [*] (PROVIDED, THAT FOR PURPOSES OF THIS SECTION 5.3, DUTIES
SOLELY WITH RESPECT TO ACCOUNTS RECEIVABLE ANALYSIS, BOOKKEEPING AND ACCOUNTING
SHALL NOT, WITHOUT MORE, BE DEEMED INVOLVEMENT IN [*]).  SUCH REPRESENTATIVES
SHALL HAVE SKILLS REASONABLY APPROPRIATE TO THEIR RESPONSIBILITIES AND FUNCTIONS
AS MEMBERS OF THE PRICING COMMITTEE. THE OTHER REPRESENTATIVE FROM EACH MEMBER
PARTY (THE “[*] REPRESENTATIVE”) SHALL BE [*] FOR THAT MEMBER PARTY. 
FURTHERMORE, EACH MEMBER PARTY COVENANTS THAT, FOR [*] IMMEDIATELY AFTER AN
INDIVIDUAL’S SERVICE ON THE PRICING COMMITTEE (OR FOR SUCH SHORTER PERIOD AS HE
OR SHE IS EMPLOYED BY SUCH MEMBER PARTY OR ITS AFFILIATE), HE OR SHE WILL NOT BE
ASSIGNED TO A FUNCTION OR POSITION THAT

 

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INVOLVES, DIRECTLY OR INDIRECTLY, THE PRICING OF SUCH MEMBER PARTY’S (OR ANY OF
ITS AFFILIATES’) [*] PRODUCTS.  EACH MEMBER PARTY SHALL HAVE THE RIGHT TO
APPROVE THE OTHER MEMBER PARTY’S PROPOSED [*] REPRESENTATIVE AND [*]
REPRESENTATIVE ON THE PRICING COMMITTEE (OR ANY REPLACEMENT THEREFOR), WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD.  SUBJECT TO THE PRECEDING SENTENCE,
EACH MEMBER PARTY SHALL HAVE THE RIGHT TO REPLACE ITS [*] REPRESENTATIVE AND/OR
[*] REPRESENTATIVE FROM TIME TO TIME DURING THE TERM OF THIS AGREEMENT, PROVIDED
THAT THE COMPOSITION OF THE PRICING COMMITTEE AS SO CHANGED MEETS THE
REQUIREMENTS SET FORTH ABOVE IN THIS SECTION 5.3(B).  FOR THE AVOIDANCE OF
DOUBT, THE PRICING COMMITTEE IS NOT AN OPERATING COMMITTEE OF THE JV AND,
ACCORDINGLY, REFERENCES IN THIS AGREEMENT, THE OPERATING AGREEMENT AND, IF
APPLICABLE, ANY ANCILLARY AGREEMENT TO AN OPERATING COMMITTEE SHALL NOT APPLY TO
THE PRICING COMMITTEE.  THE PRICING COMMITTEE MAY DETERMINE IN ITS SOLE
DISCRETION TO RETAIN INDEPENDENT LEGAL COUNSEL, IN WHICH CASE THE EXPENSES OF
SUCH COUNSEL SHALL BE DEEMED TO BE AUTHORIZED OTHER EXPENSES.

 

(C)                                  GILEAD AND BMS SHALL EACH BE RESPONSIBLE
FOR THE PERFORMANCE OF ITS REPRESENTATIVES ON THE PRICING COMMITTEE AND THEIR
COMPLIANCE WITH THE TERMS OF THIS SECTION 5.3 AND THE [*].  ANY ISSUE REGARDING
THE [*] OF THE PRICING COMMITTEE SHALL BE REVIEWED [*]  GILEAD AND BMS SHALL
EACH BEAR THEIR OWN EXPENSES RELATED TO THE PRICING COMMITTEE, INCLUDING WITHOUT
LIMITATION ALL EXPENSES RELATING TO THE MEETINGS OF THE PRICING COMMITTEE, THE
PARTICIPATION OF THE MEMBER PARTIES’ REPRESENTATIVES IN SUCH MEETINGS,
COMMUNICATIONS WITH THE OTHER MEMBER PARTY IN CONNECTION WITH SUCH MEETINGS OR
MATTERS WITHIN THE AUTHORITY OF THE PRICING COMMITTEE, AND TRAVEL TO AND FROM
SUCH MEETINGS, AND SUCH EXPENSES SHALL NOT BE DEEMED JV EXPENSES OR AUTHORIZED
OTHER EXPENSES.

 

(D)                                 THE PRICING COMMITTEE SHALL BE RESPONSIBLE,
ON AN ONGOING BASIS, FOR [*] GILEAD, AS AGENT OF THE JV [*], (I) THE [*] IN
ACCORDANCE WITH THIS SECTION 5.3 AND THE [*] (THE “[*]”) AND (II) ANY [*]
(“[*]”) AS [*] ACCORDING TO THE [*] WITH RESPECT TO [*] (AS DEFINED IN THE [*])
FROM THE JV.  THE PRICING COMMITTEE SHALL MEET AT LEAST QUARTERLY (WHICH MEETING
MAY BE CONDUCTED BY TELEPHONE OR VIDEOCONFERENCE EQUIPMENT, SO LONG AS EACH
ATTENDEE IS ABLE TO HEAR THE OTHERS), AND AS OTHERWISE REQUIRED FROM TIME TO
TIME, TO [*].  THE [*] WILL SERVE AS [*], AS APPLICABLE, IN [*] GILEAD, AS AGENT
OF THE JV, AND [*].  GILEAD, AS AGENT OF THE JV, SHALL HAVE NO AUTHORITY TO [*],
AS THE CASE MAY BE, FOR [*].

 

(E)                                  SHOULD INTERPRETATION OF THE [*] BECOME
NECESSARY, THE [*] REPRESENTATIVES ON THE PRICING COMMITTEE SHALL DISCUSS THE
MATTER WITH THE [*] REPRESENTATIVES AND ATTEMPT TO RESOLVE THE MATTER BY
CONSENSUS.  IN THE EVENT THAT A CONSENSUS CANNOT BE REACHED, NO [*] WITH RESPECT
TO [*] AND GILEAD, AS AGENT OF THE JV, SHALL NOT [*].

 

(F)                                    THE FUNCTIONAL ROLE OF EACH
REPRESENTATIVE ON THE PRICING COMMITTEE SHALL BE LIMITED TO:

 

(I)                                     COORDINATING WITH GILEAD, AS AGENT OF
THE JV, TO ASCERTAIN [*];

 

(II)                                  ON AN AS-NEEDED BASIS, PROVIDING THE
PRICING COMMITTEE THE [*], AS THE CASE MAY BE;

 

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(III)                               ONLY ON AN AS-NEEDED BASIS, AND AS
SPECIFICALLY REQUESTED WITH RESPECT TO [*], PROVIDING THE PRICING COMMITTEE SUCH
OTHER SPECIFICALLY LIMITED [*] PERTINENT TO [*], AS THE [*] REPRESENTATIVES
SHALL AGREE IS NECESSARY AND APPROPRIATE;

 

(IV)                              APPLYING THE [*] TO [*] WITH RESPECT TO [*]; 
AND

 

(V)                                 ENSURING THAT THE [*] FOR THE COMBINATION
PRODUCT, AS [*], IS [*], AS THE CASE MAY BE, FOR [*].

 

(G)                                 EITHER MEMBER PARTY (THE “REQUESTING
MEMBER”) MAY, UPON WRITTEN NOTICE TO THE OTHER MEMBER PARTY, CAUSE THE
INDEPENDENT ACCOUNTING EXPERT (SELECTED PURSUANT TO SECTION 7.1(D)) TO CONFIRM
THE ACCURACY, WITH RESPECT TO ANY [*], OF (I) ANY [*] AND/OR (II) ANY [*] THE
PRICING COMMITTEE, INCLUDING, WITHOUT LIMITATION, THE [*], AS THE CASE MAY BE. 
IN SUCH CASE, EACH MEMBER PARTY AND THE PRICING COMMITTEE SHALL COOPERATE WITH
THE INDEPENDENT ACCOUNTING EXPERT AND (UPON THE INDEPENDENT ACCOUNTING EXPERT’S
ENTRY INTO AN APPROPRIATE CONFIDENTIALITY AGREEMENT) PROVIDE HIM OR HER WITH THE
DATA NECESSARY TO MAKE THE REQUISITE CALCULATIONS.  FURTHER, UPON THE WRITTEN
REQUEST OF EITHER MEMBER PARTY, THE CALCULATIONS OF THE INDEPENDENT ACCOUNTING
EXPERT SHALL BE AUDITED BY A SECOND THIRD PARTY MUTUALLY AGREED BY THE MEMBER
PARTIES.  THE INDEPENDENT ACCOUNTING EXPERT AND THE THIRD PARTY AUDITOR, IF ANY,
SHALL NOTIFY THE JEC OF THEIR RESPECTIVE DETERMINATIONS, WHICH NOTIFICATIONS
SHALL NOT CONTAIN ANY INFORMATION PROVIDED TO SUCH INDEPENDENT ACCOUNTING EXPERT
(AND/OR SUCH THIRD PARTY AUDITOR) BY EITHER MEMBER PARTY.  THE CALCULATIONS MADE
BY THE INDEPENDENT ACCOUNTING EXPERT PURSUANT TO THIS SECTION 5.3(G) SHALL BE
BINDING UPON THE PRICING COMMITTEE AND THE PARTIES; PROVIDED, HOWEVER, THAT IN
THE EVENT THAT A THIRD PARTY AUDITOR IDENTIFIES A DISCREPANCY IN THE INDEPENDENT
ACCOUNTING EXPERT’S CALCULATIONS, THE MEMBER PARTIES SHALL CAUSE THE INDEPENDENT
ACCOUNTING EXPERT AND SUCH THIRD PARTY AUDITOR TO CONFER AND AGREE UPON THE
FINAL CALCULATIONS AND ADVISE THE MEMBER PARTIES IN WRITING OF SAME, WHEREUPON
SUCH FINAL AGREED CALCULATIONS SHALL BE BINDING ON THE PARTIES.  THE REQUESTING
MEMBER SHALL BEAR THE FEES AND COSTS OF THE INDEPENDENT ACCOUNTING EXPERT IN
CONNECTION WITH  ITS CONFIRMATION OF THE ACCURACY OF SUCH DETERMINATION AND/OR
INFORMATION, UNLESS THE INDEPENDENT ACCOUNTING EXPERT FINDS A DISCREPANCY EQUAL
TO OR GREATER THAN [*] THEREIN, IN WHICH CASE THE JV (IN THE CASE OF A
DISCREPANCY IN A [*]) OR THE OTHER MEMBER PARTY (IN THE CASE OF A DISCREPANCY IN
[*]), SHALL BEAR SUCH FEES AND COSTS.  NOTHING IN THIS SECTION 5.3(G) SHALL BE
DEEMED TO LIMIT ANY REMEDY AVAILABLE TO EITHER MEMBER PARTY IN THE EVENT OF A
BREACH OF ANY OF THE PROVISIONS OF THIS SECTION 5.3 OR THE [*] BY THE OTHER
MEMBER PARTY.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, SUCH
BREACH SHALL NOT BE SUBJECT TO THE CURE PROVISIONS SET FORTH IN SECTION 14.4.

 

(H)                                 ALL INFORMATION PROVIDED TO THE PRICING
COMMITTEE (“PRICING INFORMATION”) SHALL BE CONSIDERED CONFIDENTIAL INFORMATION
OF THE DISCLOSING MEMBER PARTY AND SHALL BE USED SOLELY FOR THE PURPOSE OF [*]
AND FOR NO OTHER PURPOSE. FOR THE AVOIDANCE OF DOUBT, THE EXCEPTIONS TO
CONFIDENTIALITY SET FORTH IN SECTION 12.2 (OTHER THAN IN SECTIONS 12.2(A) AND
(B)) SHALL NOT APPLY TO PRICING INFORMATION.  EXCEPT AS EXPRESSLY PERMITTED BY
THE [*], PRICING INFORMATION SHALL NOT BE DISCLOSED BY THE PRICING COMMITTEE
REPRESENTATIVES EXCEPT TO COUNSEL, THE INDEPENDENT ACCOUNTING EXPERT, OR ANY
THIRD PARTY AUDITOR SELECTED PURSUANT TO SECTION 5.3(G).  ALL PRICING
INFORMATION SHALL BE [*] MAINTAINED BY THE PRICING COMMITTEE, WHICH [*] SHALL
NOT BE ACCESSIBLE BY PERSONS OTHER THAN THE MEMBERS OF THE PRICING COMMITTEE. 
WITHOUT LIMITING THE FOREGOING, EACH OF BMS AND GILEAD SHALL:

 

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(I)                                     CAUSE ITS REPRESENTATIVES ON THE PRICING
COMMITTEE NOT TO DISCLOSE TO ANY OTHER PERSON [*]; AND

 

(II)                                  NOT REFERENCE OR USE, DIRECTLY OR
INDIRECTLY, ANY INFORMATION FROM THE PRICING COMMITTEE [*].

 

(I)                                     PRIOR TO THE LAUNCH OF THE COMBINATION
PRODUCT AND THEREAFTER ANNUALLY, THE JEC SHALL REVIEW THE [*] (AS MOST RECENTLY
MODIFIED PURSUANT TO THIS SECTION 5.3(I), IF APPLICABLE) IN LIGHT OF THE
THEN-PREVAILING MARKET CONDITIONS AND JV MARKETING AND SALES STRATEGIES.  IF
APPROPRIATE, THE JEC SHALL RECOMMEND TO THE MEMBER PARTIES CHANGES TO THE [*]. 
THE JEC’S ACTION OR INACTION UNDER THIS SECTION 5.3(I) SHALL NOT BE SUBJECT TO
ARBITRATION.  IF (AND ONLY IF) GILEAD AND BMS MUTUALLY AGREE ON ANY SUCH CHANGES
PROPOSED BY THE JEC, THEN THE [*] AS SO CHANGED SHALL BE DEEMED TO BE THE “[*]”
HEREUNDER.

 

(J)                                     GILEAD AND BMS SHALL EACH RETAIN SOLE
DISCRETION WITH RESPECT TO PRICE-SETTING AND DISCOUNTS FOR ITS RESPECTIVE SINGLE
AGENT PRODUCTS AND DOUBLE AGENT PRODUCT, IF ANY.  NOTWITHSTANDING THE FOREGOING,
EACH MEMBER PARTY COVENANTS THAT IT SHALL [*] AND SHALL NOT DIRECTLY OR
INDIRECTLY [*] OF [*] SOLELY OR PRIMARILY FOR THE PURPOSE OF [*].

 

5.4                                 NATIONAL ACCOUNTS.  GILEAD SHALL HAVE SOLE
RESPONSIBILITY TO ACT AS AGENT FOR CONDUCTING ALL PRICING ACTIVITIES ON BEHALF
OF THE JV RELATING TO GOVERNMENTAL ORGANIZATIONS, AIDS DRUG ASSISTANCE PROGRAMS,
CORRECTIONAL FACILITIES AND SYSTEMS, MANAGED CARE ORGANIZATIONS AND ALL OTHER
NATIONAL ACCOUNTS IN ALL PAYOR SEGMENTS IN THE TERRITORY, INCLUDING WITHOUT
LIMITATION CONTRACT STRATEGY AND CONTRACT CREATION.  SUCH ACTIVITIES SHALL BE
FURTHER DEFINED IN THE COMMERCIALIZATION PLAN AND SHALL COMPLY WITH SECTION 5.3
AND THE [*].  EXCEPT WITH RESPECT TO PRICING ACTIVITIES, BMS SHALL SHARE IN THE
COMMERCIALIZATION ACTIVITIES IN CORRECTIONAL FACILITIES AND SYSTEMS AND OTHER
NATIONAL ACCOUNTS.

 

5.5                                 PERFORMANCE; SUBCONTRACTING.  GILEAD AND BMS
EACH SHALL COMPLY, AND SHALL CAUSE ITS AFFILIATES TO COMPLY, WITH ALL APPLICABLE
LAWS, REGULATIONS AND APPROVALS IN CONDUCTING THEIR RESPECTIVE COMMERCIALIZATION
ACTIVITIES.  EITHER MEMBER PARTY MAY SUBCONTRACT THE PERFORMANCE OF
COMMERCIALIZATION ACTIVITIES ALLOCATED TO IT UNDER THE COMMERCIALIZATION PLAN;
PROVIDED, HOWEVER, THAT THE SUBCONTRACTING MEMBER PARTY SHALL OVERSEE THE
PERFORMANCE BY ITS SUBCONTRACTORS OF SUCH SUBCONTRACTED COMMERCIALIZATION
ACTIVITIES IN A MANNER THAT WOULD BE REASONABLY EXPECTED TO RESULT IN THEIR
TIMELY AND SUCCESSFUL COMPLETION AND SHALL REMAIN RESPONSIBLE FOR THE
PERFORMANCE OF SUCH COMMERCIALIZATION ACTIVITIES IN ACCORDANCE WITH THIS
AGREEMENT AND THE COMMERCIALIZATION PLAN; AND, PROVIDED, FURTHER, THAT NEITHER
GILEAD NOR BMS MAY ENGAGE ANY SUBCONTRACTOR, INCLUDING, WITHOUT LIMITATION, ANY
CONTRACT SALES ORGANIZATION, TO PERFORM ANY DETAILS OF THE COMBINATION PRODUCT.

 

5.6                                 CONFLICT AVOIDANCE.  GILEAD AND BMS EACH
AGREES TO ENSURE THAT, DURING THE INITIAL LAUNCH PERIOD, NONE OF ITS FIELD FORCE
EMPLOYEES WHO ENGAGES IN THE MARKETING OF THE COMBINATION PRODUCT SHALL ALSO
MARKET ANY [*] WHICH [*], ANY [*] THAT IS [*] IN THE TERRITORY AS OF [*], OR ANY
[*] THAT IS [*] IN THE TERRITORY AS OF [*].

 

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5.7                                 MARKETING MATERIALS.

 

(A)                                  THE JCC SHALL DEVELOP AND APPROVE AN
INITIAL SET OF ADVERTISING AND PROMOTIONAL MATERIALS FOR THE COMBINATION
PRODUCT.  IF THE JCC CANNOT REACH AGREEMENT WITH RESPECT TO SUCH MATERIALS, THE
JEC SHALL ATTEMPT TO RESOLVE ANY DISPUTED ISSUES RELATING TO THE MATERIALS.  IN
THE EVENT THAT THE JCC OR, FOLLOWING A DISPUTE WITHIN THE JCC,  THE JEC SHALL
REACH AGREEMENT WITH RESPECT TO SUCH MATERIALS (AS MODIFIED FROM TIME TO TIME
PURSUANT TO THIS SECTION 5.7, THE “APPROVED MARKETING MATERIALS”), THEN SUBJECT
TO SUBPARAGRAPH (B) BELOW, EACH MEMBER PARTY SHALL USE THE APPROVED MARKETING
MATERIALS (AND ONLY THE APPROVED MARKETING MATERIALS, TOGETHER WITH THE
FDA-APPROVED PRODUCT LABEL AND THE PACKAGE INSERT) IN PROMOTING THE COMBINATION
PRODUCT IN THE TERRITORY FOR AT LEAST THE FIRST TWELVE MONTHS FOLLOWING THE
LAUNCH.  IF EACH OF THE JCC AND THE JEC IS UNABLE TO REACH AGREEMENT ON SUCH
MATERIALS, THEN THE MEMBER PARTIES SHALL PROMOTE THE COMBINATION PRODUCT IN THE
TERRITORY USING ONLY THE FDA-APPROVED PRODUCT LABEL AND THE PACKAGE INSERT FOR
THE COMBINATION PRODUCT.

 

(B)                                 EACH MEMBER PARTY MAY PROPOSE INTERIM
UPDATES TO THE APPROVED MARKETING MATERIALS FROM TIME TO TIME, INDEPENDENT OF
THE ANNUAL REVIEWS CONDUCTED PURSUANT TO SECTION 5.7(C).  THE JCC SHALL BE
REQUIRED TO CONSIDER, AND SHALL ADOPT, SUCH UPDATES ONLY IF THEY SATISFY THE
FOLLOWING CONDITIONS:  (I) THE UPDATE IS BASED ON RELEVANT NEW SCIENTIFIC,
MEDICAL OR CLINICAL DATA, RELEVANT NEW REGULATORY OR LEGAL DEVELOPMENTS, OR
CHANGES TO THE FDA-APPROVED LABEL OR PACKAGE INSERT FOR THE COMBINATION
PRODUCT;  AND (II) IN THE ABSENCE OF SUCH UPDATE, THE USE OF THE APPROVED
MARKETING MATERIALS WOULD NOT COMPLY WITH APPLICABLE LAW ( ANY UPDATE SATISFYING
SUCH CONDITIONS, A “REQUIRED UPDATE”).

 

(C)                                  APPROXIMATELY [*] AFTER THE LAUNCH, THE JCC
SHALL REVIEW AND, IF APPROPRIATE, UPDATE THE APPROVED MARKETING MATERIALS, IF
ANY.  SUCH UPDATES SHALL INCLUDE, AT A MINIMUM, ANY REQUIRED UPDATES.  IF THE
JCC CANNOT REACH AGREEMENT ON A REQUIRED UPDATE PROPOSED BY A MEMBER PARTY, THEN
THE MATTER SHALL BE SUBJECT TO DISPUTE RESOLUTION UNDER SECTION 2.8.  IN THE
EVENT THAT NEITHER THE JCC NOR THE JEC IS ABLE TO REACH AGREEMENT ON A PROPOSED
REQUIRED UPDATE, AND AFTER [*] RELATING TO REQUIRED UPDATES, EACH MEMBER PARTY
MAY ELECT UPON WRITTEN NOTICE TO THE OTHER MEMBER PARTY TO PROMOTE THE
COMBINATION PRODUCT IN THE TERRITORY USING EITHER (I) ONLY THE FDA-APPROVED
PRODUCT LABEL AND THE PACKAGE INSERT OR (II) THE APPROVED MARKETING MATERIALS AS
MODIFIED TO REFLECT ANY REQUIRED UPDATES [*].

 

(D)                                 IN CONNECTION WITH THE REVIEW CONDUCTED
PURSUANT TO SECTION 5.7(C), THE JCC MAY MAKE OTHER APPROPRIATE CHANGES ARISING
FROM BUSINESS OR OTHER CONSIDERATIONS (EACH, AN “OPTIONAL UPDATE”) AS PROPOSED
BY A MEMBER PARTY.  IN THE EVENT THAT THE JCC CANNOT REACH AGREEMENT ON ANY
PROPOSED OPTIONAL UPDATE, THEN THE DISPUTE SHALL BE SUBJECT TO DISPUTE
RESOLUTION UNDER SECTION 2.8;  PROVIDED, HOWEVER, THAT [*] TO [*].  IN THE EVENT
THAT NEITHER THE JCC NOR THE JEC IS ABLE TO REACH AGREEMENT ON A PROPOSED
OPTIONAL UPDATE, EACH MEMBER PARTY MAY ELECT UPON WRITTEN NOTICE TO THE OTHER
MEMBER PARTY TO PROMOTE THE COMBINATION PRODUCT IN THE TERRITORY USING EITHER
(I) ONLY THE FDA-APPROVED PRODUCT LABEL AND THE PACKAGE INSERT OR (II) THE
APPROVED MARKETING MATERIALS WITHOUT SUCH OPTIONAL UPDATE.

 

(E)                                  AFTER THE REVIEW CONDUCTED PURSUANT TO
SECTION 5.7(C), THE JCC SHALL REVIEW THE MOST RECENT REVISED MARKETING MATERIALS
ON AN ANNUAL BASIS, AND SHALL MAKE REQUIRED UPDATES AND  CONSIDER ANY OPTIONAL
UPDATES PROPOSED BY A MEMBER PARTY.  ANY DISPUTES WITHIN THE JCC RELATING TO
SUCH UPDATES SHALL BE RESOLVED USING THE PROCEDURES SET FORTH IN SECTIONS 5.7(C)
AND 5.7(D).

 

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(F)            THE JV SHALL OWN ALL RIGHTS, TITLE AND INTEREST IN AND TO SUCH
APPROVED MARKETING MATERIALS.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, NEITHER MEMBER PARTY SHALL USE IN THE PROMOTION OF THE COMBINATION
PRODUCT IN THE TERRITORY MATERIALS OTHER THAN THE FDA-APPROVED PRODUCT LABEL AND
INSERTS AND THE APPROVED MARKETING MATERIALS.  THE JCC SHALL SELECT FOR THE
MARKETING OF THE COMBINATION PRODUCT AN ADVERTISING AGENCY OR AGENCIES, AND THE
JV SHALL RETAIN SUCH AGENCY OR AGENCIES ON COMMERCIALLY REASONABLE TERMS.  THE
JCC SHALL ALSO DEVELOP, IMPLEMENT AND OVERSEE AN ORDERLY, SYSTEMATIC PROCESS,
INVOLVING REPRESENTATIVES FROM THE LEGAL, MEDICAL AND REGULATORY FUNCTIONS OF
THE RESPECTIVE MEMBER PARTIES, FOR THE REVIEW AND APPROVAL OF ALL SUCH
ADVERTISING AND PROMOTIONAL MATERIALS.  IN ANY INTERACTIONS WITH FDA, THE
ALLOCATION OF THE MEMBER PARTIES’ RIGHTS AND RESPONSIBILITIES SHALL BE AS SET
FORTH IN SECTION 3.4.

 

5.8           DEVELOPMENT AND USE OF TRADEMARKS.  THE JCC SHALL SELECT ALL
COMBINATION PRODUCT TRADEMARKS, WHICH SHALL BE OWNED BY THE JV.  SUBJECT TO
APPLICABLE LAW, THE JV SHALL INCLUDE A TRADEMARK AND THE NAME OF EACH OF GILEAD
PARENT AND BMS PARENT ON THE LABELING, PACKAGING AND ADVERTISING MATERIALS FOR
THE COMBINATION PRODUCT IN THE TERRITORY.  THE JV SHALL COMPLY WITH ALL NOTICE
AND MARKING REQUIREMENTS OF APPLICABLE INTELLECTUAL PROPERTY LAW FOR THE
PROTECTION AND ENFORCEMENT OF THE TRADEMARKS OF THE JV, GILEAD AND BMS, UNLESS
SUCH NOTICE AND MARKING REQUIREMENTS ARE NOT COMMERCIALLY REASONABLE UNDER THE
CIRCUMSTANCES.

 

5.9           INSURANCE.  THE MEMBER PARTIES AGREE THAT THE JV WILL [*]. 
FURTHER, NEITHER MEMBER PARTY SHALL HAVE ANY OBLIGATION TO [*].  IN THE EVENT
THAT EITHER MEMBER PARTY ELECTS TO [*] ARISING OUT OF THE EXPLOITATION OF THE
COMBINATION PRODUCT, THE MEMBER PARTY [*] SHALL HAVE THE SOLE RIGHT TO [*].  FOR
THE AVOIDANCE OF DOUBT, NOTHING CONTAINED IN THIS SECTION 5.9 IS INTENDED, OR
SHALL BE CONSTRUED, TO LIMIT A MEMBER PARTY’S (OR THE JV’S) INDEMNITY
OBLIGATIONS PURSUANT TO SECTION 13.

 

5.10         RECORDS.

 

(A)           MAINTENANCE OF RECORDS.  GILEAD AND BMS EACH SHALL SEVERALLY (IN
ACCORDANCE WITH THEIR RESPECTIVE ALLOCATIONS OF RESPONSIBILITY WITH RESPECT TO
PROJECT ACTIVITIES) MAINTAIN AND RETAIN, OR CAUSE TO BE MAINTAINED AND RETAINED,
FINAL RECORDS (BUT NOT DRAFT RECORDS OR DOCUMENTS EXCEPT AS OTHERWISE REQUIRED
BY APPLICABLE LAW) OF ITS RESPECTIVE COMMERCIALIZATION ACTIVITIES COVERED IN THE
COMMERCIALIZATION PLAN FOR AT LEAST (I) THREE (3) YEARS OR (II) SUCH LONGER
PERIOD AS MAY BE REQUIRED BY APPLICABLE LAW.

 

(B)           ACCESS TO RECORDS.  SUBJECT TO THIS SECTION 5.10(B), EACH MEMBER
PARTY SHALL HAVE THE RIGHT, WITH RESPECT TO RECORDS MAINTAINED BY THE OTHER
MEMBER PARTY OF SUCH OTHER MEMBER PARTY’S COMMERCIALIZATION ACTIVITIES COVERED
IN THE COMMERCIALIZATION PLAN, DURING NORMAL BUSINESS HOURS AND UPON REASONABLE
NOTICE, TO INSPECT AND COPY ANY SUCH RECORDS SOLELY TO THE EXTENT RELATING TO
THE COMBINATION PRODUCT AND SOLELY TO THE EXTENT (I) NECESSARY IN ORDER FOR THE
RECEIVING MEMBER PARTY TO PERFORM ITS OBLIGATIONS WITH RESPECT TO
COMMERCIALIZATION ACTIVITIES IN A MANNER CONSISTENT WITH THE COMMERCIALIZATION
PLAN, (II) NECESSARY FOR THE RECEIVING MEMBER PARTY TO CONFIRM COMPLIANCE WITH
AND/OR TO COMPLY WITH GLP, GCP AND GMP (TO THE EXTENT APPLICABLE), AND OTHER
APPLICABLE LAW, AS IT RELATES TO PROJECT ACTIVITIES, AND/OR (III) NECESSARY TO
ENABLE THE RECEIVING MEMBER PARTY TO CONDUCT REASONABLE DILIGENCE ON MATTERS
POTENTIALLY GIVING RISE TO LIABILITY ON THE PART OF THE JV AND/OR SUCH RECEIVING

 

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MEMBER PARTY, OR TO CONDUCT A DEFENSE OF ITSELF AND/OR THE JV WITH RESPECT TO
ANY SUCH LIABILITY, IF AND TO THE EXTENT THAT A FACT, CIRCUMSTANCE OR EVENT HAS
ARISEN THAT GIVES THE RECEIVING MEMBER PARTY A REASONABLE BASIS TO BELIEVE THAT
IT OR THE JV HAS OR MAY INCUR SUCH LIABILITY, IN EACH CASE FOR USE BY THE
RECEIVING MEMBER PARTY FOR THE PURPOSE SET FORTH IN CLAUSE (I), (II) OR  (III)
ABOVE, AS THE CASE MAY BE.  CLAUSE (III) OF THE IMMEDIATELY PRECEDING SENTENCE
SHALL NOT REQUIRE ANY PARTY TO PROVIDE SUCH DATA, DOCUMENTATION OR RECORDS IN
THE EVENT THAT THE PARTIES’ INTERESTS IN SUCH MATTER ARE OR MAY BE [*], IN WHICH
CASE [*] SHALL APPLY.  EACH SUCH REQUEST SHALL BE MADE IN WRITING AND SHALL
STATE THE REASON(S) THEREFORE (EACH A “COMMERCIAL RECORD REQUEST”).  THE MEMBER
PARTY FROM WHICH SUCH RECORDS, DOCUMENTATION OR DATA ARE REQUESTED SHALL HAVE
THE RIGHT TO RAISE REASONABLE OBJECTIONS IN WRITING IN RESPONSE TO SUCH
COMMERCIAL RECORD REQUEST, INCLUDING, WITHOUT LIMITATION, BASED ON SUCH MEMBER
PARTY’S INTERESTS IN PROTECTING FROM DISCLOSURE TO THE REQUESTING MEMBER PARTY
TRADE SECRETS OR OTHER COMPETITIVE BUSINESS INFORMATION.  UPON ANY SUCH
OBJECTION BEING ASSERTED, THE MEMBER PARTIES SHALL PROMPTLY CONFER IN AN ATTEMPT
TO ADDRESS EACH MEMBER PARTY’S CONCERNS AND REACH A RESOLUTION WITH RESPECT TO
THE MATTER, AND IN THE EVENT THAT THE MEMBER PARTIES ARE UNABLE TO AGREE UPON A
MUTUALLY AGREEABLE RESOLUTION, EITHER MEMBER PARTY SHALL HAVE THE RIGHT TO REFER
THE MATTER TO THE JCC.  IN THE EVENT THAT ANY SUCH DISPUTE IS ULTIMATELY [*]
DETERMINE AS A THRESHOLD MATTER WHETHER AND TO WHAT EXTENT ONE OR MORE CRITERIA
SET FORTH IN CLAUSES (I), (II) AND/OR (III) ABOVE HAVE BEEN SATISFIED BY THE
REQUESTING MEMBER PARTY, AND, IF SO, SHALL MAKE A DETERMINATION WITH RESPECT TO
WHETHER AND TO WHAT EXTENT THE DISCLOSURE OF SUCH INFORMATION SHALL BE REQUIRED,
BY [*], AND [*].  IN MAKING SUCH DETERMINATION, [*] TO THE FACTS AND ARGUMENTS
SET FORTH IN THE COMMERCIAL RECORD REQUEST AND THE OTHER MEMBER PARTY’S WRITTEN
RESPONSE THERETO, AND (Y) HAVE THE RIGHT TO REQUIRE THE RECEIVING MEMBER PARTY
TO ABIDE BY TERMS AND CONDITIONS FOR THE HANDLING, USE AND NON-DISCLOSURE
(EITHER WITHIN SUCH MEMBER PARTY’S ORGANIZATION AND/OR TO THIRD PARTIES) OF SUCH
INFORMATION AS MAY BE REASONABLE UNDER THE CIRCUMSTANCES. EXCEPT AS PROVIDED IN
THIS SECTION 5.10, A MEMBER PARTY SHALL NOT HAVE THE RIGHT TO OBTAIN FROM THE
OTHER MEMBER PARTY ACCESS TO OR COPIES OF THE OTHER MEMBER PARTY’S RECORDS,
DOCUMENTATION AND DATA DESCRIBED ABOVE, UNLESS OTHERWISE EXPRESSLY PERMITTED
PURSUANT TO THIS AGREEMENT OR THE OTHER MEMBER PARTY GIVES ITS CONSENT IN ITS
SOLE DISCRETION.  NOTWITHSTANDING THE FOREGOING, NEITHER MEMBER PARTY SHALL HAVE
ANY OBLIGATION TO (AND, WITH RESPECT TO PRICING AND DISCOUNTING MATTERS AS SET
FORTH IN SECTION 5.3, NEITHER MEMBER PARTY SHALL) PROVIDE TO THE OTHER MEMBER
PARTY ANY SUCH INFORMATION TO THE EXTENT IT RELATES TO PRICE SETTING AND
DISCOUNTING, OR INVENTORY MANAGEMENT AGREEMENTS, OR WHICH SUCH FIRST MEMBER
PARTY IS RESTRICTED FROM DISCLOSING PURSUANT TO APPLICABLE LAW OR
CONFIDENTIALITY OR OTHER CONTRACTUAL ARRANGEMENTS WITH THIRD PARTIES.

 

5.11         COMMERCIALIZATION PLAN AND BUDGET.

 

(A)           THE COMMERCIALIZATION PLAN SHALL COVER ONLY ACTIVITIES FOR
COMMERCIALIZATION OF THE COMBINATION PRODUCT IN THE TERRITORY THAT SHALL BE
CONDUCTED BY A SINGLE MEMBER PARTY OR THAT MUST BE COORDINATED BETWEEN THE
MEMBER PARTIES, WHICH ACTIVITIES SHALL CONFORM TO THE COLLABORATION PRINCIPLES
AND THE PROVISIONS OF THIS SECTION 5.

 

(B)           THE INITIAL COMMERCIALIZATION PLAN ATTACHED HERETO AS ANNEX C
COVERS THE PERIOD FROM THE EFFECTIVE DATE THROUGH THE INITIAL LAUNCH PERIOD. 
EACH COMMERCIALIZATION PLAN AND UPDATE SHALL CONTAIN A BUDGET FOR EACH MEMBER
PARTY’S OUT-OF-POCKET EXPENSES FOR SUCH MEMBER PARTY’S ACTIVITIES SET FORTH
THEREIN (EACH, A “COMMERCIALIZATION BUDGET”).  THE INITIAL COMMERCIALIZATION
PLAN COVERS (I) THE [*] BY EACH MEMBER PARTY IN THE

 

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TERRITORY [*] FOR THE INITIAL LAUNCH PERIOD, (II) [*] FOR THE COMBINATION
PRODUCT FOR THE INITIAL LAUNCH PERIOD, AND (III) CERTAIN OTHER MARKETING AND
OTHER COMMERCIALIZATION ACTIVITIES FOR THE COMBINATION PRODUCT THAT ARE REQUIRED
TO BE CONDUCTED BY A SINGLE MEMBER PARTY OR THAT MUST BE COORDINATED BETWEEN THE
MEMBER PARTIES; PROVIDED, HOWEVER, THAT WITHIN [*] AFTER THE EFFECTIVE DATE, THE
MEMBER PARTIES SHALL (X) SUPPLEMENT THE INITIAL COMMERCIALIZATION PLAN IN ORDER
TO ASSIGN TO THE MEMBER PARTIES THEIR RESPECTIVE RESPONSIBILITIES FOR EXECUTING
ACTIVITIES REFERRED TO IN CLAUSE (III) ABOVE AND (Y) REVISE THE INITIAL
COMMERCIALIZATION PLAN AND COMMERCIALIZATION BUDGET SO THAT THE AMOUNTS SET
FORTH IN ANNEX C WITH RESPECT TO THE PERIOD FROM THE EFFECTIVE DATE TO THE
COMMENCEMENT OF THE INITIAL LAUNCH PERIOD ARE REPORTED ON A CALENDAR
YEAR/CALENDAR QUARTER BASIS REFLECTING THE TIMING OF SUCH AMOUNTS AS
CONTEMPLATED BY ANNEX C.  UPDATES OF THE COMMERCIALIZATION PLAN SHALL NOT COVER
OR INCLUDE ANY ACTIVITIES NOT COVERED BY THE INITIAL COMMERCIALIZATION PLAN
UNLESS MUTUALLY AGREED BY THE MEMBER PARTIES.

 

(C)           NOT LESS THAN [*] PRIOR TO THE PROPOSED DATE OF FILING FOR
APPROVAL OF AN NDA FOR THE COMBINATION PRODUCT IN THE TERRITORY, THE MEMBER
PARTIES SHALL REVISE THE THEN-CURRENT COMMERCIALIZATION PLAN AND
COMMERCIALIZATION BUDGET SO THAT THE AMOUNTS SET FORTH THEREIN WITH RESPECT TO
THE INITIAL LAUNCH PERIOD ARE REPORTED ON A CALENDAR YEAR/CALENDAR QUARTER BASIS
REFLECTING THE TIMING OF SUCH AMOUNTS AS CONTEMPLATED BY THE THEN-CURRENT
COMMERCIALIZATION PLAN AND COMMERCIALIZATION BUDGET.  THE RESPONSIBLE MEMBER
PARTY (AS DETERMINED BELOW) SHALL PREPARE AND SUBMIT TO EACH OF THE JCC AND JFC
(I) NOT LESS THAN [*] PRIOR TO THE START OF EACH CALENDAR YEAR, A PROPOSED
UPDATE TO THE COMMERCIALIZATION PLAN AND THE COMMERCIALIZATION BUDGET FOR SUCH
CALENDAR YEAR AND (II) NOT LESS THAN [*] PRIOR TO THE START OF EACH CALENDAR
YEAR, A PRELIMINARY UPDATE TO SUCH COMMERCIALIZATION BUDGET (WHICH MAY ADDRESS
BUDGET ISSUES AT A GENERAL LEVEL, MAY BE INCOMPLETE AND IS SUBJECT TO CHANGE).
 FOLLOWING REVIEW, DISCUSSION AND REVISION OF SUCH PROPOSED UPDATE, THE JCC
SHALL VOTE UPON SUCH UPDATE AT LEAST [*] PRIOR TO THE START OF THE APPLICABLE
CALENDAR YEAR.  BMS SHALL PREPARE THE FIRST SUCH ANNUAL UPDATE; THEREAFTER, SUCH
RESPONSIBILITY SHALL ROTATE BETWEEN BMS AND GILEAD ON A YEAR-TO-YEAR BASIS, ON
THE SAME ANNUAL SCHEDULE AS FOR THE FIRST UPDATE, THROUGH THE CALENDAR YEAR IN
WHICH THE SUBSEQUENT LAUNCH PERIOD ENDS (OR FOR SUCH LONGER PERIOD AS MAY BE
AGREED BY THE MEMBER PARTIES).  IN ADDITION, EITHER MEMBER PARTY, DIRECTLY OR
THROUGH ITS REPRESENTATIVES ON THE JCC, MAY PROPOSE INTERIM UPDATES TO THE
COMMERCIALIZATION PLAN AND THE COMMERCIALIZATION BUDGET TO THE JCC FROM TIME TO
TIME AS APPROPRIATE IN LIGHT OF CHANGED CIRCUMSTANCES.  SUCH ANNUAL AND INTERIM
UPDATES FOR PERIODS COMMENCING WITH CALENDAR YEARS THROUGH THE ONE CONTAINING
THE END OF THE SUBSEQUENT LAUNCH PERIOD SHALL BE APPROVED BY THE JCC AS SET
FORTH IN SECTION 2.4(B)(II).  SUBJECT TO SECTIONS 2.2(VI) AND 2.10, IF A
PROPOSED UPDATE TO THE COMMERCIALIZATION PLAN OR COMMERCIALIZATION BUDGET IS NOT
APPROVED BY THE JEC OR JCC AS APPLICABLE, THEN THE COMMERCIALIZATION PLAN OR
COMMERCIALIZATION BUDGET, AS THE CASE MAY BE, SHALL CONTINUE IN EFFECT AS
APPROVED AND MOST RECENTLY UPDATED PURSUANT TO THIS SECTION 5.11(C).

