Exhibit 10.62

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.

COMMERCIALIZATION AGREEMENT

BETWEEN

GILEAD SCIENCES LIMITED

AND

BRISTOL-MYERS SQUIBB COMPANY

DATED AS OF DECEMBER 10, 2007

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

TABLE OF CONTENTS

 

SECTION 1 DEFINITIONS

   1

SECTION 2 COLLABORATION MANAGEMENT

   17

2.1

   Generally    17

2.2

   Joint Executive Committee    18

2.3

   Joint Finance Committee    19

2.4

   EU Operating Committee    21

2.5

   Alliance Managers    23

2.6

   Resolution of Disputes    24

2.7

   Commercialization Budget Deadlocks; Commercialization Plan Deadlocks    25

2.8

   Relationship to Other Committees    28

2.9

   Committee-Related Expenses    28

SECTION 3 REGULATORY MATTERS

   28

3.1

   Generally    28

3.2

   Regulatory Filings    28

3.3

   Regulatory Documentation    29

3.4

   Regulatory Communications    30

3.5

   Medical Affairs and Medical Communications    30

3.6

   Records    31

3.7

   Compliance-Related Matters    31

3.8

   Local Regulatory Expenses    32

SECTION 4 PRICING AND REIMBURSEMENT

   32

4.1

   Pricing and Reimbursement; Discounts    32

4.2

   Pricing and Other Contract Negotiations    38

4.3

   Consequence of Generic Launch on Pricing    39

4.4

   Pricing of Single Agent Products/Double Agent Product    39

4.5

   Net Selling Price of Stocrin Information    40

SECTION 5 COMMERCIALIZATION ACTIVITIES

   41

5.1

   Generally; Arrangements for Certain Territory A Countries    41

5.2

   Co-Promotion Agreements    44

5.3

   Promotion Obligations    44

5.4

   Distribution Obligations and Related Matters    45

5.5

   [*]    46

5.6

   Marketing Materials    46

5.7

   Use of Trademarks    48

5.8

   Commercialization Plan and Budget    48

5.9

   Commercialization Expenses    50

5.10

   Reports    51

5.11

   Records    51

5.12

   Samples and Product Donations    53

SECTION 6 SUPPLY-RELATED MATTERS

   54

6.1

   Generally    54

6.2

   Forecasts and Orders    54

6.3

   Supply-Related Expenses    55

 

[ * ] = 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.

i

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

SECTION 7 LICENSE GRANTS AND INTELLECTUAL PROPERTY

   55

7.1

   Licenses and Related Matters    55

7.2

   Ownership of Trademarks and Related Matters    57

7.3

   Ownership of Marketing Materials    57

7.4

   IP Expenses    58

SECTION 8 PAYMENTS

   58

8.1

   Authorized Expenses    58

8.2

   Manufacturing Fee    60

8.3

   Sharing of Recoveries Obtained from the Supply JV    60

8.4

   Other Payments    61

8.5

   Adjustment to Country-Specific Percentages Following Generic Launch    61

8.6

   Payment Terms    63

8.7

   Interest    63

8.8

   Taxes    63

8.9

   Royalty Payments to Third Parties    63

SECTION 9 TERRITORY COMBINATION PRODUCT RECALLS

   65

SECTION 10 REPRESENTATIONS AND WARRANTIES

   65

10.1

   Generally    65

10.2

   Relationship to Standard Terms    65

SECTION 11 LIMITATIONS ON LIABILITY AND RELATED MATTERS

   65

11.1

   Limits on Liability    65

11.2

   Exceptions to Standard Terms Limitations    65

11.3

   Relationship to EU Master Agreement    66

SECTION 12 TERM AND TERMINATION

   66

12.1

   Term    66

12.2

   Voluntary Termination    66

12.3

   Consequences of Expiration or Termination    66

12.4

   Accrued Rights; Survival    68

SECTION 13 MISCELLANEOUS

   69

13.1

   Standard Terms    69

13.2

   Assignment; Subcontracting    69

13.3

   Employees    70

13.4

   Nonsolicitation of Employees    70

13.5

   Notice    70

13.6

   Public Announcements    72

13.7

   Entire Agreement    72

 

[ * ] = 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.

ii

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

COMMERCIALIZATION AGREEMENT

This COMMERCIALIZATION AGREEMENT (this “Agreement”) dated and effective as of
December 10, 2007 (the “Effective Date”) is hereby made by and between Gilead
Sciences Limited, a limited company organized and existing under the laws of
Ireland, having offices at Unit 13 Stillorgan Industrial Park, Blackrock, Co.
Dublin, Ireland (“Gilead Sub”), and Bristol-Myers Squibb Company, a corporation
organized and existing under the laws of Delaware, having offices at 345 Park
Avenue, New York, New York 10154, USA (“BMS”) (each of Gilead Sub and BMS, a
“Party” and, collectively, the “Parties”).

RECITALS

WHEREAS, Gilead Sub, a wholly-owned subsidiary of Gilead Sciences, Inc. (“Gilead
Parent”), and BMS desire to commercialize the Combination Product (as defined
below) in the European Union and certain other countries;

WHEREAS, the Parties, their Affiliates (as defined below) and certain other
Persons (as defined below) have entered into certain other agreements covering
the manufacture of the Combination Product for distribution in such countries,
the filing of applications with the European Medicines Agency and any other
relevant Regulatory Authorities (as defined below) for approval of the
Combination Product by the European Commission or such other relevant Regulatory
Authorities, as the case may be, and other related matters; and

WHEREAS, Gilead Sub and BMS desire to co-promote the Combination Product, and
perform certain related activities, in such countries on the terms and
conditions set forth in this Agreement.

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

As used in this Agreement, the following terms shall have the respective
meanings set forth in this Section 1.

1.1 “1+1 Approved Reimbursement Price” shall have the meaning set forth in Annex
C.

1.2 “1+1 EXP” shall mean, with respect to a country in the Territory, the sum of
(a) the EXP (as defined in Annex C) for Sustiva or Stocrin, as applicable, in
such country and (b) the EXP for Truvada in such country.

 

[ * ] = 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

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.3 “Affected Country” shall mean a country in the Territory in which a Generic
Version Launch has occurred.

1.4 “Affected Party” shall mean (a) in the case of a Generic Version Launch of
Sustiva or Stocrin, BMS, or (b) in the case of a Generic Version Launch of
Viread, Emtriva or Truvada, Gilead Sub.

1.5 “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. Notwithstanding the foregoing, for the purposes of this definition, none
of the US JV, the Supply JV and the MAH shall constitute an Affiliate of either
of the Parties, and neither of the Parties shall constitute an Affiliate of the
US JV, the Supply JV or the MAH.

1.6 “Agreement” shall have the meaning set forth in the preamble hereto.

1.7 “Alliance Manager” shall have the meaning set forth in Section 2.5.

1.8 “Anticipated Agreements” shall mean (a) the Financial Agreement, (b) that
certain anticipated amendment and restatement of the MAH Shareholder Agreement,
(c) the Commercial License Agreement, (d) the License Agreements (as defined in
the Supply JV Shareholder Agreement), (e) those certain anticipated amendments
and restatements of the License Agreements (as defined in the MAH Shareholder
Agreement), other than that certain License Agreement (as so defined) to which
Merck and Company, Incorporated, was a party, (f) the Quality Agreement (as
defined in the Product Supply Agreement), and (g) those certain anticipated API
Quality Agreements with respect to EFV, TDF and FTC intended for inclusion in
Territory Combination Product.

1.9 “API” shall mean active pharmaceutical ingredient.

1.10 “Applicable Law” shall mean all applicable laws, rules, regulations,
guidelines or other requirements that may be in effect from time to time,
including applicable rules, regulations, guidelines or other requirements of
Regulatory Authorities, including, for the avoidance of doubt, with respect to a
product, intermediate thereof (including Blended API (as defined in the Product
Supply Services Agreement)) or active pharmaceutical ingredient, GMP, or with
respect to the Combination Product, any requirements set forth in the applicable
Territory Marketing Authorization.

1.11 “Approved Manufacturing Fee Category” shall have the meaning set forth in
Section 2.3(j).

 

[ * ] = 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.

2

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.12 “Approved Marketing Materials” shall have the meaning set forth in
Section 5.6(a).

1.13 “Approved Price” shall mean any Approved Reference Price or Approved
Reimbursement Price.

1.14 “Approved Reference Price” shall have the meaning set forth in
Section 4.1(c)(iii).

1.15 “Approved Reimbursement Price” shall have the meaning set forth in Annex C.

1.16 “Arbitration Matter” shall mean any disputed matter (a) that relates to or
arises out of the validity, interpretation or construction of, or the compliance
with or breach of, this Agreement or any Co-Promotion Agreement; (b) that came
before the JEC pursuant to Section 2.2(h) (provided that any dispute relating to
the Approved Marketing Materials may be submitted to arbitration only with
respect to the issue of whether specific proposed updates are Required Updates);
(c) as to whether, for purposes of Section 2.6(e), a proposal by one Party’s
member(s) to reverse or modify a decision of the JEC or such Operating Committee
with respect to a matter previously presented to it for decision is based on new
information or changed circumstances relevant to the applicable JEC or Operating
Committee decision; or (d) that is designated as an Arbitration Matter hereunder
or under any Co-Promotion Agreement; provided that, in each case ((a) through
(d)), such disputed matter has been considered, but not resolved, by the
Executives pursuant to Section 2.6. Notwithstanding the foregoing, (i) no
disputed matter relating to or arising out of the interpretation or construction
of the Pricing Rules or the Discount Rules shall constitute an Arbitration
Matter, and (ii) a disputed matter relating to or arising out of compliance with
or breach of a Party’s obligations with respect to providing pricing information
to the EU Pricing Discount Committee or to the other Party pursuant to the
Pricing Rules shall not constitute an Arbitration Matter unless and until it has
been finally determined pursuant to Section 4.1(e) that such Party provided
inaccurate pricing information to the EU Pricing Discount Committee, in which
case such matter shall constitute an Arbitration Matter solely for the limited
purposes of (A) determining whether the applicable breach or lack of compliance
arose from the gross negligence or intentional misconduct of such Party and
(B) determining appropriate remedies, if any.

1.17 “Attorney Representative” shall have the meaning set forth in
Section 4.1(a)(i).

1.18 “Authorized Commercialization Expenses” shall have the meaning set forth in
Section 5.9.

1.19 “Authorized Distribution Expenses” shall have the meaning set forth in
Section 5.4(c).

1.20 “Authorized Expenses” shall mean, collectively, the Authorized
Commercialization Expenses, Authorized Distribution Expenses, Authorized Other
Expenses and Authorized Supply Expenses.

 

[ * ] = 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.

3

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.21 “Authorized Other Expenses” shall mean all expenses designated herein as
Authorized Other Expenses.

1.22 “Authorized Supply Expenses” shall have the meaning set forth in
Section 6.3.

1.23 “BMS” shall have the meaning set forth in the preamble to this Agreement.

1.24 “BMS Licensed Trademarks” shall have the meaning set forth in Section
7.1(a)(ii).

1.25 “BMS Product Supply Agreement(s)” shall mean any BMS Product Supply
Agreement(s) that may be entered into between Gilead Sub and certain Affiliates
of BMS for sale or other distribution of Territory Combination Product in
certain countries in the Territory, each as amended from time to time.

1.26 “BMS Sole-Promote Countries” shall mean those countries specified as such
in Annex L.

1.27 “BMS Territory-Wide Percentage” shall have the meaning set forth in the
Financial Agreement.

1.28 “BMS Third Party Distributor Countries” shall mean those countries
specified as such in Annex L.

1.29 “Business Representative” shall have the meaning set forth in Section
4.1(a)(i).

1.30 “Business Day” shall mean a day that is not a Saturday, Sunday or day on
which banking institutions in Dublin, Ireland, New York, New York or San
Francisco, California are required by Applicable Law to remain closed.

1.31 “Calendar Quarter” shall mean each successive period of three
(3) consecutive calendar months commencing on January 1, April 1, July 1 and
October 1, except that the first Calendar Quarter of the Term shall commence on
the Effective Date and end on the day immediately prior to the first to occur of
January 1, April 1, July 1 or October 1 after the Effective Date, and the last
Calendar Quarter shall end on the last day of the Term.

1.32 “Calendar Year” shall mean each successive period of twelve
(12) consecutive calendar months commencing on January 1 and ending on
December 31, except that the first Calendar Year of the Term shall commence on
the Effective Date and end on December 31 of the year in which the Effective
Date occurs and the last Calendar Year of the Term shall commence on January 1
of the year in which the Term ends and end on the last day of the Term.

1.33 “Change of Control” shall have the meaning set forth in Section 13.2(a).

1.34 “Combination Product” shall mean the fixed-dose, co-formulated product
containing, as its only APIs per single daily dose, 300 mg TDF, 200 mg FTC, and
600 mg EFV. For the avoidance of doubt, the Combination Product may also be
referred to as the fixed-dose, co-formulated product containing, as its only
APIs per single daily dose, 245 mg tenofovir disoproxil, 200 mg FTC and 600 mg
EFV.

 

[ * ] = 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.

4

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.35 “Commercial Executives” shall mean (a) the President of EMEA (Europe,
Middle East & Africa) for BMS or any direct report (or other appropriate
employee of BMS or its Affiliates designated by the foregoing) and (b) the
Vice-President for EU Commercial Operations for Gilead Parent or any direct
report (or other appropriate employee of Gilead Parent or its Affiliates
designated by the foregoing).

1.36 “Commercial License Agreement” shall mean that certain commercial license
agreement anticipated to be entered into between the US JV and Gilead Sub, as
amended from time to time.

1.37 “Commercial Record Request” shall have the meaning set forth in Section
5.11(b).

1.38 “Commercialization Activities” shall mean Marketing and other activities
for the commercialization of the Territory Combination Product, including those
set forth in the Commercialization Plan and any other of the following conducted
for the Combination Product in a country in the Territory: execution of product
positioning, preparation of promotional and marketing materials, market research
and advertising activities, Promotion, advocacy, government and other public
relations activities, pricing under applicable regulations and guidelines and
securing local or national drug plan reimbursement.

1.39 “Commercialization Budget” shall have the meaning set forth in
Section 5.8(b).

1.40 “Commercialization Budget Deadlock” shall mean the inability of the JEC to
reach agreement on the level of expenditure with respect to a given country in
the Territory or the level of aggregate expenditure with respect to Territory
Centralized Expenses in any annual or interim update to any Commercialization
Budget.

1.41 “Commercialization Plan” shall have the meaning set forth in
Section 5.8(b).

1.42 “Commercialization Plan Deadlock” shall mean the inability of the JEC to
reach agreement on the minimum number of Details to be conducted in a given
country in the Territory in any annual or interim update to any
Commercialization Plan.

1.43 “Commercially Reasonable Efforts” shall mean, with respect to the
Commercialization Activities that a Party is required to perform with respect to
the Combination Product pursuant to the Commercialization Plan, the level of
effort that would generally be used by a Party to conduct such commercialization
activities in a manner consistent with the minimum level of expenditure
contemplated for such activities by the Commercialization Budget 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 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

 

[ * ] = 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.

5

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

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. Such determination shall be made on a country-by-country basis.

1.44 “Competing Product” shall mean (a) in the case of Gilead Sub as the
Transferring Party, a non-nucleoside reverse transcriptase inhibitor, and (b) in
the case of BMS as the Transferring Party, a nucleoside reverse transcriptase
inhibitor.

1.45 “Confidential Information” shall have the meaning set forth in the EU
Master Agreement.

1.46 “Continuing Party” shall have the meaning set forth in Section 12.2.

1.47 “Contract Manufacturer” shall mean any Third Party contract manufacturer
with which Gilead Sub (or any of its permitted successors or assigns) or any of
its Affiliates contracts for the Manufacture of the Combination Product pursuant
to the Product Supply Services Agreement.

1.48 “Contracting Matters” shall have the meaning set forth in Section 4.2(a).

1.49 “Co-Promote Country” shall mean any country in the Co-Promote Territory.

1.50 “Co-Promote Territory” shall mean (a) all countries in Territory B and
(b) all of the Territory A Co-Promote Countries.

1.51 “Co-Promotion Agreement” shall have the meaning set forth in Section 5.2.

1.52 “Cost Allocation Proposal” shall have the meaning set forth in Section 5.9.

1.53 “Cost of Goods” shall mean, with respect to an API, the cost of
Manufacturing such API as calculated pursuant to Annex A.

1.54 “Country Price” shall have the meaning set forth in Annex C.

1.55 “Country-Specific Commercialization Budget” shall have the meaning set
forth in Section 2.7(a).

1.56 “Country-Specific Commercialization Plan” shall mean, with respect to a
given country, that certain portion of the Commercialization Plan that specifies
the activities (including Details) to be performed with respect to such country.

1.57 “Country-Specific Percentage” shall mean the Gilead Country-Specific
Percentage or the BMS Country-Specific Percentage (each as defined in the
Financial Agreement), as the case may be.

 

[ * ] = 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.

6

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.58 “Covered Agreement” shall have the meaning set forth in the EU Master
Agreement.

1.59 “Customer” shall have the meaning set forth in Section 4.1(d).

1.60 “Designated EUOC Members” shall mean (a) a member of the EUOC that is
designated by BMS from time to time, and (b) a member of the EUOC that is
designated by Gilead Sub from time to time, in each case ((a) and (b)) to
resolve disputes with respect to Forecasts and Supporting Data as set forth in
Section 6.

1.61 “Designated Negotiator” shall have the meaning set forth in Section 4.2(c).

1.62 “Designated Territory A Countries” shall have the meaning set forth in
Annex L.

1.63 “Detail” shall mean an in-person presentation to a health care provider who
specializes in treatment of HIV infection or AIDS and has prescribing authority,
by a sales representative who is knowledgeable about the Combination Product and
any Approved Marketing Materials and the applicable Product SmPC, Labeling and
Package Leaflets for the Combination Product, in which presentation 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.

1.64 “Directive” shall mean European Parliament and Council Directive
2001/83/EC, as amended.

1.65 “Discount Rules” shall mean the rules set forth in Section 2 and Section 3
of Annex C.

1.66 “Discounted Price” shall have the meaning set forth in Section 4.1(d).

1.67 “Double Agent Product” shall mean Truvada.

1.68 “EDC” shall mean that certain European Development Committee established
pursuant to the MAH Shareholder Agreement.

1.69 “Effective Date” shall have the meaning set forth in the preamble to this
Agreement.

1.70 “EFV” shall mean efavirenz.

 

[ * ] = 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.

7

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.71 “EFV License Agreement” shall mean that certain license agreement, dated as
of September 1, 1994, as amended on May 18, 1998, March 7, 2000 and the
Effective Date (and, if applicable, as otherwise amended prior to the Effective
Date), between Merck Parent and Merck and Company, Incorporated, on the one
hand, and E.R. Squibb & Sons, L.L.C., as successor in interest to DuPont
Pharmaceuticals Company (formerly The DuPont Merck Pharmaceutical Company), on
the other hand, as such agreement is amended from time to time.

1.72 “Emtriva” shall mean the product sold by Gilead Parent and its Affiliates
under the trademark Emtriva® containing FTC as its only API.

1.73 “EU Marketing Authorization” shall mean that certain marketing
authorization granted by the European Commission with respect to Combination
Product.

1.74 “EU Master Agreement” shall mean that certain EU Master Agreement dated as
of the Effective Date by and among the Gilead Sub, BMS, the Supply JV, the MAH
and the US JV (or their respective Affiliates), as amended from time to time.

1.75 “EU Operating Committee” or “EUOC” shall mean that certain operating
committee with respect to the Territory established pursuant to Section 2.4.

1.76 “EU Pricing Discount Committee” or “EPDC” shall have the meaning set forth
in Section 4.1(a).

1.77 “European Union” shall mean all countries comprising the European Union, as
it may be constituted from time to time.

1.78 “Executive(s)” shall mean (a) in the case of Gilead Sub, the Chief
Executive Officer of Gilead Parent or any direct report designated by the Chief
Executive Officer of Gilead Parent and (b) in the case of BMS, the Chief
Executive Officer of BMS or any direct report designated by the Chief Executive
Officer of BMS, in each case ((a) and (b)) who shall not be a member of the JEC,
the JFC, the EUOC or any JLOC.

1.79 “Existing Discount Customers” shall have the meaning set forth in
Section 4.1(d)(i).

1.80 “Exploitation” shall mean the making, having made, importation, use, sale,
offering for sale or disposition of a product or process, including the
research, development, registration, modification, enhancement, Improvement,
Manufacturing, 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.

1.81 “Field” shall mean the treatment of HIV infection in adult humans.

1.82 “Field Force” shall mean sales representatives in the Territory, and
regional or other subnational managers of the foregoing.

1.83 “Financial Agreement” shall have the meaning set forth in the EU Master
Agreement.

 

[ * ] = 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.

8

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.84 “Forecast Principles” shall mean the objective forecast principles set
forth in Annex K.

1.85 “Forecasts” shall have the meaning set forth in Section 6.2(a).

1.86 “FTC” shall mean emtricitabine.

1.87 “Generic Version” shall mean, with respect to a country in the Territory
and a Single Agent Product, Stocrin or Double Agent Product, a product
containing the same API(s) as such product, with those being the only API(s) in
such product, and (a) for any country in the European Union, which product is
approved for Marketing in any country in the Territory under Article 10, 10a or
10b of Directive 2001/83/EC or any national implementations of, or regulations
promulgated under, such Articles, including Regulation 726/2004 or (b) for any
Other European Country, which product is approved for Marketing in such country
under any analogous Applicable Law.

1.88 “Generic Version Launch” shall mean, with respect to a country in the
Territory and the Single Agent Product, Stocrin or the Double Agent Product, as
the case may be, the later of (a) the Launch in such country of at least one
(1) Generic Version of such product and (b) the expiration of the last to expire
Patent which claims the composition or use (for the indication of HIV infection
in adult humans) of such product or the API(s) contained therein.

1.89 “Gilead Licensed Trademarks” shall have the meaning set forth in
Section 7.1(a).

1.90 “Gilead Non-Proprietary Product” shall have the meaning set forth in
Section 8.5(c).

1.91 “Gilead Parent” shall have the meaning set forth in the recitals to this
Agreement.

1.92 “Gilead Sole-Promote Countries” shall mean those countries specified as
such in Annex L.

1.93 “Gilead Sub” shall have the meaning set forth in the preamble to this
Agreement.

1.94 “Gilead Territory-Wide Percentage” shall have the meaning set forth in the
Financial Agreement.

1.95 “GMP” shall mean (a) applicable good manufacturing practice requirements
promulgated by applicable European Community law and guidance as amended from
time to time, including the applicable good manufacturing practices set forth in
European Community Directive 2003/94/EC, Directive 2001/83/EC, all relevant
implementations of such directives, and relevant guidelines including Volume 4
of the Rules Governing Medicinal Products in the European Union: Medicinal
products for human and veterinary use: Good manufacturing practices or (b) in
the case of each of the Other European Countries, the equivalent of the
foregoing promulgated by the relevant Regulatory Authorities in such country.

 

[ * ] = 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.

9

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.96 “GOA” shall have the meaning set forth in Section 4.1(d)(i).

1.97 “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 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.

1.98 “Independent Accounting Expert” shall mean an independent Third Party
accounting firm or consultant mutually agreed by the Parties.

1.99 “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 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.

1.100 “Initial Launch Period” shall mean, with respect to each country in the
Territory and the Country-Specific Commercialization Plan and Country-Specific
Commercialization Budget with respect thereto, the period commencing with the
Launch of the Combination Product in such country and ending twenty-four
(24) months after such Launch, or with respect to the Territory Centralized
Budget, the period commencing with the Effective Date and ending twenty-four
(24) months after the first Launch of the Combination Product in the Territory.

1.101 “Initial Launch Period Detail Commitment” shall mean, with respect to each
Country-Specific Commercialization Plan, that certain minimum number of Details
required to be included in such Commercialization Plan for each country in
Territory B for the applicable Initial Launch Period, as set forth in Annex J
(which Annex shall be amended by the Parties, prior to the Launch in the
applicable country to include such minimum number for any country in Territory B
for which such number is not specified in such Annex as of the Effective Date).

1.102 “Initial Launch Period Financial Commitment” shall mean, with respect to

 

[ * ] = 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.

10

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

each Country-Specific Commercialization Budget and the Territory Centralized
Commercialization Budget, that certain minimum amount to be specified in such
budget for the applicable Initial Launch Period, as set forth in Annex J (which
Annex shall be amended by the Parties, prior to the Launch in the applicable
country, to include such minimum amount for any country for which such amount is
not specified in such Annex as of the Effective Date).

1.103 “Interim Agreement” shall mean that certain interim agreement entered into
by and between Lawrence Laboratories and Bristol-Myers Squibb EMEA Sarl, on the
one hand, and Gilead Sub, on the other hand, dated as of February 1, 2007, as
such agreement is amended from time to time.

1.104 “Interim Manufacturing Agreement” shall mean that certain interim
agreement entered into by and between E.R. Squibb & Sons, L.L.C. and
Bristol-Myers Squibb EMEA Sarl, on the one hand, and Gilead Sub, on the other
hand, dated as of June 13, 2007, as such agreement is amended from time to time.

1.105 “Joint Executive Committee” or “JEC” shall have the meaning set forth in
Section 2.1(a).

1.106 “Joint Finance Committee” or “JFC” shall have the meaning set forth in
Section 2.1(a).

1.107 “Joint Local Operating Committee” or “JLOC” shall mean, with respect to a
given country in the Co-Promote Territory, that certain country-specific
commercialization committee established pursuant to the Co-Promotion Agreement
for such country, to focus on the planning and implementation of
Commercialization Activities in such country.

1.108 “Launch” shall mean (a) with respect to the Combination Product, the date
on which the Combination Product is first shipped by or on behalf of Gilead Sub
or BMS (or their respective Affiliates) to Third Parties in a country, portion
of the Territory or the Territory, as the case may be, or (b) with respect to
any Generic Version, the date on which such product is first available for
commercial sale and purchase in a country, portion of the Territory or the
Territory, as the case may be.

1.109 “Local Demand” shall mean, with respect to a given country in the
Territory and with respect to any given period of time specified in any forecast
or order prepared hereunder, the unit quantities of the Combination Product
required during such period to meet the treatment needs of HIV patients within
such country, as determined objectively in accordance with the Forecast
Principles.

1.110 “Local Regulatory Lead” shall mean (a) with respect to the BMS
Sole-Promote Countries and the BMS Third Party Distributor Countries, BMS or
(b) with respect to any other countries in the Territory, Gilead Sub.

