Exhibit
10.67


 


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


 


 


Toll Manufacturing Agreement


 


 


by and among


 


Gilead World
Markets, Ltd


Queensgate
House


South Church
Street


PO Box 1234 GT


Grand Cayman


Cayman Islands


 


Gilead
Sciences, Inc.


333 Lakeside
Drive


Foster City,
CA  94404


USA


 


and


 


 


ALTANA Pharma Oranienburg GmbH


Lehnitzstr. 70-98


16515
Oranienburg


Germany


 


1

















 


TOLL
MANUFACTURING AGREEMENT


 


This Amended And Restated Clinical and
Commercial Supply Agreement (the “Agreement”) made and effective as of the 01
day of August, 2003 (the “Effective Date”) among, on the one hand, Gilead World
Markets, Ltd., a Cayman Company (“Gilead World”), whose registered address is
Queensgate House, South Church Street, P.O. Box 1234GT, Grand Cayman, Cayman
Islands, and Gilead Sciences, Inc, a Delaware corporation (“Gilead
Sciences”) with its principal office located at 333 Lakeside Drive,
Foster City, CA 94404, USA (Gilead World and Gilead Sciences collectively, “GILEAD”),
and, on the other hand, Altana Pharma Oranienburg GmbH, a German corporation (“APO”)
having its principal place of business at Lehnitzstrasse 70-98, 16515
Oranienburg, Germany. Gilead and APO are sometimes referred to herein
individually as a “Party” and collectively as the “Parties”.


 


WHEREAS, Gilead Sciences will require the
manufacture and supply of Drug Products (as hereinafter defined) for clinical
use in the Territory and Gilead World will require the manufacture and supply
of Drug Products for commercial distribution and sale in the Territory; and


 


WHEREAS, GILEAD is a US biopharmaceutical
company that discovers, develops and commercialises therapeutics to advance the
care of patients suffering from life threatening diseases worldwide.


 


WHEREAS, GILEAD has developed the API
tenofovir disoproxil fumarate (API, as hereinafter defined) and has filed
patents thereto and commercializes the finished product under the trademark
Viread® either by itself or through its Affiliates on a world-wide basis;


 


WHEREAS, GILEAD presently supplies the “Finished
Product”
(as hereinafter defined) produced by a Third Party manufacturer (“Third Party
Manufacturer”) and its UK located affiliate GILEAD Sciences
International Ltd. Cambridge is the holder of the Marketing Approval (Approval
No.: [*]) pursuant to EU
regulation 2309/93/EEC (as amended) or any implementation of it under the laws
of any relevant EU member state where GILEAD markets the  Finished Product;


 


WHEREAS, APO is the holder of the
Manufacturing authorization pursuant to Directive 75/319/EEC (as amended) and
any implementation of it under the laws of Germany for the manufacturing of
products at its site at [*] and it
is interested in Manufacturing the Bulk Product (as hereinafter defined) for
GILEAD;


 


NOW, THEREFORE, the Parties thereby agree as
follows:


 


DEFINITIONS


 


(A)   “Affiliate”
of a Party shall mean a corporation or other corporate entity that owns, is
owned by or is under common direct or indirect ownership with such Party, where
“own”, “owned” and “ownership” refer to ownership of over fifty percent (50%)
of the voting shares or other voting interest of such entity or the ability to
control or direct management of such entity.


 


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


 


2

















 


(B)   “API”
shall mean the active pharmaceutical ingredient tenofovir disoproxil fumarate
to be used by APO in the Manufacture of the Bulk Product;


 


(C)   “[*]” shall mean, for the API, the [*] value identified as such in Schedule “H”
that shall be subject to credit or reimbursement by APO pursuant to Section 2.7
[*].


 


(D)   “Bulk
Product(s)”
shall mean the API in its finished form as coated tablet(s) containing 300 mg
of API in bulk, unlabelled after completion of all processing stages up to, but
not including, final packaging as identified in Schedule “A” hereto, having
the Specifications contained in Schedule “C” attached hereto;


 


(E)    “cGMPs”
shall mean current Good Manufacturing Practices regulations promulgated by the
EU Regulatory Agencies or the FDA, in respect of medicinal products as well as
by the Quality Agreement, each in their respective current versions;


 


(F)    “Components”
means, collectively, raw materials, excipients and ingredients, required to be
used in order to produce the Bulk Product in accordance with the
Specifications, other than the API, as set forth in Schedule “D”;


 


(G)   “Confidential
Information” shall have the meaning given such term in Section 15.1.


 


(H)   “Controlled”
means, with respect to a patent, know-how or any other item of intellectual
property, owned by or licensed to a Party with the ability to sublicense it to
the other Party in accordance with this Agreement, without violating or
breaching any agreement with any third party.


 


(I)     “EU
Regulatory Agency” shall mean the Regulatory Agency of the European
Union or their national equivalents;


 


(J)    “FDA”  shall
mean the U.S. Food and Drug Administration, or any successor agency.


 


(K)   “Finished
Product(s)”  shall mean the fully packaged Bulk Product
with all necessary product information leaflets, i.e. SPC in the saleable form
as approved by the relevant regulatory authority in the Territory


 


(L)    “Know-how”
shall mean the information and know-how necessary for the Manufacturing of the
Bulk Product to the exclusion, however, of the manufacturing know-how for the
API;


 


(M)  “Inventory”
means all inventories of Components and work-in-process produced or held by APO
in connection with the Manufacture of the Bulk Product in accordance with the
Specifications, but, for greater clarity, does not include the API;


 


(N)   “Manufacture”  or  “Manufacturing”  shall
mean the converting of API supplied by GILEAD or its appointee into Bulk
Product by APO at the Manufacturing Location, including the required analyses
and testing of API and such Bulk Products, and the bulk packing and dispatch
labelling of such Bulk Product for shipment to GILEAD or its appointee, to the
exclusion of the manufacture of API by APO;


 


3

















 


(O)   “Manufacturing
Location” shall mean the Manufacturing location for the Bulk Product
of APO at  [*];


 


(P)    “Marketing
Authorization” means the authorization to market Finished Product in
a jurisdiction issued by the appropriate Regulatory Agency in such
jurisdiction.


 


(Q)   “Release
Documents” means the documentation specified pursuant to Sections
2.2.3 and 2.2.4 of the Quality Agreement that is required for GILEAD to release
a batch of Bulk Product and authorize shipment thereof.


 


(R)   “Quality
Agreement” shall mean the agreement on the pharmaceutical
responsibilities of the Parties attached to this Agreement as Schedule “B”,
with Gilead Sciences performing responsibilities for itself and on behalf of
Gilead World.


 


(S)    “Specification(s)”
shall mean all Manufacturing, (primary) packaging, quality assurance and
release specifications in regards to Bulk Products set forth in Schedule “C”
and in regards to API set forth in Schedule “D” attached hereto;
such Specifications shall be supplied by GILEAD at its sole responsibility;


 


(T)   “Term”
shall have the meaning set forth in Section 4;


 


(U)   “Territory”  shall
mean all the countries of the world in which GILEAD has notified APO that
Finished Products shall be marketed;


 


(V)   “Year”
shall meanthe twelve month period commencing, in the case of the first Year
(regarding the remaining months) of this Agreement, on the Effective Date, and
thereafter commencing upon completion of the immediately preceding Year;


 


(W)  “Working
Day(s)”  shall mean any working day (with the
exclusion of Saturday and Sunday) on which banks are normally open in USA, and
in Germany for the transaction of business;


 


 


SECTION 1


BULK PRODUCT SUPPLY COMMITMENTS


 


 


1.1          General.
During the term of this Agreement, APO shall
Manufacture and supply to GILEAD the Bulk Product at the prices (the “Supply
Price(s)”) indicated in Schedule “A” hereto (such prices being
subject to adjustment in accordance with the terms hereof), and GILEAD agrees
to purchase from APO the Bulk Products, subject to all other terms and
conditions of this Agreement, at the Supply Prices provided for in Schedule “A”.


 


1.2          Acceptance
of Manufacturing Location by Regulatory Agencies in General. Such supply and purchase obligations shall be conditional upon
acceptance of the Manufacturing Location by the regulatory authorities of the
Territory. With the effective date of [*],
the EMEA has granted APO a manufacturing authorization to Manufacture the Bulk
Product.


 


4

















 


1.3          Acceptance of Manufacturing Location by Regulatory Agencies of the
European Community.  APO
represents and warrants that it is the holder of the Manufacturing
authorization pursuant to Directive 75/319/EEC (as amended) and any
implementation of it under the laws of Germany for the manufacturing of certain
solid pharmaceutical products at its Manufacturing Location.


 


1.4          Manufacturing of Bulk Product for the
United States of America. GILEAD may elect to have
APO Manufacturing Bulk Product also for the United States, upon which terms and
conditions are to be agreed. In such case, GILEAD shall inform APO of such intention
in writing and duly in advance; the Parties shall determine the possible
consequences of the Manufacture of the Bulk Product for the US market, and they
shall initiate the necessary steps to apply to the FDA for approval of
Manufacture of the Bulk Product to be placed on the USA market and to comply
with the applicable laws and regulations.


 


SECTION 2


SUPPLY OF API


 


2.1          Supply of API by GILEAD. GILEAD or an
Affiliate of GILEAD shall supply, or arrange for the supply by their contract
manufacturers of, API to APO for the Manufacture of Bulk Product and APO shall
Manufacture Bulk Product exclusively from API supplied by GILEAD, an Affiliate
of GILEAD, or a contract manufacturer thereof. In respect of the supply of API,
the Parties agree as follows:


 


2.2          Timely Supply. GILEAD undertakes by
itself or through an assignee to timely supply API directly to the
Manufacturing Location as further provided hereinafter. APO shall be under no
duty to Manufacture the Bulk Products (including validation batches), nor meet
delivery dates provided in the Binding Orders, to the extent that GILEAD does
not supply API in a timely fashion, whether said supply is provided by GILEAD
or a permitted appointee of GILEAD.


 


2.3          Conditions of Supply and Delivery. GILEAD
undertakes to supply API to APO [*].
All the API provided by GILEAD shall be properly packed, marked, sealed and
air-shipped [*] (Incoterms 2000)
in accordance with GILEAD’s shipping and packing instructions and with APO’s
instructions for delivery, provided that at GILEAD’s request and expense, APO
will provide reasonable assistance in arranging for any necessary import
clearance and licenses. Delivery of API shall be made at the Manufacturing
Location between 9.00 a.m. and 4.00 p.m. during Working Days.


 


2.4          Certification and Incoming Inspection of API. The API delivered by GILEAD or its permitted appointee shall be in
compliance with the Specifications and any other legal requirements and shall
be accompanied by a Certificate of Analysis and a Certificate of Compliance.
GILEAD will include the
information about gross weight, net weight and tara on the label of each barrel
of API.   APO
agrees to inspect the API delivered and to check it solely for identity,
quantity and conformity with the bill of lading and, as far as reasonably
possible, any damages suffered during shipping and any other obvious defects of
the API delivered within [*]
following receipt.  APO will check the
gross weight of each barrel within such [*]
period and will confirm the net weight of each barrel in the course of
performing the API weighing process for production orders.


