Exhibit 10.1


 


CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
WITH AN ASTERISK WITHIN 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.


 


LICENSE AGREEMENT


 


This
License Agreement (the
“Agreement”) is made and entered into as of March 22, 2005 (the “Execution Date”) by and between Japan Tobacco Inc., a Japanese corporation having its
principal place of business at JT Building, 2-1 Toranomon, 2-chome, Minato-ku,
Tokyo 105-8422, Japan (“JT”), and Gilead
Sciences, Inc., a Delaware corporation having its principal place of
business at 333 Lakeside Drive, Foster City, CA 94404, United States (“Gilead”). 
JT and Gilead are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.”


 


Recitals


 


Whereas, JT has developed a proprietary anti-viral
compound designated as JTK-303, to be used in a product or products for the
treatment of HIV; and


 


Whereas, Gilead possesses extensive capabilities in
the development, promotion and marketing of pharmaceutical products to treat
human diseases and conditions, and desires to further develop, seek regulatory approval for and
market formulations and dosages of JTK-303; and


 


Whereas, Gilead desires to obtain the exclusive right to
develop and commercialize, for itself and its Affiliates such formulations and
dosages of JTK-303 outside of Japan, and JT desires to grant Gilead such
rights, all as set forth below;


 


Now Therefore, based on the foregoing premises and the
mutual covenants and obligations set forth below, the Parties agree as follows:


 


ARTICLE
1


 


DEFINITIONS


 


The following terms shall
have the following meanings as used in this Agreement:


 


1.1          “Affiliate” shall mean, except as provided below, an
entity that, directly or indirectly, through one (1) or more intermediaries,
controls, is controlled by or is under common control with JT or Gilead.  The term “control” as used in this definition
means ownership of more than fifty percent (50%) of the voting interest in the
entity in question or having otherwise


 





















 


the power to govern the financial and the operating policies or to
appoint the management of an organization. 
Notwithstanding the foregoing, neither the government of Japan, nor any
entity controlled by the government of Japan, shall be deemed to be an
Affiliate of JT.


 


1.2          “Alliance Manager” shall have the meaning given such term in
Section 2.3(a)


 


1.3          “API” shall mean active pharmaceutical ingredients.


 


1.4           “Calendar Quarter” shall mean the respective periods of three
(3) consecutive calendar months ending on March 31, June 30,
September 30 and December 31.


 


1.5          “Change in Control” shall mean any sale of voting securities, any
sale or purchase of assets, or any merger, consolidation or similar transaction
that, directly or indirectly: (i) results in the transfer of substantially all
of a Party’s assets that relate to or are engaged in the Commercialization of
any Products to any Third Party; or (ii) results in any Third Party becoming an
Affiliate of a Party.


 


1.6          “Combination Product” shall mean any Product
in the
form of a combination product that
contains Compound in addition to one or more active pharmaceutical ingredients.


 


1.7          “Commercial Launch” shall mean, with respect to a Product, the
first commercial sale of such Product to
a Third Party occurring after Regulatory Approval for such Product.


 


1.8          “Commercialize” shall mean to promote, market, distribute,
sell or provide product support for a Product (other than in connection with
clinical trials of such Product), and “Commercializing” and “Commercialization”
shall be interpreted accordingly.


 


1.9          “Compound” shall mean (i) the
compound known as JTK-303, the chemical structure of which is shown in Schedule
1.9A, (ii) the salts, esters, hydrates, isomers, and metabolites of that
compound; (iii) any other compounds claimed in or covered by a Valid Claim in
the Patent(s) described on Schedule 1.9B; and (iv) crystalline forms of (i)
through (iii).


 


1.10        “Condition Precedent” shall have the meaning set forth in Article
17.


 


1.11         “Confidential Disclosure
Agreements” shall mean (i) the Confidential
Disclosure Agreement between the Parties dated September 16, 2004, as amended
by the Amendment to Confidential Disclosure Agreement dated October 29, 2004
and the Second Amendment to Confidential Disclosure Agreement dated February 1,
2005; (ii) the Confidential Disclosure Agreement between the Parties dated
February 1, 2005 (JT as recipient); and (iii) the Confidential Disclosure
Agreement between the Parties dated February 1, 2005 (Gilead as recipient).


 


1.12        “Confidential Information” shall mean (i) all information and
materials, received by either Party from the other Party pursuant to this
Agreement and (ii) all information and materials disclosed pursuant to the
Confidential Disclosure Agreements and/or the Material Transfer Agreements, in each case other than that portion of such
information or materials that:


 


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(a)           is publicly disclosed by the disclosing
Party, either before or after it becomes known to the receiving Party;


 


(b)           was known to the receiving Party, without
obligation to keep it confidential, prior to when it was received from the
disclosing Party, as evidenced by competent written proof;


 


(c)           is subsequently disclosed to the receiving
Party by a Third Party lawfully in possession thereof without obligation to
keep it confidential;


 


(d)           has been publicly disclosed other than by the
disclosing Party and without breach of an obligation of confidentiality with
respect thereto; or


 


(e)           has been independently developed by the
receiving Party without the aid, application or use of Confidential
Information, as evidenced by competent written proof.


 


1.13        “Control”, “Controls” and “Controlled” shall mean, with respect to a particular item
of information or intellectual property right, that the applicable Party owns
or has a license to such item or right and has the ability to grant to the
other Party access to and a license or sublicense (as applicable) under such
item or rights as provided for herein without violating the terms of any
agreement or other arrangement with any Third Party, and without incurring
material additional costs to procure such Third Party rights beyond those
already incurred.


 


1.14        “Develop”  shall mean the conduct of any pre-clinical, clinical or other studies
or activities with respect to, or required for obtaining Regulatory Approval
of, a Product (including without limitation quality assurance and quality
control activities) or for Commercialization of a Product, along with any other
clinical studies that may be conducted in each case as set forth in the Gilead
Development Plan and the Gilead Update and in accordance with this Agreement.  The terms “Developing” and “Development”
shall be interpreted accordingly.


 


1.15        “Diligent Efforts” shall mean, with respect to a Party’s
obligation under this Agreement to Develop or Commercialize a Product, the
level of efforts required to carry out such obligation in a sustained manner
consistent with the efforts a similarly situated pharmaceutical company devotes
to a product of similar market potential, risk, profit potential and strategic
value resulting from its own research efforts, based on conditions then
prevailing.  Diligent Efforts requires,
with respect to such an obligation, that: (i) a Party promptly assign
responsibility for such obligation to qualified employee(s) who are held
accountable for progress and monitor such progress on an on-going basis; (ii) a
Party set and consistently seek to achieve specific, meaningful and measurable
objectives for carrying out such obligation; and (iii) a Party consistently
make and implement decisions and allocate resources designed to advance
progress with respect to such objectives.


 


1.16        “Dispute” shall have the meaning set forth in Section
15.1.


 


1.17        “Dollar” shall mean a United States dollar, and “$”
shall be interpreted accordingly.


 


3





















 


1.18        “Effective
Date” shall mean the date on which the Condition Precedent has been satisfied.


 


1.19         “EMEA” shall mean the European Medicines Evaluation
Agency, or any successor thereto, which coordinates the scientific review of
human pharmaceutical products under the centralized licensing procedures of the
EU.


 


1.20        “Emtriva” shall mean an enantiomeric mixture
of emtricitabine (which is the (-) enantiomer of the chemical [*], in which the
ratio of such (-) enantiomer to its (+) enantiomer is equal to or greater than [*],
including without limitation the ratio of such enantiomers being [*].


 


1.21        “EU” shall mean the European Union.


 


1.22        “Execution
Date” shall have the meaning set forth in the Preamble of this Agreement.


 


1.23        “FDA” shall mean the United States Food and Drug
Administration, or a successor thereto.


 


1.24        “GAAP” shall mean generally accepted accounting
principles in the United States as consistently applied.


 


1.25        “Generic Product” shall mean a Product that is sold by an
unlicensed Third Party (i) in any country where there are no JT Patents or
Gilead Patents; (ii) in a country where there are no Valid Claims in the JT
Patents or Gilead Patents; (iii) in a country where the laws do not provide for
the effective enforcement of Patent rights; or (iv) in any other country where
the Parties both determine that it is not commercially reasonable to pursue
Third Party infringers. A Generic Product is also a Product that is sold
pursuant to a compulsory license for the Licensed Indication (which compulsory
license is for sales at a Net Selling Price that is less than or equal to what
would be the Net Selling Price of a Product sold by an unlicensed Third Party
in a comparable non-patent country).


 


1.26        “Gilead Commercialization Plan” shall have the meaning set forth in Section
5.2(a).


 


1.27        “Gilead
Development Plan” shall have the meaning set forth in Section
3.2(a).


 


1.28        “Gilead Indemnitees” shall have the meaning set forth in Section
11.1.


 


1.29        “Gilead Know-How” shall mean: (a)
Know-How Controlled by Gilead or a Gilead Affiliate that is necessary for, or that has been otherwise
actually used during the Term in, the research, Development, manufacture, use,
sale, offer for sale, or importation of Compounds or Products; and (b) Gilead
Sublicensee Know-How.


 


1.30        “Gilead Patent” shall mean: (a) any Patent Controlled by
Gilead or a Gilead Affiliate that is necessary for, or that has otherwise
actually been used during the Term in, the research, Development, manufacture,
use, sale, offer for sale, or importation of a Compound or a


 


4





















 


Product, including without
limitation Gilead’s interest in Joint Patents; and (b) any Gilead
Sublicensee Patent.


 


1.31        “Gilead Sublicensee Know-How” shall mean Sublicensee Know-How necessary for
or actually used during the Term in connection with a sublicense of Article 6
rights from Gilead.


 


1.32        “Gilead Sublicensee Patent” shall mean a Sublicensee Patent necessary for
or actually used during the Term in connection with a sublicense of Article 6
rights from Gilead.


 


1.33         “Gilead Technology” shall mean all Gilead Patents and Gilead Know-How.


 


1.34        “Gilead Territory” shall mean all countries of the world except
for the JT Territory.


 


1.35        “Gilead Update” shall have the meaning set forth in Section
3.2(a)(ii).


 


1.36        “HIV” shall mean the human immunodeficiency virus.


 


1.37        “IND” shall mean (i) an Investigational New Drug
Application as defined in the United States Food, Drug and Cosmetic Act and
applicable regulations promulgated thereunder by the FDA, or (ii) an equivalent
application to the equivalent agency in any other country or group of
countries, the filing of which is necessary to commence clinical testing of a pharmaceutical product in humans in a
particular jurisdiction.


 


1.38        “Indemnify” shall have the meaning set forth in Section
11.1.


 


1.39        “Infringement” shall have the meaning set forth in Section
9.4(a)(i). “Infringe” shall mean the carrying
out of an Infringement.


 


1.40        “IP Subcommittee” shall have the meaning set forth in Section
9.2(a).


 


1.41        “Joint Committee” shall mean the committee described in Section
2.1(a).


 


1.42        “Joint Invention”
shall have the meaning set forth in Section 9.1(a).


 


1.43        “Joint Patent” shall have the meaning set forth in Section
9.3(d).


 


1.44        “JT Commercialization Plan” shall have the meaning set forth in Section
5.2(b).


 


1.45        “JT Development Plan” shall have the meaning set forth in Section
3.2(b)(i).


 


1.46        “JT Indemnitees” shall have the meaning set forth in Section
11.2.


 


1.47        “JT Know-How” shall mean: (a) Know-How that is Controlled
by JT or a JT Affiliate that is necessary
for, or that has been otherwise actually used during the Term in, the research,
Development, manufacture, use, sale, offer for sale, or importation of
Compounds or Products; and (b) JT Sublicensee Know-How.


 


5





















 


1.48        “JT Patent” shall mean: (a) any Patent Controlled by JT
or a JT Affiliate that is necessary for, or that has been otherwise actually
used during the Term in, the research, Development, manufacture, use, sale,
offer for sale, or importation of Compounds or Products, including without
limitation JT’s interest in any Joint Patents; and (b) any JT Sublicensee
Patent.  As of the Execution Date, the JT Patents include those Patents
listed on Schedule 1.48, and it shall include those added to such Schedule
pursuant to Section 9.1(c).


 


1.49        “JT Sublicensee Know-How” shall mean Sublicensee Know-How necessary for
or actually used during the Term in connection with a sublicense of Article 6
rights from JT.


 


1.50        “JT Sublicensee Patent” shall mean a Sublicensee Patent necessary for
or actually used during the Term in connection with a sublicense of Article 6
rights from JT.


 


1.51        “JT Technology” shall mean all JT Patents and JT Know-How.


 


1.52        “JT Territory” shall mean Japan and its possessions and
territories thereof.


 


1.53        “JT Update” shall have the meaning set forth in Section
3.2(b)(ii).


 


1.54        “ [*]” shall have the meaning set forth in Section
6.8(a)(i).


 


1.55        “Key JT Personnel” shall mean the JT employees described on
Schedule 1.55 hereto.


 


1.56        “Know-How” shall mean (i) all information, know-how,
techniques and data specifically relating to development, manufacture, use or
sale of a Compound or a Product, including but not limited to, inventions,
practices, methods, knowledge, know-how, skill, experience, test data
(including without limitation pharmacological, toxicological, clinical,
analytical and quality control data, regulatory submissions, correspondence and
communications, and marketing, pricing, distribution, cost, sales,
manufacturing, patent and legal data or descriptions); (ii) Regulatory
Information containing know-how; and (iii) compositions of matter, assays and
biological materials specifically relating to development, manufacture, use or
sale of a Compound or a Product.  Solely
for purposes of this definition of Know-How, Product shall not include a
Combination Product.


 


1.57        “Licensed Indication” shall mean all possible therapeutic and
prophylactic uses (including without limitation, mono-and combination uses in
the treatment of HIV infection).


 


1.58        “Losses” shall have the meaning assigned such term in
Section 11.1.


 


1.59        “Major EU Countries” shall mean France, Germany, Italy, Spain and
the United Kingdom, and “Major EU Country” shall mean any one of the foregoing.


 


1.60        “Major Market” shall mean any of the United States and the
Major EU Countries.


 


1.61        “Manufacturing Cost” shall mean an amount equal to Gilead’s cost
to produce Product consisting of the amounts described in clauses (a), (b) or
(c) below, as appropriate:


 


6





















 


(a)           Internal Costs.


 


(i)            Material Costs, which means the prices paid
to Third Parties for raw materials including intermediates and active
compounds, excipients, components, packaging and labeling materials to the
extent used in the manufacture and transportation of Product and purchased
finished goods which are purchased from outside vendors as well as any freight
and duty where applicable.  Material
Costs includes the quantity of the components included in the bill of material
multiplied by the purchase price and the waste factor (i.e., scrap percentage)
included in the bill of materials.  It
also includes the normal quality assurance sample quantity which is included in
the bill of materials; and


 


(ii)           Direct Labor Costs, which means the standard
labor hours required for an operation according to the standard operating
procedures multiplied by the direct labor rate (i.e., the employment costs per
man-hour including, without limitation, salary and employee benefits) for work
centers within the relevant manufacturing operating unit; and


 


(iii)         Overhead Costs, which means a reasonable
allocation of overhead calculated by Gilead in accordance with reasonable cost
accounting methods that comply with GAAP and consistent with the way Gilead
allocates such costs to products it supplies to other of its customers pursuant
to contract manufacturing relationships, specifically excluding products
supplied pursuant to corporate partnering and/or other co-development
relationships.  Overhead Costs shall
include administrative costs directly in support of Gilead’s manufacturing
operation and expenses associated with quality assurance, manufacturing and
engineering associated with the operating unit(s) manufacturing a Product and
shall include depreciation and property taxes associated with the plant(s)
manufacturing a Product.  These costs
shall be allocated to each product line in such operating unit(s) or plant(s),
whichever is applicable, based on specific criteria consistent with the
standard operating procedures for each product and work center overhead rates
of the party performing the work determined and allocated in a manner
consistently applied within and across operating unit(s); and


 


(iv)          Third-Party royalties and costs of
manufacturing to the extent not already paid or credited under this Agreement
and not including royalties Gilead is obligated to pay under Section 8.3(a) of
this Agreement.


 


(b)           Contract Manufacturing Costs.  Gilead’s
costs to acquire a Product from suppliers (which amount will be net of rebates,
if any, from suppliers).


 


(c)           Combined
Costs.  For a Product that has costs arising under
both Section 1.61(a) and Section 1.61(b), “Manufacturing Costs” shall consist
of the sum of the costs described in each such subsection.


 


1.62        “Marketing Authorization
Application” or “MAA” shall mean an application for Regulatory Approval (but
excluding Price Approvals) required for marketing of pharmaceutical product.  Solely as used in Section 8.2, “MAA” shall
mean the application for
Regulatory Approval (but excluding Price Approvals) required for
marketing of the first Product
in the EU.


 


7





















 


1.63        “Material Transfer Agreements” shall mean the Material Transfer Agreement between the Parties
dated October 6, 2004, and the Clinical
Trial Material
Transfer Agreement between the Parties dated as of March 17, 2005.


 


1.64        “NDA” shall mean a
New Drug Application filed with the FDA to seek Regulatory Approval for a
pharmaceutical product in the United States.


 


1.65        “Net Sales” means, with respect to
a given period of time, the total
amount invoiced by Gilead or its Affiliates and Sublicensees for sales of
Products to a Third Party (whether an end-user, wholesaler or otherwise) in the
Gilead Territory, less the following deductions with respect to such sale, to
the extent applicable to the Product and to the extent consistent with Gilead’s
accounting practices used with respect to sales of Viread:  (a) trade, cash and quantity credits,
discounts, distributor fees, wholesaler
fees for inventory management or similar purposes (provided the fees charged by
the wholesaler are consistent across Gilead’s product lines), credits, and refunds, (b) allowances or credits
for returns or rejected Product and a reasonable allowance for bad debt expense
consistent with GAAP; (c) prepaid freight and insurance; (d) sales taxes and
other governmental charges (including value added and similar taxes, but solely
to the extent not otherwise creditable or reimbursed and excluding any income
tax) actually paid by Gilead or its Affiliates and Sublicensees in connection
with the sale; and (e) customary rebates (including, for this purpose,
discounts provided by means of chargebacks or rebates) granted to managed
health care organizations, federal, state, or local governments (or their
agencies) (including without limitation Medicaid rebates), all to the extent in
accordance with GAAP as consistently applied across all products of
Gilead.


 


Gilead and its Affiliates
and Sublicensees will use commercially reasonable efforts to collect any amount
designated as a credit or as an allowance that was previously deducted pursuant
to clause (b) of the preceding paragraph. 
If Gilead or its Affiliate or Sublicensee collects any amount designated
as a credit or as an allowance that was previously deducted pursuant to clause
(b) of the preceding paragraph, then, to the extent the amount collected
exceeds or is less than the corresponding credit or allowance taken, Net Sales
for the period in which such amount is determined shall be increased or
decreased by such amount.


 


Sales to Distributors;
Not-for-Profit and Charitable Distributions. For clarification, sale
of a Product by Gilead or its Affiliates and Sublicensees to Gilead or its
Affiliates and Sublicensees for resale by such entity to an unaffiliated Third
Party shall not be deemed a sale for purposes of “Net Sales” hereunder, but the
sale of such Product by such entity to an unaffiliated Third Party (whether an
end-user, wholesaler, distributor (including Gilead’s exclusive distributors
covering countries, territories or regions) or otherwise) shall be deemed to be
a sale by Gilead of a Product to a Third Party for purposes of calculating Net
Sales hereunder and royalties owed by Gilead under Section 8.3.  Further, transfers or dispositions of
Products in commercially reasonable quantities (consistent with Gilead’s usual
practice as applied to other compounds and products of a similar nature) and
without receipt of compensation, or if sold for at or less than Manufacturing
Cost for charitable or promotional purposes or for pre-clinical or clinical
Development, manufacturing scale-up or regulatory purposes prior to receiving
Regulatory Approval shall not be deemed “sales” for purposes of “Net Sales”
hereunder.


 


8





















 


Distribution to Global Access Programs.   To
the extent Gilead or its Affiliates distribute Product through government agencies,
not-for-profit non-governmental organizations, physicians, pharmacies or
patients in the countries listed in Schedule 1.65 at reduced rates (the “Gilead
Global Access Program”), Net Sales for the purposes of determining royalties
payable under this Agreement on Products distributed to a Gilead Global Access
Program will be calculated by reducing the gross amount invoiced to the Global
Access Program for such Product by Gilead’s Manufacturing Costs, including, to
the extent not included as Manufacturing Costs, reasonable overhead and
depreciated facilities expenses and administrative costs in direct support of
the manufacturing of the Product and of Gilead’s Global Access Program in
accordance with practices and procedures consistent with those of other relevant
products in the Gilead Global Access Program, for the Product less all credits
or allowances granted on account of rejections, returns, billing errors or
retroactive price reductions, and duties, taxes and other governmental charges,
provided that the total resulting amount shall not be reduced below zero after
deduction of applicable credits and allowances. Where Product is sold in the form of a Combination Product containing one
or more API in addition to a Compound, the Net Sales for such Combination
Product for purposes of determining royalties payable under this Agreement will
be calculated by multiplying the Net Sales of such Combination Product (without
regard to the adjustment established by this paragraph) by the fraction A/(A+B)
where A is the Net Selling Price for the stock keeping unit most comparable to
the component of the Product containing that Compound as the sole API, if sold
separately, in such country during the relevant fiscal quarter, and B is the
Net Selling Price for the stock keeping unit, most comparable to the component
containing other API, if sold separately, in such country during the relevant
fiscal quarter.  For clarity, if there
are three or more API (including the Compound), additional B terms calculated
in the same manner, shall be included in the denominator so that such fraction
shall be A/(A+B1+ B2+...).