1.111 “Local Regulatory Matters” shall have the meaning set forth in
Section 3.1.

 

[ * ] = 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.

11

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.112 “MAH” shall mean Bristol-Myers Squibb Gilead Sciences And Merck Sharp &
Dohme Limited, an Irish limited company.

1.113 “MAH Shareholder Agreement” shall mean that certain Shareholder Agreement,
dated as of September 29, 2006, by and among Gilead Sub, Lawrence Laboratories,
the MAH, and Merck Sharp & Dohme B.V. (which, for clarity, is no longer a party
to such agreement pursuant to that certain Exit Agreement among the MAH and its
shareholders and Merck and Company, Incorporated, dated as of the Effective
Date), governing the conduct of such parties with respect to the MAH’s
activities, as such agreement is amended from time to time.

1.114 “Manufacture” shall mean with respect to the applicable product or
compound, the manufacturing, processing, formulating, packaging, labeling,
holding (including storage), and quality control testing (including release), of
such product or compound.

1.115 “Market” or “Marketing” shall mean all programs and activities relating to
the Promotion and sale and other commercialization of the Combination Product,
including Detailing, advertising, and press and media activities, as well as
selling, contracting for sale of, and distributing the Combination Product.

1.116 “Maximum Percentage Discount” shall have the meaning set forth in
Section 4.1(d)(i).

1.117 “Merck Parent” shall mean Merck & Co., Inc.

1.118 “Non-Affected Party” shall mean the Party that is not the Affected Party.

1.119 “Non-Affected Product” shall mean (a) Sustiva or Stocrin, as the case may
be, in the case of a Generic Version Launch of Viread, Emtriva or Truvada, or
(b) Truvada, in the case of a Generic Version Launch of Sustiva or Stocrin.

1.120 “Notice Address” shall have the meaning set forth in Section 13.5.

1.121 “Operating Committee” shall mean the JFC or the EUOC, as the case may be.

1.122 “Order” shall have the meaning set forth in Section 6.2(b).

1.123 “Other European Countries” shall mean Iceland, Liechtenstein, Norway and
Switzerland.

1.124 “Parent” shall mean, in the case of Gilead Sub or any of its Affiliates,
Gilead Parent, and in the case of BMS or any of its Affiliates, BMS.

1.125 “Party” and “Parties” shall have the meaning set forth in the preamble to
this Agreement.

 

[ * ] = 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.

12

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.126 “Patents” shall mean (a) all patents and patent applications (including
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.

1.127 “Person” shall mean an individual, sole proprietorship, partnership,
limited partnership, limited liability partnership, corporation, limited
liability company, unlimited company, business trust, joint stock company,
trust, unincorporated association, joint venture or other similar entity or
organization, including a government or political subdivision, department or
agency of a government.

1.128 “Premium” shall mean, with respect to a given country for which, at any
time following the earliest to occur of the Generic Version Launch of Sustiva
(or Stocrin, as applicable), Viread, Emtriva or Truvada, the then-current
positive difference, if any, between the [*] for such country for a given
Calendar Year and the sum of the [*] for such country and such Calendar Year.

1.129 “Premium Share” shall mean, with respect to a given country, a given Party
and a given Calendar Year, (a) the Premium for such Calendar Year with respect
to such country, multiplied by (b) such Party’s Standard Country-Specific
Percentage for the Calendar Year prior to the Calendar Year in which the first
Generic Version Launch in such country occurred.

1.130 “Price Approval Country” shall have the meaning set forth in Section
4.1(c)(ii).

1.131 “Pricing Rules” shall mean the rules set forth in Section 1 of Annex C.

1.132 “Product SmPC, Labeling and Package Leaflets” shall mean with respect to a
product (a) for each country in the European Union, (i) the Summary of Product
Characteristics (as required by the Directive), (ii) any display of written,
printed or graphic matter upon the immediate container, outside container,
wrapper or other packaging of a product (including any pricing and reimbursement
information and other local information contained within the “blue box” on the
packaging of such product that is not included in the EU annexes attached to the
European Commission’s Decision with respect to the approval of such product) or
(iii) any written, printed or graphic material on or within the package from
which a product is to be dispensed, including the Package Leaflet (as required
by the Directive), in each case ((i) through (iii)), as approved by the European
Commission or (b) for each of the Other European Countries, the equivalent of
each of the foregoing in such country, in each case, as approved by the
applicable Regulatory Authority.

1.133 “Product Supply Agreement” shall mean the Product Supply Agreement dated
as of the Effective Date between the Supply JV and Gilead Sub for the supply to
Gilead Sub of Combination Product to be distributed in the Territory, as amended
from time to time.

1.134 “Product Supply Services Agreement” shall mean that certain Product Supply
Services Agreement dated as of the Effective Date between Gilead Sub, in its
capacity as Service Provider, and the Supply JV, as amended from time to time.

 

[ * ] = 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.

13

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.135 “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 Detailing. When used as a verb, “Promote”
shall mean to engage in any of the foregoing activities.

1.136 “Proposed Existing Customer Discount” shall have the meaning set forth in
Section 4.1(d)(i).

1.137 “Proprietary Product” shall have the meaning set forth in Section 8.5(c).

1.138 “Reference Price Country” shall have the meaning set forth in
Section 4.1(c)(iii).

1.139 “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 the European Medicines Agency and the European Commission, or other
entity exercising regulatory authority with respect to the Exploitation of the
Combination Product. For the avoidance of doubt, the Regulatory Authorities
shall include any entity exercising regulatory authority with respect to the
Manufacture of API for supply under any Covered Agreement, whether or not such
entity is located in the Territory.

1.140 “Requesting Party” shall have the meaning set forth in Section 4.1(e).

1.141 “SDEA” shall mean that certain safety data exchange agreement dated as of
September 25, 2006, by and among Gilead Parent, BMS and Merck Parent and such
other Persons as may be parties thereto from time to time, as such agreement may
be amended from time to time.

1.142 “Selling Entity” shall mean (a) with respect to each country in the
Territory in which Gilead Sub is the Selling Party, the Affiliate of Gilead Sub
that sells Territory Combination Product in such country or (b) with respect to
each country in the Territory in which BMS is the Selling Party, the Affiliate
of BMS that sells Territory Combination Product in such country.

1.143 “Selling Party” shall mean (a) with respect to each country in the
Co-Promote Territory, Gilead Sub or (b) with respect to each other country in
the Territory, BMS or Gilead Sub as set forth in Annex L. For clarity, the
Selling Party with respect to any Third Party Distributor Country is intended to
be the Party that sells (or has an Affiliate that sells) Territory Combination
Product to the Third Party Distributor and has (or has an Affiliate that has)
entered into an applicable distributor agreement with such Third Party
Distributor that is consistent with this Agreement.

 

[ * ] = 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.

14

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.144 “Service Provider” shall mean Gilead Sub, acting in its capacity as
service provider to the Supply JV pursuant to the Product Supply Services
Agreement.

1.145 “Significant Interim Update” shall have the meaning set forth in
Section 5.8(d).

1.146 “Single Agent Product” shall mean each of Viread, Emtriva, and Sustiva.

1.147 “Sole-Promote Countries” shall mean (a) all BMS Sole-Promote Countries and
(b) all Gilead Sole-Promote Countries.

1.148 “Sole Promoting Party” shall mean (a) in the case of any BMS Sole-Promote
Country, BMS or (b) in the case of any Gilead Sole-Promote Country, Gilead Sub.

1.149 “Standard Country-Specific Percentage” shall mean, with respect to a
Party, the Country-Specific Percentage of such Party as calculated pursuant to
the Financial Agreement (without regard to Section 8.5 of this Agreement).

1.150 “Standard Terms” shall mean those certain terms set forth in Annex C of
the EU Master Agreement.

1.151 “Stocrin” shall mean the product sold under the trademark Stocrin®
containing EFV as its only API.

1.152 “Subsequent Launch Period” shall mean (a) with respect to each country in
the Territory, the twelve (12) month period immediately following the Initial
Launch Period with respect to such country or (b) with respect to the Territory
Centralized Budget, the period immediately following the Initial Launch Period
with respect thereto and ending upon the end of the Subsequent Launch Period
with respect to the country in the Co-Promote Territory with the latest Launch
of the Combination Product.

1.153 “Supply JV” shall mean Tri-Supply Limited, an Irish limited company.

1.154 “Supply JV Shareholder Agreement” shall mean that certain Supply JV
Shareholder Agreement dated as of the Effective Date by and among Gilead Sub,
Lawrence Laboratories and the Supply JV, as amended from time to time.

1.155 “Supporting Data” shall have the meaning set forth in Annex K.

1.156 “Sustiva” shall mean the product sold by BMS and its Affiliates under the
trademark Sustiva® containing EFV as its only API.

1.157 “TDF” shall mean tenofovir disoproxil fumarate.

1.158 “Term” shall have the meaning set forth in Section 12.1.

1.159 “Terminated Party” shall have the meaning set forth in Section 12.2.

 

[ * ] = 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.

15

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.160 “Territory” shall mean the European Union and the Other European
Countries.

1.161 “Territory A” shall mean those countries in the Territory, other than any
country that is included in Territory B. For the avoidance of doubt, Territory A
shall include any countries that become part of the Territory after the
Effective Date. The countries included in Territory A as of the Effective Date
are set forth in Annex L.

1.162 “Territory A Co-Promote Countries” shall have the meaning set forth in
Annex L.

1.163 “Territory B” shall mean France, Germany, Italy, Spain, the United Kingdom
and the Republic of Ireland.

1.164 “Territory Centralized Budget” shall mean that portion of the
Commercialization Budget that sets forth the Territory Centralized Expenses.

1.165 “Territory Centralized Expenses” shall mean those Territory-wide expenses
set forth in the Commercialization Budget (i.e., expenses set forth therein that
are not designated as country-specific expenses).

1.166 “Territory Centralized Plan” shall mean that portion of the
Commercialization Plan setting forth Territory-wide activities (i.e., activities
in the Commercialization Plan that are not country-specific activities).

1.167 “Territory Combination Product” shall mean any Combination Product sold or
otherwise distributed (or, if not sold or otherwise distributed, Manufactured
for intended sale or other distribution) pursuant to this Agreement.

1.168 “Territory Customer Orders” shall have the meaning set forth in Section
5.4(a).

1.169 “Territory Pricing Information” shall mean Section 4.1(f).

1.170 “Territory Marketing Authorization” shall mean (a) with respect to each
country in the European Union, the EU Marketing Authorization and (b) with
respect to any of the Other European Countries, any equivalent of the foregoing
granted by the relevant Regulatory Authorities in such country.

1.171 “Third Party” shall mean any Person other than (a) the Parties or any of
their respective Affiliates or (b) the Supply JV, the MAH or the US JV. For the
avoidance of doubt, the exclusion of a Person from the definition of Third Party
hereunder shall not be construed to afford such Person any express or implied
rights, including third party beneficiary rights, hereunder.

1.172 “Third Party Acquirer” shall have the meaning set forth in
Section 13.2(a).

1.173 “Third Party Distributor” shall have the meaning set forth in
Section 5.1(b)(i).

 

[ * ] = 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.

16

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

1.174 “Third Party Distributor Agreement” shall mean any agreement between a
Third Party Distributor and either Party or any of its Affiliates, which
agreement grants such Third Party Distributor the right to distribute the
Combination Product in one or more countries in the Territory, including any
agreement under which a Third Party Distributor has the right to purchase
Territory Combination Product.

1.175 “Third Party Distributor Countries” shall have the meaning set forth in
Section 5.1(b)(i).

1.176 “Trademark” shall include any word, name, symbol, color, designation or
device or any combination thereof, including any trademark, trade dress, service
mark, service name, brand mark, trade name, brand name, logo or business symbol.

1.177 “Transferring Party” shall have the meaning set forth in Section 13.2(a).

1.178 “Truvada” shall mean the co-formulated product sold by Gilead Parent and
its Affiliates under the trademark Truvada® containing TDF and FTC as its only
APIs.

1.179 “US JV” shall mean Bristol-Myers Squibb & Gilead Sciences, LLC.

1.180 “US JV Collaboration Agreement” shall mean that certain Amended and
Restated Collaboration Agreement by and among Gilead Parent, Gilead Holdings,
LLC, BMS, E.R. Squibb & Sons, L.L.C., and the US JV dated as of September 28,
2006, as such agreement is amended from time to time.

1.181 “US JV Operating Agreement” shall mean that certain Operating Agreement
entered into as of December 17, 2004 by and between Gilead Holdings, LLC and
E.R. Squibb & Sons, L.L.C, as such agreement is amended from time to time.

1.182 “Viread” shall mean the product sold by Gilead Parent and its Affiliates
under the trademark Viread® containing TDF as its only API.

SECTION 2

COLLABORATION MANAGEMENT

2.1 Generally.

(a) The Parties desire to expand the role of certain committees established
under the US JV Collaboration Agreement and the US JV Operating Agreement as set
forth in this Section 2 and elsewhere in this Agreement. In furtherance of such
objective, (i) the Joint Executive Committee established under the US JV
Operating Agreement shall serve as the “Joint Executive Committee” or “JEC” for
purposes of this Agreement and (ii) the Joint Finance Committee established
under the US JV Collaboration Agreement shall serve as the “Joint Finance
Committee” or “JFC” for purposes of this Agreement. In taking any action
pursuant to this Agreement, the JEC and the JFC shall each act in accordance
with the terms of this Agreement. Further, any action taken by the JEC or JFC
pursuant to this Agreement shall be deemed to have been taken pursuant to, and
governed by, this Agreement and not the US JV Collaboration Agreement or the US
JV Operating Agreement, as the case may be.

 

[ * ] = 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.

17

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) The JEC and the JFC, with respect to the subject matter of this Agreement,
and the EUOC and the JLOCs, each shall have only the responsibilities and
authority delegated to or vested in such committee in this Section 2 or
elsewhere in this Agreement or any other Covered Agreement to which the Parties
or their respective Affiliates are parties.

2.2 Joint Executive Committee. Except as otherwise provided herein, the JEC
shall be governed by, and shall act in accordance with, Section 6 of the US JV
Operating Agreement (without regard to Section 6.2 of such agreement). The JEC
shall have overall authority and responsibility with respect to the
Commercialization Activities and any other activities conducted pursuant to the
Agreement or any Co-Promotion Agreement (except for those matters reserved to
the Parties or their respective Affiliates pursuant to this Agreement or any
Co-Promotion Agreement). Without limitation of the foregoing, the JEC shall have
the following powers and duties with respect to the activities conducted
pursuant to this Agreement or any Co-Promotion Agreement:

(a) to oversee the work of the Operating Committees;

(b) if possible, resolve disputes referred to the JEC by the Alliance Managers
pursuant to Section 2.5;

(c) to approve each annual update and Significant Interim Update of the
Commercialization Plan or the Commercialization Budget, as the case may be;

(d) to approve Cost Allocation Proposals;

(e) to approve the JFC’s reports submitted hereunder on financial matters that
the JEC designates for the implementation of the financial aspects of the
arrangements between the Parties and their Affiliates set forth herein with
respect to the Exploitation of Territory Combination Product;

(f) 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 Parties or its applicable Affiliates where
reasonably necessary, and methods of charging costs and expenses of each of the
Parties and its applicable Affiliates pursuant to this Agreement and the
Co-Promotion Agreements;

(g) to review and, if applicable, recommend to the Parties changes to the
Pricing Rules and Discount Rules pursuant to Section 4.1(g);

(h) to resolve disputes within the EUOC with respect to (i) the initially
proposed marketing materials for the Combination Product for each country in the
Territory, and thereafter, updates of any Approved Marketing Materials, and
(ii) a Party’s obligation, if any, pursuant to Section 5.11 to provide the other
Party with access to certain of such Party’s records, documentation and data;

 

[ * ] = 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.

18

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(i) to decide major strategic issues and any other matters relating to the
collaboration between the Parties with respect to the Exploitation of Territory
Combination Product that are not (i) within the purview of the EUOC, the JFC or
the JLOCs or (ii) reserved to the Parties pursuant to this Agreement;

(j) to consider any dispute referred to the JEC by a Party pursuant to
Section 2.6;

(k) to determine, with respect to each country in the Territory (other than with
respect to a Designated Territory A Country or a Third Party Distributor
Country, which, in each case, shall require mutual written agreement of the
Parties to Launch the Combination Product in such country), whether Launch of
the Combination Product in such country should occur and, if so, the timing
thereof (where the Parties acknowledge that as of the Effective Date, the Launch
of the Combination Product in the United Kingdom and Germany has been approved);
provided, however, that, at any time on or after the date on which all of the
Anticipated Agreements have been executed, in the case of any Price Approval
Country or Reference Price Country (in each case, other than any Designated
Territory A Country), subject to Section 5.1, the Selling Party shall have the
right to Launch the Combination Product at any time after the Approved Price
that corresponds to the price at which the Combination Product is to be sold to
wholesalers or others purchasing directly from the Selling Party in such country
has been established, provided that, in the case of a Price Approval Country,
such Approved Price is at or above the Minimum Approved Price for such country;
and

(l) to take such other actions as are reserved to the JEC in this Agreement or
any Covered Agreement to which the Parties (or their respective Affiliates) are
parties 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 (or such Covered Agreement if applicable).

Notwithstanding the enumerated authority of the JEC in this Agreement and the
express reservation to the decision-making authority of the Parties with respect
to certain matters herein, in the event that the JEC, acting (i) by unanimous
affirmative Member Votes (as defined in the US JV Operating Agreement) pursuant
to Section 6.5(d) of the US JV Operating Agreement, or (ii) by unanimous written
consent pursuant to Section 6.5(c) of the US JV Operating Agreement, takes
action on a matter relating to the Exploitation of Territory Combination
Product, but with respect to which matter authority and responsibility have not
been delegated to or vested in the JEC hereunder, the Parties shall be deemed to
waive (and each Party shall cause its Affiliates 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 Parties (and each
Party shall cause its Affiliates to be bound) for purposes of this Agreement and
any Co-Promotion Agreement.

2.3 Joint Finance Committee. Except as otherwise provided herein, the JFC shall
be governed by, and shall act in accordance with, Section 2.6(a) and Section 2.7
of the US JV Collaboration Agreement as if such Sections were incorporated
herein. Subject to the oversight of the JEC, the JFC shall have the following
powers and duties with respect to the activities conducted pursuant to this
Agreement or any Co-Promotion Agreement:

(a) to work with (i) the JEC, the EUOC and the JLOCs to assist in financial,
budgeting and planning matters as required, including assisting in the
preparation of budgets and annual and long-term plans and (ii) to the extent
applicable, to coordinate with the Joint European Finance Committee with respect
to expenses intended to be allocated on a Territory-wide basis and other matters
covered by the Financial Agreement;

 

[ * ] = 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.

19

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) in coordination with the EUOC, to oversee the work of the JLOCs;

(c) if possible, resolve disputes referred to the JFC by the Alliance Managers
pursuant to Section 2.5 or by either Party (or any of its Affiliates) pursuant
to any applicable provisions of the Financial Agreement;

(d) 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 arrangements between the Parties and their Affiliates with respect to the
Exploitation of Territory Combination Product;

(e) to prepare, for approval by the JEC, reports on such financial matters as
are designated by the JEC for the implementation of the financial aspects of the
arrangements between the Parties and their Affiliates with respect to the
Exploitation of Territory Combination Product;

(f) to make certain determinations and calculations set forth in the Financial
Agreement, which determinations and calculations the JFC is assigned to perform
thereunder;

(g) to coordinate audits of financial data where appropriate and required or
allowed by this Agreement or any Covered Agreement to which the Parties or their
respective Affiliates are parties;

(h) to address issues of implementation relating to the financial mechanics and
calculations under this Agreement and the Financial Agreement;

(i) 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 Parties
where necessary and the methods of charging costs and expenses of each of the
Parties;

(j) to consider, upon request of Gilead Sub, and designate, if appropriate, any
category of costs and expenses incurred by or on behalf of Gilead Sub in
connection with the performance of its obligations under the Product Supply
Services Agreement, other than any category that is already included in the
Manufacturing Fee or Authorized Expenses (in each case, as defined in the
Product Supply Services Agreement), as an “Approved Manufacturing Fee Category”
or approved category of Authorized Expenses (as defined in such agreement), as
applicable, for the Territory;

 

[ * ] = 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.

20

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(k) to review the appropriate allocation of costs and expenses with respect to
Authorized Expenses, including any Cost Allocation Proposals, and to make
recommendations to the JEC with respect to Cost Allocation Proposals;

(l) 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, if
any, pursuant to this Agreement and, if applicable, pursuant to any Co-Promotion
Agreement;

(m) to provide updates on the JFC’s activities and achievements hereunder to the
JEC each Calendar Quarter; and

(n) to perform such other functions as the Parties may mutually agree in writing
from time to time or as the JEC may delegate from time to time.

2.4 EU Operating Committee.

The Parties shall establish the EUOC, which shall have certain responsibilities
with respect to the Parties’ collaboration under this Agreement, including to
facilitate communications between the Parties with respect to the
commercialization of Territory Combination Product, as set forth in this Section
2.4.

(a) Membership. Each Party shall appoint four (4) members of the EUOC. BMS shall
appoint one (1) of the members designated by BMS to serve as chairperson of the
EUOC through the first anniversary of the Effective Date. Thereafter, a member
designated by Gilead Sub and then a member designated by BMS shall serve
alternately as chairperson, on a rotating annual basis from each anniversary of
the Effective Date. The initial EUOC members and the chairperson are identified
in Annex B hereto.

(b) Authority. Subject to the oversight of the JEC, the EUOC shall have the
following powers and duties:

(i) in coordination with the JFC, to oversee the work of the JLOCs;

(ii) if possible, resolve any disputes referred to the EUOC by the Alliance
Managers pursuant to Section 2.5;

(iii) to (A) review and propose to the JEC for its approval each annual update
and Significant Interim Update of the Commercialization Plan and
Commercialization Budget and (B) review and approve each interim update other
than any Significant Interim Update, in each case ((A) and (B)) proposed
pursuant to Section 5.8;

(iv) to oversee and coordinate the Parties’ activities under the
Commercialization Plan;

(v) to oversee the distribution of Territory Combination Product;

 

[ * ] = 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.

21

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(vi) to develop and approve (A) initial marketing materials for the Combination
Product in the Territory, and (B) updates to such materials from time to time as
may be reasonably necessary or appropriate, all in accordance with Section 5.6;

(vii) to review any Cost Allocation Proposals and make recommendations to the
JEC with respect to any such proposal;

(viii) to monitor whether the Combination Product is being sold at prices that
are permitted by Section 4.1, the Pricing Rules and the Discount Rules;

(ix) to coordinate matters relating to the Manufacturing and labeling of
Territory Combination Product (to the extent that such matters are not within
the authority of the EDC) as set forth in Section 6.1;

(x) to oversee the activities of any Third Party Distributors;

(xi) to resolve disputes between the Parties with respect to a Party’s
obligation, if any, pursuant to Section 5.11 to provide the other Party with
access to certain of such Party’s records, documentation and data relating to
the Commercialization Activities;

(xii) to oversee the forecasting of Local Demand for the Territory;

(xiii) consider and resolve any dispute referred to it by any JLOC pursuant to
any Co-Promotion Agreement;

(xiv) to provide updates on the EUOC’s activities and achievements to the JEC
each Calendar Quarter;

(xv) subject to the MAH Shareholder Agreement to the extent applicable, to
oversee medical affairs and medical communication activities with respect to
Territory Combination Product; and

(xvi) to perform such other functions as the Parties may mutually agree in
writing from time to time or as the JEC may delegate from time to time.

(c) Member Qualifications. Any person appointed to serve as a member of the EUOC
shall have appropriate expertise and be otherwise qualified to serve in such
capacity. A member of the EUOC may serve on any other (sub)committee established
hereunder. The Parties shall endeavor to match their respective representation
on the EUOC in terms of functional areas and management level.

(d) Substitutions. A member of the EUOC may be removed or replaced at any time,
with or without cause, by the Party that appointed such member. Such action
shall be accomplished by written notice to the other Party. Each member of the
EUOC shall serve until a successor is named by the Party that appointed such
committee member (or until his or her earlier resignation or removal).

 

[ * ] = 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.

22

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(e) Meetings. The EUOC shall meet at least once per Calendar Quarter until the
second anniversary of the date on which the Combination Product has been
Launched in each country in the Territory in which Launch is anticipated to
occur or on such other schedule as may be determined by the EUOC. The EUOC shall
meet at times and places mutually agreed by the members of the EUOC. The EUOC
shall keep accurate and complete minutes of its meetings to record all
proposals, recommendations and actions taken, which minutes shall be taken and
approved as set forth in Section 2.4(f). All such minutes and other records of
the EUOC shall be available to each member of the EUOC and each Party.

(f) Notice and Agendas; Minutes. The Alliance Managers, in collaboration with
the chairperson of the EUOC, shall organize committee meetings, prepare the
meeting agenda based on items submitted by committee members, take or cause to
be taken accurate minutes of meetings, circulate draft minutes promptly after
the meeting for approval by the members of such committee, and circulate final
minutes to such 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 EUOC so that such materials are received reasonably in
advance of such meeting. Any member of the EUOC may waive notice of a meeting
thereof, and shall be deemed to waive such notice if he or she attends the
meeting and does not object to the meeting because of a lack of notice prior to
its commencement.

(g) Quorum. At least three (3) members, including at least one (1) member
appointed by each Party, shall be in attendance at a meeting of the EUOC to
establish a quorum for the conduct of business. The EUOC 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.

(h) Voting. Each member of the EUOC shall have one (1) vote on all matters to be
acted upon by the EUOC. The EUOC shall take action with respect to a matter only
if: (i) a quorum is present at the time when such matter is to be acted upon by
the EUOC; and (ii) the action proposed to be taken is approved by the
affirmative vote of a majority of the EUOC members participating in such
meeting, including the affirmative vote of at least one EUOC member appointed by
each Party. Notwithstanding the foregoing, the EUOC may also act by unanimous
written consent of its members without a meeting. If the EUOC is unable to reach
agreement on a matter properly presented to the EUOC for its consideration, the
matter shall be resolved as set forth in Section 2.6.

2.5 Alliance Managers.

(a) Gilead Sub and BMS shall each designate within their respective
organizations an alliance manager (an “Alliance Manager”) with responsibility
for facilitating the interaction and cooperation between the Parties with
respect to the activities conducted hereunder and under the Co-Promotion
Agreements. The initial Alliance Managers are identified in Annex B hereto. Each
Party may change its Alliance Manager from time to time upon written notice to
the other Party.

 

[ * ] = 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.