 

5.12         COMMERCIALIZATION EXPENSES.  THE PARTIES AGREE THAT THE JV SHALL
BEAR ALL JV EXPENSES INCURRED BY EACH OF GILEAD AND BMS IN CONNECTION WITH THE
PERFORMANCE OF ITS RESPECTIVE COMMERCIALIZATION ACTIVITIES TO THE EXTENT THAT
THEY MEET ALL OF THE FOLLOWING CRITERIA (“AUTHORIZED COMMERCIALIZATION
EXPENSES”):  (A) SUCH COMMERCIALIZATION ACTIVITIES ARE COVERED IN AND CONSISTENT
WITH THE COMMERCIALIZATION PLAN AND ARE WITHIN AN AREA OF RESPONSIBILITY FOR THE
RELEVANT MEMBER PARTY LISTED IN THE COMMERCIALIZATION BUDGET AS BEING CHARGEABLE
TO THE JV; (B) THE TOTAL EXPENSES FOR THAT MEMBER PARTY’S DESIGNATED ACTIVITIES
UNDER THE COMMERCIALIZATION PLAN FOR THE RELEVANT PERIOD TO THE EXTENT THAT THEY
DO NOT EXCEED THE AGGREGATE AMOUNT SET FORTH

 

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IN THE COMMERCIALIZATION BUDGET FOR SUCH ACTIVITIES IN THAT PERIOD BY MORE THAN
[*]; (C) THE EXPENSES ARE EXTERNAL, OUT-OF-POCKET COSTS OF GILEAD OR BMS,
WITHOUT ANY MARKUP, AND NOT INTERNAL COSTS, INCLUDING, WITHOUT LIMITATION,
INTERNAL COSTS INCURRED IN [*]; AND (D) THE RELEVANT COMMERCIALIZATION
ACTIVITIES ARE FOR THE MARKETING OF THE COMBINATION PRODUCT ONLY AND NOT FOR THE
MARKETING OF ANY OTHER PROPRIETARY PRODUCTS OF GILEAD OR BMS.  NOTWITHSTANDING
THE LIMITATION CONTAINED IN CLAUSE (D) ABOVE, IN THE EVENT THAT EITHER MEMBER
PARTY REASONABLY BELIEVES THAT THERE ARE COST OR OTHER EFFICIENCIES THAT THE JV
CAN REASONABLY BE EXPECTED TO ACHIEVE THROUGH ONE OR BOTH MEMBER PARTIES’
CONDUCTING COMMERCIALIZATION ACTIVITIES WITH RESPECT TO THE COMBINATION PRODUCT
AS PART OF, OR IN COORDINATION WITH, ACTIVITIES BEING CONDUCTED BY ONE OR BOTH
MEMBER PARTIES WITH RESPECT TO ITS OR THEIR SINGLE AGENT PRODUCT(S) AND/OR
DOUBLE AGENT PRODUCT, SUCH MEMBER PARTY(IES) MAY PROPOSE, BY AND THROUGH ITS JCC
MEMBER(S), THAT SUCH ACTIVITIES BE COORDINATED AND AN APPROPRIATE AND REASONABLE
ALLOCATION OF THE RELATED COSTS BE MADE BETWEEN THE COMBINATION PRODUCT, ON THE
ONE HAND, AND SUCH OTHER PRODUCT OR PRODUCTS, ON THE OTHER HAND, AND THAT THE
AMOUNT ALLOCATED TO THE COMBINATION PRODUCT BE TREATED AS AUTHORIZED
COMMERCIALIZATION EXPENSES (EACH SUCH PROPOSAL, A “COST ALLOCATION PROPOSAL”). 
IF, AND ONLY TO THE EXTENT THAT, SUCH COST ALLOCATION PROPOSAL IS REVIEWED BY
THE JFC AND JCC PURSUANT TO SECTIONS 2.5(B)(VII) AND 2.4(B)(VIII), RESPECTIVELY,
AND APPROVED BY THE JEC PURSUANT TO SECTION 2.2(IX) (WITH ANY MODIFICATIONS MADE
BY THE JEC), THE AMOUNT APPROVED BY THE JEC FOR ALLOCATION TO THE COMBINATION
PRODUCT (ANY SUCH APPROVED COSTS, “ALLOCATED COSTS”) SHALL CONSTITUTE AUTHORIZED
COMMERCIALIZATION EXPENSES.

 

5.13         REPORTS.  GILEAD AND BMS SHALL EACH PRESENT TO THE OTHER, AT A
MEETING OF THE JCC AT LEAST ONCE PER CALENDAR QUARTER UNTIL THE SECOND
ANNIVERSARY OF THE LAUNCH OF THE COMBINATION PRODUCT, AND, THEREAFTER, AT A
MEETING OF THE JCC, AT LEAST SEMIANNUALLY, A REPORT (ORAL AND WRITTEN, WHICH
WRITTEN REPORT SHALL NOT BE REQUIRED TO CONTAIN MORE DETAIL THAN THAT TYPICALLY
INCLUDED IN AN EXECUTIVE SUMMARY) DESCRIBING (I) THE COMMERCIALIZATION
ACTIVITIES IT HAS PERFORMED, OR CAUSED TO BE PERFORMED, SINCE THE PRECEDING
MEETING AT WHICH SUCH A REPORT WAS PRESENTED (OR, IN THE CASE OF THE FIRST
MEETING OF THE JCC, PRIOR TO SUCH MEETING) AND ON A CALENDAR YEAR-TO DATE BASIS,
EVALUATING THE WORK PERFORMED IN RELATION TO THE GOALS AND TIMELINE OF THE
COMMERCIALIZATION PLAN, (II) ITS COMMERCIALIZATION ACTIVITIES IN PROCESS AND THE
FUTURE ACTIVITIES IT EXPECTS TO INITIATE DURING THE THEN-CURRENT CALENDAR YEAR,
AS COMPARED TO THE COMMERCIALIZATION PLAN, AND (III) IN THE CASE OF THE WRITTEN
REPORT THE AUTHORIZED COMMERCIALIZATION EXPENSES INCURRED, AND EXPECTED TO BE
INCURRED, BY SUCH MEMBER PARTY FOR THE THEN-CURRENT CALENDAR YEAR, AS COMPARED
TO THE COMMERCIALIZATION BUDGET (IF APPLICABLE).  IN ADDITION, GILEAD AND BMS
SHALL REPORT PROMPTLY TO THE JCC THROUGH THEIR RESPECTIVE COMMITTEE MEMBERS ANY
MATERIAL DEVELOPMENTS WITH RESPECT TO COMMERCIALIZATION ACTIVITIES THAT THEY ARE
RESPONSIBLE FOR PERFORMING UNDER THE COMMERCIALIZATION PLAN.  NOTWITHSTANDING
ANYTHING CONTAINED IN THIS SECTION 5.13 TO THE CONTRARY, EACH MEMBER PARTY’S
REPORTING OBLIGATIONS UNDER THIS SECTION 5.13 SHALL AUTOMATICALLY BE DEEMED TO
TERMINATE WITH RESPECT TO ANY PERIOD IN WHICH THERE IS NOT THEN IN EFFECT A
COMMERCIALIZATION PLAN AND/OR A COMMERCIALIZATION BUDGET.

 

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SECTION 6.
LICENSE GRANTS

 

6.1           TECHNOLOGY LICENSES BY MEMBER PARTIES TO THE JV.

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, GILEAD
HEREBY GRANTS TO THE JV A SOLE, ROYALTY-FREE LICENSE (WHICH LICENSE SHALL BE
EXCLUSIVE AS TO BMS, ITS AFFILIATES AND ALL THIRD PARTIES BUT NOT AS TO GILEAD
AND ITS AFFILIATES), WITH THE RIGHT TO GRANT SUBLICENSES SOLELY AS SET FORTH IN
SECTIONS 6.2(A) AND (C) OR PURSUANT TO SECTION 6.4, UNDER THE GILEAD TECHNOLOGY
ONLY TO EXPLOIT THE COMBINATION PRODUCT (BUT NOT TO MAKE OR HAVE MADE THE ACTIVE
PHARMACEUTICAL INGREDIENTS THEREOF OR OTHERWISE TO EXPLOIT THE ACTIVE
PHARMACEUTICAL INGREDIENTS THEREOF INDIVIDUALLY OR IN COMBINATION OTHER THAN IN
THE COMBINATION PRODUCT) WORLDWIDE.

 

(B)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, BMS HEREBY
GRANTS TO THE JV A SOLE, ROYALTY-FREE LICENSE (WHICH LICENSE SHALL BE EXCLUSIVE
AS TO GILEAD, ITS AFFILIATES AND ALL THIRD PARTIES BUT NOT AS TO BMS AND ITS
AFFILIATES), WITH THE RIGHT TO GRANT SUBLICENSES SOLELY AS SET FORTH IN SECTIONS
6.2(A) AND (C) OR PURSUANT TO SECTION 6.4, UNDER THE BMS TECHNOLOGY ONLY TO
EXPLOIT THE COMBINATION PRODUCT (BUT NOT TO MAKE OR HAVE MADE THE ACTIVE
PHARMACEUTICAL INGREDIENTS THEREOF OR OTHERWISE TO EXPLOIT THE ACTIVE
PHARMACEUTICAL INGREDIENTS THEREOF INDIVIDUALLY OR IN COMBINATION OTHER THAN IN
THE COMBINATION PRODUCT) IN THE APPLICABLE EFV TERRITORY.

 

6.2           LICENSES AND SUBLICENSES BY THE JV TO MEMBER PARTIES.  SUBJECT TO
THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE JV HEREBY GRANTS THE FOLLOWING
LICENSES AND SUBLICENSES:

 

(A)           TO GILEAD, (1) A NON-EXCLUSIVE, ROYALTY-FREE SUBLICENSE, WITHOUT
THE RIGHT TO GRANT FURTHER SUBLICENSES UNDER THE LICENSE GRANTED TO THE JV IN
SECTION 6.1(B), (2) A NON-EXCLUSIVE, ROYALTY-FREE LICENSE, WITHOUT THE RIGHT TO
GRANT SUBLICENSES, UNDER THE JOINT TECHNOLOGY AND JOINT INVENTIONS, AND ANY AND
ALL RIGHTS, TITLE AND INTEREST THAT THE JV MAY HAVE IN AND TO ANY GILEAD CORE
IMPROVEMENT  AND PATENTS CLAIMING SUCH IMPROVEMENT AND (3) ADDITIONALLY, A
PERPETUAL, ROYALTY-FREE, FULLY PAID-UP, IRREVOCABLE, EXCLUSIVE (EVEN AS TO THE
JV) LICENSE, WITH THE RIGHT TO GRANT SUBLICENSES THROUGH MULTIPLE TIERS, UNDER
ANY AND ALL RIGHTS, TITLE, AND INTEREST THAT THE JV MAY HAVE IN AND TO ANY
GILEAD CORE IMPROVEMENT AND PATENTS CLAIMING SUCH IMPROVEMENT, IN THE CASE OF
CLAUSES (1) AND (2) ONLY (I) TO EXPLOIT THE COMBINATION PRODUCT (BUT NOT TO
EXPLOIT THE EFV ACTIVE PHARMACEUTICAL INGREDIENT THEREIN INDIVIDUALLY OR IN
COMBINATION OTHER THAN IN THE COMBINATION PRODUCT) IN THE TERRITORY; (II) TO
CONDUCT ANYWHERE IN THE WORLD DEVELOPMENT ACTIVITIES IN SUPPORT OF APPROVALS FOR
THE COMBINATION PRODUCT IN THE TERRITORY; AND (III) TO MAKE AND HAVE MADE, AND
IMPORT INTO THE TERRITORY, COMBINATION PRODUCT (BUT NOT TO MAKE OR HAVE MADE THE
EFV ACTIVE PHARMACEUTICAL INGREDIENT THEREIN) FOR EXPLOITATION IN THE TERRITORY,
IN EACH CASE ((I), (II) AND (III)) PURSUANT TO AND IN ACCORDANCE WITH THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, PERFORMANCE OF GILEAD’S OBLIGATIONS
UNDER THE DEVELOPMENT PLAN AND THE COMMERCIALIZATION PLAN, AND, IN THE CASE OF
CLAUSE (3) ONLY, TO EXPLOIT SUCH IMPROVEMENT WORLDWIDE ONLY WITH RESPECT TO
PRODUCTS CONTAINING TDF OR FTC AS AN ACTIVE PHARMACEUTICAL INGREDIENT, WHETHER
ALONE OR IN COMBINATION WITH ONE OR MORE OTHER ACTIVE PHARMACEUTICAL INGREDIENTS
(EXCLUDING EFV AND OTHER PROPRIETARY BMS ACTIVE PHARMACEUTICAL INGREDIENTS);

 

(B)           TO BMS, (1) A NON-EXCLUSIVE, ROYALTY-FREE SUBLICENSE, WITHOUT THE
RIGHT TO GRANT FURTHER SUBLICENSES UNDER THE LICENSE GRANTED TO THE JV IN
SECTION 6.1(A), (2) A NON-EXCLUSIVE, ROYALTY-FREE LICENSE, WITHOUT THE RIGHT TO
GRANT SUBLICENSES, UNDER THE JOINT TECHNOLOGY AND JOINT INVENTIONS, AND ANY AND
ALL RIGHTS, TITLE, AND INTEREST THAT THE JV MAY HAVE IN AND TO ANY

 

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BMS CORE IMPROVEMENT AND PATENTS CLAIMING SUCH IMPROVEMENT AND (3) ADDITIONALLY,
A PERPETUAL, ROYALTY-FREE, FULLY PAID-UP, IRREVOCABLE, EXCLUSIVE (EVEN AS TO THE
JV) LICENSE, WITH THE RIGHT TO GRANT SUBLICENSES THROUGH MULTIPLE TIERS, UNDER
ANY AND ALL RIGHTS, TITLE, AND INTEREST THAT THE JV MAY HAVE IN AND TO ANY BMS
CORE IMPROVEMENT AND PATENTS CLAIMING SUCH IMPROVEMENT, IN THE CASE OF CLAUSES
(1) AND (2) ONLY (I) TO EXPLOIT THE COMBINATION PRODUCT (BUT NOT TO EXPLOIT THE
TDF OR FTC ACTIVE PHARMACEUTICAL INGREDIENTS THEREIN INDIVIDUALLY OR IN
COMBINATION OTHER THAN IN THE COMBINATION PRODUCT) IN THE TERRITORY; (II) TO
CONDUCT ANYWHERE IN THE WORLD DEVELOPMENT ACTIVITIES IN SUPPORT OF APPROVALS FOR
THE COMBINATION PRODUCT IN THE TERRITORY; AND (III) TO MAKE AND HAVE MADE, AND
IMPORT INTO THE TERRITORY, COMBINATION PRODUCT (BUT NOT TO MAKE OR HAVE MADE THE
TDF OR FTC ACTIVE PHARMACEUTICAL INGREDIENTS THEREIN) FOR EXPLOITATION IN THE
TERRITORY, IN EACH CASE ((I), (II) AND (III)) PURSUANT TO AND IN ACCORDANCE WITH
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, PERFORMANCE OF BMS’ OBLIGATIONS
UNDER THE DEVELOPMENT PLAN AND THE COMMERCIALIZATION PLAN, AND, IN THE CASE OF
CLAUSE (3) ONLY, TO EXPLOIT SUCH IMPROVEMENT IN THE EFV LICENSE AGREEMENT
TERRITORY ONLY WITH RESPECT TO PRODUCTS CONTAINING EFV AS AN ACTIVE
PHARMACEUTICAL INGREDIENT, WHETHER ALONE OR IN COMBINATION WITH ONE OR MORE
OTHER ACTIVE PHARMACEUTICAL INGREDIENTS (EXCLUDING TDF, FTC AND OTHER
PROPRIETARY GILEAD PHARMACEUTICAL INGREDIENTS);

 

(C)           TO EACH OF GILEAD AND BMS, A PERPETUAL, NON-EXCLUSIVE,
ROYALTY-FREE LICENSE, WITH THE RIGHT TO GRANT SUBLICENSES THROUGH MULTIPLE
TIERS, UNDER THE JOINT TECHNOLOGY AND JOINT INVENTIONS (INCLUDING, WITHOUT
LIMITATION, JOINT KNOW-HOW CONSISTING OF CLINICAL DATA AND OTHER RELEVANT
EXPERIENCE INFORMATION, CMC DATA AND FINISHED PRODUCT MANUFACTURING DATA), ONLY
TO EXPLOIT ON A WORLDWIDE BASIS (IN THE CASE OF GILEAD) OR IN THE EFV LICENSE
AGREEMENT TERRITORY (IN THE CASE OF BMS), (I) SUCH MEMBER PARTY’S SINGLE AGENT
PRODUCT(S) AND DOUBLE AGENT PRODUCT, AS THE CASE MAY BE, AND (II) OTHER
PHARMACEUTICAL COMPOUNDS AND PRODUCTS (OTHER THAN THE COMBINATION PRODUCT), IN
EACH CASE ((I) AND (II)) WHETHER ALONE OR IN COMBINATION WITH OTHER AGENTS; AND

 

(D)           TO GILEAD, AN EXCLUSIVE, ROYALTY-FREE, WITH THE RIGHT TO GRANT
SUBLICENSES THROUGH MULTIPLE TIERS, UNDER THE LICENSE GRANTED TO THE JV IN
SECTIONS 6.1(A) AND (B) AND UNDER THE JOINT TECHNOLOGY AND JOINT INVENTIONS
(INCLUDING, WITHOUT LIMITATION, JOINT KNOW-HOW CONSISTING OF CLINICAL DATA AND
OTHER RELEVANT EXPERIENCE INFORMATION, CMC DATA AND FINISHED PRODUCT
MANUFACTURING DATA) AND ANY AND ALL RIGHTS, TITLE AND INTEREST THAT THE JV MAY
HAVE IN AND TO ANY GILEAD CORE IMPROVEMENT AND PATENTS CLAIMING SUCH
IMPROVEMENT, (1) TO EXPLOIT THE COMBINATION PRODUCT (BUT NOT TO EXPLOIT THE
ACTIVE PHARMACEUTICAL INGREDIENTS THEREOF INDIVIDUALLY OR IN COMBINATION OTHER
THAN IN THE COMBINATION PRODUCT) WORLDWIDE (EXCEPT IN THE TERRITORY, CANADA AND
EUROPE), (2) TO CONDUCT ANYWHERE IN THE WORLD DEVELOPMENT ACTIVITIES IN SUPPORT
OF APPROVALS FOR THE COMBINATION PRODUCT WORLDWIDE (OTHER THAN APPROVALS IN THE
TERRITORY, CANADA AND EUROPE), AND (3) TO MAKE AND HAVE MADE ANYWHERE IN THE
WORLD, AND IMPORT ANYWHERE IN THE WORLD, COMBINATION PRODUCT (BUT NOT TO MAKE OR
HAVE MADE THE ACTIVE PHARMACEUTICAL INGREDIENTS THEREOF INDIVIDUALLY OR IN
COMBINATION OTHER THAN IN THE COMBINATION PRODUCT) FOR EXPLOITATION WORLDWIDE
(OTHER THAN EXPLOITATION IN THE TERRITORY, CANADA AND EUROPE), WITH SUCH LICENSE
TO CONTINUE IN EFFECT SO LONG AS, AND ONLY SO LONG AS, GILEAD IS NOT IN MATERIAL
BREACH OF THE CONDITIONS SET FORTH IN THE FOLLOWING CLAUSES (I) THROUGH (V) OF
THIS SECTION 6.2(D), SUBJECT TO THE LAST SENTENCE OF THIS SECTION 6.2(D):

 

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(I)            GILEAD SHALL USE ALL COMMERCIALLY REASONABLE EFFORTS TO OBTAIN
FOR BMS APPROPRIATE AND LEGALLY PERMISSIBLE PUBLIC RECOGNITION FOR BMS’ ROLE IN
ENABLING ACCESS TO THE COMBINATION PRODUCT IN THE DEVELOPING WORLD, WHICH MAY
INCLUDE ANY OR ALL OF THE FOLLOWING, IN ORDER OF PREFERENCE: (A) INCLUSION OF
BMS AS A LICENSOR AND, IF APPLICABLE, MANUFACTURER, ON THE PACKAGING AND LABEL
OF COMBINATION PRODUCT SOLD OR PROVIDED FOR USE IN THE DEVELOPING WORLD, (B)
ACKNOWLEDGEMENT OF BMS AS A LICENSOR AND, IF APPLICABLE, MANUFACTURER OR
SUPPLIER OF EFV, IN PRESS RELEASES AND OTHER PUBLIC ANNOUNCEMENTS RELATING TO
PROVISION OF COMBINATION PRODUCT FOR THE DEVELOPING WORLD, AND (C)
ACKNOWLEDGEMENT OF BMS AS A LICENSOR AND, IF APPLICABLE, MANUFACTURER OR
SUPPLIER OF EFV, IN ANY WEBSITES MAINTAINED BY OR THROUGH THE COOPERATION OF
GILEAD SPECIFICALLY TO PROMOTE OR ENABLE PROVISION OF COMBINATION PRODUCT FOR
THE DEVELOPING WORLD; PROVIDED, HOWEVER, THAT THE PARTIES ACKNOWLEDGE THAT
GILEAD CANNOT ENSURE THAT ANY REQUIRED THIRD PARTY OR REGULATORY AUTHORITY
CONSENTS OR APPROVALS FOR SUCH RECOGNITION CAN BE OBTAINED.

 

(II)           EXCEPT AS PROVIDED IN SECTION 6.9(A), GILEAD SHALL NOT CAUSE THE
SALE BY THE JV OF THE COMBINATION PRODUCT FOR USE OR SALE OUTSIDE THE TERRITORY.

 

(III)          WITHOUT BMS’ PRIOR WRITTEN CONSENT, NOT TO BE UNREASONABLY
WITHHELD OR DELAYED, GILEAD SHALL NOT GRANT SUBLICENSES UNDER THE LICENSE
GRANTED TO IT IN THIS SECTION 6.2(D) TO, OR UTILIZE FOR MANUFACTURE OF
COMBINATION PRODUCT, ANY PERSON OTHER THAN ONE WHO HAS CONTRACTED FOR
MANUFACTURE AND SUPPLY OF TABLETED COMBINATION PRODUCT WITH BMS, ONE OF ITS
AFFILIATES, OR A JOINT VENTURE OR SIMILAR ENTITY IN WHICH BMS HAS AN OWNERSHIP
INTEREST, OR ANY PERSON ACTING ON BEHALF OF ANY OF THE FOREGOING.

 

(IV)          IN THE EVENT THAT GILEAD EXPLOITS THE COMBINATION PRODUCT OUTSIDE
THE TERRITORY, CANADA AND EUROPE PURSUANT TO THE LICENSE GRANTED TO IT IN THIS
SECTION 6.2(D), BMS AGREES TO PERFORM ANY ADMINISTRATIVE OR MINISTERIAL ACTS
THAT MAY BE REASONABLY NECESSARY OR USEFUL IN ORDER TO ENABLE GILEAD TO SATISFY
ITS OBLIGATIONS UNDER CLAUSES (I) THROUGH (III) ABOVE OR TO ENABLE GILEAD TO
EXERCISE ITS RIGHTS UNDER THE LICENSE GRANTED TO IT IN THIS SECTION 6.2(D). 
GILEAD AGREES THAT, OTHER THAN WITH BMS’ CONSENT, BMS SHALL HAVE NO ADDITIONAL
OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, ANY OBLIGATION TO INCUR ADDITIONAL
EXPENSES OR OBLIGATIONS, AS A RESULT OF SUCH EXPLOITATION, OTHER THAN THE
FOLLOWING:  BMS’ OBLIGATIONS PROVIDED FOR IN THIS SECTION 6.2(D); BMS’
OBLIGATIONS PURSUANT TO SECTION 6.9(A), THE LAST SENTENCE OF SECTION 6.9(B) AND
THE LAST SENTENCE OF SECTION 6.11;  AND BMS’ OBLIGATIONS PURSUANT TO APPLICABLE
LAW AND ANY SEPARATE AGREEMENTS BETWEEN THE MEMBER PARTIES (INCLUDING, WITHOUT
LIMITATION, IF APPLICABLE, THE BMS SUPPLY AGREEMENT).

 

(V)           GILEAD SHALL CAUSE ITS SUBLICENSEES, IF ANY, UNDER THIS SECTION
6.2(D) TO COMPLY WITH THE OBLIGATIONS OF GILEAD UNDER CLAUSES (I) THROUGH (IV)
ABOVE, AND ANY FAILURE ON THE PART OF ANY SUCH SUBLICENSEE TO COMPLY IN ANY
MATERIAL RESPECT WITH ANY SUCH OBLIGATION OF GILEAD SHALL BE DEEMED TO BE A
FAILURE ON THE PART OF GILEAD TO COMPLY IN SUCH RESPECT WITH SUCH OBLIGATION.

 

IF GILEAD IS IN MATERIAL BREACH OF ANY OF CLAUSES (I) THROUGH (V) ABOVE,
GILEAD’S LICENSE UNDER THIS SECTION 6.2(D) SHALL NOT TERMINATE UNLESS AND UNTIL
BMS HAS GIVEN NOTICE TO GILEAD OF SUCH BREACH AND SUCH BREACH REMAINS UNCURED
FOR SIXTY (60) DAYS AFTER GILEAD’S RECEIPT OF SUCH NOTICE OR, IF LONGER, SUCH
PERIOD AS WOULD REASONABLY BE REQUIRED TO CURE SUCH BREACH PROVIDED THAT

 

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GILEAD IS USING COMMERCIALLY REASONABLE EFFORTS TO EFFECT SUCH CURE.  FOR
CLARITY, A MATERIAL BREACH OF CLAUSES (I) THROUGH (V) ABOVE SHALL NOT GIVE RISE
TO ANY RIGHTS OF CURE OR OF TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION
14.4 OF THIS AGREEMENT.  THE PARTIES ACKNOWLEDGE AND AGREE THAT THE REMEDY OF
SPECIFIC PERFORMANCE SET FORTH IN SECTION 14.4(D) SHALL BE AVAILABLE WITH
RESPECT TO ANY MATERIAL BREACH BY GILEAD OF ITS OBLIGATIONS UNDER THIS SECTION
6.2(D) OR ANY MATERIAL BREACH BY BMS OF ITS OBLIGATIONS UNDER SECTION
6.2(D)(IV), SECTION 6.9 OR SECTION 6.11.

 

6.3           LICENSES AND RIGHTS OF REFERENCE BETWEEN MEMBER PARTIES.

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, GILEAD
HEREBY GRANTS TO BMS (1) A (A) NON-EXCLUSIVE RIGHT OF REFERENCE IN THE EFV
LICENSE AGREEMENT TERRITORY WITH RESPECT TO SUCH GILEAD KNOW-HOW AS CONSISTS OF
CLINICAL DATA AND OTHER RELEVANT EXPERIENCE INFORMATION, AND  (B) NON-EXCLUSIVE,
ROYALTY-FREE, FULLY PAID-UP, IRREVOCABLE LICENSE, WITH THE RIGHT TO GRANT
SUBLICENSES THROUGH MULTIPLE TIERS, TO USE SUCH GILEAD KNOW-HOW IN THE EFV
LICENSE AGREEMENT TERRITORY, IN EACH CASE ((A) AND (B)) SOLELY TO THE EXTENT
REASONABLY NECESSARY TO ENABLE BMS TO EXPLOIT ITS SINGLE AGENT PRODUCT, WHETHER
ALONE OR IN COMBINATION WITH OTHER AGENTS (OTHER THAN GILEAD’S SINGLE AGENT
PRODUCT(S) OR DOUBLE AGENT PRODUCT), IN THE EFV LICENSE AGREEMENT TERRITORY IN A
MANNER CONSISTENT WITH THE LABELING AND APPROVED MARKETING MATERIALS FOR THE
COMBINATION PRODUCT, AND (2) A PERPETUAL, ROYALTY-FREE, FULLY PAID-UP,
IRREVOCABLE, EXCLUSIVE (EVEN AS TO GILEAD AND ITS AFFILIATES) LICENSE, WITH THE
RIGHT TO GRANT SUBLICENSES THROUGH MULTIPLE TIERS, UNDER ANY AND ALL RIGHTS,
TITLE, AND INTEREST THAT GILEAD AND ITS AFFILIATES MAY HAVE IN AND TO ANY BMS
CORE IMPROVEMENT AND PATENTS CLAIMING SUCH IMPROVEMENT, TO EXPLOIT SUCH
IMPROVEMENT IN THE EFV LICENSE AGREEMENT TERRITORY ONLY WITH RESPECT TO PRODUCTS
CONTAINING EFV AS AN ACTIVE PHARMACEUTICAL INGREDIENT, WHETHER ALONE OR IN
COMBINATION WITH ONE OR MORE OTHER ACTIVE PHARMACEUTICAL INGREDIENTS (EXCLUDING
TDF, FTC AND OTHER PROPRIETARY GILEAD PHARMACEUTICAL INGREDIENTS).  FOR CLARITY,
GILEAD SHALL NOT BE REQUIRED TO TRANSFER ANY GILEAD KNOW-HOW TO BMS PURSUANT TO
SECTION 6.3(A)(1).

 

(B)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, BMS HEREBY
GRANTS TO GILEAD (1) A (A) WORLDWIDE, NON-EXCLUSIVE RIGHT OF REFERENCE WITH
RESPECT TO SUCH BMS KNOW-HOW AS CONSISTS OF CLINICAL DATA AND OTHER RELEVANT
EXPERIENCE INFORMATION, AND (B) WORLDWIDE, NON-EXCLUSIVE, ROYALTY-FREE, FULLY
PAID-UP, IRREVOCABLE LICENSE, WITH THE RIGHT TO GRANT SUBLICENSES THROUGH
MULTIPLE TIERS, TO USE SUCH BMS KNOW-HOW, IN EACH CASE ((A) AND (B)) SOLELY TO
THE EXTENT REASONABLY NECESSARY TO ENABLE GILEAD TO EXPLOIT ITS SINGLE AGENT
PRODUCTS OR DOUBLE AGENT PRODUCT AS APPLICABLE, WHETHER ALONE OR IN COMBINATION
WITH OTHER AGENTS (OTHER THAN BMS’ SINGLE AGENT PRODUCT), IN A MANNER CONSISTENT
WITH THE LABELING AND APPROVED MARKETING MATERIALS FOR THE COMBINATION PRODUCT,
AND (2) A PERPETUAL, WORLDWIDE, ROYALTY-FREE, FULLY PAID-UP, IRREVOCABLE,
EXCLUSIVE (EVEN AS TO BMS AND ITS AFFILIATES) LICENSE, WITH THE RIGHT TO GRANT
SUBLICENSES THROUGH MULTIPLE TIERS, UNDER ANY AND ALL RIGHTS, TITLE, AND
INTEREST THAT BMS AND ITS AFFILIATES MAY HAVE IN AND TO ANY GILEAD CORE
IMPROVEMENT AND PATENTS CLAIMING SUCH IMPROVEMENT, TO EXPLOIT SUCH IMPROVEMENT
ONLY WITH RESPECT TO PRODUCTS CONTAINING TDF OR FTC AS AN ACTIVE PHARMACEUTICAL
INGREDIENT, WHETHER ALONE OR IN COMBINATION WITH ONE OR MORE OTHER ACTIVE
PHARMACEUTICAL INGREDIENTS (EXCLUDING EFV AND OTHER PROPRIETARY BMS ACTIVE
PHARMACEUTICAL INGREDIENTS).  FOR CLARITY, BMS SHALL NOT BE REQUIRED TO TRANSFER
ANY BMS KNOW-HOW TO GILEAD PURSUANT TO SECTION 6.3(B)(1).

 

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6.4           RIGHTS OF REFERENCE TO AND FROM THE JV AND RELATED MATTERS.

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, GILEAD AND
BMS EACH HEREBY GRANTS TO THE JV A NON-EXCLUSIVE RIGHT OF REFERENCE IN THE
TERRITORY WITH REGARD TO THE GILEAD REGULATORY DOCUMENTATION AND THE BMS
REGULATORY DOCUMENTATION, RESPECTIVELY, FOR THE PURPOSE OF THE JV’S SECURING,
MAINTAINING AND UPDATING APPROVALS AND AGREES TO PROVIDE A SIGNED STATEMENT TO
THAT EFFECT IN ACCORDANCE WITH 21 C.F.R. § 314.50(G)(3).

 

(B)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE JV
HEREBY GRANTS TO BMS A NON-EXCLUSIVE RIGHT OF REFERENCE IN THE TERRITORY WITH
REGARD TO THE COMBINATION PRODUCT REGULATORY DOCUMENTATION, FOR THE PURPOSE OF
BMS’ SECURING, MAINTAINING AND UPDATING NDAS FOR SUSTIVA AND ANY OTHER OF ITS
PRODUCTS CONTAINING EFV, OTHER THAN THE COMBINATION PRODUCT, AND AGREES TO
PROVIDE A SIGNED STATEMENT TO THAT EFFECT IN ACCORDANCE WITH 21 C.F.R. §
314.50(G)(3).

 

(C)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE JV
HEREBY GRANTS TO GILEAD A NON-EXCLUSIVE RIGHT OF REFERENCE IN THE TERRITORY WITH
REGARD TO THE COMBINATION PRODUCT REGULATORY DOCUMENTATION, FOR THE PURPOSE OF
GILEAD’S SECURING, MAINTAINING AND UPDATING NDAS FOR VIREAD, EMTRIVA, TRUVADA,
AND ANY OTHER OF ITS PRODUCTS CONTAINING EITHER OR BOTH OF TDF AND FTC, OTHER
THAN THE COMBINATION PRODUCT, AND AGREES TO PROVIDE A SIGNED STATEMENT TO THAT
EFFECT IN ACCORDANCE WITH 21 C.F.R. § 314.50(G)(3).

 

(D)           FOR SO LONG AS THE LICENSE GRANTED TO GILEAD IN SECTION 6.2(D)
REMAINS IN EFFECT, (I) THE JV SHALL (AND THE MEMBERS AGREE TO CAUSE THE JV TO)
COOPERATE WITH GILEAD TO MAKE THE COMBINATION PRODUCT REGULATORY DOCUMENTATION
AVAILABLE TO GILEAD (INCLUDING POTENTIALLY THROUGH FILING OF AN SNDA TO THE NDA
AS NEEDED TO CHANGE THE COMBINATION PRODUCT LABEL OR, IF APPLICABLE, QUALIFY A
DIFFERENT PRESENTATION OF THE COMBINATION PRODUCT FOR EXPORT, OR GRANTING A
RIGHT OF REFERENCE THERETO) FOR USE IN SECURING APPROVALS FROM THE FDA FOR
EXPORT OF THE COMBINATION PRODUCT AND FOR SECURING APPROVALS FROM OTHER
REGULATORY AUTHORITIES FOR USE AND SALE OUTSIDE OF THE TERRITORY, CANADA AND
EUROPE, (II) BMS AND THE JV HEREBY GRANT TO GILEAD  RIGHTS OF REFERENCE, IF ANY,
IN ANY COUNTRY WORLDWIDE OUTSIDE THE TERRITORY, CANADA AND EUROPE SOLELY FOR
PURPOSES OF FILING FOR APPROVALS OF THE COMBINATION PRODUCT IN ANY SUCH COUNTRY,
WHICH RIGHTS OF REFERENCE SHALL CONTINUE FOR SO LONG AS THE LICENSE GRANTED TO
GILEAD IN SECTION 6.2(D)  REMAINS IN EFFECT, AND AGREE TO PERFORM ANY
ADMINISTRATIVE OR MINISTERIAL ACTS THAT MAY BE REASONABLY NECESSARY OR USEFUL IN
ORDER TO ENABLE GILEAD TO AVAIL ITSELF OF SUCH RIGHTS OF REFERENCE, AND (III)
BMS AND THE JV SHALL PERMIT GILEAD OR ITS DESIGNEE TO PROVIDE A COPY OF ANY OR
ALL OF THE COMBINATION PRODUCT REGULATORY DOCUMENTATION OR ANY DATA OR
INFORMATION THEREIN TO REGULATORY AUTHORITIES OUTSIDE THE TERRITORY, CANADA AND
EUROPE, SHALL PERMIT GILEAD TO OBTAIN AND PROVIDE CERTIFICATES OF PHARMACEUTICAL
PRODUCT FOR THE COMBINATION PRODUCT (AS APPROVED BY THE FDA OR OTHER REGULATORY
AUTHORITIES) FOR SUBMISSIONS TO REGULATORY AUTHORITIES OUTSIDE OF THE TERRITORY,
CANADA AND EUROPE, AND SHALL PROVIDE ANY DOCUMENTATION OR CONSENTS NECESSARY TO
EFFECTUATE SUCH RIGHTS OF REFERENCE OR PERMIT GILEAD TO TAKE ALL THE FOREGOING
ACTIONS IN THIS CLAUSE (II) FOR THE COMBINATION PRODUCT REGULATORY DOCUMENTATION
AND SUCH COMBINATION PRODUCT CERTIFICATES OF PHARMACEUTICAL PRODUCT.  FOR
CLARITY, BMS’ GRANTS OF RIGHTS UNDER CLAUSES (II) AND (III) ABOVE SHALL NOT BE
CONSTRUED AS BMS’ GRANTING ANY RIGHT TO GILEAD UNDER ANY OR ALL BMS TECHNOLOGY
ANYWHERE OUTSIDE THE APPLICABLE EFV TERRITORY.

 

6.5           OTHER SUBLICENSES.  IN SUPPLY AGREEMENTS WITH THE SUPPLIERS
SELECTED PURSUANT TO SECTION 4.2, THE JV SHALL HAVE THE RIGHT TO GRANT SUCH
SUPPLIERS A NON-EXCLUSIVE,

 

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ROYALTY-FREE, WORLDWIDE SUBLICENSE, WITHOUT RIGHT TO SUBLICENSE, UNDER THE JOINT
TECHNOLOGY AND THE LICENSES GRANTED TO THE JV IN SECTIONS 6.1(A) AND 6.1(B), FOR
THE SOLE PURPOSE OF MANUFACTURING THE COMBINATION PRODUCT (BUT NOT THE ACTIVE
PHARMACEUTICAL INGREDIENTS THEREOF), FOR SUPPLY TO THE JV.

 

6.6           TRADEMARK LICENSES BY MEMBER PARTIES TO THE JV.

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, GILEAD
HEREBY GRANTS TO THE JV A NON-EXCLUSIVE, ROYALTY-FREE, FULLY PAID-UP, LICENSE,
WITH RIGHT TO SUBLICENSE THROUGH MULTIPLE TIERS, TO USE IN THE TERRITORY (I) THE
TRADEMARKS LISTED ON ANNEX F HERETO (THE “GILEAD LICENSED TRADEMARKS”) FOR THE
SOLE PURPOSES OF EXPLOITATION OF THE COMBINATION PRODUCT (BUT NOT TO EXPLOIT THE
ACTIVE PHARMACEUTICAL INGREDIENTS THEREOF INDIVIDUALLY OR IN COMBINATION OTHER
THAN IN THE COMBINATION PRODUCT) IN THE TERRITORY AND (II) GILEAD PARENT’S NAME
AND COMPANY LOGO/IDENTIFIERS, FOR USE IN THE NAME OF THE JV, AND/OR ON PRODUCT
LABELING, PRODUCT PACKAGING, AND PROMOTIONAL MATERIALS FOR THE COMBINATION
PRODUCT PURSUANT TO SECTION 5.8.

 

(B)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, BMS HEREBY
GRANTS TO THE JV A NON-EXCLUSIVE, ROYALTY-FREE, FULLY PAID-UP, LICENSE, WITHOUT
RIGHT TO SUBLICENSE, TO USE IN THE TERRITORY (I) THE TRADEMARKS LISTED ON ANNEX
G HERETO (THE “BMS LICENSED TRADEMARKS”) FOR THE SOLE PURPOSES OF  EXPLOITATION
OF THE COMBINATION PRODUCT (BUT NOT TO EXPLOIT THE ACTIVE PHARMACEUTICAL
INGREDIENTS THEREOF INDIVIDUALLY OR IN COMBINATION OTHER THAN IN THE COMBINATION
PRODUCT) IN THE TERRITORY AND (II) BMS PARENT’S NAME AND COMPANY
LOGO/IDENTIFIERS, FOR USE IN THE NAME OF THE JV, AND/OR ON PRODUCT LABELING,
PRODUCT PACKAGING, AND PROMOTIONAL MATERIALS FOR THE COMBINATION PRODUCT
PURSUANT TO SECTION 5.8.

 

(C)           EACH OF THE MEMBER PARTIES SHALL BE RESPONSIBLE FOR DETERMINING
AND THEREAFTER MONITORING WHAT STEPS, IF ANY, IT NEEDS TO TAKE IN ORDER TO
SATISFY ITSELF THAT THE JV’S USE OF ITS TRADEMARKS (I.E. THE GILEAD LICENSED
TRADEMARKS OR THE BMS LICENSED TRADEMARKS, AS THE CASE MAY BE), MEETS THE
COMMERCIALLY REASONABLE HIGH QUALITY STANDARDS, SPECIFICATIONS, AND INSTRUCTIONS
SUBMITTED OR APPROVED BY GILEAD OR BMS, RESPECTIVELY, IN CONNECTION WITH THIS
AGREEMENT.