 


If, on a country-by-country basis, one or more of the
other API in the Combination Product are not sold separately in said country,
the Net Sales for the purpose of determining royalties payable under this
Agreement for the Combination Product shall be calculated by multiplying the
Net Sales of such Combination Product (without regard to the adjustment
established by this paragraph) by the fraction A/C where A is the Net Selling
Price for the stock keeping unit most comparable to the component of the
Product containing the relevant Compound as the sole API, if sold separately,
in such country during the relevant fiscal quarter and C is the Net Selling
Price for the Combination Product in such country during the relevant fiscal
quarter.


 


If, on a country-by-country basis, the Product
containing a Compound as the sole API is not sold separately in said country
during the relevant fiscal quarter but one or more of the other API in the
Combination Product are sold separately in said country during the relevant
fiscal quarter, the Net Sales for the Combination Product shall be calculated
by multiplying the Net Sales of such Combination Product (without regard to the
adjustment established by this paragraph) by the fraction (1-(D/C)) where D is
the Net Selling Price for the stock keeping unit most comparable to the product
containing the other API as the sole API and C is the Net Selling Price for the
Combination Product in such country during the relevant fiscal quarter.  For clarity, if there are two or more other
product API, additional D terms calculated in the same manner shall be included
in the numerator so that the fraction shall be

(1-(D1+D2+. . .)/C).


 


9





















 


If, on a country-by-country basis, the Product
containing a Compound as the sole API is not sold separately in a country and
one or more of the other API in the Combination Product are not sold separately
in such country, the Net Sales of the Combination Product shall be deemed to be
the Net Sales of such Combination Product (without regard to the adjustment
established by this paragraph) multiplied by the fraction A/C where A is the
Net Selling Price on an average worldwide basis for the stock keeping unit most
comparable to the Product containing the relevant Compound as the sole API, and
C is the Net Selling Price for the Combination Product on an average worldwide
basis.


 


1.66        Net Selling Price” means the Net Sales (as defined in the first
and second paragraphs of the definition of “Net Sales”, without giving effect
to the subsequent paragraphs of such definition) of a Product divided by the
number of units of Product sold.


 


1.67        “Non-breaching Party” shall have the meaning set forth in Section
14.3(a).


 


1.68        “Offsetting Patents” shall mean Patents controlled by a Third
Party and that are required for the research, Development, manufacture, use,
sale, offer for sale or importation of JTK-303 based on the formulation furnished
by JT to Gilead, as used for treatment and/or prophylaxis of HIV infection and
to the extent based on the manufacturing process provided by JT to Gilead.


 


1.69        “Other Indication” shall mean therapeutic and prophylactic uses
other than in the treatment and prophylaxis of HIV infection.


 


1.70        “Patent” shall mean (a) all patents,
certificates of invention, applications for certificates of invention, and
patent applications, including without limitation patent applications under the
Patent Cooperation Treaty and the European Patent Convention, and abandoned
patent applications throughout the world, together with (b) any renewal,
divisional, continuation (in whole or in part), or continued prosecution
applications of any of such patents, certificates of invention and patent
applications, and any all patents or certificates of invention issuing thereon,
and any and all reissues, reexaminations, extensions, divisions, renewals,
substitutions, confirmations, supplemental protection certificates,
registrations, revalidations, revisions, and additions of or to any of the
foregoing, and any counterparts in any other country of any of the foregoing
and any other patents and patent applications claiming priority back to any of
the foregoing.


 


1.71        “Payment Term” shall have the meaning set forth in Section
8.3(d).


 


1.72        “Phase II Study” shall mean initial clinical trials of a
Product on a limited number of patients for the purposes of determining dose
and evaluating safety and efficacy of the proposed therapeutic indication as
more fully defined in 21 C.F.R. §312.21(b) (or
the equivalent process in other countries or groups of countries in the Gilead
Territory).


 


1.73        “Phase III Study” shall mean expanded clinical trials of a
Product on a large number of patients for the purposes of evaluation of the
overall benefit-risk relationship and long-term safety of the proposed
therapeutic indication as more fully defined in 21 C.F.R. §312.21(c) (or the equivalent process in other countries
or groups of countries in the Gilead Territory).


 


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1.74        “Phase IIIB/IV Study” shall mean any clinical trials of a drug
that are not required for receipt of Regulatory Approval, but that may be
useful in providing additional Product Profile data for such drug, supporting
label expansion for such drug, or satisfying any conditions imposed by a
Regulatory Authority upon the granting of Regulatory Approval for such drug.


 


1.75        “Price Approval” shall mean the receipt of approval (to the
extent that such approval is required) by the applicable governmental authority
with respect to the price at which a pharmaceutical product is sold and can be
reimbursed by healthcare insurers, non-profits,
government programs, and the like.


 


1.76       “Product” shall mean (i) any pharmaceutical product that contains Compound as the sole active
pharmaceutical ingredient, or (ii) a Combination Product.


 


1.77        “Product Labeling” shall mean (i) the full prescribing
information for any Product, as approved by the relevant Regulatory Authority
and (ii) all labels and other written, printed or graphic information included
in or placed upon any container, wrapper or package insert used with or for any
Product that complies with the Regulatory Approval for such product.


 


1.78        “Product Profile” shall mean the recommendations for and
limitations upon use of a pharmaceutical product that must be included in
product labeling and packaging pursuant to any Regulatory Approval for such
product.


 


1.79        “Promotional Materials” shall mean written, printed, graphic,
electronic, audio or video matter, including but not limited to journal
advertisements, sales visual aids, leave items, formulary binders, reprints,
direct mail, direct-to-consumer advertising, internet postings, broadcast
advertisements and sales reminder aids (for example, note pads, pens and other
such items) intended for use or used by Gilead or its Affiliate or Sublicensees in connection with the promotion of a
Product, but excluding Product Labeling.


 


1.80        “Prosecution” shall
have the meaning set forth in Section 9.3(a).


 


1.81        “Regulatory Approval” shall mean all approvals (including without
limitation supplements, amendments, and Price Approvals), licenses,
registrations or authorizations of any national, supra-national, regional,
state or local regulatory agency, department, bureau, commission, council or
other governmental entity, necessary for the manufacture, distribution, use or
sale of a Product in a given regulatory jurisdiction.


 


1.82        “Regulatory Authority” shall mean the FDA or a counterpart of the
FDA outside the United States.


 


1.83        “Regulatory
Information” shall mean know-how, trade secrets, procedures, information, technology,
experimental data, pre-clinical, non-clinical and clinical data, clinical
safety, post-market safety, efficacy or comparative data, including without
limitation raw or patient data, and any and all material information or reports
relating to the development, registration, manufacture and commercialization of
a Product that is reasonably necessary or required for Regulatory Approval of a
Product.  For illustration, Regulatory
Information includes, but is not limited to, draft and final copies of all NDAs
and INDs that are to be


 


11





















 


submitted or have been submitted by JT and Gilead
or their respective Affiliates to the regulatory authorities, including,
without limitation, the FDA or EMEA, and that are included in other NDAs and
INDs for a Product filed by either Party or its Affiliates, together with all
material subsequent correspondence and data submissions relating to the
foregoing, and all improvements or inventions made or obtained by either Party
or its Affiliates, which are reasonably necessary or required to the
formulation of a Product or the manufacture, development and registration of a
Product.


 


1.84        “Remaining Competitive Recovery” shall have the meaning set forth in Section
9.4(f)(i).


 


1.85        “Reverted
Country” shall mean a country in the Gilead Territory as to which Gilead’s rights
under this Agreement are terminated in part by JT pursuant to Section 14.3(c).


 


1.86        “Sole Invention” shall have the meaning set forth in Section
9.1(a).


 


1.87        “Sublicensee” shall mean a Third Party that is a
sublicensee of a Party’s rights granted under Article 6.


 


1.88        “Sublicensee Know-How” shall mean Know-How owned, assigned to,
developed by, or in-licensed by a Sublicensee that is necessary for, or
actually used during the Term in, the Sublicensee’s Development or
Commercialization of a Product.


 


1.89        “Sublicensee Patent” shall mean any Patent owned, assigned to, or
in-licensed by a Sublicensee that is necessary for, or actually used during the
Term in, the Sublicensee’s Development or Commercialization of a Product.


 


1.90        “Supply Agreement” shall mean an agreement entered into by the
Parties after the Execution Date governing the commercial supply of Products.


 


1.91        “Term” shall have the meaning set forth in Section
14.1.


 


1.92        “Third Party” shall mean any entity other than JT or Gilead
or an Affiliate of either Party.


 


1.93        “Third Party Claim” shall have the meaning set forth in Section
11.1.


 


1.94        “Third Party Royalties” shall mean up-front, milestone, royalty and
any other similar payments paid by Gilead to any Third Party for Offsetting
Patents for the Development, manufacture, use sale, offer for sale, or
importation of Compound or Product.


 


1.95        “Trademark” shall have the meaning set forth in Section
9.7(a).


 


1.96        “Truvada” shall mean
the fixed dose combination of Emtriva and Viread.


 


1.97        “Valid Claim” shall mean a claim of
an issued and unexpired Patent, which has not been revoked or held
unenforceable or invalid by a decision of a court or other governmental agency
of competent jurisdiction, and which is not appealable or has not been appealed
within


 


12





















 


the time allowed for appeal, and which has not
been disclaimed, denied or admitted to be invalid or unenforceable through
reissue, re-examination, disclaimer or otherwise.


 


1.98        “Viread” shall mean shall mean the pro-drug of Tenofovir known as tenofovir disoproxil
fumarate, having the chemical formula (9-[(R)-2-[[bis [[isopropoxycarbonyl)oxy]
methoxy] phosphinyl] methoxy] propyl] adenine fumarate).


 


1.99        “Viread Supply Agreement” shall mean the Supply Agreement between the
Parties dated December 25, 2003 with respect to Viread, and as amended
thereunder.


 


ARTICLE
2


 


MANAGEMENT


 


2.1          Joint Committee.


 


(a)                           Formation and Role.  The
Parties wish to establish a Joint Committee (the “Joint
Committee”) to provide a forum for the Parties to share and discuss
their respective plans relating to the Development and Commercialization of
Compound(s) and Products and to coordinate activities to be taken by the
Parties with respect to the Development and Commercialization of such
Compound(s) and Products.  The Joint
Committee shall operate by the procedures set forth in this Section 2.1 and in
Section 2.2 and shall have only the powers described in this Article 2 and
elsewhere in this Agreement.  The role of
the Joint Committee will be to:


 


(i)                            review and discuss the Parties’ respective
strategies for seeking Regulatory Approval of Products for treatment
of HIV infection, and such Other Indications for which a Party wishes to seek
Regulatory Approval, within the
Parties’ Territories (for clarification, the Parties may meet with Regulatory
Authorities in their respective Territory with respect to Products for the
Licensed Indication without the approval of the Joint Committee), subject to
their obligations under this Agreement;


 


(ii)                           facilitate the exchange of information
between the Parties with respect to Gilead’s activities hereunder for the
Gilead Territory and JT’s activities hereunder for the JT Territory;


 


(iii)                         review and discuss the Gilead Development
Plan, the Gilead Commercialization Plan and updates thereof;


 


(iv)                          review and discuss the
JT Development Plan, the JT Commercialization Plan and updates thereof;


 


(v)                            review, discuss and facilitate resolution of
matters discussed in the Joint Committee, including other agenda items
submitted in accordance with Section 3.4 and Section 5.4;


 


13





















 


(vi)                          in conjunction with the IP Subcommittee,
provide a forum for updates on strategies for obtaining, maintaining and
enforcing Patent and Trademark protection for Products in the Gilead Territory;


 


(vii)                         establish such working groups or
sub-committees, in addition to the IP Subcommittee, as it may choose from time
to time to accomplish its purposes, and such groups or subcommittees may include
those not members of the Joint Committee;


 


(viii)                        work with the Alliance Managers to facilitate
communication, interaction and coordination of the activities under this
Agreement;


 


(ix)                          establish procedures for the efficient
sharing of Regulatory Information, Know-How and materials necessary for each
Party’s preclinical, non-clinical, clinical and
regulatory Development of Products hereunder, consistent with this Agreement;


 


(x)                           review and discuss actions taken by either
Party with respect to Products that would conflict with a Party’s efforts to
achieve Regulatory Approval of a Product or to maximize global
Commercialization of a Product for the treatment of HIV infection, and such
Other Indications for which a Party wishes to seek Regulatory Approval, and
that could reasonably be expected to have a material adverse impact upon the
regulatory status or potential sales of Products in the other Party’s
Territory;


 


(xi)                          review and discuss any unresolved conflict
arising under Section 6.7; and


 


(xii)                         perform such other functions as appropriate
to further the purposes of this Agreement, as determined by the Parties.


 


(b)           Committee Principles.  The Joint Committee will perform its responsibilities under this
Agreement based on the principles of prompt and diligent Development of
Products for treatment of HIV infection, consistent with the obligations of the Parties under this Agreement
and with good pharmaceutical practices and the maximization of long-term
profits derived from the sale of Products for treatment of HIV infection in the Gilead Territory and the JT
Territory.


 


(c)           Decision-Making.


 


(i)            Subject to Section
2.1(c)(ii)-(iv), any disputes or disagreements concerning matters that cannot
be resolved within the Joint Committee, and for which agreement between the
Parties is required or otherwise involves breach, may be referred by the Joint
Committee for resolution under Article 15. 
The Joint Committee shall not have any power to amend, modify or waive
compliance with this Agreement.


 


(ii)           Any disputes or disagreements, concerning
matters that directly relate to either Party’s Patents or Know-How (other than
matters relating to a breach of this Agreement) that cannot be resolved within
the Joint Committee shall be decided by [*].


 


14





















 


(iii)         Disputes or disagreement concerning the
Gilead Development Plan, any Gilead Updates, or any JT Development Plan and JT
Updates, shall be addressed as provided in Section 3.2(d).


 


(iv)          Disputes or disagreement concerning the Gilead
Commercialization Plan or any JT Commercialization Plan shall be addressed as
provided in Section 5.2(c).


 


2.2          Joint Committee Membership and
Procedures.


 


(a)           Membership.  As
of the Effective Date, JT and Gilead have each designated three (3) representatives
to serve on the Joint Committee, as set forth in Schedule 2.2.  Either Party may designate substitutes for
its representatives if one (1) or more of such Party’s designated
representatives is unable to be present at a meeting.  From time to time each Party may replace its
representatives by written notice to the other Party specifying the prior
representative(s) and their replacement(s).  A representative of Gilead shall serve as the
chairperson of the Joint Committee.


 


(b)           Meetings.  The
Joint Committee shall hold at least two (2) meetings per year at such times as
it elects to do so.  The chairperson
shall be responsible for calling meetings. 
As the Joint Committee so determines at each such meeting, participants
shall discuss the Development, Regulatory Approval, manufacture and/or
Commercialization of Products and the procurement, maintenance and enforcement
of Patent and Trademark protection for Products.  Meetings of the Joint Committee shall be
effective only if at least two (2) representatives of each Party are present or
participating.  The Joint Committee may
meet either (i) in person at either Party’s facilities, (ii) by audio or video
teleconference, or (iii) at such locations as the Parties may otherwise
agree.  With the prior consent of each
Party’s representatives, other representatives of each Party or Third Parties
involved with Development, Regulatory Approval, manufacture and/or
Commercialization of Products and procurement, maintenance and enforcement of
Patent and Trademark protection for Products may attend meetings as observers,
provided however that if the Alliance Manager for either Party is not a member
of the Joint Committee, such Alliance Manager may attend all meetings of the
Joint Committee without such consent. Additional meetings of the Joint
Committee may also be held with the consent of each Party, or as required under
this Agreement, and neither Party will unreasonably withhold or delay its
consent to hold such an additional meeting. 
Each Party shall be responsible for all of its own expenses of
participating in the Joint Committee.


 


(c)           Minutes.  One of Gilead’s Joint Committee
representatives shall be responsible for preparing and issuing minutes of each
such meeting within thirty (30) days thereafter.  Such minutes will not be finalized until JT reviews and confirms with Gilead the accuracy of such minutes in writing.


 


(d)           Meeting Agendas.  The
Gilead Alliance Manager shall, after consulting with the Joint Committee
members, develop and circulate an agenda containing the topics (i.e.,
Development, manufacturing and/or Commercialization issues and other agenda
items submitted in accordance with Section 3.4 and Section 5.4) for the
upcoming meeting.  The Gilead Alliance
Manager shall disclose to the members of the Joint Committee (i) the draft
agenda no later than


 


15





















 


ten (10) business days in advance, and (ii) its final agenda at least
five (5) business days in advance, of each meeting of the Joint Committee;
provided that under exigent circumstances requiring Joint Committee input, the
Gilead Alliance Manager may provide the draft and final agenda to the members
of the Joint Committee within a lesser period of time in advance of the
meeting, or may propose that there not be a specific agenda for a particular
meeting, so long as such Joint Committee members reasonably consent to such
temporary changes to the general process for distributing the agenda for Joint
Committee meetings.


 


2.3          Alliance Managers.


 


(a)           Selection of Alliance
Managers.  Each Party has designated on Schedule 2.3 an
appropriate person to facilitate communication, interaction and coordination of
the Parties’ activities under this Agreement relating to Products and to
provide support and guidance to the Joint Committee (each, an “Alliance Manager”). 
Each Alliance Manager shall have appropriate experience and may also
serve as a representative of either Party on the Joint Committee.  Each Party may change its Alliance Manager
from time to time upon notice to the other Party.


 


(b)           Responsibilities.  The Alliance Managers shall attend all meetings of the Joint Committee,
and may attend, as necessary, any meetings held by subcommittees of the Joint
Committee, including the IP Subcommittee. 
Each Alliance Manager shall (i) be the initial point of contact and
communication for each Party to identify actual or potential disputes arising
in connection with this Agreement; (ii) refer such issues or disputes to the
Joint Committee, IP subcommittee, or other subcommittee, as appropriate, for
discussion; (iii) plan and coordinate cooperative efforts for internal and
external communications and notices; and (iv) ensure that governance
activities, such as the conduct of the Joint Committee, or any subcommittee,
including production of meeting minutes and relevant action items agreed upon
at such meetings, are appropriately carried out, referred to the appropriate
employees of each Party, or are otherwise addressed by the Parties.


 


2.4          Collaboration Guidelines.  In
all matters relating to this Agreement, each Party shall seek to comply with
good pharmaceutical and environmental practices consistent with its own
existing practices.  Subject to the terms
of this Agreement, the activities and resources of each Party shall be managed
by such Party, acting independently and in its individual capacity.  The relationship between JT and Gilead is
that of independent contractors and neither Party shall have the power to bind
or obligate the other Party in any manner, other than as is expressly set forth
in this Agreement.


 


ARTICLE
3


 


DEVELOPMENT


 


3.1          Performance.


 


(a)           Gilead
Activities.  Upon the Effective Date, as
between the Parties, Gilead shall be responsible for conducting regulatory,
non-clinical, clinical, pharmaceutical, and commercial development,
manufacturing, registering and marketing, of a Product for treatment of HIV infection in the Gilead
Territory in accordance with this Article 3, and shall reasonably


 


16





















 


apprise the Joint Committee of such efforts.  Gilead shall devote Diligent Efforts to the Development of a Product
for use in the treatment of HIV infection to support the Commercial Launch of
such Product in the Gilead Territory in accordance with this Agreement. Gilead shall bear all of the costs and expenses
incurred in connection with any such activities performed.


 


(b)           JT Activities.  JT
may Develop Products to support the Commercial Launch of a Product in the JT
Territory, but shall not be under any obligation to do so.  JT shall bear all of the costs and expenses
incurred in connection with any such activities.


 


3.2          Development Plans.


 


(a)           Gilead Development Plan.


 


(i)            Attached hereto as Schedule 3.2 is Gilead’s plan for Development of Products
(“Gilead Development Plan”).  The Joint Committee will review the Gilead
Development Plan at its first meeting.


 


(ii)           Not less frequently than semi-annually,
Gilead shall provide to the Joint Committee, in advance of any meeting of such
Committee, updates, if any, to the Gilead Development Plan (“Gilead Updates”).  Each Gilead Update will revise and/or describe,
as necessary or appropriate, among other things: (A) project milestones; (B)
estimated target dates for achieving milestones in Developing Product; (C) responsibilities of Gilead; (D) the resources
to be made available by Gilead; (E) scope, tasks and estimated timelines
for Gilead’s conduct of regulatory and clinical studies for Product, including
without limitation clinical trial protocols, estimated enrollment numbers and
estimated filing submission dates for such activities; (F) summaries of clinical data and reports on such data; (G) any other
significant matters relating to clinical and pre-clinical development,
regulatory filings and manufacturing; (H) a comparison of the
then-current Development status for Product against the Gilead Development Plan
or any previous Gilead Update; (I) a summary of material differences between
such Gilead Update and the initial Gilead Development Plan or previous Gilead
Update; and (J) other agenda items.  Such Gilead Update
shall be submitted to the Joint Committee for review and comment in advance of
the meeting of the Joint Committee at which it is to be discussed.


 


(b)           JT Development Plan.


 


(i)            If JT should in its discretion elect to Develop
Products in the JT Territory, then prior to the commencement of material
activities specifically undertaken for clinical trials for a Product, JT will
submit JT’s plan for Development of Products in the JT Territory (“JT Development Plan”) to the Joint Committee, which will
have an opportunity to review and discuss the JT Development Plan prior to the
commencement by JT of any such activities.


