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EXHIBIT 10.39    
  

 
 

LICENSING AGREEMENT    
    
    BY AND BETWEEN    
    
    GILEAD WORLD MARKETS, LIMITED    
    
    AND    
    
    GLAXO GROUP LIMITED    
  

April 26, 2002  

[ * ] = 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.

  

 
 

Table of Contents    
  

	 
	 	 
	 	 
	 	Page

	ARTICLE 1	 	DEFINITIONS	 	1
	 	1.1	 	"Administrative Protection"	 	1
	 	1.2	 	"ADV"	 	2
	 	1.3	 	"Affiliate"	 	2
	 	1.4	 	"Certificate of Pharmaceutical Product"	 	2
	 	1.4	 	"China"	 	2
	 	1.5	 	"Class I Certification"	 	2
	 	1.6	 	"Class II Certification"	 	2
	 	1.7	 	"Clinical Development Committee"	 	2
	 	1.9	 	"Clinical Supply Agreement"	 	2
	 	1.8	 	"Commercial Launch"	 	2
	 	1.9	 	"Commercialization Plan"	 	2
	 	1.12	 	"Commercial Supply Agreement"	 	3
	 	1.10	 	"Commercialize"	 	3
	 	1.11	 	"Committee"	 	3
	 	1.12	 	"Confidential Information"	 	3
	 	1.13	 	"Contract Revenue Term"	 	3
	 	1.14	 	"Control"	 	3
	 	1.15	 	"CPMP"	 	3
	 	1.17	 	"Current Gilead Trials"	 	3
	 	1.18	 	"Current INDs"	 	4
	 	1.16	 	"Current Pediatric Product"	 	4
	 	1.19	 	"Current Product"	 	4
	 	1.20	 	"Diligent Efforts"	 	4
	 	1.21	 	"Distributor"	 	4
	 	1.22	 	"Dollar"	 	4
	 	1.26	 	[ * ]	 	4
	 	1.27	 	[ * ]	 	4
	 	1.25	 	"EMEA"	 	4
	 	1.29	 	"Exclusivity"	 	4
	 	1.26	 	"FDA"	 	5
	 	1.31	 	"Full Exclusivity"	 	5
	 	1.28	 	"Gilead Know-How"	 	5
	 	1.29	 	"Gilead Marks"	 	5
	 	1.31	 	"Gilead Patent"	 	5
	 	1.30	 	"Gilead Product Marks"	 	5
	 	1.32	 	"Gilead Technology"	 	5
	 	1.33	 	"Gilead Territory"	 	5
	 	1.34	 	"GSK Development Plan"	 	5
	 	1.35	 	"GSK Know-How"	 	5
	 	1.37	 	"GSK Patent"	 	5
	 	1.36	 	"GSK Product Marks"	 	6
	 	1.38	 	"GSK Technology"	 	6
	 	1.39	 	"GSK Territory"	 	6
	 	1.40	 	"HBV"	 	6
	 	1.41	 	"HBV Indication"	 	6
	 	1.46	 	"Higher Rate"	 	6

i

 

	 	1.42	 	"IND"	 	6
	 	1.43	 	"Infringement"	 	6
	 	1.44	 	"IOCB/Rega License"	 	6
	 	1.45	 	"Joint Committee"	 	6
	 	1.46	 	"Joint Invention"	 	6
	 	1.47	 	"Joint Patent"	 	6
	 	1.53	 	"Key Gilead Personnel"	 	6
	 	1.48	 	"Know-How"	 	6
	 	1.49	 	"Licensed Indication"	 	7
	 	1.50	 	"Licensed Product"	 	7
	 	1.57	 	"Limit"	 	7
	 	1.51	 	"Loss"	 	7
	 	1.59	 	"Lower Rate"	 	7
	 	1.52	 	"Major GSK Country"	 	7
	 	1.53	 	"Marketing Authorization Application"	 	7
	 	1.54	 	"Marketing Committee"	 	7
	 	1.55	 	"NDA"	 	7
	 	1.56	 	"Net Sales"	 	7
	 	1.65	 	"Non-Exclusivity"	 	8
	 	1.57	 	"Other Clinical Trial Agreements"	 	8
	 	1.58	 	"Other Formulation"	 	8
	 	1.59	 	"Other Indication"	 	8
	 	1.60	 	"Other Licensee"	 	8
	 	1.61	 	"Other Sales"	 	8
	 	1.62	 	"Patent"	 	8
	 	1.63	 	"Permitted Sublicensee"	 	9
	 	1.64	 	"Phase III Clinical Trial"	 	9
	 	1.65	 	"Phase IIIB Clinical Trial"	 	9
	 	1.66	 	"Phase IV Clinical Trial"	 	9
	 	1.67	 	"Price Approval"	 	9
	 	1.68	 	"Product Labeling"	 	9
	 	1.69	 	"Promotional Materials"	 	9
	 	1.70	 	"Regulatory Approval"	 	9
	 	1.71	 	"Regulatory Authority"	 	9
	 	1.72	 	"Royalty Term"	 	10
	 	1.82	 	"Semi-Exclusivity"	 	10
	 	1.73	 	"Substitutable"	 	10
	 	1.84	 	"Substitutable ADV Product"	 	10
	 	1.75	 	"Term"	 	11
	 	1.76	 	"Territory"	 	11
	 	1.77	 	"Third Party"	 	11
	 	1.78	 	"Third Party Royalties"	 	11
	 	1.79	 	"Valid Claim"	 	11
	ARTICLE 2	 	MANAGEMENT	 	11
	 	2.1	 	General	 	11
	 	2.2	 	Joint Committee	 	11
	 	 	(a)	 	Formation	 	11
	 	 	(b)	 	Specific Responsibilities	 	12

ii

 

	 	2.3	 	Clinical Development Committee	 	12
	 	 	(a)	 	Formation	 	12
	 	 	(b)	 	Specific Responsibilities of the Clinical Development Committee	 	12
	 	2.4	 	Marketing Committee	 	13
	 	 	(a)	 	Formation	 	13
	 	 	(b)	 	Specific Responsibilities of the Marketing Committee	 	13
	 	2.5	 	General Committee Membership, Authority and Procedures	 	14
	 	 	(a)	 	Membership	 	14
	 	 	(b)	 	Meetings	 	14
	 	 	(c)	 	Limited Authority	 	15
	 	 	(d)	 	Decision-Making	 	15
	 	 	(e)	 	Meeting Agendas	 	15
	 	 	(f)	 	Information Sharing Between Committees	 	15
	 	2.6	 	Project Coordinators	 	15
	 	2.7	 	Collaboration Guidelines	 	16
	 	 	(a)	 	General	 	16
	 	 	(b)	 	Independence	 	16
	 	 	(c)	 	[ * ]	 	16
	ARTICLE 3	 	DEVELOPMENT	 	17
	 	3.1	 	Current Status; Overview	 	17
	 	3.2	 	Gilead Development	 	18
	 	3.3	 	GSK Development and Plan	 	18
	 	 	(a)	 	Responsibility	 	18
	 	 	(b)	 	Initial Plan	 	18
	 	 	(c)	 	Updates	 	18
	 	 	(d)	 	Compassionate Use/Expanded Access Program	 	20
	 	3.4	 	GSK Activities	 	20
	 	3.5	 	Gilead Development of Other Formulations and Other Indications	 	20
	 	 	(a)	 	General	 	20
	 	 	(b)	 	Notices and Information Regarding Other Formulations and Other Indications	 	20
	 	 	(c)	 	Negotiation	 	21
	 	 	(d)	 	[ * ] with Respect to Substitutable Formulations of ADV	 	21
	 	 	(e)	 	Gilead Activities with Respect to Different Chemical Entities	 	22
	 	3.6	 	GSK Development of Other Formulations and Indications	 	23
	 	3.7	 	Specific Responsibilities of the Clinical Development Committee during Development	 	23
	 	3.8	 	Site of Activities	 	23
	ARTICLE 4	 	REGULATORY	 	24
	 	4.1	 	Current Status	 	24
	 	4.2	 	Certificate of Pharmaceutical Products; GSK Marketing Authorization Applications and Regulatory Approvals	 	24
	 	4.3	 	GSK Access to Gilead Know-How	 	25
	 	 	(a)	 	Regulatory Data	 	25
	 	 	(b)	 	Form of Transfer; Items not Transferred	 	26
	 	 	(c)	 	Other Licensee Permission and Know-How	 	27
	 	 	(d)	 	GSK Use of Know-How	 	27
	 	 	(e)	 	Gilead Regulatory Filings	 	27
	 	 	(f)	 	Costs	 	27

iii

 

	 	4.4	 	Gilead Access to GSK Know-How and Filings	 	27
	 	 	(a)	 	Provision to Gilead	 	27
	 	 	(b)	 	Sublicensee Permission; Transferability to Sublicensees	 	28
	 	4.5	 	Adverse Event Reporting	 	28
	 	4.6	 	Communications	 	28
	 	4.7	 	Applications for Regulatory Exclusivity	 	28
	 	4.8	 	Recalls and Voluntary Withdrawals	 	29
	 	4.10	 	Impermitted Regulatory Filings	 	30
	 	4.11	 	No Harmful Actions	 	30
	 	4.11	 	Additional Information and Uses of Information	 	30
	 	4.12	 	Gilead Transition Assistance	 	31
	 	 	(a)	 	Initial	 	31
	 	 	(b)	 	Extended	 	31
	 	 	(c)	 	Additional	 	31
	 	 	(e)	 	[ * ]	 	33
	 	 	(f)	 	Mechanics	 	34
	 	5.1	 	Commercialization	 	34
	 	5.2	 	Commercialization Plan	 	34
	 	5.3	 	Promotional Materials	 	36
	 	5.4	 	Training of Sales Force	 	37
	 	5.5	 	Compliance	 	37
	 	5.6	 	Product Trademarks	 	37
	 	5.7	 	No Misappropriation	 	38
	 	5.8	 	Use of Distributors	 	38
	ARTICLE 6	 	DILIGENCE	 	38
	 	6.1	 	Clinical Development Diligence	 	38
	 	 	(a)	 	Level of Effort	 	38
	 	 	(b)	 	Timetable	 	38
	 	6.2	 	Regular Reports on Development Activities	 	39
	 	6.3	 	Commercialization Diligence	 	39
	 	 	(a)	 	Level of Efforts	 	39
	 	 	(b)	 	Time to Launch Licensed Product	 	39
	 	6.4	 	Non-diligence	 	39
	 	 	(a)	 	Special Meeting of Collaboration Committee	 	39
	 	 	(b)	 	Supplemental Plan	 	40
	 	 	(c)	 	Non-Limitation of Remedies	 	40
	ARTICLE 7	 	LICENSES	 	41
	 	7.1	 	Patent Licenses to GSK	 	41
	 	7.2	 	Patent Licenses to Gilead	 	41
	 	7.3	 	Know-How License to GSK	 	41
	 	7.4	 	Know-How License to Gilead	 	41
	 	7.5	 	Clinical Scope	 	42
	 	7.6	 	Trademark License	 	42
	 	 	(a)	 	Limited License for Gilead Marks	 	42
	 	 	(b)	 	Licensed Gilead Product Marks	 	42
	 	 	(c)	 	Standards for Using the Marks	 	42
	 	7.7	 	Third-Party Technology	 	43
	 	7.8	 	Sublicensed Technology	 	43
	 	7.9	 	Grants Back	 	44
	 	7.10	 	Sublicensing by GSK	 	44

iv

 