 

(D)           GILEAD AND THE JV HEREBY RECOGNIZE BMS’ RIGHT, TITLE, AND INTEREST
IN AND TO THE BMS LICENSED TRADEMARKS.  GILEAD AND THE JV FURTHER RECOGNIZE THAT
THIS AGREEMENT, OR USE OF THE BMS LICENSED TRADEMARKS IN CONNECTION WITH THIS
AGREEMENT, IN NO WAY CONFERS TO GILEAD OR THE JV ANY RIGHT, TITLE, AND INTEREST
IN AND TO THE BMS LICENSED TRADEMARKS OR ANY OTHER TRADEMARKS OR INTELLECTUAL
PROPERTY RIGHTS OWNED BY BMS, EXCEPT AS MAY OTHERWISE BE EXPRESSLY PROVIDED IN
THIS AGREEMENT.  BMS AND THE JV HEREBY RECOGNIZE GILEAD’S RIGHT, TITLE, AND
INTEREST IN AND TO THE GILEAD LICENSED TRADEMARKS.  BMS AND THE JV FURTHER
RECOGNIZE THAT THIS AGREEMENT, OR USE OF THE GILEAD LICENSED TRADEMARKS IN
CONNECTION WITH THIS AGREEMENT, IN NO WAY CONFERS TO BMS OR THE JV ANY RIGHT,
TITLE, AND INTEREST IN AND TO THE GILEAD LICENSED TRADEMARKS OR ANY OTHER
TRADEMARKS OR INTELLECTUAL PROPERTY RIGHTS OWNED BY GILEAD, EXCEPT AS MAY
OTHERWISE BE EXPRESSLY PROVIDED IN THIS AGREEMENT.

 

(E)           THE JV ACKNOWLEDGES THAT (I) THE GOODWILL GENERATED BY THE JV’S
USE OF THE GILEAD LICENSED TRADEMARKS WILL INURE SOLELY TO THE BENEFIT OF
GILEAD; AND (II) THE

 

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GOODWILL GENERATED BY THE JV’S USE OF THE BMS LICENSED TRADEMARKS WILL INURE
SOLELY TO THE BENEFIT OF BMS.

 

6.7           TRADEMARK LICENSE BY THE JV TO GILEAD.

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE JV
HEREBY GRANTS TO GILEAD A NON-EXCLUSIVE, ROYALTY-FREE, FULLY PAID-UP LICENSE, IN
ALL COUNTRIES AND TERRITORIES OF THE WORLD EXCLUDING THE TERRITORY, CANADA AND
EUROPE, WITH THE RIGHT TO SUBLICENSE THROUGH MULTIPLE TIERS, TO USE COMBINATION
PRODUCT TRADEMARKS FOR THE SOLE PURPOSE OF EXPLOITATION OF THE COMBINATION
PRODUCT (BUT NOT TO EXPLOIT THE ACTIVE PHARMACEUTICAL INGREDIENTS THEREOF
INDIVIDUALLY OR IN COMBINATION OTHER THAN IN THE COMBINATION PRODUCT) IN SUCH
COUNTRIES AND TERRITORIES; PROVIDED, HOWEVER, THAT THIS LICENSE SHALL REMAIN IN
EFFECT ONLY SO LONG AS GILEAD’S LICENSE PURSUANT TO SECTION 6.2(D) REMAINS IN
EFFECT.

 

(B)           BMS AND GILEAD HEREBY RECOGNIZE THE JV’S RIGHT, TITLE, AND
INTEREST IN AND TO THE COMBINATION PRODUCT TRADEMARKS.  BMS AND GILEAD FURTHER
RECOGNIZE THAT THIS AGREEMENT, OR USE OF THE COMBINATION PRODUCT TRADEMARKS IN
CONNECTION WITH THIS AGREEMENT, IN NO WAY CONFERS ON BMS OR GILEAD ANY RIGHT,
TITLE, AND INTEREST IN AND TO THE COMBINATION PRODUCT TRADEMARKS ON ANY OTHER
TRADEMARKS OR INTELLECTUAL PROPERTY RIGHTS OWNED BY THE JV, EXCEPT AS MAY
OTHERWISE BE EXPRESSLY PROVIDED IN THIS AGREEMENT.

 

(C)           BMS AND GILEAD ACKNOWLEDGE THAT THE GOODWILL GENERATED BY THEIR
USE OF THE COMBINATION PRODUCT TRADEMARKS WILL INURE SOLELY TO THE BENEFIT OF
THE JV.

 

6.8           RETAINED RIGHTS.  ALL LICENSE RIGHTS NOT SPECIFICALLY GRANTED IN
THIS SECTION 6 ARE EXPRESSLY RESERVED BY EACH LICENSING PARTY.  ANY LICENSE
GRANTED IN THIS SECTION 6 WHICH IS NOT SUBLICENSABLE MAY BE TRANSFERRED OR
ASSIGNED BY THE LICENSEE PARTY ONLY IN CONNECTION WITH A PERMITTED ASSIGNMENT OF
THIS AGREEMENT BY SUCH PARTY UNDER SECTION 15.4.

 

6.9           COMBINATION PRODUCT SALES FOR OUTSIDE THE TERRITORY, CANADA AND
EUROPE.

 

(A)           IF SO REQUESTED BY GILEAD, EITHER OR BOTH OF BMS AND THE JV
(ACTING FOR THESE PURPOSES THROUGH BMS REPRESENTATIVES), AS APPLICABLE, SHALL
NEGOTIATE IN GOOD FAITH A COMMERCIALLY REASONABLE ARRANGEMENT (TAKING INTO
ACCOUNT RELEVANT ECONOMIC AND MARKET CONDITIONS IN THE RELEVANT TERRITORIES,
E.G. SHOULD BMS BECOME THE SUPPLIER, A TRANSFER PRICE [*] OF THE COMBINATION
PRODUCT IN TERRITORIES WHERE IT WOULD BE SUPPLIED) TO ENABLE THE SUPPLY OF EFV
ACTIVE PHARMACEUTICAL INGREDIENT FOR MANUFACTURE OF COMBINATION PRODUCT (IN THE
CASE OF BMS, EITHER MANUFACTURING OR ENABLING A THIRD PARTY TO MANUFACTURE SUCH
EFV ACTIVE PHARMACEUTICAL INGREDIENT) OR OF COMBINATION PRODUCT (IN THE CASE OF
THE JV), IN EACH CASE SUFFICIENT TO ALLOW GILEAD, ITS DESIGNEE OR THE JV (AS
PERMITTED UNDER SECTION 6.9(B)), TO SELL OR PROVIDE COMBINATION PRODUCT FOR USE
BOTH IN THE DEVELOPING WORLD AND IN OTHER TERRITORIES OUTSIDE THE TERRITORY,
CANADA AND EUROPE, TO MEET THE ANTICIPATED DEMAND THEREFOR IN SUCH COUNTRIES.

 

(B)           IF REQUESTED BY GILEAD, AND AS PERMITTED BY APPLICABLE LAWS, RULES
AND REGULATIONS, AND CONSENTED TO BY BMS (SUCH CONSENT NOT TO BE UNREASONABLY
WITHHELD OR DELAYED), THE PARTIES SHALL COOPERATE TO ENABLE AND CAUSE THE JV TO
MAKE THE COMBINATION PRODUCT AVAILABLE FOR EXPORT TO, AND USE AND SALE IN, THE
DEVELOPING WORLD, INCLUDING, WITHOUT LIMITATION, ANY SALES WITHIN THE TERRITORY
OF COMBINATION PRODUCT ONLY FOR EXPORT, USE OR SALE IN

 

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THE DEVELOPING WORLD.  AS PART OF THESE EFFORTS, THE PARTIES SHALL NEGOTIATE IN
GOOD FAITH APPROPRIATE AMENDMENTS TO THIS AGREEMENT AND THE OPERATING AGREEMENT
CONSISTENT WITH CLAUSES (I) THROUGH (V) OF SECTION 6.2(D) AND SECTION 6.9(C).

 

(C)           OTHER THAN PAYMENTS IN RESPECT OF ANY SUPPLY OF EFV (IF
APPLICABLE) OR COMBINATION PRODUCT BY BMS OR THE JV PURSUANT TO SECTION 6.8(A),
BMS AND THE JV SHALL NOT BE ENTITLED TO ANY ADDITIONAL FINANCIAL COMPENSATION,
WHETHER IN THE FORM OF LICENSE FEES, MILESTONE PAYMENTS, ROYALTIES OR OTHERWISE,
EITHER BY REASON OF SALES BY THE JV OR OTHER PERSONS AUTHORIZED BY GILEAD, OF
COMBINATION PRODUCT FOR USE OUTSIDE THE TERRITORY, CANADA AND EUROPE OR BY
REASON OF THE JV’S GRANT OF THE LICENSE IN SECTION 6.2(D).

 

6.10         COMBINATION PRODUCT SALES FOR EUROPE.  THE PARTIES ACKNOWLEDGE AND
AGREE THAT THE COMBINATION PRODUCT SHALL BE SOLD OR OTHERWISE COMMERCIALLY
DISTRIBUTED IN EUROPE ONLY [*] TO (AND ONLY IF THE [*] UPON) ONE (1) OR MORE [*]
(AND, IF APPLICABLE, THE [*]) COVERING [*], UNLESS SUCH SALE OR DISTRIBUTION IS
COMMENCED ONLY AFTER A [*] IN [*].

 

6.11         EFV LICENSE AGREEMENT.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
TO THE CONTRARY, GILEAD AGREES TO EXERCISE THE RIGHTS GRANTED TO IT IN SECTIONS
6.2(D), 6.4(D) AND 6.9(A) IN THE TERRITORIES OUTSIDE THE EFV LICENSE AGREEMENT
TERRITORY, ONLY AFTER REACHING AN AGREEMENT WITH THE EFV LICENSOR IF AND AS
NECESSARY FOR GILEAD TO AVOID INFRINGING OR MISAPPROPRIATING THE INTELLECTUAL
PROPERTY RIGHTS OF THE EFV LICENSOR IN SUCH TERRITORIES.  IF REQUESTED BY
GILEAD, BMS SHALL COOPERATE WITH GILEAD IN ITS EFFORTS TO REACH SUCH AN
AGREEMENT.

 

6.12         JV OBLIGATIONS AS SUBLICENSEE.  THE JV SHALL COMPLY WITH ALL
PROVISIONS APPLICABLE TO SUBLICENSEES SET FORTH IN THE EFV LICENSE AGREEMENT (IN
THE FORM PROVIDED BY BMS TO GILEAD PURSUANT TO SECTION 13.2(C)) AND IN THE
LICENSE AGREEMENTS DELIVERED BY GILEAD TO BMS PURSUANT TO THE THIRD SENTENCE OF
SECTION 13.3(C) (IN THE FORM SO DELIVERED), RESPECTIVELY, INCLUDING WITHOUT
LIMITATION ANY SUCH PROVISIONS WITH RESPECT TO REPORTING OF INFORMATION, RECORD
KEEPING AND ACCESS TO RECORDS FOR AUDIT BY THE UPSTREAM LICENSOR (BUT EXCLUDING
ANY PAYMENT OBLIGATIONS OR OTHER MATTERS FOR WHICH A MEMBER PARTY IS RESPONSIBLE
UNDER SECTION 7.2).  SUCH OBLIGATIONS AS OF THE EFFECTIVE DATE ARE MORE
SPECIFICALLY IDENTIFIED IN ANNEX O.  WITH RESPECT TO [*] WITH [*] REFERRED TO IN
ANNEX O (THE [*]), [*] SHALL USE COMMERCIALLY REASONABLE EFFORTS TO [*] AFTER
THE EFFECTIVE DATE, THE [*] TO [*] GRANT OF A SUBLICENSE TO THE JV UNDER THIS
AGREEMENT AS REQUIRED BY [*] (WHICH [*] SHALL BE IN FORM AND SUBSTANCE
REASONABLY ACCEPTABLE TO [*]).

 

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SECTION 7.
PAYMENTS AND THIRD PARTY ROYALTIES

 

7.1           PAYMENTS TO MEMBER PARTIES.

 

(A)           IN CONSIDERATION OF THE SUPPLY BY GILEAD AND BMS TO THE JV OF
QUANTITIES OF THEIR RESPECTIVE ACTIVE PHARMACEUTICAL INGREDIENTS FOR MANUFACTURE
OF NON-CLINICAL SUPPLY OF THE COMBINATION PRODUCT PURSUANT TO SECTION 4.2(C) AND
THEIR RESPECTIVE SUPPLY AGREEMENTS (AND IN CONSIDERATION OF THE PROVISION OF
CERTAIN SERVICES HEREUNDER), AND SUBJECT TO ADJUSTMENT PURSUANT TO SECTION
7.1(D), THE JV SHALL PAY TO GILEAD THE “GILEAD TRANSFER PRICE” AND TO BMS SUB
THE “BMS TRANSFER PRICE” IN ACCORDANCE WITH THIS SECTION 7.  FOR A GIVEN
CALENDAR YEAR, PURSUANT TO THIS SECTION 7.1, THE JFC SHALL CALCULATE (I) INTERIM
GILEAD TRANSFER PRICES PER KILOGRAM OF TDF OR FTC BULK ACTIVE PHARMACEUTICAL
INGREDIENT RESPECTIVELY, I.E. THE APPLICABLE TRANSFER PRICE IN ACCORDANCE WITH
ANNEX K HERETO PER KILOGRAM OF BULK ACTIVE PHARMACEUTICAL INGREDIENT (EACH AN
“INTERIM GILEAD UNIT TRANSFER PRICE”) AND (II) AN INTERIM BMS TRANSFER PRICE PER
KILOGRAM OF EFV ACTIVE PHARMACEUTICAL INGREDIENT, I.E. THE APPLICABLE TRANSFER
PRICE IN ACCORDANCE WITH ANNEX K HERETO PER KILOGRAM OF EFV ACTIVE
PHARMACEUTICAL INGREDIENT (THE “INTERIM BMS UNIT TRANSFER PRICE”), IN EACH CASE
BASED UPON THE RESPECTIVE WORKING PERCENTAGES CALCULATED PURSUANT TO SECTION
7.1(C)(I), THE ESTIMATED NET SELLING PRICE OF THE COMBINATION PRODUCT DETERMINED
BY THE JFC WITH RESPECT TO SUCH CALENDAR YEAR PURSUANT TO SECTION 7.1(C)(II),
AND THE RELEVANT TARGET YIELD FOR THE ACTIVE PHARMACEUTICAL INGREDIENT
CALCULATED PURSUANT TO ANNEX K HERETO.  THE JFC SHALL THEN INFORM GILEAD AND BMS
OF THEIR RESPECTIVE INTERIM UNIT TRANSFER PRICES PURSUANT TO SECTION
7.1(C)(III).  SUBJECT TO THE LAST SENTENCE OF SECTION 7.3(C), EACH OF GILEAD AND
BMS SUB SHALL USE ITS THEN-CURRENT INTERIM UNIT TRANSFER PRICE(S) IN PREPARING
AN INVOICE FOR EACH SHIPMENT OF BULK ACTIVE PHARMACEUTICAL INGREDIENTS IT MAKES
PURSUANT TO SECTION 4.2(C) AND ITS SUPPLY AGREEMENT.

 

(B)           THE ACTUAL GILEAD PERCENTAGE AND THE ACTUAL BMS PERCENTAGE FOR A
PARTICULAR CALENDAR YEAR SHALL BE EQUAL TO ONE HUNDRED PERCENT (100%) MULTIPLIED
BY A FRACTION, THE DENOMINATOR OF WHICH IS THE SUM OF THE NET SELLING PRICES OF
TRUVADA AND SUSTIVA IN THE TERRITORY DURING THE RELEVANT CALENDAR YEAR, AND THE
NUMERATOR OF WHICH IS:

 

(I)            FOR THE ACTUAL GILEAD PERCENTAGE, THE NET SELLING PRICE OF
TRUVADA IN THE TERRITORY DURING THE RELEVANT CALENDAR YEAR; AND

 

(II)           FOR THE ACTUAL BMS PERCENTAGE, THE NET SELLING PRICE OF SUSTIVA
IN THE TERRITORY DURING THE RELEVANT CALENDAR YEAR;

 

provided, however, that, without limitation of the obligations of the Member
Parties under Section 5.3(j), for purposes of calculating the numerator and
denominator of such fraction for both the Actual Gilead Percentage and the
Actual BMS Percentage, any [*] in the Net Selling Price of Sustiva or Truvada
for the relevant Calendar Year that [*] the [*] for the Calendar Year [*] shall
be [*] and any such [*] shall not be [*].  In the event of a termination of this
Agreement, the effective date of which falls on a date other than December 31 of
a Calendar Year, the determination of the Actual Percentages shall be based on
the period from January 1 of such Calendar Year through the effective date of
termination, instead of the entire Calendar Year; and the provisions of this
Agreement shall apply, mutatis mutandis, to such period.

 

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(C)           THE JFC SHALL DETERMINE THE MEMBER PARTIES’ INTERIM UNIT TRANSFER
PRICES FOR EACH CALENDAR YEAR USING THE MEMBER PARTIES’ RESPECTIVE WORKING
PERCENTAGES, THE ESTIMATED NET SELLING PRICE AND THE TARGET YIELD, AS FOLLOWS:

 

(I)            ON OR BEFORE [*], BMS AND GILEAD SHALL AGREE IN WRITING ON THE
WORKING BMS PERCENTAGE AND THE WORKING GILEAD PERCENTAGE FOR CALENDAR YEAR 2005
(WHICH SHALL BE EQUAL TO THEIR RESPECTIVE ACTUAL PERCENTAGES FOR CALENDAR YEAR
2004 USING THE RELEVANT DATA FOR CALENDAR YEAR 2004 INCLUSIVE).  FOR EACH
SUBSEQUENT CALENDAR YEAR, THE RESPECTIVE WORKING PERCENTAGES SHALL EQUAL THE
ACTUAL BMS PERCENTAGE AND THE ACTUAL GILEAD PERCENTAGE, RESPECTIVELY, FOR THE
IMMEDIATELY PRECEDING CALENDAR YEAR; PROVIDED, HOWEVER, THAT, WITH RESPECT TO
ANY CALENDAR YEAR, PENDING DETERMINATION OF THE ACTUAL PERCENTAGES FOR THE
IMMEDIATELY PRECEDING CALENDAR YEAR, THE WORKING PERCENTAGES FOR SUCH
IMMEDIATELY PRECEDING CALENDAR YEAR SHALL REMAIN IN EFFECT UNTIL SUCH TIME AS
THE ACTUAL PERCENTAGES FOR SUCH IMMEDIATELY PRECEDING CALENDAR YEAR HAVE BEEN
DETERMINED. ON OR BEFORE [*], BMS AND GILEAD SHALL AGREE IN WRITING ON THE
TARGET YIELDS FOR EACH OF EFV, TDF AND FTC FOR THE CALENDAR YEAR 2005.  FOR EACH
SUBSEQUENT CALENDAR YEAR, THE RELEVANT TARGET YIELDS FOR EFV, TDF AND FTC SHALL
BE CALCULATED PURSUANT TO SECTION 7.1(D)(II) AND ANNEX K.

 

(II)           NO LATER THAN [*] OF EACH SUBSEQUENT CALENDAR YEAR, THE JFC SHALL
DETERMINE THE ESTIMATED NET SELLING PRICE FOR THE COMBINATION PRODUCT FOR SUCH
CALENDAR YEAR USING ONLY HISTORICAL DATA (SUCH AMOUNT FOR EACH CALENDAR YEAR,
THE “ESTIMATED NET SELLING PRICE”).

 

(III)          USING THE MEMBER PARTIES’ RESPECTIVE WORKING PERCENTAGES, THE
ESTIMATED NET SELLING PRICE AND THE TARGET YIELD FOR SUCH CALENDAR YEAR, THE JFC
SHALL CALCULATE EACH MEMBER PARTY’S INTERIM UNIT TRANSFER PRICE(S) IN ACCORDANCE
WITH ANNEX K AND SHALL SO NOTIFY THE MEMBER PARTIES IN WRITING NO LATER THAN [*]
DAYS AFTER THE FIRST DAY OF THE APPLICABLE CALENDAR YEAR.  FROM AND AFTER THE
DATE ON WHICH A MEMBER PARTY RECEIVES A NOTICE FROM THE JFC WITH RESPECT TO SUCH
MEMBER PARTY’S RESPECTIVE INTERIM UNIT TRANSFER PRICE(S) WITH RESPECT TO SUCH
CALENDAR YEAR, SUCH AMOUNTS SHALL THEN BE USED BY THE MEMBER PARTIES IN
INVOICING THE JV FOR THE TRANSFER PRICE FOR SHIPMENTS OF BULK ACTIVE
PHARMACEUTICAL INGREDIENTS PURSUANT TO SECTION 4.2(C) AND THE APPLICABLE SUPPLY
AGREEMENT IN SUCH CALENDAR YEAR.  NOTWITHSTANDING THE FOREGOING, ON A CALENDAR
QUARTER BASIS,  THE JFC SHALL RECALCULATE THE RESPECTIVE INTERIM UNIT TRANSFER
PRICES (EACH, A “RECALCULATED TRANSFER PRICE”) IN ACCORDANCE WITH ANNEX K WITHIN
[*] AFTER THE END OF [*].  SUCH RECALCULATION SHALL BE MADE USING THE WORKING
PERCENTAGES, TARGET YIELD AND UPDATED NET SELLING PRICES AS DETERMINED IN ANNEX
I FOR SUCH [*].  IN THE EVENT THAT A PARTICULAR INTERIM UNIT TRANSFER PRICE IS
LESS THAN THE RECALCULATED TRANSFER PRICE, THE JV SHALL DELIVER A RECONCILIATION
STATEMENT TO THE APPLICABLE MEMBER PARTY SETTING FORTH THE DIFFERENCE IN PRICE
MULTIPLIED BY THE QUANTITY OF ACTIVE PHARMACEUTICAL INGREDIENT THE MEMBER PARTY
INVOICED TO THE JV DURING SUCH [*].  IN THE EVENT A PARTICULAR INTERIM UNIT
TRANSFER PRICE IS GREATER THAN THE RECALCULATED TRANSFER PRICE, THE JV SHALL
DELIVER A RECONCILIATION STATEMENT TO THE APPLICABLE MEMBER PARTY SETTING FORTH
THE DIFFERENCE IN PRICE MULTIPLIED BY THE QUANTITY OF ACTIVE PHARMACEUTICAL
INGREDIENT THE MEMBER PARTY INVOICED TO THE JV DURING SUCH [*].  IN EACH CASE,
THE RELEVANT ADJUSTMENT SHALL BE ADDRESSED AS PART OF THE CASH NETTING MECHANISM
PROVIDED FOR IN SECTION 4.1 OF THE OPERATING AGREEMENT AND SHALL BE SETTLED

 

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ON THE FIRST CASH NETTING DAY FOLLOWING SUCH RECALCULATION.  THE INTERIM UNIT
TRANSFER PRICES SHALL NOT BE CHANGED AS A RESULT OF THE RECALCULATION MENTIONED
ABOVE.

 

(IV)          FOLLOWING [*], THE JV SHALL CAUSE THE INDEPENDENT ACCOUNTING
EXPERT TO CALCULATE (SOLELY FOR PLANNING, ACCOUNTING AND BOOKKEEPING PURPOSES OF
THE MEMBER PARTIES) THE ACTUAL PERCENTAGES FOR SUCH [*] BASED ON DATA AS OF [*],
TO BE COMPLETED NO LATER THAN [*] AFTER [*].  THE RESPECTIVE PERCENTAGES SHALL
NOT BE CHANGED AS A RESULT OF THE RECALCULATION MENTIONED ABOVE.

 

(D)           FOLLOWING THE END OF EACH CALENDAR YEAR, THE JFC SHALL CAUSE AN
INDEPENDENT THIRD PARTY ACCOUNTING FIRM OR CONSULTANT MUTUALLY AGREED BY THE
MEMBER PARTIES (SUCH AGREED THIRD PARTY, THE “INDEPENDENT ACCOUNTING EXPERT”) TO
CALCULATE THE ACTUAL PERCENTAGES FOR SUCH CALENDAR YEAR AND RECALCULATE THE
TRANSFER PRICES (USING THE PRODUCT YIELDS DETERMINED PURSUANT TO SECTION
7.1(D)(II) AND ACTUAL NET SELLING PRICE FOR THE COMBINATION PRODUCT DETERMINED
PURSUANT TO SECTION 7.1(D)(III)) WITH RESPECT TO SHIPMENTS OF BULK ACTIVE
PHARMACEUTICAL INGREDIENT MADE BY THE MEMBER PARTIES IN SUCH CALENDAR YEAR
PURSUANT TO SECTION 4.2(C) AND THEIR RESPECTIVE SUPPLY AGREEMENTS, AS FOLLOWS.

 

(I)            WITHIN [*] FOLLOWING THE END OF EACH CALENDAR YEAR, EACH MEMBER
PARTY SHALL PROVIDE TO THE INDEPENDENT ACCOUNTING EXPERT THE DATA NECESSARY IN
ORDER TO MAKE THE CALCULATIONS REQUIRED PURSUANT TO THIS SECTION 7.1(D), WHICH
DATA IS DESCRIBED IN ANNEX N.

 

(II)           WITHIN [*] FOLLOWING THE END OF EACH CALENDAR YEAR, THE JFC SHALL
(A) CALCULATE THE PRODUCT EFV YIELD, PRODUCT FTC YIELD, AND PRODUCT TDF YIELD,
IN EACH CASE BASED ON ACTUAL YIELD, FOR THE SUPPLY OF COMBINATION PRODUCT AND
(B) PROVIDE TO THE INDEPENDENT ACCOUNTING EXPERT WRITTEN CONFIRMATION OF SUCH
CALCULATIONS.  WITHIN [*] FOLLOWING THE FIRST FULL-SCALE COMMERCIAL
MANUFACTURING RUN, THE JFC SHALL DETERMINE A BLENDED AVERAGE OF EACH OF PRODUCT
EFV YIELD, PRODUCT FTC YIELD AND TDF PRODUCT YIELD ON A PER WEIGHT AND PER UNIT
BASIS AND INFORM THE INDEPENDENT ACCOUNTING EXPERT THEREOF.

 

(III)          WITHIN [*] FOLLOWING THE END OF EACH CALENDAR YEAR, THE JV SHALL
CAUSE THE INDEPENDENT ACCOUNTING EXPERT TO (A) CALCULATE THE ACTUAL NET SELLING
PRICES OF THE COMBINATION PRODUCT, TRUVADA AND SUSTIVA FOR THAT CALENDAR YEAR,
(B) CALCULATE THE ACTUAL GILEAD PERCENTAGE AND THE ACTUAL BMS PERCENTAGE
PURSUANT TO SECTION 7.1(B) USING THE ACTUAL NET SELLING PRICES OF THE
COMBINATION PRODUCT, TRUVADA AND SUSTIVA FOR THAT CALENDAR YEAR AND (C)
RECALCULATE THE GILEAD TRANSFER PRICE AND THE BMS TRANSFER PRICES FOR THE BULK
ACTIVE PHARMACEUTICAL INGREDIENT SHIPMENTS DURING THAT CALENDAR YEAR PURSUANT TO
SECTION 7.1(A) IN ACCORDANCE WITH ANNEX K.

 

(IV)          WITHIN [*] FOLLOWING THE END OF EACH CALENDAR YEAR, ON THE BASIS
OF SUCH THE RECALCULATED TRANSFER PRICES (AS NOTIFIED TO THE JV BY THE
INDEPENDENT ACCOUNTING EXPERT), THE JFC SHALL RECALCULATE THE AMOUNTS OWED BY
THE JV TO THE MEMBER PARTIES WITH RESPECT TO SHIPMENTS RECEIVED BY THE JV IN
SUCH CALENDAR YEAR PURSUANT TO SECTION 4.2(C) AND THEIR RESPECTIVE SUPPLY
AGREEMENTS AND PROVIDE TO THE MEMBER PARTIES NOTICE OF THE RECALCULATED AMOUNTS
(AND THE ADJUSTMENTS THAT WILL BE REQUIRED PURSUANT TO THIS SECTION
7.1(D)(IV)).  IF THE AGGREGATE AMOUNT INVOICED BY A MEMBER PARTY FOR TRANSFER
PRICES IS GREATER

 

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THAN OR LESS THAN  THE AGGREGATE AMOUNT OWED TO SUCH MEMBER PARTY BY THE JV FOR
SUCH TRANSFER PRICES, AS RECALCULATED PURSUANT TO THIS SECTION 7.1(D), THEN THE
RELEVANT ADJUSTMENT SHALL BE ADDRESSED AS PART OF THE CASH NETTING MECHANISM
PROVIDED FOR IN SECTION 4.1 OF THE OPERATING AGREEMENT AND SHALL BE SETTLED ON
THE FIRST CASH NETTING DAY FOLLOWING SUCH RECALCULATION.

 

(E)           THE INDEPENDENT ACCOUNTING EXPERT SHALL BE BOUND BY COMMERCIALLY
REASONABLE WRITTEN CONFIDENTIALITY AND NON-USE OBLIGATIONS TO THE MEMBER
PARTIES.  SUCH INDEPENDENT ACCOUNTING EXPERT SHALL, UPON THE WRITTEN REQUEST OF
EITHER MEMBER PARTY (THE “INITIATING MEMBER”), AUDIT THE OTHER MEMBER PARTY TO
CONFIRM THE ACCURACY OF THE DATA PROVIDED TO SUCH INDEPENDENT ACCOUNTING EXPERT
BY SUCH OTHER MEMBER PARTY.  FURTHER, UPON THE WRITTEN REQUEST OF EITHER MEMBER
PARTY, THE CALCULATIONS OF THE INDEPENDENT ACCOUNTING EXPERT SHALL BE AUDITED BY
A SECOND THIRD PARTY MUTUALLY AGREED BY THE MEMBER PARTIES.  THE INDEPENDENT
ACCOUNTING EXPERT AND THE THIRD PARTY AUDITOR, IF ANY, SHALL NOTIFY THE MEMBER
PARTIES OF THEIR RESPECTIVE DETERMINATIONS;  PROVIDED, HOWEVER, THAT NEITHER THE
INDEPENDENT ACCOUNTING EXPERT NOR ANY THIRD PARTY SELECTED TO AUDIT THE
INDEPENDENT ACCOUNTING EXPERT SHALL SHARE WITH EITHER MEMBER PARTY ANY
INFORMATION PROVIDED TO SUCH INDEPENDENT ACCOUNTING EXPERT (AND/OR SUCH THIRD
PARTY) BY THE OTHER MEMBER PARTY.  THE CALCULATIONS MADE BY THE INDEPENDENT
ACCOUNTING EXPERT PURSUANT TO THIS SECTION 7.1(E) SHALL BE BINDING ON THE
PARTIES; PROVIDED, HOWEVER, THAT IN THE EVENT THAT A THIRD PARTY AUDITOR
IDENTIFIES A DISCREPANCY IN THE INDEPENDENT ACCOUNTING EXPERT’S CALCULATIONS,
THE MEMBER PARTIES SHALL CAUSE THE INDEPENDENT ACCOUNTING EXPERT AND SUCH THIRD
PARTY TO CONFER AND AGREE UPON THE FINAL CALCULATIONS AND ADVISE THE MEMBER
PARTIES IN WRITING OF SAME, WHEREUPON SUCH FINAL AGREED CALCULATIONS SHALL BE
BINDING ON THE PARTIES.  THE INITIATING MEMBER SHALL BEAR THE FEES AND COSTS OF
THE INDEPENDENT ACCOUNTING EXPERT IN CONNECTION WITH ITS CONFIRMATION OF THE
ACCURACY OF SUCH DATA, UNLESS THE INDEPENDENT ACCOUNTING EXPERT FINDS A
DISCREPANCY EQUAL TO OR GREATER THAN [*] THEREIN, IN WHICH CASE THE OTHER MEMBER
PARTY SHALL BEAR SUCH FEES AND COSTS.

 

7.2           ROYALTY PAYMENTS TO THIRD PARTIES.  IF A THIRD PARTY’S PATENT IS
OR WOULD BE INFRINGED OR A THIRD PARTY’S TRADE SECRETS ARE OR WOULD BE
MISAPPROPRIATED SOLELY AS A DIRECT RESULT OF THE INCORPORATION OF TDF, FTC OR
BOTH TDF AND FTC IN THE COMBINATION PRODUCT, THEN GILEAD SHALL BE SOLELY
RESPONSIBLE FOR ANY LOSSES OR ROYALTY, LICENSE FEE OR OTHER PAYMENT OBLIGATION
TO SUCH THIRD PARTY (WHICH SHALL NOT QUALIFY AS A JV EXPENSE OR AUTHORIZED
EXPENSE) IN CONNECTION WITH SUCH INFRINGEMENT OR MISAPPROPRIATION, INCLUDING,
WITHOUT LIMITATION, ITS OBLIGATIONS PURSUANT TO SECTION 11.4.  IF A THIRD
PARTY’S PATENT IS OR WOULD BE INFRINGED OR A THIRD PARTY’S TRADE SECRETS ARE OR
WOULD BE MISAPPROPRIATED SOLELY AS A DIRECT RESULT OF THE INCORPORATION OF EFV
IN THE COMBINATION PRODUCT, THEN BMS SHALL BE SOLELY RESPONSIBLE FOR ANY LOSSES
OR ROYALTY, LICENSE FEE OR OTHER PAYMENT OBLIGATION TO SUCH THIRD PARTY (WHICH
SHALL NOT QUALIFY AS A JV EXPENSE OR AUTHORIZED EXPENSE) IN CONNECTION WITH SUCH
INFRINGEMENT OR MISAPPROPRIATION, INCLUDING, WITHOUT LIMITATION, ITS OBLIGATIONS
PURSUANT TO SECTION 11.4.  ALL OTHER ROYALTY, LICENSE FEE OR OTHER PAYMENTS BY
GILEAD OR BMS TO THIRD PARTIES IN CONNECTION WITH LICENSES UNDER THIRD PARTY
PATENTS OR THIRD PARTY TRADE SECRETS WHICH ARE REASONABLY NECESSARY FOR THE
PERFORMANCE OF THE MEMBER PARTIES’ OBLIGATIONS UNDER THIS AGREEMENT SHALL
QUALIFY AS AUTHORIZED COMMERCIALIZATION EXPENSES.

 

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7.3           AUTHORIZED EXPENSES; MODE AND TIMING OF PAYMENT.

 

(A)           THE JV SHALL BEAR ALL AUTHORIZED EXPENSES INCURRED BY GILEAD AND
BMS.  EACH MEMBER PARTY SHALL CALCULATE AND INVOICE THE JV FOR ITS RESPECTIVE
AUTHORIZED EXPENSES INCURRED IN EACH CALENDAR QUARTER IN SUFFICIENT TIME TO
ENSURE THAT THE APPLICABLE INVOICE IS RECEIVED BY THE JV NO LATER THAN THE LAST
DAY OF THE NEXT CALENDAR QUARTER (THE “FINAL INVOICE DATE”).  THE JV SHALL NOT
HAVE ANY OBLIGATION TO MAKE PAYMENTS TO GILEAD OR BMS ON ACCOUNT OF ANY SUCH
EXPENSES INCURRED IN A GIVEN CALENDAR QUARTER FOR WHICH AN INVOICE IS NOT
RECEIVED BY THE FINAL INVOICE DATE.

 

(B)           ALL PAYMENTS BY THE JV TO THE MEMBER PARTIES PURSUANT TO SECTIONS
7.3(A) AND 14.6(B)(II) AND OTHER PAYMENTS TO BE MADE TO MEMBER PARTIES UNDER
THIS AGREEMENT SHALL BE MADE BY WIRE TRANSFER OR ELECTRONIC FUNDS TRANSFER OF
UNITED STATES DOLLARS IN THE REQUISITE AMOUNT TO SUCH BANK ACCOUNT AS EACH
MEMBER PARTY MAY DESIGNATE FROM TIME TO TIME BY NOTICE TO THE PAYOR.

 

(C)           EACH MEMBER PARTY SHALL CALCULATE AND INVOICE THE JV AT THE TIME
OF SHIPMENT, FOR THE TRANSFER PRICE FOR EACH SHIPMENT OF BULK ACTIVE
PHARMACEUTICAL INGREDIENT  PURSUANT TO SECTION 4.2(C) AND THE APPLICABLE SUPPLY
AGREEMENT USING THE APPLICABLE INTERIM UNIT TRANSFER PRICE.  THE JV SHALL PAY TO
A MEMBER PARTY ANY AMOUNTS OWED TO SUCH MEMBER PARTY (OR, IN THE CASE OF BMS, TO
BMS SUB) PURSUANT TO SECTION 7.1(A) ON THE APPLICABLE CASH NETTING DAY AS
PROVIDED IN SECTION 4.1 OF THE OPERATING AGREEMENT.  IN THE CASE OF ANY SHIPMENT
OF BULK ACTIVE PHARMACEUTICAL INGREDIENT  PURSUANT TO THE APPLICABLE SUPPLY
AGREEMENT DURING THE FIRST CALENDAR QUARTER OF A GIVEN CALENDAR YEAR PRIOR TO
THE JFC GIVING NOTICE OF THE APPLICABLE INTERIM UNIT TRANSFER PRICE, THE MEMBER
PARTY PROVIDING SUCH SHIPMENT SHALL USE THE INTERIM UNIT TRANSFER PRICE FOR THE
IMMEDIATELY PRECEDING CALENDAR YEAR FOR PURPOSES OF INVOICING SUCH SHIPMENT,
PROVIDED THAT UPON THE JFC’S DETERMINATION OF THE NEW INTERIM UNIT TRANSFER
PRICE FOR THE CALENDAR YEAR IN WHICH SUCH SHIPMENT OCCURS PURSUANT TO SECTION
7.1(D) AND ANNEX K, THE JV SHALL RECALCULATE SUCH INVOICES USING SUCH NEW
INTERIM TRANSFER PRICE FOR SUCH CALENDAR YEAR AND AT THE TIME OF PAYMENT SHALL
ISSUE TO THE APPLICABLE MEMBER PARTY A RECONCILIATION STATEMENT, WITH RESPECT TO
SUCH INVOICE TO RECONCILE ANY DIFFERENCES BETWEEN THE ORIGINAL TRANSFER PRICE
FOR SUCH SHIPMENT AND THE TRANSFER PRICE FOR SUCH SHIPMENT AS CALCULATED USING
SUCH NEW INTERIM UNIT TRANSFER PRICE.

 

(D)           INTEREST SHALL ACCRUE ON DELINQUENT PAYMENTS FROM THE DATE SUCH
PAYMENTS ARE DUE AT THE LESSER OF (I) THE PRIME RATE OF INTEREST, AS PUBLISHED
IN THE WALL STREET JOURNAL (EASTERN UNITED STATES EDITION), PLUS [*] BASIS
POINTS AND (II) THE MAXIMUM RATE OF INTEREST PERMISSIBLE UNDER APPLICABLE LAW,
TAKING INTO CONSIDERATION ANY AMOUNTS DEEMED ADDITIONAL INTEREST.

 

7.4           TAXES.  THE JV SHALL BE RESPONSIBLE FOR ALL SALES, USE, EXCISE,
VALUE ADDED AND SIMILAR TAXES AND CHARGES IMPOSED WITH RESPECT TO ACQUISITION OF
PRODUCT FROM A MEMBER PARTY AND/OR PAYMENTS BY THE JV TO A MEMBER PARTY PURSUANT
TO THIS SECTION 7, PROVIDED THAT EACH MEMBER PARTY SHALL BE RESPONSIBLE FOR ANY
TAXES (INCLUDING ANY SUCH TAXES IMPOSED BY WAY OF WITHHOLDING) IN THE NATURE OF
INCOME OR FRANCHISE TAXES OR BASED ON OR MEASURED BY GROSS OR NET INCOME IMPOSED
WITH RESPECT TO ITS INCOME.  THE JV SHALL PAY ANY AND ALL WITHHOLDING TAXES OR
SIMILAR CHARGES IMPOSED BY ANY GOVERNMENTAL UNIT THAT ARE REQUIRED TO BE
WITHHELD FROM ANY

 

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AMOUNTS DUE TO A MEMBER PARTY FROM THE JV PURSUANT TO THIS SECTION 7 TO THE
PROPER TAXING AUTHORITY, AND PROOF OF PAYMENT OF SUCH TAXES OR CHARGES SHALL BE
SECURED AND SENT TO SUCH MEMBER PARTY AS EVIDENCE OF SUCH PAYMENT.  ALL AMOUNTS
PAID BY THE JV PURSUANT TO THE IMMEDIATELY PRECEDING SENTENCE WITH RESPECT TO
TAXES FOR WHICH A MEMBER PARTY IS RESPONSIBLE PURSUANT TO THE FIRST SENTENCE OF
THIS SECTION 7.4 SHALL BE PAID FOR THE ACCOUNT OF SUCH MEMBER PARTY AND DEDUCTED
FROM THE AMOUNTS DUE FROM THE JV TO SUCH MEMBER PARTY PURSUANT TO THIS SECTION
7.