 


(ii)           Not less frequently than semi-annually, JT
shall provide to the Joint Committee in advance of any meeting of such
Committee, drafts of updates, if any, to any JT Development Plan (“JT Updates”).  Each JT Update will revise and/or describe, as
necessary or appropriate, among other things: (A) scope, tasks and
estimated timelines for JT’s conduct of regulatory and clinical studies for
Product, including without limitation clinical trial protocols, estimated
enrollment numbers, filing submission dates for such activities; (B) any other


 


17





















 


significant matters relating to clinical and
pre-clinical development, regulatory filings and manufacturing; (C) a comparison of the then-current
Development status for Product against the JT Development Plan or any previous
JT Update; (D) a summary of material differences between such JT Update and the
initial JT Development Plan or previous JT Update; and (E) other agenda items.  Such JT Update shall be submitted
to the Joint Committee for review and comment in advance of the meeting of the
Joint Committee at which it is to be discussed.


 


(c)           Availability of Information. Any information that is required to be
included in the Gilead Development Plan or any JT Development Plan or updates
thereto pursuant to Section 3.2(a) or (b), but which is not yet available to or
developed by a Party at the time such plan is first reviewed by the Joint
Committee, shall be provided when available to the Joint Committee by such
Party and included in a subsequent JT Update or Gilead Update, as applicable.


 


(d)           Principles of Development
Plans.  Each Party, in developing or preparing its
Development Plan and updates thereto, will seek to be consistent with and
address: (i) the development of a clinical profile for a Product that supports
appropriate use recommendations and restrictions; and (ii) each Party’s efforts
to maximize global Commercialization of a Product for treatment
of HIV infection.
Notwithstanding anything in this Agreement to the contrary, each Party shall be
responsible for and control its own Development Plan and shall consider in good
faith any comments by the Joint Committee or the other Party on such
Development Plan, provided that the final determination as to the content of
such Development Plan shall reside in [*].


 


3.3          Reports and Information.  Both Parties shall informally update
the Joint Committee periodically regarding significant Development and
regulatory activities with respect to Products for the Licensed Indication,
including without limitation any informal meetings between Gilead and the
Regulatory Authorities in the Gilead Territory, and JT and the Regulatory
Authorities in the JT Territory.  In
addition, each Party shall present written reports to the Joint Committee on
such activities at each meeting of the Joint Committee summarizing each Party’s
significant clinical and regulatory activities with respect to Products
pursuant to this Agreement.


 


3.4          Other Agenda Items. Prior to any meeting
of the Joint Committee, any member of the Joint Committee may request that the
Chairperson of the Joint Committee put on the agenda for such upcoming meeting
one or more of the following items for discussion:


 


(a)           Gilead’s performance of
its obligations under Section 3.1(a);


 


(b)           Gilead’s activities
pursuant to the Gilead Development Plan, Gilead Updates, or other Gilead
activities involving Development;


 


(c)           JT’s activities
pursuant to the JT Development Plan, JT Updates, or other JT activities
involving Development; or


 


(d)           any item for discussion referred by
representatives on the IP Subcommittee under Section 9.2(c).


 


18





















 


3.5          Information Exchange.


 


(a)           Obligation
to Exchange Information. During the Term, subject to Section 3.5(b) and
Section 4.3(a):


 


(i)            JT shall, upon reasonable request of Gilead,
make available, on a fully paid-up basis, to Gilead as soon as practicable
after such request, JT Know-How and Regulatory Information which is Controlled
by JT, and its Affiliates or Sublicensees as a result of JT’s activities in the
JT Territory;


 


(ii)           Gilead shall, upon reasonable request of JT,
on a fully paid-up basis, make available to JT as soon as practicable after
such request, Gilead Know-How and Regulatory Information which is Controlled by
Gilead, and Gilead’s Affiliates or Sublicensees as a result of the performance
of Gilead’s obligations hereunder.


 


(b)           Limitations.  The obligations in this Section 3.5 are subject to any existing legal
or contractual restrictions or limitations on either Party; provided, however,
that, if legal or contractual restrictions or limitations exist, the nature of
such restrictions or limitations shall be promptly disclosed to the other Party
to the extent permissible.  The Party that is subject to such restrictions or
limitations shall use its Diligent Efforts to obtain a waiver of such
restrictions or limitations to the extent that the other Party agrees to be bound by any terms and
conditions associated with any such waiver.


 


(c)           Creation of New Data.


 


(i)            Either Party may ask the other Party to
generate new Regulatory Information (i.e., Regulatory Information not already
in the possession or Control of the other Party) to satisfy regulatory
requirements applicable to such Party.


 


(ii)           Upon receiving such a request, the requested
Party will consider such request on a reasonable basis and provide such Regulatory
Information if the requested Party can do so without unreasonable burden,
additional cost or other disadvantage to the requested Party.


 


(iii)         If new Regulatory Information requested
pursuant to Section 3.5(c)(i) would impose additional costs on the requested
Party, the requested Party may (A) in its sole discretion decline to provide
the requested Regulatory Information; or (B) request that the requesting Party
pay some or all of such costs on a basis to be negotiated by the Parties.


 


(d)           Permitted Purposes.  The receiving Party or the receiving Party’s Sublicensees receiving
Regulatory Information pursuant to this Section 3.5 may use such Regulatory
Information only for the receiving Party’s development and/or marketing
activities, including filing regulatory applications.


 


(e)           Form and Manner of Exchange. The exchanges of Regulatory Information shall
be undertaken in written, electronic and/or oral form from time to time, as
necessary or as reasonably requested, and, in general, in meetings of the Joint
Committee. All


 


19





















 


Regulatory
Information under this Section 3.5 will be exchanged in English to the extent
possible.


 


ARTICLE
4


 


REGULATORY
MATTERS


 


4.1          Gilead Marketing Authorization
Applications and Regulatory Approval.  In the Gilead Territory,
Gilead shall file and own all INDs (if applicable), Marketing Authorization
Applications and Regulatory Approvals for Products for the Licensed Indication,
and shall be solely responsible for all communications with Regulatory
Authorities in the Gilead Territory in relation thereto (to the extent
permitted by law).


 


4.2          Gilead Access to JT Know-How and
Filings.


 


(a)           Regulatory Data.  Without limiting the
generality of Section 3.5, JT
shall, as soon as practicable after the Effective Date, provide, to the extent
not previously provided,  Gilead copies
of all IND
drafts to be submitted by JT or
its Affiliates. JT shall also provide Gilead with additional material
information, data (in draft or final report form) and Know-How that is reasonably required for Regulatory
Approval of Products for the Licensed Indication in the Gilead Territory,
together with all material subsequent correspondence and data submissions
relating to the foregoing, as soon as practicable.  JT will use reasonable efforts to cooperate
with Gilead and to advise Gilead with respect to questions raised with Gilead
by Regulatory Authorities within the Gilead Territory regarding Products (and agreed to by JT
as provided in this Section 4.2(a));
provided that Gilead shall nevertheless continue to have the primary
responsibility to prepare responses and respond to all such questions and
inquiries.


 


(b)           Form of Transfer; Items not
Transferred.  Pursuant to the Confidential Disclosure Agreements, JT shall provide
all regulatory data and related documentation that it is required to provide to
Gilead hereunder in electronic form, to the extent that an electronic copy is
reasonably available to JT or its Affiliates. 
JT shall not be required to provide in paper form to Gilead any such
item that JT provides to Gilead in electronic form, except items which may be
required by Regulatory Authorities in the Gilead Territory to be submitted in
their original form.  Gilead shall have
the right, in accordance with Section 4.2(c), to reference and incorporate such
data in Gilead’s regulatory filings for Products in the Gilead Territory.  The Parties shall discuss the form in which
the Parties shall exchange Know-How
pursuant to Sections 3.5, 4.2 and 4.3, where
not expressly provided in such Sections.


 


(c)           JT Regulatory Filings. 
Subject to Section 12.2, JT hereby grants Gilead the right to reference
all of JT’s (including its Affiliates, Sublicensees and distributors)
Regulatory Approvals for the Products for the Licensed Indication in Japan, and
all subsequent correspondence and data submissions relating thereto, in Gilead’s
regulatory filings for Products for the Licensed Indication in the Gilead
Territory.  Such right shall be
transferable to Gilead’s Affiliates, Sublicensees and distributors.


 


20





















 


4.3          JT Access to Gilead Know-How and
Filings.


 


(a)           Use. 
Subject to Section 12.2, JT shall have the right to use and incorporate
all Gilead Know-How provided to it
pursuant to Section 3.5 in Marketing Authorization Applications for
Products.  Gilead hereby grants JT,
subject to Section 12.2, the right to reference all of Gilead’s and its
Affiliates’ and Sublicensees’ INDs (if relevant), Marketing Authorization
Applications, Regulatory Approvals and post-approval Phase IIIB/IV data for
Products in such JT regulatory filings. 
Such rights shall be transferable to JT’s Affiliates, its other Sublicensees and distributors. 
Gilead shall provide JT with an electronic copy of each IND (if
relevant), Marketing Authorization Application and other Gilead regulatory
filing for Products in the Gilead Territory, and of all of Gilead’s and its
Affiliates’ and Sublicensees’ material subsequent correspondence and data
submissions relating thereto, as well as a copy of Gilead’s post-approval Phase
IIIB/IV data and a status report regarding all Gilead’s and its Affiliates’ and
Sublicensees’ regulatory filings for Products in the Gilead Territory and
material events occurring in relation thereto (to the extent not otherwise provided
to JT pursuant to this Section 4.3). 
Gilead shall provide such copies as soon as practicable after any
regulatory filing.


 


(b)           Sublicensee Permission;
Transferability to Sublicensees.  Gilead shall require its Affiliates and Sublicensees hereunder
(i) to permit Gilead to provide
to JT any of such Affiliate’s Gilead Know-How, or any of such Sublicensee
Know-How; and (ii) to grant to JT the right to reference any IND, Marketing
Authorization Application or Regulatory Approval containing such Know-How for
the purposes set forth in Section 4.3(a). 
Gilead shall also require its Affiliates and Sublicensees to disclose to
Gilead and to allow Gilead to disclose to JT all Know-How that Gilead must
report pursuant to Section 4.4.


 


4.4          Adverse Event Reporting and
Safety Data Exchange.  The Parties shall report, and take other
actions in relation to, adverse events experienced with Products that are
reported or otherwise known to them, their Affiliates or their
Sublicensees in accordance with
a “Safety Data Exchange Protocol” to be
agreed upon at the appropriate time by the Parties.


 


4.5          Communications; Regulatory
Filings.


 


(a)           Gilead.  Gilead shall be responsible for making the filings for Regulatory
Approval in the Gilead Territory.  Except
as may be required by law and unless explicitly requested or permitted in
writing to do so by JT, Gilead shall not communicate with any Regulatory
Authority having jurisdiction in the JT Territory regarding any Product, or
file any IND or Marketing Authorization Application for Products in the JT
Territory.  The foregoing restrictions shall cease to be applicable on a
country-by-country basis upon the expiration of the last-to-expire Valid Claim
of a JT Patent in such country, provided that
Gilead shall not utilize any JT Know-How other than with respect to a Product
or Compound; and, provided further that nothing in
the foregoing shall contravene Gilead’s confidentiality obligations under this
Agreement or the Confidential Disclosure Agreements.


 


(b)           JT.  JT shall be responsible for making the filings for Regulatory Approval
in the JT Territory.  Except (i) as may
be required by law or (ii) as provided for in the Safety Data Exchange
Protocol, and unless explicitly requested or permitted in writing to do so by
Gilead, JT shall not communicate regarding any Product with any Regulatory
Authority having jurisdiction in the Gilead Territory or file any IND or
Marketing Authorization Application for Products in the Gilead Territory.  The foregoing restrictions shall cease to be


 


21





















 


applicable on a country-by-country basis upon the expiration of the
last-to-expire Valid Claim of a JT Patent in such country, provided
that JT shall not utilize any Gilead Know-How other than with respect to a
Product or Compound; and, provided further
that nothing in the foregoing shall contravene JT’s confidentiality obligations
under this Agreement or the Confidential Disclosure Agreements.


 


ARTICLE
5


 


COMMERCIALIZATION


 


5.1          Performance.


 


(a)           Gilead Activities.  Gilead shall have sole responsibility for Commercializing any Product
for the Licensed Indication in the Gilead Territory, as provided in this
Article 5. Gilead shall devote Diligent Efforts to Commercialize a Product for
use in the treatment of HIV infection in the Gilead Territory in accordance
with this Agreement. Gilead shall bear all of the costs and expenses incurred
in connection with all such Commercialization.


 


(b)           JT Activities.  JT may Commercialize Products in the JT
Territory, but shall not be under any obligation to do so.  JT shall bear all the costs and expenses
incurred in connection with any such activities performed.


 


5.2          Commercialization Plans.


 


(a)           Gilead Commercialization Plan.


 


(i)            On or before the filing of an MAA or NDA for
a Product to be Commercialized in the Gilead Territory, Gilead shall provide
the Gilead Commercialization Plan to the Joint Committee (“Gilead
Commercialization Plan”). 
Gilead shall update the Gilead Commercialization Plan not less than once
annually and no later than [*] of each year, and submit such updated Plan to
the Joint Committee for review and comment.


 


(ii)           The Gilead
Commercialization Plan will describe, among other things:  (A)
current status of Regulatory Approval for such Product; (B) estimated timelines
of milestones for obtaining [*] (including without limitation [*]) of [*] such
Product; (C) pricing [*]; (D) plans for [*] for such Product; (E) [*] for Product in the [*]
in each of the [*];  (F) [*] for Product for
[*]; (G) [*] against the [*] presented at the preceding Joint Committee meeting
and a [*] between such [*] and the [*]; (H) for each [*], the total number of
Gilead [*] the Product, and the expected [*] the Product by [*]; and (I)
and other significant events occurring in relation thereto.  The Gilead Commercialization Plan will
provide a level of detail reasonably sufficient to enable JT to determine
whether Gilead’s activities are consistent with the requirements of Sections
5.1(a) and 5.3.


 


(iii)         Gilead shall informally update the Joint
Committee periodically regarding Gilead’s significant Commercialization
activities for Products for the Licensed Indication in the Gilead
Territory.  In addition, at each meeting
of the Joint Committee, Gilead shall present written reports to the Joint
Committee on such activities summarizing Gilead’s


 


22





















 


significant Commercialization activities with respect to Products in
the Gilead Territory pursuant to this Agreement.


 


(b)           JT Commercialization Plan.


 


(i)            If JT should in its discretion elect to
Commercialize Products in the JT Territory, JT shall provide the JT
Commercialization Plan to the Joint Committee (“JT
Commercialization Plan”) within sixty (60) days after any request by
JT to transfer an NDA or MAA to JT for the purpose of effecting Commercial
Launch in the JT Territory.  JT shall
thereafter update any JT Commercialization Plan not less than once annually and
no later than [*] of each year, and submit such revised or updated Plan to the
Joint Committee for review and comment.


 


(ii)           Any JT
Commercialization Plan will describe, among other things:  (A)
current status of Regulatory Approval for such Product; (B) estimated timelines
of milestones for obtaining [*] (including without limitation [*]) of [*] such
Product; (C) pricing [*]; (D) plans for [*] for such Product; (E) other significant events occurring in
relation thereto.  Any JT Commercialization Plan will
provide a level of detail reasonably sufficient to enable Gilead to determine
whether JT’s activities are consistent with the requirements of 5.1 and 5.2(c).


 


(iii)         JT shall informally update the Joint
Committee periodically regarding any significant JT Commercialization
activities for Products for the Licensed Indication in the JT Territory.  In addition, at each meeting of the Joint
Committee, JT shall present written reports to the Joint Committee on such
activities summarizing any significant JT Commercialization activities with
respect to Products in the JT Territory pursuant to this Agreement.


 


(c)           Principles of Commercialization
Plans and Global Efforts under Commercialization Plans.  The Gilead Commercialization Plan and JT Commercialization Plan defined
under this Article 5 shall be consistent with and address each Party’s efforts
to maximize global Commercialization of a Product for treatment
of HIV infection.  Notwithstanding anything in this Agreement to
the contrary, each Party shall be responsible for and control its own
Commercialization Plan, and shall consider in good faith any comments by the
Joint Committee or the other Party on such Commercialization Plan, provided
that the final determination as to the content of such Commercialization Plan
shall reside in the Party responsible for the Commercialization Plan.


 


(i)            Gilead’s diligence obligations under Section
5.1(a) shall include efforts to maximize overall Commercialization of a Product
in the Gilead Territory.  In determining
whether or not to initiate Commercial Launch in a particular country in the
Gilead Territory, Gilead may appropriately consider (A) legal, political,
economic, intellectual property, trade, pricing, health care policy and
infrastructure, regulatory infrastructure, environmental and other relevant
factors that may result from Commercial Launch in that country; (B) how such
factors or results may impact Commercialization of a Product in that country;
and (C) how such factors and results may impact the Commercialization of such
Product globally.


 


23





















 


(ii)           If Gilead does not initiate Commercial Launch
in a particular country and JT reasonably believes that such failure to Launch
constitutes a breach of Gilead’s diligence obligations under Section 5.1(a),
then JT shall notify Gilead in writing of its concerns and may request
information supporting Gilead’s decision. 
Gilead shall promptly respond to JT’s written notice and any request for
supporting information by (A) providing JT with information supporting its
decision to not initiate Commercial Launch of the Product in the particular
country; (B) initiating Commercial Launch of the Product in such country; or
(C) acknowledging that Gilead has not fulfilled its diligence obligations in
such country.  If upon receipt of any
supporting information from Gilead, JT still believes that Gilead has not
exercised its diligence obligations with respect to the Commercial Launch of a
Product in such country, then JT may raise the issue to the Joint Committee for
discussion and for facilitation of potential resolution.  If such issue is not resolved through
discussions in the Joint Committee, the Joint Committee may refer the issue to
dispute resolution in accordance with Article 15.


 


(iii)         If an issue under this Section 5.2(c) is
subject to arbitration under Article 15 and such arbitration results in a
binding determination that Gilead failed to exercise its diligence obligations
with respect to the Commercial Launch of a Product in such country and that
factors favorable to Commercial Launch did exist, or if Gilead makes the
acknowledgement in Section 5.2(c)(ii)(C), then Gilead shall elect to either (A)
[*] or (B) [*].  If JT accepts such [*],
JT shall have the right (including through Affiliates or Sublicensees)
following such [*].  If JT (i) does not accept [*] when they are
offered by Gilead; (ii) JT does [*]; or (iii) JT [*].   The terms “commercialize” and “commercialization”
for purpose of this subsection 5.2(c)(iii) include the initiation by JT of a
commercial discussion with potential Sublicensees or distributors.


 


(iv)          In determining if
Gilead has exercised diligence, the arbitrator in the arbitration shall
consider the factors in Section 5.2(c)(i). 
In addition, the arbitrator may consider the [*] by Gilead in the
country as a factor in justifying a [*] in a particular country if, under
similar circumstances, a [*].


 


5.3          Promotional Materials.


 


(a)           Preparation of Promotional
Materials.  Gilead shall prepare or have prepared
Promotional Materials for Products for the Licensed Indication in the Gilead
Territory.  Consistent with applicable
law, Gilead shall provide to the Joint Committee exemplars and/or
representative samples of all Promotional Materials for Products pursuant to
mutually agreed-upon procedures and timelines.  
JT or its Affiliates will have the right to use such Promotional
Materials in the Commercialization of Products for the Licensed Indication in
the JT Territory.


 


(b)           Filing of Promotional
Materials.  To the extent required by applicable
regulatory requirements, Gilead shall file all Promotional Materials as
required by the appropriate Regulatory Authority in the Gilead Territory.  All Promotional Materials and Product
Labeling shall, to the extent permitted by law, identify JT as the licensor of
Products.


 


(c)           JT’s Use of
Promotional Materials.  Gilead shall use commercially reasonable efforts to
respond to JT’s or its Affiliates’ request for, and to provide JT or its Affiliates with, the following materials, information and opportunities (to the extent available to Gilead), which shall be used by JT or its Affiliates for the Commercialization of Products for the


 


24





















 


Licensed Indication in the JT Territory: (i) samples of Gilead’s
Promotional Materials used for sales of Products; (ii) training materials used
by Gilead to train its sales force for Products; (iii)
opportunities for two employees of JT or its Affiliates to participate in
Gilead’s training programs, on terms described in the License Agreement between
the Parties dated July 31, 2003, that are established for the specific purpose
of training Gilead’s sales force to promote Products; and (iv) other public
information or materials that are reasonably necessary for Commercialization of
Products in the JT Territory.


 


5.4          Other
Agenda Items. Prior to any meeting of the Joint Committee, any member of the Joint
Committee may request that the Chairperson of the Joint Committee put on the
agenda for such upcoming meeting one or more of the following items for
discussion:


 


(a)           Gilead’s performance of
its obligations under Section 5.1(a);


 


(b)           Any matter contained in
the Gilead Commercialization Plan, or Gilead’s activities thereunder; or


 


(c)           Any matter contained in
the JT Commercialization Plan, or JT’s activities thereunder.