23

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) The Alliance Managers shall not be members of the JEC or any Operating
Committee. The Alliance Managers shall attend all meetings of the JEC and the
EUOC and support the chairpersons of the JEC and the EUOC in the discharge of
their responsibilities hereunder. The Alliance Managers shall be nonvoting
participants in such meetings. Each Alliance Manager shall endeavor to create
and maintain a collaborative work environment within and among the JEC, and the
Operating Committees. In addition, with respect to the activities conducted
hereunder and under the Co-Promotion Agreements, each Alliance Manager:
(i) shall coordinate the relevant functional representatives of the Parties;
(iii) shall provide a single point of communication for seeking consensus both
internally within the respective Parties’ organizations and between the Parties;
(iv) shall identify and bring disputes relating to this Agreement or any
Co-Promotion Agreement (other than any such disputes that, herein or in the
applicable Co-Promotion Agreement, are expressly excluded from the scope of
Section 2.6) to the attention of the JEC or the applicable 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 Co-Promotion Agreements and that
relevant action items agreed upon at such meetings are appropriately carried out
or otherwise addressed.

2.6 Resolution of Disputes.

(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 JEC; and (ii) either Party may refer to the JEC any
issue arising under or with respect to this Agreement or any Co-Promotion
Agreement that is not covered by clause (i), other than (A) a dispute arising
with respect to Forecasts or Supporting Data (which dispute shall be resolved as
set forth in Section 6), (B) a dispute with respect to a matter within the
decision-making authority of the EU Pricing Discount Committee, or (C) a dispute
that this Agreement (or the applicable Co-Promotion Agreement) expressly
excludes from this Section 2.6.

(b) If the JEC is unable to resolve a dispute referred to it by an Operating
Committee or by a Party pursuant to Section 2.6(a) within ten (10) days 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
Executives.

(c) If the Executives are unable to reach agreement on a disputed matter
referred to them pursuant to Section 2.6(b) within ten (10) days after such
referral, then either Gilead Sub or BMS may refer the disputed matter to binding
arbitration pursuant to Section 6.7 of the Standard Terms if and only if the
disputed matter constitutes an Arbitration Matter.

(d) Each Party shall, and shall cause its Affiliates to, refrain from exercising
its rights to pursue arbitration under Section 2.9(c)(A) of the US JV
Collaboration Agreement with respect to any disputed matter arising under or
with respect to this Agreement or any Co-Promotion Agreement.

 

[ * ] = 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.

24

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(e) Notwithstanding anything in this Section 2.6 to the contrary, the dispute
resolution procedures set forth in Sections 2.6(a) through (c) shall not apply
to any deadlock within the JEC or any Operating Committee resulting from a
proposal by one Party’s member(s) to reverse or modify a decision of the JEC or
such Operating Committee with respect to a matter previously presented to it for
decision, unless such proposal is based on new information or changed
circumstances relevant to the applicable JEC or Operating Committee decision;
provided, however, that this Section 2.6(e) shall not apply to the deliberations
and decisions of the EUOC pursuant to Section 5.6, or the deliberations and
decisions of the JEC with respect to any disputes that arise within the EUOC
with respect thereto; and provided, further, that the EUOC’s and the JEC’s
reconsideration of prior decisions with respect to the matters covered by the
preceding proviso shall be governed by Section 5.6, 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 continue to apply until such time, if any, as a modified
position may be agreed by the EUOC or the JEC, or adopted by the Executives or,
if applicable, the arbitrator(s), as the case may be.

(f) Nothing in this Section 2.6 shall affect the right of a Party to exercise
its rights under Section 5.4(a) of the Standard Terms as incorporated herein
with respect to a Material Default (as defined in the Standard Terms) by the
other Party concurrently with the exercise of its rights under this Section 2.6.
In the event that, at any time prior to completion of the dispute resolution
procedures set forth in this Section 2.6, the non-Breaching Party (as defined in
the Standard Terms) delivers a notice of Material Default to the Breaching
Party, the cure period set forth in Section 5.4(a) of the Standard Terms shall
begin to run upon the receipt of such notice and shall run concurrently with the
procedures set forth in this Section 2.6.

(g) The dispute resolution mechanisms set forth in this Section 2.6 shall be the
sole method for resolving any Arbitration Matter or any other matter that is the
subject of this Section 2.6.

2.7 Commercialization Budget Deadlocks; Commercialization Plan Deadlocks.
Notwithstanding anything herein to the contrary, in the event of a
Commercialization Budget Deadlock or a Commercialization Plan Deadlock, in each
case with respect to any period prior to the end of the Subsequent Launch
Period, then in lieu of any other dispute resolution procedures set forth in
this Agreement, the Parties agree that the dispute shall be conclusively
resolved as follows:

(a) If a Commercialization Budget Deadlock arises with respect to the portion of
the Commercialization Budget relating to a given country (such portion, the
“Country-Specific Commercialization Budget”) for a given Calendar Year (or part
thereof) prior to the end of the Initial Launch Period with respect to such
country, the level of aggregate expenditure for such period with respect to such
country shall be fixed, upon notice given by a Party to the other Party, at
(i) in the case of disputes as to annual updates of such Country-Specific
Commercialization Budget, the level of aggregate expenditure for such period
provided for in the Initial Launch Period Financial Commitment (apportioned, if
appropriate, to account for a period in dispute that is shorter than twelve
(12) months), or (ii) in the case of disputes as to interim updates of any
Country-Specific Commercialization Budget, the level of aggregate expenditure
then in effect for the relevant part of the then-current Calendar Year in such
Country-Specific Commercialization Budget.

 

[ * ] = 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.

25

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) If a Commercialization Budget Deadlock arises with respect to any
Country-Specific Commercialization Budget for a given Calendar Year (or part
thereof) during the Subsequent Launch Period with respect to such country, the
level of aggregate expenditure for such period with respect to such country
shall be fixed, upon notice given by a Party to the other Party, at (A) in the
case of disputes as to annual updates of such Country-Specific Commercialization
Budget, seventy-five percent (75%) of the level of spending set forth in the
Initial Launch Period Financial Commitment for such country for the second
twelve (12) month period of the Initial Launch Period for such country
(apportioned, if appropriate, to account for a period in dispute that is shorter
than twelve (12) months) unless both Parties, through their respective
representatives on the JEC have proposed levels of aggregate expenditure for
such country for such period in dispute both of which are lower than the
aforesaid seventy-five percent (75%) level, in which case the level of aggregate
expenditure for such period in dispute with respect to such country shall
instead be fixed with respect to such country at the higher of the two levels of
aggregate expenditure proposed for such period by the Parties through their
respective representatives on the JEC, or (B) in the case of disputes as to
interim updates of such Country-Specific Commercialization Budget, the level of
aggregate expenditure then in effect for the relevant part of the current
Calendar Year in such Country-Specific Commercialization Budget.

(c) For any period after the Subsequent Launch Period with respect to a given
country, any aggregate expenditures in the Country-Specific Commercialization
Budget for such period for such country shall be decided by the mutual agreement
in writing of the Parties; failure to reach agreement thereon shall not be
subject to dispute resolution pursuant to Section 2.6 or otherwise.

(d) Following the resolution of any Commercialization Budget Deadlock pursuant
to this Section 2.7 with respect to a given Calendar Year and a given country,
the Parties agree to negotiate in good faith such modifications to the
activities set forth in the applicable Country-Specific Commercialization Plan
as may be necessary in light of the modified Country-Specific Commercialization
Budget.

(e) Any Commercialization Budget Deadlock that arises with respect to the
Territory Centralized Budget for a given Calendar Year (or part thereof) prior
to the end of the Initial Launch Period shall be resolved as set forth in
Section 2.7(a) (and Section 2.7(d) shall apply) as if (i) it were a
Commercialization Budget Deadlock with respect to a given country, and (ii) the
Territory Centralized Budget were a Country-Specific Commercialization Budget.

(f) The Parties acknowledge and agree that the Territory Centralized Budget
shall be established at a level of expenditure that is reasonably necessary to
support the Commercialization Activities being conducted with respect to the
countries that have a Country-Specific Commercialization Plan in effect as
described in Section 5.8(c). Accordingly, if a Commercialization Budget Deadlock
arises with respect to the Territory Centralized Budget for a given Calendar
Year (or part thereof) during the Subsequent Launch Period, the Parties shall

 

[ * ] = 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.

26

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

attempt to resolve such dispute based on such principle. If no such agreement
can be reached, (i) in the case of disputes as to annual updates thereto, the
level of aggregate expenditure for the Territory Centralized Budget for such
period shall be an amount that differs from the Territory Centralized Budget for
the previous Calendar Year by the same percentage as the level of aggregate
expenditure set forth in the Country-Specific Commercialization Budgets differs
from the level of aggregate expenditure set forth in the Country-Specific
Commercialization Budgets for the previous Calendar Year, and (ii) in the case
of disputes as to interim updates to the Territory Centralized Budget, the level
of aggregate expenditure for such period shall be the level of aggregate
expenditure then in effect for the relevant part of the then-current Calendar
Year in such Territory Centralized Budget. (For example, if the Territory
Centralized Budget for a given Calendar Year during the Subsequent Launch Period
is in dispute and (A) level of expenditure in the Territory Centralized Budget
for the prior Calendar Year was $1 million, (B) level of expenditure in the
Country-Specific Commercialization Budgets, in the aggregate, for such prior
Calendar Year was $5 million and (C) the level of expenditure in the
Country-Specific Commercialization Budgets, in the aggregate, for the Calendar
Year in dispute is $4 million, then the level of expenditure in the Territory
Centralized Budget will be set at $800,000.) Further, Section 2.7(d) shall apply
to such Territory Centralized Budget as if it were a Country-Specific
Commercialization Budget.

(g) For any period after the Subsequent Launch Period with respect to the
Territory Centralized Budget, any aggregate expenditures in the Territory
Centralized Budget for such period shall be decided by the mutual agreement in
writing of the Parties; failure to reach agreement thereon shall not be subject
to dispute resolution pursuant to Section 2.6 or otherwise.

(h) If a Commercialization Plan Deadlock arises with respect to the
Country-Specific Commercialization Plan for a given country for a given Calendar
Year (or part thereof) prior to the end of the Initial Launch Period with
respect to such country, the minimum number of Details for such period shall be
fixed, upon notice given by a Party to the other Party, at (i) in the case of
disputes as to annual updates of such Country-Specific Commercialization Plan,
the minimum number of Details for such country set forth in the Initial Launch
Period Detail Commitment for such period (apportioned, if appropriate, to
account for a period in dispute that is shorter than twelve (12) months) with
respect to such country, or (ii) in the case of disputes as to interim updates
of such Country-Specific Commercialization Plan, the minimum number of Details
then in effect for such country for the relevant part of the then-current
Calendar Year. For clarity, minimum Detail requirements are not required for any
country in Territory A.

(i) If a Commercialization Plan Deadlock arises with respect to the
Country-Specific Commercialization Plan for any country for a given Calendar
Year (or part thereof) during the Subsequent Launch Period with respect to such
country, (i) the minimum number of Details for such period with respect to such
country shall be fixed, upon notice given by a Party to the other Party, at
(A) in the case of disputes as to annual updates of such Country-Specific
Commercialization Plan, seventy-five percent (75%) of the minimum number of
Details for such period for such country set forth in the Initial Launch Period
Financial Commitment for the second twelve (12) month period of the Initial
Launch Period for such country (apportioned, if appropriate, to account for a
period in dispute that is shorter than twelve (12) months) unless

 

[ * ] = 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.

27

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

both Parties, through their respective representatives on the JEC have proposed
minimum numbers of Details for such period in dispute both of which are lower
than the aforesaid seventy-five percent (75%) level, in which case the minimum
number of Details for such period in dispute with respect to such country shall
instead be fixed with respect to such country at the higher of the two minimum
numbers proposed by the Parties for such period in dispute through their
respective representatives on the JEC, or (B) in the case of disputes as to
interim updates of such Country-Specific Commercialization Plan, the minimum
number of Details then in effect for the relevant part of the current Calendar
Year for such country in the Commercialization Plan. For clarity, minimum Detail
requirements are not required for any country in Territory A.

(j) For any period commencing after the Subsequent Launch Period with respect to
a given country, the minimum number of Details for such country for such period
shall be decided by the mutual agreement in writing of the Parties; failure to
reach agreement thereon shall not be subject to dispute resolution pursuant to
Section 2.6 or otherwise.

2.8 Relationship to Other Committees. The EUOC and, with respect to the
Territory, the JEC and the JFC shall each coordinate with the EDC and any other
committees established pursuant to any Covered Agreement to which the Parties
(or their respective Affiliates) are parties, as appropriate, and shall act in a
manner consistent with the decisions of the EDC or any such other committee made
pursuant to the applicable agreement.

2.9 Committee-Related Expenses. Gilead Sub and BMS shall each bear its own
expenses related to the operations of the JEC, the Operating Committees and the
JLOCs, including all expenses relating to the meetings of such committees, the
participation of the Parties’ representatives in such meetings, communications
with the other Party 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 Authorized Expenses.

SECTION 3

REGULATORY MATTERS

3.1 Generally. This Section 3 shall govern any country-specific regulatory
matters arising with respect to Territory Combination Product that are not
governed by Section 4.1 (and the Pricing Rules and the Discount Rules), the MAH
Shareholder Agreement or the SDEA (any such regulatory matters, “Local
Regulatory Matters”). In the event of a conflict between this Section 3 and any
provision of any of the foregoing agreements, such provision of such agreement
shall control and this Agreement shall be construed in a manner consistent with
such provision. For clarity, any Party that is the Local Regulatory Lead with
respect to any Third Party Distributor Country may delegate its responsibilities
hereunder as the Local Regulatory Lead to the Third Party Distributor in such
country.

3.2 Regulatory Filings. Under the oversight of the EUOC (which shall coordinate
with the EDC as appropriate) and participation of each Party as set forth in
this Section 3, Gilead Sub and BMS (or their respective designated Affiliates)
shall jointly prepare any submissions with respect to any Local Regulatory
Matter and the Local Regulatory Lead shall have primary responsibility for
filing such submissions with the applicable Regulatory Authority. All

 

[ * ] = 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.

28

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

submissions with respect to any Local Regulatory Matter shall be approved in
advance by the applicable JLOC (or in the case in which (a) disclosing the
applicable submission to the JLOC would violate Section 3.3 or (b) there is no
JLOC with respect to the applicable country in the Territory (e.g., in the case
of a Sole-Promote Country), the EUOC). Each member of such committee shall
indicate, within a time period to be established by such committee with respect
to the applicable submission, whether he or she approves such proposed
submission; provided, that such time period shall, in each case, allow the Local
Regulatory Lead sufficient time to comply with Applicable Law and any deadlines
required or reasonably requested by the applicable Regulatory Authority with
respect to such submission. Notwithstanding the foregoing, the review and
approval requirements of this Section 3.2 shall not apply to any minor
regulatory submissions of an administrative nature; provided, however, that the
Local Regulatory Lead shall make copies of such submissions available to the
other Party for review promptly upon request of the other Party.

3.3 Regulatory Documentation.

(a) Notwithstanding the restrictions on use set forth in Section 5.4(b) of the
MAH Shareholder Agreement, subject to Section 3.3(d), each Party (and its
Affiliates) shall have the right to use any BMS Regulatory Documentation and
Gilead Regulatory Documentation (each, as defined in the MAH Shareholder
Agreement) provided or made available pursuant to such Section to the extent
reasonably necessary to comply with Applicable Law. Further, without limitation
of the foregoing, in the event that a Party desires to use such information of
the other Party to perform its obligations hereunder and does not have the right
to use such information pursuant to the immediately preceding sentence, such
first Party shall obtain the consent of such other Party, such consent not to be
unreasonably withheld.

(b) Subject to Section 3.3(d), in the event that either Party (or any of its
Affiliates) reasonably requires any information in the possession and control of
the other Party (other than any BMS Regulatory Documentation and Gilead
Regulatory Documentation described in the foregoing clause (a)) to comply with
Applicable Law, the Parties shall coordinate in good faith to ensure that such
information is provided by the applicable Party to the other Party for such
purpose in a timely manner. Further, without limitation of the foregoing, in the
event that a Party desires to use any such information of the other Party to
perform its obligations hereunder, such first Party shall obtain the consent of
such other Party, such consent not to be unreasonably withheld, and if such
consent is obtained, the consenting Party shall provide such information to such
first Party.

(c) In the event that a Party (or its EUOC representatives) does not provide the
consent required pursuant to this Section 3.3 to permit the other Party to
obtain or use any BMS Regulatory Documentation, Gilead Regulatory Documentation
or other information, or does not provide any such information, then, to the
extent that such information is reasonably required for the other Party to
perform its obligations hereunder, such other Party shall not be obligated to
perform such obligations.

(d) Notwithstanding anything in this Section 3.3 to the contrary, except as
provided in this Section 3.3(d) or required by the SDEA, (i) Gilead Sub shall
not provide or

 

[ * ] = 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.

29

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

make available any BMS Regulatory Documentation or other information provided by
BMS to Gilead Sub pursuant to this Section 3.3 that relates to EFV as an API to
any local country Affiliate of Gilead Sub without the prior written consent of
BMS (or consent of its EUOC representatives), provided that such consent may not
be unreasonably withheld if the information is required to be submitted for
regulatory or other legal reasons; and (ii) BMS shall not provide or make
available any Gilead Regulatory Documentation or other information provided by
Gilead Sub to BMS pursuant to this Section 3.3 that relates to either TDF or FTC
as an API, or to both, to any local country Affiliate of BMS without the prior
written consent of Gilead Sub (or consent of its EUOC representatives), provided
that such consent may not be unreasonably withheld if the information is
required to be submitted for regulatory or other legal reasons. Notwithstanding
the foregoing, in the event that a local country Affiliate of a Party is
required under Applicable Law to provide any of the foregoing information of the
other Party to any Regulatory Authority, such first Party shall be permitted to
provide such information to such local country Affiliate if and only if (x) such
first Party has first notified the other Party and allowed such other Party an
opportunity to provide such information directly to such Regulatory Authority,
if and to the extent that such direct provision would fulfill such local country
Affiliate’s obligation under Applicable Law, and (y) to the extent such
information is Confidential Information of the other Party, such first Party
ensures that the information related to the other Party’s API(s) that is
provided to a local country Affiliate of such first Party is only used for
Permitted Purposes (as defined in the EU Master Agreement) and in accordance
with this Section 3.3 and not for any other purpose. In the event that a Party
determines that it is reasonably necessary to provide any such information of
the other Party to such first Party’s local country Affiliate for the purpose of
fulfilling such first Party’s obligations hereunder, such other Party shall
consider a request of such Party to do so. Such other Party shall not
unreasonably withhold or delay its request to any such request. If such request
is denied, for the avoidance of doubt, Section 3.3(c) shall apply.

(e) For the avoidance of doubt, nothing set forth in this Section 3 or elsewhere
in this Agreement shall be construed to limit the rights and obligations of the
Parties or its Affiliates with respect to safety-related information, data or
other documentation required to be provided, maintained or disclosed pursuant to
the SDEA.

3.4 Regulatory Communications. Communications regarding any Local Regulatory
Matter shall be treated (a) with respect to countries for which Gilead Sub is
the Local Regulatory Lead, as if such communications were communications covered
by Section 5.4(d) and Section 5.4(e) of the MAH Shareholder Agreement, without
giving effect to either such Section to the extent it affords the MAH any rights
with respect thereto, or (b) with respect to countries for which BMS is the
Local Regulatory Lead, as if BMS were the Regulatory Lead (as defined in the MAH
Shareholder Agreement) under the MAH Shareholder Agreement and as if such
communications were communications covered by Section 5.4(d) and Section 5.4(e)
of the MAH Shareholder Agreement, without giving effect to either such Section
to the extent it affords the MAH any rights with respect thereto.

3.5 Medical Affairs and Medical Communications.

(a) Subject to this Section 3.5 and the MAH Shareholder Agreement, the Parties
shall determine independently how to utilize and deploy their respective medical
science liaisons for activities relating to the Combination Product in each
country in the Territory.

 

[ * ] = 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.

30

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) Subject to the MAH Shareholder Agreement, the EUOC shall develop and approve
presentation materials for use by each Party’s medical science liaisons when
engaging in activities to support the Combination Product. Each Party’s medical
science liaisons shall use only such approved presentation materials and any
standard response documents approved pursuant to the MAH Shareholder Agreement
in connection with such activities. The EUOC shall develop, and the Parties
shall implement, procedures to coordinate the training of each Party’s medical
science liaisons on any approved presentation materials and standard response
documents.

(c) Each Party shall cause its (and its Affiliates’) medical science liaisons to
comply with the provisions of this Section 3.5 and the MAH Shareholder
Agreement.

3.6 Records. Each Party shall maintain, or cause to be maintained, records with
respect to its activities pursuant to this Section 3 in sufficient detail and in
material compliance with Applicable Law. Such records shall be retained for at
least (a) three (3) years or (b) such longer period as may be required by
Applicable Law.

3.7 Compliance-Related Matters.

(a) Role of QPPV. Notwithstanding anything herein to the contrary, nothing
herein shall preclude the QPPV (as defined in the MAH Shareholder Agreement) for
the Combination Product from performing his or her obligations as QPPV for the
Combination Product under Applicable Law and no such performance, to the extent
reasonably required by Applicable Law, shall constitute a breach of this
Agreement by either Party.

(b) Certain Compliance Matters. Notwithstanding anything herein to the contrary,
and except as otherwise provided in the Co-Promotion Agreements, as between the
Parties, each Party shall have sole responsibility for any submissions to, or
communications with, any Regulatory Authority in the Territory with respect to
any matter relating to such Party’s or any of its Affiliates’ or subcontractors’
compliance with Applicable Law in connection with its performance of (i) such
Party’s Commercialization Activities or (ii) any other activities of such Party
or any of its Affiliates or subcontractors under any Co-Promotion Agreement.
Notwithstanding anything in this Section 3.7(b) to the contrary, the foregoing
shall not apply to any submissions or communications made in connection with
obtaining or maintaining the applicable Territory Marketing Authorization.

 

[ * ] = 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.

31

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

3.8 Local Regulatory Expenses. Any external, out-of-pocket costs and expenses
incurred by either Party in connection with the performance of its obligations
under this Section 3 (other than Section 3.7(b)) shall constitute Authorized
Other Expenses.

SECTION 4

PRICING AND REIMBURSEMENT

4.1 Pricing and Reimbursement; Discounts. The provisions set forth in this
Section 4.1 and Annex C shall apply to the pricing of Territory Combination
Product sold by the Selling Entity or any of its applicable Affiliates to any
Third Party and shall not be construed to apply to the pricing of any other
Combination Product (or any other sale). The Selling Party shall cause the
Selling Entity to sell the Combination Product at prices that comply with the
determinations of the EU Pricing Discount Committee (as defined below) made
pursuant to the provisions of this Section 4.1, the Pricing Rules and the
Discount Rules. Notwithstanding anything in this Section 4, the Pricing Rules or
the Discount Rules, except to the extent mutually agreed in writing by the
Parties, this Section 4.1, the Pricing Rules and the Discount Rules shall not
apply with respect to any Third Party Distributor Country.

(a) European Pricing Discount Committee.

(i) Each Party shall appoint two (2) members of a committee to determine any
discounts to be applied in connection with the sale of Territory Combination
Product (the “EU Pricing Discount Committee” or “EPDC”). One (1) representative
from each Party (the “Business Representative”) shall be an employee of such
Party (or any of its Affiliates) and shall not be, at the time of his or her
appointment, or at any time during his or her service on the EPDC, otherwise
involved, directly or indirectly, in the pricing of such Party’s (or any of its
Affiliates’) antiviral products (provided, that for purposes of this
Section 4.1(a)(i), duties solely with respect to accounts receivable analysis,
bookkeeping and accounting shall not, without more, be deemed involvement in
pricing). The other representative from each Party (the “Attorney
Representative”) shall be an attorney for such Party. Such representatives shall
have skills reasonably appropriate to their responsibilities and functions as
members of the EPDC. Furthermore, each Party covenants that, for twelve
(12) months immediately after an individual’s service on the EPDC (or for such
shorter period as he or she is employed by such Party or its Affiliate), he or
she will not be assigned to a function or position that involves, directly or
indirectly, the pricing of such Party’s (or any of its Affiliates’) antiviral
products. Each Party shall have the right to approve the other Party’s proposed
Business Representative and Attorney Representative on the EPDC (or any
replacement therefor), which approval shall not be unreasonably withheld.
Subject to the preceding sentence, each Party shall have the right to replace
its Business Representative or Attorney Representative from time to time during
the term of this Agreement, provided that the composition of the EPDC as so
changed meets the requirements set forth above in this Section 4.1(a)(i). For
the avoidance of doubt, the EPDC is not an Operating Committee.

(ii) Each Party shall be responsible for the performance of its representatives
on the EPDC and their compliance with the terms of this Section 4.1, the Pricing
Rules and the Discount Rules. Any issue regarding the functioning of the EPDC
shall be

 

[ * ] = 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.

32

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

reviewed jointly by the Parties’ respective Attorney Representatives. Each Party
shall bear its own expenses related to the EPDC, including all expenses relating
to the meetings of the EPDC, the participation of the Parties’ representatives
in such meetings, communications with the other Party in connection with such
meetings or matters within the authority of the EPDC, and travel to and from
such meetings, and such expenses shall not be deemed Authorized Expenses.

(iii) The EU Pricing Discount Committee shall meet at least each Calendar
Quarter (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 determine such matters as are within
the jurisdiction of the EU Pricing Discount Committee as set forth in this
Section 4.1.

(iv) The EU Pricing Discount Committee shall perform only such functions as are
assigned to the EU Pricing Discount Committee hereunder. The EU Pricing Discount
Committee shall apply the Discount Rules to make such calculations and
determinations as are specified in the Discount Rules.

(v) The representatives of each Party on the EU Pricing Discount Committee
shall, in connection with any proposed GOA with respect to a Customer, provide
the EU Pricing Discount Committee with (A) if applicable, its Proposed Existing
Customer Discount, and (B) such other limited pricing information, if any, with
respect to such Customer as the Attorney Representatives shall agree is
necessary and appropriate.

(vi) In the event that interpretation or application of the Discount Rules is
necessary in order to implement the provisions of the Discount Rules, the
Business Representatives shall discuss the matter with the Attorney
Representatives and attempt to resolve the matter by consensus. In the event
that the Attorney Representatives disagree regarding any such interpretation or
application, either Attorney Representative may refer the dispute to the JEC for
resolution pursuant to Section 2.6.

(vii) The EU Pricing Discount Committee may determine, by consensus and 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.

(b) Default Rules and Related Matters.