	 	7.11	 	Use of Patents and Know-How	 	44
	 	7.12	 	Cross-Territory Sales	 	44
	 	7.13	 	Exclusivity Commitment	 	45
	 	7.14	 	Right Relating to the HBV Indication	 	46
	 	7.15	 	No Implied Licenses	 	48
	ARTICLE 8	 	MANUFACTURE AND SUPPLY	 	48
	 	8.1	 	Supply by Gilead	 	48
	 	8.2	 	GSK Manufacturing Right	 	48
	 	8.3	 	Clinical Supply Agreement	 	48
	 	8.4	 	Commercial Supply Agreement	 	49
	 	8.5	 	Consistency	 	51
	 	8.6	 	Additional Products	 	51
	ARTICLE 9	 	COMPENSATION	 	51
	 	9.1	 	License Fee	 	51
	 	9.2	 	Milestone Payments	 	51
	 	9.3	 	Royalty on Net Sales	 	53
	 	 	(a)	 	Rates	 	53
	 	 	(b)	 	[ * ]	 	53
	 	 	(c)	 	Assumption Relating to Royalty Tier	 	54
	 	 	(b)	 	Term	 	54
	 	 	(c)	 	Payment for Non-Patent Benefits	 	54
	 	 	(d)	 	Example Calculation	 	55
	 	 	(e)	 	Quarterly Payments and Reconciliation	 	55
	 	 	(f)	 	Cross-Border Sales	 	56
	 	 	(i)	 	Korea and Taiwan	 	56
	 	9.4	 	Contract Revenue on [ * ]	 	57
	 	 	(a)	 	Rate	 	57
	 	 	(b)	 	Term	 	57
	 	 	(c)	 	[ * ]	 	57
	 	9.5	 	Annual Exclusivity Determination With Respect to China	 	58
	 	9.5	 	Combination and Bundled Products	 	59
	 	 	(a)	 	Combination Products	 	59
	 	 	(b)	 	Bundled Products	 	59
	 	9.7	 	Other Payments by Distributors and Permitted Sublicensees	 	59
	 	9.7	 	Third-Party Royalties and Other Payments	 	60
	 	9.8	 	Royalty Payments and Reports	 	60
	 	9.9	 	Taxes	 	60
	 	9.10	 	Blocked Currency	 	61
	 	9.11	 	Foreign Exchange	 	61
	 	9.12	 	Payments to or Reports by Affiliates	 	61
	 	9.13	 	Late Payments	 	61
	 	9.14	 	Accounting	 	61
	 	9.15	 	Third Party Licenses	 	62
	 	9.17	 	Compulsory Licenses	 	62
	ARTICLE 10	 	INTELLECTUAL PROPERTY	 	63
	 	10.1	 	Ownership of Inventions	 	63
	 	10.2	 	Prosecution of Patents	 	63
	 	 	(a)	 	Gilead Patents	 	63
	 	 	(b)	 	GSK Patents	 	63
	 	 	(c)	 	Joint Patents	 	63

v

 

	 	 	(d)	 	ADV Patents	 	64
	 	 	(e)	 	Administrative Protections	 	64
	 	10.3	 	Patent Term Extensions	 	65
	 	10.4	 	Non-Patent Regulatory Exclusivity	 	65
	 	10.5	 	Infringement of Patents by Third Parties	 	65
	 	 	(a)	 	Notification	 	65
	 	 	(b)	 	Infringement of Gilead Patents	 	66
	 	 	(c)	 	Joint Patents	 	66
	 	 	(d)	 	Infringement of GSK Patents Outside the GSK Territory by Competitive Product Infringement	 	66
	 	 	(e)	 	Other Infringement of GSK Patents	 	67
	 	 	(f)	 	Settlement	 	67
	 	 	(g)	 	Allocation of Proceeds	 	67
	 	10.6	 	Infringement of Third Party Rights	 	68
	 	 	(a)	 	Notice	 	68
	 	 	(b)	 	Defense	 	68
	 	 	(c)	 	Settlement	 	68
	 	10.7	 	Patent Marking	 	68
	 	10.8	 	Selection and Registration of Product Trademarks	 	68
	 	10.9	 	Infringement of Trademarks by Third Parties	 	68
	 	10.10	 	Patent Oppositions	 	69
	 	 	(a)	 	Third-Party Patent Rights	 	69
	 	 	(b)	 	Parties' Patent Rights	 	69
	 	 	(c)	 	Noncontravention	 	69
	ARTICLE 11	 	REPRESENTATIONS AND WARRANTIES	 	70
	 	11.1	 	Mutual Representations and Warranties	 	70
	 	 	(a)	 	Corporate Existence and Power	 	70
	 	 	(b)	 	Authority and Binding Agreement	 	70
	 	 	(c)	 	No Conflict	 	70
	 	 	(d)	 	Regulatory Data	 	70
	 	 	(e)	 	No Misappropriation	 	70
	 	 	(f)	 	No Debarment	 	70
	 	 	(g)	 	Rights in Technology	 	70
	 	11.2	 	Gilead	 	71
	 	 	(a)	 	Non-Infringement of Gilead Technology by Third Parties	 	71
	 	 	(b)	 	Non-infringement of Third Party Rights	 	71
	 	 	(c)	 	Claims	 	71
	 	 	(d)	 	Due Diligence	 	71
	 	11.3	 	Disclaimer	 	71
	 	11.4	 	No Other Representations	 	71
	ARTICLE 12	 	INDEMNIFICATION	 	72
	 	12.1	 	Indemnification by Gilead	 	72
	 	12.2	 	Indemnification by GSK	 	72
	 	12.3	 	Procedure	 	72
	 	12.4	 	Insurance	 	73
	 	12.5	 	Limitation of Liability	 	73
	ARTICLE 13	 	RECORDS; AUDITS; PUBLICATIONS	 	73
	 	13.1	 	Records; Audits	 	73
	 	13.2	 	Publications	 	74

vi

 

	ARTICLE 14	 	CONFIDENTIALITY	 	74
	 	14.1	 	Treatment of Confidential Information	 	74
	 	14.2	 	Authorized Disclosure	 	74
	 	14.3	 	Publicity	 	75
	ARTICLE 15	 	TERM AND TERMINATION	 	76
	 	15.1	 	Term	 	76
	 	15.2	 	Elective Termination	 	76
	 	15.3	 	Termination for Breach	 	77
	 	 	(a)	 	Notice	 	77
	 	 	(b)	 	Failure to Cure	 	77
	 	 	(c)	 	Disputes	 	77
	 	15.4	 	Fee upon Certain Terminations	 	77
	 	15.4	 	Termination for Bankruptcy/Insolvency	 	78
	 	15.5	 	Gilead Rights upon Certain Terminations of the Agreement or as to Certain Licensed Products	 	79
	 	 	(a)	 	Reverted Products	 	79
	 	 	(b)	 	Trademark License	 	79
	 	 	(c)	 	Regulatory Filings	 	79
	 	 	(d)	 	Technology Licenses	 	79
	 	 	(e)	 	No Further Representations	 	79
	 	 	(f)	 	Transition Assistance	 	80
	 	 	(g)	 	Remaining Inventories	 	80
	 	15.6	 	GSK Rights upon Certain Terminations	 	80
	 	15.7	 	Survival	 	81
	ARTICLE 16	 	DISPUTE RESOLUTION	 	81
	 	16.1	 	Disputes	 	81
	 	16.2	 	Governing Law; Judicial Resolution	 	81
	 	16.3	 	Patent and Trademark Dispute Resolution	 	82
	 	16.4	 	Industry Expert Resolution of Certain Disputes	 	82
	 	 	(a)	 	Referable Issues	 	82
	 	 	(b)	 	Finality of Decision	 	82
	 	 	(c)	 	Industry Expert Resolutions	 	82
	 	 	(d)	 	Interim Performance; Costs	 	83
	ARTICLE 17	 	MISCELLANEOUS	 	83
	 	17.1	 	Entire Agreement; Amendment	 	83
	 	17.2	 	Force Majeure	 	83
	 	17.3	 	Notices	 	84
	 	17.4	 	Maintenance of Records	 	85
	 	17.5	 	No Strict Construction	 	85
	 	17.6	 	Assignment	 	85
	 	17.7	 	Performance by Affiliates	 	85
	 	17.8	 	Further Actions	 	85
	 	17.9	 	Severability	 	86
	 	17.10	 	Headings	 	86
	 	17.11	 	No Waiver	 	86
	 	17.12	 	Counterparts	 	86

[ * ] = 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.

vii

  

[ * ] = 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.

 
 

EXHIBIT 10.39    
  

 
 

LICENSING AGREEMENT    
  

        THIS LICENSING AGREEMENT (the "Agreement") is made effective as of April 26, 2002 (the "Effective Date") by
and between GLAXO GROUP LIMITED, an English corporation having its principal place of business at Glaxo Wellcome House, Berkeley Avenue, Greenford,
Middlesex, England UB6 ONN ("GSK"), and GILEAD WORLD MARKETS, LIMITED, a Cayman Company whose registered address is Queensgate House, South Church
Street, P.O. Box 1234GT, Grand Cayman, Cayman Islands ("Gilead"). Gilead and GSK are sometimes referred to herein individually as a "Party" and collectively as the "Parties." 

 
 

RECITALS    
  

        WHEREAS, Gilead is developing a proprietary compound known under the generic name of adefovir dipivoxil for the
treatment of chronic hepatitis B; 

        WHEREAS, Gilead has conducted and is currently conducting phase III clinical trials of such compound for such use in various countries,
and is seeking or intends to seek regulatory approval in the United States, Canada, Europe, Australia and certain other countries of, and thereafter to Commercialize, such compound for such use in
such countries; 

        WHEREAS, GSK possesses extensive capabilities in various other countries (including China, Japan and other Asian countries) in the
clinical development, manufacture, promotion and marketing of pharmaceutical products  [ * ]; and 

        WHEREAS, GSK desires to obtain the exclusive right to develop and Commercialize the same formulation and dosage of adefovir dipivoxil for
hepatitis B in countries of interest to GSK as Gilead is developing in its countries of interest, and Gilead desires to grant GSK such rights in such countries of interest to GSK, all as set forth
below; 

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

 
 

ARTICLE 1    
    
    DEFINITIONS    
  

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

        1.1    "Administrative Protection"  shall mean a right conferred by a Chinese governmental entity to exclude others
from manufacturing or marketing a pharmaceutical product in China, other than by means of a Patent granted by the Chinese government. Notwithstanding the foregoing, Administrative Protections shall
exclude any rights conferred in connection with any Class I Certification or Class II Certification. 

        1.2    "ADV"  shall mean adefovir dipivoxil, or 9- [2-
[[bis [(pivaloyloxy) methyl]phosphinyl] -methoxy] ethyl] adenine. 

        1.3    "Affiliate"  shall mean, except as provided below, an entity that, directly or indirectly, through one or
more intermediaries, controls, is controlled by or is under common control with Gilead or GSK. 