 

SECTION 8.
FINANCIAL RECORDS

 

8.1           FINANCIAL RECORDS.  GILEAD SHALL KEEP COMPLETE AND ACCURATE BOOKS
AND RECORDS ON BEHALF OF THE JV PERTAINING TO SALES OF THE COMBINATION PRODUCT,
INCLUDING, WITHOUT LIMITATION, BOOKS AND RECORDS OF THE NET SALES OF THE
COMBINATION PRODUCT, IN THE DETAIL REQUIRED FOR THE CALCULATION ON BEHALF OF THE
JV OF AMOUNTS PAYABLE BY THE JV UNDER SECTION 7.1(A) AND TO IDENTIFY THE
PURCHASE ORDER DETAILS FOR EACH CUSTOMER TO WHICH IT SELLS THE COMBINATION
PRODUCT, OR PERTAINING TO AUTHORIZED COMMERCIALIZATION EXPENSES, AUTHORIZED
DEVELOPMENT EXPENSES OR AUTHORIZED OTHER EXPENSES.  GILEAD SHALL RETAIN SUCH
BOOKS AND RECORDS FOR AT LEAST THE LATEST OF (A) THREE (3) YEARS AFTER THE
CALENDAR QUARTER IN WHICH THE RELEVANT SALE WAS MADE OR THE RELEVANT EXPENSE WAS
REIMBURSED PURSUANT TO SECTION 7.3, (B) THE EXPIRATION OF THE APPLICABLE STATUTE
OF LIMITATIONS FOR TAX PURPOSES (OR ANY EXTENSION THEREOF) OR (C) SUCH LONGER
PERIOD AS MAY BE REQUIRED BY APPLICABLE LAW.  GILEAD AND BMS SHALL EACH KEEP ALL
RECORDS OF AUTHORIZED COMMERCIALIZATION EXPENSES, AUTHORIZED DEVELOPMENT
EXPENSES AND AUTHORIZED OTHER EXPENSES THAT IT INCURS FOR AT LEAST THE LATEST OF
(I) THREE (3) YEARS AFTER THE CALENDAR QUARTER IN WHICH IT INVOICED THEM TO THE
JV, (II) THE EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS FOR TAX
PURPOSES (OR ANY EXPIRATION THEREOF) OR (III) SUCH LONGER PERIOD AS MAY BE
REQUIRED BY APPLICABLE LAW.  GILEAD AND BMS SHALL EACH KEEP DOCUMENTATION
SUPPORTING [*] FOR AT LEAST (X) THREE (3) YEARS AFTER THE CALENDAR QUARTER IN
WHICH SUCH [*] OCCURRED OR (Y) SUCH LONGER PERIOD AS MAY BE REQUIRED BY
APPLICABLE LAW.

 

8.2           AUDIT OF RECORDS.  AT THE REQUEST OF BMS OR GILEAD, AS THE CASE
MAY BE, THE OTHER MEMBER PARTY SHALL PERMIT AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT REASONABLY ACCEPTABLE TO THE OTHER MEMBER PARTY, AT REASONABLE TIMES
AND UPON REASONABLE NOTICE, TO EXAMINE THE BOOKS AND RECORDS MAINTAINED BY THE
OTHER MEMBER PARTY (AND, IF APPLICABLE, THE BOOKS AND RECORDS MAINTAINED BY
GILEAD ON BEHALF OF THE JV) PURSUANT TO SECTION 8.1 TO VERIFY ANY OR ALL OF THE
FOLLOWING: (A) THE ACCURACY OF THE AMOUNTS INVOICED BY THE OTHER MEMBER PARTY TO
THE JV PURSUANT TO SECTION 7.1 AND (B) THE AUTHORIZED COMMERCIALIZATION
EXPENSES, AUTHORIZED DEVELOPMENT EXPENSES AND AUTHORIZED OTHER EXPENSES CHARGED
BY THE OTHER MEMBER TO THE JV, IN EACH CASE ONLY AS TO ANY PERIOD ENDING NOT
MORE THAN THREE (3) YEARS PRIOR TO THE DATE OF SUCH REQUEST.  SUCH THIRD PARTY
ACCOUNTANT SHALL BE BOUND BY WRITTEN COMMERCIALLY REASONABLE CONFIDENTIALITY AND
NON-USE OBLIGATIONS TO THE MEMBER PARTIES.  EACH MEMBER PARTY SHALL RECEIVE A
COPY OF THE THIRD PARTY ACCOUNTANT’S REPORT OF ANY SUCH AUDIT, WHICH SHALL
DISCLOSE ONLY WHETHER SUCH AMOUNTS AS INVOICED OR CHARGED ARE CORRECT OR
INCORRECT, AND THE AMOUNTS OF ANY UNDERPAYMENTS OR OVERPAYMENTS; SUCH REPORT
SHALL BE CONFIDENTIAL INFORMATION OF BOTH MEMBER PARTIES.  ANY DISCREPANCY SHALL
BE RECTIFIED BY A RECONCILIATION PAYMENT MADE BY THE UNDERPAYING PARTY OR THE
OVERPAID PARTY, AS THE CASE MAY BE, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF
NOTICE THEREOF.  IF SUCH AUDIT ESTABLISHES THAT EITHER THE NON-REQUESTING MEMBER
PARTY OR THE JV

 

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MADE AN ERROR IN INVOICING OR PAYMENT TO THE DETRIMENT OF THE REQUESTING MEMBER
PARTY, IN AMOUNT EQUAL TO OR GREATER THAN [*] OF THE RELEVANT AMOUNTS FOR THE
PERIOD UNDER AUDIT, THEN THE OUT-OF-POCKET COSTS OF SUCH AUDIT SHALL QUALIFY AS
AN AUTHORIZED OTHER EXPENSE.  IN ALL OTHER CASES, THE COSTS OF SUCH AUDIT SHALL
BE BORNE SOLELY BY THE REQUESTING MEMBER PARTY AND SHALL NOT QUALIFY AS A JV
EXPENSE OR AN AUTHORIZED EXPENSE.  BMS AND GILEAD MAY EACH MAKE AUDIT REQUESTS
UNDER THIS SECTION 8.2 ON ITS OWN BEHALF OR ON BEHALF OF THE JV.

 

8.3           CERTAIN REPORTS.  SO THAT BMS MAY SATISFY ITS INTERNAL REPORTING
NEEDS, GILEAD SHALL PROVIDE TO BMS, AT THE APPLICABLE TIMES SET FORTH IN ANNEX
M, THE FINANCIAL DATA DESCRIBED IN THAT ANNEX.

 

SECTION 9.
ADVERSE EVENT AND OTHER INFORMATION EXCHANGE

 

9.1           PHARMACOVIGILANCE.  SUBJECT TO THE TERMS OF THIS AGREEMENT, BMS
AND GILEAD (UNDER THE GUIDANCE OF THEIR RESPECTIVE PHARMACOVIGILANCE
DEPARTMENTS, OR EQUIVALENT THEREOF) SHALL DEFINE AND FINALIZE MUTUALLY
ACCEPTABLE GUIDELINES AND PROCEDURES TO BE FOLLOWED BY THE MEMBER PARTIES WITH
RESPECT TO THE RECEIPT, INVESTIGATION, RECORDATION, COMMUNICATION, AND EXCHANGE
(AS BETWEEN THE MEMBER PARTIES) OF ADVERSE EVENT REPORTS, PREGNANCY REPORTS, AND
ANY OTHER INFORMATION, CONCERNING THE SAFETY OF THE COMBINATION PRODUCT OR EFV,
TDF OR FTC, AS APPROPRIATE.  SUCH GUIDELINES AND PROCEDURES SHALL BE INCLUDED IN
AN AGREEMENT (HEREAFTER REFERRED TO AS THE SAFETY DATA EXCHANGE AGREEMENT
(“SDEA”)), TO BE ENTERED INTO BY THE MEMBER PARTIES PRIOR TO THE EARLIER TO
OCCUR OF  (I) THE [*] ANNIVERSARY OF THE EFFECTIVE DATE AND (II) THE FIRST
DOSING OF THE COMBINATION PRODUCT IN PATIENTS, AND SHALL BE IN ACCORDANCE WITH,
AND ENABLE THE PARTIES AND THEIR AFFILIATES TO FULFILL, LOCAL AND INTERNATIONAL
REGULATORY REPORTING OBLIGATIONS TO GOVERNMENT AUTHORITIES.  FURTHERMORE, SUCH
AGREED PROCEDURES SHALL BE CONSISTENT WITH RELEVANT INTERNATIONAL COUNCIL FOR
HARMONIZATION GUIDELINES, EXCEPT WHERE SAID GUIDELINES MAY CONFLICT WITH
EXISTING LOCAL REGULATORY SAFETY REPORTING REQUIREMENTS, IN WHICH CASE LOCAL
REPORTING REQUIREMENTS SHALL PREVAIL.  WITHOUT LIMITATION OF THE FOREGOING, THE
SDEA SHALL INCLUDE PROVISIONS STATING THAT:  (I) GILEAD SHALL BE PRIMARILY
RESPONSIBLE FOR COMPLYING WITH APPLICABLE LAWS IN COLLECTING AND REPORTING TO
REGULATORY AUTHORITIES ANY INFORMATION ABOUT ADVERSE EVENTS ASSOCIATED WITH THE
USE OF THE COMBINATION PRODUCT; (II) GILEAD SHALL MAINTAIN THE GLOBAL SAFETY
DATABASE FOR THE COMBINATION PRODUCT; AND (III) BMS SHALL HAVE THE RIGHT TO
REVIEW AND APPROVE PSURS PREPARED BY GILEAD, SUCH APPROVAL NOT TO BE
UNREASONABLY WITHHELD.

 

9.2           MATERIAL COMMUNICATIONS.  IN ADDITION TO THE NOTIFICATIONS
REQUIRED BY SECTION 3.9 AND THE SDEA, EACH MEMBER PARTY SHALL PROMPTLY PROVIDE
NOTICE TO THE OTHER MEMBER PARTY OF ANY MATERIAL COMMUNICATIONS WITH ANY
GOVERNMENTAL AGENCY CONCERNING THE SAFETY OF THE COMBINATION PRODUCT, INCLUDING,
WITHOUT LIMITATION, ADVERSE DRUG REACTION REPORTS.  COPIES OF ALL SUCH MATERIAL
COMMUNICATIONS SHALL BE ATTACHED TO THE APPLICABLE NOTICE.

 

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SECTION 10.
PRODUCT RECALL

 

10.1         NOTIFICATION AND RECALL.

 

(A)           IN THE EVENT THAT ANY GOVERNMENTAL AGENCY OR AUTHORITY ISSUES OR
REQUESTS A RECALL OR MARKET WITHDRAWAL OR TAKES SIMILAR ACTION IN CONNECTION
WITH THE COMBINATION PRODUCT, OR IN THE EVENT THAT EITHER MEMBER PARTY
DETERMINES THAT A RECALL OR MARKET WITHDRAWAL OF THE COMBINATION PRODUCT MAY BE
NECESSARY OR ADVISABLE, SUCH MEMBER PARTY SHALL ADVISE THE OTHER MEMBER PARTY
THEREOF BY TELEPHONE, WITHIN [*].  EACH MEMBER PARTY SHALL ALSO NOTIFY THE OTHER
PROMPTLY IN THE EVENT OF (I) THE ISSUANCE OF AN FDA FIELD ALERT OR SIMILAR ALERT
BY SUCH MEMBER PARTY (IN WHICH CASE THE MEMBER PARTY ISSUING SUCH FIELD ALERT
SHALL NOTIFY THE OTHER MEMBER PARTY AT THE SAME TIME AS  THE APPLICABLE
GOVERNMENTAL AGENCY OR AUTHORITY), AND (II) ANY COMMUNICATION FROM ANY
GOVERNMENTAL AGENCY OR AUTHORITY REGARDING A POTENTIAL RECALL OR MARKET
WITHDRAWAL OF THE COMBINATION PRODUCT OR ANY OF SUCH MEMBER PARTY’S RESPECTIVE
SINGLE AGENT PRODUCT OR DOUBLE AGENT PRODUCT.

 

(B)           WITHIN [*] OF RECEIPT OF NOTICE GIVEN PURSUANT TO THE FIRST
SENTENCE OF SECTION 10.1(A), THE MEMBER PARTIES’ SHALL CAUSE THEIR RESPECTIVE
REPRESENTATIVES FROM THE BUSINESS, MEDICAL, REGULATORY, QUALITY ASSURANCE AND
LEGAL FUNCTIONS (AND ANY OTHERS DEEMED NECESSARY BY A MEMBER PARTY) TO CONVENE
AN INITIAL MEETING TO CONSIDER WHETHER OR NOT THE JV SHOULD CONDUCT A RECALL
(EXCEPT IN THE CASE OF A GOVERNMENT-MANDATED RECALL OR MARKET WITHDRAWAL), AND
SUCH REPRESENTATIVES SHALL THEREAFTER MAKE A RECOMMENDATION TO THE MEMBER
PARTIES WITH RESPECT TO SUCH DETERMINATION, AND, IF THERE IS A RECOMMENDATION TO
RECALL THE COMBINATION PRODUCT, WITH RESPECT TO THE TIMING OF THE RECALL; THE
BREADTH, EXTENT AND LEVEL OF CUSTOMER TO WHICH THE RECALL SHALL REACH; THE
STRATEGIES AND NOTIFICATIONS TO BE USED; AND OTHER RELATED ISSUES.  NEITHER
MEMBER PARTY SHALL UNREASONABLY OBJECT TO A RECALL REQUESTED BY THE OTHER MEMBER
PARTY; AND NEITHER MEMBER PARTY SHALL HAVE ANY RIGHT TO OBJECT TO A RECALL
REQUESTED BY THE OTHER MEMBER PARTY (I) FOR FAILURE OF THE COMBINATION PRODUCT
TO MEET THE SPECIFICATIONS THEREFOR, (II) IF THERE IS A REASONABLE BASIS TO
CONCLUDE THAT MATERIAL HARM TO PATIENTS MAY OCCUR, OR (III) FOR THE MANUFACTURE
OF THE COMBINATION PRODUCT IN A MANNER THAT DOES NOT COMPLY WITH THE ACT. 
NOTWITHSTANDING THE FOREGOING, IF A RECALL OR MARKET WITHDRAWAL IS MANDATED BY A
GOVERNMENTAL AGENCY OR AUTHORITY, OR A RECALL IS PROPOSED BY A MEMBER PARTY, ON
ACCOUNT OF SUCH MEMBER PARTY’S SINGLE AGENT PRODUCT OR DOUBLE AGENT PRODUCT,
THEN SUCH MEMBER PARTY MAY CAUSE THE JV (AND, ACCORDINGLY, GILEAD SHALL TAKE
SUCH ACTION ON BEHALF OF THE JV) TO EFFECTUATE SUCH RECALL ON SUCH REASONABLE
TERMS AS SUCH MEMBER PARTY DETERMINES, WITHOUT THE MEETING DESCRIBED IN THE
FIRST SENTENCE OF THIS SECTION 10.1(B) AND WITHOUT ANY LIABILITY TO THE OTHER
MEMBER PARTY OR THE JV (EXCEPT FOR EXPENSES DESCRIBED IN SECTION 10.2 AND
INDEMNITY AMOUNTS PAYABLE BY A PARTY PURSUANT TO SECTION 13.7).

 

(C)           THE MEMBER PARTIES MAY, FOR COMMERCIAL REASONS OR OTHERWISE,
MUTUALLY DETERMINE TO WITHDRAW THE COMBINATION PRODUCT FROM THE MARKET.  IF THE
REASON FOR MARKET WITHDRAWAL RELATES TO EFFICACY OR SAFETY, SUCH WITHDRAWAL
SHALL BE TREATED AS ONE MANDATED BY A GOVERNMENT AGENCY OR AUTHORITY AND BE
DEALT WITH AS PROVIDED IN SECTION 10.1(B).  IN ALL OTHER CASES, THE JV SHALL,
UPON RECEIVING FDA APPROVAL, CEASE SELLING THE COMBINATION PRODUCT; AND THE
MEMBER PARTIES SHALL MUTUALLY DETERMINE WHETHER, AND IF SO HOW, TO RECALL ANY
COMBINATION PRODUCT ALREADY ON THE MARKET.

 

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(D)           NOTHING SET FORTH IN THIS SECTION 10.1 SHALL BE CONSTRUED AS
RESTRICTING THE RIGHT OF EITHER MEMBER PARTY TO MAKE A TIMELY REPORT OF SUCH
MATTER TO ANY GOVERNMENT AGENCY OR TAKE OTHER ACTION THAT IT DEEMS APPROPRIATE
OR REQUIRED BY APPLICABLE LAW.

 

10.2         RECALL EXPENSES.  THE MEMBER PARTIES SHALL BEAR THE EXPENSES OF ANY
RECALL OF THE COMBINATION PRODUCT IN PROPORTION TO THEIR RESPECTIVE PERCENTAGES,
AND THEIR RESPECTIVE EXTERNAL, OUT-OF-POCKET COSTS OF SUCH RECALL (WITHOUT ANY
MARKUP) SHALL QUALIFY AS AN AUTHORIZED OTHER EXPENSE; PROVIDED, HOWEVER, THAT
EACH MEMBER PARTY SHALL BEAR THE EXPENSES OF A RECALL INCURRED IN A REASONABLE
MANNER TO THE EXTENT THAT SUCH RECALL IS (A) CAUSED BY SUCH MEMBER PARTY’S
BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR ITS SUPPLY AGREEMENT (OR, IF
IT IS THE SUPPLIER, ITS SUPPLY CONTRACT REFERRED TO IN SECTION 4.2) OR ITS GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT, OR (B) OTHERWISE OCCASIONED SOLELY BY SUCH
MEMBER PARTY’S SINGLE AGENT PRODUCT AND/OR DOUBLE AGENT PRODUCT, AS THE CASE MAY
BE.  SUCH EXPENSES OF RECALL SHALL INCLUDE, WITHOUT LIMITATION, THE EXPENSES OF
NOTIFICATION AND DESTRUCTION OR RETURN OF THE RECALLED COMBINATION PRODUCT AND
THE REFUND TO CONSUMERS OF AMOUNTS PAID FOR THE RECALLED COMBINATION PRODUCT.

 

SECTION 11.
INTELLECTUAL PROPERTY RIGHTS

 

11.1         OWNERSHIP OF INTELLECTUAL PROPERTY.

 

(A)           GILEAD INTELLECTUAL PROPERTY.  EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN SECTIONS 6.1(A), 6.3(A), 6.4(A) AND 14.6, AS AMONG THE PARTIES,
GILEAD SHALL OWN ALL RIGHT, TITLE, AND INTEREST IN AND TO THE GILEAD PATENTS,
THE GILEAD KNOW-HOW, THE GILEAD INVENTIONS, AND THE GILEAD REGULATORY
DOCUMENTATION.  GILEAD SHALL DISCLOSE, AND SHALL CAUSE ITS AFFILIATES TO
DISCLOSE, TO BMS ANY BMS CORE IMPROVEMENT PROMPTLY AFTER IT IS CONCEIVED,
DISCOVERED, DEVELOPED, OR OTHERWISE MADE.

 

(B)           BMS INTELLECTUAL PROPERTY.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN SECTIONS 6.1(B), 6.3(B), 6.4(A), 6.4(D) AND 14.6, AS AMONG THE PARTIES, BMS
SHALL OWN ALL RIGHT, TITLE, AND INTEREST IN AND TO THE BMS PATENTS, THE BMS
KNOW-HOW, THE BMS INVENTIONS AND THE BMS REGULATORY DOCUMENTATION.  BMS SHALL
DISCLOSE, AND SHALL CAUSE ITS AFFILIATES TO DISCLOSE, TO GILEAD ANY GILEAD CORE
IMPROVEMENT PROMPTLY AFTER IT IS CONCEIVED, DISCOVERED, DEVELOPED, OR OTHERWISE
MADE.

 

(C)           JV INTELLECTUAL PROPERTY.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN SECTIONS 6.2, 6.4(B), 6.4(C), 6.4(D) AND 14.6, AS AMONG THE PARTIES, THE JV
SHALL OWN ALL RIGHT, TITLE AND INTEREST IN AND TO THE JOINT PATENTS, JOINT
KNOW-HOW, JOINT INVENTIONS AND COMBINATION PRODUCT REGULATORY DOCUMENTATION. 
EXCEPT AS OTHERWISE EXPRESSLY PERMITTED BY THIS AGREEMENT, NO PARTY, INCLUDING,
WITHOUT LIMITATION, THE JV, SHALL LICENSE, ASSIGN, SELL, CONVEY OR OTHERWISE
EXPLOIT ITS RIGHTS IN ANY JOINT PATENTS, JOINT KNOW-HOW, JOINT INVENTIONS OR
COMBINATION PRODUCT REGULATORY DOCUMENTATION FOR ANY PURPOSE.  EACH MEMBER PARTY
SHALL DISCLOSE TO THE OTHER MEMBER PARTY PROMPTLY IN WRITING ANY AND ALL JOINT
INVENTIONS THAT ARE CONCEIVED, DISCOVERED, DEVELOPED OR OTHERWISE MADE BY OR ON
BEHALF OF SUCH MEMBER PARTY, AND EACH OF THE MEMBER PARTIES HEREBY ASSIGNS, AND
AGREES TO CAUSE ITS EMPLOYEES AND AGENTS TO ASSIGN TO THE JV, WITHOUT PAYMENT OF
ADDITIONAL CONSIDERATION, ALL OF SUCH MEMBER PARTY’S RIGHTS, TITLE AND INTEREST
IN AND TO SUCH JOINT INVENTIONS.

 

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11.2         PROSECUTION OF PATENTS.

 

(A)           GILEAD PATENTS.  GILEAD SHALL HAVE THE SOLE RIGHT, AT ITS SOLE
COST AND EXPENSE, TO PREPARE, FILE, PROSECUTE AND MAINTAIN THE GILEAD PATENTS IN
THE TERRITORY.  GILEAD SHALL HAVE SOLE DISCRETION TO DETERMINE WHICH GILEAD
PATENTS, IF ANY, SHALL BE LISTED IN THE “ORANGE BOOK” WITH RESPECT TO THE
COMBINATION PRODUCT.

 

(B)           BMS PATENTS.  BMS SHALL HAVE THE SOLE RIGHT, AT ITS SOLE COST AND
EXPENSE, TO PREPARE, FILE, PROSECUTE AND MAINTAIN THE BMS PATENTS IN THE
TERRITORY.  BMS SHALL HAVE THE SOLE DISCRETION TO DETERMINE WHICH BMS PATENTS,
IF ANY, SHALL BE LISTED IN THE “ORANGE BOOK” WITH RESPECT TO THE COMBINATION
PRODUCT.

 

(C)           JOINT PATENTS.

 

(I)            A PATENT APPLICATION FOR A JOINT PATENT CLAIMING ANY JOINT
INVENTION SHALL BE FILED ONLY WITH THE MUTUAL WRITTEN AGREEMENT OF THE MEMBER
PARTIES, AND SOLELY IN ACCORDANCE WITH THIS SECTION 11.2(C).  IN THE EVENT THAT
EITHER MEMBER PARTY DESIRES TO HAVE FILED A PATENT APPLICATION FOR A JOINT
PATENT CLAIMING A JOINT INVENTION, SUCH MEMBER PARTY SHALL PROPOSE SUCH FILING
TO THE OTHER MEMBER PARTY, AND REPRESENTATIVES DESIGNATED BY EACH MEMBER PARTY
SHALL DISCUSS AND CONSIDER THE MATTER.  IN THE EVENT THAT THE MEMBER PARTIES
FAIL TO REACH WRITTEN AGREEMENT THAT SUCH PATENT APPLICATION SHOULD BE FILED,
NEITHER MEMBER PARTY, WHETHER ON BEHALF OF ITSELF, THE JV OR ANY THIRD PARTY,
MAY FILE OR CAUSE TO BE FILED SUCH PATENT APPLICATION.

 

(II)           IN THE EVENT THAT THE MEMBER PARTIES MUTUALLY AGREE IN WRITING
PURSUANT TO SECTION 11.2(C)(I) THAT A PATENT APPLICATION FOR A JOINT PATENT
CLAIMING A JOINT INVENTION SHOULD BE FILED, GILEAD SHALL HAVE THE SOLE RIGHT AND
OBLIGATION TO PREPARE, FILE, PROSECUTE AND MAINTAIN THE JOINT PATENTS IN THE
NAME OF THE JV IN SUCH COUNTRIES AS THE MEMBER PARTIES SHALL DETERMINE, AND THE
EXTERNAL, OUT-OF-POCKET COSTS, WITHOUT ANY MARKUP, WITH RESPECT THERETO SHALL BE
TREATED AS AUTHORIZED OTHER EXPENSES.  BMS SHALL COOPERATE FULLY IN GILEAD’S
PREPARATION, FILING, PROSECUTION, AND MAINTENANCE OF THE JOINT PATENTS (AND IN
ANY OTHER PROCEEDINGS BEFORE A PATENT OFFICIAL OR OFFICE WITH RESPECT THERETO). 
SUCH COOPERATION SHALL INCLUDE, WITHOUT LIMITATION, (A) PROMPTLY EXECUTING ALL
PAPERS AND INSTRUMENTS OR REQUIRING EMPLOYEES TO EXECUTE SUCH PAPERS AND
INSTRUMENTS AS REASONABLE AND APPROPRIATE SO AS TO ENABLE GILEAD TO PREPARE,
FILE, PROSECUTE, AND MAINTAIN THE JOINT PATENTS IN ANY COUNTRY; AND (B) PROMPTLY
INFORMING GILEAD OF MATTERS THAT MAY AFFECT THE PREPARATION, FILING,
PROSECUTION, OR MAINTENANCE OF ANY SUCH JOINT PATENT, INCLUDING, WITHOUT
LIMITATION, PROVIDING A COPY OF ANY OFFICIAL CORRESPONDENCE RECEIVED BY BMS FROM
A PATENT OFFICE IN ANY COUNTRY WITH RESPECT TO JOINT PATENTS.  GILEAD SHALL KEEP
BMS ADVISED OF THE STATUS OF JOINT PATENT FILINGS AND UPON REQUEST OF BMS SHALL
PROVIDE COPIES OF ANY OFFICIAL CORRESPONDENCE OR OTHER DOCUMENTATION WITH
RESPECT TO OFFICIAL ACTIONS AND SUBMISSIONS RELATING TO THE PROSECUTION OR
MAINTENANCE OF SUCH JOINT PATENTS.

 

(III)          THE MEMBER PARTIES SHALL HAVE THE SOLE DISCRETION TO DETERMINE
(BY MUTUAL AGREEMENT) WHICH JOINT PATENTS, IF ANY, SHALL BE LISTED IN THE
“ORANGE BOOK” WITH RESPECT TO THE COMBINATION PRODUCT.

 

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11.3         ENFORCEMENT OF PATENTS.

 

(A)           GILEAD PATENTS.  AS AMONG THE PARTIES, GILEAD SHALL HAVE THE SOLE
RIGHT AND OPTION, AT ITS SOLE COST AND EXPENSE, TO RESPOND TO ANY INFRINGEMENT
(AS DEFINED BELOW) WITH RESPECT TO ANY GILEAD PATENT BY APPROPRIATE STEPS,
INCLUDING, WITHOUT LIMITATION, BY FILING AN INFRINGEMENT SUIT OR TAKING OTHER
SIMILAR ACTION. GILEAD SHALL ALSO HAVE THE SOLE RIGHT AND OPTION NOT TO TAKE
ACTION TO RESPOND TO ANY SUCH INFRINGEMENT (AND IN SUCH EVENT NO OTHER PARTY
SHALL HAVE THE RIGHT TO TAKE ANY ACTION TO RESPOND TO ANY INFRINGEMENT WITH
RESPECT TO SUCH GILEAD PATENT).  AT GILEAD’S REQUEST, EACH OF BMS AND THE JV
SHALL, AT SUCH PARTY’S OWN EXPENSE, PROVIDE REASONABLE ASSISTANCE TO GILEAD IN
CONNECTION WITH ANY SUCH ACTION TO RESPOND TO INFRINGEMENT, INCLUDING, WITHOUT
LIMITATION, PROVIDING ACCESS TO RELEVANT DOCUMENTS AND OTHER EVIDENCE, MAKING
ITS EMPLOYEES AVAILABLE AT REASONABLE BUSINESS HOURS, AND JOINING (AND HAVING
THE JV JOIN) THE ACTION TO THE EXTENT NECESSARY TO ALLOW GILEAD TO MAINTAIN THE
ACTION.  FOR PURPOSES OF THIS SECTION 11.3, (I) “INFRINGEMENT” SHALL MEAN
INFRINGEMENT OR POTENTIAL INFRINGEMENT OF ONE (1) OR MORE GILEAD PATENTS AND/OR
ONE (1) OR MORE BMS PATENTS, AS THE CASE MAY BE, BY THE ACTIONS OF A THIRD PARTY
IN CONNECTION WITH A PRODUCT (AN “INFRINGING COMBINATION PRODUCT”) CONTAINING,
AMONG ITS ACTIVE PHARMACEUTICAL INGREDIENTS, ALL OF TDF, FTC AND EFV AND (II)
“OTHER SIMILAR ACTION” SHALL INCLUDE, WITHOUT LIMITATION, RESPONSES TO PARAGRAPH
(IV) CERTIFICATION UNDER THE DRUG PRICE COMPETITION AND PATENT RESTORATION ACT
(ALSO KNOWN AS THE HATCH-WAXMAN ACT) RESULTING FROM AN ATTEMPT TO MARKET A
GENERIC VERSION COMBINATION PRODUCT (A “PARAGRAPH (IV) CERTIFICATION”).  FOR THE
AVOIDANCE OF DOUBT, THE PARTIES ACKNOWLEDGE AND AGREE THAT INFRINGEMENT OF A
GILEAD PATENT OR A BMS PATENT, AS THE CASE MAY BE, OTHER THAN BY AN INFRINGING
COMBINATION PRODUCT, IS OUTSIDE THE SCOPE OF THIS AGREEMENT AND SHALL NOT CREATE
ANY RIGHTS OR IMPOSE ANY OBLIGATIONS ON THE PARTIES HEREUNDER, INCLUDING ANY
RIGHT OR OBLIGATION TO TAKE ACTIONS TO RESPOND TO SUCH INFRINGEMENT.

 

(B)           BMS PATENTS.  AS AMONG THE PARTIES, BMS SHALL HAVE THE SOLE RIGHT
AND OPTION, AT ITS SOLE COST AND EXPENSE, TO RESPOND TO ANY INFRINGEMENT WITH
RESPECT TO ANY BMS PATENT BY APPROPRIATE STEPS, INCLUDING, WITHOUT LIMITATION,
FILING AN INFRINGEMENT SUIT OR TAKING OTHER SIMILAR ACTION.  BMS SHALL ALSO HAVE
THE SOLE RIGHT AND OPTION NOT TO TAKE ACTION TO RESPOND TO ANY SUCH
INFRINGEMENT  (AND IN SUCH EVENT NO OTHER PARTY SHALL HAVE THE RIGHT TO TAKE ANY
ACTION TO RESPOND TO ANY INFRINGEMENT WITH RESPECT TO A BMS PATENT).  AT THE
REQUEST OF BMS, EACH OF GILEAD AND THE JV SHALL, AT SUCH PARTY’S OWN EXPENSE,
PROVIDE REASONABLE ASSISTANCE TO BMS OR THE EFV LICENSOR AS APPLICABLE, IN
CONNECTION WITH ANY SUCH ACTION TO RESPOND TO INFRINGEMENT INCLUDING, WITHOUT
LIMITATION, PROVIDING ACCESS TO RELEVANT DOCUMENTS AND OTHER EVIDENCE, MAKING
ITS EMPLOYEES AVAILABLE AT REASONABLE BUSINESS HOURS, AND JOINING (AND HAVING
THE JV JOIN) THE ACTION TO THE EXTENT NECESSARY TO ALLOW BMS OR THE EFV LICENSOR
TO MAINTAIN THE ACTION.

 

(C)           JOINT PATENTS.  IF EITHER MEMBER PARTY DETERMINES THAT ANY JOINT
PATENT IS BEING INFRINGED BY A THIRD PARTY’S ACTIVITIES, IT SHALL NOTIFY THE
OTHER MEMBER PARTY IN WRITING AND PROVIDE IT WITH ANY EVIDENCE OF SUCH
INFRINGEMENT THAT IS REASONABLY AVAILABLE.  GILEAD, ON BEHALF OF, AND IN THE
NAME OF, THE JV, SHALL HAVE THE FIRST RIGHT AND OPTION TO RESPOND TO ANY
INFRINGEMENT WITH RESPECT TO ANY JOINT PATENT BY APPROPRIATE STEPS, INCLUDING
WITHOUT LIMITATION, FILING AN INFRINGEMENT SUIT OR TAKING OTHER SIMILAR ACTION,
AND SHALL NOTIFY BMS OF, AND CONSULT WITH BMS FROM TIME TO TIME REGARDING, ANY
SUCH SUIT OR OTHER ACTION.  IF GILEAD ELECTS AT ITS SOLE DISCRETION NOT TO TAKE
ACTION TO RESPOND TO ANY SUCH INFRINGEMENT, THEN BMS, ON BEHALF OF, AND IN THE
NAME OF, THE JV, SHALL HAVE THE RIGHT AND OPTION TO RESPOND TO SUCH INFRINGEMENT
BY

 

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APPROPRIATE STEPS, INCLUDING WITHOUT LIMITATION, FILING AN INFRINGEMENT SUIT OR
TAKING OTHER SIMILAR ACTION, AND SHALL NOTIFY GILEAD OF, AND CONSULT WITH GILEAD
FROM TIME TO TIME REGARDING, ANY SUCH SUIT OR OTHER ACTION.  WITHOUT LIMITING
THE FOREGOING, IN THE EVENT THAT GILEAD (FOR ITSELF OR ON BEHALF OF THE JV)
RECEIVES A PARAGRAPH (IV) CERTIFICATION WITH RESPECT TO THE COMBINATION PRODUCT,
GILEAD SHALL NOTIFY BMS WITHIN [*] AFTER ITS RECEIPT OF SUCH PARAGRAPH (IV)
CERTIFICATION WHETHER OR NOT GILEAD HAS MADE THE ELECTION DESCRIBED IN THE
PRECEDING SENTENCE AND, IF GILEAD ELECTS NOT TO TAKE ACTION TO RESPOND TO ANY
SUCH INFRINGEMENT, OR FAILS TO NOTIFY BMS WITHIN SUCH [*] PERIOD, THEN BMS SHALL
HAVE THE RIGHTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE.  THE MEMBER
PARTY NOT TAKING ACTION TO RESPOND TO THE INFRINGEMENT SHALL PROVIDE REASONABLE
ASSISTANCE TO THE MEMBER PARTY TAKING SUCH ACTION, INCLUDING WITHOUT LIMITATION
PROVIDING ACCESS TO RELEVANT DOCUMENTS AND OTHER EVIDENCE, MAKING ITS EMPLOYEES
AVAILABLE AT REASONABLE BUSINESS HOURS, AND JOINING THE ACTION TO THE EXTENT
NECESSARY TO ALLOW THE MEMBER PARTY TAKING SUCH ACTION TO MAINTAIN THE ACTION. 
ANY AMOUNTS RECOVERED BY A MEMBER PARTY PURSUANT TO THIS SECTION 11.3(C),
WHETHER BY SETTLEMENT OR JUDGMENT, SHALL BE DEEMED TO BE RECOVERED ON BEHALF OF
(AND SHALL BE PAID OVER TO) THE JV; AND THE REASONABLE OUT-OF-POCKET COSTS,
INCLUDING REASONABLE ATTORNEYS’ FEES, WITHOUT ANY MARKUP, INCURRED BY THE MEMBER
PARTIES IN MAKING SUCH RECOVERY SHALL BE TREATED AS AUTHORIZED OTHER EXPENSES.

 

(D)           PARAGRAPH (IV) CERTIFICATIONS.  EACH MEMBER PARTY SHALL NOTIFY THE
OTHER MEMBER PARTY IN WRITING WITHIN [*] OF RECEIVING ANY PARAGRAPH (IV)
CERTIFICATION WITH RESPECT TO THE COMBINATION PRODUCT, (IN THE CASE OF BMS)
SUSTIVA, OR (IN THE CASE OF GILEAD) VIREAD, EMTRIVA OR TRUVADA, AS APPLICABLE.

 

11.4         INFRINGEMENT OF THIRD PARTY RIGHTS.  IF A THIRD PARTY INITIATES A
PROCEEDING AGAINST THE JV OR A MEMBER PARTY ALLEGING THAT THE CONDUCT OF THE
PROJECT ACTIVITIES INFRINGES OR WILL INFRINGE SUCH THIRD PARTY’S PATENT OR
MISAPPROPRIATES OR WILL MISAPPROPRIATE SUCH THIRD PARTY’S TRADE SECRETS, (A) IF
SUCH PROCEEDING ARISES AS A DIRECT RESULT OF TDF, FTC OR BOTH TDF AND FTC BEING
INCORPORATED IN THE COMBINATION PRODUCT, IN EACH CASE WITHOUT REFERENCE TO EFV,
THEN GILEAD SHALL DEFEND AND HOLD THE JV AND BMS HARMLESS FROM AND AGAINST SUCH
PROCEEDING AND ANY LOSSES RESULTING FROM SUCH PROCEEDING, AND SHALL HAVE THE
SOLE RIGHT AND OBLIGATION TO DEFEND SUCH PROCEEDING OR TO SETTLE IT (E.G., BY
OBTAINING A LICENSE FROM SUCH THIRD PARTY) AT GILEAD’S SOLE COST (WHICH SHALL
NOT BE DEEMED A JV EXPENSE OR AUTHORIZED EXPENSE), AND BMS SHALL REASONABLY
COOPERATE AT GILEAD’S REQUEST AND EXPENSE IN SUCH DEFENSE AND/OR SETTLEMENT; (B)
IF SUCH CLAIM ARISES AS A DIRECT RESULT OF EFV BEING INCORPORATED IN THE
COMBINATION PRODUCT, IN EACH CASE WITHOUT REFERENCE TO TDF OR FTC, THEN BMS
SHALL DEFEND AND HOLD THE JV AND GILEAD HARMLESS FROM AND AGAINST SUCH
PROCEEDING AND ANY LOSSES RESULTING FROM SUCH PROCEEDING, AND SHALL HAVE THE
SOLE RIGHT AND OBLIGATION TO DEFEND SUCH PROCEEDING OR TO SETTLE IT (E.G., BY
OBTAINING A LICENSE FROM SUCH THIRD PARTY) AT BMS’ SOLE COST (WHICH SHALL NOT BE
DEEMED A JV EXPENSE OR AUTHORIZED EXPENSE), AND GILEAD SHALL REASONABLY
COOPERATE AT BMS’ REQUEST AND EXPENSE IN SUCH DEFENSE AND/OR SETTLEMENT;  AND
(C) IN THE EVENT THAT NEITHER CLAUSE (A) NOR (B) APPLIES, THEN THE JEC SHALL
DETERMINE WHETHER TO DEFEND AGAINST SUCH CLAIM OR TO OBTAIN A LICENSE FROM SUCH
THIRD PARTY, AND IF SO, ON WHAT TERMS AND CONDITIONS (WHICH OUT-OF-POCKET COSTS,
WITHOUT ANY MARKUP, SHALL BE DEEMED AUTHORIZED OTHER EXPENSES), AND WHICH MEMBER
PARTY SHALL TAKE SUCH ACTIONS ON BEHALF OF THE JV.  THE PROCEDURES SET FORTH IN
SECTION 13.8 SHALL APPLY TO INDEMNIFICATION OF MEMBER PARTIES UNDER THIS SECTION
11.4.

 

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11.5         TRADEMARKS.

 

(A)           GILEAD LICENSED TRADEMARKS.  GILEAD SHALL HAVE THE SOLE RIGHT, AT
ITS SOLE COST AND EXPENSE, TO SEARCH, CLEAR, FILE, REGISTER, PROSECUTE, MAINTAIN
AND ENFORCE THE GILEAD LICENSED TRADEMARKS IN THE TERRITORY.  GILEAD SHALL HAVE
THE SOLE RIGHT AND OPTION, AT ITS SOLE COST AND EXPENSE, TO RESPOND TO ANY
INFRINGEMENT WITH RESPECT TO ANY GILEAD LICENSED TRADEMARK BY APPROPRIATE STEPS,
INCLUDING, WITHOUT LIMITATION, BY FILING AN INFRINGEMENT SUIT OR TAKING OTHER
SIMILAR ACTION.  GILEAD SHALL ALSO HAVE THE SOLE RIGHT AND OPTION NOT TO
PROSECUTE, MAINTAIN OR ENFORCE GILEAD LICENSED TRADEMARKS OR TAKE ACTION TO
RESPOND TO ANY SUCH INFRINGEMENT.

 

(B)           BMS LICENSED TRADEMARKS.  BMS SHALL HAVE THE SOLE RIGHT, AT ITS
SOLE COST AND EXPENSE, TO SEARCH, CLEAR, FILE, REGISTER, PROSECUTE, MAINTAIN AND
ENFORCE THE BMS LICENSED TRADEMARKS IN THE TERRITORY.  BMS SHALL HAVE THE SOLE
RIGHT AND OPTION, AT ITS SOLE COST AND EXPENSE, TO RESPOND TO ANY INFRINGEMENT
WITH RESPECT TO ANY BMS LICENSED TRADEMARK BY APPROPRIATE STEPS, INCLUDING,
WITHOUT LIMITATION, BY FILING AN INFRINGEMENT SUIT OR TAKING OTHER SIMILAR
ACTION.  BMS SHALL ALSO HAVE THE SOLE RIGHT AND OPTION NOT TO PROSECUTE,
MAINTAIN OR ENFORCE BMS LICENSED TRADEMARKS OR TAKE ACTION TO RESPOND TO ANY
SUCH INFRINGEMENT.