 


2.5.         Failure of API to satisfy Incoming Inspection. If the API delivered by GILEAD or its


 


5

















 


permitted appointee to APO fails the
inspections to be carried out during the [*]
following receipt as provided under Section 2.4 above, due to a discrepancy
from the bill of lading due to lack of identity or a difference in gross
weight, or to physical damages or other obvious defects, APO undertakes to
notify GILEAD without undue delay in writing. GILEAD shall, upon receiving such
written notice from APO, use commercially reasonable efforts to replace the
rejected API as soon as reasonably possible; in any event, the provisions of
Section 2.9 shall apply.


 


2.6.         Title to API. All API (whether being
held for Manufacture or in the process of Manufacture) supplied to APO by
GILEAD or by a permitted appointee of GILEAD in accordance with this Agreement
shall at all times be and remain the property of GILEAD, and shall be treated
by APO in all respects as such, and shall be stored and handled in a manner to
prevent contamination by other drugs and chemicals and in accordance with
GILEAD’s instructions as set forth in Schedule “D” hereto, which GILEAD may
update from time to time with APO’s approval, not to be unreasonably withheld.


 


2.7          API Lost or Destroyed. APO shall
compensate GILEAD for any API lost or destroyed during the storage of API, or
during the Manufacture or storage of the Bulk Product, which in any Year [*] which will be set forth in accordance
with Schedule
“H” hereto, at the price as likewise set forth under such Schedule “H”,
[*]. In any event, it remains understood and
agreed between the Parties that APO shall not be responsible for any loss or
damage to the API, except where such loss or damage [*] provided under Section 1.1  or is otherwise due to [*]; and that APO’s liability shall be
limited to [*] as likewise set
forth under Schedule “H”. Upon a determination that API has been lost or
destroyed such that APO is required to compensate GILEAD, APO shall[*] GILEAD for the compensable amount.


 


2.8.         Defects of Bulk Product attributable to Defective API. With respect to defects of the Bulk Product attributable to
defective API, the provisions of Section 8.5 of this Agreement shall apply.


 


2.9.         Delays in Delivery of API or Replacement Deliveries of API pursuant
to Section 2.4. If GILEAD should fail to make
timely delivery of API, or of a replacement delivery of API, to APO, the
provisions of Section 2.1 hereof shall apply and APO shall not be liable for
any breach of its obligations hereunder due to such events caused by GILEAD, provided,
however, that APO shall be liable for any breach of its obligations
due to failure to properly and timely inspect API pursuant to Section 2.4.


 


2.10        Destruction of Defective API. If API in
the possession of APO is determined by the Parties to be defective, then APO
will destroy it in compliance with GILEAD’s instructions and applicable laws,
rules and regulations, with GILEAD to bear the expenses thereof unless the
defect was introduced after delivery to APO pursuant to Section 2.3.


 


SECTION 3


MANUFACTURING LICENSE; MANUFACTURING BULK PRODUCT
BY APO


 


3.1          Manufacturing
License. In relation to the grant of the
Manufacturing license by GILEAD to APO for purposes of this Agreement, the
Parties agree as follows:


 


3.1.1       Grant of
Manufacturing License. GILEAD grants APO a
non-exclusive, royalty-free, non-sublicensable, non-transferable license for
the entire term of this Agreement, under all


 


6

















 


patents
Controlled by GILEAD that, but for the grant of this license, would be
infringed by the Manufacture by APO of Bulk Product in accordance with this
Agreement, and under all Know-how Controlled by GILEAD that is necessary or
reasonably useful to the Manufacture by APO of Bulk Product in accordance with
Agreement, to Manufacture the Bulk Product at the Manufacturing Location for
the sole purpose of supply for the Territory of the Bulk Product so
Manufactured to GILEAD, an Affiliate, or one of their contract manufacturers of
Finished Product, indicated to APO in writing duly in advance, in accordance
with the terms and provisions of this Agreement.


 


APO shall be responsible for the Manufacture
of Bulk Product. Accordingly, GILEAD shall be responsible for the finishing of
the Bulk Product into the Finished Product and, as holder of the Marketing
Authorizations for the Territory, GILEAD shall release and place the Finished
Product on the market.


 


3.1.2       Transfer
of Manufacturing and Quality Control Procedures. To
the extent reasonably necessary for the exercise by APO of the rights granted
by GILEAD under Section 3.1.1 hereof and to the extent not already performed
pursuant to Section 3.2 hereof, GILEAD shall make available to APO all
Manufacturing and quality control procedures, including the related Know-How of
GILEAD and all the other information, necessary to carry out the contracted
operations correctly in accordance with the Marketing Authorisations and any
other legal requirements.


 


3.2          Validation
and other Implementation Work Costs. The validation
of the manufacturing process of Bulk Product and of the analytical methods is
already performed.  If further
validation work will be necessary, it will be charged to GILEAD based on the
then-current daily rates; the daily rates will be those generally offered to
APO’s customers.


 


3.3          Manufacturing Standards. In the
Manufacturing of the Bulk Product, APO agrees to adhere to (i) the quality standards and
testing methods of GILEAD indicated in the Specifications; (ii) the Quality Agreement; (iii)
any other condition provided under the Manufacturing Authorisation and the
Marketing Authorisation; (iv) the cGMPs; as well as (v)
any additional manufacturing standards agreed upon by the Parties in writing.
Subject to what is provided under Section 10.2 below, APO agrees not to
unreasonably withhold its consent to the implementation of any such additional
manufacturing standards to the extent that GILEAD reimburses APO’s
out-of-pocket-costs, excluding overheads pertaining to the implementation of
any such additional manufacturing standards.


 


3.4          Manufacturing Capacity. During the Term
of this Agreement, APO agrees to use commercially reasonable efforts to
allocate sufficient Manufacturing resources in order to meet GILEAD’s
requirements of the Bulk Product scheduled for delivery in accordance with
Section 5 and 6 hereof.  Nothing in this
Section 3.4 is intended to negate APO’s obligations to fulfil Binding Orders
accepted pursuant to Section 6.3 or to prevent GILEAD from submitting aggregate
Binding Orders that APO will accept, if otherwise properly submitted, for a
calendar year for the applicable Yearly Minimum Volume.


 


3.5          Quality Agreement, Change Control. The
pharmaceutical responsibilities of APO and GILEAD, in particular the procedures
applicable in the event of any changes of the Specifications, and/or GILEAD’s
instructions for the packing and dispatch labelling of the Bulk Product, are
set forth in the Quality Agreement attached hereto as Schedule “B”.


 


7

















 


SECTION 4

TERM AND RENEWAL


 


4.1.Term. Subject to any
extension pursuant to Section 4.2. below, this Agreement shall commerce on the
Effective Date and shall run until [*]
(the “Initial
Term”), unless it is terminated on an earlier date in accordance
with Section 17 hereof.


 


4.2  Extension. GILEAD shall give written notice of its willingness to extend the
duration of this Agreement to APO at least [*]
months before expiry of the Initial Term. The Parties will negotiate in good
faith the conditions of the extension of the Agreement. Should the Parties not
reach an agreement on such conditions within [*]
months of receipt of said written notice, then this Agreement shall expire at
the end of its Initial Term.


 


SECTION 5

YEARLY MINIMUM VOLUMES OF PURCHASES


LONG TERM FORECASTS FOR BULK PRODUCT


 


5.1.         Minimum Volumes of Purchases. GILEAD
undertakes to guarantee the yearly minimum volumes of purchases of Bulk
Products to be Manufactured by APO as set forth in Schedule “I” attached hereto
(the “Yearly
Minimum Volumes”). The Yearly Minimum Volumes shall be firm and
binding on GILEAD and shall not be subject to reduction, provided, however, that if
GILEAD orders an amount of Bulk Product for delivery in a calendar year that is
less than the applicable Yearly Minimum Volumes, GILEAD shall not be in breach
of this Section 5.1 if it exceeds the applicable Yearly Minimum Volume during
any of the following Years by an amount equal to the shortfall from the Yearly
Minimum Volume in the that prior calendar year.


 


5.2.         Long Term Rolling Forecast for Bulk Product. Subject to what is provided under  Section 5.1, for the entire
term of the Agreement, within the first [*]
Working Days of each calendar month (“M”), GILEAD shall submit to APO its updated
written long term rolling forecast for Bulk Product, (hereinafter the “Long Term
Rolling Forecast for Bulk Product”) showing GILEAD’s estimated
requirements for the Bulk Product to be produced and delivered to GILEAD during
the following [*] period beginning
with such month M.  The forecast for
months M+[*] through M+[*] shall be non-binding.


 


SECTION 6

PURCHASE ORDERS


 


6.1          Binding Orders for Bulk Product. Within
the first [*] Working Days of each
month M, GILEAD shall submit to APO its written binding orders (the “Binding
Orders”) for Bulk Product to be manufactured and delivered by APO in
month M+[*].


 


The Binding Orders submitted to APO shall
specify GILEAD’s purchase order number, quantities of the Bulk Product, monthly
delivery schedule and any other elements necessary to ensure the timely
production and delivery of the Bulk Product by APO. The quantities of Bulk
Product ordered in such written orders shall be firm and binding on GILEAD and
shall not be subject to reduction.


 


8

















 


6.2          Binding Orders for Bulk Product in batch size. Subject to what is provided under Section 3.4, GILEAD shall place
with APO Binding Orders for the Bulk Product for a full batch size or multiples
thereof, whereby it is understood that one (1) batch shall comprise
approximately [*] of the Bulk
Product. It is furthermore understood by the Parties, that it is foreseen, that
APO shall Manufacture the Bulk Product batches in campaigns of at least [*] batches preferably in not more than [*] campaigns per year which should be
regularly distributed over the year. Therefore GILEAD shall consider this
opportunity in its production planning and the following submission of its
Binding Orders.


 


6.3          Acceptance of Binding Orders for Bulk Product by APO. APO is obliged to accept the Binding Orders placed by GILEAD
pursuant to Sections 6.1 and 6.2 for as long as the quantities ordered do not
exceed applicable Yearly Minimum Volume.


APO shall use commercially reasonable efforts
to supply Bulk Product in excess of the applicable Yearly Minimum Volume
(subject to Section 3.4) and to supply Bulk Product in excess of [*] of GILEAD’s previous Long Term Rolling
Forecast for Bulk Product for the applicable calendar year, but shall not be
obligated to supply such quantities if it is not able to do so by use of
commercially reasonable efforts, and APO shall be allowed to take into
consideration in making its commercially reasonable decision to supply the
quantity of the excess amounts APO’s Manufacturing capacity and other
manufacturing commitments.