1

 

        1.4    "Certificate of Pharmaceutical Product"  shall mean a document issued by a Regulatory Authority in the Gilead
Territory to certify that a Licensed Product has been granted Regulatory Approval in the country of such issuing Regulatory Authority. Certificates of Pharmaceutical Products shall include both
documents referred to commonly as "certificates of pharmaceutical product," and "free sales certificates," and documents similar to either of the foregoing but referred to by other names,  provided that
such similar documents do not impose a substantially greater burden on the applicant than those commonly referred to as "certificates of
pharmaceutical products" and "free sales certificates." 

        1.5    "China"  shall mean the People's Republic of China, as in existence as of the Effective Date,  [ * ] "Chinese" shall be interpreted accordingly.
 

        1.6    "Class I Certification"  shall mean a Class I drug certification for a pharmaceutical product
granted by a Chinese governmental authority, which certification provides a period of partial or complete exclusivity in China for certain pharmaceutical products that, generally, are new active
entities or not previously approved by Regulatory Authorities outside China. A Class I Certification, as of the Effective Date, has a term of twelve (12) years. 

        1.7    "Class II Certification"  shall mean a Class II drug certification for a pharmaceutical product
granted by a Chinese governmental authority, which certification provides for a period of partial or complete exclusivity in China for certain drugs approved by Regulatory Authorities outside China,
derivatives of such drugs, or new methods of delivery of such drugs. A Class II Certification, as of the Effective Date, has a term of eight (8) years. 

        1.8    "Clinical Development Committee"  shall have the meaning assigned such term in Section 2.3(a). 

        1.9    "Clinical Supply Agreement"  shall mean the agreement relating to the clinical supply of the Current Product
that is to be entered into by the Parties after the Effective Date as set forth in Section 8.3. 

        1.10    "Commercial Launch"  shall mean, with respect to a Licensed Product and a given country, the first sale of
such Licensed Product to a Third Party in such country once Regulatory Approval therefor and therein has been obtained. 

        1.11    "Commercialization Plan"  shall have the meaning given such term in Section 5.2(a). 

        1.12    "Commercial Supply Agreement"  shall mean the agreement relating to the commercial supply of the Licensed
Products and bulk ADV that is to be entered into by the Parties after the Effective Date as set forth in Section 8.4. 

        1.13    "Commercialize"  shall mean to promote, market, distribute, sell and provide product support for a product,
and "Commercializing" and "Commercialization" shall be interpreted accordingly. 

        1.14    "Committee"  shall mean the Joint Committee, Clinical Development Committee or Marketing Committee. 

        1.15    "Confidential Information"  shall mean (i) all information and materials, received by either Party
from the other Party pursuant to this Agreement, (ii) all information disclosed pursuant to the Secrecy Agreement between Affiliates of the Parties dated April 30, 1998, and
(iii) all information disclosed pursuant to the Confidential Disclosure Agreement between Affiliates of the Parties dated October 26, 2001, in each case other than that portion of such
information or materials that: 

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

2

 

        (b)  was known to the receiving Party, without obligation to keep it confidential, prior to when it was received from the
disclosing Party; 

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

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

        (e)  has been independently developed by the receiving Party without the aid, application or use of Confidential Information,
as demonstrated by competent written proof and except as permitted under this Agreement. 

        1.16    "Contract Revenue Term"  shall have the meaning assigned such term in Section 9.4(b). 

        1.17    "Control"  shall mean possession of the ability to grant a license or sublicense as provided for herein
without violating the terms of any agreement or other arrangement with any Third Party. 

        1.18    "CPMP"  shall mean the Committee for Proprietary Medicinal Products, which represents the medicine
authorities of the European Union member states. 

        1.19    "Current Gilead Trials"  shall mean those clinical trials referenced in Exhibit A, which trials are
currently being conducted (or are currently planned to be conducted) by or on behalf of Gilead in the GSK Territory. 

        1.20    "Current INDs"  shall mean all INDs for the Current Product for the Licensed Indication that Gilead has
filed in the GSK Territory on or before the Effective Date. 

        1.21    "Current Pediatric Product"  shall mean the dosage formulation of ADV that is one of the subjects of U.S.
IND #52,182 and that is being developed for pediatric use for the HBV Indication. As of the Effective Date, the Current Pediatric Product has not yet entered clinical trials. 

        1.22    "Current Product"  shall mean the ten (10) milligram dosage formulation of ADV that was tested in
clinical trial numbers GS-98-437 and GS-98-438. 

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

        1.24    "Distributor"  shall mean any Third Party (i) to which GSK or a GSK Affiliate has granted (at any
time during the Term) a right to sell or distribute a Licensed Product for a Licensed Indication in any country of the GSK Territory, (ii) that sells Licensed Products to hospitals and/or
pharmacies for their sale to or use with patients (rather than to other Third Parties for resale to hospitals and/or pharmacies for their sale to or use with patients), and (iii) that does not
make payments to GSK or such GSK Affiliate that are calculated on the basis of a percentage of, or profit share on, such Third Party's sales of Licensed Products. 

        1.25    "Dollar"  shall mean a United States dollar, and "$" shall be interpreted accordingly. 

        1.26    [ * ]  shall mean  [ * ]

3

 

        1.27    [ * ]  shall mean  [ * ]
 in the GSK Territory. 

        1.28    "EMEA"  shall mean the European Medicines Evaluation Agency, or any successor thereto, which coordinates the
scientific review of human pharmaceutical products under the centralized licensing procedures of the European Union. 

        1.29    "Exclusivity"  shall mean Full Exclusivity, Semi-Exclusivity or Non-Exclusivity. 

        1.30    "FDA"  shall mean the United States Food and Drug Administration, or any successor thereto. 

        1.31    "Full Exclusivity"  shall be deemed to exist for a given Licensed Product in any calendar year for which it
is determined pursuant to Section 9.5 that [ * ] for a  [ * ] (that is  [ * ]) for a Licensed Indication in China, and is commercially
selling such [ * ] in China. Full Exclusivity shall exist based on
the foregoing, [ * ] any of the following forms of exclusivity at
any time during such calendar year as a basis for exclusivity: (i) a Valid Claim contained in an issued Chinese patent and covering such Licensed Product (or a method of manufacture or use
thereof); (ii) an Administrative Protection covering such Licensed Product; (iii) a Class I Certification relating to such Licensed Product; or (iv) a Class II
Certification relating to such Licensed Product. 

        1.32    "Gilead Know-How" shall mean all Know-How that is within the Control of Gilead or a Gilead
Affiliate and that is Confidential Information. 

        1.33    "Gilead Marks"  shall mean the Gilead names and logo as set forth in Exhibit B. 

        1.34    "Gilead Patent"  shall mean any Patent that (i) claims  [ * ] and (ii) is  [ * ] including Gilead's interest in any Joint Patents.

        1.35    "Gilead Product Marks"  shall mean any tradenames or trademarks for a Licensed Product that are Controlled
by Gilead or its Affiliates that the Marketing Committee designates for GSK's use in the GSK Territory as provided in Section 5.6, and may include the product logo set forth in
Exhibit B. 

        1.36    "Gilead Technology"  shall mean all Gilead Patents and Gilead Know-How. 

        1.37    "Gilead Territory"  shall mean the countries set forth in Exhibit C, and the territories and
possessions of each of the foregoing countries. The Gilead Territory shall include the foregoing countries as they exist on the Effective Date, and any successors thereto within their geographic
territories (or any portion thereof) during the Term. 

        1.38    "GSK Development Plan"  shall have the meaning assigned such term in Section 3.3. 

        1.39    "GSK Know-How"  means Know-How that is within the Control of GSK or a GSK Affiliate
and that is Confidential Information. 

        1.40    "GSK Patent"  means any Patent that (i) claims  [ * ] and (ii) is  [ * ] including without limitation GSK's interest in any
Joint
Patents. 

        1.41    "GSK Product Marks"  shall mean (i) all trademarks or tradenames that GSK uses solely with any
Licensed Product in the GSK Territory, and (ii) all counterparts throughout the world of any of the foregoing. 

        1.42    "GSK Technology"  shall mean all GSK Patents and GSK Know-How. 

        1.43    "GSK Territory"  shall mean all the countries of the world that are not included in the Gilead Territory,
and the possessions and territories of each such country. 

        1.44    "HBV"  shall mean the hepatitis B virus. 

        1.45    "HBV Indication"  means the treatment of HBV infection in humans. 

4

 

        1.46    "Higher Rate"  shall have the meaning given in Section 9.3(a)(ii). 

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

        1.48    "Infringement"  shall have the meaning assigned such term in Section 10.5. 

        1.49    "IOCB/Rega License"  shall mean the license agreement between Gilead, on the one hand, and the Institute of
Organic Chemistry and Biochemistry (as an integral part of Ceskoslovenska Akademia VED, which has become Ceska Academie) and Rega Stichting v.z.w., on the other hand, with respect to ADV as well as
other compounds, dated November 15, 1991, as subsequently amended. 

        1.50    "Joint Committee"  shall mean the committee formed as described in Section 2.2(a). 

        1.51    "Joint Invention" shall have the meaning assigned such term in Section 10.1. 

        1.52    "Joint Patent"  shall have the meaning assigned such term in Section 10.2(c). 

        1.53    "Key Gilead Personnel"  shall mean  [ * ]

        1.54    "Know-How"  shall mean (i) all information, techniques and data  [ * ]including, but not limited to, inventions, practices,
methods, knowledge, know-how, skill, experience, test data (including without limitation pharmacological, toxicological, clinical, analytical and quality control data, regulatory
submissions, correspondence and communications, and marketing, pricing, distribution, cost, sales, manufacturing, patent and legal data or descriptions), and (ii) compositions of matter, assays
and biological materials specifically relating to development, manufacture, use or sale of Licensed Products. 

        1.55    "Licensed Indication"  shall mean the  [ * ]

        1.56    "Licensed Product(s)"  shall mean the Current Product, the Current Pediatric Product and  
[ * ]

        1.57    "Limit"  shall have the meaning given in Section 9.3(c). 

        1.58    "Loss"  shall have the meaning assigned such term in Section 12.1. 

        1.59    "Lower Rate"  shall have the meaning given in Section 9.3(a)(i). 

        1.60    "Major GSK Country"  shall mean any of  [ * ]

        1.61    "Marketing Authorization Application"  shall mean an application for Regulatory Approval (but excluding
Price Approvals), including without limitation an NDA filed in the United States. For clarity, Marketing Authorization Applications shall exclude INDs. 

        1.62    "Marketing Committee"  shall have the meaning assigned such term in Section 2.4(a). 

        1.63    "NDA"  shall mean a New Drug Application for Regulatory Approval filed in the United States. 