 

(C)           COMBINATION PRODUCT TRADEMARKS.  EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN SECTION 6.7, THE PARTIES AGREE THAT, AS AMONG THEMSELVES, THE JV
SHALL OWN ALL RIGHT, TITLE AND INTEREST IN AND TO THE COMBINATION PRODUCT
TRADEMARKS.  GILEAD SHALL BE SOLELY RESPONSIBLE FOR SEARCHING, CLEARING, FILING,
REGISTERING, PROSECUTING AND MAINTAINING THE COMBINATION PRODUCT TRADEMARKS IN
THE TERRITORY IN THE NAME OF THE JV, THE EXTERNAL OUT-OF-POCKET COSTS (WITHOUT
ANY MARKUP) OF WHICH SHALL BE TREATED AS AUTHORIZED OTHER EXPENSES.  IF EITHER
MEMBER PARTY HAS A REASONABLE BASIS TO BELIEVE THAT A THIRD PARTY IS OR MAY BE
ENGAGING IN COMMERCIALLY SIGNIFICANT INFRINGEMENT OF ANY COMBINATION PRODUCT
TRADEMARK, SUCH MEMBER PARTY SHALL NOTIFY THE OTHER MEMBER PARTY IN WRITING AND
PROVIDE IT WITH ANY EVIDENCE OF SUCH INFRINGEMENT THAT IS REASONABLY AVAILABLE. 
GILEAD SHALL HAVE THE FIRST RIGHT AND OPTION TO RESPOND TO ANY INFRINGEMENT OR
POTENTIAL INFRINGEMENT WITH RESPECT TO ANY COMBINATION PRODUCT TRADEMARK BY
APPROPRIATE STEPS, INCLUDING, WITHOUT LIMITATION, FILING AN INFRINGEMENT SUIT OR
TAKING OTHER SIMILAR ACTION, AND SHALL NOTIFY BMS OF, AND CONSULT WITH BMS FROM
TIME TO TIME REGARDING, ANY SUCH SUIT OR OTHER ACTION.  IF GILEAD ELECTS AT ITS
SOLE DISCRETION NOT TO TAKE ACTION TO RESPOND TO ANY SUCH INFRINGEMENT OR
POTENTIAL INFRINGEMENT WITHIN THIRTY (30) DAYS OF GILEAD’S BECOMING AWARE OF
SUCH INFRINGEMENT OR POTENTIAL INFRINGEMENT, THEN BMS SHALL HAVE THE RIGHT AND
OPTION TO RESPOND TO SUCH INFRINGEMENT OR POTENTIAL INFRINGEMENT BY APPROPRIATE
STEPS, INCLUDING, WITHOUT LIMITATION, FILING AN INFRINGEMENT SUIT OR TAKING
OTHER SIMILAR ACTION, AND SHALL NOTIFY GILEAD OF, AND CONSULT WITH GILEAD FROM
TIME TO TIME REGARDING, ANY SUCH SUIT OR OTHER ACTION.  THE MEMBER PARTY NOT
TAKING ACTION TO RESPOND TO THE INFRINGEMENT OR POTENTIAL INFRINGEMENT SHALL
PROVIDE REASONABLE ASSISTANCE TO THE MEMBER PARTY TAKING SUCH ACTION, INCLUDING,
WITHOUT LIMITATION, PROVIDING ACCESS TO RELEVANT DOCUMENTS AND OTHER EVIDENCE,
MAKING ITS EMPLOYEES AVAILABLE AT REASONABLE BUSINESS HOURS, AND JOINING THE
ACTION TO THE EXTENT NECESSARY TO ALLOW THE MEMBER PARTY TAKING SUCH ACTION TO
MAINTAIN THE ACTION.  ANY AMOUNTS RECOVERED BY A MEMBER PARTY PURSUANT TO THIS
SECTION 11.5(C), WHETHER BY SETTLEMENT OR JUDGMENT, SHALL BE DEEMED TO BE
RECOVERED ON BEHALF OF (AND SHALL BE PAID OVER TO) THE JV; AND THE REASONABLE
OUT-OF-POCKET COSTS, INCLUDING REASONABLE ATTORNEYS’ FEES, WITHOUT ANY MARKUP,

 

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INCURRED BY THE MEMBER PARTIES IN MAKING SUCH RECOVERY SHALL BE TREATED AS
AUTHORIZED OTHER EXPENSES.

 

SECTION 12.
CONFIDENTIALITY

 

12.1         TREATMENT OF CONFIDENTIAL INFORMATION.  EXCEPT AS PROVIDED IN THIS
SECTION 12, DURING THE TERM OF THIS AGREEMENT AND FOR FIVE (5) YEARS AFTER THIS
AGREEMENT’S EXPIRATION OR TERMINATION, EACH PARTY (THE “RECEIVING PARTY”) (A)
SHALL HOLD IN STRICT CONFIDENCE AND SHALL NOT PUBLISH OR OTHERWISE DISCLOSE,
DIRECTLY OR INDIRECTLY, TO ANY THIRD PARTY ANY CONFIDENTIAL INFORMATION OF
ANOTHER PARTY OR ITS AFFILIATES (COLLECTIVELY, THE “DISCLOSING PARTY”), (B)
EXCEPT AS PERMITTED PURSUANT TO SECTION 12.7, SHALL NOT DIRECTLY OR INDIRECTLY
USE CONFIDENTIAL INFORMATION OF A DISCLOSING PARTY FOR ANY PURPOSE OTHER THAN
PERFORMANCE OF ITS OBLIGATIONS OR EXERCISE OF ITS RIGHTS UNDER THIS AGREEMENT,
OR AS OTHERWISE PERMITTED UNDER THIS AGREEMENT, THE OPERATING AGREEMENT OR ANY
ANCILLARY AGREEMENT, AND (C) SHALL USE THE SAME LEVEL OF EFFORT TO MAINTAIN THE
CONFIDENTIALITY OF CONFIDENTIAL INFORMATION OF A DISCLOSING PARTY AS IT USES FOR
ITS OWN CONFIDENTIAL OR PROPRIETARY INFORMATION, BUT IN ANY EVENT AT LEAST
COMMERCIALLY REASONABLE EFFORTS.

 

12.2         PERMITTED DISCLOSURE.  EACH PARTY MAY DISCLOSE CONFIDENTIAL
INFORMATION OF A DISCLOSING PARTY TO THE EXTENT THAT SUCH DISCLOSURE IS:

 

(A)           MADE ONLY AS REQUIRED TO SPECIFIC PERSONS OR ENTITIES UNDER
APPLICABLE LAWS, RULES, REGULATIONS OR ORDERS OF A COURT OF COMPETENT
JURISDICTION OR OTHER SUPRA-NATIONAL, FEDERAL, NATIONAL, REGIONAL, STATE,
PROVINCIAL OR LOCAL GOVERNMENTAL OR REGULATORY BODY OF COMPETENT JURISDICTION;
PROVIDED, HOWEVER, THAT THE RECEIVING PARTY SHALL FIRST HAVE GIVEN NOTICE TO THE
DISCLOSING PARTY AND GIVEN THE DISCLOSING PARTY A REASONABLE OPPORTUNITY TO SEEK
ANY AVAILABLE LIMITATIONS ON, EXEMPTIONS FROM OR PROTECTIONS AVAILABLE UNDER
SUCH DISCLOSURE REQUIREMENT AND REASONABLY COOPERATE IN ANY SUCH EFFORTS BY THE
DISCLOSING PARTY; AND PROVIDED FURTHER THAT IF AN EXEMPTION FROM SUCH DISCLOSURE
REQUIREMENT IS NOT OBTAINED, THE CONFIDENTIAL INFORMATION DISCLOSED IN RESPONSE
TO SUCH REQUIREMENT SHALL BE LIMITED TO THAT INFORMATION WHICH IS LEGALLY
REQUIRED TO BE DISCLOSED;

 

(B)           OTHERWISE REQUIRED BY LAW, IN THE OPINION OF LEGAL COUNSEL TO THE
RECEIVING PARTY AS EXPRESSED IN AN OPINION LETTER IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE DISCLOSING PARTY, WHICH SHALL BE PROVIDED TO THE
DISCLOSING PARTY AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE RECEIVING PARTY’S
DISCLOSURE OF THE CONFIDENTIAL INFORMATION PURSUANT TO THIS SECTION 12.2(B);

 

(C)           MADE AS REQUIRED BY THE APPLICABLE LAWS AND REGULATIONS
(INCLUDING, WITHOUT LIMITATION, REGULATION FD) RELATING TO SECURITIES OR RULES
OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, THE NEW YORK STOCK EXCHANGE,
OR ANY OTHER APPLICABLE ASSOCIATION GOVERNING THE STOCK EXCHANGE ON WHICH A
MEMBER PARTY’S STOCK IS LISTED, INCLUDING WITHOUT LIMITATION FILING OF REPORTS
ON FORMS 10-K, 10-Q AND 8-K WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, IN
WHICH CASE (I) THE PROCEDURES SET FORTH IN SECTION 12.2(D) SHALL APPLY IF
SECTION 12.2(D) IS ALSO APPLICABLE TO SUCH FILING AND (II) THE PROCEDURES SET
FORTH IN THE PROVISO TO SECTION 12.5(B) SHALL APPLY;

 

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(D)           MADE IN THE FORM OF A FILING OF A COPY OF THIS AGREEMENT BY GILEAD
OR BMS (AS THE CASE MAY BE) WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION TO
COMPLY WITH APPLICABLE LAW, PROVIDED THAT SUCH MEMBER PARTY (I) REQUESTS
CONFIDENTIAL TREATMENT OF AT LEAST THE COMMERCIAL TERMS AND MATERIAL TERMS
HEREOF TO THE EXTENT SUCH CONFIDENTIAL TREATMENT IS REASONABLY AVAILABLE TO SUCH
MEMBER PARTY, AND (II) SOLICITS THE OTHER MEMBER PARTY’S COMMENTS ON SUCH
REQUEST FOR CONFIDENTIAL TREATMENT, IN WHICH CASE THE FILING MEMBER PARTY SHALL
USE COMMERCIALLY REASONABLE EFFORTS TO TAKE INTO ACCOUNT THE OTHER MEMBER
PARTY’S REASONABLE COMMENTS ON SUCH REQUEST;

 

(E)           SUBJECT TO SECTION 3.4, MADE BY THE RECEIVING PARTY TO THE
REGULATORY AUTHORITIES AS REQUIRED IN CONNECTION WITH ANY FILING, APPLICATION OR
REQUEST FOR ANY REGULATORY APPROVALS OR OTHERWISE TO COMPLY WITH THE
REQUIREMENTS OF APPLICABLE LAW; PROVIDED, HOWEVER, THAT REASONABLE MEASURES
SHALL BE TAKEN TO ASSURE CONFIDENTIAL TREATMENT OF SUCH INFORMATION;

 

(F)            MADE BY THE RECEIVING PARTY AS NECESSARY TO FILE OR PROSECUTE
PATENT APPLICATIONS, PROSECUTE OR DEFEND LITIGATION OR OTHERWISE ESTABLISH
RIGHTS OR ENFORCE OBLIGATIONS UNDER THIS AGREEMENT;

 

(G)           MADE BY THE RECEIVING PARTY TO ITS EMPLOYEES, AFFILIATES,
INDEPENDENT CONTRACTORS, LEGAL COUNSEL, CONSULTANTS, AUDITORS AND ADVISORS WHO
ARE BOUND BY CONFIDENTIALITY AND NON-USE OBLIGATIONS NO LESS PROTECTIVE THAN
THOSE IN THIS SECTION 12 AND WHO REASONABLY REQUIRE SUCH CONFIDENTIAL
INFORMATION FOR THE PERFORMANCE OF SUCH MEMBER PARTY’S OBLIGATIONS OR
ENFORCEMENT OF SUCH MEMBER PARTY’S RIGHTS UNDER THIS AGREEMENT (INCLUDING,
WITHOUT LIMITATION, THE MATTERS DESCRIBED IN SECTIONS 12.2(A) THROUGH (J));
PROVIDED, HOWEVER, THAT THE RECEIVING PARTY SHALL REMAIN RESPONSIBLE FOR ANY
FAILURE BY ANY SUCH PERSON TO TREAT SUCH CONFIDENTIAL INFORMATION AS REQUIRED BY
THIS SECTION 12;

 

(H)           MADE BY THE RECEIVING PARTY TO ITS LICENSORS OF ITS RESPECTIVE
TECHNOLOGY PURSUANT TO CONTRACTUAL OBLIGATIONS TO SUCH LICENSORS EXISTING AS OF
THE EFFECTIVE DATE AND UNDER OBLIGATIONS OF CONFIDENTIALITY AND NON-USE NO LESS
PROTECTIVE THAN THOSE IN THIS SECTION 12; PROVIDED, HOWEVER, THAT THE RECEIVING
PARTY SHALL REMAIN RESPONSIBLE FOR ANY FAILURE BY ANY SUCH PERSON TO TREAT SUCH
CONFIDENTIAL INFORMATION AS REQUIRED BY THIS SECTION 12;

 

(I)            MADE BY THE RECEIVING PARTY AS NECESSARY FOR THE FILING OF ITS
TAX RETURNS OR PURSUANT TO ANY AUDIT THEREOF; OR

 

(J)            AS OTHERWISE PERMITTED PURSUANT TO SECTION 12.5 AND SECTION 12.7.

 

12.3         CONFIDENTIAL INFORMATION.

 

(A)           DEFINED.  “CONFIDENTIAL INFORMATION” OF A PARTY SHALL MEAN THE
TERMS OF THIS AGREEMENT AND ALL INFORMATION AND INVENTIONS PROVIDED BY OR ON
BEHALF OF SUCH PARTY TO ANOTHER PARTY (OR, IN THE CASE OF SECTION 5.3, TO THE
PRICING COMMITTEE) EITHER IN CONNECTION WITH THE DISCUSSIONS AND NEGOTIATIONS
PERTAINING TO THIS AGREEMENT (INCLUDING UNDER THE MUTUAL CONFIDENTIAL DISCLOSURE
AGREEMENT ENTERED INTO BY AND BETWEEN BRISTOL-MYERS SQUIBB COMPANY AND GILEAD
SCIENCES, INC. AS OF DECEMBER 12, 2003) OR IN THE COURSE OF PERFORMING THIS
AGREEMENT OR THE MTTA, INCLUDING, WITHOUT LIMITATION: THE MATERIAL TERMS OF

 

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THIS AGREEMENT; DATA; KNOWLEDGE; PRACTICES; PROCESSES; IDEAS; RESEARCH PLANS;
ENGINEERING DESIGNS AND DRAWINGS; RESEARCH DATA; MANUFACTURING PROCESSES AND
TECHNIQUES; SCIENTIFIC, MANUFACTURING, MARKETING AND BUSINESS PLANS; AND
FINANCIAL AND PERSONNEL MATTERS RELATING TO THE DISCLOSING PARTY OR TO ITS
PRESENT OR FUTURE PRODUCTS, SALES, SUPPLIERS, CUSTOMERS, EMPLOYEES, INVESTORS OR
BUSINESS.  FOR THE AVOIDANCE OF DOUBT, CONFIDENTIAL INFORMATION SHALL INCLUDE
ANY AND ALL INFORMATION PROVIDED BY ONE PARTY TO ANOTHER PARTY RELATING TO THE
COMBINATION PRODUCT OR THE FIRST-MENTIONED PARTY’S SINGLE AGENT PRODUCT(S) OR
DOUBLE AGENT PRODUCT, AS APPLICABLE; PROVIDED, HOWEVER, THAT INFORMATION
PROVIDED BY ONE PARTY TO ANOTHER PARTY RELATING TO IMPROVEMENTS TO THE CORE
TECHNOLOGY OF SUCH OTHER PARTY SHALL BE DEEMED CONFIDENTIAL INFORMATION OF SUCH
OTHER PARTY.

 

(B)           EXCLUSIONS.  NOTWITHSTANDING THE FOREGOING, INFORMATION AND
INVENTIONS OF A DISCLOSING PARTY SHALL NOT BE DEEMED CONFIDENTIAL INFORMATION
WITH RESPECT TO A RECEIVING PARTY FOR PURPOSES OF THIS AGREEMENT IF IT:

 

(I)                                     WAS ALREADY KNOWN TO THE RECEIVING PARTY
OR ITS AFFILIATES, OTHER THAN UNDER AN OBLIGATION OF CONFIDENTIALITY OR NON-USE,
AT THE TIME OF DISCLOSURE TO SUCH RECEIVING PARTY;

 

(II)                                  WAS GENERALLY AVAILABLE OR KNOWN, OR WAS
OTHERWISE PART OF THE PUBLIC DOMAIN, AT THE TIME OF ITS DISCLOSURE TO SUCH
RECEIVING PARTY;

 

(III)                               BECAME GENERALLY AVAILABLE OR KNOWN, OR
OTHERWISE BECAME PART OF THE PUBLIC DOMAIN, AFTER ITS DISCLOSURE TO SUCH
RECEIVING PARTY THROUGH NO FAULT OF THE RECEIVING PARTY OR ITS AFFILIATES;

 

(IV)                              WAS DISCLOSED TO SUCH RECEIVING PARTY OR ITS
AFFILIATES, OTHER THAN UNDER AN OBLIGATION OF CONFIDENTIALITY OR NON-USE, BY A
THIRD PARTY WHO HAD NO OBLIGATION TO THE DISCLOSING PARTY NOT TO DISCLOSE SUCH
INFORMATION AND INVENTIONS TO OTHERS; OR

 

(V)                                 WAS INDEPENDENTLY DISCOVERED OR DEVELOPED BY
SUCH RECEIVING PARTY OR ITS AFFILIATES, AS EVIDENCED BY THEIR WRITTEN RECORDS,
WITHOUT THE USE OF CONFIDENTIAL INFORMATION BELONGING TO THE DISCLOSING PARTY.

 

Specific aspects or details of Confidential Information shall not be deemed to
be within the public domain or in the possession of a Party merely because the
Confidential Information is embraced by more general information in the public
domain or in the possession of such Party.  Further, any combination of
Confidential Information shall not be considered in the public domain or in the
possession of a Party merely because individual elements of such Confidential
Information are in the public domain or in the possession of such Party unless
the combination and its principles are in the public domain or in the possession
of such Party.

 

12.4         USE OF NAME.  SUBJECT TO SECTIONS 5.8, 6.7 AND 12.5, NO MEMBER
PARTY SHALL MENTION OR OTHERWISE USE THE NAME, INSIGNIA, SYMBOL, TRADEMARK,
TRADE NAME OR LOGOTYPE OF ANOTHER PARTY (OR ANY ABBREVIATION OR ADAPTATION
THEREOF) IN ANY PUBLICATION, PRESS RELEASE, PROMOTIONAL MATERIAL OR OTHER FORM
OF PUBLICITY WITHOUT THE PRIOR WRITTEN APPROVAL OF SUCH OTHER MEMBER PARTY IN
EACH INSTANCE.  FOR PURPOSES OF THIS SECTION 12.4, APPROVED MARKETING MATERIALS
SHALL BE DEEMED TO HAVE BEEN APPROVED BY ALL OF THE MEMBER PARTIES.  THE
RESTRICTIONS

 

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IMPOSED BY THIS SECTION SHALL NOT PROHIBIT ANY MEMBER PARTY FROM MAKING ANY
DISCLOSURE IDENTIFYING ANOTHER PARTY THAT IS REQUIRED BY APPLICABLE LAW.

 

12.5         PUBLICITY; TERMS OF AGREEMENT.

 

(A)                                  THE PARTIES SHALL MAKE A JOINT PUBLIC
ANNOUNCEMENT OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT SUBSTANTIALLY IN
THE FORM OF THE JOINT PRESS RELEASE ATTACHED AS ANNEX L HERETO UPON OR AFTER
EXECUTION OF THIS AGREEMENT.

 

(B)                                 AFTER PUBLIC DISCLOSURE OF THE JOINT PRESS
RELEASE PURSUANT TO SECTION 12.5(A), IF EITHER MEMBER PARTY DESIRES TO MAKE A
PUBLIC ANNOUNCEMENT (SUCH AS A PRESS RELEASE) CONCERNING THE MATERIAL TERMS OF
THIS AGREEMENT, SUCH MEMBER PARTY SHALL GIVE REASONABLE PRIOR ADVANCE NOTICE OF
THE PROPOSED TEXT OF SUCH ANNOUNCEMENT TO THE OTHER MEMBER PARTY FOR ITS PRIOR
REVIEW AND APPROVAL (EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 12.5(B)), SUCH
APPROVAL NOT TO BE UNREASONABLY WITHHELD.  A MEMBER PARTY COMMENTING ON SUCH A
PROPOSED ANNOUNCEMENT SHALL PROVIDE ITS COMMENTS, IF ANY, AS SOON AS REASONABLY
PRACTICABLE BUT IN ANY EVENT WITHIN THREE (3) BUSINESS DAYS AFTER RECEIVING THE
PROPOSED ANNOUNCEMENT FOR REVIEW.  EITHER MEMBER PARTY SHALL HAVE THE RIGHT TO
MAKE A PRESS RELEASE ANNOUNCING THE RECEIPT OF APPROVALS, SUBJECT ONLY TO THE
REVIEW PROCEDURE SET FORTH IN THE PRECEDING SENTENCE.  NEITHER MEMBER PARTY
SHALL BE REQUIRED TO SEEK THE PERMISSION OF THE OTHER MEMBER PARTY TO REPEAT ANY
INFORMATION AS TO THE TERMS OF THIS AGREEMENT THAT HAVE ALREADY BEEN PUBLICLY
DISCLOSED BY SUCH MEMBER PARTY IN ACCORDANCE WITH SECTION 12.2 OR THIS SECTION
12.5.  IN THE EVENT OF A LEGALLY REQUIRED PRESS RELEASE OR OTHER PUBLIC
ANNOUNCEMENT OR DISCLOSURE, THE MEMBER PARTY IN QUESTION SHALL PROVIDE THE OTHER
MEMBER PARTY WITH A COPY OF THE PROPOSED TEXT WITH AS MUCH NOTICE AS PRACTICABLE
(WHICH SHALL BE NO LESS THAN THREE (3) BUSINESS DAYS PRIOR TO THE PROPOSED
DISCLOSURE), THE OTHER MEMBER PARTY SHALL RESPOND WITH ITS COMMENTS AS PROMPTLY
AS PRACTICABLE (BUT NO LESS THAN ONE (1) BUSINESS DAY PRIOR TO THE PROPOSED
DISCLOSURE), AND THE MEMBER PARTY IN QUESTION SHALL TAKE INTO DUE CONSIDERATION
ANY AND ALL REASONABLE COMMENTS THAT SUCH OTHER MEMBER PARTY MAY PROVIDE IN A
TIMELY MANNER; PROVIDED, HOWEVER, THAT IF A MEMBER PARTY DETERMINES THAT IT MUST
MAKE A LEGALLY REQUIRED DISCLOSURE UNDER REGULATION FD, THEN IT SHALL HAVE THE
RIGHT TO MAKE SUCH DISCLOSURE AT SUCH TIME AS IS NECESSARY TO COMPLY WITH
REGULATION FD AND SHALL PROVIDE THE OTHER MEMBER PARTY WITH AS MUCH NOTICE AND
OPPORTUNITY FOR REVIEW AND COMMENT AS IS PRACTICABLE IN THE CIRCUMSTANCES.

 

12.6         NOTIFICATION.  THE RECEIVING PARTY SHALL NOTIFY THE DISCLOSING
PARTY IMMEDIATELY, AND COOPERATE WITH THE DISCLOSING PARTY AS THE DISCLOSING
PARTY MAY REASONABLY REQUEST, UPON THE RECEIVING PARTY’S DISCOVERY OF ANY LOSS
OR COMPROMISE OF THE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION.

 

12.7         PERMITTED USES.  NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO
THE CONTRARY, REGARDLESS OF WHICH MEMBER PARTY IS THE DISCLOSING PARTY, TO THE
EXTENT THAT ANY CONFIDENTIAL INFORMATION RELATES SPECIFICALLY TO THE COMBINATION
PRODUCT, INCLUDING ANY SUCH CONFIDENTIAL INFORMATION CONSISTING OF COMBINATION
PRODUCT REGULATORY DOCUMENTATION, EACH MEMBER PARTY SHALL HAVE THE RIGHT TO USE
SUCH CONFIDENTIAL INFORMATION IN CONNECTION WITH ANY EXPLOITATION OF THE
COMBINATION PRODUCT TO THE EXTENT PERMITTED BY THE TERMS AND CONDITIONS OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION (A) ANY USE IN ACCORDANCE WITH THE
LICENSE GRANTS MADE BY THE JV TO THE MEMBER PARTIES IN SECTION 6.2, OR WITH THE
RIGHTS OF REFERENCE GRANTED BY

 

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THE JV TO THE MEMBER PARTIES IN SECTIONS 6.4(B), 6.4(C) AND 6.4(D), AS THE CASE
MAY BE, OR (B) IN CONNECTION WITH THE PREPARATION AND/OR SUBMISSION TO
REGULATORY AUTHORITIES AS REQUIRED IN CONNECTION WITH ANY FILING OR APPLICATION,
OR REQUEST FOR REGULATORY APPROVAL FOR THE COMBINATION PRODUCT ANYWHERE IN THE
WORLD.

 

12.8         REMEDIES.  EACH PARTY AGREES THAT THE UNAUTHORIZED USE OR
DISCLOSURE OF ANY MATERIAL CONFIDENTIAL INFORMATION BY THE RECEIVING PARTY IN
VIOLATION OF THIS AGREEMENT MAY CAUSE SEVERE AND IRREPARABLE DAMAGE TO THE
DISCLOSING PARTY, FOR WHICH MONEY DAMAGES REPRESENT AN INSUFFICIENT REMEDY.  IN
THE EVENT OF ANY VIOLATION OF THIS SECTION 12, NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, THE DISCLOSING PARTY SHALL BE AUTHORIZED AND ENTITLED
TO SEEK FROM ANY COURT OF COMPETENT JURISDICTION INJUNCTIVE RELIEF, WHETHER
PRELIMINARY OR PERMANENT, WITH RESPECT TO SUCH VIOLATION AS WELL AS ANY OTHER
RELIEF PERMITTED BY APPLICABLE LAW, AND MAY OBTAIN THAT RELIEF WITHOUT MAKING A
SHOWING OF INSUFFICIENCY OF MONEY DAMAGES OR IRREPARABLE HARM.  THE RECEIVING
PARTY AGREES TO WAIVE ANY REQUIREMENT THAT THE DISCLOSING PARTY POST BOND AS A
CONDITION FOR OBTAINING ANY SUCH RELIEF.

 

SECTION 13.
WARRANTIES; INDEMNITIES

 

13.1         REPRESENTATIONS, WARRANTIES AND COVENANTS.  EACH MEMBER PARTY
HEREBY REPRESENTS, WARRANTS AND COVENANTS TO THE OTHER MEMBER PARTY AS OF THE
EFFECTIVE DATE AS FOLLOWS:

 

(A)                                  SUCH MEMBER PARTY AS APPLICABLE (I) HAS THE
POWER AND AUTHORITY AND THE LEGAL RIGHT TO ENTER INTO THIS AGREEMENT, THE
OPERATING AGREEMENT AND ANY ANCILLARY AGREEMENTS TO WHICH IT IS A PARTY AND TO
PERFORM ITS OBLIGATIONS HEREUNDER AND THEREUNDER, AND (II) HAS TAKEN ALL
NECESSARY ACTION ON ITS PART REQUIRED TO AUTHORIZE THE EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE OPERATING AGREEMENT AND ANY ANCILLARY AGREEMENTS TO WHICH IT
IS A PARTY.  EACH OF THIS AGREEMENT AND THE OPERATING AGREEMENT HAS BEEN (AND IN
THE CASE OF ANY ANCILLARY AGREEMENTS TO WHICH SUCH MEMBER PARTY IS A PARTY, WHEN
EXECUTED AND DELIVERED, WILL HAVE BEEN) DULY EXECUTED AND DELIVERED ON BEHALF OF
SUCH MEMBER PARTY AND CONSTITUTES (AND IN THE CASE OF ANY ANCILLARY AGREEMENTS
TO WHICH SUCH MEMBER PARTY IS A PARTY, WHEN DULY EXECUTED AND DELIVERED, SHALL
CONSTITUTE) A LEGAL, VALID AND BINDING OBLIGATION OF SUCH MEMBER PARTY AND IS
(AND IN THE CASE OF ANY ANCILLARY AGREEMENTS TO WHICH SUCH MEMBER PARTY IS A
PARTY, WHEN DULY EXECUTED AND DELIVERED, SHALL BE) ENFORCEABLE AGAINST IT IN
ACCORDANCE WITH ITS TERMS SUBJECT TO THE EFFECTS OF BANKRUPTCY, INSOLVENCY OR
OTHER LAWS OF GENERAL APPLICATION AFFECTING THE ENFORCEMENT OF CREDITOR RIGHTS
AND JUDICIAL PRINCIPLES AFFECTING THE AVAILABILITY OF SPECIFIC PERFORMANCE AND
GENERAL PRINCIPLES OF EQUITY, WHETHER ENFORCEABILITY IS CONSIDERED A PROCEEDING
AT LAW OR EQUITY.

 

(B)                                 SUCH MEMBER PARTY IS NOT AWARE OF ANY
PENDING OR THREATENED LITIGATION (AND HAS NOT RECEIVED ANY COMMUNICATION) THAT
ALLEGES THAT SUCH MEMBER PARTY’S ACTIVITIES RELATED TO THIS AGREEMENT HAVE
VIOLATED, OR THAT BY CONDUCTING THE ACTIVITIES AS CONTEMPLATED IN THIS AGREEMENT
SUCH PARTY WOULD VIOLATE, ANY OF THE INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER
PERSON (AFTER GIVING EFFECT TO THE LICENSE GRANTS IN THIS AGREEMENT).  ON THE
EFFECTIVE DATE, SUCH MEMBER PARTY HAS DELIVERED TO THE OTHER MEMBER PARTY A LIST
SETTING FORTH, TO THE EXTENT OF SUCH MEMBER PARTY’S KNOWLEDGE ANY AND ALL (I)
PRODUCTS LIABILITY LITIGATION, (II) INTELLECTUAL PROPERTY LITIGATION THAT IS
REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT ON SUCH

 

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MEMBER PARTY’S SINGLE AGENT PRODUCT(S) OR DOUBLE AGENT PRODUCT OR THE
COMBINATION PRODUCT, AS APPLICABLE, OR THE RIGHTS OR LICENSES GRANTED BY SUCH
MEMBER PARTY TO THE OTHER MEMBER PARTY OR THE JV HEREUNDER WITH RESPECT TO ANY
SUCH PRODUCT, AND (III) LITIGATION OR INVESTIGATION(S) INITIATED BY, AND WARNING
LETTERS RECEIVED FROM, REGULATORY AUTHORITIES, INCLUDING FORM 483 LETTERS, IN
EACH CASE WITH RESPECT TO MANUFACTURING; AND IN EACH CASE ((I), (II) AND
(III)):  (A) WHICH RELATES TO SUCH MEMBER PARTY’S SINGLE AGENT PRODUCT(S) OR
DOUBLE AGENT PRODUCT, AND (B) WHICH LITIGATION OR INVESTIGATION IS CURRENTLY
PENDING OR WAS PENDING, OR WHICH WARNING LETTER WAS RECEIVED, AT ANY TIME ON OR
AFTER [*].

 

(C)                                  ALL NECESSARY CONSENTS, APPROVALS AND
AUTHORIZATIONS OF ALL REGULATORY AND GOVERNMENTAL AUTHORITIES AND OTHER PERSONS
REQUIRED TO BE OBTAINED BY SUCH MEMBER PARTY IN CONNECTION WITH THE EXECUTION
AND DELIVERY OF THIS AGREEMENT AND THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS
AGREEMENT HAVE BEEN OBTAINED.

 

(D)                                 WITH RESPECT TO SUCH MEMBER PARTY AS
APPLICABLE, THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE OPERATING
AGREEMENT AND ANY ANCILLARY AGREEMENTS TO WHICH IT IS A PARTY AND THE
PERFORMANCE OF SUCH MEMBER PARTY’S OBLIGATIONS HEREUNDER AND THEREUNDER (I) DO
NOT CONFLICT WITH OR VIOLATE IN ANY MATERIAL WAY ANY REQUIREMENT OF APPLICABLE
LAW, (II) DO NOT CONFLICT WITH OR VIOLATE ANY PROVISION OF THE ARTICLES OF
INCORPORATION, BYLAWS, LIMITED PARTNERSHIP AGREEMENT OR ANY SIMILAR INSTRUMENT
OF SUCH MEMBER PARTY, AS APPLICABLE AND (II) DO NOT CONFLICT WITH, VIOLATE, OR
BREACH OR CONSTITUTE A DEFAULT OR REQUIRE ANY CONSENT UNDER, ANY CONTRACTUAL
OBLIGATION OR COURT OR ADMINISTRATIVE ORDER BY WHICH SUCH MEMBER PARTY IS BOUND.

 

13.2         ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF BMS.  BMS
REPRESENTS, WARRANTS AND COVENANTS TO GILEAD THAT:

 

(A)                                  EACH OF BMS PARENT AND BMS SUB (I) IS A
CORPORATION OR LIMITED LIABILITY COMPANY, AS THE CASE MAY BE, DULY ORGANIZED AND
IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE, AND (II) HAS FULL
POWER AND AUTHORITY AND THE LEGAL RIGHT TO OWN AND OPERATE ITS PROPERTY AND
ASSETS AND TO CARRY ON ITS BUSINESS AS IT IS NOW BEING CONDUCTED AND AS IT IS
CONTEMPLATED TO BE CONDUCTED BY THIS AGREEMENT.

 

(B)                                 NEITHER BMS NOR ANY OF ITS AFFILIATES HAS
BEEN DEBARRED OR IS SUBJECT TO DEBARMENT AND NEITHER BMS NOR ANY OF ITS
AFFILIATES SHALL USE IN ANY CAPACITY, IN CONNECTION WITH THE SERVICES TO BE
PERFORMED UNDER THIS AGREEMENT, ANY PERSON WHO HAS BEEN DEBARRED PURSUANT TO
SECTION 306 OF THE ACT, OR WHO IS THE SUBJECT OF A CONVICTION DESCRIBED IN SUCH
SECTION.  BMS AGREES TO INFORM GILEAD IN WRITING IMMEDIATELY IF IT OR ANY PERSON
WHO IS PERFORMING SERVICES UNDER THIS AGREEMENT IS DEBARRED OR IS THE SUBJECT OF
A CONVICTION DESCRIBED IN SECTION 306, OR IF ANY ACTION, SUIT, CLAIM,
INVESTIGATION OR LEGAL OR ADMINISTRATIVE PROCEEDING IS PENDING OR, TO THE
KNOWLEDGE OF BMS, IS THREATENED, RELATING TO THE DEBARMENT OR CONVICTION OF BMS
OR ANY PERSON PERFORMING SERVICES UNDER THIS AGREEMENT.

 

(C)                                  BMS HAS THE RIGHT TO GRANT THE LICENSE
UNDER THE BMS PATENTS THAT IS SET FORTH IN SECTION 6.1(B), AND HAS NOT, PRIOR TO
THE EFFECTIVE DATE, MADE A GRANT TO ANY THIRD PARTY OF ANY RIGHT OR LICENSE IN
RESPECT OF THE BMS PATENTS THAT WOULD CONFLICT WITH ANY GRANT OF RIGHTS OR
LICENSES TO GILEAD OR THE JV HEREUNDER.  THE BMS PATENTS ARE NOT SUBJECT TO ANY

 

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ENCUMBRANCE OR LIEN BY ANY THIRD PARTY (EXCEPT FOR ANY SUCH ENCUMBRANCES OR
LIENS AS WOULD NOT, IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT ON THE
LICENSE RIGHTS GRANTED TO THE JV AND GILEAD UNDER THIS AGREEMENT).  PRIOR TO THE
EFFECTIVE DATE, BMS HAS DELIVERED TO GILEAD A COPY (WITH FINANCIAL TERMS
REDACTED) OF ANY LICENSE OR SIMILAR GRANT OF RIGHTS BETWEEN BMS, ON THE ONE
HAND, AND A THIRD PARTY, ON THE OTHER HAND, (I) PURSUANT TO WHICH BMS OBTAINED
FROM SUCH THIRD PARTY A LICENSE OR OTHER RIGHTS WITH RESPECT TO ANY OF THE BMS
PATENTS, OR (II) PURSUANT TO WHICH BMS GRANTS TO ANY SUCH THIRD PARTY A LICENSE
OR OTHER RIGHTS WITH RESPECT TO ANY OF THE BMS PATENTS FOR EXPLOITATION IN THE
TERRITORY.  BMS COVENANTS AND AGREES THAT, EXCEPT FOR AGREEMENTS REFERRED TO IN
THE PRECEDING SENTENCE (INCLUDING EXTENSIONS, AMENDMENTS AND RENEWALS THEREOF),
IT SHALL NOT, FROM AND AFTER THE EFFECTIVE DATE AND THROUGHOUT THE TERM OF THIS
AGREEMENT, GRANT TO ANY THIRD PARTY ANY RIGHT OR LICENSE IN RESPECT OF THE BMS
PATENTS THAT WOULD CONFLICT WITH ANY GRANT TO GILEAD OR THE JV HEREUNDER.

 

(D)                                 THERE ARE NO JUDGMENTS OR SETTLEMENTS
AGAINST OR AMOUNTS WITH RESPECT THERETO OWED BY BMS RELATING TO THE BMS
PATENTS.  TO THE KNOWLEDGE OF BMS, IT HAS NOT RECEIVED WRITTEN NOTICE OF ANY
PROCEEDING IN WHICH IT IS ALLEGED THAT (I) THE BMS PATENTS ARE INVALID OR
UNENFORCEABLE OR (II) THE EXPLOITATION OF EFV, WHETHER ALONE OR IN COMBINATION
WITH EITHER OR BOTH OF TDF AND FTC, INFRINGES ANY THIRD PARTY PATENT.

 

(E)                                  TO THE KNOWLEDGE OF BMS, THE INFORMATION
CONTAINED IN BMS’ SINGLE AGENT PRODUCT LABEL AND IN THE NDA FOR BMS’ SINGLE
AGENT PRODUCT REPRESENTS, IN ALL MATERIAL RESPECTS, A COMPLETE AND ACCURATE
REFLECTION OF THE SAFETY AND EFFICACY PROFILE OF BMS’ SINGLE AGENT PRODUCT AS OF
THE EFFECTIVE DATE.  BMS SHALL USE COMMERCIALLY REASONABLE EFFORTS TO MAINTAIN
ITS SINGLE AGENT PRODUCT LABEL AND THE BMS REGULATORY DOCUMENTATION THROUGH
UPDATES AS NEEDED TO ENSURE THAT SUCH INFORMATION CONTINUES TO REPRESENT A
COMPLETE AND ACCURATE REFLECTION IN ALL MATERIAL RESPECTS OF THE SAFETY AND
EFFICACY PROFILE OF ITS SINGLE AGENT PRODUCT.  IT IS UNDERSTOOD AND AGREED THAT
BMS MAKES THE REPRESENTATION AND COVENANT TO GILEAD SET FORTH IN THIS SECTION
13.2(E) SOLELY FOR PURPOSES OF THE MEMBER PARTIES’ COLLABORATION PURSUANT TO
THIS AGREEMENT, AND FOR NO OTHER PURPOSE.

 

(F)                                    QUANTITIES OF EFV PROVIDED BY BMS
PURSUANT TO SECTION 4.1 WILL (I) BE MANUFACTURED USING REASONABLE CARE; (II)
CONFORM TO THE APPLICABLE EFV BULK SPECIFICATIONS (AS DEFINED IN THE BMS SUPPLY
AGREEMENT) AND WITH THE APPLICABLE CERTIFICATE OF ANALYSIS AT THE TIME OF
DELIVERY; (III) BE CONVEYED BY BMS WITH GOOD TITLE AND FREE FROM ANY LAWFUL
SECURITY INTEREST, LIEN OR ENCUMBRANCE; AND BMS (OR ANY AFFILIATES OR THIRD
PARTY SUPPLIERS AS APPLICABLE) WILL HAVE OBTAINED ALL APPROVALS REQUIRED BY ALL
APPLICABLE REGULATORY AUTHORITIES TO MANUFACTURE EFV FOR USE IN SUSTIVA.

 

13.3         ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF GILEAD. 
GILEAD REPRESENTS, WARRANTS AND COVENANTS TO BMS THAT:

 

(A)                                  EACH OF GILEAD PARENT AND GILEAD SUB IS A
CORPORATION OR LIMITED LIABILITY COMPANY, AS THE CASE MAY BE, DULY ORGANIZED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE,
AND HAS FULL POWER AND AUTHORITY AND THE LEGAL RIGHT TO OWN AND OPERATE ITS
PROPERTY AND ASSETS AND TO CARRY ON ITS BUSINESS AS IT IS NOW BEING CONDUCTED
AND AS IS CONTEMPLATED TO BE CONDUCTED BY THIS AGREEMENT.