 


6.4          Addressee of Purchase Orders. All
purchase orders shall be sent by GILEAD with contemporaneous telephone
notification, by email or to APO to the email or fax number set forth below or
identified in writing by APO:


 


ALTANA Pharma Oranienburg GmbH


Attention: [*]


email: [*]


Tel. No.:   [*]


Fax No.:  
[*]


 


APO will acknowledge and either
accept or reject purchase orders within [*]


[*] business days of receipt to the email or
fax number set forth below:


 


Attention: [*]


Email: [*]


Tel. No.: [*]


Fax No.: [*]


 


 


6.5          Prevailing Terms. To the extent the
terms of any Binding Order or acknowledgement are inconsistent with the terms
of this Agreement, the terms of this Agreement shall control, and any
inconsistent terms are hereby expressly rejected.


 


 


6.6          Reliance by APO. GILEAD understands and
acknowledges that APO will rely on the Binding Orders submitted pursuant to
this Section 6 in ordering the Components required to meet such Binding Orders.
In addition, GILEAD understands that to ensure an orderly supply of


 


9

















 


such Components and to achieve economies of
scale in the costs thereof, it may be desirable for APO to purchase such
Components in sufficient volumes to meet the production requirements for the
Bulk Product during part or all of the forecasted periods referred to in
Section 5 or to meet the production requirements of any longer period as APO
and GILEAD may agree to. Accordingly, GILEAD agrees that purchases may be made
by APO in respect of the Components to satisfy the production requirements for
the Bulk Product for forecasted periods to meet production requirements during
such longer periods as may be agreed to in writing from time to time by GILEAD
at the request of APO. If such Components are not included in the Bulk Products
purchased by GILEAD within [*]
months after the forecasted month in respect of which such purchases have been
made (or such longer period as the Parties may agree), GILEAD will pay to APO
its costs thereof and, in the event such Components are incorporated into the
Bulk Products subsequently purchased by GILEAD, GILEAD will receive credit for
any costs of such Components previously paid to APO by GILEAD.


 


 


SECTION 7

DELIVERY


 


7.1          Terms of Delivery of Bulk Product. Prior
to delivery and shipment of Bulk Product, APO will send the Release Documents
to GILEAD at the following email or, with prior notification by telephone by
fax, as follows:


 


Attention: [*]


Address: Unit 13, Stillorgan Industrial Park,
Blackrock, Co. Dublin, Ireland


email: [*]


Fax no: [*]


Tel. no: [*]


 


APO will not deliver or ship until GILEAD has
released the batch and authorized shipment. 
GILEAD will either release or reject a batch within [*] business days of receipt of the Release
Documents.  Bulk Product Deliveries of
the Bulk Product shall be made [*]
(as such term is defined in the Incoterms 2000) [*], provided that APO [*]
(except as otherwise set forth below). Such title as APO has in the Bulk
Products and risk of loss or of damage to the Bulk Products shall remain with
APO until the Bulk Products are [*]
at which time title and risk of loss or damage shall transfer to GILEAD in
accordance with the Incoterms 2000 [*]
clause. APO shall, in accordance with GILEAD’s instructions, (i) arrange for
shipping and insurance, to be paid by [*]
and (ii) at [*] risk and expense,
obtain any export licence or other official authorization and carry out all
customs formalities necessary to export the Bulk Products. GILEAD, at its election,
may select the freight carrier used by APO to ship the Bulk Products, informing
APO of the name thereof reasonably in advance, and may monitor APO’s shipping
and freight practices as they pertain to this Agreement.


 


Transport conditions shall be based upon
GILEAD’s instructions for the transportation of the Bulk Products.


 


7.2          Accompanying Documentation. With each
shipment of the Bulk Product, APO shall provide GILEAD with the appropriate
documentation, including but not limited to bills of lading, certificate of
analysis and certificate of compliance, and an invoice for such shipment. APO


 


10

















 


undertakes, with prior notification by
telephone, to email or fax to GILEAD a copy of each bill of lading to the
attention of the following employee of GILEAD or as otherwise instructed by
GILEAD in writing duly in advance:


 


Attention: [*]


Address: Unit 13, Stillorgan Industrial Park,
Blackrock, Co. Dublin, Ireland


email: [*]


Fax no: [*]


Tel. no: [*]


 


7.3          Short Deliveries. Subject  to
what  is
provided under Section 8.2.4 below, acceptance by GILEAD of deliveries falling
short of the quantities ordered and confirmed by APO shall be without prejudice
to GILEAD’s rights in relation to any such shortage.


 


 


SECTION 8

DEFECTIVE BULK PRODUCT


 


8.1          Defective Bulk Products. Quantities of
the Bulk Product shall be deemed to be defective if such quantities do not
comply with APO’s warranties under Section 13.1 hereof (the “Defective
Bulk Product(s)”) and, in relation to any such non-compliance with
APO’s warranties under Section 13.1 (the “Defect(s)”).


 


8.2          GILEAD’s Duties to inspect and confirm; Implied Waiver. GILEAD agrees to inspect and confirm incoming shipments of Bulk
Product as follows:


 


8.2.1       Incoming Inspection. GILEAD shall
inspect, or cause its Affiliates or manufacturers to inspect, Bulk Product
supplied by APO for transport damages, completeness, compliance as to quantity
or timing as stated in the Binding Orders and, as far as reasonably possible,
any other obvious defects within [*]
following receipt; GILEAD shall give APO written notice of all claims for any
such obvious defect within such [*]
period.


 


8.2.2       Additional Quality Control Procedures. Thereafter,
GILEAD may perform quality control procedures to be agreed between the Parties
in writing with respect to Bulk Products supplied by APO no later than [*] after receipt of the delivered Bulk
Products in order to check if the delivered Bulk Product meet the
Specifications.


 


8.2.3       Notification of Defects. GILEAD shall
inform APO by prompt written communication (telex, fax) of any Defect as
hereinafter defined, in any event such notice to be received by APO in case of
defects due to a discrepancy from the bill of lading due to lack of identity or
a difference in gross weight, or to physical damages, other obvious defects, or
defects that reasonably should be detected by any additional quality control
procedures that GILEAD may perform under Section 8.2.2 (“Detectable Defects”), within [*] of receipt of the Bulk Product, and, in
case of other Defects, i.e. those not reasonably detectable by the inspections
in Section 8.2.1 or the procedures carried out pursuant to Section 8.2.2 (“Non-Detectable
Defects”), within [*]
of discovery by GILEAD.


 


11

















 


Any such notification of defects shall be
made by notice given by courier under the following address, or, with
contemporaneous telephone notification, by either fax to the number given below
or email to the address below:


 


ALTANA Pharma Oranienburg GmbH


Quality Control Dept.


[*]


[*]


Germany


 


	
  Attention:

  	
  [*]

  
	
  Tel. No.:

  	
  [*]

  
	
  Fax No.:

  	
  [*]

  
	
  email:

  	
  [*]

  



 


8.2.4       Implied Waiver. Failure of GILEAD to
inspect or to perform agreed quality control procedures, and to notify in
writing APO in the relevant time periods specified in Sections 8.2.1, 8.2.2 and
8.2.3 above of any Detectable Defect, or to notify in writing APO within the
pertaining time period specified in Section 8.2.3 above of any Non-Detectable
Defect after its discovery, shall constitute a waiver of any rights relating to
such Defects, unless otherwise agreed in writing.


 


8.3          Disagreement as to Defects. In the event
of a disagreement between APO and GILEAD in respect of any Defects of the Bulk
Product, GILEAD and APO shall conduct a joint investigation in accordance with
GILEAD’s and APO’s quality control procedures governing the re-testing of the
Bulk Product, in order to determine if any Bulk Product has a Defect. Should
the Parties fail to agree within [*]
days after receipt of GILEAD’s deficiency notice delivered to APO pursuant to
Section 8.2.1 and/or Section 8.2.3 above as to whether any Bulk Product
identified in such GILEAD’s notice has a Defect, the Parties shall submit a
representative sample of the rejected Bulk Product to an independent laboratory
acceptable to both Parties for testing under GILEAD’s quality control
procedures. The findings of such third party laboratory shall be binding upon
the Parties, and if such evaluation certifies that any Bulk Product is
Defective, Sections 8.4, 8.5 and 8.6 below shall apply. The fees and expenses
of such Third Party laboratory shall be borne by the Party against whom the
finding is made.


 


8.4          Remedies in relation to Defective Bulk Products. Subject to Section 8.5 and subject to appropriate notification of
GILEAD of potential Defects in Bulk Products in accordance with Section 8.2
above and to a confirmation of any such Defects in accordance with Section 8.3
above due to APO’s failure to produce the Bulk Products in compliance with the
Specifications and with any other warranties as specified in Section 13.1
below, APO shall forthwith after receiving written request thereof from GILEAD
(i) in case of a visible Defect, sort the rejected Bulk Product from any
non-rejected Bulk Product (ii) in case of any Defect, whether visible or not,
replace the rejected Bulk Product in the next available campaign.  GILEAD shall supply APO with the additional
API for new batches at no additional costs for APO, provided that API
quantities used to Manufacture such Defective Bulk Product shall be subject as
applicable to the compensation provisions of Section 2.7. If GILEAD reasonably
determines after consultation with APO that the timing of any projected
replacement by APO of rejected Bulk Product during the next available campaign
may cause GILEAD to have insufficient inventories of Finished


 


12

















 


Product to meet its requirements for Finished
Product, GILEAD shall have the right to have another supplier provide such
replacement batch of Bulk Product. 
Subject to the other provisions of this Agreement, GILEAD’s remedies
under this Section 8.4 shall be cumulative with other remedies it may have
under this Agreement.


 


8.5          Defects of Bulk Product attributable to Deficiencies of API. Subject to what is provided under Section 2 above, APO shall have
no responsibility for any Defects in the Bulk Products which are due to
deficiencies of API provided that such Defects are not attributable to APO’s
breach of its obligations to inspect the API delivered in accordance with
Section 2.4 above.


 


8.6          Limitation of Liability. Except in the
circumstances where APO has failed to comply with the Specifications and any
other warranties as specified in Section 13.1 above, APO shall not be liable or
have any responsibility for any deficiencies in, or other liabilities
associated with, any Bulk Product manufactured by it, including, without
limitation, any deficiencies contained in the formulae and procedures specified
by GILEAD in the Specifications and effects deriving from compliance with legal
requirements as specified in Section 13.1, or which are connected to the
safety, efficacy or marketability of the Bulk Products or any distribution
risk.


 


8.7          Consequential Damages. Neither Party
shall be liable to the other for any consequential damages, except in the case
of Party’s gross negligence or intentional misconduct.


 


 


SECTION 9

API OR BULK PRODUCT SHORTFALLS


 


If at any time during the Initial Term and
any extension of this Agreement, APO is or expects that it will be unable to
satisfy GILEAD’ requirements of Bulk Product, in full or in part, or GILEAD is
or expects that it will be unable to satisfy APO’s requirements of API, then
that Party shall promptly notify the other Party, detailing the extent to which
it will not meet such requirements. 
Nothing in this Section 9 is intended to relieve a Party of its other
obligations under this Agreement.