        1.64    "Net Sales"  shall mean, with respect to a particular time period, the amount billed by GSK, its Affiliates
and Permitted Sublicensees for sales of Licensed Products made in such time period to a Third Party (including without limitation to Distributors), less: 

          (i)  discounts, including cash and quantity discounts, charge-back payments and rebates granted to managed health
care organizations or to federal, state and local governments, their agencies, purchasers and reimbursers or to trade customers; 

5

 

        (ii)  credits or allowances actually granted upon claims, damaged goods, rejections or returns of such Licensed Products,
including recalls; 

        (iii)  freight, postage, shipping, transportation and insurance charges actually allowed or paid for delivery of Licensed
Products to the extent billed; and 

        (iv)  taxes (other than income taxes), duties or other governmental charges levied on, absorbed or otherwise imposed on sale
of such Licensed Products, including without limitation value-added taxes, or other governmental charges otherwise measured by the billing, when included in the billing, as adjusted for rebates and
refunds. 

        Notwithstanding
the foregoing in this Section 1.64, amounts received by GSK, its Affiliates or Permitted Sublicensees for the sale of Licensed Products among GSK, its Affiliates
and Permitted Sublicensees for resale shall not be included in the computation of Net Sales hereunder. Section 9.7 addresses certain other payments that may be included in calculating Net Sales
hereunder 

        For
purposes of calculating Net Sales, no Distributor shall be deemed to be a Permitted Sublicensee of GSK. Net Sales of the quantities of Licensed Product sold by Distributors shall be
calculated based on the amount invoiced the Distributors by GSK and/or its Affiliate rather than by the Distributors to their customers. 

        1.65    "Non-Exclusivity"  shall be deemed to exist for a given Licensed Product in any calendar year
for which it is determined pursuant to Section 9.5 that neither Full Exclusivity nor Semi-Exclusivity exists. 

        1.66    "Other Clinical Trial Agreements"  shall mean those agreements between Affiliates of the Parties that are
listed in Exhibit D, and any other written agreements a Party (or any of its Affiliates) may enter into during the Term with the other Party (or any of its Affiliates) regarding any clinical
trial of a Licensed Product. 

        1.67    "Other Formulation"  shall mean (i) any formulation  [ * ] other than the Current Product and the Current Pediatric
Product, or (ii) any [ * ] is  [ * ]
to or  [ * ] a  [ * ] (which is the
 [ * ] that is  [ * ] is administered in
[ * ]. Other Formulations shall include without limitation  [ * ] of the  [ * ] formulation  [ * ]. 

        1.68    "Other Indication"  shall mean an indication that is not a Licensed Indication. 

        1.69    "Other Licensee"  shall mean any Third Party to whom Gilead has granted or grants a license and/or
sublicense to develop or Commercialize a Licensed Product within the Gilead Territory. 

        1.70    "Other Sales"  shall mean, with respect to a particular time period, the amount that is calculated by  [ * ] to  [ * ] during such time period in the same
manner as  [ * ] amounts billed by GSK, its Affiliates and Permitted
Sublicensees for sales of Licensed Products during such time period. 

        1.71    "Patent"  shall mean (i) unexpired letters patent (including inventor's certificates) which have not
been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period, including without limitation any
substitution, extension, registration, confirmation, reissue, re-examination, renewal or any like filing thereof and (ii) pending applications for letters patent, including without
limitation any provisional, converted provisional, continued prosecution application, continuation, divisional or continuation-in-part thereof. 

        1.72    "Permitted Sublicensee"  shall have the meaning assigned such term in Section 7.10. 

        1.73    "Phase III Clinical Trial"  shall mean one of those trials on sufficient numbers of patients that are
designed to establish that a drug is safe and efficacious for its intended use, and to define 

6

 

warnings, precautions and adverse reactions that are associated with the drug in the dosage range to be prescribed, and to support Regulatory Approval of such drug or label expansion of such drug. 

        1.74    "Phase IIIB Clinical Trial"  shall mean one of those product-support clinical trials of a drug (i.e., a
clinical trial which is not required for receipt of Regulatory Approval but which may be useful in providing additional drug profile data or to support label expansion for such drug) commenced before
receipt of Regulatory Approval in the country where such trial is being conducted. 

        1.75    "Phase IV Clinical Trial"  shall mean one of those product-support clinical trials of a drug (i.e., having a
similar purpose to a Phase IIIB Clinical Trial), or one of those long-term safety-related clinical trials that a Regulatory Authority may require as a condition of granting a marketing
authorization for a drug, in either case that are commenced after receipt of Regulatory Approval in the country where such trial is being conducted. 

        1.76    "Price Approval"  shall mean, with respect to any country in which the price at which GSK sells Licensed
Product must be approved by a governmental authority for reimbursement or payment purposes, the receipt of approval by the applicable governmental authority with respect to such price. 

        1.77    "Product Labelling"  shall mean (i) the full prescribing information for any Licensed Product,
approved by the relevant Regulatory Authority and (ii) all labels and other written, printed or graphic information included in or placed upon any container, wrapper or package insert used with
or for any Licensed Product. 

        1.78    "Promotional Materials"  shall mean all sales representative training materials and all written, printed,
graphic, electronic, audio or video matter, including but not limited to journal advertisements, sales visual aids, leave items, formulary binders, reprints, direct mail,
direct-to-consumer advertising, internet postings, broadcast advertisements and sales reminder aides (for example, note pads, pens and other such items) intended for use or
used by GSK or its Affiliate, Permitted Sublicensee or Distributor in connection with any promotion of any Licensed Product, but excluding Product Labelling. 

        1.79    "Regulatory Approval"  shall mean all approvals (including supplements, amendments, pre- and
post-approvals and Price Approvals), licenses, registrations or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity, necessary for the manufacture, distribution, use or sale of a pharmaceutical product in a given regulatory jurisdiction. 

        1.80    "Regulatory Authority"  shall mean the FDA or a counterpart of the FDA outside the United States. 

        1.81    "Royalty Term"  shall have the meaning assigned such term in Section 9.3(d). 

        1.82    "Semi-Exclusivity"  shall be deemed to exist for a given Licensed Product in any calendar year
for which it is determined pursuant to Section 9.5 that (a) any  [ * ] for a  [ * ] and is commercially selling  [ * ] in China, where such Third Parties  [ * ] and GSK has been  [ * ] (or  [ * ] pursuant to such Section) and under
[ * ]covering such Licensed Product that  [ * ]; and (b)  [ * ] the following forms of exclusivity: (i) a Valid Claim
contained in an issued Chinese patent and covering such Licensed Product (or a method of manufacture or use thereof); (ii) an Administrative Protection covering such Licensed Product;
(iii) a Class I Certification relating to such Licensed Product; or (iv) a Class II Certification relating to such Licensed Product. 

Semi-Exclusivity
shall also be deemed to exist for a given Licensed Product in any calendar year if: (a) either Party or any of their Affiliates has obtained, Control or own any of
the following forms of exclusivity at any time during such calendar year as a basis for exclusivity in China: (i) an Administrative Protection covering such Licensed Product, (ii) a
Class I Certification relating to such Licensed Product, or (iii) a Class II Certification relating to such Licensed Product; and
(b) [ * ] as 

7

 

described in clause (a) of the foregoing paragraph is  [ * ], and Net Sales of Licensed Products in China are greater
than: (1) [ * ] multiplied by (2) the sum of
(i) the Net Sales of Licensed Products in such calendar year in China and (ii) the sales by any Third Party of  [ * ] in such calendar
year in China pursuant to Regulatory
Approvals held by such Third Party for such [ * ] (such
multiplicative product, the "Chinese Market Share" with respect to such calendar year). The Chinese Market Share shall be determined annually as set forth in Section 9.5(b). 

        1.83    "Substitutable"  shall mean, for a given formulation of ADV that is not a Licensed Product, or that is a
Licensed Product but is used for an Other Indication, that such formulation  [ * ]. Substitutability shall be determined without regard to 
[ * ] For example and without limitation, an Other Formulation
that differs from the Current Product only because it [ * ] is
Substitutable for the Current Product, because [ * ] the Current
Product. 

        1.84    "Substitutable ADV Product"  shall mean any human pharmaceutical product that (i) is a formulation of
ADV and (ii) is Substitutable for a Licensed Product. 

        1.85    "Term"  shall mean the term of this Agreement, as determined in accordance with Article 15. 

        1.86    "Territory"  shall mean the Gilead Territory or the GSK Territory. 

        1.87    "Third Party"  shall mean any entity other than Gilead or GSK or an Affiliate of either of them. 

        1.88    "Third Party Royalties"  shall mean royalties payable to any Third Party as a result of the manufacture, use
or sale of Licensed Products pursuant to, and in accordance with, the provisions of this Agreement, including without limitation royalties due by Gilead pursuant to the IOCB/Rega License. 

        1.89    "Valid Claim"  shall mean (i) an unexpired claim of an issued patent within Gilead Patents which has
not been found to be unpatentable, invalid or unenforceable by a court or other authority in the subject country, from which decision no appeal is taken or can be taken; or (ii) a claim of a
pending application within the Gilead Patents, which claim has been pending for no more than  [ * ] as of the date upon which pendency is
determined. 

 
 

ARTICLE 2    
    
    MANAGEMENT    
  

        2.1    General.    The Parties desire to establish a general committee that will monitor their activities under this
Agreement and facilitate communications between the Parties with respect to the development, Regulatory Approval and Commercialization of Licensed Products in the GSK Territory hereunder.
Additionally, the Parties wish to establish two (2) specialized committees to focus on clinical development and Regulatory Approval issues, and Commercialization issues, respectively, with
respect to Licensed Products. Each of such committees shall have the responsibilities and authority set forth for it in this Article 2 and elsewhere in this Agreement. 

        2.2    Joint Committee.    

        (a)    Formation.    Gilead and GSK shall establish the Joint Committee on the Effective Date. The initial members of
the Joint Committee are set forth in Exhibit G. The Joint Committee shall have overall responsibility for monitoring and coordinating communication regarding the Parties' efforts for the GSK
Territory under this Agreement, and shall have the membership and authority, and shall operate by the procedures, set forth for it in Section 2.5. The purposes of the Joint Committee shall be
(i) [ * ] (ii) to facilitate the exchange of
information between the Parties with respect to their activities hereunder for the GSK Territory, and (iii) to resolve issues that the 

8

 

Clinical Development Committee and the Marketing Committee cannot resolve, all based on the principles of prompt and diligent development of the Licensed Products for the HBV Indication in the GSK
Territory consistent with good pharmaceutical practices and the maximization of long-term profits derived from the sale of Licensed Products in the GSK Territory. 

        (b)    Specific Responsibilities.    In addition to its overall responsibility for monitoring and providing a forum to
discuss and coordinate the Parties' activities under this Agreement, the Joint Committee shall in particular: 

          (i)  review,  [ * ] and, as
provided in  [ * ] for Licensed Products in the GSK Territory;
 

        (ii)  review strategies for  [ * ] for
Licensed Products within the GSK Territory; 

        (iii)  review and discuss GSK's forecasts of its needs for supply of Licensed Products at times when Gilead is supplying GSK
with Licensed Products hereunder; 

        (iv)  review and discuss GSK's  [ * ]
relating to Licensed Products, and, to the extent set forth
in [ * ]; 

        (v)  review and  [ * ] to  [ * ]; 

        (vi)  review GSK's  [ * ] with respect to
Licensed Products; 

      (vii)  review GSK's  [ * ]; 

      (viii)  review and approve  [ * ], as requested by either
Party as provided in such section;
and 

        (ix)  perform such other functions as appropriate to further the purposes of this Agreement as determined by the Parties,
including the periodic evaluation of the Parties' performance under this Agreement. 