 

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(B)                                 NEITHER GILEAD NOR ANY OF ITS AFFILIATES HAS
BEEN DEBARRED OR IS SUBJECT TO DEBARMENT AND NEITHER GILEAD NOR ANY OF ITS
AFFILIATES SHALL USE IN ANY CAPACITY, IN CONNECTION WITH THE SERVICES TO BE
PERFORMED UNDER THIS AGREEMENT, ANY PERSON WHO HAS BEEN DEBARRED PURSUANT TO
SECTION 306 OF THE ACT, OR WHO IS THE SUBJECT OF A CONVICTION DESCRIBED IN SUCH
SECTION.  GILEAD AGREES TO INFORM BMS IN WRITING IMMEDIATELY IF IT OR ANY PERSON
WHO IS PERFORMING SERVICES UNDER THIS AGREEMENT IS DEBARRED OR IS THE SUBJECT OF
A CONVICTION DESCRIBED IN SECTION 306, OR IF ANY ACTION, SUIT, CLAIM,
INVESTIGATION OR LEGAL OR ADMINISTRATIVE PROCEEDING IS PENDING OR, TO THE
KNOWLEDGE OF GILEAD, IS THREATENED, RELATING TO THE DEBARMENT OR CONVICTION OF
GILEAD OR ANY PERSON PERFORMING SERVICES UNDER THIS AGREEMENT.

 

(C)                                  GILEAD HAS THE RIGHT TO GRANT THE LICENSE
UNDER THE GILEAD PATENTS THAT IS SET FORTH IN SECTION 6.1(A), AND HAS NOT, PRIOR
TO THE EFFECTIVE DATE, MADE A GRANT TO ANY THIRD PARTY OF ANY RIGHT OR LICENSE
IN RESPECT OF THE GILEAD PATENTS THAT WOULD CONFLICT WITH ANY GRANT OF RIGHTS OR
LICENSES TO BMS OR THE JV HEREUNDER.  THE GILEAD PATENTS ARE NOT SUBJECT TO ANY
ENCUMBRANCE OR LIEN BY ANY THIRD PARTY (EXCEPT FOR ANY SUCH ENCUMBRANCES OR
LIENS AS WOULD NOT, IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT ON THE
LICENSE RIGHTS GRANTED TO THE JV AND BMS UNDER THIS AGREEMENT).  PRIOR TO THE
EFFECTIVE DATE, GILEAD HAS DELIVERED TO BMS A COPY (WITH FINANCIAL TERMS
REDACTED) OF ANY LICENSE OR SIMILAR GRANT OF RIGHTS BETWEEN GILEAD, ON THE ONE
HAND, AND A THIRD PARTY, ON THE OTHER HAND, (I) PURSUANT TO WHICH GILEAD
OBTAINED FROM SUCH THIRD PARTY A LICENSE OR OTHER RIGHTS WITH RESPECT TO ANY OF
THE GILEAD PATENTS, OR (II) PURSUANT TO WHICH GILEAD GRANTS TO ANY SUCH THIRD
PARTY A LICENSE OR OTHER RIGHTS WITH RESPECT TO ANY OF THE GILEAD PATENTS FOR
EXPLOITATION IN THE TERRITORY.  GILEAD COVENANTS AND AGREES THAT, EXCEPT FOR
AGREEMENTS REFERRED TO IN THE PRECEDING SENTENCE (INCLUDING EXTENSIONS,
AMENDMENTS AND RENEWALS THEREOF), IT SHALL NOT, FROM AND AFTER THE EFFECTIVE
DATE AND THROUGHOUT THE TERM OF THIS AGREEMENT, GRANT TO ANY THIRD PARTY ANY
RIGHT OR LICENSE IN RESPECT OF THE GILEAD PATENTS THAT WOULD CONFLICT WITH ANY
GRANT TO GILEAD OR THE JV HEREUNDER.

 

(D)                                 THERE ARE NO JUDGMENTS OR SETTLEMENTS
AGAINST OR AMOUNTS WITH RESPECT THERETO OWED BY GILEAD RELATING TO THE GILEAD
PATENTS.  TO THE KNOWLEDGE OF GILEAD, IT HAS NOT RECEIVED WRITTEN NOTICE OF ANY
PROCEEDING IN WHICH IT IS ALLEGED THAT (I) THE GILEAD PATENTS ARE INVALID OR
UNENFORCEABLE OR (II) THE EXPLOITATION OF EITHER TDF OR FTC, WHETHER ALONE OR
TOGETHER AND WHETHER OR NOT IN COMBINATION WITH EFV, INFRINGES ANY THIRD PARTY
PATENT.

 

(E)                                  TO THE KNOWLEDGE OF GILEAD, THE INFORMATION
CONTAINED IN THE LABELS OF GILEAD’S SINGLE AGENT PRODUCTS AND DOUBLE AGENT
PRODUCT AND IN THE NDAS FOR GILEAD’S SINGLE AGENT PRODUCTS AND DOUBLE AGENT
PRODUCT REPRESENTS, IN ALL MATERIAL RESPECTS, A COMPLETE AND ACCURATE REFLECTION
OF THE SAFETY AND EFFICACY PROFILE OF GILEAD’S SINGLE AGENT PRODUCTS AND DOUBLE
AGENT PRODUCT AS OF THE EFFECTIVE DATE.  GILEAD SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO MAINTAIN ITS SINGLE AND DOUBLE AGENT PRODUCT LABELS AND
THE GILEAD REGULATORY DOCUMENTATION THROUGH UPDATES AS NEEDED TO ENSURE THAT
SUCH INFORMATION CONTINUES TO REPRESENT A COMPLETE AND ACCURATE REFLECTION IN
ALL MATERIAL RESPECTS OF THE SAFETY AND EFFICACY PROFILE OF ITS SINGLE AND
DOUBLE AGENT PRODUCTS.  IT IS UNDERSTOOD AND AGREED THAT GILEAD MAKES THE
REPRESENTATION AND COVENANT TO BMS SET FORTH IN THIS SECTION 13.3(E) SOLELY FOR
PURPOSES OF THE MEMBER PARTIES’ COLLABORATION PURSUANT TO THIS AGREEMENT, AND
FOR NO OTHER PURPOSE.

 

(F)                                    QUANTITIES OF FTC AND TDF PROVIDED BY
GILEAD PURSUANT TO SECTION 4.1 WILL (I) BE MANUFACTURED USING REASONABLE CARE;
(II) CONFORM TO THE APPLICABLE

 

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PRODUCT SPECIFICATIONS (AS DEFINED IN THE GILEAD SUPPLY AGREEMENT) AND WITH THE
APPLICABLE CERTIFICATE OF ANALYSIS AT THE TIME OF DELIVERY; (III) BE CONVEYED BY
GILEAD WITH GOOD TITLE AND FREE FROM ANY LAWFUL SECURITY INTEREST, LIEN OR
ENCUMBRANCE; AND GILEAD (OR ANY AFFILIATES OR THIRD PARTY SUPPLIERS AS
APPLICABLE) WILL HAVE OBTAINED ALL APPROVALS REQUIRED BY ALL APPLICABLE
REGULATORY AUTHORITIES TO MANUFACTURE FTC AND TDF FOR USE IN VIREAD, EMTRIVA AND
TRUVADA AS APPLICABLE.

 

13.4                           DISCLAIMER.  EXCEPT AS SET FORTH IN SECTIONS
13.1, 13.2 AND 13.3, EACH PARTY HEREBY DISCLAIMS ANY AND ALL WARRANTIES, WHETHER
WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WITH
RESPECT TO THE SINGLE AGENT PRODUCTS, THE DOUBLE AGENT PRODUCT, THE COMBINATION
PRODUCT OR ANY ACTIVE PHARMACEUTICAL INGREDIENTS FOR THE COMBINATION PRODUCT
SUPPLIED UNDER THIS AGREEMENT, OR ANY TECHNOLOGY LICENSED UNDER THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF QUALITY, PERFORMANCE,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.  FOR THE AVOIDANCE
OF DOUBT, NOTHING CONTAINED IN THIS SECTION 13.4 SHALL OPERATE TO LIMIT OR
INVALIDATE ANY WARRANTY CONTAINED IN ANY ANCILLARY AGREEMENT.

 

13.5                           INDEMNIFICATION BY THE JV.  THE JV SHALL
INDEMNIFY EACH OF THE MEMBER PARTIES AND THEIR AFFILIATES AND THEIR RESPECTIVE
OFFICERS, DIRECTORS AND EMPLOYEES FROM AND AGAINST (A) (I) ALL PROCEEDINGS IN
WHICH SUCH MEMBER PARTY (OR ITS AFFILIATE) IS INVOLVED OR THREATENED TO BE
INVOLVED AND WHICH ARISES OUT OF THE EXPLOITATION OF THE COMBINATION PRODUCT OR
EITHER MEMBER PARTY’S (OR ITS AFFILIATE’S) PERFORMANCE OF ITS OBLIGATIONS UNDER
AND IN COMPLIANCE WITH THIS AGREEMENT, THE OPERATING AGREEMENT, THE SDEA OR THE
MTTA  AND (II) ALL LOSSES INCURRED BY THE INDEMNITEE RESULTING FROM SUCH
PROCEEDINGS, AND (B) WITHOUT LIMITATION OF THE FOREGOING CLAUSE (A), (I) ALL
PROCEEDINGS IN WHICH SUCH MEMBER PARTY (OR ITS AFFILIATE) IS INVOLVED OR
THREATENED TO BE INVOLVED AND WHICH ARISES OUT OF (A) THE CONTENT OF ANY
APPROVED MARKETING MATERIALS, TO THE EXTENT THAT SUCH APPROVED MARKETING
MATERIALS ARE USED BY BOTH MEMBER PARTIES, (B) THE PERFORMANCE OF SUCH MEMBER
PARTY’S DUTIES UNDER SECTION 3.3 (WITH RESPECT TO FORMULATION AND MANUFACTURING
PROCESS DEVELOPMENT RELATED ACTIVITIES), 5.2, 5.3, 5.4, 7.1 OR 8.1 OF THIS
AGREEMENT, (C) THE PERFORMANCE BY THE TAX MATTERS MEMBER OF ITS DUTIES UNDER THE
OPERATING AGREEMENT, OR (D) THE JV’S USE OF THE COMBINATION PRODUCT TRADEMARKS,
THE GILEAD LICENSED TRADEMARKS, AND/OR THE BMS LICENSED TRADEMARKS, AND (II) ALL
LOSSES INCURRED BY THE INDEMNITEE RESULTING FROM SUCH PROCEEDINGS, EXCEPT IN
EACH CASE ((A) AND (B)) TO THE EXTENT THAT SUCH PROCEEDINGS ARISE OUT OF OR SUCH
LOSSES WERE CAUSED BY THE INDEMNITEE MEMBER PARTY’S (OR ITS AFFILIATE’S OR
SUBCONTRACTOR’S) GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FAILURE TO COMPLY WITH OR
PERFORM ONE OR MORE OF ITS COVENANTS IN THIS AGREEMENT, THE OPERATING AGREEMENT,
THE SDEA OR THE MTTA, OR BREACH OR INACCURACY OF ONE OR MORE OF ITS
REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT, THE OPERATING AGREEMENT OR (IF
APPLICABLE) THE SDEA, AND EXCEPT IN EACH CASE ((A) AND (B)) TO THE EXTENT THAT
THE OTHER MEMBER PARTY HAS AN OBLIGATION OF INDEMNITY FOR SUCH LOSSES AND
PROCEEDINGS PURSUANT TO SECTION 13.6, 13.7 OR SECTION 11.4, AS THE CASE MAY BE. 
THE INDEMNIFICATION PROVIDED IN THIS SECTION 13.5 SHALL NOT BE DEEMED EXCLUSIVE
OF ANY OTHER RIGHTS TO WHICH THOSE INDEMNIFIED MAY BE ENTITLED UNDER ANY
APPLICABLE, STATUTES, AGREEMENT, VOTE OF THE JEC OR OTHERWISE.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, INCLUDING WITHOUT

 

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LIMITATION THIS SECTION 13.5 OR SECTION 13.6 OR 13.7, ALL LOSSES INCURRED BY THE
JV SHALL BE BORNE BY THE MEMBER PARTIES IN ACCORDANCE WITH THE TERMS OF THE
OPERATING AGREEMENT.

 

13.6         INDEMNIFICATION BY THE MEMBER PARTIES IN GENERAL.  EACH MEMBER
PARTY (THE “INDEMNIFYING MEMBER PARTY”) SHALL INDEMNIFY THE JV AND THE OTHER
MEMBER PARTY AND ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS AND
EMPLOYEES FROM AND AGAINST (A) ALL PROCEEDINGS IN WHICH THE JV OR SUCH OTHER
MEMBER PARTY (OR ITS AFFILIATE) IS INVOLVED OR THREATENED TO BE INVOLVED AND
WHICH ARISES OUT OF (I) THE INDEMNIFYING MEMBER PARTY’S (OR ITS AFFILIATE’S OR
SUBCONTRACTOR’S) GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FAILURE TO COMPLY WITH OR
PERFORM ONE OR MORE OF ITS COVENANTS IN THIS AGREEMENT, THE OPERATING AGREEMENT,
THE SDEA OR THE MTTA, OR BREACH OR INACCURACY OF ONE OR MORE OF ITS
REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT, THE OPERATING AGREEMENT OR (IF
APPLICABLE) THE SDEA, OR (II) THE CONTENT OF ANY APPROVED MARKETING MATERIALS
USED BY THE INDEMNIFYING MEMBER PARTY IN ACCORDANCE WITH SECTION 5.7, FOLLOWING
ITS RECEIPT OF NOTIFICATION FROM THE OTHER MEMBER PARTY IN ACCORDANCE WITH
SECTION 5.7 THAT THE OTHER MEMBER PARTY HAS ELECTED NOT TO USE SUCH APPROVED
MARKETING MATERIALS IN THE PROMOTION OF THE COMBINATION PRODUCT IN THE TERRITORY
(AND PROVIDED THAT THE OTHER MEMBER PARTY DOES NOT USE SUCH APPROVED MARKETING
MATERIALS IN THE PROMOTION OF THE COMBINATION PRODUCT IN THE TERRITORY), AND (B)
ALL LOSSES INCURRED BY THE INDEMNITEE RESULTING FROM SUCH PROCEEDINGS, EXCEPT TO
THE EXTENT THAT SUCH PROCEEDINGS ARISE OUT OF OR SUCH LOSSES WERE CAUSED BY THE
OTHER MEMBER PARTY’S (OR ITS AFFILIATE’S OR SUBCONTRACTOR’S) GROSS NEGLIGENCE,
WILLFUL MISCONDUCT, FAILURE TO COMPLY WITH OR PERFORM ONE OR MORE OF ITS
COVENANTS IN THIS AGREEMENT, THE OPERATING AGREEMENT, THE SDEA OR THE MTTA, OR
BREACH OR INACCURACY OF ONE OR MORE OF ITS REPRESENTATIONS AND WARRANTIES IN
THIS AGREEMENT, THE OPERATING AGREEMENT OR (IF APPLICABLE) THE SDEA, AND EXCEPT
TO THE EXTENT A MEMBER PARTY OR THE JV HAS AN OBLIGATION OF INDEMNITY FOR LOSSES
AND PROCEEDINGS PURSUANT TO SECTION 13.7 OR SECTION 11.4 OR SECTION 13.5, AS THE
CASE MAY BE.  THE INDEMNIFICATION PROVIDED IN THIS SECTION 13.6 SHALL NOT BE
DEEMED EXCLUSIVE OF ANY OTHER RIGHTS TO WHICH THOSE INDEMNIFIED MAY BE ENTITLED
UNDER ANY APPLICABLE STATUTES, AGREEMENT, VOTE OF THE JEC OR OTHERWISE.

 

13.7         INDEMNIFICATION FOR CERTAIN PRODUCT LIABILITY RELATED MATTERS.

 

(A)                        GILEAD SHALL INDEMNIFY THE JV AND EACH BMS
INDEMNIFIED PARTY FROM AND AGAINST (I) ALL PROCEEDINGS IN WHICH THE JV OR SUCH
BMS INDEMNIFIED PARTY IS INVOLVED OR THREATENED TO BE INVOLVED AND WHICH ARISE
FROM PERSONAL INJURY OR DEATH CAUSED BY THE COMBINATION PRODUCT DUE TO DESIGN
DEFECTS, MANUFACTURING DEFECTS OR THE INHERENT CHARACTERISTICS THEREOF, WHERE
THE [*] THAT SUCH DEFECT(S) OR CHARACTERISTICS ARE THE DIRECT RESULT OF THE
INCORPORATION IN THE COMBINATION PRODUCT OF TDF, FTC OR BOTH TDF AND FTC, IN
EACH CASE WITHOUT REFERENCE TO THE INCORPORATION IN THE COMBINATION PRODUCT OF
EFV (OTHER THAN ANY SELECTED PRODUCT LIABILITY CLAIMS), IRRESPECTIVE OF WHETHER
SUCH DEFECT(S) OR CHARACTERISTICS (OR ANY ASSOCIATED DEFECTS OR CHARACTERISTICS
OF TDF AND/OR FTC) ARE [*], AND (II) ALL LOSSES INCURRED BY THE JV OR SUCH BMS
INDEMNIFIED PARTY, AS THE CASE MAY BE, RESULTING FROM SUCH PROCEEDINGS, EXCEPT
TO THE EXTENT THAT SUCH PROCEEDINGS ARISE OUT OF OR SUCH LOSSES WERE CAUSED BY
BMS’ (OR ITS AFFILIATE’S OR SUBCONTRACTOR’S) GROSS NEGLIGENCE, WILLFUL
MISCONDUCT, FAILURE TO COMPLY WITH OR PERFORM ONE OR MORE OF ITS COVENANTS IN
THIS AGREEMENT, THE OPERATING AGREEMENT, THE SDEA OR THE MTTA, OR BREACH OR
INACCURACY OF ONE OR MORE OF ITS REPRESENTATIONS AND WARRANTIES IN THIS
AGREEMENT, THE OPERATING AGREEMENT OR (IF APPLICABLE) THE SDEA.

 

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(B)                                 BMS SHALL INDEMNIFY THE JV AND EACH GILEAD
INDEMNIFIED PARTY FROM AND AGAINST (I) ALL PROCEEDINGS IN WHICH THE JV OR SUCH
GILEAD INDEMNIFIED PARTY IS INVOLVED OR THREATENED TO BE INVOLVED AND WHICH
ARISE FROM PERSONAL INJURY OR DEATH CAUSED BY THE COMBINATION PRODUCT DUE TO
DESIGN DEFECTS, MANUFACTURING DEFECTS OR THE INHERENT CHARACTERISTICS THEREOF,
WHERE THE [*] THAT SUCH DEFECT(S) OR CHARACTERISTICS ARE THE DIRECT RESULT OF
THE INCORPORATION IN THE COMBINATION PRODUCT OF EFV, IN EACH CASE WITHOUT
REFERENCE TO THE INCORPORATION IN THE COMBINATION PRODUCT OF EITHER OR BOTH OF
TDF AND FTC (OTHER THAN ANY SELECTED PRODUCT LIABILITY CLAIMS), IRRESPECTIVE OF
WHETHER SUCH DEFECT(S) OR CHARACTERISTICS (OR ANY ASSOCIATED DEFECTS OR
CHARACTERISTICS OF EFV) ARE [*], AND (II) ALL LOSSES INCURRED BY THE JV OR SUCH
GILEAD INDEMNIFIED PARTY, AS THE CASE MAY BE, RESULTING FROM SUCH PROCEEDINGS,
EXCEPT TO THE EXTENT THAT SUCH PROCEEDINGS ARISE OUT OF OR SUCH LOSSES WERE
CAUSED BY GILEAD’S (OR ITS AFFILIATE’S OR SUBCONTRACTOR’S) GROSS NEGLIGENCE,
WILLFUL MISCONDUCT, FAILURE TO COMPLY WITH OR PERFORM ONE OR MORE OF ITS
COVENANTS IN THIS AGREEMENT, THE OPERATING AGREEMENT, THE SDEA OR THE MTTA, OR
BREACH OR INACCURACY OF ONE OR MORE OF ITS REPRESENTATIONS AND WARRANTIES IN
THIS AGREEMENT, THE OPERATING AGREEMENT OR (IF APPLICABLE) THE SDEA.

 

(C)                                  THE JV SHALL INDEMNIFY EACH OF THE GILEAD
INDEMNIFIED PARTIES AND BMS INDEMNIFIED PARTIES FROM AND AGAINST (I) ALL
PROCEEDINGS IN WHICH ANY SUCH GILEAD INDEMNIFIED PARTY OR BMS INDEMNIFIED PARTY,
AS THE CASE MAY BE, IS INVOLVED OR THREATENED TO BE INVOLVED AND WHICH ARISE
FROM PERSONAL INJURY OR DEATH CAUSED BY THE COMBINATION PRODUCT DUE TO DESIGN
DEFECTS, MANUFACTURING DEFECTS OR THE INHERENT CHARACTERISTICS THEREOF, (A)
WHERE THE [*] THAT SUCH DEFECT(S) OR CHARACTERISTICS ARE THE DIRECT RESULT OF
BOTH (1) EFV AND (2) EITHER OR BOTH OF TDF AND/OR FTC BEING INCORPORATED INTO
THE COMBINATION PRODUCT, (B) WHERE IT ULTIMATELY CANNOT BE OR IS NOT DETERMINED
WHETHER SUCH DEFECT(S) OR CHARACTERISTICS ARE THE DIRECT RESULT OF EFV, ON THE
ONE HAND, AND EITHER OR BOTH OF TDF AND FTC, ON THE OTHER HAND, BEING
INCORPORATED INTO THE COMBINATION PRODUCT, OR (C) WHERE SUCH DEFECT(S) OR
CHARACTERISTICS ARE THE DIRECT RESULT OF AN ASPECT OF THE COMBINATION PRODUCT
OTHER THAN ANY OF ITS ACTIVE INGREDIENTS (EACH SUCH CLAIM ((A), (B) OR (C)) A
“SELECTED PRODUCT LIABILITY CLAIM”); AND (II) ALL LOSSES INCURRED BY THE GILEAD
INDEMNIFIED PARTY OR BMS INDEMNIFIED PARTY, AS THE CASE MAY BE, RESULTING FROM
SUCH PROCEEDINGS; IN EACH CASE EXCEPT TO THE EXTENT THAT SUCH PROCEEDINGS ARISE
OUT OF OR SUCH LOSSES WERE CAUSED BY A MEMBER PARTY’S (OR ITS AFFILIATE’S OR
SUBCONTRACTOR’S) GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FAILURE TO COMPLY WITH OR
PERFORM ONE OR MORE OF ITS COVENANTS IN THIS AGREEMENT, THE OPERATING AGREEMENT,
THE SDEA OR THE MTTA, OR BREACH OR  INACCURACY OF ONE OR MORE OF ITS
REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT, THE OPERATING AGREEMENT OR (IF
APPLICABLE) THE SDEA, AND EXCEPT TO THE EXTENT A MEMBER PARTY HAS AN OBLIGATION
OF INDEMNITY FOR SUCH LOSSES AND PROCEEDINGS PURSUANT TO SECTION 11.4.

 

(D)                                 FOR PURPOSES OF SECTIONS 13.7(B) AND 13.7(C)
ONLY, [*] SHALL BE DEEMED TO BE AN AFFILIATE OF GILEAD;  PROVIDED, HOWEVER, THAT
BMS SHALL HAVE NO GREATER SCOPE OF LIABILITY TO [*] PURSUANT TO THIS SECTION
13.7(D) THAN THE LESSER OF (I) THE SCOPE OF LIABILITY OF BMS TO GILEAD PURSUANT
TO SECTION 13.7(B) AND (II) THE SCOPE OF LIABILITY OF GILEAD TO [*] PURSUANT TO
[*] OF THE [*] AS OF THE EFFECTIVE DATE.

 

13.8         INDEMNIFICATION PROCEDURE.

 

(A)                                  EACH INDEMNIFIED PARTY AGREES TO GIVE THE
INDEMNIFYING PARTY PROMPT WRITTEN NOTICE OF ANY LOSSES OR THE DISCOVERY OF A
FACT (INCLUDING ANY PROCEEDING) UPON

 

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WHICH SUCH INDEMNIFIED PARTY INTENDS TO BASE A REQUEST FOR INDEMNIFICATION UNDER
SECTION 11.4, 13.5, 13.6 OR 13.7, AS THE CASE MAY BE (IT BEING UNDERSTOOD AND
AGREED, HOWEVER, THAT THE FAILURE TO GIVE NOTICE AS PROVIDED IN THIS SECTION
13.8(A) SHALL NOT RELIEVE THE INDEMNIFYING PARTY OF ANY SUCH INDEMNIFICATION
OBLIGATIONS EXCEPT AND ONLY TO THE EXTENT THAT THE INDEMNIFYING PARTY IS
ACTUALLY MATERIALLY PREJUDICED AS A RESULT OF SUCH FAILURE TO GIVE NOTICE).

 

(B)                                 EACH PARTY SHALL FURNISH PROMPTLY TO THE
OTHER PARTIES, COPIES OF ALL PAPERS AND OFFICIAL DOCUMENTS RECEIVED IN RESPECT
OF ANY PROCEEDINGS.  THE INDEMNIFIED PARTY SHALL REASONABLY COOPERATE AS
REQUESTED BY AND AT THE EXPENSE OF THE INDEMNIFYING PARTY IN THE DEFENSE OF ANY
PROCEEDINGS.

 

(C)                                  WITH RESPECT TO ANY LOSSES RELATING SOLELY
TO THE PAYMENT OF MONEY DAMAGES AND WHICH SHALL NOT RESULT IN THE INDEMNIFIED
PARTY’S BECOMING SUBJECT TO INJUNCTIVE OR OTHER RELIEF OR OTHERWISE ADVERSELY
AFFECTING THE INDEMNIFIED PARTY IN ANY MANNER, AND AS TO WHICH THE INDEMNIFYING
PARTY SHALL HAVE ACKNOWLEDGED IN WRITING THE OBLIGATION TO INDEMNIFY THE
INDEMNIFIED PARTY UNDER THIS AGREEMENT, THE INDEMNIFYING PARTY SHALL HAVE THE
SOLE RIGHT TO DEFEND, SETTLE OR OTHERWISE DISPOSE OF SUCH PROCEEDING, ON SUCH
TERMS AS THE INDEMNIFYING PARTY SHALL DEEM APPROPRIATE.

 

(D)                                 WITH RESPECT TO ALL LOSSES OTHER THAN THOSE
ADDRESSED IN SECTION 13.8(C), AND AS TO WHICH THE INDEMNIFYING PARTY SHALL HAVE
ACKNOWLEDGED IN WRITING THE OBLIGATION TO INDEMNIFY THE INDEMNIFIED PARTY UNDER
THIS AGREEMENT,  THE INDEMNIFYING PARTY SHALL HAVE THE SOLE RIGHT TO CONTROL THE
DEFENSE OF THE RELEVANT PROCEEDING, PROVIDED THAT THE INDEMNIFYING PARTY SHALL
OBTAIN THE WRITTEN CONSENT OF THE INDEMNIFIED PARTY, WHICH SHALL NOT BE
UNREASONABLY WITHHELD, PRIOR TO CEASING TO DEFEND, SETTLING OR OTHERWISE
DISPOSING OF ANY PROCEEDING IF AS A RESULT THEREOF (I) THE INDEMNIFIED PARTY
WOULD BECOME RESPONSIBLE FOR THE PAYMENT OF ANY MONEY DAMAGES OR OTHER COSTS
(WITH RESPECT TO WHICH THE INDEMNIFYING PARTY HAS CONTESTED OR CHALLENGED OR MAY
CONTEST OR CHALLENGE ITS OBLIGATION TO INDEMNIFY), (II) THE INDEMNIFIED PARTY
WOULD BECOME SUBJECT TO INJUNCTIVE OR OTHER EQUITABLE RELIEF OR ANY REMEDY OTHER
THAN THE PAYMENT OF MONEY BY THE INDEMNIFYING PARTY OR (III) THE INDEMNIFIED
PARTY WOULD OTHERWISE BE ADVERSELY AFFECTED.

 

(E)                                  FURTHERMORE, WITH RESPECT TO EACH OF
SECTION 13.8(C) AND 13.8(D), THE INDEMNIFYING PARTY SHALL BE ENTITLED TO CONTROL
THE PROCEEDING ONLY IF IT SO NOTIFIES THE INDEMNIFIED PARTY WITHIN THIRTY (30)
DAYS AFTER DELIVERY OF THE NOTICE BY THE INDEMNIFIED PARTY UNDER SECTION
13.8(A).

 

(F)                                    THE INDEMNIFYING PARTY SHALL NOT BE
LIABLE FOR ANY LOSSES RESULTING FROM ANY SETTLEMENT OR OTHER DISPOSITION OF A
PROCEEDING BY THE INDEMNIFIED PARTY WHICH IS REACHED WITHOUT THE WRITTEN CONSENT
OF THE INDEMNIFYING PARTY.

 

(G)                                 THE ALLOCATION AMONG THE MEMBER PARTIES AND
THE JV OF ANY LIABILITY FOR A LOSS OR PROCEEDING, IF NOT OTHERWISE DETERMINED IN
A COURT OF LAW, SHALL BE CONSIDERED BY THE JEC AND, IF THE JEC DOES NOT REACH
AGREEMENT ON SUCH ALLOCATION, BY UNANIMOUS MEMBER VOTE OR UNANIMOUS WRITTEN
CONSENT OF ITS MEMBERS, EITHER MEMBER PARTY SHALL HAVE THE RIGHT TO REFER THE
DISPUTE TO ARBITRATION PURSUANT TO SECTION 15.6.  THE DISPUTE

 

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RESOLUTION PROCEDURES IN SECTION 2.8 SHALL NOT APPLY TO ANY DISPUTES ARISING
UNDER THIS SECTION 13.8(G).

 

(H)                                 THE OUT-OF-POCKET EXPENSES REASONABLY
INCURRED BY ANY INDEMNIFIED PARTY IN CONNECTION WITH ANY PROCEEDING SHALL BE
REIMBURSED ON A CALENDAR QUARTER BASIS BY THE INDEMNIFYING PARTY, WITHOUT
PREJUDICE TO THE INDEMNIFYING PARTY’S RIGHT TO CONTEST THE INDEMNIFIED PARTY’S
RIGHT TO INDEMNIFICATION AND SUBJECT TO REFUND IN THE EVENT THE INDEMNIFYING
PARTY IS ULTIMATELY HELD NOT TO BE OBLIGATED TO INDEMNIFY THE INDEMNIFIED PARTY.

 

13.9         LIMITATION ON DAMAGES.  EXCEPT FOR BREACHES OF SECTION 12, THE
PARTIES SHALL NOT BE LIABLE TO EACH OTHER FOR SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, FOR LOST PROFITS), WHETHER
IN CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHERWISE, ARISING
OUT OF ANY BREACH OR FAILURE TO PERFORM ANY PROVISION(S) OF THIS AGREEMENT;
PROVIDED, HOWEVER, THAT THE PARTIES SHALL BE LIABLE TO EACH OTHER FOR [*]; AND
PROVIDED, FURTHER, THAT THE PARTIES SHALL BE LIABLE TO EACH OTHER FOR [*] AND
[*], PROVIDED THAT SUCH BREACHES ARE INTENTIONAL OR ARISE OUT OF ACTS OR
OMISSIONS CONSTITUTING GROSS NEGLIGENCE.  NOTHING IN THIS SECTION 13.9 IS
INTENDED TO OR SHALL OPERATE TO LIMIT A PARTY’S OBLIGATIONS OF INDEMNITY WITH
RESPECT TO LOSSES AWARDED TO THIRD PARTIES IN A PROCEEDING UNDER SECTIONS 11.4,
13.5, 13.6 AND 13.7.

 

13.10       ANCILLARY AGREEMENTS.  ANY REFERENCE IN THIS AGREEMENT TO AN
ANCILLARY AGREEMENT (OTHER THAN THE SDEA) OR ANY OBLIGATION UNDER ANY SUCH
ANCILLARY AGREEMENT, SHALL NOT BE CONSTRUED TO INCLUDE WITHIN THE SCOPE OF  THE
INDEMNIFICATION OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT ANY LIABILITY
ARISING OUT OF ANY SUCH ANCILLARY AGREEMENT OR ANY OBLIGATION UNDER ANY SUCH
ANCILLARY AGREEMENT.

 

13.11       EMPLOYEES.  THE PARTIES AGREE THAT, AS AMONG THE PARTIES, ALL
ACTIONS TAKEN OR OMITTED TO BE TAKEN BY ANY EMPLOYEE OF A MEMBER PARTY (OR ANY
OF ITS AFFILIATES) IN HIS OR HER CAPACITY AS A MEMBER OF THE JEC, ANY OPERATING
COMMITTEE OR THE PRICING COMMITTEE, AND ALL OTHER ACTIONS TAKEN OR OMITTED TO BE
TAKEN BY ANY EMPLOYEE OF A MEMBER PARTY (OR ANY OF ITS AFFILIATES) WITH RESPECT
TO THE PROJECT ACTIVITIES, SHALL BE ATTRIBUTED ONLY TO SUCH MEMBER PARTY. 
ACCORDINGLY, ANY CLAIMS BY THE OTHER MEMBER PARTY OR THE JV ARISING OUT OF SUCH
ACTIONS OR INACTIONS SHALL BE ASSERTED DIRECTLY AGAINST THE MEMBER PARTY WHO IS
(OR WHOSE AFFILIATE IS) SUCH INDIVIDUAL’S EMPLOYER, AND SUCH OTHER MEMBER PARTY,
OR THE JV, AS THE CASE MAY BE, HEREBY WAIVES ANY SUCH CLAIMS AGAINST SUCH
INDIVIDUAL.

 

SECTION 14.
TERM AND TERMINATION

 

14.1         TERM.  THE TERM OF THIS AGREEMENT SHALL COMMENCE AS OF THE
EFFECTIVE DATE AND SHALL CONTINUE UNTIL TERMINATED BY MUTUAL AGREEMENT OF THE
PARTIES OR OTHERWISE IN ACCORDANCE WITH THIS SECTION 14.

 

14.2         CERTAIN LITIGATION. THIS AGREEMENT SHALL TERMINATE UPON NOTICE
GIVEN BY EITHER MEMBER PARTY TO THE OTHER MEMBER PARTY IN THE EVENT THAT ANY
U.S. GOVERNMENTAL AUTHORITY SEEKS OR OBTAINS A TEMPORARY RESTRAINING ORDER OR
PRELIMINARY INJUNCTION TO ENJOIN THE

 

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TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR INSTITUTES LITIGATION SEEKING
OTHER RELIEF IN RESPECT OF SUCH TRANSACTIONS UNDER ANY APPLICABLE LAW IN THE
TERRITORY.

 

14.3         TERMINATION FOR NDA FILING DELAY.  EITHER MEMBER PARTY MAY
TERMINATE THIS AGREEMENT BY NOTICE TO THE OTHER MEMBER PARTY IF EITHER (A) NO
NDA FOR THE COMBINATION PRODUCT IN THE FIELD IS FILED BY DECEMBER 31, 2006, OR
(B) NO NDA FOR THE COMBINATION PRODUCT IN THE FIELD IS APPROVED BY DECEMBER 31,
2007.

 

14.4         MATERIAL DEFAULT.

 

(A)                                  IF A MEMBER PARTY (THE “BREACHING MEMBER
PARTY”) FAILS TO COMPLY WITH OR PERFORM, IN ANY MATERIAL RESPECT, ANY OF ITS
MATERIAL OBLIGATIONS CONTAINED IN THIS AGREEMENT OR THE OPERATING AGREEMENT, OR
ANY ACT OR OMISSION BY SUCH MEMBER PARTY CAUSES A FAILURE BY THE JV TO COMPLY
WITH OR PERFORM, IN ANY MATERIAL RESPECT, ANY OF ITS MATERIAL OBLIGATIONS
CONTAINED IN THIS AGREEMENT OR THE OPERATING AGREEMENT (ANY SUCH DEFAULT, A
“MATERIAL DEFAULT”), THEN THE OTHER MEMBER PARTY (THE “NON-BREACHING MEMBER
PARTY”) SHALL HAVE THE RIGHT TO GIVE TO THE BREACHING MEMBER PARTY NOTICE
SPECIFYING THE NATURE OF THE MATERIAL DEFAULT.  THE BREACHING MEMBER PARTY SHALL
HAVE A PERIOD OF SIXTY (60) DAYS AFTER RECEIPT OF SUCH NOTICE TO FULLY CURE THE
MATERIAL DEFAULT IN A MANNER REASONABLY ACCEPTABLE TO THE NON-BREACHING MEMBER
PARTY, AND, IF IT DOES NOT DO SO WITHIN SUCH PERIOD, THE MEMBER PARTIES SHALL
DISCUSS IN GOOD FAITH APPROPRIATE ADJUSTMENTS TO OR CANCELLATION OF THE MEMBER
PARTIES’ RESPECTIVE OBLIGATIONS UNDER THIS AGREEMENT TO PERMIT THE CONTINUATION
OF THIS AGREEMENT AND THE JV ON A MUTUALLY AGREEABLE BASIS.  FOR THE AVOIDANCE
OF DOUBT, THE NON-BREACHING MEMBER PARTY MAY, IN ITS SOLE DISCRETION, DELIVER A
NOTICE OF MATERIAL DEFAULT TO THE BREACHING MEMBER PARTY PRIOR TO COMPLETION OF
THE DISPUTE RESOLUTION PROCEDURES SET FORTH IN SECTION 2.8, IN WHICH CASE THE
SIXTY (60) DAY CURE PERIOD REFERRED TO IN THE PRECEDING SENTENCE SHALL BEGIN TO
RUN UPON RECEIPT OF SUCH NOTICE AND SHALL RUN CONCURRENTLY WITH SUCH PROCEDURES.

 

(B)                                 IF THE BREACHING MEMBER PARTY DOES NOT CURE
A MATERIAL DEFAULT PURSUANT TO SECTION 14.4(A) AND THE MEMBER PARTIES’
DISCUSSIONS PURSUANT TO THE LAST SENTENCE OF SECTION 14.4(A) DO NOT LEAD TO A
MUTUALLY AGREEABLE RESTRUCTURING OF THIS AGREEMENT, THEN IF THE NON-BREACHING
MEMBER PARTY AND THE BREACHING MEMBER PARTY MUTUALLY AGREE THAT IT IS BOTH
DESIRABLE AND PRACTICABLE TO WITHDRAW THE COMBINATION PRODUCT FROM THE MARKET IN
THE TERRITORY, THE NON-BREACHING MEMBER PARTY SHALL HAVE THE RIGHT TO TERMINATE
THIS AGREEMENT UPON NOTICE TO THE BREACHING MEMBER PARTY GIVEN WITHIN THIRTY
(30) DAYS OF THE CESSATION OF THE MEMBER PARTIES’ DISCUSSIONS PURSUANT TO THE
LAST SENTENCE OF SECTION 14.4(A).  ANY SUCH TERMINATION SHALL BE EFFECTIVE UPON
SUCH WITHDRAWAL, AND THE MEMBER PARTIES SHALL COOPERATE WITH EACH OTHER AND
CAUSE THE JV TO EFFECT SUCH WITHDRAWAL AS PROMPTLY AS PRACTICABLE UNDER
APPLICABLE LAW.

 

(C)                                  WHETHER OR NOT THERE IS A TERMINATION OF
THIS AGREEMENT PURSUANT TO SECTION 14.4(B), THE NON-BREACHING MEMBER PARTY SHALL
HAVE THE RIGHT TO SEEK DAMAGES ON ACCOUNT OF THE MATERIAL DEFAULT IN AN
ARBITRATION PURSUANT TO SECTION 15.6.  THE EXPRESS REMEDIES OF THE NON-BREACHING
MEMBER PARTY PURSUANT TO THIS SECTION 14.4 SHALL BE IN ADDITION TO ANY OTHER
REMEDIES IN FAVOR OF THE NON-BREACHING MEMBER PARTY (OR, IF APPLICABLE, THE JV)
PROVIDED FOR IN THIS AGREEMENT OR THE OPERATING AGREEMENT, AS APPLICABLE, OR
UNDER THE BMS GUARANTEE AGREEMENT OR GILEAD GUARANTEE AGREEMENT, AS APPLICABLE.

 

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(D)                                 THE PARTIES ACKNOWLEDGE THAT EACH MEMBER
PARTY HAS ENTERED INTO THIS AGREEMENT AND THE OPERATING AGREEMENT IN RELIANCE ON
THE OTHER MEMBER PARTY’S CONTINUED COMPLIANCE WITH, AND PERFORMANCE OF, ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OPERATING AGREEMENT.  ACCORDINGLY, EACH
MEMBER PARTY AGREES THAT ANY MATERIAL DEFAULT MAY CAUSE SEVERE AND IRREPARABLE
DAMAGE TO THE NON-BREACHING MEMBER PARTY OR THE JV AS APPLICABLE, FOR WHICH
MONEY DAMAGES WOULD REPRESENT AN INSUFFICIENT REMEDY.  IN THE EVENT OF ANY SUCH
MATERIAL DEFAULT, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
THE NON-BREACHING MEMBER PARTY SHALL BE AUTHORIZED AND ENTITLED TO SEEK FROM ANY
ARBITRATOR UNDER SECTION 15.6 THE REMEDY OF SPECIFIC PERFORMANCE WITH RESPECT TO
ANY SUCH MATERIAL DEFAULT, AS WELL AS ANY OTHER RELIEF PERMITTED BY APPLICABLE
LAW AND MAY OBTAIN THAT RELIEF WITHOUT MAKING A SHOWING OF THE INSUFFICIENCY OF
MONEY DAMAGES.  THE BREACHING MEMBER PARTY AGREES TO WAIVE ANY REQUIREMENT THAT
THE NON-BREACHING MEMBER PARTY POST BOND AS A CONDITION FOR OBTAINING ANY SUCH
RELIEF.