 


5.5          Global Access Program.  Gilead may from time to time add to Schedule
1.65 the names of additional countries participating in the Gilead Global
Access Program; provided, however, that prior to making any such additions,
Gilead shall provide to JT: (a) [*]; and (b) a reasonable time in which to
discuss any such additions with Gilead. 
Gilead shall undertake commercially reasonable efforts to seek to [*] in
the Gilead Global Access Program, which efforts are consistent with those
Gilead uses with its other HIV products. 
Gilead will discuss in good faith with JT any such [*] and shall keep JT
reasonably informed of actions taken in furtherance of such efforts to [*] in
the Gilead Global Access Program. 
In any Gilead press release announcing an expansion of the Gilead Global
Access Program with respect to the Product, Gilead will include a statement to
the effect that JT has agreed to waive its right to a royalty on sales of the
Product in the countries participating in the Gilead Global Access Program.


 


ARTICLE
6


 


LICENSES,
RIGHTS OF NEGOTIATION AND DISCUSSION


 


6.1          License to Gilead. Subject to the terms and conditions of this
Agreement, JT hereby grants to Gilead an exclusive (even as to JT except to the
extent provided in this Article 6), royalty-bearing license under the JT
Technology to Develop, make, have made, use, sell, have sold, offer for sale
and import Compounds and Products for the Licensed Indication in the Gilead
Territory. Gilead shall have the right to sublicense [*] It is understood by
the Parties that [*] for the grant of any sublicense for commercialization
rights to any JT Technology [*].


 


6.2          Licenses to JT.  Subject to the terms and conditions of this Agreement, Gilead hereby
grants to JT an exclusive, fully-paid license or sublicense under the Gilead
Technology


 


25





















 


to (a) Develop, make, have
made, use, sell, have sold, offer for sale and import Compound and Products for
the Licensed Indication in
Japan, (b) Develop, make, have made, use and import Compound and Products
worldwide, solely in furtherance of JT’s rights to the Compound or Products
under applicable law or hereunder, and (c) upon the expiration in a particular
country of the Payment Term or reversion pursuant to Section 5.2(c)(iii) or
Article 14, to sell, have sold, and offer for sale Compound and Products in
such country.  JT shall have the right to
sublicense [*].  Such sublicense shall be
sublicenseable through one (1) or more tiers of Sublicensees [*].


 


6.3          Use of Trademarks by JT.  Subject to the terms and conditions
of this Agreement, Gilead hereby agrees to
grant to JT (with right of sublicense to JT’s Affiliates and licensees) a perpetual, fully paid-up, exclusive
license to use the Trademark in the JT Territory for the Development and
Commercialization of Products. JT shall have the right to sublicense, subject
to Gilead’s prior written consent, which shall not be unreasonably withheld or
delayed.  Such sublicense shall be
sublicenseable through one (1) or more tiers of sublicensees without Gilead’s
prior written consent.


 


6.4          Third Party Licenses.


 


(a)           Inclusion
of Right to Sublicense.  In the event that either
Party obtains from a Third Party a license under Sublicensee Patents or
Sublicensee Know-How, such Party shall, subject to Section 6.4(b), use its
commercially reasonable efforts to include in such license a right to grant a
sublicense on the same terms and conditions to the other Party solely to
support the license grants contained in Sections 6.1 and 6.2.


 


(b)           Payments
to Third Parties.  It is understood by
both Parties that, regarding any license or sublicense described in Section
6.4(a), if a Party (the “First Party”)
is obliged to make payments to Third Parties relating to the license or
sublicense under a specific Patent or Know-How to the other Party (the “Other Party”), the First Party shall provide written notice
to the Other Party in a timely manner about the details of such payment
obligations. The Other Party shall provide written notice to the First Party in
a timely manner indicating whether it:


 


(i)            accepts
responsibility for (x) all such payments to the extent they relate to the
license or sublicense in question or (y) in the case such payments are based
upon global sales, its pro-rata portion of such payments based upon sales
inside or outside of the Gilead Territory, as the case may be, or (z) in case
such payments are not based upon sales inside or outside of the Gilead
Territory, as the case may be, or


 


(ii)           declines to accept
responsibility for such payment.  If the
Other Party declines to accept such responsibility, the specific Patent or
Know-How shall not be regarded as a part of the license or sublicense granted
pursuant to Section 6.4(a).


 


6.5          Affiliate and Sublicensee
Obligations.  To the extent
applicable, each Party shall require: (a) its Affiliates to grant the other
Party a license under such Affiliates’ Patents and Know-How to the extent
necessary for or actually used during the Term in such Party’s or such Party’s
Affiliate’s Development and Commercialization activities under this Agreement;
and (b) its Sublicensees to grant the
other Party a license under such Sublicensee’s Sublicensee Patents


 


26





















 


and Sublicensee Know-How, to the extent necessary for or actually used
during the Term in such Party’s or such Party’s Sublicensee’s Development and
Commercialization activities under this Agreement.


 


6.6          Covenants Regarding Use of
Patents and Know-How.


 


(a)           JT Scope of License.  JT covenants that it shall not practice the Gilead Technology outside
the scope of the licenses granted to it pursuant to this Article 6.


 


(b)           Gilead Scope of License.  Gilead covenants that it shall not practice the JT Technology outside
the scope of the licenses granted to it pursuant to this Article 6.


 


6.7          Other Integrase Products.


 


(a)           Permitted Gilead Activities. 
During the Term and in the Gilead Territory, Gilead or its Affiliates or Sublicensees may
(i) [*]; or (ii) [*].  If Gilead or its Affiliates elects to develop
and/or commercialize such product under this Section 6.7, including through a
license to a Third Party, Gilead shall, prior to [*].


 


(b)           Effect on Gilead’s
Obligations.  In the event that JT believes that Gilead’s
activities or potential activities relating to any such product will result in
a conflict with Gilead’s obligations under Section 3.1(a) or 5.1(a), JT shall
so inform Gilead in writing, stating the basis for its belief.  The Parties shall negotiate in good faith an
appropriate mechanism to address the issues raised by JT.  If, after [*] days of good faith negotiation,
the Parties cannot agree on an appropriate mechanism, such [*], and, in the
event that the [*].


 


(c)           Developing and Selling Multiple Products.  Any development and/or commercialization described in this Section 6.7 [*]
affect Gilead’s level of Development and/or Commercialization efforts relating
to the Product; provided, however, that the Parties agree that: (A)
Gilead may utilize the synergies and efficiencies of two [*] without such
utilization being considered diminished effort; and (B) the existence of a
second [*] as a result of such synergies, or a loss of sales or market share
(or potential therefor) for the Product, even where Gilead exerts the same
level of effort.


 


(d)           [*]  Gilead agrees that neither it nor its Affiliates shall license any [*] from any
Third Party except that:  (i) beginning
on the [*] this covenant shall be inapplicable to any such license for [*] that
has not yet [*] and (ii) this covenant shall be inapplicable after the
occurrence of the later of (x) the [*] and (y) the [*].


 


6.8           [*].


 


(a)           Right of First Negotiation.


 


(i)            When and if the JT compound known as [*] JT
shall so notify Gilead in writing. The notice shall include the information
described in Section 6.8(b).


 


(ii)           Gilead shall have [*] after receipt of the
notice described in Section 6.8(b) (or, if later, [*] after receipt of any
materials and information properly requested


 


27





















 


by Gilead pursuant to Section 6.8(b)), to notify JT in writing that
Gilead wishes to enter into exclusive negotiations with JT to acquire a license
to develop and commercialize [*].


 


(iii)         Upon delivery to JT of the notice described
in Section 6.8(a)(ii), JT shall negotiate exclusively with Gilead in good
faith, for not less than [*], the terms and conditions of such a license.  If in the course of such negotiation Gilead
offers, in writing, terms and conditions as adjusted pursuant to Section 6.8(b)
for a license that are in the [*] not [*] for JT than those contained in this
Agreement for the Compound (other than this Section 6.8), then JT shall agree
to such terms and conditions, and the Parties shall enter into a license
agreement with modifications appropriate for the circumstances.  For clarity, potential [*] under Section
6.8(c) will not be considered when determining whether the proposed terms for a
license to [*] are in the [*] for JT than those contained in this Agreement for
the Compound.


 


(iv)          Unless otherwise agreed by the Parties in
writing prior to the expiration of the [*] period described in Section
6.8(a)(iii), JT or its Affiliate shall after the expiration of such [*] period
be free to enter into an agreement with any Third Party for the development or
commercialization of [*].


 


(b)           Information and Material to be
Provided to Gilead.


 


(i)            No later than [*] of each year, until Gilead
acquires a license to [*] or its rights expire under this Section 6.8, JT shall
provide to Gilead: (A) a summary of [*] and other matters as JT can reasonably
provide on a non-confidential basis relating to [*];  (B) should Gilead so request in writing,
sufficient quantities of materials comprising [*] to allow Gilead to determine
its interest in [*], which material shall be provided under a material transfer
agreement then in effect between the Parties, and on similar terms as those
contained in the Material Transfer Agreement dated October 6, 2004; and (C) any
other information, ancillary to the information already provided (including Confidential
Information), which is reasonably requested in writing by Gilead, to the extent
such information is available to JT or its Affiliates or licensees or can be
made readily available to any of them without substantial additional cost.


 


(ii)           The notice provided by JT pursuant to Section
6.8(a)(i) and Section 6.8(b)(i) shall include the information described in
Section 6.8(b)(i)(A) to the extent it has not been previously provided to
Gilead.  Following receipt of such
notice, Gilead may request, and JT shall provide, the material and information
described in Section 6.8(b)(i)(B)-(C) on the terms described therein whether or
not Gilead has previously requested and received such material and information.


 


(c)           [*].  If
Gilead and JT elect to enter into an agreement for the Development and
Commercialization of [*], and if, at any time prior to termination of any such
agreement, Gilead discontinues Development and/or seeking Regulatory Approval
of a Compound or Product pursuant to this Agreement and a termination of this
Agreement has become effective, [*] of the license fee and milestone payments
paid by Gilead to JT with respect to the Compound or Product shall be [*] the
corresponding license fee and milestone payments remaining payable pursuant to
the agreement for [*] at the time of such termination.  No such [*] shall be available while Gilead
pursues Development and/or Commercialization of [*] until the termination of
this


 


28





















 


Agreement has become effective. 
In addition, the Net Sales of Products hereunder and of [*] under the
agreement therefor shall be [*] for purposes of application of the royalty
rates under Section 8.3 and the comparable provision in the agreement for [*].  So long as both this Agreement and the
agreement for [*] remain in effect, [*], the diligence obligations of Gilead
under Sections 3.1(a) and 5.1(a) of this Agreement and the comparable diligence
obligations contained in the agreement for [*] shall each be deemed satisfied
if the diligence obligations in either or both of said agreements has been
satisfied.


 


6.9          No Implied Licenses. 
Except as expressly set forth in this Agreement, neither Party grants
any license under its intellectual property rights (including without
limitation Patents) to the other Party.


 


ARTICLE
7



MANUFACTURE AND SUPPLY


 


7.1          Supply. 
After the Effective Date, Gilead shall be responsible for the
manufacture of all additional quantities of Compound and finished materials necessary for the Development and Commercialization
of Products in Gilead Territory.  Further, to the extent requested by JT,
Gilead shall supply JT and its Affiliates and Sublicensees fully for their
respective material requirements for such activities in Japan.  If Gilead elects to Develop and Commercialize
a new formulation of Product for Gilead Territory,
JT shall have the right to be supplied for such formulation for its activities
in Japan.  The supply needs of JT (and
its Affiliates and licensees), Gilead and other purchasers shall be treated
equally by Gilead (including in terms of quality and delivery times and in
circumstances involving shortages of Product). 
Gilead shall use its Diligent Efforts to supply such amounts of Product
pursuant to the terms set forth in a Supply Agreement to be separately made and
entered into between the Parties
including standard terms and conditions similar to those agreed upon in the
Viread Supply Agreement.  For clarity, JT
reserves the right to manufacture and have manufactured, in the Gilead
Territory, all quantity of bulk and finished materials necessary for the
commercialization of Product in Japan.  JT will discuss its plans with respect to the
manufacture of Product in advance with Gilead, and will in good faith work to
minimize any negative impact of such manufacturing on Gilead’s planning and
reservation of manufacturing capacity for supply to JT.


 


7.2          Price.  JT’s
ex-works
purchase price for a Product
shipped pursuant to this Section 7.2 shall be equal to Gilead’s Manufacturing
Cost plus a [*] percent [*] markup thereon. In the event that the Manufacturing
Cost cannot be calculated in advance of an order, Manufacturing Cost of the
previous year shall be used.  In February
of the following year a true-up calculation shall be performed to determine the
Manufacturing Cost.  This true-up
calculation shall base the Manufacturing Cost on the December 31 exchange rates
of the previous year.  Any overpayment or
underpayment by JT will be balanced in March of the respective year.


 


29





















 


ARTICLE
8


 


COMPENSATION


 


8.1          License Fee. 
Within ten (10) business days after the Effective Date, Gilead shall pay
to JT a license fee of fifteen million dollars ($15,000,000) in cash by wire
transfer of immediately available funds into an account designated by JT.  Such license fee shall be [*] hereunder.  For clarification, the license fee hereunder
shall be paid to JT from Gilead and/or its Affiliates from the United States
and/or up to two (2) other jurisdictions for which no withholding tax is
applicable.


 


8.2          Milestone Payments.


 


(a)           HIV. 
Gilead shall make the following milestone payments to JT based on
achievement of the following regulatory and Commercialization milestone events
with respect to HIV for Products in the Gilead Territory as set forth in this
Section 8.2.  Gilead shall notify JT
promptly in writing after first achievement of each of the milestone events
listed below, and Gilead shall pay to JT the amounts set forth below.  Such report and payment may occur together,
at the same time, within [*] days of Gilead’s achievement of the relevant
milestone event for a Product.  Each
milestone payment by Gilead to JT hereunder shall be payable only once,
regardless of the number of times achieved with one Product or multiple
Products for use with respect to HIV. 
Each such payment shall be [*] under this Agreement.  For
clarification, the milestone payments hereunder shall be paid to JT from Gilead
and/or its Affiliates from the United States and/or up to two (2) other jurisdictions
for which no withholding tax is applicable.


 


	
  Milestone
  Event for a Product containing Compound

  	
   

  	
  Payment

  Amount

  	
   

  
	
  1.

  	
  First [*] (the “First Event”)

  	
   

  	
  $

  	
  [*]

  	
   million

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  First [*] (the “Second Event”)

  	
   

  	
  $

  	
  [*]

  	
   million

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Filing of [*] (the “Third Event”)

  	
   

  	
  $

  	
  [*]

  	
   million

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Regulatory Approval of [*] (the “Fourth
  Event”)

  	
   

  	
  $

  	
  [*]

  	
   million

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Filing of [*] (the “Fifth Event”)

  	
   

  	
  $

  	
  [*]

  	
   million

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Regulatory Approval of [*] (the “Sixth
  Event”)

  	
   

  	
  $

  	
  [*]

  	
   million

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  First achievement of Net Sales in the
  Gilead Territory equal to $[*] million in a calendar year

  	
   

  	
  $

  	
  [*]

  	
   million

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Maximum
  Total:

  	
   

  	
  $

  	
  90

  	
   million

  
								



 


30





















 


Notwithstanding anything
else herein:


 


(1)             if
the Second Event has occurred, the First Event shall be deemed to have occurred
or been completed and the corresponding event payment shall become due;


 


(2)             if
the Third Event or the Fifth Event has occurred, the Second Event shall be
deemed to have occurred or been completed and the corresponding event payment
shall become due;


 


(3)             if
the Fourth Event has occurred, the Third Event shall be deemed to have occurred
or been completed and the corresponding event payment shall become due; and


 


(4)             if
the Sixth Event has occurred, the Fifth Event shall be deemed to have occurred
or been completed and the corresponding event payment shall become due.


 


(b)           Other
Indications.  If Gilead desires to
pursue Development and Commercialization of a Product or Compound for any Other
Indication, the Parties will agree on a schedule of payments for achievement of
regulatory and Commercialization milestone events with respect thereto for
Products in the Gilead Territory.  If the
Parties cannot reach an agreement, they may submit the matter for resolution in
accordance with the executive negotiation
and arbitration procedures set forth in Section 15.1.


 


8.3          Royalty
Payments.


 


(a)           Rates.  Gilead shall pay JT a royalty based on Net
Sales of Products sold by Gilead and its Affiliates and Sublicensees in such
country in a given calendar year during the Payment Term for each Product
according to the following rates:


 


(i)            [*]
percent ([*]%) of the portion of aggregate Net Sales of Products in the Gilead
Territory that is less than or equal to [*] million Dollars ($[*]) in any
calendar year;


 


(ii)           [*]
([*]%) of the portion of aggregate Net Sales of Products in the Gilead
Territory that exceeds [*] million Dollars ($[*]) and that is less than or
equal to [*] million Dollars ($[*]) in any calendar year;
and


 


(iii)         [*]
percent ([*]%) of the portion of aggregate Net Sales of Products in the Gilead
Territory that exceeds [*] million Dollars ($[*]) in any calendar year.


 


(b)           Sales by Sublicensees.  Upon request by Gilead, the Parties will in
good faith discuss whether an adjustment to the royalty applicable on Net Sales
made by Sublicensees outside the Major Markets is appropriate, and if the
Parties agree in writing to any adjustment, the royalty rate pursuant to
Section 8.3(a) for such sales will reflect such adjustment.


 


(c)           Example Calculation.  For
example, if aggregate Net Sales of a Product for the Licensed Indication
throughout the Gilead Territory were equal to [*] million Dollars [*] in a
calendar year, and no offsets or reductions described in Sections 8.3(f), (g)
or (h) are


 


31





















 


applicable, then the royalty payable to JT
hereunder for such total Net Sales would be equal to [*] plus [*] plus [*], for
a total royalty of [*] Dollars [*].


 


(d)           Payment
Term.  “Payment Term” shall mean, the
period of time beginning upon the date of Commercial Launch of a Product in the
Gilead Territory, and ending upon the later of, on a product-by-product basis:
(i) the [*] year anniversary of
such Commercial Launch; or (ii) expiration of the last-to-expire Valid Claim of
a JT Patent in the Gilead Territory which Valid Claim would be infringed by the
manufacture, use or sale of a Product.


 


(e)           Payment
for Non-Patent Benefits. This Section 8.3 is intended to provide for
payments equal to the percentages of Net Sales set forth above for a minimum of
[*] years from Commercial Launch
of each Product in the Gilead Territory, or a longer period if JT Patents
covering Products in the Gilead Territory are in effect after such time
period.  In establishing this payment
structure, the Parties recognize, and Gilead acknowledges, the substantial
value of the various actions and investments undertaken by JT prior to the
Effective Date.  Such value is
significant and in addition to the value of JT’s grant to Gilead of a patent
license pursuant to Section 6.1, as it enables the rapid and effective market
introduction of the Products for the Licensed Indication in the Gilead
Territory.  The Parties agree that the
royalty payments calculated as a percentage of Net Sales (plus the license fee
and the cost reimbursements provided for elsewhere herein) provide fair
compensation to JT for these additional benefits.


 


(f)            Generic Products.  If a Third Party is selling in any country units
of a Generic Product that, in any calendar year, are greater than [*] percent
[*] of the sales by Gilead, its Affiliates and Sublicensees of units of such
Product (where the API for such Product is chemically identical to the API for
the Generic Product) in such country in such year, then the Parties will in
good faith discuss a reduction of royalties due under Section 8.3(a) for such
country.  If the Parties cannot agree on
the amount of such reduction, the royalty due by Gilead pursuant to this
Section 8.3 for such country shall be reduced by [*] percent ([*]%) of that
which would otherwise be due under Section 8.3(a) for such year.


 


(g)           Payment
of Patent Costs.  In the event that
Gilead reasonably elects to prosecute and maintains a patent application within
the JT Patents pursuant to Section 9.3(b) in any country, then Gilead shall
provide an accounting of such costs to JT and shall offset [*] percent ([*]%) of the reasonable costs thereof
against amounts due to JT for such country pursuant to Section 8.3.


 


(h)           Third
Party Royalties.  Promptly upon
learning of the need for any payments needed to secure Offsetting Patents in
any country, Gilead shall give written notice to JT specifying the amount of
such payments and describing the Offsetting Patents.  The royalty
payments required to be paid on any given date in such country pursuant to
Section 8.3 shall be subject to an offsetting reduction on such date by Gilead
in an amount equal to [*] Percent ([*]%) of the amount of Third Party Royalties
that are paid to secure Offsetting Patents in such country.


 


(i)            Limitation.  Notwithstanding
the foregoing, no offsets or reductions made by Gilead in any country pursuant
to Section 8.3(f), (g) and (h) shall in the aggregate exceed an


 


32





















 


amount equal to [*] Percent ([*]%) of the
amount otherwise due pursuant to Section 8.3 in such country.  Any amount that has not been offset because
of this Section 8.3(i) shall be eligible for offset against the next succeeding
royalty payment or payments due for such Product in such country.  If such deferred offset is again limited by
Section 8.3(i), the deferred amount shall be subject to offset against future
royalty payments for such Product successively until a total of [*] Percent
([*]%) of all Third Party Royalties made in respect of such Product in such
country have been offset against royalty payments paid by Gilead for such
Product in such country.


 


8.4          Payment,
Rules and Procedures.


 


(a)           Quarterly
Reports. Royalties,
payments hereunder and written reports showing the calculation and the basis
for the payments shall be made by Gilead within [*] days after the end of each
Calendar Quarter in which such sales of Product occur in Gilead Territory.


 


(b)           Other
Reports. Within [*]
days following the end of each Calendar Quarter in which sales of Product occur
in Gilead Territory, in the case
of sales by Gilead or its
Affiliates, or within [*] days after Gilead
receives the account of Net Sales from its Sublicensee in the case of sales by Gilead’s Sublicensees, Gilead shall submit to JT an estimate of
the Net Sales in each country of the Gilead
Territory that occurred in the preceding Calendar Quarter, together with any
corrections to estimates submitted in prior Calendar Quarter of the same year.