 


SECTION 10

PRICING AND CHANGES


 


10.1        Supply Price. APO shall Manufacture and
supply the Bulk Product to GILEAD at the Supply Price set forth in Schedule “A”.
Subject to Section 10.2, the Supply Price shall be in force during the Initial
Term of this Agreement.


 


10.2        Changes in Manufacturing, Quality Control and Packaging of the Bulk
Product. With respect to any changes of the
Manufacturing, quality control and packaging of the Bulk Product (hereinafter
collectively referred to as “Change(s)”), the Parties agree with respect
to the implication on the Supply Price as follows:


 


10.2.1     Changes requested by GILEAD. If GILEAD
requests a Change which would result in an increase in APO’s costs for
Components or for manufacturing, controlling or packaging the Bulk Product, the
Parties shall discuss in good faith what impact, if any, such Change will have on
the Supply Price of the Bulk Product, and APO shall propose in good faith a
proposal that


 


13

















 


states the price change due to implementation
of such a Change.  If GILEAD should
accept a proposed price change, the proposed Change shall be implemented, and
the price change shall become effective only with respect to those orders of
the Bulk Product which are manufactured in accordance with the revised
Specifications.  Unless a proposed
Change would cause extreme disruption to APO’s other operations at the
Manufacturing Facility, APO will be obligated to implement such Change if
GILEAD accepts APO’s good faith proposal for a price change.


 


Notwithstanding any Change in the
Specifications implemented in accordance with the terms of Art. 10.2.1 above,
GILEAD agrees to purchase all the Bulk Product manufactured by APO based upon
any Binding Order relying on “old” Specification at the “old” price for those
Bulk Product. In addition, GILEAD agrees to purchase all Components and
Inventory utilised under the “old” Specifications and purchased or maintained
by APO in order to fulfil Binding Orders in accordance with Section 6 of the
Agreement, to the extent that such Components and Inventory can no longer be
utilised under the revised Specifications. Open purchase orders for Components
no longer required under any revised Specification which were placed by APO
with suppliers in order to fulfil Binding Orders in accordance with Section 6
of the Agreement shall be cancelled where possible, and where such orders are
not subject to cancellation without penalty, shall be assigned to and satisfied
by GILEAD.


 


10.2.2     Other Required Changes. In any event, should
a Change become necessary in order to allow APO to guarantee the performance of
the activities in a state of the art way or to comply with new provisions or
compulsory requests of the regulatory authorities or, in any event, with APO’s
obligations under this Agreement, APO shall immediately inform GILEAD
accordingly and the provisions set forth in Art. 10.2.1 above shall apply, provided,
however, that if such Change is not specific to the Bulk Product but
instead relates to compliance of the Manufacturing Facility or APO’s general
procedures with GMP, any increased costs to APO would be allocated equitably
and consistently across all products manufactured by APO at the Manufacturing
Facility.


 


 


SECTION 11

PAYMENT


 


11.1        Invoicing. APO shall issue invoices for
the payment due from GILEAD for Bulk Product shipped to GILEAD, and all invoice
amounts shall be expressed, and all payments made in Euros.


 


11.2        Payment. Payment shall be made by GILEAD
to APO within [*] days of the date
of each invoice sent pursuant to Section 7.2.


 


11.3        Currency. Unless otherwise agreed, all
monetary amounts are expressed in this Agreement in Euros.


 


SECTION 12

GENERAL INFORMATION DUTIES


 


General Duties to inform. Each
Party to this Agreement shall keep the other Party fully informed of any
notification or other information, whether received directly or indirectly
which


 


14

















 


might affect the marketability, safety or
effectiveness of the finished drug product or which might result in the recall
or seizure of the registration / market validation lots.


 


SECTION 13

WARRANTIES


 


13.1        Representations and Warranties of APO. APO
makes the following representations and warranties with respect to the Bulk
Product sold hereunder: (i) the Bulk Product shall be of
merchantable quality and shall fully comply with all Specifications; (ii)
In Manufacturing the Bulk Product, APO shall adhere to (a) the quality standards and
testing methods of GILEAD set forth in the Specifications; (b) the Quality Agreement; (c)
any other condition provided under the Manufacturing Authorisation and the
Marketing Authorisation; (d) the cGMPs; (e) any other applicable
laws, rules and regulations applicable to manufacture of Bulk Product in
territories where Finished Product is to be marketed, as notified by GILEAD; (f) any
additional manufacturing standards agreed upon by the Parties; as well as (g)
the Binding Orders.


 


13.2        Limitation of Warranty. The above stated
warranty does not apply in the event of improper storage and/or improper
handling of the Bulk Product by GILEAD or by any third party.


 


13.3        Authority. Each Party represents and
warrants that it has the full right and authority to enter into this Agreement,
and that it is not aware of any impediment that would inhibit its ability to
perform its obligations hereunder.


 


13.4        Formulae. GILEAD represents and warrants
that the Specifications for the Bulk Product are its property and that GILEAD
may lawfully disclose such Specifications to APO. GILEAD further represents and
warrants that any trademarks utilized by APO in connection with the Bulk
Product are its property and may be lawfully used as directed by GILEAD. GILEAD
further represents and warrants that the Specifications for the Bulk Product
conform to all applicable laws and regulations, and that the Bulk Product if
labelled and formulated in accordance with such Specifications and Manufactured
in compliance with this Agreement (i) may be lawfully sold and distributed in
every jurisdiction in which GILEAD markets the Bulk Product, (ii) will be fit
for the purpose intended, and (iii) subject to labelling and application in
accordance with applicable laws will be safe for human consumption.


 


SECTION 14


INDEMNIFICATION


 


14.1        Indemnification by APO. APO shall
indemnify, defend and hold harmless GILEAD, its officers, directors, agents,
servants, and employees harmless against all losses, damages, judgments,
liabilities, costs and expenses (including reasonable legal expenses) (“Losses”)
resulting from third party claims, demands, actions, suits or proceedings (“Third Party
Claims”), arising out of APO’s breach of this Agreement (including
breaches of its warranties in Section 13.1) or APO’s negligence or willful
misconduct in activities under this Agreement, except in each case to the
extent GILEAD has an obligation of defense or indemnity with respect to such
Loss or Third Party Claim pursuant to Section 14.2..


 


GILEAD shall not settle any such Third Party
Claim without the prior written approval of APO, and APO shall have the right,
if it so wishes, to conduct negotiations to settle, settle or to conduct any
litigation arising out of, any such Third Party Claim. GILEAD shall provide
prompt written notice of


 


15

















 


any such Third Party Claim to APO and shall
reasonably co-operate in the defence and/or settlement of any such Third Party
Claim at APO’s request and expense.


 


14.2        Indemnification by GILEAD. GILEAD shall
indemnify, defend and hold harmless APO, its officers, directors, agents,
servants, and employees harmless against all Losses resulting from Third Party
Claims arising out of (i) GILEAD’s breach of this Agreement (including breaches
of its warranties in Section 13.4), (ii) for shipments of Bulk Product, the
manufacture, use, import, offer for sale, sale, distribution, testing,
handling, transport or disposal of Bulk Product or Finished Product following
delivery of the relevant Bulk Product pursuant to this Agreement, or (iii)
GILEAD’s negligence or willful misconduct in activities under this Agreement,
except in each case to the extent APO has an obligation of defense or indemnity
with respect to such Loss or Third Party Claim pursuant to Section 14.1..


 


APO shall not settle any such Third Party
Claim without the prior written approval of GILEAD, and GILEAD shall have the
right, if it so wishes, to conduct negotiations to settle, settle or to conduct
any litigation arising out of, any such Third Party Claim APO shall provide
prompt written notice of any such Third Party Claim to GILEAD and shall
reasonably co-operate in the defence and/or settlement of any such Third Party
Claim at GILEAD’s request and expense.


 


14.3        Survival of Indemnification Obligations. The indemnification obligations set forth in this Section 14 shall
survive the expiration or termination of this Agreement.


 


SECTION 15


CONFIDENTIALITY


 


15.1        General Principle.  “Confidential Information” shall mean confidential or
proprietary information of a Party either disclosed orally or in writing to or
otherwise learned by the other Party that should reasonably be known to be
confidential or proprietary to the disclosing Party, including but not limited
to such Party’s: research, development, preclinical and clinical programs, data
and results; pharmaceutical or biologic candidates and products; inventions,
works of authorship, trade secrets, processes, conceptions, formulas, patents,
patent applications, and licenses; business, product, marketing, sales,
scientific and technical strategies, programs and results, including costs and
prices; suppliers, manufacturers, customers, market data, personnel, and
consultants.  Each Party agrees to hold in strict confidence any and all
Confidential Information of the other Party disclosed to it, to use such
Confidential Information only for the purposes of this Agreement, and to
restrict access to such Confidential Information to those persons entrusted to
carry out the activities provided for hereunder and who are subject to the same
secrecy obligation. Each Party will protect the confidentiality of Confidential
Information of the other Party using use the same level of effort it uses to
protect its own confidential or proprietary information of a similar nature but
in no event less than a commercially reasonable level of effort.


 


15.2        Exceptions. Excepted from the secrecy
obligations in Section 15.1 shall be any Confidential Information: (i)
which is in public domain at the time of disclosure; (ii) which is published or
otherwise becomes part of the public domain through no fault of the receiving
Party; (iii)
which was in the possession of the receiving Party at the time of disclosure as
shown by prior written records; (iv) which becomes available to the
receiving Party without secrecy obligations from a third party


 


16

















 


who has the right to disclose it without
breach of any obligation to the other Party; (v) or, of which the
receiving Party can clearly and convincingly prove that it was independently
developed by employees of the receiving Party who had no access to the
Confidential Information disclosed.


 


15.3        Required Disclosure. Notwithstanding any
other provision of this Agreement, each Party may disclose Confidential
Information of the other Party to the extent and to the persons or entities as
required by applicable governmental law, rule, regulation or order (including
to Regulatory Agencies for the purposes of this Agreement), provided that it
first notifies the other Party of such disclosure requirement to enable it to
seek any available Excepted from this secrecy obligation shall further be Information
or Know-How which has to be disclosed to the EU Regulatory Agencies for the
purposes of this Agreement or which GILEAD is entitled to disclose according to
this Agreement.


 


15.4        Duration of Confidentiality Obligations. The confidentiality obligations of the Parties shall survive this
Agreement for a period of ten (10) years.


 


15.5        Improvements


 


15.5.1     APO acknowledges and agrees that it has no proprietary intellectual
property rights in or to the current manufacturing process for the Finished
Product, as set forth in the Specifications. 
APO shall not perform any Manufacturing other than for Manufacture of
Finished Product for supply to Gilead pursuant to this Agreement, and APO shall
not perform any process development or otherwise attempt to modify the
Manufacturing process without Gilead’s prior written consent.