        2.3    Clinical Development Committee.    

        (a)    Formation.    The Parties shall form a committee on the Effective Date, to address clinical development
and regulatory issues relating to Licensed Products, as provided in this Section 2.3(a) and in Article 3 (the "Clinical Development Committee"). The initial members of the Clinical
Development Committee are set forth in Exhibit G. The Clinical Development Committee shall have the membership and authority, and shall operate by the procedures, set forth for it in
Section 2.5. 

        (b)    Specific Responsibilities of the Clinical Development Committee.    In addition to its overall responsibility
for reviewing GSK's clinical development and regulatory activities under this Agreement, the Clinical Development Committee shall in particular: 

          (i)  review and comment upon the  [ * ]; 

        (ii)  discuss the requirements for  [ * ];

        (iii)  coordinate the provision of all of  [ * ] for Licensed Products in the GSK Territory  [ * ]; 

9

  

        (iv)  work to achieve a smooth transition from Licensed Product clinical and regulatory development to Commercialization by
coordinating efforts with the Marketing Committee; 

        (v)  review and comment upon  [ * ];

        (vi)  monitor GSK's projected Licensed Product clinical requirements; and 

      (vii)  perform such other functions as may be appropriate to further the purposes of this Agreement, as directed by the Joint
Committee. 

        2.4    Marketing Committee.    

        (a)    Formation.    The Parties shall form a committee on the Effective Date, to address marketing issues
relating to Licensed Products in the GSK Territory (the "Marketing Committee"). The initial members of the Marketing Committee are set forth in Exhibit G. The Marketing Committee shall have the
membership and authority, and operate by the procedures, set forth for it in Section 2.5. 

        (b)    Specific Responsibilities of the Marketing Committee.    In addition to its overall responsibility for
monitoring GSK's marketing and Commercialization activities under this Agreement in the GSK Territory, the Marketing Committee shall in particular: 

          (i)  review and comment upon  [ * ] of Licensed Products in the GSK Territory; 

        (ii)  monitor GSK's transition from Licensed Product development to Commercialization by coordinating efforts with the
Clinical Development Committee; 

        (iii)  [ * ]
GSK's needs for commercial supply of Licensed Products at times when Gilead will be supplying GSK with quantities of Licensed Products hereunder; 

        (iv)  consider and discuss GSK's efforts to  [ * ]; 

        (v)  [ * ]
GSK's Commercialization Plans; 

        (vi)  review and comment upon GSK's plans to  [ * ]; 

      (vii)  coordinate the  [ * ] in relation to Licensed
Products  [ * ] to the GSK Territory to  [ * ] or
[ * ] with respect to  [ * ] for Licensed
Products; 

      (viii)  review and facilitate discussion of any  [ * ];
and 

        (ix)  perform such other functions as appropriate to further the purposes of this Agreement as determined by the Joint
Committee. 

        2.5    General Committee Membership, Authority and Procedures.    

        (a)    Membership.    For each Committee, Gilead and GSK have designated two (2) representatives with
appropriate expertise to serve as members of such Committee as set forth in Exhibit G. GSK shall select one (1) such person to serve as chairperson of the Joint Committee and the
Marketing Committee, and Gilead shall appoint the first chairperson of the Clinical Development Committee, during the first year following the Effective Date. Thereafter, the Parties shall rotate
designation of the chairperson of each such Committee such that in the second year after the Effective Date Gilead shall select the chairperson of the Joint Committee and Marketing Committee, and GSK
shall select the chairperson of the Clinical Development Committee. Either Party may designate substitutes for its Committee representatives to participate if one or more of such Party's designated
representatives is unable to be present at a meeting. A Party may replace its representatives serving on any Committee from time to time by written notice to the other Party specifying the prior
representative(s) to be replaced and the replacement(s) therefor. The chairpersons of each Committee shall be responsible for calling meetings, preparing and circulating 

10

 

an agenda in advance of each meeting of such Committee, and preparing and issuing minutes of each such meeting  [ * ]; provided
that each Committee chairperson shall call a meeting of the applicable Committee promptly upon the written request of the non-chairing Party to convene such a meeting.
Such minutes will not be finalized until the other Party reviews and confirms the accuracy of such minutes in writing. 

        (b)    Meetings.    Each Committee shall hold meetings at such times as it elects to do so, but in no event shall any
Committee hold meetings less frequently than [ * ]. Each Committee
shall meet alternately at (i) Gilead's Affiliate's facilities in Foster City, California and (ii) GSK's facilities in Brentford, England, or at such locations as the Parties may
otherwise agree. With the prior consent of the representatives of each Party serving on a Committee, other representatives of each Party or of Third Parties involved in the manufacture, development or
Commercialization of the Licensed Products may attend meetings of such Committee as nonvoting participants. Meetings of any Committee may be held by audio or video teleconference with the consent of
each Party, provided that at least one (1) meeting of such Committee per year shall be held in person. Each Party shall be responsible for all of its own expenses of participating in the
Committees. Meetings of each Committee shall be effective only if at least one (1) representative of each Party is present or participating. 

        (c)    Limited Authority.    Except as otherwise expressly provided, the role of the Committees shall be advisory,
with the goal of serving as a forum for the sharing of information and for the purpose of preventing, or informally resolving (if they are able to facilitate mutual agreement between the Parties),
disputes between the Parties. The Clinical Development Committee shall focus on the provision of information and discussing disputes in clinical and regulatory areas. The Marketing Committee shall
focus on launch, marketing and other Commercialization issues. The Joint Committee shall provide a more general coordination function with respect to activities for the GSK Territory and shall oversee
the other Committees. The rights and responsibilities of each Party shall be governed by this Agreement, including the Exhibits hereto. Each Committee shall have solely the powers assigned to it in
this Article 2 and elsewhere in this Agreement. No Committee shall have any power to amend, modify or waive compliance with this Agreement. 

        (d)    Decision-Making.    Each Committee shall operate as to matters within its jurisdiction by consensus, as
provided in this Section 2.5(d). With respect to matters to be discussed by any Committee, the representatives of each Party shall present a unified position on behalf of such Party. In the
absence of consensus of Joint Committee members with respect to any matter before the Joint Committee, such matter shall be deemed not to have been approved by the Joint Committee. Any disagreement
among the members of either the Clinical Development Committee or the Marketing Committee as to matters within such Committee's jurisdiction shall be submitted for resolution by the Joint Committee. 

        (e)    Meeting Agendas.    Each Party shall disclose to the other Party  [ * ] no later than  [ * ] in advance, and  
[ * ] in advance, of each meeting of the applicable Committee;  provided that under exigent circumstances requiring
Committee input, a Party may provide its agenda items to the other Party a lesser period of time in
advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of
a specific agenda for such Committee meeting. 

        (f)    Information Sharing Between Committees.    The chairperson of each Committee shall make the minutes of each
meeting of such Committee available to the members of other Committees promptly as
such minutes are finalized pursuant to Section 2.5(a). Any Committee may discuss, within its area of expertise, the actions of the other Committees, and the Committees shall endeavor to provide
input to one another as appropriate and reasonable in areas in which their respective expertise overlaps. In particular but without limitation, the Marketing Committee 

11

 

may keep itself apprised of, and provide input to the Clinical Development Committee regarding, matters relating to  [ * ] in the GSK Territory.

        2.6    Project Coordinators.    Each Party shall, promptly after the Effective Date designate an appropriately expert
and experienced individual to facilitate communication and coordination of activities relating to Licensed Products and to provide support and guidance to the Committees (each a "Project
Coordinator"). Each Project Coordinator shall be experienced in project management and may also serve as a representative of either Party on any Committee. 

        2.7    Collaboration Guidelines.    

        (a)    General.    In all matters relating to this Agreement, each Party shall seek to comply with good pharmaceutical
and environmental practices consistent with its own existing practices. 

        (b)    Independence.    Subject to the terms of this Agreement, the activities and resources of each Party shall be
managed by such Party, acting independently and in its individual capacity. The relationship between Gilead and GSK is that of independent contractors and neither Party shall have the power to bind or
obligate the other Party in any manner, other than as is expressly set forth in this Agreement. 

        (c)    [ * ].    GSK recognizes
that while [ * ], in its development, Commercialization and other
activities [ * ] in the  [ * ]. GSK
acknowledges that Gilead is disclosing to GSK hereunder  [ * ] GSK further recognizes that as Gilead's licensee in the GSK
Territory, GSK will have a unique opportunity to access, learn and develop Know-How and expertise with the Licensed Products  [ * ] in the Gilead
Territory. GSK shall  [ * ] in its  [ * ]
Gilead recognizes that GSK  [ * ] Gilead recognizes that  [ * ] may be  [ * ] In order to  [ * ]

          (i)  Shall not permit either the  [ * ] to  [ * ] for purposes of performance under this Agreement; 

        (ii)  Shall require that  [ * ] neither
 [ * ] to  [ * ] employees, consultants or
other agents involved in the
[ * ], nor  [ * ] with regard to Licensed
Products  [ * ]; 

        (iii)  Shall prohibit the  [ * ] from 
[ * ] involved in  [ * ], or  [ * ] regarding such matters, or
[ * ] the  [ * ]; 

        (iv)  Shall inform each of  [ * ] that such
 [ * ]; 

        (v)  Shall not permit  [ * ] to  [ * ] such information for purposes of performance under this
Agreement; 

        (vi)  Shall make reasonable efforts to  [ * ]
involved in  [ * ] in  [ * ] in or for
 [ * ] during the Term; and 

      (vii)  Shall make reasonable efforts to  [ * ] in any
 [ * ] during the Term in
[ * ] the  [ * ] of the  [ * ] of each such  [ * ]

The
Joint Committee shall, to the extent requested by either Party,  [ * ], and  [ * ]. GSK shall reasonably consider and  [ * ]. 

 
 

ARTICLE 3
  
    DEVELOPMENT    
  

        3.1    Current Status; Overview.    As of the Effective Date, Gilead has conducted or is conducting Phase III Clinical
Trials and other clinical trials of the Current Product for the HBV Indication in various countries of the world, including without limitation the Current Gilead Trials, the results of which Gilead
has included and intends to include in its Marketing Authorization Applications in the 

12

 

Gilead Territory. As of the Effective Date, the status of Gilead's regulatory filings for the Licensed Products for the HBV Indication is set forth in Section 4.1. Although data resulting from
clinical trials of the Current Product for the HBV Indication that Gilead is conducting as of the Effective Date may be sufficient to support Regulatory Approval for the Current Product for the HBV
Indication in the United States, Canada, Australia, the member countries of the European Union and other countries in the Gilead Territory, the Parties recognize that GSK may not be able to rely
solely on such data to support Regulatory Approval for the Current Product in the GSK Territory. The Parties recognize, therefore, that additional clinical trials of the Current Product for the HBV
Indication within certain of the countries of the GSK Territory may be required to support Regulatory Approval of the Current Product in such countries. GSK shall be responsible for conducting, at its
sole expense, clinical development within the GSK Territory to the extent necessary to support Regulatory Approval of the Current Products therein, as more specifically set forth in Sections 3.3 and
6.1. 