 


(c)           United
States Dollars.  Royalty payments by
Gilead to JT hereunder shall be made in United States Dollars, based on
calculations of such Net Sales converted and stated in United States
Dollars.  For clarification, the royalty
payment hereunder shall be paid to JT from Gilead and/or its Affiliates from
the United States and/or up to two (2) other jurisdictions for which no
withholding tax is applicable.


 


(d)           Exchange
Rate.  Gilead shall use an exchange
rate equal to the spot rate as published in the Eastern Edition of the Wall
Street Journal as of the close of business on the business day that is two (2)
business days before the last business day of the prior month for each month in
the applicable Calendar Quarter.  For
example, the rate used to calculate Net Sales in the month of April would be
the spot rate from the applicable business day in March; if the last business
day in March were Wednesday the 31st, the rate would be based on the
applicable spot rate for Monday the 29th, and if the last business
day in March were Monday the 31st, the rate would be based on the
applicable spot rate for Thursday the 27th.  If Gilead changes its currency system, Gilead
shall provide JT with prompt written notice and the Parties shall negotiate in
good faith a new methodology which is acceptable under GAAP.


 


8.5          Additional
Information.  Gilead shall provide to
JT any other information reasonably requested by JT to determine whether Gilead
has made all payments due to JT pursuant to this Article 8.


 


8.6          Taxes
and Payments.  Each Party shall be responsible for any
and all taxes levied on amounts it receives from the other under this Agreement.


 


8.7          Withholding Taxes.  If
Gilead is required by law, rule or regulation to withhold taxes from payments
due JT hereunder, Gilead shall (i) deduct those taxes from the amount
remittable to JT hereunder, (ii) promptly pay the taxes to the proper taxing
authority, and (iii)


 


33





















 


send evidence of the obligation together with proof of payment to JT
within thirty (30) days following that payment to enable JT to claim all
foreign tax credits available to it under law. 
The Parties
understand that under the laws and regulations currently in effect, no
withholding taxes apply to any payments made under this Agreement.  If changes in the applicable laws and
regulations result in withholding tax obligations on payments hereunder, the Parties will engage promptly in good
faith discussions in order to adopt changes in order to minimize such
obligations.


 


8.8          Payments
to or Reports by Affiliates.  Any
payment required under any provision of this Agreement to be made to either
Party, or any report required to be made by any Party, shall be made to or by
an Affiliate of that Party if designated in writing by that Party and agreed to by the other as the
appropriate recipient or reporting entity.


 


8.9          Late
Payments.  Any amounts not paid by
Gilead when due under this Agreement shall be subject to interest from and
including the date payment is due, through and including the date upon which
Gilead has made a wire transfer of immediately available funds into an account
designated by JT, at an annual rate equal to the sum of [*] percent ([*]%) plus the prime rate of interest
quoted in (i) the Money Rates section of the New York edition of the Wall
Street Journal calculated daily on the basis of a 365-day year, or (ii) if such
edition is unavailable, a similar reputable data source, or (iii) if lower, the
highest rate permitted under applicable law; provided that if a higher interest
rate applies to payments JT must make to Third Party licensors that are based
upon or derived from any late payment by Gilead under this Article 8, then such
higher rate shall apply to the portion of such late payment attributable to
amounts owed to such Third Party.


 


8.10        Accounting.  Each Party shall determine any costs and
expenses that may be reimbursed to a Party or reported by a Party under this
Agreement using its standard accounting procedures, consistently applied, to
the maximum extent practical as if such Product were a solely owned product of
the determining Party, except as specifically provided in this Agreement.  The Parties also recognize that such
procedures may change from time to time and that any such changes may affect
the calculation of such costs and expenses. 
The Parties agree that, where such changes are economically material to
either Party, adjustments shall be made to compensate the affected Party in
order to preserve the same economics as reflected under this Agreement.


 


ARTICLE 9


 


INTELLECTUAL PROPERTY


 


9.1          Ownership
and Rights


 


(a)           Ownership
of Inventions.  Each Party shall own
any inventions made solely by its employees, agents or independent contractors
in conducting their activities hereunder (each a “Sole
Invention”).  Inventions
hereunder made jointly by employees, agents or independent contractors of each
Party in the course of performing under this Agreement shall be owned jointly
by the Parties in accordance with
joint ownership interests of co-inventors as


 


34





















 


determined under United States patent laws (“Joint
Inventions”).  Inventorship
shall be determined in accordance with United States patent laws.


 


(b)           Cooperation.  Each Party shall promptly execute all
papers and instruments, and/or require its employees or contractors to execute
such papers and instruments, as applicable, so as to effectuate the ownership
of JT Technology and Gilead Technology.


 


(c)           Updates
to Schedules


 


(i)            Schedule 1.9B shall be updated from time to
time by JT to list Patents covering the structure of, or manufacture or use of,
JTK-303.


 


(ii)           JT
agrees to amend or supplement Schedule 1.48 from time to time to include any JT
Patent existing after the Effective Date and prior to expiration or termination
of this Agreement under Article 14.


 


9.2          IP
Subcommittee.


 


(a)           Establishment
and Scope.  Promptly after the
Effective Date, the Parties shall establish, as a subcommittee of the Joint
Committee, a joint IP subcommittee (the “IP Subcommittee”)
to function, until the Parties agree to disband such committee, to facilitate
and discuss (i) the filing, Prosecution and maintenance of JT Patents and
Gilead Patents under Section 9.3; (ii) the filing, prosecution, registration and
maintenance of Trademarks under Section 9.7; and (iii) the need for or
usefulness of any Third Party license. 
The IP Subcommittee shall operate under the procedures established in
this Section 9.2.


 


(b)           Composition.
 The IP Subcommittee shall be composed
of three (3) named representatives of Gilead and three (3) named
representatives of JT. Each Party shall appoint its respective representatives
to the IP Subcommittee from time to time, and may substitute one or more of its
representatives, in its sole discretion, effective upon notice to the other
Party of such change.  The members of the
IP Subcommittee shall have appropriate technical or legal credentials,
experience and knowledge, and ongoing familiarity with the Development and
Commercialization of Compound(s) and Products, and related Patents and other IP
issues arising under this Agreement. Members of the IP Subcommittee may
delegate from time-to-time certain matters arising within the IP Subcommittee
as they deem appropriate. Additional representatives or consultants may from
time to time, by mutual consent of the Parties, be invited to attend IP
Subcommittee meetings, subject to such representative’s or consultant’s written
agreement to comply with the confidentiality and non-use obligations equivalent
to those set forth in Article 13. 
Gilead shall select one (1) of its representatives as the initial
chairperson of the IP Subcommittee.  On
each anniversary of the Effective Date, the Parties shall rotate designation of
the chairperson.


 


(c)           Governance. 
The IP Committee may
resolve any issue before it based on a consensus of its members.  In the event that the IP Subcommittee cannot
or does not, after good faith efforts, reach a consensus on an issue, a
majority of either Party’s representatives in the IP Subcommittee may refer
such issue to make it an item on the agenda of the Joint Committee for
discussion under the procedures set forth in Section 3.4.   With respect to the need for any Third


 


35





















 


Party license described in Section 9.2(a)(iii), the Party [*] shall
make the final determination of whether to obtain such license.


 


(d)           Meetings.  The IP Subcommittee shall meet in accordance
with a schedule established by the Parties, but no less frequently than once
per Calendar Quarter, in a location mutually agreed upon by the Parties, or by
means of teleconference, videoconference or other similar communications
equipment. Additional meetings of the IP Subcommittee may also be held with the
consent of each Party, or as required under this Agreement, and neither Party
will unreasonably withhold or delay its consent to hold such an additional
meeting. Each Party shall bear its own expenses related to the attendance of
such meetings by its representatives.  No
IP Subcommittee meeting may be conducted unless at least two
(2) representatives of each Party are participating. The IP Subcommittee
may choose to reduce the frequency of their meetings or disband, as appropriate
based on the reduced need for oversight of JT Patents and/or Gilead Patents
under Section 9.3, or the reduced need for oversight of Trademark issues under
Section 9.7.


 


9.3          Prosecution
of Patents.


 


(a)           Prosecution.  As used herein, “Prosecution” shall mean any procedure or practice before an
administrative agency such as the United States Patent and Trademark Office, or
an equivalent agency, including but not limited to interferences,
reexaminations, reissues, oppositions, and the like.


 


(b)           JT
Patents.


 


(i)            Except
as otherwise set forth in this Section 9.3, JT shall be responsible for the
filing, Prosecution and maintenance of JT Patents on a worldwide basis at its
sole expense.  If JT determines to
abandon or not file or maintain any (i) Patent within the JT Patents in any
country in the Gilead Territory; or (ii) any claim or subject matter directed
to a composition of matter, manufacture or use of a Compound or Product in the
Licensed Indication in any country in the Gilead Territory, then JT shall
promptly notify the representatives of the IP Subcommittee and shall provide
Gilead with thirty (30) days prior written notice of such determination (or
such other period of time reasonably necessary to allow Gilead to assume such
responsibilities).  Gilead shall then
have the opportunity to file, Prosecute and/or maintain such Patent, claims or
subject matter in such country in Gilead’s Name and at Gilead’s sole expense,
and if Gilead is Commercializing Product in such country, [*] of any such costs
incurred by Gilead shall be creditable against royalties paid to JT under
Section 8.3 in that country.


 


(ii)           Interference,
Opposition, Reexamination and Reissue.  If
JT becomes aware of any request for, or filing or declaration of, any
interference, opposition, or reexamination relating to JT Patents in the Gilead
Territory for which JT is responsible for Prosecution, JT shall inform Gilead
within thirty (30) days of learning of such event. The Parties shall
reasonably cooperate with respect to such interference, opposition, or
reexamination. Gilead shall have the right to review and consult with JT
regarding any submission to be made in connection with such proceeding. JT
shall give Gilead timely notice of any proposed settlement of an interference
relating to an JT Patent, and shall not enter into such settlement without
Gilead’s prior written consent (such consent not to be unreasonably withheld or
delayed).


 


36





















 


(iii)         English
Translation of JT Patents.  JT has
provided Gilead with English language translations of the JT Patents listed on
Schedule 1.48, and will provide Gilead with English language translations of
any other JT Patents added to Schedule 1.48 after the Execution Date as soon as
practicable after such addition.


 


(c)           Gilead
Patents.  Except as otherwise set
forth in this Section 9.3, Gilead shall be responsible for the filing,
Prosecution and maintenance of the Gilead Patents at its sole expense. If
Gilead determines to abandon or not file or maintain any (i) Patent within the
Gilead Patents in any country; or (ii) any claim or subject matter directed to
a composition of matter, manufacture or use of a Compound or Product in the
Licensed Indication in any country, then Gilead shall promptly notify the
representatives of the IP Subcommittee and shall provide JT with thirty (30)
days prior written notice of such determination (or such other period of time
reasonably necessary to allow JT to assume such responsibilities).  JT shall then have the opportunity to file,
Prosecute and/or maintain such Patent, claims or subject matter in any such
country in JT’s Name and at JT’s sole expense.


 


(d)           Joint
Patents.  Except
as otherwise set forth in this Section 9.3, with respect to Joint Inventions,
the IP Subcommittee shall determine which Party shall file, Prosecute and/or
maintain Patents covering such Joint Inventions (“Joint
Patents”).  Except as provided
in the final sentence of this Section 9.3(d), if either Party Prosecutes a
Joint Patent, such Party shall solely bear its own internal costs thereof, and
the external costs for such Prosecution (e.g., outside counsel, filing fees,
etc.) shall be borne equally by the Parties. 
Except to the extent either Party is restricted by the licenses granted
to the other Party and covenants contained herein, and to the extent permitted
by law, each Party shall be entitled to practice, and to grant to Third Parties
or its Affiliates the right to practice, inventions claimed in a Joint Patent
without restriction or an obligation to account to the other Party.  Either Party may disclaim its interest in any
particular Joint Patent, in which case (i) the disclaiming Party shall assign
its ownership interest in such Joint Patent to the other Party for no
additional consideration, (ii) the Party that is then the sole owner shall be
solely responsible for all future costs of such Patent, and (iii) the
disclaiming Party shall hold no further rights thereunder and such Patent shall
thereafter not be a Joint Patent.


 


(e)           Cooperation.


 


(i)            If a Party determines that
(A) regulatory exclusivity of a Patent is required in a country in such Party’s
territory and (B) the failure to obtain such regulatory exclusivity will have a
material adverse impact on such Party’s activities with respect to the Compound
or Product in such country, then it shall notify the other Party in writing of
such determinations and propose a commercially reasonable means to obtain such
regulatory exclusivity.  The Parties shall cooperate with each other
in good faith to take whatever actions are reasonably appropriate in a timely
manner to address the material adverse impact. 
A Party shall not be required to effect any transfer or assignment of
its Patent rights for the purpose of obtaining regulatory exclusivity in any
country in the other Party’s territory without such Party’s express written
consent, which shall not be unreasonably withheld.


 


37





















 


(ii)           Neither
Party may take any action under this Section 9.3 that would otherwise interfere
with or prevent the other Party from fulfilling its diligence obligations under
this Agreement.


 


(iii)          If either Party becomes aware of any
Patents, information or proceeding that relate to any JT Patent, Gilead Patent
or Joint Patent that may adversely impact the validity, title or enforceability
of such JT Patent, Gilead Patent or Joint Patent, such Party shall promptly
notify the other Party of such patent, information or proceeding, provided that
such notification would not contravene any existing, relevant obligations of
confidentiality to which such Party may be subject.


 


(f)            Diligence.  The Parties
shall use Diligent Efforts to pursue claims and subject matter in Patents
directed to JTK-303 in each Major Market; and (b) in such other countries in
the Gilead Territory where Gilead reasonably requests.  In the United States the Parties shall use Diligent Efforts to [*]  In all Major Markets the Parties shall use Diligent Efforts to pursue claims in
such Patents so that such claims would issue in a timely manner.


 


(g)           Third
Party License Rights.  To the extent
any rights granted under this Article 9 relate to Patents subject to a license
to either Party of Third Party technology, such rights shall be subject to the
terms and conditions of such licenses, and the provisions of this Article 9
shall apply to such Patents only to the extent consistent with such licenses.


 


9.4          Infringement
of Patents by Third Parties.


 


(a)           Notification.


 


(i)            Notice.   
If either Party learns of any alleged or threatened infringement of the JT
Patents or Gilead Patents, or any misappropriation or misuse of Know-How, of which the other Party is a
sole owner, co-owner or licensee, such Party shall promptly notify, in writing,
the other Party of such infringement, misappropriation or misuse.  Any infringement reported hereunder shall be
an “Infringement”.


 


(ii)           Certifications.  Each Party shall inform the other Party
of any certification regarding any JT Patent or Gilead Patent that it has
received pursuant to either 21 U.S.C. §§ 355(b)(2)(A)(iv) or
(j)(2)(A)(vii)(IV) or its successor provisions, or Canada’s Patented
Medicines (Notice of Compliance) Regulations Article 5, or any similar
provisions in a country other than the United States and Canada, and shall
provide the other Party with a copy of such certification within [*] days
of receipt by such Party.  JT’s and
Gilead’s rights with respect to the initiation and prosecution of any legal
action as a result of such certification or any recovery obtained as a result
of such legal action shall be as defined in this Section 9.4.


 


(b)           Infringement
of JT Patents.


 


(i)            First
Right.  JT shall have the first
right, but not the obligation, to prosecute Infringement of the JT Patents by
activities conducted by Third Parties. 
Such prosecution shall be at JT’s own expense and responsibility;
provided, however, that Gilead may separately represent itself in such
prosecution by counsel of its own choice (at Gilead’s own expense), in which
case Gilead shall cooperate fully with JT.


 


38





















 


(ii)           Back-up
Right for Infringement in the Gilead Territory.  If within [*] days after
notification pursuant to Section 9.4(a)(i), or
[*] days before the time limit, if any, set forth in the appropriate laws
and regulations for the filing of such actions, whichever comes first, JT does
not prosecute Infringement, then Gilead shall have the right, but not the
obligation, to bring at Gilead’s expense and in its sole control, such
appropriate action in the Gilead Territory. 
Such prosecution shall be at Gilead’s own expense and responsibility;
provided, however, that JT may separately represent itself in such prosecution
by counsel of its own choice (at JT’s own expense), in which case JT shall cooperate fully with Gilead.


 


(c)           Infringement
of Gilead Patents.  Gilead shall have
the first right, but not the obligation, to bring, at its own expense, an
appropriate action against the person or entity Infringing a Gilead
Patent.  If within [*] days after
notification pursuant to Section 9.4(a)(i), or [*]
days before the time limit, if any, set forth in the appropriate laws and
regulations for the filing of such actions, whichever comes first, Gilead does
not bring such action, JT shall have the right, but not the obligation, to
bring at JT’s expense and in its sole control, such appropriate action in the
JT Territory.  The Party not bringing an
action under this Section 9.4(c) shall be entitled to separate representation
in such matter by counsel of its own choice (at its own expense), in which case
such Party shall cooperate fully with the other Party.


 


(d)           Cooperation
and Diligence.


 


(i)            For
any action to terminate any Infringement of JT Patents, or any misappropriation
or misuse of JT Know-How, if either
Party is unable to initiate or prosecute such action solely in its own name,
the other Party shall join such action voluntarily and shall execute all
documents necessary to initiate litigation to prosecute and maintain such
action.  In connection with any such
action, Gilead and JT shall cooperate fully and will provide each other with
any information or assistance that either reasonably requests.  Each Party shall keep the other informed of
developments in any such action or proceeding, including, to the extent
permissible by law, the consultation and approval of any offer related thereto.


 


(ii)           Notwithstanding
the obligations under Sections 9.4(b) and 9.4(c), neither Party may take any
action under this Section 9.4 that would otherwise interfere with or prevent
the other Party from fulfilling its diligence obligations under this Agreement.


 


(e)           Joint
Patents.  With
respect to Third Party Infringement of jointly owned Joint Patents other than
that Infringement described in Sections 9.4(b) and 9.4(c), the Parties shall
confer and take such action in such manner as they shall agree.  If the Parties are unable after a reasonable
period of time to agree on how to proceed, then each Party may exercise its
rights as joint owner of the affected Joint Patent in accordance with Section
9.1.  The Parties shall allocate their
expenses and recoveries in relation to such actions as they shall agree,
provided that unless the Parties otherwise agree in writing, they shall divide
such recoveries as set forth in Section 9.4(f)(iii).


 


(f)            Allocation
of Proceeds.  If either Party
recovers monetary damages from any Third Party in an action brought under
Section 9.4(b), Section 9.4(c) or Section 9.3(e), whether such damages result
from the Infringement of JT Patents or Gilead Patents, such recovery shall be
allocated first to the reimbursement of any expenses incurred by the Parties in


 


39





















 


such litigation
(including, for this purpose, a reasonable allocation of expenses of internal
patent officers). Any remaining amounts after such allocations (“Net Recovery”) shall be split as follows:


 


(i)            The
portion of any Net Recovery that represents recovery for Infringement in the
Gilead Territory relating to Products (“Remaining Competitive
Recovery”) shall be allocated to JT in an amount equal to the total
royalty that would have been payable to JT under Article 8 if Gilead had made
Net Sales equivalent to the sales made by the Third Party underlying the award.
The remaining portion of the Remaining Competitive Recovery shall be allocated to Gilead, except as provided in
subsection (ii).


 


(ii)           The
portion of any Net Recovery that represents recovery for Infringement involving
a product that (A) is or would be competitive with Products in the JT
Territory, or (B) is not or would not be competitive with Products in the
Gilead Territory, shall be allocated to the Parties in accordance with the
proportion of their respective expenses to prosecute the underlying
Infringement action.


 


(iii)         The
portion of any Net Recovery that represents recovery for Infringement in an
action brought pursuant to Section 9.4(e) shall be [*] percent ([*]%) to Gilead and [*] percent ([*]%) to JT, unless Gilead and JT
otherwise agree in writing.


 


9.5          Infringement
of Third Party Rights.


 


(a)           Defense.


 


(i)            Gilead
shall have the right, but not the obligation, to defend against any claim or
initiate any declaratory judgment action relating to a Compound or Product, or
bring any such action necessary to protect its interest in such Compound or
Product, in the Gilead Territory at its own expense, and JT shall have the
right to participate in any such suit, at its own expense.  The Parties shall reasonably cooperate with
respect to the defense of the claim, including if required to conduct such defense,
furnishing a power of attorney.


 


(ii)           If,
within [*] days of receiving the notice provided for in Section 9.4(a), or
[*] days before the time limit, if any, set forth in the appropriate laws
and regulations for the filing of a claim or response in such actions,
whichever comes first, Gilead fails to take such action, or if Gilead informs
JT that it elects not to exercise such first right, JT (or its designee)
thereafter shall have the right to defend against such claim or initiate any
declaratory judgment action relating to a Compound or Product or bring any such
action necessary to protect its interest in such Compound or Product. The
Parties shall reasonably cooperate with respect to the defense of the claim,
including if required to conduct such defense, furnishing a power of attorney,
provided that JT shall have the right to approve in advance (such approval not
to be unreasonably withheld or delayed) Gilead’s strategy in any such action to
the extent that such claim potentially relates to the scope, validity or
enforceability of the JT Patents.