 


15.5.2     The Parties acknowledge that they, independently or jointly, may
develop improvements to the Specifications, inventions and other know-how
(including without limitation data, information, processes, techniques,
methods, and unpatentable inventions) in the course of fulfilling their
obligations under this Agreement (“Improvements”).  Subject to Section 15.5.3, (i) APO shall own all right, title and
interest in and to Improvements that are general manufacturing Improvements
that have application beyond manufacture and processing of [*](including Finished Product and finished
products incorporating [*] to the [*]) (“APO Improvements”), and (ii) Gilead shall
own all, right, title and interest in and to all other Improvements (“Gilead
Improvements”). Each Party hereby assigns its entire right, title
and interest in Improvements that are to be owned by the other Party pursuant
to this Section 15.5.2, and all patents and copyrights that may be obtained
thereon and trade secrets and other intellectual property rights therein (“Improvements
IP”), to the other Party, and each Party will take all reasonable
steps and execute and deliver all documents reasonably required for the other
Party to evidence or record such assignment as applicable.  Each Party shall only use in its performance
under this Agreement, its employees or consultants who have agreed in writing
to assign Improvements to it.


 


15.5.3     APO hereby grants to Gilead an irrevocable, nonexclusive, worldwide,
royalty-free license under the APO Improvements and the APO Improvements IP to
research, develop, make, have made, use, sell, offer for sale, import and
otherwise commercialize Gilead’s (and its Affiliates’ and licensees’) products
throughout the world, with the right to sublicense (through one or more tiers
of sublicensees to Affiliates of Gilead, licensees with exclusive or
co-exclusive commercialization rights to such products to in one or more
countries, and contract manufacturers).


 


17

















 


SECTION 16

TERMINATION


 


16.1        Either Party’s Right to terminate for Cause. Either Party shall have the right to terminate this Agreement for
cause in any of the following events:


 


16.1.1     Termination for Material Breach. Without
prejudice to any remedy or claim it may have against the other Party for
material breach or non-performance of this Agreement, either Party shall have
the right to terminate this Agreement for cause in the event that the other Party
fails to materially comply with or perform any material provision of this
Agreement (the “Breach”) in accordance with the following provisions:


 


16.1.1.1 The terminating Party shall notify
the terminated Party of any such Breach in writing, specifying such Breach in
reasonable detail and stating its intention to terminate this Agreement for
cause (the “Reminder”).


 


16.1.1.2 In the event that the terminated
Party either (i) if the Breach is of such a nature that it can be
reasonably expected to be cured within a [*]
day period (for example, as with an obligation to make payment of monies),
fails to cure such Breach within a period of [*]
days following receipt by the terminated Party of such Reminder (the “Remedy
Period”), or (ii) if the Breach is of such a nature that
it cannot be reasonably expected to be cured within a [*] day period, if the terminated Party
fails to establish to the reasonable satisfaction of the terminating Party that
it is diligently and actively pursuing a cure at the expiration of such Remedy
Period, , the terminating Party shall be entitled to terminate this Agreement
within a period of [*] following
the expiry of such Remedy Period with immediate effect by giving the terminated
Party related written notice.


 


16.1.1.3 In the event that the terminated Party, under the circumstances
referred to under (ii) of Section 16.1.1.2 above, can establish to the
reasonable satisfaction of the terminating Party that it is diligently and
actively pursuing a cure at the expiration of the Remedy Period, then such Remedy
Period shall be extended for so long as a cure is being diligently and actively
pursued, such extension not to exceed [*]
days in the aggregate (the “Extended Remedy Period”).  For clarity, the Remedy Period and the
Extended Remedy Period together shall not exceed [*] days.


 


16.1.1.4 In the event that the terminated
Party shall not have cured the Breach pursuant to Section 16.1.1.3 above at the
end of such Extended Remedy Period, the terminating Party may exercise its
termination right for Breach within a period of [*] following the expiry of such Extended Remedy Period by
giving the terminated Party related written notice.


 


16.1.2     Termination for Reasons of Insolvency or Termination of Business
Activities. Either Party shall be entitled to
terminate this Agreement if the other Party becomes insolvent or is subject of
a petition in bankruptcy whether voluntary or involuntary or of any other
proceeding under bankruptcy, insolvency or similar laws, or if this Agreement
is assigned by such other Party for the benefit of creditors. Such termination
right may be exercised within a term of [*]
following the date as of which the Party entitled to terminate receives
knowledge of such insolvency or termination of business activities by the other
Party, by giving the terminated Party


 


18

















 


related written notice


 


16.1.3     Termination for Medical or Regulatory Reasons. GILEAD shall be entitled to terminate this Agreement in case of
medical or regulatory reasons which prevent the use of Finished Product in
humans or in case approval of Finished Product is rejected or withdrawn by EU
or foreign Regulatory Agencies or in case of other serious safety reasons and
GILEAD has undertaken serious attempts to remove the reasons therefore.


 


16.2        Financial Consequences in Case of Termination. Upon expiration or termination of this Agreement GILEAD shall, to
the exclusion of other financial obligations of GILEAD except as specifically
provided for herein: (i) purchase, at APO’s cost, the Inventory
applicable to the Bulk Product which was purchased, produced or maintained by
APO in contemplation of filling Binding Orders and that is suitable for
production of Bulk Product; (ii) purchase from APO all undelivered Bulk
Products already firmly ordered in accordance with the ordering terms of
Section 5.2, at the price in effect at the time the Binding Order was placed;
and (iii)
satisfy the purchase price payable pursuant to APO’s orders with
suppliers of Components, provided such orders were made by APO in reliance on
Binding Orders.   The provisions of this
Agreement relating to delivery, acceptance, rejection and payment or and for
Bulk Product shall govern delivery and purchase of such Bulk Product under (ii)
and (iii).


 


If the Agreement is terminated by
GILEAD pursuant to Section 16.1.1 as a result of a Breach by APO or pursuant to
Section 16.1.3, GILEAD agrees to purchase such of the items referred to in (i),
(ii) and (ii) above as it determines, acting reasonably, can be used by it.


 


16.3        Return of Stocks of API. In case of the expiration or termination of this Agreement for any
reason whatsoever, APO shall, at GILEAD’s request and option, return to GILEAD
or its designee or destroy all stocks of API remaining at APO, the costs of
transportation or destruction to be borne by GILEAD, or, in the case of a
termination of this Agreement by GILEAD pursuant to Section 16.1.1 as a result
of a Breach by APO or pursuant to Section 16.1.3, by APO.


 


16.4        Termination of Manufacturing License. Effective
upon the expiration or termination of this Agreement for any reason whatsoever,
the Manufacturing license granted by GILEAD to APO under Section 3.1 shall
terminate, and the rights of each Party to Information and Know-How of the
other Party shall expire with immediate effect.  APO shall either, at GILEAD’s option, return or destroy all
Information and Know-How of GILEAD and all copies, extracts, summaries and
derivatives thereof, in its possession and shall certify to GILEAD the completion
thereof.


 


 


SECTION 17

NOTICES


 


Unless otherwise specified herein, any notice
or other communication required or permitted to be given under this Agreement
may be delivered personally or be sent by prepaid certified or registered post,
courier or facsimile transmission (with receipt acknowledged or confirmed)
addressed to the Party addressed as follows:


 


 


If to GILEAD:        [*]


 


19

















 


Gilead Sciences Inc.


333 Lakeside Drive


Foster City, CA 94404


USA


Fax No.:  [*]


Tel. No.: [*]


Email: [*]


 


with a copy to:      Gilead
Sciences, Inc.


333 Lakeside Drive


Foster City, CA  94404


USA


Attention:  Vice President and General Counsel


Fax No.:  [*]


 


and


 


if to APO:              [*]


 


Tel. No.: [*]


Fax No.: [*]


Email:         [*]


 


and any such notice or other communication
shall be deemed to be effective upon receipt by the Party to which it is
addressed if received during a Working Day or otherwise at the start of the
next Working Day. Any Party may change the address to which notice is to be
given as provided herein by giving the other Party related written
notification.


 


 


SECTION 18

DISPUTE RESOLUTION AND GOVERNING LAW


 


18.1        Disputes. In the event of any dispute,
claim, question or disagreement arising out of or relating to this Agreement (a
“Dispute”),
the Parties shall use all reasonable efforts to settle such Dispute by amicable
negotiations within a period of [*]
days of one Party giving notice of the Dispute to the other Party.


 


18.2        Arbitration. Should the Parties not
manage to settle the dispute by amicable negotiations within the such period of
[*] days, all disputes shall be
finally settled under the rules of conciliation and arbitration of the
International Chamber of Commerce (the “Rules”) by three arbitrators,
reasonably fluent in English, one appointed by each of the Parties and the
third one, who shall act as Chairman, by the other two arbitrators, or, in the
event of their failure to reach agreement within [*] days of the appointment, in accordance with the Rules.


 


The arbitration procedure will take place in
Geneva  and
will be conducted in the English language.


 


The decision of the arbitrators will be final
and binding upon the Parties.


 


20

















 


18.3        Governing law. This Agreement shall be
construed and enforced in accordance with the laws of Switzerland.


 


 


SECTION 19

ASSIGNMENT AND SUBCONTRACT


 


19.1        Assignment. This Agreement may be
assigned by GILEAD provided that:


 


(i) GILEAD shall inform APO of said
assignment in writing and in advance; and (ii) any assignee shall covenant in
writing with APO to be bound by the terms of this Agreement.


 


APO may assign this Agreement to subsidiaries
of APO only with prior written agreement by GILEAD which agreement shall not be
unreasonably withheld.


 


19.2        Subcontract. APO may subcontract, in
whole or in part, to third parties the performance of the activities
contemplated under Section 3 above entrusted to it by this Agreement, provided
that APO shall bear any additional costs possibly related to this appointment. In
any event, before subcontracting the performance of the aforesaid activities to
third parties, APO must first receive written consent from GILEAD.


 


19.3        [*] shall be APO’s counterparty to for [*] supplies of Bulk Product, and [*] will have the rights and obligations of GILEAD
hereunder to the extent pertaining to [*] supplies of Bulk Products.  [*] shall be APO’s counterparty to for [*] supplies of Bulk Product and will have the
rights and obligations of GILEAD hereunder to the extent pertaining to [*] supplies of Bulk Products.


 


 


SECTION 20

FORCE MAJEURE


 


20.1        Force Majeure. Neither Party
shall be liable for the failure to perform its obligations under this Agreement
if such failure is occasioned by a cause or contingency beyond such party’s
reasonable control, including, but not limited to riots, wars, fires, floods,
storms, strikes (excluding strikes and work slow-downs that affect APO but not
the German pharmaceutical manufacturing sector generally), interruption of
energy supply, or compliance with any order or regulation of any government
entity which is not due to any failure or non-compliance of the Party affected.
A Party claiming a right to excused performance under this Section 21 shall
immediately notify the other Party in writing of the extent of its inability to
perform, which notice shall specify the occurrence beyond its reasonable
control that prevents such performance and shall indicate its consequences from
the stand point of the fulfilment of contractual obligations.


 


The Party affected by an event of force
majeure must use and continue to use every effort in order to continue to
perform this Agreement and, subject to the following paragraph, if absolutely
necessary the Parties shall co-operate in order to agree upon terms and
conditions different from those contained herein, for the continuance of the
Agreement itself for the entire period of time the event of force majeure
continues.