(i) In the event that, after following the procedures set forth in this
Section 4.1, the Pricing Rules and the Discount Rules, as applicable, to
completion (including those set forth in Section 3 of Annex C, if applicable),
the Parties are unable to agree upon (A) any modification of a Country Price for
a given country, the existing Country Price shall remain in effect, except in
the case of a permitted modification to the existing Country Price pursuant to
the Pricing Rules; or (B) a GOA (as defined below) with respect to a Customer,
there shall be no GOA with respect to such Customer, except in the case of a GOA
that applies automatically to an Existing Discount Customer pursuant to
Section 4.1(d) or in the event that a GOA has been previously established
pursuant to the Discount Rules or in the case of a permitted modification to the
GOA with respect to a given Customer pursuant to this Section 4.1

 

[ * ] = 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.

33

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

or the Discount Rules. In the event that there is no GOA with respect to a given
Customer, the Selling Party shall not, and shall cause the Selling Entity not
to, enter into any contract with respect to the Combination Product with such
Customer at a price less than the applicable Country Price. Further, in the
event that the Parties cannot (x) reach agreement on a Country Price with
respect to a country other than a Price Approval Country or Reference Price
Country, or (y) obtain any initial pricing approval required by a national
pricing authority in a Price Approval Country [*] (as defined in Annex C), the
Combination Product shall not be Launched in such country. For clarity, Launch
of the Combination Product in any Designated Territory A Country shall occur
solely if and when approved by the Parties. Further, Launch in any Third Party
Distributor Country or any country for which BMS is the Selling Party shall
occur solely as provided in Section 5.1.

(ii) Notwithstanding Section 4.1(b)(i) or any other provision of this Agreement,
in the event that, following the Launch of the Combination Product in a given
Price Approval Country or Reference Price Country, any national pricing
authority in such country reduces (despite the commercially reasonable efforts
of the Selling Party or without advance notice to the Selling Party) an Approved
Price to a price that is [*] the Selling Party shall submit to the other Party,
promptly following the date on which the Selling Party becomes aware that such a
reduction has been imposed and in no event less than twenty (20) Business Days
after such date, the Selling Party’s good faith interpretation of how such
reduced Approved Price should be implemented and the effect of such reduced
Approved Price on other prices with respect to the Combination Product in the
country in which such Approved Price applies and on any Approved Prices in other
countries in the Territory. If the non-Selling Party, based on its good faith
assessment, objects in writing within ten (10) Business Days that the Selling
Party’s interpretation is incorrect, the dispute resolution provisions of
Section 2.6 shall apply and, if such matter is not resolved by the Executives
within the time period set forth therein, the matter shall constitute an
Arbitration Matter. Prior to the resolution of such matter pursuant to
Section 2.6, the Selling Party shall continue to fulfill orders for the
Combination Product in the Territory (unless and until the Combination Product
is withdrawn in such country by mutual written agreement of the Parties) and
shall fulfill such orders at a price that is consistent with the Selling Party’s
good faith interpretation of any adjustment to the Country Price for the
applicable country that shall be required to comply with the new Approved Price.
Following the resolution of such matter pursuant to Section 2.6, the Country
Price for the applicable country shall be adjusted in accordance with such
resolution. In the event that the non-Selling Party does not object to the
Selling Party’s interpretation of any new Approved Price pursuant to this
Section 4.1(b) within the time period required for such objection, the Country
Price with respect to the applicable country shall be adjusted to reflect the
Selling Party’s interpretation of such new Approved Price. In no event shall
(A) an incorrect interpretation of any adjusted Approved Price, or the effect of
such an adjustment on the Country Price, or (B) any sales by the Selling Party
or the Selling Entity made based on such interpretation, constitute a breach of
this Agreement, so long as such interpretation was made in good faith by the
Selling Party.

 

[ * ] = 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.

34

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(c) Country Prices and Pricing Approvals.

(i) In each country in the Territory, the respective Selling Party shall cause
the respective Selling Entity to sell Territory Combination Product to any Third
Party in such country at the Country Price for such country except as otherwise
permitted in this Section 4.1, including Section 4.1(d).

(ii) For any country for which, as a matter of Applicable Law, the applicable
Regulatory Authority approves a maximum reimbursement price or a maximum price
at which the Selling Party may sell the Combination Product in such country
(each, a “Price Approval Country”), the Country Price (as defined in Annex C)
shall be set in accordance with this Section 4.1(c)(ii) and the Pricing Rules.
Without limitation of any other country in the Territory that may constitute a
Price Approval Country, the Parties acknowledge and agree that, as of the
Effective Date, the United Kingdom, France, Italy and Spain each constitute a
Price Approval Country. Except as otherwise agreed by the Parties, the Selling
Party shall be responsible for managing the negotiation with the relevant agency
in each country relating to obtaining and maintaining such reimbursement or
other pricing approval. In conducting such negotiations, the Selling Party shall
cooperate with the other Party and act in accordance with this
Section 4.1(c)(ii) and the Pricing Rules. For each Price Approval Country, the
Selling Party with respect to such country shall be responsible for any
reporting required in connection with obtaining and maintaining reimbursement or
other pricing approvals for the Combination Product in such country and shall
handle dealings with any applicable agencies with respect to compliance with the
rules, regulations and guidelines of such agencies with respect to obtaining and
maintaining reimbursement or other pricing approvals for the Combination
Product; provided, however, that the Selling Party shall provide to the other
Party a copy of the initial submission for obtaining reimbursement or other
pricing approval for the Combination Product in each Price Approval Country in
the Territory for review in advance of its filing. The Selling Party shall
promptly furnish the other Party with a copy of all materials received from such
agencies, together with all reports and other communications submitted by the
Selling Party to such agencies, in each case solely to the extent relating to
Territory Combination Product. In addition, at least five (5) Business Days
prior to filing any periodic reports with such agencies pursuant to this
Section 4.1(c)(ii), the Selling Party shall furnish the other Party with a copy
of such report.

(iii) For any country for which, as a matter of Applicable Law, the applicable
Regulatory Authority determines the maximum reimbursement price or the maximum
price at which the Selling Party may sell the Combination Product using
reference pricing based on the pricing of Combination Product in one or more
other countries (each, a “Reference Price Country”), the Selling Party shall
notify the other Party promptly of the approved reference price (any such price,
an “Approved Reference Price”) for the Combination Product in such country once
such price has been set, or thereafter modified by the Regulatory Authority in
the country. The Country Price for any Reference Price Country shall be
determined as set forth in Section 1(B) of the Pricing Rules. Without limitation
of any other country in the Territory that may constitute a Reference Price
Country, the Parties acknowledge and agree that, as of the Effective Date, the
Republic of Ireland constitutes a Reference Price Country. Except as otherwise
agreed by the Parties, the Selling Party shall be responsible for managing the
discussions with the relevant agency in the Reference Price Country relating to
obtaining and

 

[ * ] = 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.

35

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

maintaining such reference pricing approval. For each Reference Price Country,
the Selling Party with respect to such country shall be responsible for any
reporting required in connection with obtaining and maintaining reference
pricing approvals for the Combination Product in such country and shall handle
dealings with any applicable agencies with respect to compliance with the rules,
regulations and guidelines of such agencies with respect to obtaining and
maintaining reference pricing approvals for the Combination Product; provided,
however, that the Selling Party shall provide to the other Party a copy of the
initial submission for obtaining reference pricing approval for the Combination
Product in each Reference Price Country in the Territory for review in advance
of its filing. The Selling Party shall promptly furnish the other Party with a
copy of all materials received from such agencies, together with all reports and
other communications submitted by the Selling Party to such agencies, in each
case solely to the extent relating to Territory Combination Product in such
country. In addition, at least five (5) Business Days prior to filing any
periodic reports with such agencies pursuant to this Section 4.1(c)(iii), the
Selling Party shall furnish the other Party with a copy of such report.

(iv) Any country in the Territory for which the Country Price is not established
pursuant to Section 4.1(c)(ii) or 4.1(c)(iii), the Country Price for such
country shall be determined based on Section 1(C) of the Pricing Rules. The
Parties acknowledge and agree that, as of the Effective Date, Germany is
governed by this Section 4.1(c)(iv) and Section 1(C) of the Pricing Rules (which
classification shall be without limitation of any other countries in the
Territory that may be so governed).

(v) Prior to the commencement of pricing negotiations in any country in
Territory A, the EUOC shall designate such country in the Territory as a Price
Approval Country, a Reference Price Country, or a country for which the Country
Price is governed by Section 4.1(c)(iv).

 

[ * ] = 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.

36

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(d) Customer Discounts.

(i) This Section 4.1(d) shall cover any request by any customer, whether a
public or private entity (each, a “Customer”), to purchase, or otherwise
establish the price for any proposed sale of (e.g., in the case in which such
entity is a third-party payor), the Combination Product at a price that is lower
than the Country Price for the applicable country (such price, a “Discounted
Price”). The EU Pricing Discount Committee shall be responsible, on an on going
basis, for calculating and providing to the Selling Party any grant of authority
(“GOA”) as calculated in accordance with this Section and the Discount Rules
with respect to each Customer that seeks to obtain a Discounted Price. The GOA,
if any, for each Customer shall serve as the maximum discount that may be
offered by the Selling Party (or its applicable Affiliate) in its negotiations
with such Customer. The Selling Party shall cause the applicable Selling Entity
not to sell any Territory Combination Product to any Customer at a price, or
agree to a reimbursement price for the Combination Product in connection with
any formulary listing of a Customer, that is less than the price calculated by
applying the GOA, if any, for such Customer. The term for any agreement to sell
Combination Product to a Customer at a Discounted Price shall not exceed [*] or,
if applicable, such longer period as is agreed by the Parties pursuant to
Section 2(D) of the Pricing Rules.

(ii) At least thirty (30) days prior to the Launch of the Combination Product in
each country in the Territory (or such shorter period as is mutually agreed by
the Parties), each Party shall submit to the EPDC [*]

(iii) In the event that any Customer, including an Existing Discount Customer,
requests a Discounted Price, the Discount Rules shall apply.

(e) Independent Accounting Expert. Either Party (the “Requesting Party”) may,
upon written notice to the other Party, cause the Independent Accounting Expert
to confirm the accuracy, with respect to any Customer, of (i) any calculation by
the EU Pricing Discount Committee or (ii) any pricing or discounting information
provided to the EU Pricing Discount Committee or to the other Party pursuant to
this Section 4.1, the Pricing Rules or the Discount Rules, including any Net
Component Price (as defined in Annex C) so provided. In such case, each Party
and the EU Pricing Discount 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 Party, the calculations of the Independent Accounting Expert shall be
audited by a second Third Party mutually agreed by the 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 (or such Third Party
auditor) by either Party. The calculations made by the Independent Accounting
Expert pursuant to this Section 4.1(e) shall be binding upon the EU Pricing
Discount 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 Parties shall cause the Independent Accounting Expert
and such Third Party auditor to confer and agree upon the final calculations and
advise the Parties in writing of same, whereupon such final agreed calculations
shall be binding on the Parties. The

 

[ * ] = 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.

37

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Requesting Party shall bear the fees and costs of the Independent Accounting
Expert and any Third Party auditor in connection with his or her engagement
pursuant to this Section 4.1(e). Nothing in this Section 4.1(e) shall be deemed
to limit any remedy available to either Party in the event of a breach of any of
the provisions of this Section 4.1, the Pricing Rules or the Discount Rules by
the other Party. Notwithstanding anything in this Agreement to the contrary,
such breach shall not be subject to the cure provisions set forth in Section 5.4
of the Standard Terms as incorporated herein. For clarity, Section 4.5, and not
this Section, governs the audit of the Net Selling Prices of Stocrin provided by
Merck Parent or its applicable Affiliate.

(f) Pricing Information. All information provided to the EU Pricing Discount
Committee that is not publicly available (“Territory Pricing Information”) shall
be considered Confidential Information of the disclosing Party and shall be used
solely for the purpose of making the applicable calculation under the Discount
Rules and setting any applicable GOAs and for no other purpose. Notwithstanding
Section 4 of the EU Master Agreement, except as expressly permitted by this
Section 4.1, the Pricing Rules or the Discount Rules, each Party shall cause its
representatives to not disclose any Territory Pricing Information of the other
Party except to (i) counsel, the Independent Accounting Expert, or any Third
Party auditor selected pursuant to Section 4.1(e), or (ii) the extent permitted
by Section 4.2(a) of the EU Master Agreement (but not any other subsection of
Section 4.2 of the EU Master Agreement). All Territory Pricing Information shall
be segregated in locked or password protected files maintained by the EU Pricing
Discount Committee, which files shall not be accessible by Persons other than
the members of EU Pricing Discount Committee (and as required, counsel, the
Independent Accounting Expert and any Third Party auditor performing activities
described in this Section 4). Without limiting the foregoing, each Party shall
cause its representatives not to reference or use, directly or indirectly, any
information from the EU Pricing Discount Committee in pricing its or any of its
Affiliate’s own products.

(g) Review of Rules. On an annual basis, or as requested by either Attorney
Representative in the event that such representative believes that the Pricing
Rules or the Discount Rules do not cover a scenario with respect to Territory
Combination Product that needs to be addressed, the JEC shall review the Pricing
Rules and the Discount Rules (in each case, as most recently modified pursuant
to this Section 4.1(g), if applicable) in light of the then-prevailing market
conditions and any marketing and sales strategies agreed by the Parties. If
appropriate, the JEC shall recommend to the Parties changes to the Pricing Rules
and the Discount Rules. For the avoidance of doubt, the JEC’s action or inaction
under this Section 4.1(g) shall not be subject to arbitration. If (and only if)
the Parties agree in writing to any changes to the Pricing Rules or the Discount
Rules, as the case may be, proposed by the JEC, then the Pricing Rules or the
Discount Rules, as applicable, as so changed shall be deemed to be the “Pricing
Rules” or the “Discount Rules” hereunder.

4.2 Pricing and Other Contract Negotiations.

(a) As between the Parties (and their respective Affiliates), the applicable
Selling Entity (and its Affiliates) shall have sole responsibility for
conducting pricing and discounting negotiations (and all other contracting
matters) with respect to the Combination Product with Customers in the
applicable country in the Territory in accordance with the Pricing

 

[ * ] = 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.

38

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Rules; provided, however, that except as otherwise agreed by the Parties in
writing, subject to Section 5.1, the Third Party Distributor in any Third Party
Distributor Country shall have all rights and responsibilities with respect to
the foregoing activities.

(b) Each Party shall ensure that none of its employees or contractors, other
than a Designated Negotiator (as defined below), conduct any negotiations with
any Customer in the Territory with respect to pricing or discounting matters (or
any other terms of any contract to be entered into between such a Customer and
the applicable Selling Entity or its applicable Affiliate) with respect to the
Combination Product (such matters, “Contracting Matters”) or discuss the
availability of discounts to such Customer (or any other matter with respect to
discounts with respect to the Combination Product) without the prior consent of
a Designated Negotiator.

(c) For each country other than a Third Party Distributor Country, a “Designated
Negotiator” shall mean an employee(s) of the applicable Selling Entity (or its
applicable Affiliate) that has been authorized by the applicable Selling Entity
(or such Affiliate), from time to time, to conduct price and discount
negotiations with Customers in the applicable country in the Territory. The
applicable Selling Party shall cause the applicable Selling Entity to keep the
non-Selling Party (or its applicable Affiliate) apprised, from time to time, of
the names(s) and contact information for the Designated Negotiator(s).

(d) In the event that any Customer desires to discuss any Contracting Matter,
the non-Selling Party shall ensure that such matter is referred to a Designated
Negotiator (or in the case of a Third Party Distributor Country, the Third Party
Distributor).

4.3 Consequence of Generic Launch on Pricing. The consequences of a Generic
Version Launch on pricing and discounting shall be solely as set forth in the
applicable sections of the Pricing Rules and Discount Rules. For the avoidance
of doubt, nothing in such sections shall be construed to modify the Parties’
respective rights and obligations with respect to the calculation of the
Parties’ respective Country-Specific Percentages (as set forth in the Financial
Agreement, as modified by Section 8.5) with respect to the applicable country or
any other related calculations under any other Covered Agreement.

4.4 Pricing of Single Agent Products/Double Agent Product. Gilead Sub and BMS
shall each retain sole discretion with respect to price-setting and discounts
for its respective Single Agent Products and Double Agent Product.
Notwithstanding the foregoing, each Party covenants that it shall act in good
faith in setting the price and discounts for its respective Single Agent
Products and Double Agent Product in the Territory and shall not directly or
indirectly manipulate pricing or discounting arrangements of its own Single
Agent Products or Double Agent Product in the Territory solely or primarily for
the purpose of increasing the Gilead Territory-Wide Percentage or the BMS
Territory-Wide Percentage, as the case may be, or any Country-Specific
Percentage.

 

[ * ] = 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.

39

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

4.5 Net Selling Price of Stocrin Information. Unless and until BMS acquires
rights to commercialize Stocrin in the Territory, the following shall apply:

(a) BMS shall cause Merck Parent or its applicable Affiliate to provide to BMS
the Net Selling Price of Stocrin (600 mg dosage form) for each country in the
Territory in which Stocrin is sold and BMS shall promptly provide to Gilead Sub
any such information provided by Merck Parent or such Affiliate thereof for use
as set forth in this Section 4.5 (and for no other purpose). Such Net Selling
Prices shall be provided for (i) the first three Calendar Quarters of each
Calendar Year sixty (60) days prior to the end of such Calendar Year or on such
later date as such information is reasonably available and (ii) each Calendar
Year within thirty (30) days following the end of such Calendar Year or on such
later date as such information is reasonably available. Each such Net Selling
Price shall be calculated based on the definition of “Net Sales” set forth in
the EFV License Agreement for the applicable country and period divided by the
number of Units (as defined in the Financial Agreement) of Stocrin (600 mg
dosage form) sold in such country and period. In the event that the Stocrin (600
mg dosage form) is not on the market in a given country, BMS shall cause Merck
Parent or its applicable Affiliate to provide the Net Selling Price of Stocrin
(200 mg dosage form) and Gilead and BMS shall negotiate in good faith to
determine the manner of converting such Net Selling Price into a proxy for the
Net Selling Price of Stocrin (600 mg dosage form) in such country for use in
connection with calculations hereunder and under any other Covered Agreement.

(b) Gilead Sub shall calculate, based on the Net Selling Prices supplied by
Merck Parent or its applicable Affiliate as described in the foregoing clause
[*].

(c) BMS shall ensure that the EFV License Agreement permits an independent
accountant acceptable to BMS and Gilead Sub to audit the Net Selling Price of
Stocrin information provided by Merck Parent or its applicable Affiliate
pursuant to the EFV License Agreement at least once a Calendar Year (with a
reasonable look-back period). Except as otherwise agreed by the Parties in
writing, BMS shall invoke such audit right each Calendar Year for the Calendar
Year information supplied by Merck Parent or its applicable Affiliate with
respect to the prior Calendar Year. Any reasonable costs and expenses incurred
by BMS in connection with any such audit shall constitute Authorized Other
Expenses. Gilead Sub shall be entitled to a copy of any information provided by
BMS by the independent accountant in connection with any such audit. The
findings of the audit shall be binding on the Parties (and each Party shall
cause such findings to be binding on its Affiliates).

(d) In the event that the independent accountant determines, pursuant to clause
(c), that any Net Selling Price of Stocrin provided by Merck Parent or its
applicable Affiliate was inaccurate, the independent accountant shall calculate
and provide to BMS and Gilead the correct Net Selling Price. Any calculations
made based on the erroneous Net Selling Price hereunder or under any other
Covered Agreement shall be recalculated based on the correct Net Selling Price
and any amounts due hereunder or under any Covered Agreement that were
determined based on such calculations shall be adjusted and appropriate credit
notes or invoices shall be issued within thirty (30) days after the results of
the audit are obtained by the Parties. Any such invoice shall be due thirty
(30) days after such invoice is provided to a Party or its applicable Affiliate.
Each Party shall cause its Affiliates to be bound by the foregoing.

 

[ * ] = 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.

40

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(e) Gilead Sub shall ensure that any information provided to it pursuant to this
Section 4.5 shall (i) not be shared with any of its or its Affiliates’ employees
that is involved with the pricing or marketing strategies for any of its or its
Affiliates’ HIV-related products, (ii) shall not be used for any purpose other
than those specified in this Section 4.5 and (iii) be treated as Proprietary
Information (as defined in the EFV License Agreement as such agreement is in
effect as of the Effective Date and as such definition has been provided to
Gilead Sub prior to the Effective Date) of Merck Parent (or its applicable
Affiliate) in accordance with the EFV License Agreement (as such agreement is in
effect as of the Effective Date) to the extent the applicable provisions of the
EFV License Agreement have been provided to Gilead Sub in writing prior to the
Effective Date.

SECTION 5

COMMERCIALIZATION ACTIVITIES

5.1 Generally; Arrangements for Certain Territory A Countries.

(a) Generally.

(i) The Parties shall, and shall cause their respective Affiliates to,
commercialize the Combination Product in the Territory in accordance with this
Section 5, the other terms of this Agreement, any applicable Co-Promotion
Agreement and the MAH Shareholder Agreement. The Parties acknowledge the rights
granted by the MAH to the Parties to commercialize the Combination Product in
the Territory.

(ii) Unless otherwise agreed by the Parties in writing, (A) Gilead Sub shall
(and shall cause its Affiliates to) sell all Combination Product purchased by
Gilead Sub pursuant to the Product Supply Agreement solely in the Territory (or
as otherwise mutually agreed by the Parties) in accordance with the terms of
this Agreement and (B) if applicable, BMS shall (and shall cause its Affiliates
to) sell any Combination Product purchased by BMS or any of its Affiliates
pursuant to any BMS Product Supply Agreement solely in the Territory and in
accordance with the terms of this Agreement and such BMS Product Supply
Agreement.

(iii) Each of Gilead Sub and BMS shall comply, and shall cause its Affiliates to
comply, with Applicable Law, including the applicable Territory Marketing
Authorization, in conducting their respective Commercialization Activities.

(iv) Promptly following the Effective Date, the Parties shall negotiate in good
faith (A) to complete the designations set forth in Annex L, (B) without
limitation of the foregoing, to determine which Party shall be the Selling Party
with respect to such country, and (C) to determine the supply arrangements with
respect to such country, including any modifications to the financial
transactions set forth in the Covered Agreements as may be required to reflect
such supply arrangements (provided that, in no event shall either Party be
entitled to a distribution fee or other additional compensation or commission
for serving as the distributor in any such country (other than reimbursement for
any Authorized Distribution Expenses to the extent provided herein) unless
otherwise mutually agreed by the Parties). In connection with the foregoing, the
Parties shall amend this Agreement, including amending Annex L to specify the
foregoing designations, and amend (or cause their respective Affiliates to
amend) any other applicable Covered Agreement to reflect the Parties’
determinations with respect to the foregoing and enter into any BMS Product
Supply Agreement(s) that are determined to be required.

 

[ * ] = 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.

41

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(v) Neither Party shall have any right or obligation to distribute, Promote,
Launch, or seek pricing approvals for the Combination Product in any Third Party
Distributor Country until (A) the foregoing amendments with respect to such
country have been made, (B) the Parties have complied with any other applicable
provision(s) of this Section 5.1, including Section 5.1(b), and (C) any
applicable BMS Product Supply Agreement or Third Party Distributor Agreement (or
modifications thereto) has been executed. Further, prior to Launch in any Third
Party Distributor Country, the Parties shall mutually agree in writing on the
price at which the Combination Product will be sold to the Third Party
Distributor for such country.

(vi) For any country other than (A) those countries in the Co-Promote Territory
and (B) the Gilead Sole-Promote Countries, the Parties agree that, until such
time as the distributor for such country has been determined (i.e., a Selling
Entity or Third Party Distributor has been designated for such country
hereunder), the Parties shall specify an Affiliate of BMS, designated by BMS, as
the local distributor in any applicable regulatory filings with respect to the
Combination Product in the Territory on or after the Effective Date and on any
applicable Product SmPC, Labeling and Package Leaflets for the Combination
Product; provided, that the foregoing shall not apply to the extent and for so
long as such designation is inconsistent with any Territory Marketing
Authorization that may require the designation of Merck Parent (or its
applicable Affiliate) as the local distributor.

(b) Third Party Distributor Countries.

(i) It is anticipated that, for certain countries in the Territory, a Third
Party distributor (“Third Party Distributor”) will be engaged to distribute the
Combination Product (such country, for so long as a Third Party is so engaged to
distribute the Combination Product, a “Third Party Distributor Country”).

(ii) With respect to any anticipated Third Party Distributor Country, promptly
following the Effective Date, the applicable Party shall provide to the other
Party redacted copies of its relevant existing agreement(s) with the anticipated
Third Party Distributor and the proposed terms to be included in such agreement
in connection with extending such agreement to cover the Combination Product in
the applicable country(ies) in the Territory. Such copies may be redacted to
exclude provisions to the extent relating solely to products other than the
Combination Product. Such Party shall provide the other Party an opportunity to
comment on the (anticipated) terms of such Third Party arrangements (including
the applicable transfer price and the commercialization plan (including
discounts to be offered to such Third Party Distributor, the volume thresholds
associated with such discounts, and initial launch pricing) and the term of the
agreement(s) as it/they apply to the Combination Product) with respect to the
Combination Product. In the event that the terms of such Third Party
arrangements are unacceptable to one of the Parties or one of the Parties
notifies the other Party that it elects not to Launch the Combination Product in
the applicable country, the anticipated Third Party Distributor shall not be
granted the right to distribute the Combination Product in such country.
Further, the applicable Party shall provide the other Party an opportunity to
comment on

 

[ * ] = 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.

42

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

modifications to the relevant commercialization plan that the Third Party
Distributor intends to adopt from time to time, and in the event that such
modifications are unacceptable to one of the Parties, then the applicable Party
shall terminate such Third Party Distributor’s right to distribute the
Combination Product in such country. For clarity, until such time as the Third
Party Distributor has the right to sell Combination Product in the applicable
Third Party Distributor Country, the Parties shall make available Combination
Product to Customers located in such country in a manner determined by the EUOC
by way of sales by a Selling Entity in another country in the Territory to the
extent that orders are received from such country.

(iii) In no event shall the Selling Party (A) extend the term of any Third Party
Distributor Agreement (as the term applies to Territory Combination Product),
(B) grant any further rights to any Third Party Distributor with respect to
Territory Combination Product, or (C) otherwise materially modify any Third
Party Distributor Agreement as it relates to Territory Combination Product
without the consent of the non-Selling Party. For the avoidance of doubt,
nothing in this Section 5.1(b)(iii) shall preclude either Party (or its
applicable Affiliate) from negotiating, extending or modifying any Third Party
Distributor Agreement (or any other agreement) as it applies to any of its
products other than the Combination Product.