 


(b)           Noncontravention.  Nothing in this Section 9.5 shall be deemed
to relieve either Party of its obligations under Article 11.


 


40





















 


9.6          Settlement.  Each Party shall give the other Party timely
written notice of the proposed settlement of any action under Sections 9.4 or
9.5, and neither Party shall consent to the entry of any judgment or settlement
or otherwise compromise any such action or suit in a way that adversely affects
the other Party’s intellectual property rights or its rights or interests with
respect to a Compound or a Product without such other Party’s prior written
consent (not to be unreasonably withheld).


 


9.7          Selection,
Registration and Use of Product Trademarks.


 


(a)           Trademark.  It is the intent of the Parties that a single trademark (the “Trademark”) be identified and developed for use in
connection with Development and Commercialization of each Product wherever
possible throughout the Gilead Territory and the JT Territory.  The alternatives and preferences to be
presented to the Regulatory Authorities for such Trademark shall be agreed upon
by both Parties in a timely manner.


 


(b)           Registration.


 


(i)            Gilead
will own the Trademark and be responsible for registering Trademark within the Gilead
Territory.  Gilead shall use commercially
reasonable efforts to maintain the Trademark as a valid and effective trademark
registration in such countries, and shall be responsible for all taxes and fees
required in connection therewith.  JT
agrees to provide Gilead with all reasonable assistance for that purpose.


 


(ii)           
JT will be responsible for registering Trademark in the JT Territory, shall use
commercially reasonable efforts to maintain the Trademark as a valid and
effective trademark registration within the JT Territory, and shall be
responsible for all taxes and fees required in connection therewith.  Gilead agrees to provide JT with all
reasonable assistance for that purpose.


 


9.8          Trademark
Infringement.


 


(a)           Gilead.  Gilead shall have the right, but not the
obligation, to defend against any claim or initiate any action relating to the
Trademark (including Third Party claims of infringement against such Trademark)
for any Product in the Gilead Territory at its own expense, and JT shall have the
right to participate in any such suit, at its own expense.


 


(b)           JT.  JT shall have the right, but not the
obligation, to defend against any claim or initiate any action relating to the
Trademark (including Third Party claims of infringement against such Trademark)
for any Product in the JT Territory at its own expense, and Gilead shall have
the right to participate in any such suit, at its own expense.


 


(c)           Damages.  The damages, if any, recovered from any such
action under this Section 9.8 shall first go to reimbursement of each Party’s
respective costs with the remainder of recovery going to the Party who
initiated such action or defense. The Parties shall reasonably cooperate with
respect to the defense of the claim, including if required to conduct such
defense, furnishing a power of attorney.


 


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ARTICLE 10


 


REPRESENTATIONS AND WARRANTIES


 


10.1        Mutual
Representations and Warranties.  Each
Party hereby represents, warrants and covenants (as
applicable) to the other Party as follows:


 


(a)           Corporate
Existence and Power.  It is a company
or corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated, and has full corporate
power and authority and the legal right to own and operate its property and
assets and to carry on its business as it is now being conducted and as
contemplated in this Agreement, including, without limitation, the right to
grant the licenses granted hereunder.


 


(b)           Authority
and Binding Agreement.  As of the Execution Date, (a) it has the corporate
power and authority and the legal right to enter into this Agreement and
perform its obligations hereunder; (b) it has taken all necessary corporate
action on its part required to authorize the execution and delivery of the
Agreement and the performance of its obligations hereunder; and (c) the
Agreement has been duly executed and delivered on behalf of such Party, and
constitutes a legal, valid and binding obligation of such Party that is
enforceable against it in accordance with its terms.


 


(c)           No
Conflict.  It has not entered, and
shall not enter, into any agreement with any Third Party that is in conflict
with the rights granted to the other Party under this Agreement, and has not
taken and shall not take any action that would in any way prevent it from
granting the rights granted to the other Party under this Agreement, or that
would otherwise materially conflict with or adversely affect the rights granted
to the other Party under this Agreement. 
Its performance and execution of this Agreement shall not result in a
material breach of any other contract to which it is a Party.


 


(d)           No
Misappropriation.  As of the
Execution Date, it has not misappropriated, and, after the Execution Date,
shall not misappropriate, the trade secret of any Third Party in the course of
performing its responsibilities under this Agreement.


 


(e)           Rights
in Technology.  As of the Execution Date, each of JT and Gilead
has sufficient right in and to its Know-How
and Patents, free and clear of any conflicting Third Party rights, to grant the
rights set forth in this Agreement. 
During the Term, each Party shall devote Diligent Efforts not to
diminish the rights under Know-How
and Patents owned or Controlled by it that are granted to the other Party
herein, including without limitation by not committing or permitting any acts
or omissions which would cause the material breach of any agreements between
itself and Third Parties that provide access to or rights under intellectual
property rights applicable to the development, manufacture, use or sale of
Products.  Each Party agrees to provide
promptly to the other Party notice of any such alleged breach.  As of the Execution Date, each Party is in compliance in all material respects
with any such agreements with Third Parties. 
Furthermore, where an agreement or arrangement between a Party and a
Third Party governing licenses under intellectual property that, but for a
requirement to obtain such Third Party’s consent to grant a license or
sublicense as provided for in the Agreement,


 


42





















 


would be included in the JT Technology or the Gilead Technology, as
applicable, the relevant Party to such agreement or arrangement shall use
commercially reasonable efforts to obtain such consent, provided that if
obtaining such consent would impose an economic burden on the other Party, then
such intellectual property shall not be deemed to be Controlled by the Party
requesting consent unless the other Party agrees in writing to assume such
economic burden.


 


10.2        JT
Representations.  JT represents and
warrants to Gilead as of the Execution
Date:


 


(a)           JT
Patents.  The JT Patents listed in
Schedule 1.48 are all of the Patents that JT Controls that would be infringed,
but for the licenses granted to Gilead or its Affiliates pursuant to this
Agreement, by the manufacture, Development,
use, sale, offer for sale or importation of Products for treatment and
prophylaxis of HIV infection in the Gilead Territory by Gilead.


 


(b)           No Liens on JT Patents.  To the actual knowledge of the Key JT
Personnel, the JT Patents are free
and clear of any liens and encumbrances except for any minor liens and
encumbrances that arise in the ordinary course of business and that do not
materially detract from JT’s ability to grant licenses thereunder to Gilead as
provided herein.


 


(c)           Third
Party Know-How.  To the actual
knowledge of Key JT Personnel, all Know-How as of the Execution Date required
for the licenses granted to Gilead in this Agreement is Controlled by JT.


 


(d)           Commercialization
of Products.  To the actual knowledge
of the Key JT Personnel there are no Patents (other than the JT Patents) that
would be infringed by the manufacture, development,
use, sale, offer for sale or importation of Compound for treating HIV infection in
the Gilead Territory.


 


(e)           Non-Infringement
of JT Technology by Third Parties. 
To the actual knowledge of the Key JT Personnel there are no activities
by Third Parties that would constitute infringement or misappropriation of the
JT Technology as applied to treating HIV infection within the Gilead Territory.


 


(f)            Non-infringement
of Third Party Rights.  To the actual knowledge of the Key JT
Personnel there are no claims by a Third Party that any Patent or trade secret
right owned or controlled by such Third Party would be infringed or
misappropriated by the manufacture, develop,
use, sale, offer for sale or importation of Compound for use in treating HIV infection in the Gilead Territory.


 


(g)           Knowledge
of Specified Individuals.  No
knowledge shall be imputed to any Key JT Personnel, and no Key JT Personnel
shall be expected or required to undertake any investigation or inquiry of any
nature for the purpose of verifying the accuracy of any representation,
warranty or other statement set forth in this Agreement.


 


10.3        Gilead
Representations and Covenant.  Gilead
represents and warrants to JT as of the Execution
Date that Gilead is not a party to any
agreement which would (i) restrict Gilead from [*] and/or any other [*] for [*]
that Gilead or its Affiliate or Sublicensee owns or Controls


 


43





















 


(or comes to
Control) together with [*], either [*] or in [*], and (ii) as a result of such
restriction, would inhibit the Development or Commercialization of
Product.  Gilead agrees not to enter into
any such agreement during the Term.


 


10.4        Disclaimer.  Gilead understands that Compound and/or Products are the
subjects of ongoing clinical research and development and that JT cannot assure
the safety or usefulness of Compound
and/or Products.  JT makes no
warranty except as set forth in this Article 10 concerning its Patents or Know-How.


 


10.5        No
Other Representations.  The express
representations and warranties stated in this Article 10 are in lieu of all
other representations and warranties, express, implied, or statutory, including
without limitation, warranties of merchantability, fitness for a particular
purpose, non-infringement or non-misappropriation of Third Party intellectual
property rights.


 


ARTICLE 11


 


INDEMNIFICATION


 


11.1        Indemnification
by JT.  JT
hereby agrees to defend, hold harmless and indemnify (collectively “Indemnify”) Gilead and its Affiliates, agents, directors,
officers and employees (the “Gilead Indemnitees”)
from and against any and all liabilities, expenses and/or losses, including
without limitation reasonable legal expenses and attorneys’ fees (collectively “Losses”) in each case resulting from Third Party suits,
claims, actions and demands (each, a “Third Party Claim”)
arising directly or indirectly out of (i) a breach of any of JT’s obligations
under this Agreement, including without limitation JT’s representations and
warranties or covenants pursuant to Article 10; (ii) the research, development,
use, sale, offer for sale or importation of Compound and/or Products by JT or its Affiliates or Third Party
licensees in the JT Territory, or (iii) the research, development, use, sale,
offer for sale or importation of Compound
and/or Products by JT or its Affiliates or Third Party licensees.  JT’s obligation to Indemnify the Gilead
Indemnitees pursuant to this Section 11.1 shall not apply to the extent that
any such Losses (A) arise from the negligence or intentional misconduct of any
Gilead Indemnitee; (B) arise from any breach by Gilead of this Agreement or any
Supply Agreement (including without limitation any such breach that results in
any defect in Compound and/or Products
or failure of Compound and/or Products
to conform to relevant specifications arising out of Gilead’s failure to
manufacture and supply, or to have manufactured and supplied, Compound and/or Product to JT in
compliance with any Supply Agreement); or (C) are Losses for which Gilead is
obligated to Indemnify the JT Indemnitees pursuant to Section 11.2.


 


11.2        Indemnification
by Gilead. Gilead hereby agrees to Indemnify JT and its Affiliates, agents,
directors, officers and employees (the “JT Indemnitees”)
from and against any and all Losses resulting from Third Party Claims arising
directly or indirectly out of (i) a breach of any obligations of Gilead under
this Agreement, including without limitation Gilead’s representations and
warranties or covenants pursuant to Article 10; or (ii) the Development,
manufacture (to the extent of any formulation work performed by Gilead pursuant
to Article 7), storage, distribution, promotion, labeling, handling, use, sale,
offer for sale or importation of Compound
and/or Products by Gilead or its Affiliates in the Gilead Territory (subject
to Section 11.3).  Gilead’s obligation to
Indemnify the JT Indemnitees pursuant to the foregoing
sentence


 


44





















 


shall not apply to the extent that any such Losses (A) arise from the
negligence or intentional misconduct of any JT Indemnitee; (B) arise from any
breach by JT of this Agreement or any Supply Agreement; or (C) are Losses for
which JT is obligated to Indemnify the Gilead Indemnitees pursuant to Section
11.1.  The Supply Agreement, if any, may
provide additional indemnification obligations of Gilead as the supplier of Compound and/or Products, including
without limitation that Gilead shall indemnify JT for any Third Party Claims
arising out of any failure by Gilead to manufacture and supply, or to have
manufactured and supplied, Compound
and/or Products in compliance with such agreements.


 


11.3        Unknown
Source Product Liability.  Unless the Parties agree otherwise,
all other liabilities, losses, damages, costs or expenses (including reasonable
legal fees) relating to
or involving the Compound and/or Products, including the inherent properties and
characteristics of Compound and/or Products, which are not covered by Section 11.1
or 11.2 shall be the responsibility of the Party marketing the Compound and/or Products in the country in which the Compound and/or Products was sold.  Such marketing Party shall indemnify and hold
harmless the other Party, its Affiliates, employees
and agents from and against any and all liabilities, losses, damages, costs or
expenses (including reasonable legal fees) which
the other Party may incur or be required to pay resulting from or arising in
connection therewith.


 


11.4        Procedure.  To be eligible to be Indemnified hereunder,
the indemnified Party shall provide the indemnifying Party with prompt notice
of the claim giving rise to the indemnification obligation pursuant to this
Article 11 and the exclusive ability to defend (with the reasonable cooperation
of the indemnified Party) or settle any such claim; provided, however, that the
indemnifying Party shall not enter into any settlement for damages other than
monetary damages without the indemnified Party’s written consent, such consent
not to be unreasonably withheld. The indemnified Party shall have the right to
participate, at its own expense and with counsel of its choice, in the defense
of any claim or suit that has been assumed by the indemnifying Party.  If the Parties cannot agree as to the
application of Sections 11.1, 11.2 or 11.3 to any particular Third Party Claim,
the Parties may conduct separate defenses of such Third Party Claim.  Each Party reserves the right to claim
indemnity from the other in accordance with Sections 11.1, 11.2 and 11.3 above
upon resolution of the underlying claim, notwithstanding the provisions of this
Section 11.4 requiring the indemnified Party to tender to the indemnifying
Party the exclusive ability to defend such claim or suit.


 


11.5        Insurance.  Each Party shall procure and maintain
insurance, including product liability insurance, adequate to cover its
obligations hereunder and which are consistent with normal business practices
of prudent companies similarly situated at all times during which any Product
is being clinically tested with human subjects or commercially distributed or sold.  It is understood that such insurance shall
not be construed to create a limit of either Party’s liability with respect to
its indemnification obligations under this Article 11.  Each Party shall provide the other with
written evidence of such insurance upon request.  Each Party shall provide the other with
written notice at least thirty (30) days prior to the cancellation, non-renewal
or material change in such insurance or self-insurance which materially
adversely affects the rights of the other Party hereunder.


 


11.6        Limitation
of Liability.  Except to the extent such Party may be
required to Indemnify the other Party under this Article 11, and except


 


45





















 


for a Party’s breach of its obligations under
Section 6.6 or
Article 13, neither Party nor its respective Affiliates and licensees shall be
liable for special, exemplary, consequential or punitive damages, whether in
contract, warranty, tort, strict liability or otherwise.


 


ARTICLE 12


 


RECORDS; AUDITS; PUBLICATIONS


 


12.1        Records;
Audits.  Each Party shall keep or
cause to be kept such records as are required to determine, in a manner
consistent with generally accepted accounting principles in the United States
with respect to JT, and in Japan with respect to Gilead, the sums or credits
due under this Agreement.  If either
Party requires additional information from the other Party in order to comply
with the generally accepted accounting principles in the United States (for JT)
or Japan (for Gilead), then the other Party shall make its reasonable efforts to provide such information
promptly.  At the request (and expense)
of either Party (the “Auditing Party”),
the other Party (the “Audited Party”)
and its Affiliates and licensees and Sublicensees shall permit an independent
certified public accountant appointed by the Auditing Party and reasonably
acceptable to the Audited Party, at reasonable times and in the presence of
representatives of the Audited Party, upon reasonable notice and no more
frequently than [*] per [*], to examine only those records as may be necessary
to determine, with respect to any [*] ending not more than [*] years prior to
such Auditing Party’s request, the correctness or completeness of any report or
payment made under this Agreement.  The
auditor’s reports of any such examination shall be (i) limited to information
relating to the Products, (ii) made available to both Parties, and (iii)
subject to Article 13.  The Auditing
Party shall bear the full cost of the performance of any such audit, unless
such audit discloses an underpayment of more than [*] from the amount actually
due to the Auditing Party.  In such case,
the Audited Party shall [*] of the performance of such audit.


 


12.2        Review
of Publications and Marketing Materials. 
If a Party wishes to publish or present the results of any clinical or
other studies permitted to be performed by such Party under this Agreement,
such Party shall provide the other Party a copy of any proposed abstracts,
manuscripts or presentations (including verbal presentations) that relate to
any Product as soon as practicable prior to
their intended submission for publication or presentation.  The other Party shall have the right to (i)
review and propose modifications to the publication or presentation for patent reasons, trade secret reasons or business
reasons or (ii) to request a reasonable delay (not to exceed sixty (60) days)
in publication or presentation in order to protect patentable information.  If the other Party requests modification to
the publication or presentation, the publishing Party shall edit such
publication or presentation to prevent
disclosure of trade secret or proprietary business information of the other
Party prior to submission of the publication or presentation.  Neither Party shall publish or present
the other Party’s Confidential Information.


 


46





















 


ARTICLE 13


 


CONFIDENTIALITY


 


13.1        Treatment
of Confidential Information.  The
Parties agree that during the Term, and for a period of [*] years after this
Agreement expires or terminates, a Party receiving Confidential Information of
the other Party shall (i) maintain in confidence such Confidential Information
to the same extent such Party maintains its own proprietary industrial information
of similar kind and value (but at a minimum each Party shall use commercially
reasonable efforts to maintain Confidential Information in confidence); (ii)
not disclose such Confidential Information to any Third Party without prior
written consent of the disclosing Party, except for disclosures made in
confidence to any Third Party pursuant to a plan approved by the Joint
Committee or to its licensees or Sublicensees who agree to be bound by
obligations of non-disclosure and non-use at least as stringent as those
contained in this Article 13; and (iii) not use such Confidential Information
for any purpose except those purposes permitted by this Agreement.


 


13.2        Authorized
Disclosure.  Notwithstanding any
other provision of this Agreement, each Party may disclose Confidential
Information of the other Party:


 


(i)            to
the extent and to the persons and entities required by an applicable
governmental law, rule, regulation or order; provided, however, that the Party
required to disclose Confidential Information shall first have given prompt
notice to the other Party hereto to enable it to seek any available exemptions
from or limitations on such disclosure requirement and shall reasonably
cooperate in such efforts by the other Party;


 


(ii)           to
the extent and to the persons and entities required by rules of the National
Association of Securities Dealers, the Japanese Securities Dealers Association
or any other applicable association governing the stock exchange on which a
Party’s stock is listed; and


 


(iii)         as
necessary to file or prosecute patent applications, prosecute or defend
litigation or otherwise establish rights or enforce obligations under this
Agreement, but only to the extent that any such disclosure is necessary.


 


13.3        Publicity;
Terms of Agreement.


 


(a)           Terms
of this Agreement.  The Parties agree
that the material terms of this Agreement, and the fact that discussions
concerning this Agreement are
taking place, are included within the Confidential Information of both Parties,
subject to the special authorized disclosure provisions set forth in Sections
13.2 and 13.3.  JT’s and Gilead’s draft
press releases announcing the execution of this Agreement are attached to this
Agreement as Schedules 13.3A and Schedule 13.3B, respectively.


 


(b)           Press
Releases.  The Parties acknowledge
that each Party may wish or be required to issue subsequent press releases
relating to the Agreement or activities thereunder.


 


47





















 


(c)           Review
of Press Releases.


 


(i)            If either Party wishes to issue press releases or
otherwise make public statements or disclosures concerning matters relating to
this Agreement or activities thereunder, including but not limited to new
clinical or safety data or information, the Party wishing to make such
disclosure shall give reasonable prior advance notice of the proposed text of
such announcement to the other Party for review and comment (except as
otherwise provided herein).


 


(ii)           If either Party wishes to issue press releases or
otherwise make such public statements or disclosures concerning the material
terms of this Agreement, the Party wishing to make such disclosure shall
provide the other Party with reasonable prior advance notice of the proposed
text for such other Party’s review and approval, except to the extent
that doing so is not feasible within the time frame required for compliance
with any laws, regulations or market disclosure requirements, with such approval not to be unreasonably
withheld.


 


(iii)         Either
Party may repeat any information as to the terms of this Agreement that have
already been publicly disclosed by such Party in accordance with Section 13.2
or 13.3 without going through the review procedures set forth in this Section
13.3(c).


 


(iv)          Either
Party may disclose the terms of this Agreement to potential investors, Sublicensees or commercial partners who
are bound in writing by obligations of non-disclosure and non-use of the terms
of this Agreement at least as stringent as those contained in this Article 13.


 


(v)            A
Party may disclose the financial terms of this Agreement to any Third Party or
in any press release only (i) with the prior written approval of the other
Party, or (ii) if required by applicable law, rule or regulation.


 


(d)           Required
Disclosure.


 


(i)            The
Parties acknowledge that Gilead may be obligated to file a copy of this
Agreement with the United States Securities and Exchange Commission (the
“SEC”).  Gilead shall be entitled to make
such a required filing, provided that it (i) requests confidential treatment of
at least the commercial terms and material terms hereof to the extent such
confidential treatment is reasonably available to Gilead, and (ii) solicits
JT’s comments on such request for confidential treatment.  JT recognizes that United States laws and SEC
policies and regulations to which Gilead is subject may require Gilead to
publicly disclose certain terms of this Agreement that neither of the Parties
wishes to disclose, and that Gilead is entitled hereunder to make such required
disclosures.


 


(ii)           The
Parties acknowledge that JT or its Affiliate may be obligated to file a copy of
this Agreement with the Japanese Securities and Exchange Surveillance
Commission.  JT shall be entitled to make
such a required filing, provided that it (i) requests confidential treatment of
the commercial terms and material terms hereof to the extent such confidential
treatment is reasonably available and in a manner consistent with Gilead’s
request for confidential treatment thereof, and (ii) solicits Gilead’s comments
on such request for confidential treatment.