 

14.5         TERMINATION UPON GENERIC LAUNCH.  EITHER MEMBER PARTY (THE
“CONTINUING MEMBER PARTY”) MAY TERMINATE THIS AGREEMENT BY NOTICE TO THE OTHER
MEMBER PARTY (THE “TERMINATED MEMBER PARTY”) IN THE EVENT THAT THERE IS THE
LAUNCH IN THE TERRITORY OF AT LEAST ONE (1) GENERIC VERSION OF ALL OF THE SINGLE
AGENT PRODUCTS (OR THE DOUBLE AGENT PRODUCT) OF THE TERMINATED MEMBER PARTY (A
“GENERIC VERSION LAUNCH”) AND THE CONTINUING MEMBER PARTY DELIVERS NOTICE OF
TERMINATION WITHIN THIRTY (30) DAYS AFTER THE GENERIC VERSION LAUNCH.  SUCH
TERMINATION SHALL BE EFFECTIVE ON THE LAST DAY OF THE CALENDAR QUARTER IN WHICH
SUCH NOTICE IS GIVEN.

 

14.6         CONSEQUENCES OF TERMINATION.

 

(A)                                  TERMINATION PURSUANT TO SECTIONS 14.2, 14.3
OR 14.4(B).  IF A MEMBER PARTY TERMINATES THIS AGREEMENT PURSUANT TO SECTION
14.2, 14.3 OR 14.4(B), (I) THE LICENSE AND SUBLICENSE GRANTS AND RIGHTS OF
REFERENCE IN SECTION 6 FROM THE MEMBER PARTIES TO THE JV SHALL TERMINATE, (II)
THE RIGHTS OF REFERENCE AND LICENSE GRANTS IN SECTION 6.3(A)(1) AND 6.3(B)(1)
SHALL SURVIVE SOLELY TO THE EXTENT NECESSARY IN ORDER FOR THE LICENSEE MEMBER
PARTY TO SUPPORT THE LABELING OF ITS SINGLE AGENT PRODUCT(S) AND/OR DOUBLE AGENT
PRODUCT, AS APPLICABLE, AS APPROVED AS OF THE EFFECTIVE DATE OF SUCH
TERMINATION, (III) THE LICENSE GRANTS IN SECTION 6.3(A)(2) AND 6.3(B)(2) SHALL
SURVIVE, (IV) THE LICENSE GRANTS AND RIGHTS OF REFERENCE IN SECTION 6 FROM THE
JV TO THE MEMBER PARTIES SHALL SURVIVE UNTIL THE FIRST DATE ON WHICH THE JV HAS
BEEN DISSOLVED AND ANY AND ALL INTANGIBLE PROPERTY (AS DEFINED IN THE OPERATING
AGREEMENT) HAS BEEN DISTRIBUTED IN KIND TO THE MEMBER PARTIES PURSUANT TO
SECTION 10.2(C) OF THE OPERATING AGREEMENT, (V) UNLESS GILEAD IS THE BREACHING
MEMBER PARTY, THE LICENSES AND OTHER RIGHTS GRANTED TO GILEAD IN SECTIONS 6.2(D)
AND 6.4(D) WITH RESPECT TO THE COMBINATION PRODUCT OUTSIDE THE TERRITORY, CANADA
AND EUROPE SHALL SURVIVE (IN WHICH EVENT SUCH LICENSES AND OTHER RIGHTS SHALL BE
DEEMED TO BE GRANTED BY BMS DIRECTLY TO GILEAD), (VI) THE JV SHALL BE DISSOLVED
IN ACCORDANCE WITH THE OPERATING AGREEMENT AND, IN CONNECTION WITH SUCH
DISSOLUTION, EACH COMBINATION PRODUCT TRADEMARK SHALL BE SOLD TO A MEMBER IN A
BIDDING PROCESS, (VII) THE OPERATING AGREEMENT AND THE ANCILLARY AGREEMENTS
SHALL TERMINATE (EXCEPT AS EXPRESSLY PROVIDED IN ANY SUCH AGREEMENT) AND (VIII)
EACH MEMBER PARTY SHALL PROMPTLY (AND IN ANY EVENT WITHIN THIRTY (30) DAYS
THEREAFTER) MAKE ARRANGEMENTS FOR THE RETURN OR DISPOSAL, AT THE OTHER MEMBER
PARTY’S OPTION, OF ANY CONFIDENTIAL INFORMATION, IN TANGIBLE OR INTANGIBLE FORM
(EXCEPT FOR (X) ONE (1) COPY WHICH MAY BE RETAINED SOLELY FOR ARCHIVAL PURPOSES
AND (Y) CONFIDENTIAL INFORMATION RELATING TO ANY SURVIVING LICENSES AND OTHER
RIGHTS DESCRIBED ABOVE).

 

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(B)           TERMINATION PURSUANT TO SECTION 14.5.  UPON TERMINATION OF THIS
AGREEMENT PURSUANT TO SECTION 14.5, THE JV SHALL NOT BE DISSOLVED AND THE
FOLLOWING TERMS AND CONDITIONS SHALL APPLY:

 

(I)                                     (A) THE LICENSE GRANTS AND RIGHTS OF
REFERENCE IN SECTION 6 FROM THE TERMINATED MEMBER PARTY TO THE JV SHALL SURVIVE
(EXCEPT FOR THE TRADEMARK LICENSE GRANTS IN SECTION 6.6, WHICH SHALL SURVIVE
ONLY TO THE EXTENT NECESSARY TO ENABLE THE CONTINUING MEMBER PARTY TO IDENTIFY
THE TERMINATED MEMBER PARTY ON THE LABEL OF THE COMBINATION PRODUCT AND/OR IN
THE COMBINATION PRODUCT REGULATORY DOCUMENTATION, AS REQUIRED BY APPLICABLE
LAW); (B) IF GILEAD IS THE TERMINATED MEMBER PARTY, THE LICENSE GRANT IN SECTION
6.7 FROM THE JV TO GILEAD SHALL TERMINATE; (C) THE LICENSE AND SUBLICENSE GRANTS
IN SECTION 6.2 FROM THE JV TO THE TERMINATED MEMBER PARTY SHALL TERMINATE (OTHER
THAN SECTION 6.2(A)(3) OR 6.2(B)(3), AS APPLICABLE), AND 6.2(C) AND, IF GILEAD
IS THE TERMINATED MEMBER PARTY, OTHER THAN THE SUBLICENSE GRANT IN SECTION
6.2(D) WHICH SHALL BE ADDRESSED AS SET FORTH IN CLAUSE (F) BELOW); (D) THE
LICENSE GRANTS AND RIGHTS OF REFERENCE FROM A MEMBER PARTY TO THE OTHER MEMBER
PARTY IN SECTION 6.3 SHALL SURVIVE; (E) THE RIGHTS OF REFERENCE FROM THE JV TO
THE TERMINATED MEMBER PARTY IN SECTION 6.4(B) OR 6.4(C) SHALL SURVIVE; AND (F)
IF GILEAD IS THE TERMINATED MEMBER PARTY, THE SUBLICENSES AND RIGHTS OF
REFERENCE GRANTED TO GILEAD IN SECTIONS 6.2(D) AND 6.4(D) WITH RESPECT TO THE
COMBINATION PRODUCT OUTSIDE THE TERRITORY, CANADA AND EUROPE SHALL SURVIVE.

 

(II)                                  THE CONTINUING MEMBER PARTY SHALL PAY OR
CAUSE THE JV TO PAY TO THE TERMINATED PARTY, IN THE MANNER SET FORTH IN SECTIONS
7.3(B) AND (D) AND SUBJECT MUTATIS MUTANDIS TO SECTION 7.4, WITH RESPECT TO THE
PERIOD FROM THE EFFECTIVE DATE OF SUCH TERMINATION THROUGH THE [*] THEREOF, AN
AMOUNT DETERMINED PURSUANT TO THE FOLLOWING FORMULA (WITH NET SALES AND NET
SELLING PRICES IN EACH CASE BEING DETERMINED FOR THE APPLICABLE YEARLY PERIOD):

 

Net Sales of the Combination Product * ([[Net Selling Price of the Combination
Product] – [Net Selling Price of the Continuing Member Party’s Single Agent
Product or Double Agent Product]]/[Net Selling Price of the Combination
Product]), multiplied by the following percentages for the following twelve
(12)-month periods commencing with the effective date of termination:

 

[*]

 

The JV or other paying Member Party shall pay any amounts owed to a Member Party
pursuant to this Section 14.6(b)(ii) within sixty (60) days of the end of the
Calendar Quarter in which the relevant Net Sales were invoiced. Each such
payment shall be accompanied by a written report, providing a detailed breakdown
of the calculation of amounts paid for the relevant period.

 

(III)                               THE TERMINATED MEMBER PARTY, AT ITS OWN
ELECTION (OF WHICH IT SHALL PROMPTLY NOTIFY THE CONTINUING MEMBER PARTY IN
WRITING), SHALL (PURSUANT TO A LICENSE AND/OR SUPPLY AGREEMENT CONTAINING THE
FOLLOWING TERMS AND ANY OTHER TERMS UPON WHICH THE MEMBER PARTIES MUTUALLY
AGREE) EITHER (A) ENABLE THE CONTINUING MEMBER PARTY TO MANUFACTURE QUANTITIES
OF EFV OR TDF AND FTC, AS THE CASE MAY BE, IN BULK ACTIVE PHARMACEUTICAL
INGREDIENT FORM FOR USE IN THE MANUFACTURE OF THE COMBINATION PRODUCT FOR USE IN

 

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THE TERRITORY, IN WHICH EVENT THE TERMINATED MEMBER PARTY SHALL (1)
AUTOMATICALLY BE DEEMED TO GRANT A ROYALTY-FREE, NON-EXCLUSIVE LICENSE TO THE
CONTINUING MEMBER PARTY (OR ITS THIRD PARTY DESIGNEE, WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE TERMINATED MEMBER PARTY) UNDER THE TERMINATED MEMBER PARTY’S
PATENTS COVERING SUCH MANUFACTURE AND INFORMATION AND INVENTIONS USED IN SUCH
MANUFACTURE BY OR ON BEHALF OF THE TERMINATED MEMBER PARTY, TO MANUFACTURE SUCH
INGREDIENT(S) FOR THE SOLE PURPOSE OF USING SUCH INGREDIENT(S) IN THE
MANUFACTURE OF THE COMBINATION PRODUCT FOR THE TERRITORY, AND (2) PROVIDE
REASONABLE TECHNICAL ASSISTANCE TO SUCH CONTINUING MEMBER PARTY OR THIRD PARTY
DESIGNEE (WHICH CHOICE OF RECIPIENT SHALL BE SUBJECT TO THE PRIOR APPROVAL OF
THE TERMINATED MEMBER PARTY, SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD OR
DELAYED), AT THE CONTINUING MEMBER PARTY’S EXPENSE ON THE TERMINATED MEMBER
PARTY’S THEN-CURRENT STANDARD TERMS AND CONDITIONS; OR (B) CONTINUE TO SUPPLY TO
THE JV (OR ITS DESIGNEE) ON A NON-EXCLUSIVE BASIS SUCH QUANTITIES OF EFV OR TDF
AND FTC, AS THE CASE MAY BE, IN BULK ACTIVE PHARMACEUTICAL INGREDIENT FORM, AS
SUCH CONTINUING MEMBER PARTY MAY REQUEST FOR MANUFACTURE OF THE COMBINATION
PRODUCT FOR THE TERRITORY, AT A TRANSFER PRICE OF SUCH SUPPLY EQUAL TO [*] OF
THE COST OF GOODS.  NOTWITHSTANDING THE FOREGOING, THEREAFTER, THE TERMINATED
MEMBER PARTY MAY ELECT PURSUANT TO CLAUSE (B) ABOVE TO CONTINUE TO SUPPLY THE
APPLICABLE BULK ACTIVE PHARMACEUTICAL INGREDIENT, OR DETERMINE TO CEASE TO
MANUFACTURE SUCH INGREDIENT(S) OR THAT IT OTHERWISE DESIRES TO TERMINATE THE
AFOREMENTIONED SUPPLY ARRANGEMENT WITH THE CONTINUING MEMBER PARTY, AT A TIME
WHEN THE CONTINUING MEMBER PARTY IS STILL MANUFACTURING OR HAVING MANUFACTURED
THE COMBINATION PRODUCT.  IN THE EVENT THAT THE TERMINATED MEMBER PARTY ELECTS
TO CEASE THE MANUFACTURE OF SUCH INGREDIENT(S) OR OTHERWISE DESIRES TO TERMINATE
SUCH SUPPLY ARRANGEMENT, THE TERMINATED MEMBER PARTY SHALL (X) GIVE THE
CONTINUING MEMBER PARTY AT LEAST [*] WRITTEN NOTICE PRIOR TO CEASING SUCH
MANUFACTURE OR OTHERWISE TERMINATING SUCH AGREEMENT, (Y) GRANT TO THE CONTINUING
MEMBER PARTY THE LICENSE DESCRIBED IN CLAUSE (A)(1) ABOVE, AND (Z) PROVIDE TO
THE CONTINUING MEMBER PARTY THE TECHNICAL ASSISTANCE DESCRIBED IN CLAUSE (A)(2)
ABOVE.  IN THE EVENT THAT THE TERMINATED MEMBER PARTY AND THE JV OR THE
CONTINUING MEMBER PARTY ENTER INTO A SUPPLY ARRANGEMENT FOR BULK ACTIVE
PHARMACEUTICAL INGREDIENT(S) PURSUANT TO THE FIRST SENTENCE OF THIS SECTION
14.6(B)(III), AND THEREAFTER THE JV OR SUCH CONTINUING MEMBER PARTY, AS THE CASE
MAY BE, DESIRES TO TERMINATE SUCH SUPPLY ARRANGEMENT (WITHOUT RECEIVING FROM THE
TERMINATED MEMBER PARTY THE LICENSE DESCRIBED IN CLAUSE (A)(1) ABOVE OR THE
TECHNICAL ASSISTANCE DESCRIBED IN CLAUSE (A)(2) ABOVE), THE JV OR SUCH
CONTINUING MEMBER PARTY, AS THE CASE MAY BE, SHALL PROVIDE [*] WRITTEN NOTICE
THEREOF TO THE TERMINATED MEMBER PARTY.  THE JV AND THE CONTINUING MEMBER PARTY
SHALL BE RESPONSIBLE FOR ALL THIRD PARTY ROYALTIES PAYABLE BY THE TERMINATED
MEMBER PARTY IN RESPECT OF ANY SUPPLY PROVIDED BY THE TERMINATED MEMBER PARTY
PURSUANT TO THIS SECTION 14.6(B)(III).

 

(IV)                              THE NAME OF THE JV SHALL BE CHANGED TO REMOVE
THE NAME OF THE TERMINATED MEMBER PARTY, AND THE CONTINUING MEMBER PARTY SHALL
NOT, AND SHALL CAUSE THE JV NOT TO, INCLUDE THE TRADEMARK OR NAME OF THE
TERMINATED MEMBER PARTY ON THE LABELING, PACKAGING AND ADVERTISING MATERIALS OF
THE COMBINATION PRODUCT, OR OTHERWISE IN CONNECTION WITH THE JV’S BUSINESS WITH
RESPECT TO THE COMBINATION PRODUCT.

 

(V)                                 THE TERMINATED MEMBER PARTY SHALL PROMPTLY
(AND IN ANY EVENT WITHIN THIRTY (30) DAYS THEREAFTER) MAKE ARRANGEMENTS FOR THE
RETURN OR DISPOSAL, AT THE CONTINUING MEMBER PARTY’S OPTION, OF ANY CONFIDENTIAL
INFORMATION, IN TANGIBLE OR INTANGIBLE FORM (EXCEPT FOR (X) ONE (1) COPY WHICH
MAY BE RETAINED SOLELY FOR ARCHIVAL PURPOSES AND (Y)

 

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CONFIDENTIAL INFORMATION RELATING TO ANY SURVIVING LICENSES AND OTHER RIGHTS
PURSUANT TO SECTION 14.6(B)(I)).

 

(VI)                              EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE
OPERATING AGREEMENT AND/OR ANY ANCILLARY AGREEMENT, THE OPERATING AGREEMENT AND
THE ANCILLARY AGREEMENTS SHALL TERMINATE.

 

(VII)                           THE JV SHALL IMMEDIATELY DISCONTINUE USE OF THE
TERMINATED MEMBER PARTY’S TRADEMARKS, AND THE LICENSE GRANTED BY THE TERMINATED
MEMBER PARTY TO THE JV TO USE THE TERMINATED MEMBER PARTY’S TRADEMARKS SHALL
IMMEDIATELY REVERT TO THE TERMINATED MEMBER PARTY.

 

(VIII)                        FOR THE AVOIDANCE OF DOUBT, THE PRICING AND OTHER
PROVISIONS CONTAINED IN SECTION 5.3 AND THE [*] SHALL TERMINATE.

 

14.7         RIGHTS IN BANKRUPTCY.  ALL RIGHTS AND LICENSES GRANTED UNDER OR
PURSUANT TO THIS AGREEMENT BY THE JV, BMS OR GILEAD ARE, AND SHALL OTHERWISE BE
DEEMED TO BE, FOR PURPOSES OF SECTION 365(N) OF THE UNITED STATES BANKRUPTCY
CODE, LICENSES OF RIGHT TO “INTELLECTUAL PROPERTY” AS DEFINED UNDER SECTION 101
OF THE UNITED STATES BANKRUPTCY CODE.  THE PARTIES AGREE THAT THE JV, BMS AND
GILEAD, AS LICENSEES OF SUCH RIGHTS UNDER THIS AGREEMENT, SHALL RETAIN AND MAY
FULLY EXERCISE ALL OF ITS RIGHTS AND ELECTIONS UNDER THE UNITED STATES
BANKRUPTCY CODE.  THE PARTIES FURTHER AGREE THAT, IN THE EVENT OF THE
COMMENCEMENT OF A BANKRUPTCY PROCEEDING BY OR AGAINST THE JV OR EITHER MEMBER
PARTY UNDER THE UNITED STATES BANKRUPTCY CODE, THE NON-SUBJECT PARTIES SHALL BE
ENTITLED TO A COMPLETE DUPLICATE OF (OR COMPLETE ACCESS TO, AS THE NON-SUBJECT
PARTY DEEMS APPROPRIATE) ANY SUCH INTELLECTUAL PROPERTY AND ALL EMBODIMENTS OF
SUCH INTELLECTUAL PROPERTY, WHICH, IF NOT ALREADY IN THEIR POSSESSION, SHALL BE
PROMPTLY DELIVERED TO THEM (A) UPON ANY SUCH COMMENCEMENT OF A BANKRUPTCY
PROCEEDING UPON A NON-SUBJECT PARTY’S WRITTEN REQUEST THEREFOR, UNLESS THE PARTY
SUBJECT TO SUCH PROCEEDING ELECTS TO CONTINUE TO PERFORM ALL OF ITS OBLIGATIONS
UNDER THIS AGREEMENT OR (B) IF NOT DELIVERED UNDER CLAUSE (A) ABOVE, FOLLOWING
THE REJECTION OF THIS AGREEMENT BY OR ON BEHALF OF THE PARTY SUBJECT TO SUCH
PROCEEDING UPON WRITTEN REQUEST THEREFOR BY A NON-SUBJECT PARTY.  THE PROVISIONS
OF THIS SECTION 14.7 ARE WITHOUT PREJUDICE TO ANY RIGHTS THE NON-SUBJECT PARTIES
MAY HAVE ARISING UNDER THE U.S. BANKRUPTCY CODE OR OTHER APPLICABLE LAW.

 

14.8         ACCRUED RIGHTS; SURVIVING OBLIGATIONS.

 

(A)                                  TERMINATION OR EXPIRATION OF THIS AGREEMENT
SHALL BE WITHOUT PREJUDICE TO ANY RIGHTS THAT SHALL HAVE ACCRUED TO THE BENEFIT
OF A PARTY PRIOR TO SUCH TERMINATION OR EXPIRATION.  SUCH TERMINATION OR
EXPIRATION SHALL NOT RELIEVE A PARTY FROM OBLIGATIONS THAT ARE EXPRESSLY
INDICATED TO SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT.

 

(B)                                 WITHOUT LIMITING ANYTHING CONTAINED IN THIS
SECTION 14, SECTIONS 1, 3.6, 3.11 (WHICH PROVISION SHALL BE IMPLEMENTED BY THE
MEMBER PARTIES), 5.10, 6 (AS MODIFIED BY 14.6 OR 14.7), 7 (FOR PAYMENTS PURSUANT
TO SECTION 14.6(B)(II)), 8, 9, 11.1, 11.2, 11.3, 11.4, 12, 13.2(E) (AS TO THE
SECOND SENTENCE THEREOF) 13.3(E), (AS TO THE SECOND SENTENCE THEREOF), 13.4,
13.5, 13.6, 13.7, 13.8, 13.9, 13.10, 13.11,14.4(D) (AS IT APPLIES TO OTHER
SURVIVING PROVISIONS), 14.6, 14.7 (FOR SURVIVING RIGHTS AND LICENSES), 14.8 AND
15 SHALL SURVIVE THE TERMINATION OR

 

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EXPIRATION OF THIS AGREEMENT FOR ANY REASON.

 

SECTION 15.
GENERAL PROVISIONS

 

15.1         FORCE MAJEURE.  NO PARTY SHALL BE HELD LIABLE OR RESPONSIBLE TO THE
OTHER PARTIES OR BE DEEMED TO HAVE DEFAULTED UNDER OR BREACHED THIS AGREEMENT
FOR FAILURE OR DELAY IN FULFILLING OR PERFORMING ANY TERM OF THIS AGREEMENT,
EXCEPT FOR THE PAYMENT OF ANY AMOUNTS UNDER THIS AGREEMENT, WHEN SUCH FAILURE OR
DELAY IS CAUSED BY OR RESULTS FROM CAUSES BEYOND THE REASONABLE CONTROL OF THE
NON-PERFORMING PARTY, INCLUDING, WITHOUT LIMITATION, FIRES, FLOODS, EMBARGOES,
SHORTAGES, EPIDEMICS, QUARANTINES, WAR, ACTS OF WAR (WHETHER WAR BE DECLARED OR
NOT), TERRORISM, INSURRECTIONS, RIOTS, CIVIL COMMOTION, ACTS OF GOD OR ACTS,
OMISSIONS OR DELAYS IN ACTING BY ANY GOVERNMENTAL AUTHORITY.  THE NON-PERFORMING
PARTY SHALL NOTIFY THE OTHER PARTIES OF SUCH FORCE MAJEURE WITHIN FIVE (5) DAYS
AFTER SUCH OCCURRENCE BY GIVING WRITTEN NOTICE TO THE OTHER PARTIES STATING THE
NATURE OF THE EVENT, ITS ANTICIPATED DURATION, AND ANY ACTION BEING TAKEN TO
AVOID OR MINIMIZE ITS EFFECT.  THE SUSPENSION OF PERFORMANCE SHALL BE OF NO
GREATER SCOPE AND NO LONGER DURATION THAN IS NECESSARY AND THE NON-PERFORMING
PARTY SHALL USE, THROUGHOUT THE PERIOD OF SUSPENSION OF PERFORMANCE,
COMMERCIALLY REASONABLE EFFORTS TO REMEDY ITS INABILITY TO PERFORM; PROVIDED,
HOWEVER, THAT IN THE EVENT THE SUSPENSION OF PERFORMANCE CONTINUES FOR NINETY
(90) DAYS AFTER THE DATE SUCH FORCE MAJEURE COMMENCES, THE PARTIES SHALL MEET TO
DISCUSS IN GOOD FAITH HOW TO PROCEED IN ORDER TO ACCOMPLISH THE COLLABORATION
PRINCIPLES.  FOR PURPOSES OF THIS AGREEMENT A FORCE MAJEURE SHALL NOT INCLUDE A
FAILURE TO COMMIT SUFFICIENT RESOURCES, FINANCIAL OR OTHERWISE, TO THE PROJECT
ACTIVITIES OR GENERAL MARKET OR ECONOMIC CONDITIONS.

 

15.2         NOTICE.  ALL NOTICES, REQUESTS, REPORTS, STATEMENTS AND OTHER
COMMUNICATIONS TO ANY PARTY (OTHER THAN AS SPECIFIED IN SECTION 2.7(C)) SHALL BE
IN WRITING, SHALL REFER SPECIFICALLY TO THIS AGREEMENT AND SHALL BE DELIVERED
PERSONALLY, SENT BY NATIONALLY-RECOGNIZED OVERNIGHT COURIER OR SENT BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE
FOLLOWING RESPECTIVE ADDRESSES (OR TO SUCH OTHER ADDRESS AS MAY BE SPECIFIED BY
NOTICE FROM TIME TO TIME BY THE RELEVANT PARTY):

 

if to Gilead, to:

 

Gilead Sciences, Inc.

333 Lakeside Drive

Foster City, CA 94404

Attn:  EVP and CFO

 

with copies to:

 

Gilead Sciences, Inc.

333 Lakeside Drive

Foster City, CA 94404

Attn:  VP and General Counsel

 

and:

 

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Covington & Burling

One Front Street

San Francisco, CA 94111

Attn:  James C. Snipes, Esq.

 

if to BMS, to:

 

Bristol-Myers Squibb Worldwide Medicines Group

Route 206 and Province Line Road

Princeton, NJ 08540

Attn:  Vice President and Senior Counsel, Corporate and Business

Development

 

with a copy to:

 

Hughes Hubbard & Reed LLP

One Battery Park Plaza

New York, NY 10004

Attn:  Ellen S. Friedenberg, Esq.

 

Any such communication shall be deemed to have been given (i) when delivered, if
personally delivered during the recipient’s normal business hours, (ii) on the
Business Day after dispatch, if sent by nationally-recognized overnight courier
and proof of delivery is obtained, and (iii) on the third (3rd) Business Day
following the date of mailing, if sent by mail.  It is understood and agreed
that this Section 15.2 is not intended to govern the day-to-day business
communications necessary between the Parties in performing their duties, in due
course, under the terms of this Agreement.  Whenever this Agreement requires or
permits the giving of notice by a Member Party, such notice may be given by BMS
Parent on behalf of itself and BMS Sub, and by Gilead Parent on behalf of itself
and Gilead Sub.

 

15.3         FURTHER ASSURANCES.  EACH PARTY SHALL DULY EXECUTE AND DELIVER, OR
CAUSE TO BE DULY EXECUTED AND DELIVERED, SUCH FURTHER INSTRUMENTS AND DO AND
CAUSE TO BE DONE SUCH FURTHER MINISTERIAL, ADMINISTRATIVE OR SIMILAR ACTS AND
THINGS, INCLUDING, WITHOUT LIMITATION, THE FILING OF SUCH ASSIGNMENTS,
AGREEMENTS, DOCUMENTS AND INSTRUMENTS, AS MAY BE NECESSARY OR AS ANOTHER PARTY
MAY REASONABLY REQUEST IN CONNECTION WITH THIS AGREEMENT OR TO CARRY OUT MORE
EFFECTIVELY THE PROVISIONS AND PURPOSES HEREOF, OR TO BETTER ASSURE AND CONFIRM
UNTO SUCH OTHER PARTY ITS RIGHTS AND REMEDIES UNDER THIS AGREEMENT.

 

15.4         SUCCESSORS AND ASSIGNS.

 

(A)                                  THE TERMS AND PROVISIONS HEREOF SHALL INURE
TO THE BENEFIT OF, AND BE BINDING UPON, THE PARTIES AND THEIR RESPECTIVE
SUCCESSORS AND PERMITTED ASSIGNS.  EXCEPT AS EXPRESSLY PERMITTED PURSUANT TO
SECTIONS 3.5, 4.1, 4.2 AND 5.5, NO MEMBER PARTY MAY, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE OTHER MEMBER PARTY, ASSIGN OR OTHERWISE TRANSFER ANY OF ITS
RIGHTS AND INTERESTS OR SUBCONTRACT OR OTHERWISE DELEGATE ANY OF ITS OBLIGATIONS
UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT (I) EITHER MEMBER PARTY, WITHOUT
SUCH CONSENT, MAY ASSIGN ITS RIGHTS AND DELEGATE ITS DUTIES UNDER THIS AGREEMENT
TO AN AFFILIATE WHICH IS A DIRECTLY OR INDIRECTLY WHOLLY-OWNED SUBSIDIARY OF
GILEAD PARENT OR BMS PARENT, AS THE CASE MAY BE; PROVIDED, HOWEVER, THAT

 

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THE ASSIGNING MEMBER PARTY SHALL REMAIN PRIMARILY (AND NOT SECONDARILY OR
DERIVATIVELY) LIABLE FOR THE FULL AND TIMELY PERFORMANCE BY SUCH AFFILIATE OF
ALL ITS OBLIGATIONS UNDER THIS AGREEMENT; AND PROVIDED, FURTHER, THAT, EXCEPT AS
SET FORTH IN CLAUSE (II) BELOW, SUCH ASSIGNMENT OR DELEGATION SHALL TERMINATE
AUTOMATICALLY AT SUCH TIME, IF ANY, AS SUCH AFFILIATE CEASES TO BE WHOLLY-OWNED,
DIRECTLY OR INDIRECTLY, BY GILEAD PARENT OR BMS PARENT, AS THE CASE MAY BE, AND
(II) EITHER MEMBER PARTY, WITHOUT SUCH CONSENT, MAY ASSIGN ITS RIGHTS AND
DELEGATE ITS DUTIES UNDER THIS AGREEMENT, WHETHER BY CONTRACT OR OPERATION OF
LAW, TO A THIRD PARTY ACQUIRER IN THE EVENT OF A CHANGE OF CONTROL OF SUCH
MEMBER PARTY.  ANY PERMITTED SUCCESSOR OR ASSIGNEE OF RIGHTS AND/OR OBLIGATIONS
HEREUNDER (A “PERMITTED ASSIGNEE”) SHALL, IN A WRITING DELIVERED TO THE OTHER
PARTIES AT THE TIME OF SUCH ASSIGNMENT, EXPRESSLY ASSUME PERFORMANCE OF SUCH
RIGHTS AND/OR OBLIGATIONS.  THE JV MAY NOT ASSIGN THIS AGREEMENT WITHOUT THE
PRIOR WRITTEN CONSENT OF THE MEMBER PARTIES.  ANY PURPORTED ASSIGNMENT,
TRANSFER, SUBCONTRACT OR DELEGATION BY EITHER MEMBER PARTY OR THE JV IN
VIOLATION OF THE TERMS OF THIS SECTION 15.4 SHALL BE NULL AND VOID AND OF NO
LEGAL EFFECT.

 

(B)                                 IN THE EVENT OF ANY CHANGE OF CONTROL OF A
MEMBER PARTY (THE “TRANSFERRING MEMBER PARTY”), THE TRANSFERRING MEMBER PARTY
SHALL GIVE THE OTHER MEMBER PARTY WRITTEN NOTICE THEREOF WITHIN TEN (10) DAYS,
IDENTIFYING SUCH THIRD PARTY ACQUIRER.  IF AT THE TIME OF SUCH CHANGE OF CONTROL
SUCH THIRD PARTY ACQUIRER IS MARKETING IN THE TERRITORY A COMPETING PRODUCT THAT
WAS COMMERCIALLY AVAILABLE AS OF THE EFFECTIVE DATE, THEN UPON WRITTEN NOTICE
FROM THE OTHER MEMBER PARTY AT ITS ELECTION TO THE TRANSFERRING MEMBER PARTY
WITHIN THIRTY (30) DAYS OF SUCH OTHER MEMBER PARTY’S RECEIVING WRITTEN NOTICE OF
SUCH CHANGE OF CONTROL, SUCH THIRD PARTY ACQUIRER SHALL HAVE [*] TO [*].  IF
SUCH THIRD PARTY ACQUIRER FAILS TO [*]:  (I) THE PERFORMANCE OBLIGATIONS (OTHER
THAN PAYMENT OBLIGATIONS) OF THE MEMBER PARTIES UNDER THIS AGREEMENT SHALL
TERMINATE, EXCEPT TO THE EXTENT OF THOSE MINIMUM OBLIGATIONS REASONABLY REQUIRED
(A) FOR THE JV TO OBTAIN AND MAINTAIN APPROVAL FOR THE COMBINATION PRODUCT IN
THE TERRITORY, (B) FOR GILEAD, TO ACT AS AGENT FOR SELLING THE COMBINATION
PRODUCT ON BEHALF OF THE JV, TO PERFORM ITS OBLIGATIONS WITH RESPECT TO PRICING
AND DISCOUNTING OF THE COMBINATION PRODUCT PURSUANT TO SECTION 5.3 AND THE [*],
AND (C) FOR EACH MEMBER PARTY TO SUPPLY TO THE JV BULK ACTIVE PHARMACEUTICAL
INGREDIENT PURSUANT TO SECTION 4 AND THE APPLICABLE SUPPLY AGREEMENT, (II) THE
COMMERCIALIZATION PLAN AND BUDGET (INCLUDING ANY MINIMUM COMMERCIALIZATION
EXPENDITURES AND/OR [*]) SHALL TERMINATE, AND (III) EACH MEMBER PARTY SHALL HAVE
THE RIGHT TO PROMOTE, MARKET AND OTHERWISE COMMERCIALIZE THE COMBINATION PRODUCT
IN THE TERRITORY WITHOUT COORDINATION WITH THE OTHER MEMBER PARTY UNDER THIS
AGREEMENT (INCLUDING, WITHOUT ANY OBLIGATION TO REACH AGREEMENT ON THE FORM OF
APPROVED MARKETING MATERIALS).

 

15.5         GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE
RULES OF CONFLICT OF LAWS THEREOF.

 

15.6         ARBITRATION.

 

(A)                                  DISPUTES BETWEEN THE MEMBER PARTIES, OR
BETWEEN A MEMBER PARTY AND THE JV, RELATING TO OR ARISING OUT OF THE VALIDITY,
INTERPRETATION OR CONSTRUCTION OF, OR THE COMPLIANCE WITH OR BREACH OF, THIS
AGREEMENT, THE OPERATING AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER
AGREEMENT CONTEMPLATED BY THIS AGREEMENT TO WHICH SUCH MEMBER PARTY (OR ITS
AFFILIATES) AND THE JV AND/OR THE OTHER MEMBER PARTY (OR ITS AFFILIATES) ARE
PARTIES SHALL (EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE
OPERATING AGREEMENT, ANY

 

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ANCILLARY AGREEMENT OR ANY SUCH OTHER AGREEMENT) BE REFERRED INITIALLY TO THE
JEC AS PROVIDED IN SECTION 2.8 AND, IF NOT RESOLVED AS SO PROVIDED IN SECTION
2.8, THEREAFTER (SUBJECT TO THE LIMITATIONS IN SECTION 2.8) RESOLVED EXCLUSIVELY
THROUGH BINDING ARBITRATION IN ACCORDANCE WITH THE CPR INSTITUTE FOR DISPUTE
RESOLUTION RULES FOR NON-ADMINISTERED ARBITRATION, TO BE HELD IN WASHINGTON,
D.C.  IN ANY PROCEEDING BETWEEN A MEMBER PARTY AND THE JV, THE OTHER MEMBER
PARTY SHALL ACT ON BEHALF OF AND IN THE NAME OF THE JV, AND ANY EXTERNAL,
OUT-OF-POCKET COSTS (WITHOUT MARKUP) SO INCURRED BY SUCH OTHER MEMBER PARTY
SHALL BE DEEMED TO BE JV EXPENSES AND AUTHORIZED EXPENSES.  IN ANY PROCEEDING
UNDER THIS SECTION 15.6, THERE SHALL BE ONE ARBITRATOR, EXCEPT THAT AT THE
ELECTION OF EITHER MEMBER PARTY IN WRITING WITHIN TEN (10) BUSINESS DAYS OF
RECEIVING NOTICE OF SUCH REFERRAL TO ARBITRATION, THERE SHALL BE A PANEL OF
THREE (3) ARBITRATORS.  THE MEMBER PARTIES SHALL APPOINT SUCH ARBITRATOR(S) BY
MUTUAL AGREEMENT OR, IF THE MEMBER PARTIES CANNOT AGREE ON THE APPOINTMENT OF
SUCH ARBITRATOR(S) WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A DEMAND FOR
ARBITRATION, THE MEMBER PARTIES SHALL HAVE THE RELEVANT NUMBER OF ARBITRATORS
WITH THE REQUIRED QUALIFICATIONS APPOINTED BY THE CPR INSTITUTE FOR DISPUTE
RESOLUTION, PROVIDED THAT IF EITHER MEMBER PARTY HAS ELECTED TO HAVE A PANEL OF
THREE ARBITRATORS, EACH MEMBER PARTY SHALL HAVE THE RIGHT TO APPOINT ONE
ARBITRATOR WITH THE REQUIRED QUALIFICATIONS, AND THE THIRD ARBITRATOR SHALL BE
APPOINTED BY THE CPR INSTITUTE FOR DISPUTE RESOLUTION.  EACH ARBITRATOR SHALL
EITHER HAVE AT LEAST TEN (10) YEARS OF SIGNIFICANT MANAGEMENT LEVEL EXPERIENCE
IN THE BIOPHARMACEUTICAL INDUSTRY INCLUDING RESPONSIBILITY FOR LEGAL MATTERS OR
HAVE AT LEAST TEN (10) YEARS OF SUBSTANTIAL EXPERIENCE AS AN ATTORNEY
REPRESENTING OR WORKING WITH BIOPHARMACEUTICAL CLIENTS AS EITHER IN-HOUSE OR
OUTSIDE COUNSEL IN COMMERCIAL LITIGATION OR TRANSACTIONAL MATTERS, SHALL NOT BE
DIRECTLY OR INDIRECTLY AFFILIATED WITH EITHER MEMBER PARTY OR WITH EITHER MEMBER
PARTY’S AFFILIATES, AND SHALL NOT HAVE ANY DIRECT OR INDIRECT INTEREST OF ANY
KIND IN THE RESOLUTION OF THE RELEVANT ISSUE.  THIS SECTION 15.6 SHALL ALSO
APPLY TO ANY DISPUTE PROPERLY REFERRED TO ARBITRATION IN ACCORDANCE WITH SECTION
2.8 OR SECTION 13.8(G) HEREOF OR SECTION 6.5(D) OF THE OPERATING AGREEMENT (WITH
RESPECT TO THE JEC).

 

(B)                                 ANY FEES AND EXPENSES PAYABLE WITH RESPECT
TO AN ARBITRATION UNDER THIS SECTION 15.6, TOGETHER WITH THE REASONABLE LEGAL
FEES OF THE PREVAILING PARTY, SHALL BE BORNE BY THE NON-PREVAILING PARTY, AS
DETERMINED BY THE ARBITRATOR(S).  ALL ARBITRATION RULINGS AND AWARDS SHALL BE
FINAL AND BINDING ON THE PARTIES.

 

(C)                                  ANY DISPUTE REFERRED TO BINDING ARBITRATION
PURSUANT TO THIS SECTION 15.6 SHALL BE SCHEDULED FOR DISCOVERY, BRIEFING AND
ARGUMENTS BY THE ARBITRATOR(S) SO THAT THE DECISION CAN BE RENDERED WITHIN [*]
(OR AS SOON THEREAFTER AS PRACTICABLE) AFTER SUCH REFERRAL.  EACH OF THE MEMBER
PARTIES SHALL SUBMIT TO THE ARBITRATOR(S) A COMPREHENSIVE PROPOSAL FOR
RESOLUTION OF THE DISPUTE (INCLUDING, IF THE ARBITRATION INVOLVES AN ALLEGATION
OF BREACH BY A MEMBER PARTY OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, THE
OPERATING AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT CONTEMPLATED
BY THIS AGREEMENT TO WHICH SUCH MEMBER PARTY (OR ITS AFFILIATES) AND THE JV
AND/OR THE OTHER MEMBER PARTY (OR ITS AFFILIATES) ARE PARTIES, A PROPOSAL FOR
DAMAGES), AND THE ARBITRATOR(S) SHALL DECIDE IN FAVOR OF ONE OF THE TWO (2)
PROPOSALS, WITHOUT MAKING ANY MODIFICATIONS THERETO.  THE DECISION OF THE
ARBITRATOR(S) SHALL BE BASED ON WHICH OF THE PROPOSALS COMPLIES MOST NEARLY WITH
THIS AGREEMENT, ANY RELEVANT DEVELOPMENT PLAN(S) OR COMMERCIALIZATION PLAN(S),
AND ANY RELEVANT PRINCIPLES REFLECTED IN SUCH PLANS, INCLUDING, WITHOUT
LIMITATION, THE COLLABORATION PRINCIPLES.

 

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(D)                                 NOTHING IN THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION THIS SECTION 15.6, SHALL PRECLUDE EITHER MEMBER PARTY FROM
SEEKING INTERIM OR PROVISIONAL RELIEF, INCLUDING A TEMPORARY RESTRAINING ORDER,
PRELIMINARY INJUNCTION OR OTHER INTERIM EQUITABLE RELIEF CONCERNING A DISPUTE
WITH THE OTHER MEMBER PARTY, EITHER PRIOR TO OR DURING THE DISPUTE RESOLUTION
PROCEDURES SET FORTH IN THIS SECTION 15.6, IF NECESSARY TO PROTECT THE INTERESTS
OF SUCH MEMBER PARTY.  THIS SECTION 15.6(D) SHALL BE SPECIFICALLY ENFORCEABLE.