        3.2    Gilead Development.    Gilead intends to continue to develop the Current Product for the Gilead Territory, and
may, in its sole discretion, develop Other Formulations. GSK shall have access to the results of such development by Gilead to the extent set forth in Section 3.5 and in accordance with the
licenses to GSK set forth in Sections 7.1 and 7.3. 

        3.3    GSK Development and Plan.    

        (a)    Responsibility.    GSK shall devote Diligent Efforts to clinically and regulatorily develop the Current Product
to support Regulatory Approval thereof for the Licensed Indication in  [ * ]. Once  [ * ] the Current Pediatric Product to treat a Licensed
Indication, GSK shall devote Diligent Efforts to clinically and regulatorily develop the Current Pediatric Product in  [ * ]

        (b)    Initial Plan.    GSK has, as confirmed in a letter from Gilead to GSK dated as of the Effective Date, provided
to Gilead a written plan describing GSK's plans for any clinical trials GSK plans to conduct to support Regulatory Approval of the Current Product for the HBV Indication in the GSK Territory,
including the [ * ] (such plan, the "GSK Development Plan"). 

        (c)    Updates.    

          (i)  The initial GSK Development Plan includes a timeline for completion of clinical and regulatory development of the
Current Product for the Licensed Indication in the GSK Territory in a manner that  [ * ] consistent with the use of Diligent Efforts. The Clinical
Development Committee shall review the initial GSK Development Plan at its first meeting, and shall  [ * ] any modifications thereof necessary to
reflect the Parties'
ongoing efforts to optimize clinical development of the Current Product in the GSK Territory. The Joint Committee shall discuss any  [ * ] in a
manner consistent with prompt development of Licensed
Products in the GSK Territory. Any such changes that [ * ]
Regulatory Approval of Licensed Products in the Major GSK Countries, or Administrative Protection, Class I Certification or Class II Certification for Licensed Products in China, for
reasons [ * ] shall be  [ * ]. Gilead's
members of the Joint Committee shall not  [ * ]

        (ii)  Subject to  [ * ] in any modification
of the GSK Development Plan in
accordance with the next-to-last sentence in Section 3.4(c)(i), GSK shall thereafter modify the GSK Development Plan from time to time to promptly reflect changes to the
IND submission and commencement dates or protocols for the clinical trials described therein, or to reflect additional clinical trials of Licensed Products for Licensed Indications (including the
detailed protocol and expected IND submission and commencement dates for each trial) that GSK decides to conduct or terminate during the Term. GSK shall provide an update to the GSK Development Plan
to the Clinical Development Committee [ * ] to GSK's development
plans for Licensed Products. In any event, subject to this Section 3.4(c)(ii), GSK shall update the GSK Development Plan  [ * ] of each year
and submit (no later than such date) such
updated plan to the Clinical Development Committee for [ * ]. GSK
shall, along with any such update, 

13

 

provide to Gilead [ * ]. In addition, GSK shall include in the
GSK Development Plan GSK's plans for Phase IIIB Clinical Trials and Phase IV Clinical Trials of Licensed Product for Licensed Indications, in view of their impact on development strategy and timeline.
The Clinical Development Committee shall review and meet to discuss each such update proposed by GSK to the GSK Development Plan. The Clinical Development Committee may  [ * ] such proposed updates or request that GSK  [ * ] as such Committee deems appropriate. In addition to those
comments that Gilead provides via its participation in the Clinical Development Committee, Gilead may provide further comments on any such update within thirty (30) days after the date of such
Committee's meeting to discuss such update. 

        (iii)  In light of the current development status of the Current Pediatric Product, the initial GSK Development Plan does not
address development of the Current Pediatric Product. Reasonably in advance of the time that GSK's diligence obligations to develop the Current Pediatric Product for the GSK Territory as set forth in
Section 3.3(a) come into effect (as such timing is reasonably determined by the Clinical Development Committee at the request of either Party), GSK shall expand the GSK Development Plan to
encompass GSK's plans for clinical trials to support Regulatory Approval of the Current Pediatric Product for the Licensed Indication in each country of the GSK Territory, including the  [ * ] In addition, if any Other Formulation or Other Indication
becomes a Licensed Product or Licensed Indication (respectively), then GSK shall promptly update the GSK Development Plan to encompass GSK's plans for clinical trials to support Regulatory Approval
therefor, including the [ * ]

        (iv)  Within six (6) months after the Effective Date, GSK shall update the GSK Development Plan to encompass  
[ * ] for the Licensed Indication in the GSK Territory. These
plans are an integral part of the GSK Development Plan, and will be reviewed by the Clinical Development Committee. 

        (v)  GSK shall continue to update the GSK Development Plan, subject to the  [ * ] throughout the Term, so long as any of GSK's (or its
Affiliates', Distributors' or Permitted Sublicensees') clinical trials of Licensed Products in the GSK Territory are planned or ongoing (including any such trials that are Phase IIIB Clinical Trials
and Phase IV Clinical Trials). 

        (d)    Compassionate Use/Expanded Access Program.    Gilead has received inquiries regarding expanded access to the
Current Product in various countries of the GSK Territory prior to the Effective Date. Gilead shall forward to GSK contact information resulting from such inquiries promptly after the Effective Date.
Thereafter, Gilead shall promptly forward to GSK any additional inquiries Gilead receives regarding expanded access in the GSK Territory to any Licensed Product. Gilead shall reasonably cooperate with
GSK to [ * ] to the extent set forth in such Section. GSK shall  [ * ] whether made before or after the Effective Date. GSK shall
have the exclusive right, and shall devote its [ * ] with the  [ * ], to establish an expanded access program to make the
Licensed Product available on a compassionate use basis in the countries of the GSK Territory. As GSK decides, with respect to each country of the GSK Territory, whether to establish such an expanded
access program in such country, GSK shall give due consideration to the need to maintain good relations with physicians and key opinion leaders in the GSK Territory with respect to the Current Product
and the Parties' efforts to develop treatments for the HBV Indication. GSK shall notify the Clinical Development Committee as GSK considers an expanded access program in any country of the GSK
Territory, and the Clinical Development Committee shall discuss the considerations relevant to such decision. 

        3.4    GSK Activities.    GSK shall perform its clinical and regulatory development of Licensed Products for the
Licensed Indication in the GSK Territory in accordance with the GSK Development 

14

 

Plan, as updated pursuant to Section 3.3. GSK shall bear all of the costs and expenses incurred in connection with any of the activities reflected in the GSK Development Plan. 

        3.5    Gilead Development of Other Formulations and Other Indications.    

        (a)    General.    Subject to the procedures set forth in this Section 3.5 to permit GSK to expand the licenses
granted to it pursuant to Sections 7.1 and 7.3 to include Other Formulations and Other Indications, Gilead may at any time in its sole discretion (i) develop anywhere in the world, and
Commercialize in the Gilead Territory, an Other Formulation for any indication, or (ii) develop anywhere in the world (subject to Section 3.8) and Commercialize in the Gilead Territory a
Licensed Product for an Other Indication. Such Other Formulation and/or Other Indication shall not be included in the licenses granted to GSK in Section 7.1 or 7.3 or otherwise be available to
GSK except to the extent provided in this Section 3.5. 

        (b)    Notices and Information Regarding Other Formulations and Other Indications.    Gilead shall notify GSK when it
 [ * ] of (i) an Other Formulation for any indication, or
(ii) a Licensed Product for an Other Indication. Thereafter, from time to time,  [ * ] the  [ * ] that is necessary for  [ * ] development and/or Commercialization of such
formulation for
such indication for and in the GSK Territory. If Gilead [ * ] for
(i) an Other Formulation for any indication, or (ii) a Licensed Product for an Other Indication, then Gilead shall so notify GSK. If, within  [ * ]
 after any such written notice from Gilead, GSK requests to
negotiate the terms pursuant to which the definition of Licensed Product would be expanded to include such Other Formulation and/or the definition of Licensed Indication would be expanded to include
such Other Indication (as applicable), the Parties shall negotiate such terms as set forth in Section 3.5(c). 

        (c)    Negotiation.    If pursuant to Section 3.5(b) GSK proposes to negotiate the terms pursuant to which the
definition(s) of Licensed Product and/or Licensed Indication would be so expanded, then the Parties shall negotiate  [ * ] to be paid to Gilead in
consideration of such expansion, and  [ * ] in good faith for a period of
[ * ] in the case of  [ * ] and 
[ * ] in all other cases covered by this Section 3.5. Any
such [ * ]and any  [ * ] of such
formulation for such indication relative to  [ * ] shall be negotiated based on the  [ * ] such formulation for such indication and the  [ * ] for the use of such
formulation for such indication relative
to the [ * ] for the use of Licensed Products for the treatment of
the Licensed Indications then included under this Agreement, and the  [ * ] available for the relevant formulation for use in the
relevant indication. Additionally, in such event, the Parties shall negotiate  [ * ] with respect to such newly licensed indication and/or
formulation, as applicable, which shall in any event [ * ] to
clinically develop and seek Regulatory Approval for such indication and/or formulation in  [ * ] for such formulation to treat such indication and
 [ * ] In no event shall any Other Formulation be included under
this Agreement as a Licensed Product, or an Other Indication be included under this Agreement as a Licensed Indication, unless the Parties execute a written amendment to this Agreement setting forth
mutually acceptable [ * ] and a  [ * ]
comparable to those that  [ * ]

        (d)    [ * ] with Respect to Substitutable Formulations of ADV.    If the
Parties are unable to reach agreement [ * ] after a period of  [ * ] of good faith negotiations in accordance with
Section 3.5(c), and after referral to and negotiation by their respective senior executive officers as set forth in Section 16.1 (if either Party so refers the matter), or if GSK fails
to propose to commence such negotiations within the time period set forth in Section 3.5(b), and the formulation at issue  [ * ] then:

          (i)  Gilead shall  [ * ] and
Gilead  [ * ] such formulation for such indication for the GSK Territory  [ * ] such formulation for such indication in the GSK Territory;
and 

        (ii)  either Party may  [ * ] such
formulation and/or indication (as applicable) shall be
included in the licenses hereunder [ * ]

15

 

If
either Party [ * ] then, notwithstanding any conflicting
procedures set forth in such Section, [ * ]and shall  [ * ]
 that the  [ * ] to be the  [ * ]
 The  [ * ] The  [ * ] of the Parties' proposals with respect to  [ * ] and the
[ * ] set forth therein. The Parties shall  [ * ] (which shall include a  [ * ] Either Party may,  [ * ]
 until such time, if ever, as  [ * ] of such formulation for such indication anywhere in the  
[ * ]

        (e)    Gilead Activities with Respect to Different Chemical Entities.    If (i) GSK fails to propose to
commence negotiations within the time period set forth in Section 3.5(b), or (ii) the Parties are unable to reach agreement as to such amounts and diligence obligations after a period of  [ * ] of good faith negotiations pursuant to
Section 3.5(c), and after referral to and negotiation by their respective executive officers as set forth in Section 16.1 (if either Party so refers the matter), and, in either case,  [ * ] then: 

          (i)  the definitions of Licensed Product and Licensed Indication shall not be expanded to encompass such formulation and such
indication (as applicable); 

        (ii)  Gilead shall have no further obligation to GSK with respect to such formulation, and such formulation shall thereafter
be excluded from the definition of Other Formulation for purposes of this Section 3.5; and 

        (iii)  Gilead shall have no further obligation to GSK with respect to such Other Indication (if applicable), subject to the
applicability of Sections 3.5(b), (c) and (d) if Gilead develops a different formulation (whether it be a Licensed Product or an Other Formulation) for such indication. 