 


21

















 


Should the event of force majeure extend for
more than [*] months, each of the
Parties shall be entitled to terminate this Agreement by giving [*] days written notice thereof to the
other Party. Such notice shall indicate, inter alia, the date provided for the
termination of the Agreement.


 


SECTION 21

WAIVER


 


A waiver of any breach of any provision of
this Agreement shall not be construed as a continuing waiver of other breaches
of the same or other provisions of this Agreement.


 


The tolerance by either of the Parties, even
if continued or repeated, of breaches by the other Party of provisions
contained in any clause of this Agreement shall not constitute a waiver nor it
may in any way affect the validity of the clause being breached, so long as the
breach is contested within [*]
days of the date of the event by way of registered letter with return receipt.


 


SECTION 22

NO PARTNERSHIP


 


The relationship established hereby between
GILEAD and APO is in all respects a commercial relationship. Nothing herein
shall be construed as imposing any fiduciary obligations on either Party, or as
establishing any partnership or joint venture between the Parties, or as
rendering one Party an agent of the other.


 


 


SECTION 23

ENTIRE AGREEMENT


 


This Agreement constitutes the entire
agreement between the Parties with reference to the subject matter hereof and
supersedes any prior agreements with respect to such subject matter.


 


Any modification, amendment or supplement to
this Agreement must be in writing and signed by authorised representatives.


 


The “WHEREAS”  and the documents attached
as Schedules to this Agreement form an integral and substantial part of this
Agreement.  The headings to the Sections
of this Agreement are for convenience only and shall be disregarded in
interpreting and construing this Agreement.


 


SECTION 24

SEVERABILITY


 


In the event of the invalidity of any
provisions of this Agreement or of this Agreement containing any gaps, the
Parties agree that such invalidity or gap shall not affect the validity of the
remaining provisions of this Agreement. The Parties will in good faith replace
an invalid provision or fill any gap with valid provisions, which most closely
approximate the purpose and economic effect of the invalid provision or, in
case of a gap, the Parties’ presumable intentions. In the event that the terms
and conditions of this Agreement are materially altered as a result of


 


22

















 


the preceding sentences, the Parties shall
renegotiate the terms and conditions of this Agreement in order to resolve any
inequities.


 


SECTION 25

SURVIVAL


 


The termination or expiration of this
Agreement for any reason whatsoever shall be without prejudice to any
obligations or rights on the part of either Party which have accrued prior to
such termination, and shall not affect or prejudice the following provisions of
this Agreement which shall survive such termination or expiration: Title to
API, Section 2.6; Destruction of Defective API, Section 2.10; Defective Bulk
Product, Section 8; General Information Duties, Section 12; Warranties, Section
13; Indemnification, Section 14; Confidentiality, Section 15; Financial
Consequences in Case of Termination, Section 16.2; Return of Stocks of API,
Section 16.3; Termination of Manufacturing License, Section 16.4; Notices,
Section 17; Dispute Resolution and Governing Law, Section 18; Waiver, Section
21; Entire Agreement, Section 23; Severability Section 24; and Survival,
Section 25.


 


23

















 


SECTION 26

EXECUTION BY COUNTERPART


 


This Agreement may be executed by the Parties
in two counterparts, each of which shall be deemed an original and all of
which, taken together, shall constitute one and the same instrument.


 


IN WITNESS WHEREOF, this Agreement has been
executed as of the date first above written by the parties’ respective duly
authorized representatives.


 


	
  Gilead World Markets, Ltd.

  	
  ALTANA Pharma Oranienburg GmbH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mark L. Perry, Director

  	
  Hans-Joachim Kaatz, General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  Gilead Sciences, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mark L. Perry, Executive Vice President,

  Operations

  	
  Dr. Hans-Christian Meyer, Senior Director

  
					



 


 


Schedules to this Agreement:


 


	
  Schedule
  “A”:

  	
   

  	
  Supply Price

  
	
  Schedule
  “B”:

  	
   

  	
  Quality Agreement

  
	
  Schedule
  “C”:

  	
   

  	
  Bulk Product Specifications

  
	
  Schedule
  “D”:

  	
   

  	
  API and Excipient Specifications; Handling and Storage of API

  
	
  Schedule
  “E”:

  	
   

  	
  Batch Coding System

  
	
  Schedule
  “F”:

  	
   

  	
  Dispatch Labelling of APO

  
	
  Schedule
  “G”:

  	
   

  	
  Shipment Instructions

  
	
  Schedule
  “H”:

  	
   

  	
  Manufacturing Line [*]
  of API [*]

  
	
  Schedule
  “I”:

  	
   

  	
  Yearly Minimum Volumes of Purchases

  



 


24

















 


Schedule “A”


Toll Manufacturing Agreement


 


Supply Price


 


 


1.             Supply
Price coated tablets


 


The Supply Price for [*] shall correspond to [*]. This price will be fixed till [*].


 


 


No later than [*] the end of each year APO shall be entitled to request an
adjustment to the fees for the applicable component costs and processing fees
in respect of such drug product for increases in manufacturing costs based on
the increases in the official index [*].


 


25

















 


Schedule “B”


Toll Manufacturing Agreement


 


Quality
Agreement

for

the Manufacturing and Supply of

Products for Gilead Sciences, Inc.


 


 


between


 


 


Gilead
Sciences, Inc.


650 Cliffside Drive


San Dimas, CA  91773


and


335 Lakeside Drive


Foster City, CA  94404-1147


and


Gilead
Sciences Ltd.


Unit 13, Stillorgan Industrial Park,


Blackrock, Co., Dublin, Ireland


as contract giver


 


and


 


Altana Pharma Oranienburg GmbH


[*]


Germany


as contract acceptor


 


26

















 


Table of Contents


 


	
  Introduction

  	
   

  
	
  1.

  	
  Manufacturing of PRODUCT

  	
   

  
	
   

  	
  1.1.  Manufacturing Procedures

  	
   

  
	
   

  	
  1.2.  Deviations

  	
   

  
	
   

  	
  1.3.  Rejection of Product

  	
   

  
	
   

  	
  1.4.  Compendial Compliance

  	
   

  
	
   

  	
  1.5.  Materials

  	
   

  
	
   

  	
  1.6. 
  Labeling

  	
   

  
	
   

  	
  1.7.  Distribution

  	
   

  
	
   

  	
  1.8.  Qualification/Validation

  	
   

  
	
   

  	
  1.9.  Reprocessing and Rework

  	
   

  
	
  2.

  	
  Testing of PRODUCT

  	
   

  
	
   

  	
  2.1. 
  Sampling, Inspection, and Testing of PRODUCT

  	
   

  
	
   

  	
  2.2.  Batch Release

  	
   

  
	
   

  	
  2.3.  Stability Program

  	
   

  
	
   

  	
  2.4. Annual Quality Review

  	
   

  
	
  3.

  	
  Retention of Samples

  	
   

  
	
  4.

  	
  Documentation

  	
   

  
	
   

  	
  4.1. Batch Records

  	
   

  
	
   

  	
  4.2.  Records Retention

  	
   

  
	
   

  	
  4.3.  Change Control

  	
   

  
	
  5.

  	
  Information
  Flow

  	
   

  
	
   

  	
  5.1.  Communication

  	
   

  
	
   

  	
  5.2. 
  Regulatory Inspections of Facilities and PRODUCT

  	
   

  
	
   

  	
  5.3.  Access to Facility

  	
   

  
	
   

  	
  5.4.  Product Complaints

  	
   

  
	
   

  	
  5.5.  Product Recall

  	
   

  
	
  6.

  	
  Duration

  	
   

  
	
  7.

  	
  Modifications to the AGREEMENT

  	
   

  
	
  8.

  	
  Approval Signatures

  	
   

  
	
   

  	
   

  
	
  Attachment A: PRODUCTS for MANUFACTURING

  	
   

  
	
  Attachment B: Contact Information

  	
   

  
	
  Attachment C: Responsibilities Matrix

  	
   

  



 


27

















 


Introduction


 


This Quality Agreement (hereinafter
“AGREEMENT”) is a required and integral part of the Toll Manufacturing
Agreement (hereinafter “Manufacturing Agreement”) between Gilead World Markets,
Ltd. and Altana Pharma Oranienburg GmbH (hereinafter “APO”). This AGREEMENT
defines the cooperation between Gilead Sciences, Inc., with offices in Foster
City, California, and San Dimas, California, and Gilead Sciences Ltd., with
offices in Dublin, Ireland, (hereinafter “GILEAD”) and APO with respect to
Quality Assurance issues related to all such activities as may be required for
the manufacture of those drug products set forth in Attachment A (hereinafter
“PRODUCT”), including (as appropriate) the planning, purchasing, manufacture,
processing, compounding, storage, filling, packaging, labeling, testing, sample
retention, stability testing, release, and dispatch (hereinafter “MANUFACTURE”
or “MANUFACTURING”).


 


Description of Roles between GILEAD sites:


 


GILEAD Foster City: [*]


 


GILEAD San Dimas: [*]


 


GILEAD Dublin: [*]


 


In the event that there is a discrepancy
between the provisions of the Manufacturing Agreement and the provisions of
this AGREEMENT, the provisions of this AGREEMENT shall control with respect to
terms governing the quality of the PRODUCT and the provisions of the
Manufacturing Agreement shall control with respect to all other terms.


 


In all instances, “written authorization”
shall mean communication written on official letterhead or other official forms
of written correspondence and signed by the authoring party’s QA representative
(as listed in Attachment A). In all instances, “procedures” shall mean company
standard operating procedures approved through the change control process.


 


GILEAD and APO agree as follows:


 


1.     Manufacturing of PRODUCT


 


1.1.       Manufacturing Procedures


 


1.1.1   APO shall
manufacture the PRODUCT in accordance with principles of current Good
Manufacturing Practice (cGMP) as described in the United States Code of
Federal Regulations (CFR), Title 21, Part 211 and the most current
edition of the Rules Governing Medicinal Products in the European Community,
Volume IV, Good Manufacturing Practices for Medicinal Products.


 


1.1.2   GILEAD shall
provide APO with all the information necessary to carry out the contracted
operations correctly in accordance with the marketing authorizations,
regulatory filings, and any other legal requirements via a PRODUCT-specific
Contractor Manual. GILEAD shall ensure that APO is fully aware of any problems
associated with the PRODUCT or the work that might pose a hazard to APO’s
premises, equipment, personnel, and/or other materials and products.


 


1.1.3   APO shall
manufacture the PRODUCT only in sites registered and/or approved by the US FDA
and other applicable regulatory authorities for the manufacture of the PRODUCT.


 


28

















 


1.1.4   APO shall not
subcontract to a third party any part of the MANUFACTURING of the PRODUCT
without GILEAD’s prior evaluation and written authorization of the
arrangements.