(iv) In the event that one of the Parties desires to assume the responsibilities
of distributor of the Combination Product in any Third Party Distributor Country
(e.g., in the case of expiration or termination of the Third Party
arrangements), such Party shall notify the other Party as promptly as possible.
(In the event that both Parties desire to assume the responsibilities of
distributor of the Combination Product in such country, the Parties shall
negotiate in good faith to determine which Party would assume such
responsibilities.) Promptly following receipt of such notice, the Selling Party
shall use commercially reasonable efforts to terminate such arrangement with
such Third Party Distributor with respect to distribution of the Combination
Product in such country. Upon expiration or termination of the applicable
agreement(s) with the Third Party Distributor (as they relate to Territory
Combination Product), the applicable Party shall become the Sole Promoting Party
(and the distributor) in such country.

(v) For clarity, Third Party Distributor Countries shall include only those
countries with respect to which the Combination Product is sold to a Third Party
Distributor and shall not include any country as a result of the Selling Party’s
engagement of a Distribution Subcontractor.

(vi) The Parties shall (and shall cause their respective Affiliates to)
negotiate in good faith appropriate amendments to this Agreement and any other
applicable Covered Agreement to ensure that the transfer price obtained from any
Third Party Distributor in connection with its purchase of Territory Combination
Product, taking account of any permitted discounts, is apportioned between the
Parties (or their respective Affiliates) in a manner consistent with the
apportionment of Net Sales (as defined in the Financial Agreement) of the
Combination Product between the Parties (or their respective Affiliates)
pursuant to the Covered Agreements.

 

[ * ] = 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.

43

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(c) Promotion Rights. Subject to this Section 5.1 (and any restrictions on
Launch set forth therein), both Parties shall have the right to Promote the
Combination Product in each country in the Territory (other than any Third Party
Distributor Country, in which country neither Party shall Promote the
Combination Product without the written consent of the other Party); provided,
that the non-Sole Promoting Party shall have the right to Promote the
Combination Product in the other Party’s Sole-Promote Countries pursuant to this
Section 5.1(c) only. With respect to any Sole-Promote Country, the non-Sole
Promoting Party shall have the right to commence co-Promotion of Territory
Combination Product in such country upon ninety (90) days’ written notice to the
Sole Promoting Party, which notice shall specify the date on which such non-Sole
Promoting Party intends to commence such Promotion; provided, that such non-Sole
Promoting Party shall not have the right to commence such co-Promotion until the
date on which such non-Sole Promoting Party has established an HIV sales force
in such country. Upon such notice, the Parties shall negotiate in good faith
and, prior to the anticipated date on which such non-Sole Promoting Party (or
any of its Affiliates) will commence co-Promotion of the Combination Product in
such country, enter into (i) a Co-Promotion Agreement (as defined below) with
respect to such country, and (ii) any appropriate amendments to this Agreement
and any other applicable Covered Agreement then in effect, including the
Financial Agreement, to reflect such non-Sole Promoting Party’s co-Promotion of
the Combination Product in such country, including any updates to the
Commercialization Plan and the Commercialization Budget, if applicable, for such
country commencing as of the date on which such non-Sole Promoting Party
commences co-Promotion of the Combination Product in such country.

(d) [*]

5.2 Co-Promotion Agreements. Prior to the Launch of the Combination Product in
each country in the Co-Promote Territory, Gilead Sub and BMS shall cause their
applicable Affiliates to, enter into a co-promotion agreement with respect to
the co-promotion of the Combination Product in such country substantially in the
form of the agreement set forth in Annex D (each such agreement, a “Co-Promotion
Agreement”).

5.3 Promotion Obligations.

(a) Generally. Without limitation of Section 5.2, Gilead Sub and BMS each shall
use Commercially Reasonable Efforts to perform in each country in the Territory
(other than any Third Party Distributor Country) the Commercialization
Activities that such Party is required to perform under the Commercialization
Plan in accordance with the Commercialization Budget, for so long as there is a
Commercialization Plan in effect. Subject to the Commercialization Plan and, in
the case of any country in the Co-Promote Territory, the applicable Co-Promotion
Agreement, each Party and any of its Affiliates that has the right to Promote
the Combination Product in a given country shall be free to (i) engage in
Details in such country in its sole discretion, and (ii) select independently
the target prescribers to which it shall Promote the Combination Product in such
country. Gilead Sub and BMS shall each Detail the Combination Product and
perform its other Promotional activities under this Agreement in the Territory
in strict adherence with Applicable Law and any professional requirements,
including those relating to promotion of pharmaceutical products, consumer
protection, fraud and abuse and false claims. Gilead Sub and BMS shall each
cause its Field Force to (A) comply with Section 5.6 and (B) make only such
statements and claims regarding the Combination Product as are consistent with
Applicable Law and the applicable Product SmPC, Labeling and Package Leaflets.
The Parties shall agree in good faith on appropriate metrics for tracking and
assessing the performance and effectiveness of the Parties’ respective
Commercialization Activities of the Parties and their applicable Affiliates.

 

[ * ] = 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.

44

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) Countries without Minimum Detail Requirements. Without limitation of the
foregoing clause (a), each Party shall use Commercially Reasonable Efforts to
Promote the Combination Product in any Territory A Country (other than a Third
Party Distributor Country). Not performing any Details in any Sole-Promote
Country may be consistent with such level of effort; provided, however, in the
event the Sole Promoting Party determines not to perform any Details in a given
country (or to cease performing Details in such country), it shall notify the
other Party of such determination.

5.4 Distribution Obligations and Related Matters.

(a) Except in the case of any Third Party Distributor Country, each Party (or
its applicable Affiliate) shall have the sole responsibility and right to fill
orders with respect to the Combination Product in each country in the Territory
for which it is the Selling Party (“Territory Customer Orders”). If for any
reason the non-Selling Party or any of its Affiliates with respect to a given
country receives a Territory Customer Order for the Combination Product from a
Customer located in such country, such Party shall, or shall cause such
Affiliate to, promptly forward such order to the Selling Party (or its
applicable Affiliate), or to the applicable Third Party Distributor in such
country approved pursuant to Section 5.1, if any.

(b) Without limitation of Section 5.4(a), the Selling Party shall perform the
following activities with respect to sales of the Combination Product in each
country in the Territory for which it is the Selling Party: inventory management
and control, warehousing and distribution, invoicing, collection of sales
proceeds, preparation of sales records and reports, customer relations and
services, the handling of returns, and such other activities for which the
Selling Party has responsibility pursuant to Annex E, if any, in each case in
accordance with the terms set forth in Annex E and, to the extent not
inconsistent therewith, customary practice in the pharmaceutical industry.

(c) Any reasonable, external, out-of-pocket expenses incurred by the applicable
Selling Party in connection with the performance of its activities conducted
pursuant to this Section 5.4 (and Annex E) (including any amounts paid to any
Distribution Subcontractor (as defined in Annex E) but subject to the remainder
of this Section 5.4, and excluding any expenses incurred by the applicable
Selling Party’s Third Party Distributor, if applicable) shall constitute
“Authorized Distribution Expenses”. Without limitation of the foregoing, any
shipping and warehousing costs incurred by or on behalf of either Party or any
Affiliate thereof in connection with the shipping of Territory Combination
Product to the applicable Customer or warehousing of Territory Combination
Product after it is sold to Gilead Sub pursuant to the Product Supply Agreement
or to BMS or its applicable Affiliate pursuant to any BMS Product Supply
Agreement shall constitute Authorized Distribution Expenses (and not Local
Expenses under any Co-Promotion Agreement). Notwithstanding the foregoing, in
the event that a Distribution Subcontractor is engaged to perform certain
activities (other than shipping) in a given country, (i) the amount to be paid
to such Distribution Subcontractor for performing such

 

[ * ] = 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.

45

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

activities, or if such amount is not fixed, the basis for calculating such
amount, shall be provided to the other Party and the JFC prior to the engagement
of such Distribution Subcontractor to perform such activities, and (ii) the
amounts paid to such Distribution Subcontractor shall constitute Authorized
Distribution Expenses to the extent that the JFC determines that such amounts
are reasonable, which determination the JFC shall make by comparing such amounts
to the amounts that BMS pays to its subcontractors for the same activities in
such country or a similar country or, if not available, an appropriate benchmark
selected by the JFC. For the avoidance of doubt, Authorized Distribution
Expenses shall not include any expenses that are reimbursable pursuant to any
Co-Promotion Agreement.

5.5 [*]

5.6 Marketing Materials. Subject to the remainder of this Section 5.6, each
Party’s Promotion of the Combination Product in the Territory shall be in
accordance with the Approved Marketing Materials (as defined below) (including
any localized version thereof) and the applicable Product SmPC, Labeling and
Package Leaflets for the Combination Product; provided, however, that subject to
the foregoing (and any applicable provisions of the Co-Promotion Agreements),
each Party (and its Affiliates) shall have a right to position the Combination
Product within its HIV product portfolio in its sole discretion. Except as
otherwise provided in this Section 5.6, each Party shall use the Approved
Marketing Materials (and only the Approved Marketing Materials) for a given
country in the Territory, together with the applicable Product SmPC, Labeling
and Package Leaflets, in Promoting the Combination Product in such country. In
the absence of any Approved Marketing Materials for a given country in the
Territory, each Party shall Promote the Combination Product in such country
using only the applicable Product SmPC, Labeling and Package Leaflets for the
Combination Product. The obligations set forth in this Section 5.6 shall be
without limitation of any obligations of any Parties or its Affiliates set forth
in the provisions of the MAH Shareholder Agreement with respect to Marketing
Materials (as defined in such agreement), advertising and promotional
compliance, and Combination Product Trademarks (as defined in such agreement).
The Parties agree that, subject to any applicable provisions of the MAH
Shareholder Agreement, the applicable Product SmPC, Labeling and Package
Leaflets for Territory Combination Product and any Approved Marketing Materials
shall include the two names “Bristol-Myers Squibb” and “Gilead Sciences”
displayed with equal prominence, to the extent permitted by Applicable Law.
Except as otherwise mutually agreed by the Parties in writing, any Party that is
a party to a Third Party Distributor Agreement shall cause its Third Party
Distributor to (i) use only the Approved Marketing Materials (which may be
localized by the Third Party Distributor for the applicable country provided
that no material modification is made in connection therewith) and the
applicable Product SmPC, Labeling and Package Leaflets to Promote the
Combination Product in the applicable countries and (ii) Promote the Combination
Product in accordance with Applicable Law.

(a) The EUOC shall develop and approve an initial set of advertising and
promotional materials for the Combination Product for use in each country in the
Territory. If the EUOC cannot reach agreement with respect to such materials,
the JEC shall attempt to resolve any disputed issues relating to the materials.
Any such materials approved by the EUOC

 

[ * ] = 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.

46

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

or the JEC pursuant to this Section 5.6(a) with respect to a given country (and
any updates thereto approved pursuant to Section 5.6(b) or Section 5.6(c)) shall
be deemed “Approved Marketing Materials” with respect to such country. Further,
any localization of any Approved Marketing Materials shall constitute Approved
Marketing Materials without requiring approval of the EUOC; provided, that such
localization is limited to translation and other non-material modifications.
(Any material modifications made to the Approved Marketing Materials in the
course of localization shall require the approval of the EUOC pursuant to this
Section 5.6.)

(b) Each Party may propose interim updates to the Approved Marketing Materials
for each country in the Territory from time to time, independent of the
semi-annual reviews conducted pursuant to Section 5.6(e). The EUOC 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 applicable Product SmPC, Labeling and Package Leaflets 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 six (6) months after the Launch of the Combination Product in
a country in the Territory, the EUOC, as applicable, shall review and, if
appropriate, update the Approved Marketing Materials, if any, for such country.
Such updates shall include, at a minimum, any Required Updates. If the EUOC
cannot reach agreement on a Required Update proposed by a Party, then the matter
shall be referred to the JEC and shall be subject to dispute resolution under
Section 2.6. In the event that none of the EUOC, the JEC, and the Executives
is/are able to reach agreement on a proposed Required Update, and after the
conclusion of any arbitration relating to Required Updates, each Party may elect
upon written notice to the other Party to Promote the Combination Product in
such country using (i) the applicable Product SmPC, Labeling and Package
Leaflets for the Combination Product alone or (ii) the applicable Product SmPC,
Labeling and Package Leaflets for the Combination Product or the Approved
Marketing Materials as modified to reflect any Required Updates (as finally
determined by the arbitrator(s), as applicable).

(d) In connection with the review conducted pursuant to Section 5.6(c), the EUOC
may make other appropriate changes arising from business or other considerations
(each, an “Optional Update”) as proposed by a Party. In the event that the EUOC
cannot reach agreement on any proposed Optional Update to the Approved Marketing
Materials for a country in the Territory, then the dispute shall be referred to
the JEC and shall be subject to dispute resolution under Section 2.6; provided,
however, that for the avoidance of doubt, the dispute shall not constitute an
Arbitration Matter. In the event that none of the EUOC, the JEC, and the
Executives is/are able to reach agreement on a proposed Optional Update, each
Party may elect upon written notice to the other Party to Promote the
Combination Product in such country using (i) the applicable Product SmPC,
Labeling and Package Leaflets for the Combination Product alone or (ii) the
applicable Product SmPC, Labeling and Package Leaflets for the Combination
Product or the Approved Marketing Materials without such Optional Update.

 

[ * ] = 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.

47

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(e) Following the review conducted pursuant to Section 5.6(c), the EUOC shall
review the Approved Marketing Materials on a semi-annual basis and shall make
Required Updates and consider any Optional Updates proposed by a Party. Any
disputes within the EUOC relating to such updates shall be resolved using the
procedures set forth in Sections 5.6(c) and 5.6(d), as applicable.

(f) The EUOC shall (i) select an advertising agency or agencies to assist with
the Marketing of the Combination Product in each country in the Territory and
(ii) oversee the activities of such agency or agencies. The EUOC shall determine
the Party that shall contract with each such agency, which Party shall enter
into a contract with such agency on commercially reasonable terms, and the
Parties shall include the external, out-of-pocket costs and expenses anticipated
to be incurred in connection with such contract in the Commercialization Budget.

(g) The EUOC shall develop, implement and oversee an orderly, systematic
process, involving representatives from the legal, medical and regulatory
functions of each Party, for the review and approval of advertising and
promotional materials to be used in each country in the Territory.

(h) Without prejudice to the other provisions of this Section 5.6, with respect
to Approved Marketing Materials for use in any country in the Territory, Gilead
Sub shall be responsible for obtaining and maintaining any governmental
approvals required with respect to the use of such Approved Marketing Materials
and, for the avoidance of doubt, shall have the right to file for routine
renewal of any such approvals annually without approval of the JEC or any
Operating Committee.

5.7 Use of Trademarks. Each Party shall conduct its activities hereunder in a
manner consistent with Section the provisions of the MAH Shareholder Agreement
with respect to Combination Product Trademarks (as defined is such agreement).

5.8 Commercialization Plan and Budget.

(a) The Commercialization Plan shall (i) be developed on a country-by-country
basis and, with respect to Territory Centralized Expenses and related
activities, a Territory-wide basis, (ii) specify any Territory-wide activities
and country-specific activities to be conducted in each country in the
Territory, which country-specific activities shall be mutually agreed by the
parties to the applicable Co-Promotion Agreement, if any, in accordance with
such agreement, subject to any applicable provisions of this Agreement, and
(iii) cover only activities for commercialization of Territory Combination
Product that shall be conducted by or on behalf of one Party or its applicable
Affiliate or that must be coordinated between the Parties or their respective
Affiliates hereunder or under any Co-Promotion Agreement, which activities shall
conform to the other terms of this Agreement, including the provisions of this
Section 5 and the Co-Promotion Agreement, if any, for the applicable country.
Such plan shall specify (A) such activities and (B) the Party that shall take
the lead role with respect to such activities on a country-by-country basis (or
Territory-wide basis, if applicable).

 

[ * ] = 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.

48

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) The initial Commercialization Plan attached hereto as Annex F covers
Calendar Years 2006, 2007 and 2008 (such plan, as updated from time to time in
accordance with this Section 5.8, the “Commercialization Plan”) for certain
countries in the Territory. From time to time, the Parties or the JEC shall
amend the Commercialization Plan to include each other country in the Territory
prior to the anticipated date of Launch in such country. The Commercialization
Plan and any update thereto shall contain a budget for each Party’s
out-of-pocket expenses for such Party’s activities set forth therein (such
budget, the “Commercialization Budget”), which budget shall be set forth on a
country-by-country basis (for the countries included in the Commercialization
Plan) and with respect to Territory Centralized Expenses, on a Territory-wide
basis. The initial Commercialization Plan covers, and any updates thereto shall
cover (i) unit volume and market share forecasts for the Combination Product in
each country in the Territory that is included in the Commercialization Plan for
the foregoing period, (ii) certain Marketing and other commercialization
activities for the Combination Product that are required to be conducted in each
such country by or on behalf of one Party or its applicable Affiliate or that
must be coordinated between the Parties or their respective Affiliates hereunder
or under the applicable Co-Promotion Agreement, (iii) the total minimum number
of Details by each Party in each country in the Territory in each Calendar
Quarter (or part thereof); provided, however, that, without limitation of the
obligations of each Party set forth in Section 5.3 to use Commercially
Reasonable Efforts to perform such Party’s Commercialization Activities and to
Promote the Territory Combination Product, no minimum number of Details are
required for any country in Territory A; and (iv) any other matters or
activities determined by the EUOC. With respect to each country, except as
otherwise agreed by the JEC or by the Parties in writing, the total amount
included in the Country-Specific Commercialization Budget for the Initial Launch
Period for such country shall be at least the amount of the Initial Launch
Period Financial Commitment for such country.

(c) For each Calendar Year commencing with Calendar Year 2009 (other than
(i) any such Calendar Year for which the Parties agree that there shall be no
Commercialization Plan or Commercialization Budget or (ii) any such Calendar
Year that follows a Calendar Year in which the Commercialization Budget is
zero), the Parties shall jointly prepare, based on country-by-country plans and
budgets developed by the JLOCs pursuant to the Co-Promotion Agreements or as
otherwise agreed by the Parties, any proposed updates to the Commercialization
Plan and Commercialization Budget (which updates shall be prepared in sufficient
time to permit Gilead Sub to submit, in a timely manner, such updates to the
EUOC and the JFC in accordance with this Section 5.8(c)). Gilead Sub shall
submit to the EUOC and the JFC, not less than sixty (60) days prior to the start
of each Calendar Year for such Calendar Year, any jointly-agreed proposed
updates to the Commercialization Plan and Budget. In the event that Gilead Sub
and BMS fail to reach agreement with respect to any such proposed updates, each
Party shall submit its proposed updates to the EUOC and the JFC by the deadline
set forth in the immediately preceding sentence. The JFC shall provide its
comments on any Commercialization Budget submitted to the JFC to the EUOC, for
its consideration, within ten (10) Business Days following such submission.
Following review, discussion and appropriate revision of such proposed update,
no later than forty-five (45) days prior to the start of the applicable Calendar
Year, the EUOC shall (A) agree upon an update to propose to the JEC and submit
such proposed update to the JEC, or (B) in the event the EUOC cannot reach
agreement on such any such proposed update, to submit to the JEC the proposed
update submitted by Gilead Sub (or each Party) to the EUOC pursuant to this
Section 5.8(c) and any other relevant materials, including any comments that the
JFC and either Party’s EUOC members may have on such proposed update, so as to
enable the JEC to reach agreement with respect to such an update.

 

[ * ] = 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.

49

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(d) Without limitation to the annual updates covered by Section 5.8(c), either
Party, directly or through its representatives on the EUOC, as the case may be,
may propose interim updates to the Commercialization Plan and the
Commercialization Budget to the EUOC from time to time as appropriate in light
of changed circumstances. The EUOC shall review, discuss and revise, as
appropriate, any such proposed update at its next quarterly meeting. In the
event that any such proposed update would cause the updated Commercialization
Budget to exceed one hundred and five percent (105%) of the Commercialization
Budget most recently approved by the JEC pursuant to Section 5.8(c) (a
“Significant Interim Update”), the EUOC shall forward such proposed update, with
its recommendation, if any, with respect to such proposed update, to the JEC for
review and approval. In the event that such proposed update is not a Significant
Interim Update, including in the case in which the proposed update would
reallocate funds between or among two or more countries in the Territory, but
not increase the Commercialization Budget beyond the foregoing threshold, the
EUOC shall determine whether or not to approve such proposed update, which
determination shall be final and not subject to dispute resolution pursuant to
Section 2.6.

(e) Subject to Section 2.2(c) and Section 2.7, if a proposed update to the
Commercialization Plan or Commercialization Budget is not approved by the JEC
(or if applicable, the EUOC), then such Commercialization Plan or
Commercialization Budget, as the case may be, shall continue in effect as
approved and most recently updated pursuant to this Section 5.8.

5.9 Commercialization Expenses. The Parties agree that any expenses incurred by
a Party or any of its Affiliates in connection with the performance of its
respective Commercialization Activities hereunder or under any Co-Promotion
Agreement shall constitute “Authorized Commercialization Expenses” solely to the
extent that such expenses are Territory Centralized Expenses and: (a) such
Commercialization Activities are covered in and consistent with the Territory
Centralized Plan and are within an area of responsibility for such Party listed
in the Territory Centralized Budget and are not eligible for sharing or
reimbursement pursuant to any Co-Promotion Agreement; (b) the total expenses for
such Party’s designated activities under the Territory Centralized Plan for the
relevant period do not exceed the aggregate amount set forth in the Territory
Centralized Budget for such activities in such period; (c) the expenses are
external, out-of-pocket costs of such Party or Affiliate, without any markup,
and not internal costs, including internal costs incurred in maintaining or
operating a Field Force or marketing organization (including marketing personnel
and sales support personnel); and (d) the relevant Commercialization Activities
are for the Marketing of the Combination Product in the Territory only and not
for the Marketing of any other proprietary products of such Party or any of its
Affiliates. The Parties acknowledge and agree that certain of the activities set
forth in the Commercialization Plan may have been performed prior to the
Effective Date under the Interim Agreement and that the costs and expenses
associated therewith shall be reimbursable under this Agreement as Authorized
Commercialization Expenses to the extent that they satisfy the foregoing
criteria. Notwithstanding the limitation contained in clause (d) above, in the
event that

 

[ * ] = 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.

50

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

either Party reasonably believes that there are cost or other efficiencies that
can reasonably be expected to be achieved through one or both Parties’
conducting Commercialization Activities with respect to the Combination Product
as part of, or in coordination with, activities being conducted by one or both
Parties with respect to its or their Single Agent Product(s) or Double Agent
Product, such Party(ies) may propose, by and through its applicable EUOC
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 EUOC and JFC and approved by the JEC (with any modifications made by the
JEC), the amount approved by the JEC for allocation to the Combination Product
shall constitute Authorized Commercialization Expenses.

5.10 Reports. Except as otherwise agreed by the EUOC, with respect to each
country in the Territory, Gilead Sub and BMS shall each present to the other, at
a meeting of the EUOC at least once per Calendar Quarter until the second
anniversary of the Launch of the Combination Product in such country and,
thereafter, at a meeting of the EUOC 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 (a) the
Commercialization Activities it has performed, or caused to be performed,
including Details, since the preceding meeting at which such a report was
presented (or, in the case of the first meeting of the EUOC, prior to such
meeting) and on a Calendar Year-to-date basis, evaluating the work performed in
relation to the goals and timeline of each Commercialization Plan, (b) its
Commercialization Activities in process and the future activities it expects to
initiate during the then-current Calendar Year, as compared to each
Commercialization Plan, and (c) in the case of the written report, the
Authorized Commercialization Expenses incurred, and expected to be incurred, by
such Party (and its applicable Affiliates) for the then-current Calendar Year,
as compared to the applicable Commercialization Budget. In addition, Gilead Sub
and BMS shall report promptly to the EUOC 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 5.10 to the contrary, each
Party’s reporting obligations under this Section 5.10 shall automatically be
deemed to terminate with respect to any period in which there is not then in
effect a Commercialization Plan or Commercialization Budget. Without limitation
of any of the foregoing, the Parties shall negotiate in good faith and mutually
agree in writing upon any additional reporting requirements with respect to any
Third Party Distributor Country.

5.11 Records.

(a) Maintenance of Records. Gilead Sub and BMS each shall (in accordance with
their respective allocations of responsibility with respect to the
Commercialization 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 (and its Affiliates’) 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.

 

[ * ] = 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.

51

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) Access to Records. Subject to this Section 5.11(b), each Party shall have
the right, with respect to records maintained by the other Party (and its
Affiliates) of such other Party’s (and its Affiliates’) Commercialization
Activities covered in the Commercialization Plan, during normal business hours
and upon reasonable notice, to inspect and copy any such records pursuant to
this Section 5.11(b) solely to the extent relating to the Combination Product
and solely to the extent (i) necessary in order for the inspecting Party (or its
Affiliates) to perform its obligations with respect to Commercialization
Activities in a manner consistent with the applicable Commercialization Plan,
(ii) necessary for the inspecting Party to confirm compliance with, or to comply
with, Applicable Law, as it relates to the activities conducted hereunder or
under any Co-Promotion Agreement, or (iii) necessary to enable the inspecting
Party to conduct reasonable diligence on matters potentially giving rise to
liability on the part of the Supply JV, the MAH or such Party or any of its
Affiliates, or to conduct a defense of itself or any of the foregoing Persons,
if and to the extent that a fact, circumstance or event has arisen that gives
the inspecting Party a reasonable basis to believe that it or any such Person
has or may incur such liability, in each case for use by the inspecting 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 or any of its Affiliates to provide such data, documentation or records in
the event that the Parties’ (or their respective Affiliates’) interests in such
matter are or may be adverse in any material respect, in which case Applicable
Law, including discovery rules and procedures shall apply. Each such request
shall be made in writing and shall state the reason(s) therefor (each a
“Commercial Record Request”). The Party (or its applicable Affiliate) 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 based on such Party’s or Affiliate’s interests in protecting from
disclosure to the requesting Party trade secrets or other competitive business
information. Upon any such objection being asserted, the Parties shall promptly
confer in an attempt to address each Party’s concerns and reach a resolution
with respect to the matter, and in the event that the Parties are unable to
agree upon a mutually agreeable resolution, either Party shall have the right to
refer the matter to the EUOC. In the event that any such dispute is referred by
a Party to arbitration pursuant to Section 2.6 (and Section 6.7 of the Standard
Terms), the arbitrators shall determine as a threshold matter whether and to
what extent one or more criteria set forth in clauses (i), (ii) or (iii) above
have been satisfied by the requesting 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 balancing, on the one hand, the requesting
Party’s need to obtain such records, documentation or data, and on the other
hand, the objecting Party’s interests in protecting such records, documentation
and data from disclosure. In making such determination, the arbitrator(s) shall
(x) confine their consideration to the facts and arguments set forth in the
Commercial Record Request and the other Party’s written response thereto, and
(y) have the right to require the receiving Party to abide by terms and
conditions for the handling, use and non-disclosure (either within such Party’s
organization or to other Persons) of such information as may be reasonable under
the circumstances. Except as provided in this Section 5.11, a Party shall not
have the right to obtain from the other Party access to or copies of the other
Party’s records, documentation and data described above, unless

 

[ * ] = 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.