        (f)    Substitutability Determination.    As set forth in Section 16.4, any disputes between the Parties as to
Substitutability shall be resolved as set forth in such Section. At the written request of either Party, the commencement of negotiations between the Parties as set forth in Section 3.5(c)
regarding a formulation the Substitutability of which is being determined by an Industry Expert in accordance with Section 16.4 may be postponed until such Industry Expert renders his or her
decision as to Substitutability. 

        3.6    GSK Development of Other Formulations and Indications.    GSK shall not develop any Other Formulation or
conduct any clinical trials of any Licensed Product for any Other Indication without the prior approval of the Joint Committee. If the Joint Committee is unable to reach consensus to approve GSK's
development of any such Other Formulation as a Licensed Product or Other Indication as a Licensed Indication, then GSK shall not conduct such development;  [ * ]
. GSK's rights to develop Licensed Products for patients
co-infected with both HBV and another infectious agent are set forth in Section 7.5. 

        3.7    Specific Responsibilities of the Clinical Development Committee during Development.    The Clinical Development
Committee shall [ * ]. The Clinical Development Committee shall  [ * ] of Licensed Products hereunder. In addition, the Clinical
Development Committee shall review and discuss any written proposal by a Party to fund and/or conduct jointly (with the other Party) any clinical trial of a Licensed Product for a Licensed Indication.
Such review and discussion shall serve to explore the Parties' interests in any such joint funding and/or conduct of trials. Neither Party shall be required to undertake any such funding and/or
conduct unless the Parties enter into a separate, written agreement governing such activities. 

        3.8    Site of Activities.    

        (a)  Gilead, its Affiliates and Other Licensees may conduct and sponsor clinical trials of the Current Product for an Other
Indication or the HBV Indication, or of Other Formulations (for any indication) at sites  [ * ]; provided, however,
that for any such trial that is not a Current Gilead Trial, Gilead has a  [ * ] to conduct such trial  [ * ] and  [ * ] regarding the  [ * ] after the Effective 

16

 

Date. [ * ] to the  [ * ] of any such
trial solely if the conduct of such trial will  [ * ] of any Licensed Product in the  [ * ] or would result in  [ * ] If GSK believes that enrollment of patients in any such
clinical trial would [ * ] with the  [ * ],
 then it shall so notify the Joint Committee, which shall,
within ten (10) days of such notice, discuss and resolve the matter consistent with the following principle:  [ * ] for a product, or as a
 [ * ] In addition, if requested by either Party, the Joint
Committee shall discuss whether the Parties could reasonably conduct a clinical trial of a Licensed Product  [ * ] in a manner that would 
[ * ] otherwise permitted under this Agreement. Neither Party
shall be required to [ * ] with the other Party unless the Parties
otherwise agree in writing. 

        (b)  Gilead, its Affiliates and Other Licensees shall use the data generated in any trial described by Section 3.8(a)
solely to [ * ] except to the extent that Section 3.5(e)
applies with respect thereto. 

        (c)  Except as permitted pursuant to the Other Clinical Trial Agreements, GSK shall not conduct any clinical trials of any
Licensed Product in the Gilead Territory without Gilead's prior written consent via its participation in the Joint Committee, which Committee shall discuss any such approval promptly after GSK's
written, specific request relating to the conduct of such trials;  [ * ]

 
 

ARTICLE 4
  
    REGULATORY    
  

        4.1    Current Status.    As of the Effective Date, Gilead has filed an IND for the Current Product for the HBV
Indication in China and in certain countries of the Gilead Territory, and (b) Marketing Authorization Applications in the United States and European Union. As of the Effective Date, Gilead has
not filed any Marketing Authorization Application for a Licensed Product in the GSK Territory. 

        4.2    Certificate of Pharmaceutical Products; GSK Marketing Authorization Applications and Regulatory
Approvals. 

        (a)  If GSK so requests in writing, Gilead shall apply for  [ * ]
 to obtain a Certificate of Pharmaceutical Products for any
Licensed Product for any Licensed Indication in all countries within the GSK Territory where such certificates are available to Gilead on the basis of any Regulatory Approval Gilead has obtained or
filing that GSK has made (prior to the time of GSK's request) for such product for such indication, provided that no additional actions, beyond making and pursuing an application, (including any
notarization and legalization that may be required, [ * ] and
delivering the Certificate of Pharmaceutical Product, are required to support or maintain such a Certificate of Pharmaceutical Product or application therefor in such country. In particular, Gilead
shall not be required to establish any additional manufacturing capacity in any country in order to support the availability of a Certificate of Pharmaceutical Product,  [ * ] GSK shall cooperate in all such efforts at its expense. GSK
shall [ * ] in seeking or maintaining such Certificates of
Pharmaceutical Products that are incurred after the Effective Date. Once Gilead obtains any Certificate of Pharmaceutical Product for Licensed Products for Licensed Indications for the GSK Territory,
Gilead shall forthwith provide them to GSK for provision to the relevant Regulatory Authorities in the GSK Territory. Thereafter, to the extent permitted by law, GSK shall assume all responsibility
for communication with such Regulatory Authorities in relation to such Certificate of Pharmaceutical Product and any regulatory filings or rights based thereon in such countries during the Term, and
for all compliance with law with respect thereto. In any such country in which GSK is not legally permitted to assume such responsibilities, Gilead shall reasonably cooperate with GSK to effect
communications with Regulatory Authorities in connection therewith to the extent desired and requested by GSK,  [ * ]. 

17

 

        (b)  In all countries of the GSK Territory, GSK shall  [ * ]
 Marketing Authorization Applications, Regulatory Approvals
and INDs for such Licensed Product for such Licensed Indication, and shall be  [ * ] for all communications with regulatory authorities in such
countries in relation thereto (to the extent permitted by law); provided that the Parties recognize that with respect to Certificates of Pharmaceutical
Products, Gilead shall [ * ] the Certificates of Pharmaceutical
Products that it provides to GSK for the GSK Territory in countries where such  [ * ] is required by law  
[ * ] To the extent permitted by applicable law, GSK shall make
all [ * ] to enable Gilead to conduct,  [ * ] for any Licensed Product, clinical trials of Licensed
Products for Licensed Indications in the GSK Territory that are otherwise permitted pursuant to Section 3.8. Notwithstanding anything express or implied to the contrary in this
Section 4.2(b), to the extent that Gilead may not conduct any such clinical trial  [ * ] then Gilead may  
[ * ] to cover such clinical trials. 

        4.3    GSK Access to Gilead Know-How.    

        (a)    Regulatory Data.    Gilead shall, as soon as practicable after the Effective Date, provide GSK copies of all
Marketing Authorization Applications that have been submitted by Gilead or Other Licensees to the FDA or the EMEA, additional information or data relating to other Marketing Authorization Applications
filed by Gilead elsewhere in the Gilead Territory, INDs filed within the GSK Territory,  [ * ] like items that are required to file a
Marketing
Authorization Application, subsequent licensing variations (for example, updates or amendments to any Marketing Authorization Approval or other relevant regulatory approvals) and INDs in the GSK
Territory. Gilead shall update the information provided to GSK with respect to safety reporting information as provided in Section 4.5 and shall provide GSK with a regular global status report
as material events occur in relation to obtaining Regulatory Approvals for Licensed Product in the Gilead Territories. In addition, subject to Section 7 of the Safety Data Exchange Protocol
(referred to in Section 4.5) which governs reporting of safety data, Gilead will use reasonable efforts to cooperate with GSK (i) to advise GSK as GSK formulates responses to questions
raised with GSK by Regulatory Authorities within the GSK Territory regarding Licensed Products in a timely manner or (ii) as Gilead's input directly to such authorities is otherwise
specifically required by such authorities; provided that GSK shall nevertheless continue to have the primary responsibility to prepare responses and
respond to all such questions and inquiries. Gilead acknowledges that such responses may involve representatives from Gilead attending meetings with such authorities within the GSK Territory in
situations where such attendance is reasonably required. In the event that Gilead introduces i) any technical change to any of the Licensed Products, including without limitation any change in
formulation or specification; or ii) any change in the manufacturing process pursuant to the Clinical Supply or the Commercial Supply Agreement, Gilead shall  [ * ] Gilead shall  [ * ] to cooperate with GSK on the basis set out above in this
Section 4.3(a), on the basis set forth in Section 4.12. 

        (b)    Form of Transfer; Items not Transferred.    Gilead shall provide all regulatory data and related documentation
that it is required to provide to GSK hereunder in editable electronic form, to the extent that an electronic copy is reasonably available to Gilead. Gilead shall not be required to provide in paper
form to GSK any such item that Gilead provides to GSK in electronic form, except items
which may be required by regulatory authorities in the GSK Territory to be submitted in their original form e.g. certificates of analysis or signed technical data. Subject to
Section 4.11, notwithstanding anything else to the contrary in this Section 4.3, Gilead shall not be required to disclose to GSK  [ * ]without regard to whether or not such data are incorporated
into the items that Gilead is otherwise required to provide to GSK pursuant to this Section 4.3. GSK shall have the right, in accordance with Section 4.3(d), to reference and incorporate
such data in GSK's regulatory filings for Licensed Products in the GSK Territory. Additionally, to the extent that any Regulatory Authority in the GSK Territory requires access to any data in Gilead's
Control that Gilead is not required hereunder to provide directly to GSK for purposes of GSK's (or its 

18

 

Affiliates, Distributor's or Permitted Sublicensee's) regulatory filings in relation to Licensed Products for Licensed Indications in the GSK Territory, then Gilead shall, reasonably promptly after
receiving a written request from GSK, provide such data directly to the applicable Regulatory Authority. In such event, the Clinical Development Committee shall establish mutually acceptable
confidentiality procedures to protect any such data so provided by Gilead from disclosure to GSK. The Clinical Development Committee shall discuss such procedures promptly after the request of either
Party. GSK (and its Affiliates, Distributors and Permitted Sublicensees) shall not access or seek to access any such data provided to a Regulatory Authority of the GSK Territory. The Parties shall
discuss, via their participation in the Clinical Development Committee, the form in which the Parties shall exchange Know-How pursuant to this Section 4.3 and Section 4.4,
where not expressly provided in such Sections. Notwithstanding anything else to the contrary in this Agreement, Gilead shall not be required to disclose to GSK any Know-How relating to the
manufacture of Licensed Products pursuant to this Section 4.3, as GSK's access to such manufacturing Know-How shall be treated separately in the Commercial Supply Agreement. 

        (c)    Other Licensee Permission and Know-How.    Gilead shall require Other Licensees to disclose to
Gilead and to allow Gilead to disclose to GSK all information relating to adverse events that Gilead must report pursuant to Sections 4.4 and 4.5. 