 


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(iii)         The
Parties shall use commercially reasonable efforts to take into account the
other Party’s comments on such request and to conform
their respective filings to each other under this Section 13.3(d) to the extent
reasonably practicable and permitted under applicable law.


 


ARTICLE 14


 


TERM AND TERMINATION


 


14.1        Term.  This Agreement shall be effective and
commence on the Effective Date, except for Articles 13, 15, 16 and 17, which
shall be effective on the Execution Date.  This Agreement, unless terminated earlier
pursuant to Sections 14.2, 14.3 and 14.4, shall be in full force and effect
until the expiration of the last to expire Payment Term (the “Term”).  Upon expiration of the Payment Term in a particular country in
the Gilead Territory, the licenses granted
under Article 6 shall become fully paid-up.


 


14.2        Elective
Termination by Gilead.  Gilead shall
have the right in its sole discretion and for any reason to terminate this
Agreement in its entirety, (i) prior to any Commercial Launch, upon [*] months’
prior written notice to JT, and (ii) after a Commercial Launch has occurred,
upon [*] months prior written notice to JT.


 


14.3        Termination
for Breach.


 


(a)           Notice.  If either Party believes that the other Party
is in material breach of this Agreement, then the Party holding such belief
(the “Non-breaching Party”) may deliver
notice of such breach to the other Party (the “Notified
Party”).  The Notified Party
shall have thirty (30) days to cure such breach to the extent involving
non-payment of amounts due hereunder, and ninety (90) days to either cure such
breach, or, if cure of such breach other than non-payment cannot reasonably be
effected within such ninety (90) day period, to deliver to the Non-breaching
Party a plan reasonably calculated to cure such breach within a timeframe that
is reasonably prompt in light of the circumstances then prevailing.  Following delivery of such a plan, the Notified Party shall devote Diligent
Efforts to carry out the plan and cure the breach.


 


(b)           Termination
for JT’s Breach.  If JT fails to cure
a material breach of this Agreement as provided for in Section 14.3(a) then
Gilead shall have the right in its sole discretion, upon written notice to JT,
to terminate this Agreement in its entirety.


 


(c)           Termination
for Gilead’s Breach.  If Gilead fails
to cure a material breach of this Agreement as provided for in Section 14.3(a)
then:


 


(i)            in
the event of a material breach by Gilead of its obligations set forth in
Sections 3.1(a) or 5.1(a) and in the absence of a reasonable basis therefor, JT
shall have the right to terminate this Agreement on a country-by-country basis
with respect to countries affected by such material breach (and in the event JT
terminates in all Major Markets pursuant to this Section 14.3(c)(i), JT shall
also have the right to terminate this Agreement in the remainder of the Gilead
Territory); and


 


49





















 


(ii)           in the event of a material breach by Gilead of obligations
under this Agreement other than those under Sections 3.1(a) and 5.1(a), JT
shall have the right in its sole discretion, upon written notice to Gilead, to
terminate this Agreement on a country-by-country basis, or in its entirety.


 


(d)           Disputes.  If a Party gives notice of termination under
this Section 14.3 and the other Party disputes whether such termination is
proper under this Section 14.3, then the issue of whether this Agreement may
properly be terminated upon expiration of the notice period (unless such breach
is cured as provided in Section 14.3(a)) shall be resolved in accordance with
Article 15.  If as a result of such
dispute resolution process it is determined that the notice of termination was
proper, then such termination shall be deemed to have been effective ninety
(90) days following the date of the notice of breach.  If as a result of such dispute resolution
process it is determined that the notice of termination was improper, then no
termination shall have occurred and this Agreement shall remain in effect.


 


14.4        Termination
for Bankruptcy/Insolvency.


 


(a)           Termination.  Either Party may terminate this Agreement
if (i) the other Party files in any court or agency pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver
or trustee of Party or of its assets, (ii) the other Party proposes a
written agreement of composition or extension of its debts, (iii) the
other Party is served with an involuntary petition against it, filed in any
insolvency proceeding, and such petition is not dismissed within sixty (60)
days after the filing thereof, (iv) the other Party proposes or is a Party
to any dissolution or liquidation, or (v) the other Party makes an assignment
for the benefit of creditors.


 


(b)           Rights Under US
Bankruptcy Code.  The Parties agree that, in the event either Party
becomes subject to proceedings under the US Bankruptcy Code, the other Party,
as a licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the US Bankruptcy Code.  This Section is not intended to limit any rights
such other Party would have under applicable law including, without limitation,
11 U.S.C. § 365(n).


 


14.5        JT
Rights upon Certain Terminations.  If JT terminates this Agreement
(in whole or in part) pursuant to either Section 14.3 or 14.4 or if Gilead
terminates this Agreement pursuant to Section 14.2, then:


 


(a)           Regulatory
Filings.  To the extent permitted by
law, Gilead, its Affiliates and Sublicensees shall [*] to JT transfer to JT all INDs, Marketing Authorization
Applications, and Regulatory Approvals for Products, and all data necessary to
support such INDs, Marketing Authorization Applications and Regulatory
Approvals, that in each case Gilead, its Affiliate or Sublicensee holds as of
the time of such termination in the Gilead Territory if this Agreement is
terminated in whole, or in a Reverted Country if this Agreement is terminated
in part.  In the event of such a
termination, Gilead, its Affiliates and Sublicensees shall take all actions
reasonably necessary to effect such transfer of such
INDs, Marketing Authorization Applications


 


50





















 


and Regulatory
Approvals for Products in the Gilead Territory if this Agreement is terminated
in whole, or in a Reverted Country if this Agreement is terminated in part.


 


(b)           Licenses.  The licenses granted by JT to Gilead under
Article 6 shall terminate with
respect to Products in the Gilead Territory if this Agreement is terminated in whole, or in Reverted Countries if this Agreement is
terminated in part.  Gilead shall, and
hereby does, grant to JT an exclusive, royalty-free, irrevocable license, with
the right to grant sublicenses through one (1) or more tiers of sublicensees
without Gilead’s consent, under the Gilead Technology and the Trademark, to research, develop, make, use, sell, offer for
sale and import Products worldwide if this Agreement is terminated in whole, or
in a Reverted Country if this Agreement is terminated in part.


 


(c)           No
Further Representations.  Gilead and
its Affiliates and Sublicensees shall discontinue making any representation and withdraw registrations regarding its
status as a licensee of or distributor for JT for Products in the Gilead
Territory if this Agreement is terminated in whole, or in a Reverted Country if
this Agreement is terminated in part, and shall cease conducting any activities
with respect to the marketing, promotion, sale or distribution of Products in
the Gilead Territory if this Agreement is terminated in whole, or in a Reverted
Country if this Agreement is terminated in part.


 


(d)           Transition
Assistance.  Gilead and its
Affiliates shall provide such assistance, at no cost to JT, as may be
reasonably necessary (i) during the period prior to the effective date of such
termination, to effect the transfer of all regulatory activities, regulatory
filings and Regulatory Approvals held by Gilead, its Affiliates and
Sublicensees for Product(s) in the Gilead Territory if this Agreement is
terminated in whole, or in a Reverted Country if this Agreement is terminated
in part; (ii) to transfer and/or transition over a reasonable period of time to
JT for no additional consideration a non-exclusive license to all Gilead
Technology or then-existing commercial arrangements, that is, or are, necessary
for, or actually used during the Term by, JT to commence or continue Commercializing
Products in the Gilead Territory if this Agreement is terminated in whole, or
in a Reverted Country if this Agreement is terminated in part, including
without limitation transferring all rights to the Trademark and any agreements
or arrangements with relevant Third Party vendors.  To the extent that any such contract between
Gilead, its Affiliate or Sublicensee and a Third Party is not assignable to JT,
then Gilead its Affiliate or Sublicensee shall reasonably cooperate with JT to
arrange to continue to obtain such services from such entity for Gilead to
provide to JT.  Gilead, its Affiliates and Sublicensees shall not, during the period
prior to the effective date of such termination, take any action that could
adversely affect or impair the further development and commercialization of
Products.  The Joint Committee shall
coordinate the wind-down of Gilead’s efforts under this Agreement.


 


(e)           Remaining
Inventories.  If this Agreement is
terminated in whole JT shall have the right to purchase from Gilead, its
Affiliates and Sublicensees all of the inventory of
Product held by Gilead, its Affiliates and Sublicensees as of the effective
date of such termination in the Gilead Territory. If this Agreement is
terminated in part JT shall have the right to purchase from Gilead, its
Affiliates and Sublicensees all of the inventory of
Product held by Gilead, its Affiliates and Sublicensees as of the effective
date of such termination for the Reverted Countries.  Any such purchase shall be at the average
price paid by JT therefor during the [*] months prior to such effective
date.  JT shall notify Gilead within [*]
days after the


 


51





















 


effective date of
such a termination whether JT elects to exercise such right.  If JT does not exercise such right, then
Gilead shall have the right to sell in the Gilead Territory any such remaining
inventory over a period of no greater than six (6) months after the effective
date of such termination.


 


(f)            Continued
Supply.  If JT has terminated this
Agreement on a country-by-country basis, after such termination is effective
Gilead shall continue to supply to JT the Products for Commercialization in the
JT Territory and shall supply the Products to JT, its Affiliate or Sublicensee
for the Reverted Countries.  If Gilead
has terminated this Agreement, after such termination is effective Gilead shall
continue to supply to JT the Products for Commercialization in the JT
Territory.  In each case, such supply
shall be subject to the terms and conditions of any Supply Agreement, or, if
the Parties have not yet entered into the Supply Agreement, the Parties shall
negotiate and enter into such agreement pursuant to Article 7.  In such event the licenses granted to Gilead
under Section 6.1 shall survive to the extent necessary to allow Gilead to
perform such supply obligations.


 


14.6        Gilead
Rights upon Certain Terminations.


 


(a)           Continuation
of Certain Rights.  If Gilead
terminates this Agreement pursuant to Section 14.3(b), then all the licenses granted
to it in Article 6 with respect to those Products which Gilead elects to
continue to Develop and Commercialize shall survive such termination until the
Term would otherwise expire under Section 14.1, provided that Gilead continues
to pay all amounts due to JT pursuant to Article 8 for as long as Gilead is
required to pay such amounts hereunder. The Parties’ obligations under Sections
4.2, 4.3 (to the extent necessary for JT to comply with regulatory requirements
or law) 4.4, 4.5, 9.1, 9.3, 9.4, 9.5, 9.6, 9.7, and 9.8 shall continue to the extent applicable. If Gilead terminates this
Agreement pursuant to Section 14.3, the licenses granted to JT under Sections
6.2 and 6.3 shall continue in effect on a non-exclusive basis.  Section 6.8 shall survive any expiration or
termination, in whole or in part, of this Agreement, other than a termination
by JT pursuant to Section 14.3, for a period of [*] years after the effective
date of such termination.


 


(b)           Transition
Assistance. JT shall provide such assistance, at no cost to Gilead, as may
be reasonably necessary to transfer and/or transition over a reasonable period
of time to Gilead all other technology or Know-How,
or then-existing commercial arrangements, that is, or are, necessary or useful
for Gilead to continue Commercializing Products in the Gilead Territory,
including without limitation transferring those agreements or arrangements with
relevant Third Party vendors affecting the Gilead Territory, to the extent
reasonably requested by Gilead.


 


14.7        Survival.  In addition to as otherwise provided in
Article 14, the following provisions shall survive any expiration or
termination of this Agreement for the period of time specified therein, or if
not specified, then they shall survive indefinitely: Articles 1, 11 (solely as
to actions arising during the Term or in the course of a Party’s exercise of
licenses it retains after the Term), 12, 13, 14, and 16 and Sections 6.6; 8.6;
8.7; 8.8; 8.9; 9.1; 9.4; 9.5; 9.6; 9.8; 15.1 and 15.2.  Termination of this Agreement shall not
relieve the Parties of any liability which accrued hereunder prior to the
effective date of such termination nor preclude either Party from pursuing all
rights and remedies it may have hereunder or at law or in equity with respect
to any breach of


 


52





















 


this
Agreement.  The remedies provided in this
Article 14 are not exclusive of any other remedies a Party may have in law or
equity.


 


ARTICLE 15


 


DISPUTE RESOLUTION


 


15.1        Dispute Resolution.  Except as
provided in Section 15.1(c) any dispute, controversy or claim arising out of or
relating to the validity, formation. enforceability,
performance, breach or termination of this Agreement unresolved by the Joint
Committee (a “Dispute”) shall be settled in
accordance with the provisions of this Section 15.1.  If a Party intends to initiate executive
negotiation/mediation or arbitration (as set forth in paragraph (a) or (b)
below) to resolve a Dispute, that Party shall provide written notice to the
other Party informing such other Party of such intention and the issues to be
resolved.  Nothing herein shall prohibit
either Party from initiating arbitration if such Party would be substantially
prejudiced by a failure to act during the time that efforts are being made to
otherwise resolve the Dispute.


 


(a)           By the Parties. 
The Parties shall make an
earnest, good faith attempt to resolve any Dispute through negotiation within
the Joint Committee.  If the Joint
Committee is unable to resolve any Dispute, either Party may, by written notice
to the other Party, refer such dispute for good faith negotiation between the
Chief Executive Officer of Gilead (or his designee with settlement authority)
and the President of the Pharmaceutical Division of JT (or his designee with
settlement authority) either in person at the offices of the Party not initiating the action or as otherwise agreed within
thirty (30) days after the date of notice. 
Immediately after receipt of notice of executive negotiation, the
Parties may agree to give good faith consideration to the appointment of a
mutually-acceptable mediator to assist in the executive negotiation, in which
case the costs of mediation shall be shared equally by the Parties.  Any settlement reached by mediation shall be
resolved in writing, signed by the Parties, and shall be binding on them.


 


(b)           By Arbitration. 
If any Dispute (other
than a Dispute concerning the ownership of Patents or Trademarks) has not been
settled by executive negotiation/mediation after sixty (60) days, then upon the
request of either Party, the Dispute shall be finally resolved by binding
arbitration administered under the Rules of Arbitration of the International
Chamber of Commerce (the “ICC Rules”).


 


(i)            The
arbitration shall be conducted by a panel of three neutral arbitrators (the
“Panel”) appointed in accordance with the ICC Rules.


 


(ii)           The
arbitration proceedings shall take place in San Francisco, California, USA, if
the arbitration is initiated by JT, and in Tokyo,
Japan if the arbitration is initiated by Gilead.  The arbitral proceedings and all pleadings
shall be in the English language. Any written evidence originally in a language
other than English shall be submitted in English translation accompanied by the
original or true copy thereof.


 


(iii)         The
Panel shall have the power to decide all questions of arbitrability.


 


53





















 


(iv)          At
the request of either Party, the Panel will enter an appropriate protective
order to maintain the confidentiality of information produced or exchanged in
the course of the arbitration proceedings.


 


(v)            The
Panel is empowered to award any remedy allowed by law, including monetary
damages, prejudgment interest and punitive damages, and to grant final,
complete, interim or interlocutory relief, including injunctive relief.


 


(vi)          The
Parties may apply to state or federal court of competent jurisdiction within
the County and City of New York, New York for a temporary restraining order,
preliminary injunction, or other interim or conservatory relief, as necessary,
without breach of this arbitration agreement and without any abridgment of the
powers of the arbitrators.  Judgment on
the award rendered by the Panel may be entered in any court having jurisdiction
thereof.  Each Party hereby waives any
defenses it may have to the personal jurisdiction and venue of such courts to
resolve such disputes, including without limitation the defense of forum non conveniens, and each Party agrees not to file any
motion to seek any relief under any forum non conveniens defense.


 


(vii)         Each
Party shall bear its own legal fees arising in connection with the
Dispute.  The Panel may assess costs,
fees and expenses of the ICC and the Panel to the Parties in the manner the
Panel deems appropriate under the circumstances.


 


(c)           Matters
Not Subject to Article 15. Notwithstanding anything else in this Agreement
to the contrary, the following matters shall not be resolved or settled
pursuant to this Article 15:


 


(i)            Disputes
or disagreements concerning matters that relate to either Party’s Patents or
Know-How shall be addressed as provided in Section 2.1(c)(ii).


 


(ii)           Disputes
or disagreement concerning the Gilead Development Plan, any Gilead Updates, or
any JT Development Plan and JT Updates, shall be addressed as provided in
Section 3.2(d).


 


(iii)         Disputes
or disagreement concerning the Gilead Commercialization Plan or any JT
Commercialization Plan shall be addressed as provided in Section 5.2(c).


 


15.2        Governing Law.  Resolution of all disputes
arising out of or related to this Agreement or the performance, enforcement,
breach or termination of this Agreement and any remedies relating thereto,
shall be governed by and construed under the substantive laws of the State of
New York and the federal law of the United States of America, without regard to
its conflicts of law rules that would require the application of the laws of a
foreign state or country:


 


54





















 


ARTICLE 16


 


MISCELLANEOUS


 


16.1        Entire
Agreement; Amendment.  This
Agreement, including the Schedules attached hereto and incorporated herein,
sets forth the complete, final and exclusive agreement and all the covenants,
promises, agreements, warranties, representations, conditions and
understandings between the Parties with respect to the subject matter hereof
and supersedes and terminates all prior agreements and understandings between
the Parties, except for the Confidential Disclosure Agreements and Material Transfer Agreements with respect
to such subject matter.  Except
for the Confidential Disclosure Agreements and Material Transfer Agreements, there are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the Parties other than as are set forth in this
Agreement.  No subsequent alteration,
amendment, change or addition to this Agreement shall be binding upon the
Parties unless reduced to writing and signed by an authorized officer of each
Party.


 


16.2        Force
Majeure.  Both Parties shall be
excused from the performance of their obligations under this Agreement to the
extent that such performance is prevented by a force
majeure event and the nonperforming Party promptly provides notice
of the prevention to the other Party. 
Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party uses
reasonable efforts to remove the condition. 
For purposes of this Agreement, force majeure shall
include conditions beyond the reasonable control of the Parties, including
without limitation, an act of God or terrorism, voluntary or involuntary
compliance with any regulation, law or order of any government, war, civil
commotion, labor strike or lock-out, epidemic, failure or default of public utilities
or common carriers, destruction of production facilities or materials by fire,
earthquake, storm or like catastrophe; provided, however, the payment of
invoices due and owing hereunder shall not be delayed by the payor because of a
force majeure affecting the payor.


 


16.3        Notices.  Any notice required or permitted to be given
under this Agreement shall be in writing, shall specifically refer to this
Agreement and shall be deemed to have been sufficiently given for all purposes
if delivered by (i) first class certified or registered mail, postage prepaid,
(ii) international express delivery service or (iii) personally, or if sent by
facsimile and confirmed by electronic transmission.  Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below.


 


	
  For Gilead

  	
  Gilead Sciences, Inc.

  
	
   

  	
  333 Lakeside Drive,

  
	
   

  	
  Foster City, CA 94404

  
	
   

  	
  Attn: Executive Vice President and Chief Financial Officer

  
	
   

  	
  Fax: 1-650-[*]

  
	
   

  	
  cc: Vice President and General Counsel

  
	
   

  	
  Fax: 1-650-[*]

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  Arnold & Porter LLP

  
	
   

  	
  1600 Tysons Boulevard, Suite 900

  
	
   

  	
  McLean, VA 22102

  
	
   

  	
  Fax: 1-703-[*]

  
	
   

  	
  Attention: Steve Parker, Esq.

  



 


55





















 


	
  For JT:

  	
  Japan Tobacco Inc.

  
	
   

  	
  Pharmaceutical Division

  
	
   

  	
  JT Building, 2-1 Toranomon, 2-chome

  
	
   

  	
  Minato-ku, Tokyo 105-8422, Japan

  
	
   

  	
  Attention: Vice President, Business
  Development

  
	
   

  	
  Facsimile: [*]

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  Holland & Knight LLP

  
	
   

  	
  195 Broadway

  
	
   

  	
  24th Floor

  
	
   

  	
  New York, NY 10007

  
	
   

  	
  Attn: Neal Beaton, Esq.

  
	
   

  	
  Fax: 1-212-[*]

  



 


16.4        Maintenance
of Records.  Each Party shall keep
and maintain all records required by law or regulation with respect to Products
supplied or sold by such Party or its Affiliates or Sublicensees and shall make copies of such records available to
the other Party upon request.


 


16.5        No
Strict Construction.  This Agreement
has been prepared jointly and shall not be strictly construed against either
Party.


 


16.6        Assignment.  Neither Party may assign or transfer this
Agreement or any rights or obligations hereunder without the prior written
consent of the other Party, except that, subject to Section 16.7, a Party may
make such an assignment or transfer without the other Party’s consent to the
assigning Party’s Affiliates or to its successor to all or substantially all of
the business of such Party in the field to which this Agreement relates
(whether by merger, sale of stock, sale of assets or other transaction).  Any permitted successor or assignee of rights
and/or obligations hereunder shall, in a writing to
the other Party, expressly assume performance of such rights and/or
obligations.  The JT Technology and the
Gilead Technology shall exclude any intellectual property held or developed by
a permitted successor of the relevant Party not in connection with
Products.  Any permitted assignment shall
be binding on the successors of the assigning Party.  Any assignment or attempted assignment by
either Party in violation of the terms of this Section 16.6 shall be null and
void.


 


16.7        Change in Control


 


(a)           Gilead Change in Control.  Gilead
may, without JT’s consent, assign this Agreement and its rights and obligations
hereunder in connection with a Change in Control of Gilead, subject to the
conditions contained in this Section 16.7(a).


 


(i)            Upon
a Change in Control, Gilead shall provide written notice to JT [*] days prior
to such assignment, which notice shall specify the identity of the acquirer in
the Change in Control.