 


1.1.5   APO shall
assure that the PRODUCT is manufactured,  packaged, held, labeled, and tested
according to approved procedures and specifications. APO is responsible for
shipment of the PRODUCT to GILEAD (or designee) upon written authorization by
GILEAD.


 


1.1.6   APO shall
advise GILEAD Quality Assurance (QA) prior to implementing any Major change to
the approved method of manufacture or specifications. “Major” has the same
meaning as set forth in Section 506A (21 U.S.C. 356a) of the US Federal Food,
Drug, and Cosmetic Act.


 


1.1.7   Where control
of [*] levels is required and
included in the PRODUCT specifications, material specifications, and/or
component specifications, APO shall control and monitor the facility
environment, utilities and equipment used for the MANUFACTURING of the PRODUCT
as per APO procedures.


 


1.1.8   APO shall
refrain from any activity that may adversely affect the quality of the PRODUCT
manufactured and/or analyzed for GILEAD.


 


1.2.       Deviations


 


1.2.1   APO shall
document, justify, and, when appropriate, investigate whenever there is a
manufacturing deviation (as defined in APO procedures) from approved procedures
or specifications. Included is any suspect and confirmed out-of-specification
(OOS) result for GILEAD-related raw material, components, intermediate,
in-process specification or finished PRODUCT specification. This documentation
shall be retained as part of the batch record(s) for the batch(es) affected.


 


1.2.2   APO shall notify GILEAD of a manufacturing
deviation with influence on the quality of the PRODUCT as defined in APO
procedures within [*] business days.


 


1.2.3   Reprocessing
shall be considered a deviation.


 


1.3.       Rejection of Product


 


1.3.1   APO shall
include appropriate GILEAD personnel in any investigation concerning PRODUCT
MANUFACTURING.


 


1.3.2   In the event
of rejection of PRODUCT, GILEAD and APO shall proceed per the Manufacturing
Agreement.


 


1.4.       Compendial Compliance


 


1.4.1   APO is
responsible for compliance to the Compendial methods, specifications, and
testing of Compendial articles in the MANUFACTURING of PRODUCT and for control
of the environment wherein MANUFACTURING occurs.


 


1.4.2   GILEAD is
responsible for compliance to the Compendial methods, specifications, and
testing under its direct control and responsibility.


 


1.5.       Materials


 


1.5.1   APO shall
purchase and receive from mutually agreed upon suppliers, inspect, test, release,
store, and/or handle materials related to the MANUFACTURING of the PRODUCT,
including components and excipients, in accordance with APO procedures and
consistent with cGMPs.


 


29

















 


1.5.2   GILEAD shall
provide Active Pharmaceutical Ingredient (API) to APO with a GILEAD Certificate
of Analysis.


 


1.5.3   APO shall
receive, inspect, and test API from GILEAD.


 


1.5.4   APO shall
audit and approve preferred suppliers of materials per APO procedures. GILEAD
shall audit and approve GILEAD-specified suppliers, including suppliers of API,
per GILEAD procedures.


 


1.5.5   APO shall
maintain an approved GILEAD suppliers list in accordance with APO procedures
for controlled materials purchased by APO for use in the PRODUCT.


 


1.5.6   APO shall
store controlled materials according to specified storage requirements per APO
procedures. APO shall have a system in place that ensures that stored material
is re-sampled and tested according to specified re-test dates and discarded by
specified expiration dates, as applicable.


 


1.5.7   APO shall
assure that the potential for cross-contamination from any compound used at the
APO facility is satisfactorily controlled via adequate cleaning procedures,
dedicated equipment, and/or cleaning validation as appropriate.


 


1.6.       Labeling


 


GILEAD shall be responsible
for, and provide APO with, copy content and artwork for all printed materials
associated with the PRODUCT. This includes, but is not limited to, shipping
container labels, cartons and inserts. GILEAD shall be responsible for
compliance with federal, state, and local regulations and for obtaining
regulatory approval for the PRODUCT labeling.


 


1.7.       Distribution


 


1.7.1   APO shall
prepare orders and ship PRODUCT by appropriate freight forwarders to arrive in
suitable condition at the premises designated by GILEAD.


 


1.7.2   Shipment of
PRODUCT shall be conducted upon and according to GILEAD authorization, which
shall include quantities and locations for shipment and all other pertinent
information.


 


1.7.3   APO shall
forward to GILEAD the following Inventory/Shipping documentation:


 


1.7.3.1.    API
withdrawals and finished product completion from batch records (every
transaction)


 


1.7.3.2.    Shipping
Activity (every transaction)


 


1.7.3.3.    [*]


 


1.8.       Qualification/Validation


 


1.8.1   APO shall
qualify and maintain, consistent with cGMP according to APO protocols and
procedures, the facilities, utilities, and equipment required to support the
MANUFACTURING of the PRODUCT.


 


1.8.2   APO shall
qualify cleaning processes for shared equipment in the facility for
MANUFACTURING the PRODUCT as per APO protocols and procedures.


 


1.8.3   As
specifically contracted by GILEAD (i.e., under separate purchase orders),
related APO PRODUCT qualification/validation results shall be assembled in a
validation report(s) and provided to GILEAD for review and approval. APO shall
maintain original documentation in its site files and provide GILEAD with
copies of the approved protocol(s) and report(s).


 


30

















 


1.9.       Reprocessing and Rework


 


APO shall obtain GILEAD
approval prior to performing reprocessing and/or rework of the PRODUCT.


 


 


2.     Testing of PRODUCT


 


2.1.       Sampling, Inspection, and Testing of
PRODUCT


 


2.1.1   The sampling,
inspection, and testing of in-process material related to the PRODUCT shall be
carried out by APO according to the product specifications and shall be
appropriately documented.


 


2.1.2   APO shall
sample the PRODUCT per APO procedures.


 


2.1.3   APO is
responsible for quality control (QC) testing of the PRODUCT.


 


2.1.4   APO shall
perform final PRODUCT testing per the test methods and specifications agreed
upon between APO and GILEAD.


 


2.2.       Batch Release


 


2.2.1   APO shall be
responsible for release of PRODUCT [*].


 


2.2.2   Final release
of the PRODUCT for clinical or commercial use shall be [*]. GILEAD shall provide written [*] to APO prior to [*] of the PRODUCT to any [*].


 


2.2.2.1.    Final release
of PRODUCT for distribution in the EU is the sole responsibility of the
Qualified Person at [*].


 


2.2.3   Subsequent to the successful completion of a
mutually agreeable qualification exercise, APO shall
forward to GILEAD the following documentation for each batch of the PRODUCT:


 


2.2.3.1.    [*]


 


2.2.3.2.    [*]


 


2.2.3.3.    [*]


 


2.2.3.4.    [*]


 


2.2.3.5.    [*]


 


2.2.3.6.    [*]


 


2.2.4   GILEAD may
reduce the above requirements via written authorization to APO.


 


2.3.       Stability Program


 


GILEAD is responsible for
stability testing, primary data interpretation and reporting.


 


2.4.       Annual Product Review


 


2.4.1   GILEAD shall
perform PRODUCT annual product review per GILEAD procedures.


 


2.4.2   APO shall
provide an annual product review summary to GILEAD per APO procedures.


 


2.4.3   GILEAD and APO
shall periodically discuss quality issues related to the past MANUFACTURING of
the PRODUCT with regards to the obligations and responsibilities as described
in this AGREEMENT.


 


3.     Retention of Samples


 


3.1.       APO shall retain samples of raw
materials (including API) per APO procedures.


 


3.2.       GILEAD shall retain samples of PRODUCT
according to GILEAD procedures.


 


31

















 


4.     Documentation


 


4.1.       Manufacturing Records


 


4.1.1   Records
related to the MANUFACTURING of the PRODUCT and/or materials used for the
MANUFACTURING of the PRODUCT shall be mutually approved by APO and GILEAD prior
to implementation.


 


4.1.2   Original Batch
Records (i.e., MPRs) shall be made available for inspection and review by
regulatory authorities at mutually agreeable times.


 


4.2.       Records Retention


 


APO shall retain documentation
specifically associated with the PRODUCT per APO procedures.


 


4.3.       Change Control


 


4.3.1   APO shall
process changes to documentation associated with the PRODUCT per APO
procedures.


 


4.3.2   Upon approval and issuance, APO shall distribute
copies of documentation associated with the MANUFACTURING of the PRODUCT to
GILEAD.


 


4.3.3   Prior to
manufacture of the next batch of the PRODUCT, APO shall notify GILEAD of any
planned changes that have [*], as
defined in the US FDA Guidance for Industry “Changes to an Approved NDA or
ANDA”. This includes changes to the [*]
to MANUFACTURE the PRODUCT.


 


4.4.       Contractor Manual


 


4.4.1   GILEAD shall
provide a current, controlled copy of each PRODUCT-specific Contractor Manual
that includes GILEAD controlled documents critical to the MANUFACTURING of the
PRODUCT.


 


4.4.2   APO shall
distribute internally updated copies of documents contained in the Contractor
Manual within an appropriate timeframe.


 


32

















 


5.     Information Flow


 


5.1.       Communication


 


5.1.1   APO and GILEAD
shall each employ a QA representative who shall be responsible for:


 


5.1.1.1.    Approving the
AGREEMENT


 


5.1.1.2.    Ensuring that
the terms of this AGREEMENT are complied with.


 


5.1.1.3.    Ensuring that
the terms of this AGREEMENT are performed in strict accordance with cGMPs.


 


5.1.1.4.    Ensuring that
the terms of this AGREEMENT are conducted in accordance with the regulatory
filing(s) for the PRODUCT specified.


 


5.1.2   Attachment B
identifies the contact individual(s) and areas of responsibility for APO and
GILEAD. The parties may modify the individuals listed in Attachment B by notice
in writing to the other parties.


 


5.2.       Regulatory
Inspections of Facilities and PRODUCT


 


5.2.1   APO shall
notify GILEAD [*] of any
inspections or actions by regulatory agencies that [*] the PRODUCT.


 


5.2.2   Prior to [*] with regards to the PRODUCT, APO shall
discuss the [*] with GILEAD.


 


5.2.3   Prior to [*] with regards to the MANUFACTURING of
the PRODUCT, GILEAD shall discuss the [*]
with APO.


 


5.3.       Access to Facility


 


GILEAD shall have the right to
visit APO PRODUCT manufacturing and quality control testing site after
reasonable notice and during normal business hours to review manufacturing
operations and assess its compliance with cGMP and quality assurance standards
and to discuss any related issues with manufacturing and management personnel
as it relates to the MANUFACTURING of the PRODUCT.


 


5.4.       Product Complaints


 


5.4.1   GILEAD shall
provide a system to allow for the receipt of complaints associated with the PRODUCT
(PRODUCT complaints). GILEAD shall receive, log, evaluate, and categorize each
complaint received in accordance with GILEAD procedures.


 


5.4.2   As soon as
possible, but not more than [*]
business days (unless a more urgent need is recognized) after receipt of a
PRODUCT complaint from a source other than APO, GILEAD shall report the
complaint in writing to APO QA (as required as a function of the complaint).
GILEAD shall provide all information relative to the PRODUCT complaint to APO,
including a description of the complaint and associated lot number(s) as stated
from complainant. GILEAD shall forward to APO digital pictures of complaint
subject and returned goods, as available. GILEAD shall send APO updates to the
complaint as needed.