52

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

otherwise expressly permitted pursuant to this Agreement or any other Covered
Agreement to which the Parties (or their respective Affiliates) are parties or
the other Party gives its consent in its sole discretion. Notwithstanding the
foregoing, neither Party shall have any obligation to (and, with respect to
pricing and discounting matters as set forth in Section 4.1, neither Party
shall) provide (or cause to be provided) to the other Party any information
pursuant to the Section 5.11 to the extent it relates to price setting and
discounting, or inventory management agreements, or which such first Party (or
any of its Affiliates) is restricted from disclosing pursuant to Applicable Law
or confidentiality or other contractual arrangements with Persons other than the
Parties or their Affiliates.

(c) Notwithstanding the foregoing, nothing in this Section 5.11 shall limit the
rights or obligation of the Parties (or any of their respective Affiliates)
under Section 3 of the Standard Terms as incorporated herein or any audit
provision set forth in the Financial Agreement. In the event of a conflict
between this Section 5.11 and Section 3 of the Standard Terms or any such audit
provision, Section 3 of the Standard Terms or such audit provision, as the case
may be, shall control. The Parties shall negotiate in good faith and mutually
agree in writing upon any audit rights with respect to Third Party Distributor
records.

5.12 Samples and Product Donations.

(a) Except to the extent mutually agreed in writing, Gilead Sub 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 in the Territory.

(b) Further, no Party shall donate any Territory Combination Product to any
Third Party unless (i) mutually agreed in writing by the Parties (or their
respective Affiliates) or (ii)(A) such Party provides notice to the other Party
of its intention to donate Territory Combination Product, which notice shall
specify (x) the price at which such Party intends to purchase such Territory
Combination Product, (y) the quantity of Territory Combination Product such
Party intends to purchase for purposes of such donation, and (z) the Person to
which such Party intends to donate such Territory Combination Product and
(B) the other Party consents to such proposed donation, which consent shall not
be unreasonably withheld or delayed. In the event that such consent is provided
and the donating Party proceeds with the donation, (a) if the donating Party is
the Selling Party with respect to the donated Combination Product, the donating
Party shall treat any Combination Product so donated as Net Sales (as defined in
the Financial Agreement) for the country for which the Combination Product is
labeled, or (b) if the donating Party is the non-Selling Party, the Selling
Party shall sell the Combination Product to the donating Party at the price
specified in the foregoing clause (x). Notwithstanding the foregoing, nothing in
this clause (b) shall apply to any Combination Product to be used in any
Clinical Trial.

 

[ * ] = 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.

53

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

SECTION 6

SUPPLY-RELATED MATTERS

6.1 Generally. Without limitation of the other provisions of this Section 6,
semiannually or on such other schedule as the EUOC may agree from time to time,
the EUOC shall (a) review the Manufacturing arrangements for Territory
Combination Product, including availability of API and Manufacturing capacity,
the anticipated Manufacturing schedule, and inventory levels of Territory
Combination Product, including safety stock, held by the Supply JV, (b) provide
general oversight of the process with respect to Forecasts and Orders set forth
in Section 6.2 and (c) make such recommendations to the Parties with respect to
any of the foregoing as the EUOC deems appropriate.

6.2 Forecasts and Orders.

(a) Forecasts and Related Supporting Data.

(i) Each Party shall appoint a designated employee to oversee the preparation of
Forecasts (as defined below) pursuant to this Section 6.2(a), which designated
employee may be an employee of an Affiliate of such Party. Any Forecast proposed
by a Party hereunder shall be based on Local Demand in each country in the
Territory as determined based on the Forecast Principles and Supporting Data set
forth in Annex K. Further, all Forecasts agreed pursuant to clause (ii) below
shall be based on Local Demand in each country in the Territory as determined
based on the Forecast Principles and Supporting Data set forth in Annex K and
shall be prepared in good faith and with due diligence, care and consideration.
The Parties, through their respective designated employees, shall discuss any
proposed Forecasts and review and exchange Supporting Data as appropriate and on
such schedule as the Parties may establish from time to time; provided that
neither Party shall have any obligation to provide any Supporting Data hereunder
to the other Party to the extent that such Supporting Data is licensed by such
Party (or any of its Affiliates) from any Third Party if such Party (or any of
its Affiliates) does not have the right to provide such Supporting Data as
required hereunder.

(ii) Based on the Supporting Data exchanged pursuant to clause (i), the Parties
shall jointly develop and agree on such forecasts for each country in the
Territory as Gilead Sub is required to submit to the Supply JV pursuant to the
Product Supply Agreement (such forecasts, “Forecasts”) in accordance with the
requirements for such Forecasts set forth in the Product Supply Agreement and in
sufficient time to allow Gilead Sub to submit such Forecast to the Supply JV by
the date on which such Forecast is due under the Product Supply Agreement.

(iii) In the event that the Parties have not agreed upon any Forecast by ten
(10) Business Days prior to the date on which such Forecast is due to be
submitted under the Product Supply Agreement, either Party may refer such matter
to the Designated EUOC Members, in which case the Designated EUOC Members shall
consider and agree upon such Forecast not less than four (4) days prior to the
date on which such Forecast is due under the Product Supply Agreement. The
determination of the Designated EUOC Members shall be made based on Local
Demand. In the event that the Designated EUOC Members cannot reach

 

[ * ] = 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.

54

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

agreement by such deadline with respect to any Forecast, such matter shall be
escalated to the Commercial Executives for resolution not less than two (2) days
prior to the date on which such Forecast is due under the Product Supply
Agreement. With respect to any meetings or other discussions between the
Commercial Executives regarding the resolution of such dispute, such meetings
and discussions shall relate solely to the applicable Forecast or Order which is
the subject of such dispute. In the event that the Commercial Executives are not
able to reach agreement, Gilead Sub shall submit to the Supply JV, pursuant to
the Product Supply Agreement, the required Forecast based on the previous
Forecast that was most recently submitted to the Supply JV, where the forecast
for any period not covered by such previous forecast shall be equal to the
forecast for the immediately preceding period. The terms of Section 2.6 shall
not apply with respect to any such dispute.

(b) Orders. Based on the Forecasts, and, if applicable, the relevant Supporting
Data, Gilead Sub shall prepare and submit such orders for the Territory (each, a
“Order”) for the Combination Product as (i) are required to be submitted by
Gilead Sub pursuant to the Product Supply Agreement, or (ii) Gilead Sub is
permitted to submit pursuant to the Product Supply Agreement and determines, in
connection with its management of the inventory of Territory Combination
Product, are appropriate, in each case ((i) and (ii)) in accordance with the
requirements for such orders set forth in the Product Supply Agreement.

6.3 Supply-Related Expenses. Any external, out-of-pocket amounts incurred by
Gilead Sub in the Territory pursuant to the Product Supply Agreement other than
amounts incurred by Gilead Sub pursuant to Section 6.1 or Section 6.2 of the
Product Supply Agreement, shall constitute “Authorized Supply Expenses”, except
that (a) any such amounts incurred by Gilead Sub to the extent arising out of
the gross negligence or intentional misconduct of Gilead Sub or any of its
Affiliates shall not constitute Authorized Supply Expenses and shall be borne in
full by Gilead Sub; and (b) any such amounts incurred by Gilead Sub to the
extent arising out of the gross negligence or intentional misconduct of BMS or
any of its Affiliates shall not constitute Authorized Supply Expenses and shall
be borne by BMS.

SECTION 7

LICENSE GRANTS AND INTELLECTUAL PROPERTY

7.1 Licenses and Related Matters.

(a) Trademark Licenses and Related Matters.

(i) Subject to the terms and conditions of this Agreement, Gilead Sub hereby
grants, on behalf of itself and its Affiliates, to BMS a non-exclusive,
royalty-free, fully paid-up, license, with right to sublicense through multiple
tiers, to use in the Territory (A) the Trademarks listed on Annex G hereto (the
“Gilead Licensed Trademarks”) for the sole purposes of commercialization of the
Combination Product (but not to the commercialization of the active
pharmaceutical ingredients thereof individually or in combination other than in
the Combination Product or other Exploitation of the Combination Product) in the
Territory and (B) the name and company logo/identifiers of Gilead Sub or its
applicable Affiliate(s) for use (alone or as part of the name of the MAH) on
Approved Marketing Materials and the applicable Product SmPC, Labeling and
Package Leaflets for the Combination Product.

 

[ * ] = 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.

55

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(ii) Subject to the terms and conditions of this Agreement, BMS hereby grants,
on behalf of itself and its Affiliates, to Gilead Sub a non-exclusive,
royalty-free, fully paid-up, license, with right to sublicense through multiple
tiers, to use in the Territory (A) the Trademarks listed on Annex H hereto (the
“BMS Licensed Trademarks”) for the sole purposes of commercialization of the
Combination Product (but not to the commercialization of the active
pharmaceutical ingredients thereof individually or in combination other than in
the Combination Product or other Exploitation of the Combination Product) in the
Territory and (B) the name and company logo/identifiers of BMS or its applicable
Affiliates(s) for use (alone or as part of the name of the MAH) on Approved
Marketing Materials and the applicable Product SmPC, Labeling and Package
Leaflets for the Combination Product.

(iii) Gilead Sub hereby recognizes BMS’s and its Affiliates’ right, title, and
interest in and to the BMS Licensed Trademarks. Gilead Sub further recognizes
that this Agreement, or use of the BMS Licensed Trademarks in connection with
this Agreement, in no way confers to Gilead Sub any right, title, and interest
in and to the BMS Licensed Trademarks or any other trademarks or intellectual
property rights owned by BMS or any of its Affiliates, except as may otherwise
be expressly provided in this Agreement. BMS hereby recognizes Gilead Sub’s and
its Affiliates’ right, title, and interest in and to the Gilead Licensed
Trademarks. BMS further recognizes that this Agreement, or use of the Gilead
Licensed Trademarks in connection with this Agreement, in no way confers to BMS
any right, title, and interest in and to the Gilead Licensed Trademarks or any
other trademarks or intellectual property rights owned by Gilead Sub or any of
its Affiliates, except as may otherwise be expressly provided in this Agreement.

(iv) Gilead Sub acknowledges that the goodwill generated by any use of the BMS
Licensed Trademarks in connection with this Agreement will inure solely to the
benefit of BMS or its applicable Affiliate. BMS acknowledges that the goodwill
generated by any use of the Gilead Licensed Trademarks in connection with this
Agreement will inure solely to the benefit of Gilead Sub or its applicable
Affiliate.

(b) Sublicense of Gilead Commercialization Rights. Subject to the terms and
conditions of this Agreement, Gilead Sub hereby grants to BMS a royalty-free,
non-exclusive sublicense, with the right to sublicense through multiple tiers of
sublicensees to any of its Affiliates or permitted subcontractors, under any and
all licenses granted to Gilead Sub in each Commercial License Agreement (to the
extent that such a sublicense is permitted to be granted under such agreement)
for the sole purpose of performing BMS’s obligations hereunder and BMS’s (or its
Affiliates’) obligations under the Co-Promotion Agreements and, if applicable,
any BMS Product Supply Agreement.

(c) All license rights not specifically granted in this Section 7.1 are
expressly reserved by each licensing Party. Any license granted in Section 7.1
may be transferred or assigned by the licensee Party only in connection with a
permitted assignment of this Agreement by such Party pursuant to Section 6.5 of
the Standard Terms as incorporated herein.

 

[ * ] = 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.

56

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

7.2 Ownership of Trademarks and Related Matters.

(a) Gilead Licensed Trademarks. Gilead Sub shall have the sole right, at its
sole cost and expense, to search, clear, file, register, prosecute, maintain and
enforce the Gilead Licensed Trademarks. Gilead Sub 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 by
filing an infringement suit or taking other similar action. Gilead Sub 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. 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 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. The Parties acknowledge that the ownership
of the Combination Product Trademarks (as defined in the US JV Collaboration
Agreement) and any response to any infringement or potential infringement of
such Trademark (and the costs and expenses associated therewith) shall be
governed by the US JV Collaboration Agreement. Gilead Sub shall be solely
responsible for searching, clearing, filing, registering, prosecuting and
maintaining any such Trademarks in the Territory in the name of the US JV and
the external, out-of-pocket expenses incurred by Gilead Sub in connection
therewith shall be treated as Authorized Other Expenses hereunder.

(d) EU Combination Product Trademarks. In the event that there are any EU
Combination Product Trademarks (as defined in the MAH Shareholder Agreement),
the Parties shall coordinate in good faith (i) to secure from the owner(s) of
such Trademarks (the ownership of which is governed by the MAH Shareholder
Agreement) such licenses or other rights as are reasonably necessary to conduct
the Parties’ activities hereunder and under the Co-Promotion Agreements, (ii) to
allocate responsibility as between the Parties and such owner(s) for (A) the
searching, clearing, filing, registering, prosecuting and maintaining any such
Trademarks in the Territory and (B) any response to any infringement or
potential infringement of any such Trademarks in the Territory and (iii) to
allocate, as between the Parties and such owner(s), any costs with respect to
any of the foregoing.

7.3 Ownership of Marketing Materials. Any Approved Marketing Materials, and any
intellectual property rights with respect thereto, shall be jointly owned by the
Parties; provided, that (a) except as otherwise provided in clause (b), each
Party shall have the right to use the Approved Marketing Materials solely as set
forth herein and (b) in the event that either Party desires to use the Approved
Marketing Materials (as modified appropriately) in connection with the Marketing
of the Combination Product outside the Territory, the other Party shall not
unreasonably withhold or delay its consent to such use and, if such consent is
granted, shall grant such licenses with respect to the Approved Marketing
Materials as may be reasonably necessary

 

[ * ] = 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.

57

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

in connection therewith; provided, that such grant shall not be required to
include any grant of any rights to use any Trademark; and, provided, further
that the foregoing shall not be construed to modify the rights and obligations
of the Parties or their respective Affiliates under Section 5.7 of the US JV
Collaboration Agreement.

7.4 IP Expenses. In the event that Gilead Sub reimburses the US JV pursuant to
any Covered Agreement for amounts incurred by or on behalf of the US JV with
respect to obtaining, maintaining or enforcing any intellectual property rights,
including Trademarks, that are licensed to Gilead Sub under such agreement with
respect to the Territory, such amounts reimbursed by Gilead Sub shall constitute
Authorized Other Expenses to extent attributable to the Territory.

SECTION 8

PAYMENTS

8.1 Authorized Expenses.

For clarity, any amounts paid or payable pursuant to this Section 8 shall be
subject to adjustment pursuant to the Financial Agreement to the extent provided
therein.

(a) Allocation. Gilead Sub and BMS shall each bear any Authorized Expenses in
accordance with the Working Percentage for the Gilead Territory-Wide Percentage
and the BMS Territory-Wide Percentage, respectively, as set forth in this
Section 8.1. For the avoidance of doubt, with respect to any costs and expenses
incurred by a Party in performing the Commercialization Activities or other
activities hereunder, the other Party shall bear a portion of such costs and
expenses pursuant to this Section 8.1 only if such costs and expenses constitute
Authorized Expenses.

(b) Authorized Commercialization Expenses.

(i) Each Party shall report to the other Party, no later than ten (10) Business
Days after the end of each Calendar Quarter, the Authorized Commercialization
Expenses incurred by such Party during such Calendar Quarter. Such report shall
specify in reasonable detail all amounts included in such Authorized
Commercialization Expenses during such Calendar Quarter. All Authorized
Commercialization Expenses shall be reported in Euros. For reporting purposes,
any Authorized Commercialization Expenses incurred in a currency other than
Euros shall be converted to Euros from the applicable currency by the incurring
Party in a manner consistent with its then-current standard worldwide currency
conversion methodology, as consistently applied. For the avoidance of doubt, any
expenses that are reimbursable pursuant to any Co-Promotion Agreement shall not
constitute Authorized Commercialization Expenses hereunder.

(ii) Authorized Commercialization Expenses shall be subject to reimbursement, as
follows. Within thirty (30) days after the date on which the Authorized
Commercialization Expense reports for a particular Calendar Quarter are due
pursuant to Section 8.1(b)(i), the Party that has paid less than its share
(based on the allocation principles set forth in Section 8.1(a)) of the
aggregate Authorized Commercialization Expenses for such Calendar Quarter shall
make a reconciling payment in Euros to the other Party to achieve the
appropriate allocation of Authorized Commercialization Expenses as provided in
Section 8.1(a).

 

[ * ] = 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.

58

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(c) Authorized Supply Expenses. Gilead Sub shall submit an invoice to BMS, no
later than ten (10) Business Days after the end of each calendar month, for an
amount equal to the Working Percentage for the BMS Territory-Wide Percentage
multiplied by the total amount of Authorized Supply Expenses incurred by Gilead
Sub during such month. Such invoice shall specify in reasonable detail all
amounts included in such Authorized Supply Expenses. All Authorized Supply
Expenses shall be invoiced in United States Dollars. For invoicing purposes, any
Authorized Supply Expenses incurred in a currency other than United States
Dollars shall be converted to United States Dollars from the applicable currency
by Gilead Sub in a manner consistent with its then-current standard worldwide
currency conversion methodology, as consistently applied. BMS shall pay any
invoice submitted by Gilead Sub pursuant to this Section 8.1(c) within twenty
(20) days after the date on which BMS receives such invoice.

(d) Authorized Distribution Expenses. The Selling Party shall submit an invoice
to the non-Selling Party, no later than ten (10) Business Days after the end of
each calendar month, for an amount equal to the Working Percentage for the BMS
Territory-Wide Percentage (in the case that Gilead Sub is the Selling Party in
such country) or the Gilead Territory-Wide Percentage (in the case that BMS is
the Selling Party in such country) multiplied by the total amount of Authorized
Distribution Expenses incurred by the Selling Party (or its applicable
Affiliate) during such month. Such invoice shall specify in reasonable detail
all amounts included in such Authorized Distribution Expenses. All Authorized
Distribution Expenses shall be invoiced in United States Dollars. For invoicing
purposes, any Authorized Distribution Expenses incurred in a currency other than
United States Dollars shall be converted to United States Dollars from the
applicable currency by the Selling Party in a manner consistent with its
then-current standard worldwide currency conversion methodology, as consistently
applied. The non-Selling Party shall pay any invoice submitted by the Selling
Party pursuant to this Section 8.1(d) within thirty (30) days after the date on
which the non-Selling Party receives such invoice.

(e) Authorized Other Expenses.

(i) Each Party shall report to the other Party, no later than ten (10) Business
Days after the end of each calendar month, any Authorized Other Expenses that
are incurred during such month. Such report shall specify in reasonable detail
all amounts included in such Authorized Other Expenses during such month. All
Authorized Other Expenses shall be reported in Euros. For reporting purposes,
any Authorized Other Expenses incurred in a currency other than Euros shall be
converted to Euros from the applicable currency by the incurring Party in a
manner consistent with its then-current standard worldwide currency conversion
methodology, as consistently applied.

(ii) Authorized Other Expenses shall be subject to reimbursement, as follows.
Within thirty (30) days after the date on which the Authorized Other Expense
reports for a particular month are due pursuant to Section 8.1(e)(i), the Party
that has paid less than its share (based on the allocation principles set forth
in Section 8.1(a)) of the aggregate Authorized Other Expenses for such month
shall make a reconciling payment in Euros to the other Party to achieve the
appropriate allocation of such Authorized Other Expenses as provided in
Section 8.1(a).

 

[ * ] = 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.

59

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(f) Notwithstanding anything in this Section 8.1 to the contrary, any invoice
that a Party has a right to submit to the other Party pursuant to this
Section 8.1 may be submitted to such other Party by a designated Affiliate of
such invoicing Party, in which case such other Party shall submit payment to
such designated Affiliate.

(g) Notwithstanding anything in this Section 8.1 to the contrary, no cost or
expense shall be reimbursable hereunder to the extent that it is reimbursable
pursuant to the Financial Agreement, the EU Master Agreement or the MAH
Shareholder Agreement.

8.2 Manufacturing Fee.

(a) BMS shall pay to Gilead Sub an amount equal to the Working Percentage (as
defined in the Financial Agreement) for the BMS Territory-Wide Percentage
multiplied by the Manufacturing Fee (as defined in the Product Supply Agreement)
paid or payable by Gilead Sub pursuant to Section 6.2 of the Product Supply
Agreement, subject to any adjustments made pursuant to the Financial Agreement.
Notwithstanding the foregoing, (i) with respect to any Manufacturing Fee
incurred by Gilead Sub pursuant to the Product Supply Agreement that arises out
of the gross negligence or intentional misconduct of Gilead Sub or any of its
Affiliates, BMS shall have no payment obligation pursuant to this
Section 8.2(a), and (ii) with respect to any Manufacturing Fee incurred by
Gilead Sub pursuant to the Product Supply Agreement that arises out of the gross
negligence or intentional misconduct of BMS or any of its Affiliates, BMS shall
pay, pursuant to this Section 8.2(a), such Manufacturing Fee in its entirety.
For the avoidance of doubt, this Section 8.2 shall apply with respect to the
Manufacturing Fee for any Territory Combination Product, including any such
Combination Product that is Lost (as defined in the Product Supply Agreement).

(b) Unless otherwise agreed by the Parties, upon receipt of an invoice from the
Supply JV pursuant to the Product Supply Agreement for any Manufacturing Fee
with respect to which BMS has a corresponding payment obligation pursuant to
Section 8.2(a), Gilead Sub shall invoice BMS in U.S. Dollars for the
corresponding amount due under this Section 8.2. BMS shall pay any such invoice
within twenty (20) days following receipt of such invoice from Gilead Sub.

8.3 Sharing of Recoveries Obtained from the Supply JV.

(a) Gilead Sub shall pay to BMS such proportion of any recoveries paid by the
Supply JV to Gilead Sub pursuant to Section 5.6.2 of the Product Supply
Agreement, after deduction of any out-of-pocket expenses of Gilead Sub in
obtaining such recoveries from the Supply JV pursuant to the Product Supply
Agreement, that corresponds to the proportion of the expenses to which such
recoveries relate that were borne by BMS hereunder.

 

[ * ] = 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.

60

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) In the event that a Party (or its applicable Affiliate) causes (during the
period in which such Party (or its Affiliate) holds title to a given quantity of
Territory Combination Product), due to its gross negligence or intentional
misconduct, the Loss (as defined in the Product Supply Services Agreement) of
any such Combination Product, then such Party shall be responsible for
reimbursing the other Party (or its designated Affiliate) for the API
Replacement Fee (as defined in the Product Supply Services Agreement) for the
quantity(ies) of such other Party’s API(s) contained in such Lost Combination
Product (which remedy shall be the sole remedy of the non-Selling Party or any
of its Affiliates with respect to such Loss of API).

8.4 Other Payments. Unless otherwise agreed by the Parties, and except as
otherwise provided in this Section 8, each Party promptly shall invoice the
other Party for any amounts due under this Agreement in the currency in which
the corresponding expense is incurred by such Party and each Party shall pay any
invoice provided by the other Party pursuant to this Section 8.4 within thirty
(30) days after receipt of such invoice.

8.5 Adjustment to Country-Specific Percentages Following Generic Launch. On a
country-by-country basis, this Section 8.5 shall apply with respect to the
Country-Specific Percentages for each Affected Country commencing as of the
first Calendar Quarter following the Calendar Quarter during which the
applicable Generic Version Launch occurs in such country (where the
Country-Specific Percentages for the Calendar Year in which such Calendar
Quarter occurs shall be calculated based on the Standard Country-Specific
Percentages for the portion of such Calendar Year from its commencement through
the Calendar Quarter in which such Generic Version Launch occurs and thereafter
pursuant to this Section 8.5). Notwithstanding anything to the contrary herein
or in any Covered Agreement, the Country-Specific Percentages for the applicable
country, for all purposes under the Financial Agreement, the EU Master Agreement
and any other Covered Agreement, shall be modified as follows (where any
capitalized terms used in this Section 8.5 and not defined in this Agreement
shall have the meaning set forth in the Financial Agreement):

(a) Country-Specific Percentage of the Affected Party for any Country in the
Territory. The Country-Specific Percentage of the Affected Party with respect to
the applicable Affected Country in the Territory for each Calendar Year shall
equal, stated in percentage terms: a fraction,

the numerator of which is (i) the [*] in such country minus (ii) the sum of
(A) the [*] in such country and (B) in the event that there is a [*] with
respect to such country, the Non-Affected Party’s [*]; and

the denominator of which is the Net Selling Price of the Combination Product in
such country.

(b) Country-Specific Percentage of the Non-Affected Party for any Country in the
Territory. The Country-Specific Percentage of the Non-Affected Party with
respect to the applicable country for a given Calendar Year shall equal: one
hundred percent (100%) minus the [*] with respect to such country and such
Calendar Year, as determined pursuant to this Section 8.5.

 

[ * ] = 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.

61

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(c) Generic Version Launch of Two Components. Notwithstanding the foregoing, in
the event that there has been a Generic Version Launch with respect to Sustiva
or Stocrin and either Viread or Emtriva, but not both (and not Truvada) in a
given country, commencing as of the first Calendar Quarter following the
Calendar Quarter during which the Generic Version Launch triggering this clause
(c) occurs in such country the following shall apply with respect to such
country:

(i) Gilead Sub’s Country-Specific Percentage shall equal the sum of (in each
case stated in percentage terms):

(A) a fraction, the numerator of which equals the [*] (such product, the
“Proprietary Product”) in such country, and the denominator of which equals the
[*] in such country, and

(B) (1) a fraction, the numerator of which equals the [*] that is not the
Proprietary Product (“Gilead Non-Proprietary Product”) and the denominator of
which is the sum of such [*], multiplied by (2) a fraction, the numerator of
which equals (x) the [*] in such country minus (y) the [*], and the denominator
of which equals the [*] in such country; provided, that if any [*] described in
clause (1) is not available, the fraction in clause (1) shall equal [*]. For
purposes of clause (1) of this Section 8.5(c)(i)(B), the [*]

By way of illustration, in the event that the Proprietary Product is Viread (and
the foregoing proviso does not apply), Gilead Sub’s Country-Specific Percentage
would be equal to the sum of:

[*]

(ii) BMS’s Country-Specific Percentage shall equal one hundred percent
(100%) minus [*], as determined pursuant to the foregoing clause (i).