 


56





















 


(ii)           If
the entity acquiring Gilead is a company that, at the time of the Change in
Control, is selling any [*] product that is useful for the treatment of [*] or
has any [*], the Parties shall:


 


(1)           at
any time within thirty (30) days after receipt of the notice described in
Section 16.7(a)(i), meet and discuss in good faith whether to amend this
Agreement to [*]or [*] the [*] or [*] of [*] or [*], shared by JT with Gilead
pursuant to Sections [*], and whether and how to otherwise amend or [*] the [*]
of the Parties under Sections [*]; and


 


(2)           after receipt of the notice described in Section 16.7(a)(i),
meet and discuss in good faith any adverse effect on JT by a Gilead Change in
Control.  This discussion shall include
whether and how to amend this Agreement to [*] a right to [*] and [*] future
Gilead (or successor) [*] and [*] as presented by Gilead to the Joint
Committee.


 


(b)           JT
Change in Control.  JT may, without Gilead’s consent,
assign this Agreement and its rights and obligations hereunder in connection
with a Change in Control of JT, subject to the conditions contained in this
Section 16.7(b).


 


(i)            Upon
a Change in Control, JT shall provide written notice to Gilead ten (10) days
prior to such assignment, which notice shall specify the identity of the
acquirer in the Change in Control.


 


(ii)           If
the entity acquiring JT is a company that, at the time of the Change in
Control, is selling any [*] product that is useful for the treatment of [*], or
has any such product in clinical development, the Parties shall at any time
within thirty (30) days after receipt of the notice described in Section
16.7(b)(i) meet and discuss in good faith whether and how to amend this
Agreement to reduce, alter or eliminate the amount or type of [*], or [*]
concerning [*] efforts, shared by Gilead with JT pursuant to [*] and whether
and how to amend or [*] the obligations of the Parties under [*].


 


16.8        No
Blocking Effect.  If the Parties do
not reach a consensus on any issue discussed pursuant to Section 16.7(a)(ii)(1)
or Section 16.7(b)(ii) prior to the applicable Change in Control, the
assignment of this Agreement in conjunction with such Change in Control may
proceed and the Parties (including any successors to a Party) shall continue to
discuss such issues.


 


16.9        Performance
by Affiliates.  Each of JT and Gilead
acknowledge that their obligations under this Agreement may be performed by
their respective Affiliates and Sublicensees. 
Notwithstanding any delegation of obligations under this Agreement by a
Party to an Affiliate or Sublicensee, each Party shall remain primarily liable
and responsible for the performance of all of its obligations under this
Agreement and for causing its Affiliates and Sublicensees to act in a manner
consistent herewith.  Wherever
in this Agreement the Parties delegate responsibility to Affiliates or
Sublicensees or local operating entities, the Parties agree that such entities
shall not make decisions inconsistent with this Agreement, amend the terms of
this Agreement or act contrary to its terms in any way.


 


57





















 


16.10      Further
Actions.  Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.


 


16.11      Compliance
With Laws. 
Each Party covenants to comply in all material respects with all U.S.
and non-U.S. federal, state and local laws, rules and regulations applicable to
the development, manufacture, distribution import and export and sale of
pharmaceutical products, and to the transactions contemplated by this
Agreement.


 


16.12      Severability.  If any one (1) or more of the provisions of
this Agreement is held to be invalid or unenforceable by any court of competent
jurisdiction from which no appeal can be or is taken, the provision shall be
considered severed from this Agreement and shall not serve to invalidate any
remaining provisions hereof.  The Parties
shall make a good faith effort to replace any invalid or unenforceable
provision with a valid and enforceable one such that the objectives
contemplated by the Parties when entering this Agreement may be realized.


 


16.13      Headings.  The headings for each Article and Section in
this Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular Article or Section.


 


16.14      No
Waiver.  Any delay in enforcing a
Party’s rights under this Agreement, or any waiver as to a particular default
or other matter, shall not constitute a waiver of such Party’s rights to the
future enforcement of its rights under this Agreement, except with respect to
an express written and signed waiver relating to a particular matter for a
particular period of time.


 


16.15      Translations.  This Agreement is in the English language
only, which language shall be controlling in all respects, and all versions
hereof in any other language shall be for accommodation only and shall not be
binding upon the Parties.  All
communications and notices to be made or given pursuant to this Agreement, and
any dispute proceeding related to or arising hereunder, shall be in the English
language.  If there is a discrepancy
between any Japanese translation of this Agreement and this Agreement, this Agreement
shall prevail.


 


16.16      Counterparts.  This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one (1) and the same instrument.


 


ARTICLE 17


 


CONDITION PRECEDENT


 


All
obligations, rights, duties and liabilities under this Agreement (except those
contained in this Article and Articles 13, 15 and 16 of this Agreement) are
subject to the following condition precedent (“Condition
Precedent”) being satisfied: 
If required, each Party shall use Diligent Efforts to satisfy any
applicable requirements under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (“HSR”), and the regulations promulgated thereunder.  The Effective Date of this Agreement will
begin upon satisfaction of any such requirements and the expiration or
termination of all applicable waiting periods (including any extensions
thereof),


 


58





















 


or upon Gilead
determining and notifying JT in writing that no filings are required
thereunder.  Each Party shall cooperate with the other Party in the prompt preparation, execution and filing of all
documents that are required or permitted to be filed pursuant thereto, and to notify the other Party upon receipt of any formal
or informal requests for information from any antitrust agency in connection
with any filings under HSR. Each Party
shall bear its own costs with respect thereto.


 


If the
Condition Precedent is not satisfied within six months after the mutual
execution and delivery of this Agreement by both Parties, notwithstanding each Party having fulfilled its obligations
under this Article, either Party
has the right to terminate this Agreement by notice in writing with immediate
effect.


 


59





















 


In Witness Whereof the Parties have executed this Agreement in duplicate originals by their
duly authorized officers as of the Execution Date.


 


 


	
  Gilead Sciences, Inc.

  	
  Japan Tobacco Inc.

  
	
   

  	
   

  
	
  By:

  	
  /s/ John F.
  Milligan

  	
   

  	
  By:

  	
  /s/ Noriaki
  Okubo

  	
   

  
	
   

  	
  Name: John
  F. Milligan

  	
   

  	
  Name: Noriaki
  Okubo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title:
  Executive Vice President & CFO

  	
  Title:
  President, Pharmaceutical Business

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
										



 


60





















 


	
  List of Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.9A:

  	
   

  	
  JTK-303

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.9B:

  	
   

  	
  JTK-303
  Patent Applications

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.48:

  	
   

  	
  JT
  Patents

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.55:

  	
   

  	
  Key
  JT Personnel

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.65

  	
   

  	
  Gilead
  Global Access Program

  
	
   

  	
   

  	
   

  
	
  Schedule
  2.2

  	
   

  	
  Joint
  Committee Membership;

  
	
   

  	
   

  	
   

  
	
  Schedule 2.3:

  	
   

  	
  Alliance Managers

  
	
   

  	
   

  	
   

  
	
  Schedule 3.2:

  	
   

  	
  Gilead Development Plan

  
	
   

  	
   

  	
   

  
	
  Schedule 13.3A:

  	
   

  	
  JT Draft Press Release

  
	
   

  	
   

  	
   

  
	
  Schedule 13.3B:

  	
   

  	
  Gilead Draft Press Release

  



 





















 


Schedule 1.9A


 


JTK-303


 


Chemical Structure


 


[*]


 


 


Chemical Name


[*]


 





















 


Schedule 1.9B


 


JTK-303 Patent Applications


 


[*]


 


2





















 


Schedule 1.48


 


Patent Applications For JTK-303


 


 


[*]


 


3





















 


Schedule 1.55


 


Key JT Personnel


 


 


[*]


 


4





















 


Schedule 1.65


 


Gilead Global Access Program


 


GILEAD GLOBAL ACCESS PROGRAM


 


	
  1.

  	
  Algeria

  
	
  2.

  	
  Afghanistan

  
	
  3.

  	
  Angola

  
	
  4.

  	
  Antigua
  and Barbuda

  
	
  5.

  	
  Bahamas

  
	
  6.

  	
  Bangladesh

  
	
  7.

  	
  Barbados

  
	
  8.

  	
  Benin

  
	
  9.

  	
  Bhutan

  
	
  10.

  	
  Bolivia

  
	
  11.

  	
  Botswana

  
	
  12.

  	
  Burkina
  Faso

  
	
  13.

  	
  Burundi

  
	
  14.

  	
  Cambodia

  
	
  15.

  	
  Cameroon

  
	
  16.

  	
  Cape
  Verde

  
	
  17.

  	
  Central
  African Republic

  
	
  18.

  	
  Chad

  
	
  19.

  	
  Comoros

  
	
  20.

  	
  Congo

  
	
  21.

  	
  Congo,
  Dem. Republic of the

  
	
  22.

  	
  Côte
  d’lvoire

  
	
  23.

  	
  Djibouti

  
	
  24.

  	
  Dominica

  
	
  25.

  	
  Dominican
  Republic

  
	
  26.

  	
  Egypt

  
	
  27.

  	
  Equatorial
  Guinea

  
	
  28.

  	
  Eritrea

  
	
  29.

  	
  Ethiopia

  
	
  30.

  	
  Gabon

  
	
  31.

  	
  Gambia

  
	
  32.

  	
  Ghana

  
	
  33.

  	
  Grenada

  
	
  34.

  	
  Guatemala

  
	
  35.

  	
  Guinea

  
	
  36.

  	
  Guinea-Bissau

  
	
  37.

  	
  Guyana

  
	
  38.

  	
  Haiti

  
	
  39.

  	
  Honduras

  
	
  40.

  	
  Indonesia

  
	
  41.

  	
  Jamaica

  
	
  42.

  	
  Kenya

  
	
  43.

  	
  Kiribati

  
	
  44.

  	
  Kyrgyzstan

  
	
  45.

  	
  Lao
  People’s Dem. Rep.

  
	
  46.

  	
  Lesotho

  
	
  47.

  	
  Liberia

  
	
  48.

  	
  Libya

  
	
  49.

  	
  Madagascar

  
	
  50.

  	
  Malawi

  
	
  51.

  	
  Maldives

  
	
  52.

  	
  Mali

  
	
  53.

  	
  Mauritania

  
	
  54.

  	
  Mauritius

  
	
  55.

  	
  Moldova,
  Rep. of

  
	
  56.

  	
  Mongolia

  
	
  57.

  	
  Morocco

  
	
  58.

  	
  Mozambique

  
	
  59.

  	
  Myanmar

  
	
  60.

  	
  Namibia

  
	
  61.

  	
  Nepal

  
	
  62.

  	
  Nicaragua

  
	
  63.

  	
  Niger

  
	
  64.

  	
  Nigeria

  
	
  65.

  	
  Pakistan

  
	
  66.

  	
  Papua
  New Guinea

  
	
  67.

  	
  Rwanda

  
	
  68.

  	
  Saint
  Kitts and Nevis

  
	
  69.

  	
  Saint
  Lucia

  
	
  70.

  	
  Saint
  Vincent & the Grenadines

  
	
  71.

  	
  Samoa

  
	
  72.

  	
  Sao
  Tome and Principe

  
	
  73.

  	
  Senegal

  
	
  74.

  	
  Seychelles

  
	
  75.

  	
  Sierra
  Leone

  
	
  76.

  	
  Solomon
  Islands

  
	
  77.

  	
  Somalia

  
	
  78.

  	
  South
  Africa

  
	
  79.

  	
  Sudan

  
	
  80.

  	
  Swaziland

  
	
  81.

  	
  Syria

  
	
  82.

  	
  Tajikistan

  
	
  83.

  	
  Tanzania,
  U. Rep. of

  
	
  84.

  	
  Timor-Leste

  



 





















 


	
  85.

  	
  Togo

  
	
  86.

  	
  Trinidad
  and Tobago

  
	
  87.

  	
  Tunisia

  
	
  88.

  	
  Tuvalu

  
	
  89.

  	
  Uganda

  
	
  90.

  	
  Uzbekistan

  
	
  91.

  	
  Vanuatu

  
	
  92.

  	
  Vietnam

  
	
  93.

  	
  Yemen

  
	
  94.

  	
  Zambia

  
	
  95.

  	
  Zimbabwe

  



 


2





















 


Schedule 2.2


 


Joint Committee Members;


 


Joint Committee:


 


JT


 


(To be determined)


 


 


GILEAD


 


(To be
determined)


 


2





















 


Schedule 2.3


 


Alliance Managers


 


JT: To be determined.


 


Gilead: To be determined.


 


3





















 


Schedule 3.2


 


 


JTK-303 Development Plan


Summary


 


 


 


Prepared by Gilead Sciences


For Japan Tobacco


 


 


 


15 March, 2005


 


4





















 


JTK-303 Development Plan
Summary


 


[*]


 


5





















 


Schedule 13.3A


 





JT Draft Press Release


 




	
  Contact:

  	
  Roy Tsuji

  
	
   

  	
   

  
	
   

  	
  General Manager

  
	
   

  	
   

  
	
   

  	
  Media & Investor Relations Division

  
	
   

  	
   

  
	
   

  	
  Japan Tobacco Inc.

  
	
   

  	
   

  
	
   

  	
  +81-3-5572-4287

  






 


FOR IMMEDIATE RELEASE


 


 


JT Concludes Licensing Agreement on


JT’s Anti-HIV Drug with Gilead


 


Tokyo, March 22, 2005 — Japan Tobacco Inc. (JT) (TSE:
2914) today announced that the company has signed a licensing agreement(1) with
Gilead Sciences, Inc. (Gilead) (Nasdaq: GILD) of Foster City, California, USA,
under which Gilead will obtain the development and commercialization rights to
JTK-303, JT’s anti-HIV drug, outside Japan.


 


JTK-303,
which is in phase I clinical study in Japan with JT, is an integrase inhibitor
that works by blocking integrase, an enzyme that is involved in the replication
of HIV.  This compound’s mechanism of
inhibiting the HIV replication is novel, and no similar type of anti-HIV drug
is yet available in the market.  Thus,
the two companies expect that the drug, once launched, would become another
option for anti-HIV therapies.


 










(1)          The
transaction may be subject to review by the U.S. Federal Trade Commission under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976.


 





















 


“JT has long been
committed to the exploration of anti-HIV drugs, and our efforts are gaining
significant momentum.  Today, we are
extremely pleased to announce our partnership with Gilead, an ideal partner in
the field of anti-HIV drug development,” said Noriaki Okubo, President of JT’s
Pharmaceutical Business.  “Together, we’re
now going to make every effort to advance this therapy into clinics as quickly
as possible with the goal that it will some day benefit patients suffering from
HIV.”


 


“We are very
pleased to partner with JT to develop this compound, which is from a novel
class of drugs that target the integrase enzyme,” said John C. Martin, PhD,
President and CEO, Gilead Sciences.  “HIV
has been and continues to be a leading research and development priority at Gilead, and our efforts are focused on identifying compounds
in established classes of HIV drugs and also exploring therapies with new
mechanisms of action.  We believe this
particular compound has a profile that is complementary to our existing HIV
products, and we look forward to advancing it forward in clinical trials later
this year.”


 


Under the terms of the
agreement, Gilead will have exclusive worldwide rights, excluding Japan, to
develop and commercialize JTK-303.  JT will
receive an upfront payment of US$15 million and could receive additional cash
payments of up to US$90 million upon the achievement of certain milestones, and
royalties based on product sales.


 


In July 2003, JT and
Gilead announced that the two companies had signed a licensing agreement, under
which JT would commercialize Gilead’s anti-HIV drugs, Viread® (tenofovir
disoproxil fumarate), Emtriva® (emtricitabine) and Truvada® (emtricitabine and
tenofovir disoproxil fumarate) in Japan.


 


About Gilead Sciences,
Inc.


Gilead Sciences is a
biopharmaceutical company that discovers, develops and commercializes
innovative therapeutics in areas of unmet medical need.  The company’s mission is to advance the care
of patients suffering from life-threatening diseases worldwide.  Headquartered in Foster City, California,
Gilead has operations in North America, Europe and Australia.


 


###


 


Japan Tobacco Inc. is the
world’s third largest international manufacturer of tobacco products. Since its
privatization in 1985, JT has actively diversified its operations into pharmaceuticals
and foods.  JT entered
into the pharmaceutical business in 1987 and established the Central
Pharmaceutical Research Institute in 1993.  JT is currently engaged in the research and
development of new drugs in various areas such as glucose and lipid metabolism,
anti-virus, immune disorders and inflammation, and bone metabolism.  The company’s net sales were ¥4.625 trillion
in the fiscal year that ended March 31, 2004.


 


ii





















 


Schedule 13.3B


 




	
  CONTACTS:

  	
   

  	
  Susan Hubbard, Investors

  
	
   

  	
   

  	
  (650) 522-5715

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amy Flood, Media

  
	
   

  	
   

  	
  (650) 522-5643

  






 


Draft


 


GILEAD AND JAPAN TOBACCO SIGN LICENSING
AGREEMENT FOR


NOVEL HIV INTEGRASE INHIBITOR


 


Foster City, CA, March XX, 2005 - Gilead
Sciences, Inc. (Nasdaq: GILD) today announced that the company has entered into a licensing agreement with Japan Tobacco Inc. (JT) under which JT has granted to Gilead exclusive rights to develop and
commercialize a novel HIV integrase inhibitor (JTK-303) in all countries of the
world, excluding Japan, where JT will retain rights.


 


Under the terms of the agreement, Gilead will pay to JT an upfront
payment of $15 million and additional cash payments of up to $90 million upon
the achievement of certain milestones. 
Gilead will also pay to JT a royalty based on future product sales in
the territories where Gilead will market the drug.  The agreement announced today is subject to
clearance under the Hart-Scott-Rodino Antitrust Improvements Act.


 


As a result of the financial impact of this agreement, Gilead is
providing an update on its financial guidance for research and development
(R&D) expenses for 2005.  Gilead’s
revised guidance for full year R&D expenses is now in a range of $XXX to
$XXX million, up from the guidance of $240 to $260 million provided on the
January 27, 2005 earnings conference call.


 


“We are very pleased to partner with JT to develop this compound, which
is from a novel class of drugs that target the integrase enzyme,” said John C.
Martin, PhD, President and CEO, Gilead Sciences.  “HIV has been and continues to be a leading
research and development priority at Gilead, and our
efforts are focused on identifying compounds in established classes of HIV
drugs and also exploring therapies with new mechanisms of action.  We believe this particular compound has a
profile that is complementary to our existing HIV products, and we look forward
to advancing it forward in clinical trials later this year.”


 


“JT has long been committed to the exploration of anti-HIV
drugs, and our efforts are gaining significant
momentum.  Today, we are extremely pleased to announce our partnership
with Gilead, an ideal partner in the field of anti-HIV drug development,” said
Noriaki Okubo, President of JT’s Pharmaceutical Business.  “Together, we’re going to make every effort
to advance this therapy into clinics as quickly as possible with the goal that
it will some day benefit patients suffering from HIV.”


 


Integrase is one of the key enzymes required for HIV to replicate.  By inhibiting this enzyme, the integration of
HIV DNA into the DNA of immune system cells (the process by which infection
occurs) is disabled.  JT’s compound has
previously been evaluated in a Phase I study in Japan to assess


 


iii





















 


bioavailability and pharmacokinetics in
healthy volunteers. Gilead plans to initiate Phase I/II clinical studies in HIV
patients by mid-year.


 


Gilead and JT first partnered in July 2003, when the companies
announced an agreement granting JT commercialization rights for Truvada®
(emtricitabine and tenofovir disoproxil fumarate), Viread®
(tenofovir disoproxil fumarate) and Emtriva® (emtricitabine) in
Japan.


 


About Gilead Sciences and Japan Tobacco


Gilead Sciences is a biopharmaceutical company that discovers, develops
and commercializes innovative therapeutics in areas of unmet medical need.  The company’s mission is to advance the care
of patients suffering from life-threatening diseases worldwide.  Headquartered in Foster City, California,
Gilead has operations in North America, Europe and Australia.


 


Japan Tobacco Inc. is the
world’s third largest international manufacturer of tobacco products. Since its
privatization in 1985, JT has actively diversified its operations into
pharmaceuticals and foods.  JT entered into
the pharmaceutical business in 1987 and established the Central Pharmaceutical
Research Institute in 1993.  JT is
currently engaged in the research and development of new drugs in various areas
such as glucose and lipid metabolism, anti-virus, immune disorders and
inflammation, and bone metabolism.  The
company’s net sales were ¥4.625 trillion in the fiscal year that ended March
31, 2004.


 


This press release
includes forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995, that are subject to risks,
uncertainties and other factors, including risks related to Gilead’s ability to
develop and commercialize this product. For example, initiating and completing
clinical trials may take longer or cost more than expected.  These risks, uncertainties and other factors
could cause actual results to differ materially from those referred to in the
forward-looking statements.  The reader
is cautioned not to rely on these forward-looking statements.  These and other risks are described in detail
in the Gilead Annual Report on Form 10-K for the year ended December 31, 2004,
filed with the U.S. Securities and Exchange Commission.  All forward-looking statements are based on
information currently available to Gilead and Gilead assumes no obligation to
update any such forward-looking statements.


 


# # #


 


Truvada, Viread and Emtriva are registered
trademarks of Gilead Sciences, Inc.


 


For more information on Gilead Sciences, please
visit the company’s web site at www.gilead.com or call Gilead Public Affairs at
1-800-GILEAD-5 or 1-650-574-3000.


 


iv