 


33

















 


5.4.3   APO shall
perform a thorough investigation of each PRODUCT complaint, and shall make
every effort to provide GILEAD with appropriate written correspondence and/or
final report documents for each PRODUCT complaint received within [*] business days unless a more (or less)
urgent need is recognized and mutually agreed to.


 


5.4.4   GILEAD shall
maintain communication with the complainant to include the initial
acknowledgement of the complaint received and the final results of the
investigation conducted by APO.


 


5.4.5   GILEAD shall
communicate to the complainants and/or regulatory authorities the results of
the complaint investigation, if necessary. GILEAD shall notify APO of any
regulatory action related to the MANUFACTURING of the PRODUCT taken by a
regulatory authority.


 


5.5.       Product Recall


 


5.5.1   GILEAD shall
have responsibility for initiating a PRODUCT recall or field corrections of the
PRODUCT if the PRODUCT violates applicable laws, regulations or agreed
specifications, or is deemed unacceptable for some other reason whether or not
such action is requested by any government agency.


 


5.5.2   GILEAD shall
notify APO of GILEAD’s intent to initiate a PRODUCT recall in order to meet the
standards of the US FDA and other regulatory authorities and shall review any
potential PRODUCT recall with APO prior to taking any action.


 


5.5.3   During a
PRODUCT recall, withdrawal, or field correction, APO shall fully cooperate with
GILEAD to conduct necessary activities.


 


6.     Duration


 


The term of this AGREEMENT
shall be in force for a term to coincide with the Manufacturing Agreement and
can be modified at anytime by agreement of the Parties. This AGREEMENT shall
survive the expiration or termination of the Manufacturing Agreement until [*] year after the expiration date of the
last batch of PRODUCT manufactured hereunder.


 


7.     Modifications to the
AGREEMENT


 


Any modification to this
AGREEMENT must be in writing and approved by both parties in order to be valid.
Any such modifications shall form part of this AGREEMENT and shall be attached
to this AGREEMENT. Attachments may be updated separately and appended to this
AGREEMENT upon notice in writing to the other parties and mutual approval.


 


8.     Approval Signatures


 


	
  For and on behalf of Gilead Sciences, Inc.

  	
  For and on behalf of APO

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
  [*]

  	
   

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signed:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
  [*]

  	
   

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signed:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
  [*]

  	
   

  	
   

  	
  [*]

  



 


34

















 


	
  Signed:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
  [*]

  	
   

  	
   

  	
   

  



 


35

















 


Attachment A, Quality Agreement: PRODUCTS for MANUFACTURING


 


 


	
  PRODUCT

  	
   

  	
  TRADENAME

  	
   

  	
  PRESENTATION

  	
   

  	
  GILEAD CODE NO.

  	
   

  	
  APO CODE NO.

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  



 


36

















 


Attachment B, Quality Agreement: Contact Information


 


Gilead
Sciences, Inc.


 


	
  Area
  of Responsibility

  	
   

  	
  Name

  	
   

  	
  Address

  	
   

  	
  Telephone

  	
   

  	
  FAX

  	
   

  
	
  Quality Assurance/ Product Complaints

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
    

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Quality
  Control

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  Materials/Planning

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Pharmaceutical
  Manufacturing

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Qualified
  Person, European Testing Site

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  



 


APO, Inc.


 


	
  Area
  of Responsibility

  	
   

  	
  Name

  	
   

  	
  Address

  	
   

  	
  Telephone

  	
   

  	
  FAX

  	
   

  
	
  Management

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Quality
  Assurance

  	
   

  	
  [*]

  	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Quality
  Management

  	
   

  	
  [*]

  	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Manufacturing

  	
   

  	
  [*]

  	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  



 


37

















 


Attachment C, Quality Agreement: Responsibilities Matrix


 


	
   

  	
   

  	
  Contract

  Giver

  	
   

  	
  Contract

  Acceptor

  	
   

  
	
  Agreement
  with registration documents

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Active
  ingredients(s)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Specification

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  Supply/procurement

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  Testing
  (Full specification)

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  Testing
  (Identity on receipt of each container)

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reserve
  samples

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other
  starting materials

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-compendial
  material specifications

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  Compendial
  material specifications

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
  Supply/procurement

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
  Testing(1)

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reserve
  samples

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bulk product

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Specification

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  Manufacturing
  directions

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  In-process
  control requirements

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  Testing
  directions

  	
   

  	
  [ý]

  	
   

  	
  [o]

  	
   

  
	
  Manufacture/manufacturing
  record

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
  Quality
  control/testing record

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  
	
  Certificate
  of analysis

  	
   

  	
  [o]

  	
   

  	
  [ý]

  	
   

  



 












(1) Testing is performed per the complete
specification unless otherwise specified.


 


38

















 


Schedule “C”


Toll Manufacturing Agreement


 


Bulk Product Specifications


 


APO has to test and release the Bulk Product
in accordance to GILEAD test procedure No.:[*]
and [*] (for clinical batches) in
its current version.


 


The current versions are [*] (effective date [*]) and [*]
(effective date [*]).


 


39

















 


Schedule
“D”


Toll Manufacturing Agreement


 


API and Excipient Specifications;
Handling and Storage of API


 


 


Active Pharmaceutical Ingredient provided by
Gilead


Starting materials (excipients) provided APO:


 


All API, Excipient and Component testing
shall be performed in accordance with the following Specifications, as may be
amended from time to time by mutual written agreement of the Parties:


 


	
  DESCRIPTION

  	
   

  	
  SPECIFICATION

  	
   

  
	
  API

  	
   

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Excipients

  	
   

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  



 


[*]


 


40

















 


Schedule
“E”


Toll Manufacturing Agreement


 


Batch Coding System


 


Batch coding will consist of a unique
alpha-numeric code of not more than 8 characters.  APO will assign each lot number prior to manufacturing and
reflect that number on the purchase order confirmation sent to Gilead for the
batches requested at that time.


 


41

















 


Schedule
“F”


Toll Manufacturing Agreement


 


Dispatch Labelling of APO


 


 


The labelling of the shipping carton of
Products shall include the following information:


 


•              [*]


 


42

















 


Schedule
“G”


Toll Manufacturing Agreement


 


Shipment Instructions


 


•              [*]


 


43

















 


Schedule “H”


Toll Manufacturing Agreement


 


Manufacturing
Line [*]


 


[*] of API [*]


 


 


1.         Manufacturing
Line Loss (Yield)


 


The Parties shall set forth and indicate in
an addendum
to this Schedule
“H” the total [*] of
API allowable per [*] period under
the Manufacturing line [*] after
completion of the production of [*]
bulk. Other than in cases where APO has failed to comply with Section 3.3, APO
shall not be required to [*]
GILEAD based on [*] or API
Manufacturing line [*] for the
first [*] batches.


 


In addition, the following aspects have to be
considered:


 


•           Given
that the API source might have an impact on the production process, no [*] will be [*] by APO for a special API-source before [*] with the API-source were produced at
APO.


•           Each
change of the manufacturing process, which requires a new validation and is of
a nature that it is likely to change the Manufacturing line [*] will lead to the same procedure and a
new agreement concerning the acceptable [*]
as described in the addendum to Schedule “D”. In such event, the schedule of [*] periods section (a) of the addendum
shall not be changed unless it this would cause an inequitable result, in which
case the parties will agree in good faith upon an equitable schedule.   If the parties disagree as to whether a
change is likely to change the Manufacturing line [*], they will agree in good faith as to whether to reach a
new agreement regarding acceptable line [*]
pursuant to Schedule “D”.


 


 


Addendum to Schedule “H”


 


(a) 
Initial Allowable Manufacturing Line [*]
per [*] period:  the initial allowable Manufacturing line [*] shall be equal to [*] not subject to deviation that are
produced under this Agreement, minus the allowing [*]:


[*]


[*], then


[*] Manufacturing Line [*]:  At the end of every [*] period, the allowable manufacturing
line [*] shall be adjusted to be
equal to [*] not subject to
deviation that are produced under this Agreement [*], minus the [*]
applicable at that time according to section (a).


 


(c)  [*] Arrangement:  the [*] arrangement
will start with the first batch, that is produced after the allowable
manufacturing line [*] has been
determined based on the [*]
initial batches pursuant to section (a).


 


(d)   [*] Procedure:  the [*] calculation
will consider a period of time of up to [*]
months by the following procedure, using the allowable Manufacturing line [*] determined pursuant to sections (a) or
(b) as applicable:


i.              If
the actual Manufacturing line [*]
for batches Manufactured during an initial [*]
month period is less than the allowed Manufacturing line [*], this period will [*].


 


44

















 


ii.             If
the actual Manufacturing line [*]
for batches manufactured during a [*]
month period is greater than allowed Manufacturing line [*], [*]
will be due at that time.  [*] at the end of the next [*] month period, the actual Manufacturing
line [*] shall be determined for
batches Manufactured during the [*]
month period.


iii.            If
the actual Manufacturing line [*]
for batches Manufactured during the [*]
month period is less than the allowed Manufacturing line [*], [*]
for [*] Manufacturing line [*] will be [*] pursuant to Section 2.7 for such [*] month period.


iv.            If
the actual Manufacturing line [*]
for batches Manufactured during the [*]
month period is [*] the allowed
Manufacturing line [*], [*] pursuant to Section 2.7 for the [*] between the [*] Manufacturing line [*].  With [*]
for such [*], a new period of time
with reference to a [*] will
start.


v.             For
every [*], this [*] is [*]
initially, based on an initial [*]
for [*] API.


vi.            As
the [*] for API may fluctuate over
time, on an annual basis GILEAD may determine an adjustment to the API [*] to reflect such [*] in the [*] month period prior to such adjustment.  Such adjusted API [*] shall apply under this Schedule D solely on a prospective
basis.  APO shall have the right to
audit the methodology employed by GILEAD to determine an adjusted [*] for API.


 


45

















 


Schedule “I”


 


Toll
Manufacturing Agreement


 


Yearly Minimum
Volumes of Purchases


 


Pursuant to what is provided under Section
5.1 and 3.7 of the Agreement, GILEAD undertakes to guarantee the following
yearly minimum volumes of purchases of Bulk Products:


 


•      For the
Year 2003, GILEAD shall guarantee a minimum volume of purchase of [*] of Bulk Product .


 


•      For the
Year 2004, GILEAD shall guarantee a minimum volume of purchase of [*] 
of Bulk Product.


 


•      For the
Year 2005, GILEAD shall guarantee a minimum volume of purchase of [*] of Bulk Product.


 


It is agreed by APO that the specified minimum volume of purchases
above are subject to a potential [*] volume
demand [*] from GILEAD in a
given year.  APO hereby confirms that GILEAD has the potential to discuss with
APO additional volume requirements.


 


46