(d) Generic Version Launch of Three Components. Notwithstanding the foregoing,
in the event that there has been a Generic Version Launch with respect to
Sustiva or Stocrin, as applicable, and both Single Agent Products of Gilead Sub
(or Truvada) in a given Affected Country, with respect to such country, the
Parties shall negotiate in good faith the appropriate adjustments to the
Country-Specific Percentages for the applicable Affected Country for the period
commencing as of the first Calendar Quarter following the Calendar Quarter
during which the Generic Version Launch triggering this clause (d) occurs in
such country.

(e) Effect of Modifications. For the avoidance of doubt, the Working Percentages
(as defined in the Financial Agreement) with respect to the Country-Specific
Percentages, and any calculations to be made hereunder or under the EU Master
Agreement or any Covered Agreement using Country-Specific Percentages (or such
Working Percentages), including the calculation of any applicable Transfer Price
or the Interim Transfer Price, shall be adjusted to reflect any modifications to
the Country-Specific Percentages pursuant to this Section 8.5. Each Party shall,
and shall cause its Affiliates to, be bound by any such adjustments.

 

[ * ] = 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.

62

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

8.6 Payment Terms. Except as otherwise agreed by the Parties, all payments
hereunder to a Party shall be made by wire transfer or electronic funds transfer
to such bank account as the payee Party may designate from time to time by
notice to the payor Party. Any amounts due hereunder shall be paid in the
currency in which such amounts are invoiced.

8.7 Interest. Interest on any payments due and owing pursuant to this Agreement
that are not timely made shall accrue from the date such payments are due at the
lesser of (i) an annual rate equal to the sum of (a) the prime rate of interest
in force on the date the payment is due as published in The Wall Street Journal
(Eastern United States Edition) (in the case of payments to be made in United
States dollars) or the European Central Bank main refinancing rate (as published
in the Central Bank and Financial Services Authority for Ireland website
www.centralbank.ie) (in the case of payments to be made in any currency other
than United States dollars) and (b) three hundred (300) basis points and
(ii) the maximum rate of interest permissible under Applicable Law.

8.8 Taxes. Each Party shall be responsible for any and all sales, use, excise,
value added, goods and services and similar taxes and charges imposed with
respect to any payments to such Party by the other Party pursuant to this
Section 8, provided that each 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. Each Party shall pay any and all withholding taxes or
similar charges imposed by any governmental unit that are required to be
withheld from any amounts due to the Party to be paid pursuant to this Section 8
to the proper taxing authority, and proof of payment of such taxes or charges
shall be secured and sent to such Party as evidence of such payment. All amounts
paid by a Party pursuant to the immediately preceding sentence with respect to
taxes for which the other Party is responsible pursuant to the first sentence of
this Section 8.8 shall be paid for the account of such other Party and deducted
from the amounts due from the paying Party to such other Party pursuant to this
Section 8.

8.9 Royalty Payments to Third Parties.

(a) If a Patent of any Third Party is or would be infringed or any such Person’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 Sub shall be solely responsible for any royalty, license fee or other
payment obligation to such Person (which shall not qualify as an Authorized
Expense) in connection with any such infringement or misappropriation in
connection with the Manufacture of Territory Combination Product (or the TDF or
FTC included therein) or any Commercialization Activities or other activities
conducted hereunder or under any Co-Promotion Agreement. If a Patent of any
Third Party is or would be infringed or any such Person’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
royalty, license fee or other payment obligation to such Person (which shall not
qualify as an Authorized Expense) in connection with any such infringement or
misappropriation in connection with the Manufacture of Territory Combination
Product (or the EFV included therein) or any Commercialization Activities or
other activities conducted hereunder or under any Co-Promotion Agreement.

 

[ * ] = 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.

63

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) All royalty, license fee or other payments by Gilead Sub or BMS (or any of
their respective Affiliates), other than those covered by Section 8.9(a), to any
Third Party (other than to the extent comprising Losses (as defined in the EU
Master Agreement) covered by Section 3 of the EU Master Agreement) in connection
with licenses granted to any Party or any of its Affiliates under any Patents or
trade secrets owned or controlled by any Third Party that are reasonably
necessary for (i) the performance of either Party’s obligations under this
Agreement or any Co-Promotion Agreement or (ii) the Manufacture of Territory
Combination Product, in each case ((i) and (ii)), shall constitute Authorized
Commercialization Expenses. For the avoidance of doubt, no royalty, licensee fee
or other payment by BMS (or any of its Affiliates) pursuant to the EFV License
Agreement shall constitute Authorized Commercialization Expenses.

(c) Notwithstanding Section 8.9(b), the royalties, license fees or other
payments described therein shall constitute Authorized Commercialization
Expenses solely to the extent that (i) with respect to any license agreement
existing as of the Effective Date, the Party that is a party to the applicable
license agreement has notified the other Party, on or before the Effective
Date, of the obligation to pay such royalty, license fee or other payment in
connection with the foregoing activities, (ii) with respect to any license
agreement not covered by clause (i), the Party has conferred with the other
Party prior to entering into such license agreement and has obtained the other
Party’s consent to the applicable terms of such agreement and (iii) in the event
that any such fee or payment is not attributable solely to the foregoing
activities (e.g., it covers not only the Exploitation of Territory Combination
Product, but also the Exploitation of any other product(s) or Combination
Product other than Territory Combination Product), the Parties shall negotiate
in good faith an appropriate manner of apportionment). In the event that a Party
denies its consent pursuant to the foregoing clause (ii) with respect to a given
license agreement and, as a result, the royalties, license fees or other
payments incurred by the other Party pursuant to such Agreement are excluded
from Authorized Commercialization Expenses and such first Party and its
Affiliates are not licensed under such agreement, then, notwithstanding
Section 3.5(c) of the EU Master Agreement, such unlicensed Party shall be
responsible, as between Gilead Sub (and its Affiliates) and BMS (and its
Affiliates), for any Losses (as defined in the EU Master Agreement) that would
be borne (in the absence of application of this sentence) by the Parties (or
their applicable respective Affiliates) pursuant to Section 3.5(c) of the EU
Master Agreement, to the extent that such Losses would not have arisen if such
unlicensed Party had been licensed under such license agreement.

(d) Nothing herein shall be construed to prevent either Party or any of its
Affiliates from entering into any license agreement with respect to the
Combination Product or otherwise; provided, however, that in the event that a
Party desires to enter into such a license agreement with respect to the
Combination Product, such Party shall notify the other Party. If following such
notification, the Parties mutually agree to coordinate with respect to entering
into such a license agreement and the negotiations with respect thereto, the
Parties shall coordinate in good faith with regard to the foregoing.

 

[ * ] = 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.

64

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

SECTION 9

TERRITORY COMBINATION PRODUCT RECALLS

Each Party acknowledges that any determinations with respect to any product
disposal, recall or withdrawal of Territory Combination Product that are made
pursuant to the MAH Shareholder Agreement or any other applicable Covered
Agreement are binding on the Parties and that any expenses with respect to any
of the foregoing are allocated between the Parties (and their respective
Affiliates) as set forth in the MAH Shareholder Agreement.

SECTION 10

REPRESENTATIONS AND WARRANTIES

10.1 Generally. Each Party represents and warrants to the other Party that:
(a) it is not aware of any pending or threatened litigation (and has not
received any communication) that alleges that such Party’s activities related to
this Agreement or any Co-Promotion Agreement have violated, or that by
conducting the activities as contemplated in this Agreement or any Co-Promotion
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),
and (b) such Party has the right to grant the licenses granted by such Party to
the other Party hereunder, and has not, prior to the Effective Date, made a
grant to any other Person of any right or license that would conflict with any
grant of rights or licenses granted by such Party to the other Party hereunder.

10.2 Relationship to Standard Terms. The representations and warranties set
forth in Section 10.1 shall be without limitation of the representations,
warranties and covenants set forth in the Standard Terms.

SECTION 11

LIMITATIONS ON LIABILITY AND RELATED MATTERS

11.1 Limits on Liability. Notwithstanding anything herein to the contrary, and
without limitation of any liability limitation set forth in the Standard Terms
or herein or any indemnity obligation set forth in the EU Master Agreement,
(a) with respect to any losses resulting from any breach by Gilead Sub of any
representation or covenant hereunder, to the extent such losses arise out of any
corresponding breach by the Supply JV of any representation or covenant under
the Product Supply Agreement, the liability, if any, of Gilead Sub to BMS
hereunder [*] for such losses (less any reasonable, out-of-pocket expenses of
Gilead Sub in obtaining such compensation from the Supply JV thereunder) and
(b) with respect to losses other than those covered by the foregoing clause (a),
a Party shall be liable hereunder with respect to losses of the other Party
(other than Losses as defined in the EU Master Agreement) [*] by such Party or
its Affiliates or subcontractors.

11.2 Exceptions to Standard Terms Limitations. Notwithstanding Section 4.3 of
the Standard Terms as incorporated herein, the Parties shall be liable to each
other for [*], if applicable, in connection with any breach of Section 4.1, the
Pricing Rules or the Discount Rules, provided that such breach arises out of
acts or omissions constituting gross negligence or intentional misconduct.

 

[ * ] = 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.

65

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

11.3 Relationship to EU Master Agreement. Nothing in this Section 11 is intended
to, or shall operate to limit, a Party’s (or its Affiliates’) rights to
indemnification or obligations of indemnity under any other agreement, including
the EU Master Agreement, and for clarity, “losses” as used in Section 11.1 shall
not be construed to include losses arising from Third Party Claims (as defined
in the EU Master Agreement).

SECTION 12

TERM AND TERMINATION

12.1 Term. The term of this Agreement (“Term”) shall commence as of the
Effective Date and shall continue until the expiration of the last to expire
Patent which affords market exclusivity in the Territory with respect to the
Combination Product or any component thereof unless earlier terminated pursuant
to this Section 12 or the Standard Terms as incorporated herein.

12.2 Voluntary Termination. Without limitation of the bases for termination set
forth in the Standard Terms, either Party (the “Terminating Party”) may
terminate this Agreement in its entirety by written notice to the other Party
(the “Continuing Party”), which termination shall be effective on the later of
(a) the last day of the second (2nd) Calendar Quarter after the Calendar Quarter
in which such notice is delivered to the other Party and (b) [*]. In the event
that, at least ninety (90) days prior to the date on which such termination
would become effective (in the absence of application of this sentence), the
other Party provides written notice to the Terminating Party indicating that
such other Party does not desire to continue to commercialize the Combination
Product in the Territory, the effective date of such termination shall be,
notwithstanding the foregoing, the earlier of (i) the date on which the
Territory Combination Product is withdrawn in each country in the Territory and
(ii) if the Combination Product is licensed to a Third Party for distribution in
the Territory, the date on which such Third Party assumes such distribution.
Further, in the case in which a notice is provided pursuant to the immediately
preceding sentence, the Parties shall coordinate to seek any required approvals
to withdraw the Territory Combination Product in each country in the Territory
and, provided that any such approvals are obtained, to withdraw the Territory
Combination Product in all countries in the Territory or, if mutually agreed by
the Parties, to license the Combination Product to a Third Party. In the case of
any such withdrawal or licensing to a Third Party, the Parties shall negotiate
in good faith appropriate wind-down provisions in connection therewith (and
Section 12.3(b) shall apply solely to the extent applicable). For clarity,
termination of this Agreement does not automatically terminate any other Covered
Agreement (other than the Co-Promotion Agreements) but may entitle a Party or
its Affiliates to terminate one or more of such other Covered Agreements
pursuant to their terms (including the Standard Terms as incorporate therein).

12.3 Consequences of Expiration or Termination.

(a) Expiration or Termination Pursuant to the Standard Terms. Upon expiration of
this Agreement or termination of this Agreement pursuant to the Standard Terms,
the provisions of this Section 12.3(a) shall apply. The license grants in
Section 7 to a Party shall survive only to the extent necessary to enable such
Party to perform any obligations hereunder

 

[ * ] = 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.

66

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

that survive such termination. No later than thirty (30) days after the date of
such expiration or termination, each Party shall make arrangements for, at the
election of the other Party, either the return or disposal of any Confidential
Information of the other Party, whether such Confidential Information is in
tangible or intangible form (except for one (1) copy which may be retained
solely for archival purposes); provided, however, that the foregoing shall not
apply with respect to any such Confidential Information to the extent that this
Agreement or any other binding agreement between the Parties (or their
respective Affiliates) expressly provides that the Returning Party retains the
right to use such Confidential Information (e.g., in the case of a surviving
license) following such termination. Further, with respect to any termination of
this Agreement pursuant to the Standard Terms, the Parties shall coordinate in
good faith to ensure an appropriate wind down of the activities conducted under
this Agreement.

(b) Consequences in the Case of Voluntary Termination. Upon termination of this
Agreement pursuant to Section 12.2, the provisions of this Section 12.3(b) shall
apply:

(i) The license grants in Section 7 from the Terminating Party to the Continuing
Party shall survive only to the extent necessary to enable the Continuing Party
to identify the Terminating Party on the applicable Product SmPC, Labeling and
Package Leaflets for the Combination Product to the extent required by
Applicable Law.

(ii) The Continuing Party shall pay to the Terminating Party such amounts as are
determined pursuant to the formula set forth in Annex I on the dates specified
therein. Each such payment shall be accompanied by a written report, providing a
detailed breakdown of the calculation of amounts paid for the relevant period.
For the avoidance of doubt, Sections 8.6 through 8.9 shall apply to any such
payments.

(iii) The Terminating Party, at its own election (of which it shall promptly
notify the Continuing Party in writing), shall (pursuant to a license or supply
agreement containing the following terms and any other terms upon which the
Parties mutually agree) either (A) enable the Continuing Party to Manufacture
quantities of the API(s) of the Terminating Party for use in the Manufacture of
the Combination Product for distribution in the Territory, in which event the
Terminating Party shall (1) automatically be deemed to grant a royalty-free,
exclusive (as to the Combination Product, but not any other product) license to
the Continuing Party (or its Third Party designee, which shall be reasonably
acceptable to the Terminating Party) (x) under the Terminating Party’s Patents
covering such Manufacture and Information and Inventions used in such
Manufacture by or on behalf of the Terminating Party, to Manufacture such API(s)
for use in the Manufacture of the Combination Product for distribution in the
Territory, and (y) under the Terminating Party’s Patents covering the
composition or use of such API(s), to sell or otherwise distribute such API(s)
(for inclusion in such Combination Product or as included in such Combination
Product) in such country, which license shall be sublicensable to any Third
Party distributor of such Party or any of its Affiliates, and (2) provide
reasonable technical assistance to such Continuing Party or Third Party designee
(which choice of recipient shall be subject to the prior approval of the
Terminating Party, such approval not to be unreasonably withheld or delayed), at
the Continuing Party’s expense on the Terminating Party’s then-current standard
terms and conditions; or (B) continue to supply to the Supply JV (or, at the
election of the Continuing Party, a designee of the Continuing Party) on a
non-exclusive basis such

 

[ * ] = 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.

67

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

quantities of such API(s) as such Continuing Party may request for Manufacture
of the Combination Product for distribution in the Territory, at a transfer
price of such supply equal to [*] of the Cost of Goods of such API.
Notwithstanding the foregoing, the Terminating Party may elect to cease the
Manufacture of such API(s) or to terminate the supply arrangement referred to in
the foregoing clause (B), in which case the Terminating Party shall (x) give the
Continuing Party at least twelve (12) months’ written notice prior to ceasing
such Manufacture or otherwise terminating such agreement unless the Continuing
Party obtains an alternate source for the supply of such API(s) in which case
the Terminating Party may cease Manufacture upon the Continuing Party obtaining
such alternate supply of API(s), (y) grant to the Continuing Party the license
described in clause (A)(1) above, and (z) provide to the Continuing Party the
technical assistance described in clause (A)(2) above. Further, in event that,
as an initial matter, the Terminating Party elects to proceed under the
foregoing clause (A) rather than clause (B), the Terminating Party shall supply
its API(s) for use in the Manufacture of the Combination Product for
distribution in the Territory at a transfer price of such supply equal to [*] of
the Cost of Goods of such API(s) unless and until the Terminating Party has
performed its obligations under clause (A) and the Continuing Party has secured
a source of supply of such API(s) (and any necessary regulatory approvals have
been obtained with respect to such source of supply), provided that the
Continuing Party is using diligent efforts to secure such source of supply and
such approvals. In the event that the Terminating Party and the Supply JV or
designee of the Continuing Party enter into a supply arrangement for API(s)
pursuant to the first sentence of this Section 12.3(b)(iii), and thereafter the
Supply JV or such designee, as the case may be, desires to terminate such supply
arrangement (without receiving from the Terminating Party the license described
in clause (A)(1) above or the technical assistance described in clause (A)(2)
above), the Continuing Party shall provide twelve (12) months’ written notice
thereof to the Terminating Party.

(iv) Except to the extent necessary to enable the Continuing Party to identify
the Terminating Party (or its applicable Affiliate) on the applicable Product
SmPC, Labeling and Package Leaflets for the Combination Product to the extent
required by Applicable Law, the Continuing Party shall not (and shall cause its
Affiliates not to) use the Trademark or name of the Terminating Party (or any of
its Affiliates) (A) on any labeling, packaging and advertising materials for the
Combination Product in the Territory or (B) otherwise in connection with the
Continuing Party’s business with respect to the Combination Product in the
Territory.

(v) The Terminating Party shall promptly (and in any event within thirty
(30) days thereafter) make arrangements for the return or disposal, at the
Continuing 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 pursuant to any Covered Agreement.

(vi) For the avoidance of doubt, the pricing and other provisions contained in
Section 4, the Pricing Rules and the Discount Rules shall terminate.

12.4 Accrued Rights; Survival.

(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.

 

[ * ] = 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.

68

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) Without limiting anything contained in Section 12.3, in the event of any
expiration or termination of this Agreement for any reason, this Section 12.4
and Sections 3.6, 4.4, 5.9, 5.11, 6.3, 7.2, 7.3, 8 (except Section 8.5), 9, 10,
11, 12.3 and 13 (except 13.4) shall survive such expiration or termination;
provided, however, that Section 5.9, Section 6.3, Section 8.1, Section 8.2, and
Section 8.9(b) shall survive solely to the extent that the applicable expenses
(or in the case of Section 8.9(b), royalties, license fees or other payments)
were incurred in connection with activities, including Manufacturing, performed
prior to the date of expiration or termination of this Agreement.

SECTION 13

MISCELLANEOUS

13.1 Standard Terms. The Standard Terms are hereby incorporated herein.

13.2 Assignment; Subcontracting.

(a) In the event that, with respect to a Party, there is a sale of substantially
all of the assets of such Party and its Affiliates to which the Covered
Agreements, collectively, relate or a change of control of such Party’s Parent
(such Party, the “Transferring Party”, and such event, a “Change of Control”),
without limitation of Section 6.5 of the Standard Terms as incorporated herein,
the Transferring Party shall give the other Party written notice thereof within
ten (10) days, identifying the purchaser, acquirer or surviving entity (the
“Third Party Acquirer”), as the case may be. If immediately prior to 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 Party, at its election, to the Transferring Party
within thirty (30) days of such other Party’s receiving written notice of such
Change of Control, such Third Party Acquirer shall have six (6) months to divest
any such Competing Product. If such Third Party Acquirer fails to complete a
timely divestiture of such Competing Product: (i) the performance obligations
(other than payment obligations and related financial reporting obligations) of
the Parties under this Agreement shall terminate, except to the extent of those
minimum obligations reasonably required for Gilead Sub (or its applicable
Affiliate) to sell the Combination Product in the Territory and to perform its
obligations with respect to pricing with respect to the Combination Product as
set forth in Section 4.1 and the Pricing Rules and the Discount Rules (as
modified by Section 4.3, if applicable), (ii) the Commercialization Plan and
Commercialization Budget shall terminate, (iii) each Co-Promotion Agreement
shall terminate as set forth in such agreement, (iv) each Party shall have the
right to Promote, Market and otherwise commercialize (but, in the case of BMS,
not to sell or otherwise distribute) the Combination Product in the Territory
without coordination with the other Party under this Agreement (including
without any obligation to reach agreement on Marketing materials); provided that
each Party shall ensure that its Marketing materials with respect to the
Combination Product in the Territory comply with Applicable Law and, without
limitation of the foregoing, shall be consistent with applicable Product SmPC,
Labeling and Package Leaflets, and (v) Gilead Sub shall prepare and submit to
the Supply JV any and all Forecasts and Orders, along with any required
Supporting Data, in its sole discretion.

 

[ * ] = 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.

69

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(b) Either Party may subcontract the performance of its obligations hereunder,
including any Commercialization Activities assigned to it under the
Commercialization Plan; provided, however, that the subcontracting Party shall
oversee the performance by its subcontractors of such subcontracted 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
activities and, to the extent applicable, the Commercialization Plan.
Notwithstanding the foregoing, neither Gilead Sub nor BMS may engage any
subcontractor, including any contract sales organization, to perform any Details
of the Combination Product in the Territory; provided, however, that, subject to
Section 5.1, the conduct of Details by a Third Party Distributor consistent with
the arrangements entered into with such Third Party Distributor by one or both
of the Parties pursuant to this Agreement shall be permitted.

13.3 Employees. The Parties agree that, as between the Parties, all actions
taken or omitted to be taken by any employee of a Party (or any of its
Affiliates) in his or her capacity as a member of any committee established
pursuant to this Agreement or any Co-Promotion Agreement, and all other actions
taken or omitted to be taken by any employee of a Party (or any of its
Affiliates) with respect to the Commercialization Activities and any other
activities conducted hereunder or under any Co-Promotion Agreement, shall be
attributed only to such Party.

13.4 Nonsolicitation of Employees. During the Term, each Party agrees that
neither it nor any of its Affiliates that participates in or is responsible for
the commercialization of the Combination Product pursuant to this Agreement
shall recruit, solicit or induce any employee of the other Party’s, or any of
its Affiliates’, HIV/Virology sales force (including any manager) or any
HIV/Virology marketing or medical personnel employed in the Territory to
terminate his or her employment with such other Party or its Affiliate and
become employed by or consult for such other Party or its Affiliate, whether or
not such employee is a full-time employee of such other Party or its Affiliate,
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 (a) general solicitations by Third Party placement
specialists or firms (e.g., headhunters) or (b) other general solicitations of
employment (including responses to general advertisements), in each case
((a) and (b)) not specifically targeted at employees of a Party or any of its
Affiliates.

13.5 Notice. The “Notice Address” for each Party is as follows:

if to Gilead Sub, to:

John F. Milligan, Ph.D, Chief Operating Officer

Gilead Sciences Limited

333 Lakeside Drive Foster City, CA 94404

Facsimile No.: [*]

 

[ * ] = 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.

70

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

with copies to:

Gregg H. Alton, Esq.

Senior Vice President and General Counsel

Gilead Sciences Limited

333 Lakeside Drive

Foster City, CA 94404

Facsimile No.: [*]

and:

Julie O’Neill, General Manager

Gilead Sciences Limited

Unit 13 Stillorgan Industrial Park

Blackrock, Co. Dublin, Ireland

Facsimile No.: [*]

and:

Monica Viziano, Director, Project Management

Gilead Sciences Limited

333 Lakeside Drive

Foster City, CA 94404

Facsimile No.: [*]

and:

Covington & Burling LLP

One Front Street

San Francisco, CA 94111

Attn: James C. Snipes, Esq.

if to BMS, to:

Bristol-Myers Squibb

3 rue Joseph Monnier

Rueil Malmaison, France 92500

Attn: Sr. VP Europe Marketing & Brand Commercialization

Facsimile No.: [*]

with a copy to:

Bristol-Myers Squibb Company

Route 206 and Province Line Road

Princeton, NJ 08540 USA

 

[ * ] = 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.

71

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Attn:  Vice President and Senior Counsel,

            Corporate and Business Development

Facsimile No.: [*]

and:

Frank Kuchma, Director, Alliance Management

Bristol-Myers Squibb Company

Route 206 and Province Line Road

Princeton, NJ 08543 USA

13.6 Public Announcements. The following shall constitute a “Restricted Matter,”
and as such shall be subject to Section 2.2 of the Standard Terms: any matter
concerning this Agreement or its subject matter.

13.7 Entire Agreement. This Agreement, together with the Annexes attached
hereto, the EU Master Agreement and any other Existing Covered Agreements (as
defined in the EU Master Agreement) to which the Parties are parties that set
forth rights or obligations of the Parties with respect to the subject matter of
this Agreement shall constitute, on and as of the Effective Date, the entire
agreement of the Parties with respect to the subject matter of this Agreement,
and all prior or contemporaneous understandings or agreements (other than the
foregoing agreements), whether written or oral, between the Parties with respect
to such subject matter are hereby superseded in their entireties, including the
Interim Agreement and the Interim Manufacturing Agreement (and the Parties
shall, or shall cause their respective applicable Affiliates to, terminate the
Interim Agreement).

[Signature Pages Follow]

 

[ * ] = 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.

72

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

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

 

SIGNED for and on behalf of

Gilead Sciences Limited

    /s/ John F. Milligan     December 10, 2007 John F. Milligan, Ph.D     Date
Chief Operating Officer    

SIGNATURE PAGE TO COMMERCIALIZATION AGREEMENT

 

[ * ] = 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.

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

SIGNED for and on behalf of

Bristol-Myers Squibb Company

    /s/ Graham Brazier     December 10, 2007 Graham Brazier     Date Vice
President and Head of Business Development    

SIGNATURE PAGE TO COMMERCIALIZATION AGREEMENT

 

[ * ] = 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.

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

List of Annexes

 

Annex A    Cost of Goods Annex B    Initial EUOC Members and Initial Alliance
Managers Annex C    Pricing Rules and Discount Rules Annex D    Form of
Co-Promotion Agreement Annex E    Distribution Terms Annex F    Initial
Commercialization Plan and Initial Commercialization Budget Annex G    Gilead
Licensed Trademarks Annex H    BMS Licensed Trademarks Annex I    Voluntary
Termination Compensation Formula Annex J    Initial Launch Period Commitments
Annex K    Forecast Principles and Supporting Data Annex L    Territory A
Countries

 

[ * ] = 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.

75

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex A

Cost of Goods

“Cost of Goods” shall mean, with respect to the applicable API, the amount equal
to the sum (expressed in U.S. Dollars per kilogram of the applicable API) 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.