 

15.7         WAIVER.  A PARTY’S FAILURE TO ENFORCE, AT ANY TIME OR FOR ANY
PERIOD OF TIME, ANY PROVISION OF THIS AGREEMENT, OR TO EXERCISE ANY RIGHT OR
REMEDY, DOES NOT CONSTITUTE A WAIVER OF SUCH PROVISION, RIGHT OR REMEDY, OR
PREVENT SUCH PARTY THEREAFTER FROM ENFORCING ANY OR ALL PROVISIONS AND
EXERCISING ANY OR ALL OTHER RIGHTS AND REMEDIES.  THE EXERCISE OF ANY RIGHT OR
REMEDY DOES NOT CONSTITUTE AN ELECTION OR PREVENT THE EXERCISE OF ANY OR ALL
RIGHTS OR REMEDIES, ALL RIGHTS AND REMEDIES BEING CUMULATIVE.

 

15.8         SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT, OTHER THAN THE
OBLIGATION OF THE JV TO MAKE PAYMENTS PURSUANT TO SECTION 7.1(A), SHOULD BE HELD
INVALID, ILLEGAL OR UNENFORCEABLE IN ANY RESPECT, THEN, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, (A) ALL OTHER PROVISIONS HEREOF SHALL REMAIN IN
FULL FORCE AND EFFECT AND SHALL BE LIBERALLY CONSTRUED IN ORDER TO CARRY OUT THE
INTENT OF THE PARTIES AS NEARLY AS MAY BE POSSIBLE, AND (B) THE PARTIES AGREE TO
USE THEIR BEST EFFORTS TO NEGOTIATE A PROVISION, IN REPLACEMENT OF THE PROVISION
HELD INVALID, ILLEGAL OR UNENFORCEABLE, THAT IS CONSISTENT WITH APPLICABLE LAW
AND ACCOMPLISHES, AS NEARLY AS POSSIBLE, THE ORIGINAL INTENTION OF THE PARTIES
WITH RESPECT THERETO.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HEREBY WAIVES ANY PROVISION OF LAW THAT WOULD RENDER ANY PROVISION HEREOF
PROHIBITED OR UNENFORCEABLE IN ANY RESPECT.

 

15.9         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, AND ALL OF WHICH,
TAKEN TOGETHER, SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

15.10       CONSTRUCTION.  EXCEPT WHERE THE CONTEXT OTHERWISE REQUIRES, WHEREVER
USED THE SINGULAR SHALL INCLUDE THE PLURAL, THE PLURAL THE SINGULAR, THE USE OF
ANY GENDER SHALL BE APPLICABLE TO ALL GENDERS.  THE WORDS “HEREOF” AND
“HEREUNDER”, AND WORDS OF SIMILAR IMPORT, SHALL BE CONSTRUED TO REFER TO THIS
AGREEMENT (INCLUDING THE ANNEXES HERETO) AS AN ENTIRETY AND NOT TO ANY
PARTICULAR PROVISION.  THE CAPTIONS OF THIS AGREEMENT ARE FOR CONVENIENCE OF
REFERENCE ONLY AND IN NO WAY DEFINE, DESCRIBE, EXTEND OR LIMIT THE SCOPE OR
INTENT OF THIS AGREEMENT OR THE INTENT OF ANY PROVISION CONTAINED IN THIS
AGREEMENT.  ANY REFERENCE IN THIS AGREEMENT TO A MATTER OR ACTION BEING SUBJECT
TO THE “MUTUAL AGREEMENT” OR “MUTUAL CONSULTATION” OF THE MEMBER PARTIES, OR
WORDS OF SIMILAR IMPORT, SHALL NOT BE CONSTRUED AS AN AGREEMENT THAT THE MEMBER
PARTIES SHALL AGREE TO SUCH MATTER OR ACTION.  THE LANGUAGE OF THIS AGREEMENT
SHALL BE DEEMED TO BE THE LANGUAGE MUTUALLY CHOSEN BY THE PARTIES AND NO RULE OF
STRICT CONSTRUCTION SHALL BE APPLIED AGAINST ANY PARTY.

 

15.11       STATUS OF THE PARTIES.  EXCEPT AS SET FORTH EXPRESSLY IN THIS
AGREEMENT OR IN THE OPERATING AGREEMENT, NO PARTY SHALL HAVE THE RIGHT TO ENTER
INTO ANY AGREEMENTS OR TAKE ACTION ON BEHALF OF ANY OTHER PARTY, NOR SHALL IT
REPRESENT TO ANY PERSON THAT IT HAS ANY SUCH RIGHT OR AUTHORITY.  EXCEPT FOR THE
STATUS OF BMS SUB AND GILEAD SUB AS MEMBERS OF THE JV, NOTHING IN THIS AGREEMENT
SHALL BE CONSTRUED AS ESTABLISHING A PARTNERSHIP OR JOINT VENTURE RELATIONSHIP

 

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BETWEEN THE PARTIES.  EACH MEMBER PARTY SHALL BE MADE A THIRD PARTY BENEFICIARY
OF ALL ANCILLARY AGREEMENTS TO WHICH THE OTHER MEMBER PARTY IS A PARTY, FOR THE
PURPOSE OF ENFORCING THE JV’S RIGHTS THEREUNDER.

 

15.12       STANDSTILL.  DURING THE PERIOD COMMENCING ON THE EFFECTIVE DATE AND
CONTINUING UNTIL THE FIFTH ANNIVERSARY OF THE EFFECTIVE DATE, BMS SHALL NOT, AND
SHALL CAUSE THE AFFILIATES OF BMS NOT TO:

 

(A)                                  ACQUIRE, OR OFFER OR AGREE TO ACQUIRE,
DIRECTLY OR INDIRECTLY, BENEFICIAL OWNERSHIP OF ANY EQUITY SECURITIES OF GILEAD,
OR ANY RIGHTS OR OPTIONS TO ACQUIRE SUCH BENEFICIAL OWNERSHIP, OR OTHERWISE ACT
IN CONCERT WITH RESPECT TO ANY SUCH SECURITIES, RIGHTS OR OPTIONS WITH ANY
PERSON;

 

(B)                                 MAKE, OR PARTICIPATE IN, DIRECTLY OR
INDIRECTLY, ANY “SOLICITATION” OF “PROXIES” TO VOTE (AS SUCH TERMS ARE USED IN
THE REGULATION 14A PROMULGATED UNDER THE UNITED STATES SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED (THE “EXCHANGE ACT”)), BECOME A “PARTICIPANT” IN ANY
“ELECTION CONTEST” (AS SUCH TERMS ARE DEFINED IN RULE 14A-11 PROMULGATED UNDER
THE EXCHANGE ACT) OR INITIATE, PROPOSE OR OTHERWISE SOLICIT STOCKHOLDERS OF
GILEAD FOR THE APPROVAL OF ANY STOCKHOLDER PROPOSALS;

 

(C)                                  FORM, JOIN, PARTICIPATE IN, OR ENCOURAGE
THE FORMATION OF, A GROUP (WITHIN THE MEANING OF SECTION 13(D)(3) OF THE
EXCHANGE ACT) WITH RESPECT TO ANY VOTING SECURITIES OF GILEAD;

 

(D)                                 DEPOSIT ANY SECURITIES OF GILEAD INTO A
VOTING TRUST, OR SUBJECT ANY SECURITIES OF GILEAD TO ANY AGREEMENT OR
ARRANGEMENT WITH RESPECT TO THE VOTING OF SUCH SECURITIES;

 

(E)                                  MAKE ANY PUBLIC ANNOUNCEMENT WITH RESPECT
TO, OR SUBMIT A PROPOSAL FOR, OR OFFER (WITH OR WITHOUT CONDITIONS) OF ANY
EXTRAORDINARY TRANSACTION INVOLVING GILEAD OR ANY OF ITS SECURITIES OR ASSETS;

 

(F)                                    SEEK, OR ENCOURAGE OR SUPPORT ANY EFFORT,
TO INFLUENCE OR CONTROL THE MANAGEMENT, BOARD OF DIRECTORS, BUSINESS, OR
POLICIES OF GILEAD (IT BEING UNDERSTOOD AND AGREED THAT THIS SECTION 15.12(F)
SHALL NOT APPLY TO THE EXERCISE BY BMS OF ANY OF ITS RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT, THE OPERATING AGREEMENT AND THE ANCILLARY AGREEMENTS AS
APPLICABLE);

 

(G)                                 ENCOURAGE OR ASSIST ANY OTHER PERSON TO
UNDERTAKE ANY OF THE FOREGOING ACTIONS; OR

 

(H)                                 TAKE ANY ACTION THAT COULD REASONABLY BE
EXPECTED TO REQUIRE GILEAD TO MAKE A PUBLIC ANNOUNCEMENT REGARDING THE
POSSIBILITY OF ANY OF THE EVENTS DESCRIBED IN CLAUSES (A) THROUGH (G) OF THIS
SECTION 15.12;

 

provided, however, that nothing in Sections 15.12(a), (e) or (g) shall be deemed
to prohibit BMS from acquiring (i) by merger or stock purchase of more than
fifty percent (50%) of the voting securities thereof, a Third Party that has
beneficial ownership of equity securities of Gilead (or

 

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rights or options to acquire such beneficial ownership) or (ii) beneficial
ownership of up to five percent (5%) of any class of equity securities of Gilead
(or rights or options to acquire such beneficial ownership) by or through (1) an
employee benefit plan of BMS or any of its Affiliates, (2) a diversified mutual
or pension fund managed by an independent investment adviser or pension plan
established for the benefit of the employees of BMS or its Affiliates, or (3)
any stock portfolios not controlled by BMS or any of its Affiliates that invest
in Gilead or any of its Affiliates among other companies; provided that BMS or
any of its Affiliates does not, directly or indirectly, request the trustee or
administrator or investment adviser of such fund, plan or portfolio to acquire
Gilead equity securities;  and provided, further, that this Section 15.12 shall
be of no further effect and shall not bind BMS in any manner from and after such
time, if any, as Gilead shall make a public announcement that it has entered
into a letter of intent or definitive agreement with a Third Party Acquirer
providing for a Change of Control of Gilead.

 

15.13                     NONSOLICITATION OF EMPLOYEES.  DURING THE PERIOD
COMMENCING ON THE EFFECTIVE DATE AND CONTINUING THROUGH THE TERM OF THIS
AGREEMENT, EACH MEMBER PARTY AGREES THAT NEITHER IT NOR ANY OF ITS AFFILIATES
THAT PARTICIPATES IN OR IS RESPONSIBLE FOR THE DEVELOPMENT OR COMMERCIALIZATION
OF THE COMBINATION PRODUCT PURSUANT TO THIS AGREEMENT SHALL RECRUIT, SOLICIT OR
INDUCE ANY EMPLOYEE OF THE OTHER MEMBER PARTY’S HIV/VIROLOGY SALES FORCE
(INCLUDING MANAGERS) TO TERMINATE HIS OR HER EMPLOYMENT WITH SUCH OTHER MEMBER
PARTY AND BECOME EMPLOYED BY OR CONSULT FOR SUCH OTHER MEMBER PARTY, WHETHER OR
NOT SUCH EMPLOYEE IS A FULL-TIME EMPLOYEE OF SUCH OTHER MEMBER PARTY, AND
WHETHER OR NOT SUCH EMPLOYMENT IS PURSUANT TO A WRITTEN AGREEMENT OR IS
AT-WILL.  FOR PURPOSES OF THE FOREGOING, “RECRUIT,” “SOLICIT” OR “INDUCE” SHALL
NOT BE DEEMED TO MEAN (X) GENERAL SOLICITATIONS BY THIRD PARTY PLACEMENT
SPECIALISTS OR FIRMS (E.G., HEADHUNTERS) OR (Y) OTHER GENERAL SOLICITATIONS OF
EMPLOYMENT (INCLUDING RESPONSES TO GENERAL ADVERTISEMENTS), IN EACH CASE ((X)
AND (Y)) NOT SPECIFICALLY TARGETED AT EMPLOYEES OF A PARTY OR ANY OF ITS
AFFILIATES.

 

15.14                     ENTIRE AGREEMENT.  THIS AGREEMENT (INCLUDING THE
ANNEXES HERETO), TOGETHER WITH THE OPERATING AGREEMENT, THE ANCILLARY AGREEMENTS
AND THE OTHER AGREEMENTS CONTEMPLATED BY THIS AGREEMENT (INCLUDING WITHOUT
LIMITATION THE SAFETY DATA EXCHANGE PROTOCOL), CONSTITUTES, ON AND AS OF THE
EFFECTIVE DATE, THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF, AND ALL PRIOR OR CONTEMPORANEOUS UNDERSTANDINGS OR AGREEMENTS,
WHETHER WRITTEN OR ORAL, BETWEEN THE PARTIES WITH RESPECT TO SUCH SUBJECT MATTER
(INCLUDING THE MUTUAL TECHNOLOGY TRANSFER AGREEMENT ENTERED INTO BY
BRISTOL-MYERS SQUIBB COMPANY AND GILEAD SCIENCES, INC. AS OF FEBRUARY 5, 2004
(THE “MTTA”) AND THE MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT ENTERED INTO BY
AND BETWEEN BRISTOL-MYERS SQUIBB COMPANY AND GILEAD SCIENCES, INC. AS OF
DECEMBER 12, 2003, AS AMENDED) ARE HEREBY SUPERSEDED IN THEIR ENTIRETIES; 
PROVIDED, HOWEVER, THAT ANY RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THE MTTA
AND SUCH MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT THAT HAVE ACCRUED AS OF THE
EFFECTIVE DATE SHALL SURVIVE.  THIS AGREEMENT SHALL NOT BE AMENDED IN ANY
RESPECT WHATSOEVER EXCEPT BY A FURTHER AGREEMENT, IN WRITING, FULLY EXECUTED BY
EACH OF THE PARTIES (OR PRIOR TO THE EFFECTIVE DATE, BY GILEAD AND BMS).

 

15.15                     CONSENT TO JURISDICTION.  EACH PARTY, FOR THE PURPOSE
OF ENFORCING AN AWARD UNDER SECTION 15.6 OR FOR SEEKING INJUNCTIVE OR OTHER
EQUITABLE RELIEF AS PERMITTED BY SECTION 12.8, 14.4(D) OR 15.6(D), (A)
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF COLUMBIA (THE “COURT”), FOR PURPOSES OF ANY
ACTION, SUIT

 

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OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, THE OPERATING AGREEMENT AND
ANY ANCILLARY AGREEMENT, AND (B) AGREES NOT TO RAISE ANY OBJECTION AT ANY TIME
TO THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH ACTION, SUIT OR PROCEEDING
IN ANY OF SUCH COURT, IRREVOCABLY WAIVES ANY CLAIM THAT SUCH ACTION, SUIT OR
OTHER PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER
IRREVOCABLY WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH ACTION, SUIT OR
OTHER PROCEEDING, THAT SUCH COURT DOES NOT HAVE ANY JURISDICTION OVER SUCH
PARTY.  EACH PARTY FURTHER AGREES THAT SERVICE OR ANY PROCESS, SUMMONS, NOTICE
OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S NOTICE ADDRESS PROVIDED FOR
IN THIS AGREEMENT SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR
PROCEEDING IN THE COURT WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO
JURISDICTION IN THIS SECTION 15.15.

 

15.16                     THIRD PARTIES.  EXCEPT AS SET FORTH IN SECTIONS 13.5,
13.6, AND 13.7 AS TO THOSE THIRD PARTIES EXPRESSLY REFERRED TO THEREIN, THE
AGREEMENTS, COVENANTS AND REPRESENTATIONS CONTAINED HEREIN ARE FOR THE BENEFIT
OF THE PARTIES ONLY AND ARE NOT FOR THE BENEFIT OF ANY THIRD PARTIES.

 

 

[Signatures to follow on page 104]

 

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100

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[Page intentionally left blank]

 

101

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IN WITNESS WHEREOF, the Parties have caused this Collaboration Agreement to be
duly executed and delivered as of the date first above written.

 

 

GILEAD SCIENCES, INC.

 

BRISTOL-MYERS SQUIBB COMPANY

 

 

 

 

 

By:

/s/ John C. Martin

 

 

By:

/s/ Tamar Howson

 

 

 

John C. Martin, Ph.D.

 

 

Tamar Howson

 

 

President and Chief Executive
Officer

 

 

Senior Vice President,
Corporate and Business Development

 

 

GILEAD HOLDINGS, LLC

 

E.R. SQUIBB & SONS, L.L.C.

 

 

 

 

 

By:

/s/ John F. Milligan

 

 

By:

/s/ Charles Linzner

 

 

 

John F. Milligan, Ph.D.

 

 

Charles Linzner

 

 

President

 

 

Assistant Secretary

 

 

 

BRISTOL-MYERS SQUIBB & GILEAD SCIENCES, LLC

 

 

By Gilead Holdings, LLC, its Member

 

 

 

By:

/s/ John F. Milligan

 

 

 

John F. Milligan, Ph.D.

 

 

President

 

 

 

 

 

By E.R. Squibb & Sons, L.L.C., its Member

 

 

 

 

 

By:

/s/ Charles Linzner

 

 

 

Charles Linzner

 

 

Assistant Secretary

 

 

i

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ANNEXES TO COLLABORATION AGREEMENT

 

Annex A - Initial Committee Members and Alliance Managers

 

 

 

Annex B - Development Plan and Development Budget as of Effective Date

 

 

 

Annex C – Commercialization Plan and Commercialization Budget as of Effective
Date

 

 

 

Annex D - BMS Patents

 

 

 

Annex E - Gilead Patents

 

 

 

Annex F – Gilead Licensed Trademarks

 

 

 

Annex G – BMS Licensed Trademarks

 

 

 

Annex H – Quarterly Detail Report

 

 

 

Annex I - Manner of Calculation of Net Selling Price

 

 

 

Annex J - Calculation of Cost of Goods

 

 

 

Annex K - Calculation of Transfer Price

 

 

 

Annex L – Joint Press Release

 

 

 

Annex M — Certain Financial Data

 

 

 

Annex N – Data to be Provided to Independent Accounting Expert Pursuant to
Section 7.1

 

 

 

Annex O – JV Obligations as Sublicensee

 

 

 

Annex P – Key Terms of Services Agreement

 

 

 

Annex Q – Pricing [*]

 

 

 

Annex R – List of Countries Comprising the Developing World

 

 

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Annex A - Initial Committee Members and Alliance Managers

 

GILEAD SUB

 

BMS SUB

 

 

 

 

 

Joint Executive Committee (JEC)

 

 

Joint Executive Committee (JEC)

 

[*]

 

 

 

 

 

 

 

 

 

Joint Development Committee (JDC)

 

 

Joint Development Committee (JDC)

 

[*]

 

 

 

 

 

 

 

 

 

Joint Commercialization Committee (JCC)

 

 

Joint Commercialization Committee (JCC)

 

[*]

 

 

 

 

 

 

 

 

 

Joint Finance Committee (JFC)

 

 

Joint Finance Committee (JFC)

 

[*]

 

 

 

 

 

 

 

 

 

Alliance Manager

 

 

Alliance Manager

 

[*]

 

 

 

 

 

--------------------------------------------------------------------------------

* denotes initial chairperson

 

A-1

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Annex B - Development Plan and Development Budget as of Effective Date

 

[*]

 

B-1

--------------------------------------------------------------------------------

 

Annex C – Commercialization Plan and Commercialization Budget as of Effective
Date

 

[*]

 

C-1

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Annex D - BMS Patents

 

•                  Patents exclusively licensed by BMS from Merck

 

[*]

 

D-1

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Annex E - Gilead Patents

 

[*]

 

E-1

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Annex F – Gilead Licensed Trademarks

 

Country

 

Mark

 

App. / Reg. No.

 

Filing / Reg. Date

 

Class

 

USA

 

TRUVADA

 

Application No.
78/239,720

 

Filed 4/18/03

 

5

 

USA

 

VIREAD

 

2,586,295

 

06/25/2002

 

5

 

USA

 

EMTRIVA

 

2,852,092

 

06/08/2004

 

5

 

 

F-1

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Annex G – BMS Licensed Trademarks

 

Country

 

Mark

 

App. / Reg. No.

 

Filing / Reg. Date

 

Class

 

U.S.

 

SUSTIVA

 

2,496,476

 

10/9/2001

 

5

 

Puerto Rico

 

SUSTIVA

 

39883

 

2/28/97

 

5

 

 

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Annex H – Quarterly Detail Report

 

For illustrative purposes only

 

 

 

Period Ending: 06/30/2006

 

 

 

 

Detail Activity Report

Run Date: 07/15/2006

 

Product:  FDC “Brand X”

 

[*]

 

H-1

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Annex I - Manner of Calculation of Net Selling Price

 

The Net Selling Price for a product for a relevant period for a country shall be
expressed in dollars per daily dose for such product and shall be equal to the
quotient of (i) the aggregate Net Sales for such country of such product for
such period that are recognized as revenue (under United States generally
accepted accounting principles in effect from time to time, as consistently
applied), divided by (ii) the number of daily doses of such product in units for
which revenue may be recognized (under United States generally accepted
accounting principles in effect from time to time, as consistently applied) for
such period that may be sold or used [*] in such country plus the number of
daily doses of such product in [*] for such country shipped during such period,
provided, however, that consistent with the definition of Net Sales, [*].  The
Parties’ intent is that the practices of BMS and Gilead in calculation of Net
Sales shall be harmonized in the process of calculating Net Selling Price, such
that (a) any deductions, payments, rebates or other compensations made or given
by BMS or Gilead in connection with or in respect of sales of such products
shall be treated as a deduction from gross amount invoiced in the calculation of
Net Sales, and (b) if both BMS and Gilead make payments or provide other
compensation for a similar purpose with respect to a product but only one of
them treats that item for accounting purposes as a deduction from revenues, then
for purposes of calculation of Net Selling Price under this Annex I that item
shall be a deduction from gross amount invoiced in the calculation of Net Sales
for both parties.

 

Example:

[*]

 

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Annex J - Calculation of Cost of Goods

 

“Cost of Goods” means with respect to manufacture or acquisition of a product,
an amount equal to [*].  The calculation of Cost of Goods for specific products
will be mutually agreed in writing by the Members and updated for each Calendar
Year.

 

J-1

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Annex K - Calculation of Transfer Price

 

[*]

 

K-1

--------------------------------------------------------------------------------

 

[*]

 

K-2

--------------------------------------------------------------------------------

 

[*]

 

K-3

--------------------------------------------------------------------------------

 

[*]

 

K-4

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Annex L – Joint Press Release

 

Bristol-Myers Squibb Contacts

 

Gilead Sciences Contacts

David Rosen, Media

 

Amy Flood, Media

(609) 252-5675

 

(650) 522-5643

 

 

 

JOHN ELICKER, INVESTORS

 

SUSAN HUBBARD, INVESTORS

(212) 546-3775

 

(650) 522-5715

 

BRISTOL-MYERS SQUIBB AND GILEAD SCIENCES ESTABLISH
JOINT VENTURE TO DEVELOP AND COMMERCIALIZE
FIXED-DOSE COMBINATION OF THREE HIV MEDICINES

 

First Collaboration to Develop a Once-Daily Antiretroviral Fixed-Dose Regimen

 

New York, NY and Foster City, CA, DATE, 2004 – Bristol-Myers Squibb Company
(NYSE: BMY) and Gilead Sciences, Inc. (Nasdaq: GILD) today announced details of
a joint venture to develop and commercialize the fixed-dose combination of
Bristol-Myers Squibb’s SustivaÒ (efavirenz) and Gilead’s Truvada™ (emtricitabine
and tenofovir disoproxil fumarate) in the United States.  If approved, the new
product would be the first complete Highly Active Antiretroviral Therapy (HAART)
treatment regimen for HIV available in a fixed-dose combination taken once
daily.  Fixed-dose combinations contain multiple medicines formulated together
and may help simplify HIV therapy for patients and providers. The joint venture
established by the two companies is the first of its kind in the field of HIV
therapy.

 

The work necessary to co-formulate Sustiva and Truvada into a once-daily
combination product has been ongoing throughout most of 2004 and will continue
into 2005.  Through the joint venture – Bristol-Myers Squibb & Gilead Sciences,
LLC – the companies will work in partnership to complete development and U.S.
regulatory filings for this fixed-dose regimen.  Subject to receiving marketing
approval of the fixed-dose regimen, the companies would share responsibility for
commercializing the product in the United States.  Both companies will provide
funding and field-based sales representatives in support of promotional efforts
for the combination product.  Bristol-Myers Squibb and Gilead will receive
revenues from future net sales at percentages relative to the contribution
represented by their individual products that comprise the fixed-dose
combination.

 

Guidelines issued by the U.S. Department of Health and Human Services (DHHS)
list the combination of emtricitabine, tenofovir disoproxil fumarate and
efavirenz as one of the preferred non-nucleoside reverse transcriptase inhibitor
(NNRTI)-based treatments for use in appropriate patients that have never taken
anti-HIV medicines before. It is important that patients be aware that
individual HIV medications must be taken as part of combination regimens, and
that they do not cure HIV infection or prevent passing HIV to others.

 

“Gilead and Bristol-Myers Squibb share a steadfast commitment to addressing the
needs of people living with HIV/AIDS around the world, and today’s announcement
signals significant progress toward our

 

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common goal,” commented John C. Martin, PhD, president and chief executive
officer, Gilead Sciences.  “This landmark partnership reflects the dedication
Gilead and Bristol-Myers Squibb bring to delivering simplified therapy to
physicians and patients.  We look forward to working with the Bristol-Myers
Squibb team to ensure this novel therapeutic advancement reaches physicians and
people living with HIV/AIDS as rapidly as possible.”

 

“For more than a decade, Bristol-Myers Squibb has been a leader in the field of
HIV with significant investments in innovative scientific research and an
unwavering commitment to finding new and better treatment options to help
improve the lives of people with HIV,” said Peter R. Dolan, chairman and chief
executive officer, Bristol-Myers Squibb Company.  “We are pleased to be
leveraging our leadership in HIV through this collaboration with Gilead to help
advance the management of the disease through the development of potentially
more convenient treatment options.”

 

Earlier in 2004, U.S. Secretary of Health and Human Services Tommy Thompson
addressed the need for new products to help advance and simplify treatment for
people with HIV/AIDS, encouraging members of industry to work together to create
fixed-dose combinations that would help achieve these goals.  Additionally,
earlier this year the U.S. Food and Drug Administration issued new guidelines to
expedite the approval of new combination products for HIV.

 

“The availability of simplified treatment regimens for HIV/AIDS is important to
our ability to make progress in the fight against the disease,” Secretary
Thompson said. “I am pleased to see the collaboration and efforts of
Bristol-Myers Squibb and Gilead. This partnership to create a fixed-dose
combination of three HIV medications represents an important advance in our
collective effort to deliver simplified therapy for people living with HIV.”

 

Important Safety Information About Sustiva

Sustiva is a prescription medicine used in combination with other medicines to
treat people who are infected with the human immunodeficiency virus type 1
(HIV-1).  Sustiva does not cure HIV or help prevent passing HIV to others.

 

Sustiva should not be taken with Hismanal® (astemizole), Propulsid® (cisapride),
Versed® (midazolam), Halcion® (triazolam), ergot medicines (for example,
Wigraine® and Cafergot®), or Vfend® (voriconazole).  This list of medicines is
not complete.  Patients should discuss all prescription and non-prescription
medicines, vitamin and herbal supplements, or other health preparations
(particularly St. John’s wort) they are taking or plan to take with their
healthcare provider.  Patients taking Sustiva should tell their doctor right
away if they have any side effects or conditions including: severe depression,
strange thoughts, or angry behavior, which have been reported in a small number
of patients. A few reports of suicide have been made, but it is not known if
Sustiva was the cause.  Patients should tell their doctor if they have a history
of mental illness or are using drugs or alcohol. Dizziness, trouble sleeping,
drowsiness, trouble concentrating, and/or unusual dreams are common.  These
feelings tend to go away after taking Sustiva for a few weeks.

 

Women should not become pregnant or breastfeed while taking Sustiva.  Rash is a
common side effect that usually goes away without any change in treatment.  Rash
may be a serious problem in some children.  If a child develops a rash, their
doctor should be contacted right away.  Patients should tell their doctor if
they have liver disease, have ever had seizures, or are taking medicine for
seizures as tests to check the liver or drug levels in the blood may be needed. 
Changes in body fat have been seen in some patients taking HIV medicines,
however, the cause and long-term effects of these changes are not known at this
time. Other common side effects include: tiredness, upset stomach, vomiting and
diarrhea.  Taking Sustiva with food increases the amount of medicine in the
body, which may increase the frequency of side

 

L-2

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effects.  Sustiva should be taken on an empty stomach, preferably at bedtime,
which may make some side effects less bothersome.  United States Full
Prescribing Information is available at www.sustiva.com.

 

About Truvada

Truvada combines Emtriva® (emtricitabine) and Viread® (tenofovir disoproxil
fumarate) in one tablet taken once a day in combination with other
antiretroviral agents.  In the United States, Truvada is indicated in
combination with other antiretroviral agents (such as non-nucleoside reverse
transcriptase inhibitors or protease inhibitors) for the treatment of HIV-1
infection in adults.  Safety and efficacy studies using Truvada tablets or using
Emtriva and Viread in combination are ongoing.

 

Both components of Truvada have been studied individually, as part of multi-drug
regimens and have been found to be safe and effective.  Since Emtriva and
lamivudine (3TC) are comparable in their structure, resistance profiles, and
efficacy and safety as part of multi-drug regimens, existing data from the use
of lamivudine and Viread in combination have been extrapolated to support use of
Truvada tablets for the treatment of HIV-1 infection in adults.  Therefore, in
treatment-naïve patients, Truvada should be considered as an alternative to the
combination of Viread and lamivudine for those patients who might benefit from a
once-daily regimen.  In treatment-experienced patients, the use of Truvada
should be guided by laboratory testing and treatment history.

 

There are no study results demonstrating the effect of Truvada on clinical
progression of HIV-1, and it is not recommended that Truvada be used as a
component of a triple nucleoside regimen.

 

Truvada should not be used with Emtriva or Viread, or other drugs containing
lamivudine, including Combivir®, Epivir®, Epivir-HBV®, Epzicom™ or Trizivir®. 
Two-hundred eighty-three patients have received combination therapy with Emtriva
and Viread with either a non-nucleoside reverse transcriptase inhibitor or
protease inhibitor for 24 to 48 weeks in ongoing clinical studies.  Based on
these limited data, no new patterns of adverse events were identified and there
was no increased frequency of established toxicities.  For additional safety
information about Emtriva or Viread in combination with other antiretroviral
agents, please see “About Emtriva” and “About Viread,” below.

 

Lactic acidosis and severe hepatomegaly with steatosis, including fatal cases,
have been reported with the use of nucleoside analogues alone or in combination
with other antiretrovirals. Viread, Emtriva and Truvada are not indicated for
the treatment of chronic hepatitis B virus (HBV) infection and the safety and
efficacy of these drugs has not been established in patients co-infected with
HBV and HIV.  Severe acute exacerbations of hepatitis B have been reported in
patients who have discontinued Viread or Emtriva. Hepatic function should be
monitored closely with both clinical and laboratory follow-up for at least
several months in patients who discontinue Viread, Emtriva or Truvada and are
co-infected with HIV and HBV.  If appropriate, initiation of anti-hepatitis B
therapy may be warranted.

 

Changes in body fat have been observed in patients taking Viread, Emtriva,
Truvada and other anti-HIV medicines.  The cause and long term health effect of
these conditions are unknown.

 

About Viread

In the United States, Viread is indicated in combination with other
antiretroviral agents for the treatment of HIV-1 infection.  This indication is
based on analyses of plasma HIV-1 RNA levels and CD4 cell counts in controlled
studies of Viread in treatment-naïve adults and in treatment-experienced
adults.  There are no study results demonstrating the effect of Viread on
clinical progression of HIV-1.  The use of Viread should be considered for
treating adult patients with HIV-1 strains that are expected to be susceptible
to tenofovir as assessed by laboratory testing or treatment history.

 

L-3

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Drug interactions have been observed when didanosine, atazanavir or
lopinavir/ritonavir is co-administered with Viread and dose adjustments may be
necessary.  Data are not available to recommend a dose adjustment of didanosine
for patients weighing less than 60 kg.  Patients on atazanavir or
lopinavir/ritonavir plus Viread should be monitored for Viread-associated
adverse events which may require discontinuation.  When co-administered with
Viread, it is recommended that atazanavir 300 mg be given with ritonavir 100
mg.  Atazanavir without ritonavir should not be co-administered with Viread.

 

Renal impairment, including serious cases, has been reported.  Renal impairment
occurred most often in patients with underlying systemic or renal disease or in
patients taking concomitant nephrotoxic agents, though some cases have appeared
in patients without identified risk factors.  Decreases in bone mineral density
(BMD) at the lumbar spine and hip have been seen with the use of Viread.  The
clinical significance of changes in BMD and biochemical markers is unknown and
follow-up is continuing to assess long-term impact.  The most common adverse
events and those occurring in more than 5 percent of patients receiving Viread
with other antiretroviral agents in clinical trials include asthenia, pain,
abdominal pain, headache, nausea, diarrhea, vomiting, rash (rash, pruritis,
maculopapular rash, urticaria, vesiculobullous rash and pustular rash),
flatulence, dizziness and depression.  Less than 1 percent of patients
discontinued participation because of gastrointestinal events.

 

About Emtriva

In the United States, Emtriva is indicated, in combination with other
antiretroviral agents, for the treatment of HIV-1 infection in adults.  This
indication is based on analyses of plasma HIV-1 RNA levels and CD4 cell counts
from controlled studies of 48 weeks duration in antiretroviral-naïve patients
and antiretroviral-treatment-experienced patients who were virologically
suppressed on an HIV treatment regimen.  In antiretroviral-treatment-experienced
patients, the use of Emtriva may be considered for adults with HIV strains that
are expected to be susceptible to Emtriva as assessed by genotypic or phenotypic
testing.

 

Adverse events that occurred in more than 5 percent of patients receiving
Emtriva with other antiretroviral agents in clinical trials include abdominal
pain, asthenia (weakness), headache, diarrhea, nausea, vomiting, dizziness and
rash (rash, pruritis, maculopapular rash, urticaria, vesiculobullous rash,
pustular rash and allergic reaction).  Approximately 1 percent of patients
discontinued participation because of these events.  All adverse events were
reported with similar frequency in Emtriva and control treatment groups with the
exception of skin discoloration which was reported with higher frequency in the
Emtriva treated group.  Skin discoloration, manifested by hyperpigmentation on
the palms and/or soles, was generally mild and asymptomatic.  The mechanism and
clinical significance are unknown.

 

About Bristol-Myers Squibb

Bristol-Myers Squibb is a global pharmaceutical and related healthcare products
company whose mission is to extend and enhance human life.  For more than a
decade, Bristol-Myers Squibb Company has been a global leader in the science of
infectious diseases and has invested consistently in innovative research leading
to the development of important treatments for people with HIV/AIDS.  Visit
Bristol-Myers Squibb on the World Wide Web at www.bms.com.

 

About Gilead Sciences

Gilead Sciences is a biopharmaceutical company that discovers, develops and
commercializes therapeutics to advance the care of patients suffering from
life-threatening diseases worldwide.  The company has seven marketed products
and focuses its research and clinical programs on anti-infectives. 
Headquartered in Foster City, CA, Gilead has operations in North America, Europe
and Australia.  Visit Gilead on the World Wide Web at www.gilead.com.

 

L-4

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Forward-Looking Statements

 

Bristol-Myers Squibb Forward-Looking Statement

This press release contains “forward-looking statements” as that term is defined
in the Private Securities Litigation Reform Act of 1995 regarding product
development.  Such forward-looking statements are based on current expectations
and involve inherent risks and uncertainties, including factors that could
delay, divert or change any of them, and could cause actual outcomes and results
to differ materially from current expectations.  Among other risks, there can be
no guarantee that the combination product will be submitted for regulatory
approval, will receive regulatory approval, or, if approved, will be
commercially successful.  No forward-looking statement can be guaranteed.
Forward-looking statements in this press release should be evaluated together
with the many uncertainties that affect Bristol-Myers Squibb’s business,
particularly those identified in the cautionary factors discussion in
Bristol-Myers Squibb’s Annual Report on Form 10-K/A for the year ended
December 31, 2003 and in our Quarterly Reports on Form 10-Q.  Bristol-Myers
Squibb undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or otherwise.

 

Gilead Forward-Looking Statement

This press release contains “forward-looking statements” as that term is defined
in the Private Securities Litigation Reform Act of 1995.  The forward-looking
statements include statements regarding approval and licensure of the
combination product.  These statements involve risks and uncertainties, which
may cause results to differ materially from those set forth in the statements,
including the risks related to the ability of the companies to successfully
complete ongoing studies to support approval of the combination product and the
willingness of regulatory authorities to grant regulatory approval for the
combination product based on data from those studies. No forward-looking
statement can be guaranteed, and actual results may differ materially from those
projected.  Gilead undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information, future events
or otherwise.  Forward-looking statements in this press release should be
evaluated together with the many uncertainties that affect Gilead’s business,
particularly those mentioned in the cautionary statements in the company’s Form
10-K for the year ended December 31, 2003, and in periodic reports on Form 10-Q
and Form 8-K.

 

L-5

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Annex M — Certain Financial Data

•                  Annual Budget Reports:  [*]

 

•                  Quarterly Projection Reports: (No later that [*]

 

•                  Weekly Sales Reports by [*].

 

•                  Actual Reports: (all times based on [*]

 

M-1

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Annex N – Data to be Provided to Independent Accounting Expert Pursuant to
Section 7.1

 

To be provided by BMS on an annual basis:

 

[*]

 

To be provided by Gilead on an annual basis:

 

[*]

 

To be provided by the JV (or its designee) on an annual basis:

 

[*]

 

N-1

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Annex O – JV Obligations as Sublicensee

 

[*]

 

O-1

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Annex P – Key Terms of Services Agreement

 

This term sheet focuses on certain key aspects of the Services Agreement.  It
does not discuss all the terms and conditions that would be included in the
definitive Services Agreement to be entered into by the JV and Gilead Parent
pursuant to Section 5.2 of the Collaboration Agreement.

 

1.  Agreement:   Distribution Services Agreement (“Services Agreement”) between
the JV and Gilead Parent, pursuant to which Gilead Parent will provide certain
distribution services for the Combination Product in the Territory on behalf of
the JV.

 

2.  Distribution Services:  Distribution services to be provided by Gilead
Parent on behalf of the JV will include, without limitation,

 

•                  Inventory management and control:

[*]

 

•                  Warehousing and storage:

[*]

 

•                  Orders:

[*]

 

•                  Invoicing; collection of sales proceeds:

[*]

 

•                  Customer relations and services; returns:

[*]

 

The JCC will oversee Gilead Parent’s activities under the Services Agreement.

 

Gilead Parent will provide the distribution services in accordance with
customary practice in the biopharmaceutical industry, as well as with GSP, GMP
and applicable law.

 

3.  Compensation:

 

[*]

 

4.  Term:

 

The Services Agreement will continue for the term of the Collaboration
Agreement, unless earlier terminated in accordance with Article 14 of the
Collaboration Agreement.

 

P-1

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5.  Miscellaneous:

 

The Services Agreement will contain additional provisions relating to matters
such as [*] and such other provisions, consistent with the provisions of the
Collaboration Agreement, upon which BMS and Gilead Parent mutually agree.

 

P-2

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Annex Q – Pricing [*]

 

[*]

 

Q-1

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Annex R – List of Countries Comprising the Developing World

 

African Countries:

 

Algeria

Angola

Benin

Botswana

Burkina Faso

Burundi

Cameroon

Cape Verde

Central African Republic

Chad

Comoros

Côte d’Ivoire

Democratic Republic of Congo

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

Gambia

Ghana

Guinea

Guinea-Bissau

Kenya

Lesotho

Liberia

Libya

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Republic of Congo

Rwanda

São Tomé and Príncipe

Senegal

Seychelles

Sierra Leone

Somalia

South Africa

Sudan

Swaziland

Tanzania

Togo

Tunisia

Uganda

Zambia

Zimbabwe

 

Non-African Countries on the United Nations List of Least Developed Countries:

 

Afghanistan

Antigua and Barbuda

Bahamas

Bangladesh

Barbados

Belize

Bhutan

Bolivia

Cambodia

Cuba

Dominica

Dominican Republic

El Salvador

Fiji

Grenada

Guatemala

Guyana

Haiti

Honduras

Indonesia

Iran, Islamic Rep. of

Iraq

Jamaica

Jordan

Kiribati

Laos

Lebanon

Maldives

Mongolia

Myanmar

Naura

Nepal

Nicaragua

Oman

Pakistan

Papua New Guinea

Philippines

Saint Kitts and Nevis

Saint Lucia

Samoa

Saudia Arabia

Solomon Islands

Sri Lanka

St. Vincent and the Grenadines

Suriname

Syrian Arab Republic

Timor-Leste

Trinidad and Tobago

Tonga

Tuvalu

Vanuatu

Vietnam

Yemen

 

R-1

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