A-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex B

Initial EUOC Members and Initial Alliance Managers

Gilead EUOC Members:

[*]

[*]

[*]

[*]

Gilead Alliance Manager:

[*]

BMS EUOC Members:

[*]

[*]

[*]

[*]

BMS Alliance Manager:

[*]

 

[ * ] = 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.

B-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex C

Pricing Rules and Discount Rules

[*]

 

[ * ] = 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.

C-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex D

Form of Co-Promotion Agreement

[*]

[Omitted]

 

[ * ] = 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.

D-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex E

Distribution Terms

Capitalized terms used in this Annex and not defined herein shall have the
meaning set forth in the agreement to which this Annex is attached (the
“Agreement”). Section references used in this Annex shall refer to Sections in
the Agreement except as otherwise provided. The terms set forth in this Annex
shall apply solely (a) in the case of Gilead Sub as the Selling Party, with
respect to Territory Combination Product intended for distribution in the
Co-Promote Territory or any other country in Territory A for which Gilead Sub
has been designated as the Selling Party pursuant to the Agreement, from and
after the date on which the Supply JV transfers title to such Combination
Product to Gilead Sub pursuant to the Product Supply Agreement or (b) in the
case of BMS as the Selling Party, with respect to Territory Combination Product
intended for distribution in any country in Territory A for which BMS has been
designated as the Selling Party pursuant to the Agreement, from and after the
date on which Gilead Sub transfers title to such Combination Product to BMS or
its applicable Affiliate pursuant to the BMS Product Supply Agreement(s). For
purposes of this Annex, a Third Party Distributor shall not constitute a
Distribution Subcontractor unless mutually agreed by the Parties in writing;
provided, that each Party shall cause its Third Party Distributors to be subject
to obligations with respect to its distribution of Territory Combination Product
that are substantially similar to the obligations of the Selling Party set forth
in this Annex E.

“Distribution Subcontractor” shall mean any Third Party subcontractor that
performs storage, warehousing, shipping or other distribution activities on
behalf of a Selling Party (or its Affiliates) (acting in such capacity) under
the Agreement; provided that such Distribution Subcontractor does not take title
to such Combination Product. For the avoidance of doubt, neither a Contract
Manufacturer nor a Third Party Distributor shall be deemed to be a Distribution
Subcontractor and a Distribution Subcontractor shall not be deemed to be a
Contract Manufacturer or a Third Party Distributor.

“Material Safety Data Sheet” shall have the meaning set forth in the Product
Supply Agreement.

“Quality Agreement” shall have the meaning set forth in the Product Supply
Services Agreement.

“Selling Party Products” shall mean the Selling Party’s (or its Affiliates’) own
products for the treatment of HIV infection in adult humans. For the avoidance
of doubt, the Combination Product is not a Selling Party Product.

1. General. The Selling Party with respect to a given country in the Territory
shall (a) be the exclusive distributor of Combination Product in such country
and (b) perform or cause to be performed activities as are reasonably required
to distribute Combination Product in such country (any such activities, the
“Distribution Activities”), including inventory management and control,
warehousing and storage, order filling, invoicing, collection of sales proceeds,
determination and processing of charge-backs and rebates, preparation of sales
records and reports, customer relations and services, and handling of returns.

 

[ * ] = 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.

E-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

2. Inventory Management and Control.

(a) The Selling Party shall, or shall cause an Affiliate of the Selling Party or
a Distribution Subcontractor to, receive Territory Combination Product inventory
(i) in the case of Gilead Sub as the Selling Party, directly from the Contract
Manufacturer (as defined in the Product Supply Services Agreement) or (ii) in
the case of BMS as the Selling Party, as specified in the BMS Product Supply
Agreement(s). Prior to distributing any quantity of Territory Combination
Product, the Selling Party shall, or shall cause an Affiliate of the Selling
Party or a Distribution Subcontractor to, ensure that it has the proper
certificate of analysis and other appropriate documentation with respect to such
Combination Product as required by Applicable Law, including GMP.

(b) The Selling Party shall, or shall cause an Affiliate of the Selling Party or
a Distribution Subcontractor to, (i) monitor Territory Combination Product
inventory for products that are short-dated and out-dated, as determined in
accordance with the Selling Party’s standard operating procedures (“SOPs”) and
GMP, and (ii) withhold any such product from use and ensure its proper
destruction.

(c) The Selling Party shall, or shall cause an Affiliate of the Selling Party or
a Distribution Subcontractor to, perform a periodic stock reconciliation by
comparing the actual and recorded quantities of Territory Combination Product.
If there are any significant stock discrepancies, the Selling Party shall
promptly notify the non-Selling Party and shall investigate any such
discrepancies. The non-Selling Party shall have the right to participate in the
investigation made by the Selling Party with respect to such discrepancies, upon
written request made promptly after receiving notice of any discrepancy.

3. Warehousing and Storage.

(a) The Selling Party shall, or shall cause an Affiliate of the Selling Party or
a Distribution Subcontractor to, maintain temperature, humidity (if applicable)
and other environmental controls in compliance with storage requirements listed
on the labeling of Territory Combination Product and the Material Safety Data
Sheet for the Combination Product. The Selling Party shall, or shall cause an
Affiliate of the Selling Party or a Distribution Subcontractor to, ensure that
Territory Combination Product is received, stored, segregated, and distributed
in compliance with Applicable Law and quality, storage and distribution
requirements referred to in the Material Safety Data Sheet.

(b) The Selling Party shall, or shall cause an Affiliate of the Selling Party or
a Distribution Subcontractor to, maintain premises and control systems that
provide a commercially reasonable level of security against the theft or
alteration of Territory Combination Product. The Selling Party shall, or shall
cause an Affiliate of the Selling Party or a Distribution Subcontractor to,
maintain, or cause to be maintained, a clean environment, pest control program,
and any other deterrent measure normally utilized by the Selling Party to
provide a commercially reasonable level of contamination prevention for
Territory Combination Product.

 

[ * ] = 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.

E-2

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

(c) The Selling Party shall, or shall cause an Affiliate of the Selling Party or
a Distribution Subcontractor to, perform receipt and inspection of all incoming
shipments to confirm item(s), quantity and suitability (as may reasonably be
determined by such receipt and inspection) before authorizing such shipments for
approval for distribution. The Selling Party shall notify the non-Selling Party
promptly in the event of any deviation(s) with respect to such shipments that
requires an investigation (as well as the results of such investigation)
pursuant to the Selling Party’s SOPs, Applicable Law and any applicable Covered
Agreement. The Selling Party shall keep or cause to be kept appropriate
reconciliation records of the receipts with respect to such shipments.

(d) Without limitation of its obligations under any Covered Agreement with
respect to product recalls or withdrawals, the Selling Party shall ensure that a
system is in place to immediately withhold released quantities of Territory
Combination Product from shipment when notified to do so by or on behalf of the
MAH.

(e) The Selling Party shall, or shall cause an Affiliate of the Selling Party or
a Distribution Subcontractor to, investigate and prepare an incident report for
damage to any significant quantity of Territory Combination Product that occurs
under its, its Distribution Subcontractor’s or its Affiliate’s control. The
Selling Party shall make available to the non-Selling Party pursuant to
Section 9(a) of this Annex, or pursuant to the non-Selling Party’s reasonable
request, such incident reports indicating the cause of such damage and shall
propose an action plan and corrective measures needed in order to avoid
reoccurrence of any such incident resulting in damage to significant quantities
of Territory Combination Product.

4. Order Filling.

(a) The Selling Party shall receive orders for Territory Combination Product
through means used by the Selling Party for the Selling Party Products. The
Selling Party may reject an order for Territory Combination Product only if such
rejection is reasonable under the circumstances.

(b) The Selling Party shall distribute Territory Combination Product according
to the shipping orders received based on remaining shelf life as reflected on
the product label (i.e., inventory with the shortest remaining shelf life shall
be shipped first), and only in the quantities and to those markets within the
Territory indicated in the applicable shipping orders. A picking order shall be
created only against an existing shipping order. The Selling Party shall perform
appropriate checks before a picking order can be shipped and shall follow the
Selling Party’s SOPs and Applicable Law in conducting such checks.

(c) The Selling Party shall transport, or cause to be transported, all
quantities of Territory Combination Product to Customers, its Affiliates and its
Distribution Subcontractors in a manner that provides commercially reasonable
protection of product integrity and maintenance of the applicable storage
conditions.

 

[ * ] = 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.

E-3

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

5. Purchase of Combination Product by Customers.

(a) The Selling Party (or its applicable Affiliate) shall invoice the Customer
for Territory Combination Product upon delivery of such Combination Product to
the Customer. Such invoices shall be inclusive of any applicable taxes.

(b) For each order of Territory Combination Product shipped pursuant to the
Agreement, the Selling Party shall, or shall cause its applicable Affiliate or a
Distribution Subcontractor to, be responsible for collecting payment from the
applicable Customer pursuant to the invoice delivered by the Selling Party and
shall otherwise manage the receivable resulting from such order using the same
collection procedures and efforts applicable to the Selling Party Products.

6. Customer Relations and Services. The Selling Party shall, or shall cause an
Affiliate of the Selling Party or a Distribution Subcontractor to, provide
customer relations services with respect to Combination Product sales in the
Territory. Such services shall consist of handling incoming customer calls and
documenting and resolving customer complaints in accordance with the Selling
Party’s SOPs for the Selling Party Products.

7. Returns. The Selling Party shall, or shall cause an Affiliate of the Selling
Party or a Distribution Subcontractor to, accept and process Territory
Combination Product returns in accordance with the Selling Party’s return policy
for the Selling Party Products.

8. Records Retention. The Selling Party shall, or shall cause an Affiliate of
the Selling Party or a Distribution Subcontractor to, retain all records
relating to the performance of Distribution Activities (including records of
receipt, storage, picking, shipping, and environmental controls) for at least
the duration of the applicable Combination Product’s labeled shelf life plus one
(1) year, but in all cases for not less than the periods required by the Selling
Party’s record retention policies. The Selling Party shall retain all records of
any disposal of Territory Combination Product by or on behalf of the Selling
Party (or its Affiliates) in accordance with the Selling Party’s record
retention policies, unless Applicable Law dictates otherwise in which case such
records will be kept in accordance with Applicable Law. Subject to the preceding
provisions of this Section 8, the non-Selling Party shall have access to the
original documents pursuant to Section 9 of this Annex.

9. Inspection of Facilities; Certain Regulatory Matters.

(a) During the Term, the non-Selling Party shall have the right to visit the
facilities used in the performance of Distribution Activities once per Calendar
Year during normal business hours upon reasonable prior notice to the Selling
Party, its applicable Affiliate or its applicable Distribution Subcontractor, as
appropriate; provided that (i) the visit does not unreasonably interfere with
the operations at the applicable facility and (ii) if the visit requires access
to the facilities of a Distribution Subcontractor, the non-Selling Party must
obtain such Distribution Subcontractor’s consent with the reasonable assistance
of the Selling Party. In

 

[ * ] = 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.

E-4

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

addition, during the Term, the non-Selling Party shall have the right to conduct
a “For Cause” audit at any time, when requested as a reasonable response to any
audit notice or inquiry regarding Territory Combination Product by any
Regulatory Authority, an unresolved deviation in relation to the performance of
Distribution Activities, or customer complaints or Adverse Events (as defined in
the SDEA) regarding Territory Combination Product. During any such visit or
audit, the non-Selling Party shall have the right to inspect and audit the
Selling Party’s quality system, materials management, records, and facilities
for the purpose of determining compliance with Applicable Law and this Annex.
The Selling Party shall, and shall use its reasonable efforts to cause any
Distribution Subcontractor to, cooperate fully in any such inspection conducted
pursuant to this Section 9(a). For any contractual or regulatory deficiencies
determined as a result of such a visit or audit, the Selling Party shall, or
shall cause the applicable Distribution Subcontractor to, take a commercially
reasonable course of action and resolution, and the non-Selling Party shall be
entitled to conduct additional audits to ensure that any such deficiencies have
been resolved by the Selling Party or the applicable Distribution Subcontractor,
as applicable.

(b) The Selling Party shall (i) notify the non-Selling Party of any inspections
by any Regulatory Authority of any facility used in the performance of
Distribution Activities within five (5) Business Days of the inspection and
(ii) provide the non-Selling Party with copies of all regulatory correspondence
relating to any such inspection and Territory Combination Product within five
(5) Business Days of receipt of the correspondence; provided that the Selling
Party may redact the correspondence to protect the names of and identifying
information for Third Parties and products other than the Combination Product,
as applicable. If any Territory Combination Product is implicated in any
regulatory inspection findings, the Selling Party shall provide a draft of the
pertinent responses to the non-Selling Party for review and comment prior to
submission to the applicable Regulatory Authority. In addition, the non-Selling
Party shall have the right to have a representative present during the portion
of the inspection that involves the Combination Product.

10. Employees. The Selling Party’s (or its Affiliate’s) employees engaged in
performing Distribution Activities pursuant to the Agreement shall be deemed its
(or its Affiliate’s) own employees (and not the employees of the non-Selling
Party or any of its Affiliates) for all purposes, including federal, state and
local tax and employment laws.

 

[ * ] = 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.

E-5

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex F

Initial Commercialization Plan and Initial Commercialization Budget

Territory B Initial Commercialization Budget - 2006 & 2007

The 2006 and 2007 expenses are not intended to be subject to adjustment pursuant
to the Financial Agreement.

 

     Estimated Number of Units (Bottles)    Commercialization Expenses
(in thousands of Euros)  

Country

   Total
Year 20062    Total Year Forecast
20073    Total Year 20062     Total Year Forecast
20073  

Germany

   —      —      —       [ *]

United Kingdom1 (and Ireland)

   —      —      —       [ *]

Spain

   —      —      —       —    

Italy

   —      —      —       —    

France

   —      —      —       —    

EU Headquarters

   N/A    N/A    [ *]   [ *]                       

Total

   —      —      [ *]   [ *]                       

 

1

GBP/Euro exchange rate for 2007: GBP 1 = €1.4763.

 

2

Actual Expenses 2006 as approved and reflected in the Interim Commercialization
Agreement.

 

3

Total Spend of [*] is in line with JEC approved Latest Estimate.

 

[ * ] = 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.

F-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Territory B Initial Commercialization Plan and Budget - 2008

The number of Details to be performed for Calendar Year 2008 for each country in
Territory B shall be as set forth in Annex J, provided, that the numbers set
forth therein for the first 12-month period shall be adjusted to account for the
date on which Launch occurred in the applicable country (e.g., in the event a
country were to Launch at the commencement of the third Calendar Quarter of
2008, then the minimum number of Details for such country for 2008 would be
fifty percent (50%) of the minimum number of Details specified in Annex J for
the first twelve (12) month period for such country).

 

      Estimated Number of units (Bottles)  

Country

   Q1 2008     Q2 2008     Q3 2008     Q4 2008     Total Year
Budget 2008  

Germany

   [ *]   [ *]   [ *]   [ *]   [ *]

United Kingdom (and Ireland)

   [ *]   [ *]   [ *]   [ *]   [ *]

Spain

   [ *]   [ *]   [ *]   [ *]   [ *]

Italy

   [ *]   [ *]   [ *]   [ *]   [ *]

France

   [ *]   [ *]   [ *]   [ *]   [ *]                               

Total

   [ *]   [ *]   [ *]   [ *]   [ *]                               

 

[ * ] = 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.

F-2

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Country

   Commercialization Expenses (in thousands of Euros)      Q1 2008     Q2 2008  
  Q3 2008     Q4 2008     Total Year
Budget 2008  

Germany

   [ *]   [ *]   [ *]   [ *]   [ *]

United Kingdom1 (and Ireland)

   [ *]   [ *]   [ *]   [ *]   [ *]

Spain

   [ *]   [ *]   [ *]   [ *]   [ *]

Italy

   [ *]   [ *]   [ *]   [ *]   [ *]

France

   [ *]   [ *]   [ *]   [ *]   [ *]

EU Headquarters

   [ *]   [ *]   [ *]   [ *]   [ *]                               

Total

   [ *]   [ *]   [ *]   [ *]   [ *]                               

 

1

GBP/Euro exchange rate for 2008: GBP 1 = €1.4763.

 

[ * ] = 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.

F-3

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex G

Gilead Licensed Trademarks

 

Country

   Mark    App. /Reg. No.    Filing /Reg. Date    Class Bulgaria    TRUVADA   
Int’l Reg. No. 834700    17 Aug. 2004    5 European Community    TRUVADA    Reg.
No. 3965861    8 Aug. 2004    5, 16, 44 Iceland    TRUVADA    Int’l Reg. No.
834700    17 Aug. 2004    5 Ireland    TRUVADA    Reg. No. 229350   
22 March 2004    5 Liechtenstein    TRUVADA    Int’l Reg. No. 834700    17 Aug.
2004    5 Norway    TRUVADA    Int’l Reg. No. 834700    17 Aug. 2004    5
Romania    TRUVADA    Int’l Reg. No. 834700    17 Aug. 2004    5 Serbia &
Montenegro    TRUVADA    Int’l Reg. No. 834700    17 Aug. 2004    5 Switzerland
   TRUVADA    Int’l Reg. No. 834700    17 Aug. 2004    5 Bulgaria    VIREAD   
Int’l Reg. No. 822747    20 Jan. 2004    5 European Community    VIREAD    Reg.
No. 1815364    20 Aug. 2000    1, 5, 42 Iceland    VIREAD    Int’l Reg. No.
822747    20 Jan. 2004    5 Liechtenstein    VIREAD    Int’l Reg. No. 822747   
20 Jan. 2004    5 Norway    VIREAD    Reg. No. 209953    16 Aug. 2001    5
Romania    VIREAD    Int’l Reg. No. 822747    20 Jan. 2004    5
Serbia-Montenegro    VIREAD    Int’l Reg. No. 822747    20 Jan. 2004    5
Switzerland    VIREAD    Reg. No. 485710    12 Dec. 2000    5 Bulgaria   
EMTRIVA    Reg. No. 51433    16 Oct. 2003    5 Czech Republic    EMTRIVA    Reg.
No. 264137    10 Oct. 2003    5 Estonia    EMTRIVA    Reg. No. 40344    15 Dec.
2004    5 European Community    EMTRIVA    Reg. No. 3399466    10 Oct. 2003   
5, 16, 44

 

[ * ] = 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.

G-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Hungary    EMTRIVA    Reg. No. 180771    14 Oct. 2003    5 Iceland    EMTRIVA   
Reg. No. 951/2003    28 Nov. 2003    5 Latvia    EMTRIVA    Reg. No. M53901   
16 Oct. 2003    5 Liechtenstein    EMTRIVA    Reg. No. 13173    16 Oct. 2003   
5 Lithuania    EMTRIVA    Reg. No. 49985    13 Oct. 2003    5 Norway    EMTRIVA
   Reg. No. 224467    29 Sept. 2004    5 Poland    EMTRIVA    Reg. No. 177366   
14 Oct. 2003    5 Romania    EMTRIVA    Reg. No. 57647    10 Oct. 2003    5
Serbia & Montenegro    EMTRIVA    Reg. No. 49515    17 Oct. 2003    5 Slovak
Republic    EMTRIVA    Reg. No. 207833    10 Oct. 2003    5 Slovenia    EMTRIVA
   Reg. No. 200371487    10 Oct. 2003    5 Switzerland    EMTRIVA    Reg. No.
516574    18 April 2003    5

 

[ * ] = 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.

G-2

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex H

BMS Licensed Trademarks

 

Country

   Mark    App/Reg. No.    Filing/Reg Date    Class Austria    SUSTIVA    169
299    16 Oct. 1997    5 Benelux    SUSTIVA    607899    24 Feb. 1997    5
Bulgaria    SUSTIVA    30217    27 Feb. 1997    5 Cyprus, Republic of    SUSTIVA
   47297    30 March 2001    5 Czech Republic    SUSTIVA    209211    28 Feb.
1997    5 Denmark    SUSTIVA    VR 1997/01905    25 April 1997    5 Finland   
SUSTIVA    208767    31 Dec. 1997    5 France    SUSTIVA    97665304    24 Feb.
1997    5 Germany    SUSTIVA    397 07 938    22 April 1997    5 Greece   
SUSTIVA    132368    19 Nov. 2001    5 Hungary    SUSTIVA    146 431    15 Sept.
1997    5 Iceland    SUSTIVA    1043/1997    15 Sept. 1997    5 Ireland   
SUSTIVA    203503    21 Feb. 1997    5 Italy    SUSTIVA    TO/2006/2986    2
Sept. 1999    5 Liechtenstein    SUSTIVA    10220    10 Sept. 1997    5 Malta   
SUSTIVA    27130    28 May 1997    5 Norway    SUSTIVA    187013    4 Dec. 1997
   5 Poland    SUSTIVA    116392    21 Dec. 1999    5 Portugal    SUSTIVA   
322116    12 March 1998    5 Romania    SUSTIVA    R30097    23 April 1997    5
Slovakia    SUSTIVA    187154    2 April 1997    5

Spain

   SUSTIVA    2076473    5 Sept. 1997    5

Sweden

   SUSTIVA    333623    5 Nov 1999    5

Switzerland

   SUSTIVA    444933    21 Feb. 1997    5

United Kingdom

   SUSTIVA    2124440    20 Feb. 1997    5

European Community

   SUSTIVA
SUNRISE
LOGO    969717    24 Feb. 2000    5

 

[ * ] = 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.

H-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex I

Voluntary Termination Compensation Formula

Capitalized terms used in this Annex and not defined herein shall have the
meaning set forth in the agreement to which this Annex is attached.

“Net Sales” shall have the meaning set forth in the Financial Agreement.

“Net Selling Price” shall have the meaning set forth in the Financial Agreement.

“Territory-Wide Percentage” shall mean the BMS Territory-Wide Percentage or the
Gilead Territory-Wide Percentage, as the case may be.

1. The Continuing Party shall pay to the Terminating Party with respect to the
period from the effective date of such termination through the third anniversary
thereof an amount determined pursuant to the following formula (with Net Sales
being determined for the applicable yearly period), where such amount shall be
calculated and paid in Euros:

Net Sales of the Combination Product in the Territory

multiplied by

[*]

multiplied by the following percentages for the following twelve (12)-month
periods commencing with the effective date of termination:

Year 1 – [*]

Year 2 – [*]

Year 3 – [*]

[*]

2. The Continuing Party shall pay any such amounts within sixty (60) days of the
end of the Calendar Quarter in which the relevant Net Sales were recognized as
revenue (as set forth in the definition of Net Sales set forth in the Financial
Agreement).

3. For purposes of calculating any payment pursuant to this Annex I, Net Sales
in a currency other than Euros shall be converted into Euros from the applicable
currency by the Continuing Party in a manner consistent with its then-current
standard worldwide currency conversion methodology, as consistently applied.

 

[ * ] = 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.

I-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex J

Initial Launch Period Commitments

 

Plan/Budget

  

Expected Launch Date

   Minimum Financial Commitment
(in thousands)    Total Minimum Number of Details
(Each Party is responsible for 50% of the
Details specified for each country)       First 12 Months
after Launch    Second 12 Months
after Launch    First 12 Months
after Launch    Second 12 Months
after Launch

France

   [*]    [*]    [*]    [*]    [*]

Spain

   [*]    [*]    [*]    [*]    [*]

Italy

   [*]    [*]    [*]    [*]    [*]

UK

   [*]    [*]    [*]    [*]    [*]

Ireland

   [*]    [*]    [*]    [*]    [*]

Germany

   [*]    [*]    [*]    [*]    [*]

Territory Centralized Expenses

      [*]    [*]    [*]    [*]

Total

      [*]    [*]    [*]    [*]

 

1

In Euros unless otherwise specified.

 

[ * ] = 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.

J-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex K

Forecast Principles and Supporting Data

Capitalized terms used in this Annex and not defined herein shall have the
meaning set forth in the agreement to which this Annex is attached (the
“Agreement”). Section references used in this Annex shall refer to Sections in
the Agreement except as otherwise provided.

The Parties have agreed that, in order to enable to manage the manufacturing
arrangements associated with the supply of Territory Combination Product and, in
particular, applicable production capacity, Forecasts shall be prepared based on
Local Demand (as defined in the Agreement).

The determination of Local Demand shall be based solely on the objective data,
information and criteria that would be used by Gilead Sub and BMS to forecast
unit demand for the Combination Product in the ordinary course of business to
meet the treatment needs of HIV patients within a country in the Territory or
within the Territory, as applicable (“Supporting Data”). Supporting Data may
include, without limitation, the categories of data, information and criteria
set out below. This list is non-exhaustive and the Parties may agree to add
further categories of data, information and criteria from time to time.

Supporting Data

The Supporting Data required to establish reasonable forecasted estimates of
Local Demand may include the following (to the extent that such data is
available):

 

  •  

[*]

 

  •  

[*]

 

  •  

[*]

 

  •  

[*]

 

  •  

[*]

 

  •  

[*]

 

  •  

[*]

[*]

 

[ * ] = 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.

K-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Annex L

Territory A Countries

Territory A Co-Promote Countries:

 

Country

  

Selling Party

Austria

   Gilead Sub

Belgium

   Gilead Sub

Denmark

   Gilead Sub

Finland

   Gilead Sub

Greece

   Gilead Sub

Iceland

   Gilead Sub

Liechtenstein

   Gilead Sub

Luxembourg

   Gilead Sub

Netherlands

   Gilead Sub

Norway

   Gilead Sub

Portugal

   Gilead Sub

Sweden

   Gilead Sub

Switzerland

   Gilead Sub

BMS Sole-Promote Countries:

 

Country

  

Selling Party

Czech Republic*

   To be determined pursuant to Section 5.1

Hungary

   To be determined pursuant to Section 5.1

Poland

   To be determined pursuant to Section 5.1

Romania*

   To be determined pursuant to Section 5.1

Gilead Sole-Promote Countries:

 

Country

  

Selling Party

Malta

   Gilead Sub

 

[ * ] = 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.

L-1

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

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80 (b)(4) AND 230.406

 

Third Party Distributor Countries:

 

Country

  

Selling Party/Third Party Distributor

Bulgaria*

   To be determined pursuant to Section 5.1

Cyprus

  

Gilead Sub/Third Party Distributor to be

determined pursuant to Section 5.1

Estonia*

   To be determined pursuant to Section 5.1

Latvia*

   To be determined pursuant to Section 5.1

Lithuania*

   To be determined pursuant to Section 5.1

Slovak Republic

   To be determined pursuant to Section 5.1

Slovenia

   To be determined pursuant to Section 5.1

[*]

 

[ * ] = 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.

L-2