        (d)    GSK Use of Know-How.    GSK shall have the right to use and incorporate all Know-How
required to be provided to it pursuant to this Section 4.3 in its Marketing Authorization Applications for Licensed Products for Licensed Indications within the GSK Territory. GSK shall not  [ * ] of any  [ * ] provided GSK by Gilead hereunder without Gilead's prior
written consent; provided that this Section 4.3(d) shall not alter GSK's responsibilities pursuant to Section 4.3(b). GSK may request such
consent in accordance with the procedure set forth in Section 4.12. 

        (e)    Gilead Regulatory Filings.    Gilead hereby grants GSK the right to reference Gilead's Current INDs, Marketing
Authorization Applications and Regulatory Approvals for the Licensed Product in the Gilead Territory and all subsequent correspondence and data submissions relating thereto in GSK's regulatory filings
for Licensed Products for Licensed Indications in the GSK Territory. Such right shall be transferable to GSK's Distributors and Permitted Sublicensees. In addition, Gilead will provide GSK with copies
of all Regulatory Approvals it receives for Licensed Products in the Gilead Territory. 

        (f)    Costs.    Section 4.13 sets forth certain  [ * ] in relation to Gilead activities under this
Section 4.3 that [ * ]

        4.4    Gilead Access to GSK Know-How and Filings.    

        (a)    Provision to Gilead.    During the Term, GSK shall provide to Gilead for use in Gilead's development and
Commercialization efforts for Licensed Products all Know-How in GSK's or any of its Affiliates' possession regarding Licensed Products (including without limitation all clinical or safety
data regarding Licensed Products) that is necessary or useful to develop or Commercialize Licensed Products or to support Regulatory Approval of Licensed Products outside the GSK Territory as such
Know-How becomes available; provided, however, that GSK shall not be required to disclose
any Know-How that is [ * ]. 

19

  

        (b)    Use.    Gilead shall have the right to use and incorporate all Know-How provided to it pursuant to
Section 4.4(a) in Marketing Authorization Applications for Licensed Products outside of the GSK Territory and, to the extent Section 3.5(e) applies, within the GSK Territory. GSK hereby
grants Gilead the right to reference all of GSK's and its Affiliates' INDs, Marketing Authorization Applications and Regulatory Approvals for Licensed Products in Gilead's regulatory filings for
Licensed Products in the Gilead Territory and Other Formulations world-wide. Such rights shall be transferable to Gilead's distributors for Licensed Products and Other Licensees. GSK shall
provide Gilead with an electronic copy of each IND, Marketing Authorization Application and other GSK regulatory filing filed for the Licensed Product in the GSK Territory, and of all material
subsequent correspondence and data submissions relating thereto, as well as a copy of a status report regarding all GSK filings in the GSK Territory and material events occurring in relation thereto
to the extent not otherwise provided to Gilead pursuant to this Section 4.4(b)  [ * ] in which any regulatory filing for a Licensed Product,
receipt of governmental correspondence relating thereto or other such material event occurs. 

        (c)    Sublicensee Permission; Transferability to Sublicensees.    GSK shall require its Affiliates and any Permitted
Sublicensees or Distributors (i) to permit GSK to provide to Gilead any Know-How that is necessary or useful to develop or Commercialize Licensed Products or to support Regulatory
Approval of Licensed Products in the Gilead Territory and that, if such Know-How were owned or Controlled by GSK, would be Know-How that GSK must provide to Gilead pursuant to
Section 4.4(a), and (ii) to grant to Gilead the right to reference any IND, Marketing Authorization Application or Regulatory Approval containing such Know-How for Gilead's
purposes in the Gilead Territory (including without limitation for the purposes of Gilead's Other Licensees), and, to the extent Section 3.5(e) applies, within the GSK Territory. GSK shall
require its Permitted Sublicensees, Affiliates and Distributors to disclose to GSK and to allow GSK to disclose to Gilead all Know-How that GSK must report pursuant to Section 4.5. 

        4.5    Adverse Event Reporting and Safety Data Exchange.    The Parties shall report, and take other actions in
relation to, adverse events with respect to Licensed Products reported or otherwise known to them in accordance with a reporting protocol that is substantially in the form of the "Safety Data Exchange
Protocol" attached hereto as Exhibit E. 

        4.6    Communications.    Except (i) as may be required by law, (ii) as contemplated pursuant to
Section 4.2, (iii) in relation to any IND for a Licensed Product that Gilead files within the GSK Territory in order to conduct any clinical trial therein as otherwise permitted pursuant
to Section 3.8, or (iv) as provided for in Section 7 of the Safety Data Exchange Protocol (which is referred to in Section 4.5), Gilead shall not communicate regarding any
Licensed Product for a Licensed Indication with any Regulatory Authority having jurisdiction in the GSK Territory unless explicitly requested or permitted in writing to do so by GSK. Except
(i) as may be required by law, or (ii) in regards to any clinical trial that GSK conducts pursuant to any of the Other Clinical Trial Agreements, GSK shall not communicate with any
Regulatory Authority having jurisdiction in the Gilead Territory regarding any Licensed Product unless explicitly requested or permitted in writing to do so by Gilead. 

        4.7    Applications for Regulatory Exclusivity.    The Parties recognize that exclusivity rights that may be granted
or provided for under regulatory laws of the countries in the GSK Territory are likely to  [ * ] of Licensed Products in such Territory. To the
extent
permitted by law, GSK shall have the exclusive right to file for, request and maintain any regulatory exclusivity rights for Licensed Products for Licensed Indications in the GSK Territory, including
without limitation regulatory exclusivity rights based upon an orphan drug designation of a Licensed Product in a country in the GSK Territory, and to conduct and prosecute any proceedings or actions
to enforce such regulatory exclusivity rights; provided, however, that except as provided in Section 3.6 or 3.8(c), GSK shall not develop or seek
Regulatory Approval for any Licensed Product for an Other Indication. Gilead shall use its reasonable efforts to cooperate with GSK in such actions relating to regulatory exclusivity  [ * ] In countries where 

20

 

GSK is not permitted by law to take one or more of the actions described above with respect to regulatory exclusivity but Gilead is so permitted, Gilead shall use its reasonable efforts to support
GSK in such actions, [ * ] GSK shall own any regulatory
exclusivity rights for the Licensed Product in the GSK Territory where permitted by law. Gilead hereby grants GSK the exclusive right to market Licensed Products for Licensed Indications in the GSK
Territory under any regulatory exclusivity rights that, according to legal requirements in a country in the GSK Territory, must be granted directly to Gilead in such country. Without limitation, this
Section 4.7 shall apply to Class I Certifications and Class II Certifications relating to Licensed Products and Licensed Indications, and applications therefor. The foregoing in
this Section 4.7 shall not apply to Administrative Protections and applications therefor, which are separately treated in Section 10.2(e). To the extent that any of the foregoing forms
of regulatory exclusivity would exclude Gilead (and its Affiliates and licensees) from developing or Commercializing, in a manner that is otherwise permitted hereunder, an Other Formulation or a
Licensed Product to treat an Other Indication, then, subject to GSK's rights under Section 3.5(e), GSK hereby grants Gilead (and its Affiliates and licensees) the right under such form of
regulatory exclusivity to conduct such development and Commercialization, and covenants that GSK (and its Affiliates and Permitted Sublicensees) shall refrain from enforcing such form of exclusivity
against Gilead (and its Affiliates and licensees) in relation to such activities. 

        4.8    Recalls and Voluntary Withdrawals.    The Parties shall exchange their internal standard operating procedures
("SOPs") for conducting product recalls reasonably in advance of Commercial Launch of any Licensed Product in the GSK Territory, and shall discuss and resolve any conflicts between such SOPs and
issues relating thereto promptly after exchange, via their participation in the Clinical Development Committee. If either Party becomes aware of information relating to any Licensed Product that
indicates that a unit or batch of such product supplied to GSK pursuant to the Clinical Supply Agreement or Commercial Supply Agreement may not conform to the specifications for such product then in
effect pursuant to the applicable such agreement, or that potential adulteration, misbranding and/or other issues have arisen that relate to the safety or efficacy of Licensed Products, it shall
promptly so notify the other Party. The Joint Committee shall meet to discuss such circumstances and to consider appropriate courses of action, which shall be consistent with the internal SOP of the
Party having the right to control such recall pursuant to this Section 4.8. Except as may be otherwise set forth in the Clinical Supply Agreement or Commercial Supply Agreement in relation to
the responsibilities of the Third Party suppliers supplying Licensed Product or bulk ADV to Gilead, GSK shall  [ * ] any product recall, field
correction or withdrawal of any
Licensed Product in the GSK Territory. The [ * ] with such product
recalls, field corrections or withdrawals shall [ * ] with the
Clinical Supply
Agreement and the Commercial Supply Agreement (as applicable) as appropriate in view of whether  [ * ] As between the Parties, Gilead shall
 [ * ] all recalls, field corrections and withdrawals of any
Licensed Product in the Gilead Territory. GSK shall maintain complete and accurate records of any recall in the GSK Territory for such periods as may be required by applicable legal requirements, but
in any event for no less than [ * ]

        4.9    Impermitted Regulatory Filings.    GSK shall not file any IND or Marketing Authorization Application for
(i) any Other Formulation that is not a Licensed Product for any indication, or (ii) any Licensed Product for an indication that is not a Licensed Indication. 

        4.10    No Harmful Actions.    

        (a)  GSK shall not take any action with respect to regulatory filings for Licensed Products in the GSK Territory that  
[ * ] impact upon the regulatory status or potential sales of
Licensed Products in the Gilead Territory. Prior to taking any action with respect to such filings in the GSK Territory that  [ * ] to have such
an impact,  [ * ] Gilead may bring to the  [ * ] any action or planned action that it believes would have
such an impact. [ * ] shall discuss whether any such action that
either Party brings to such Committee's attention reasonably would have such an 

21

 

impact, and potential alternative courses of action that GSK could take to avoid such an impact.  [ * ]

        (b)  If at any time during the Term  [ * ] in
either case any product (other than a Licensed Product or
Other Formulation) for the HBV Indication that is a [ * ] anywhere
in the world, then Section 4.10(a) shall apply mutatis mutandis to Gilead's actions with respect to the Licensed Products in the Gilead Territory
in the manner that it does to GSK's actions with respect to the Licensed Products in the GSK Territory. 

        4.11    Additional Information and Uses of Information.    If GSK believes that it has a legitimate need, for purposes
of its activities hereunder with any Licensed Product for a Licensed Indication for the GSK Territory, to receive from Gilead any clinical data or other Know-How that it would not
otherwise be entitled pursuant to Article 4 to so receive, then GSK shall notify Gilead in writing. GSK's notice shall set forth the information that it requests Gilead to disclose to GSK, and
specifically how GSK would propose that GSK be able to use such information. The Clinical Development Committee shall discuss any such request by GSK. If the Clinical Development Committee approves a
particular disclosure requested by GSK, then Gilead shall make such disclosure to GSK, and GSK shall use the disclosed information solely in the manner specified in, and in accordance with, GSK's
written notice to Gilead requesting such disclosure. Gilead's members of the Clinical Development Committee shall not unreasonably withhold or delay their consent to any such disclosure (or associated
permitted use) requested by GSK. The foregoing in this Section 4.11 shall apply mutatis mutandis to any requested use of Gilead's regulatory or
clinical information that GSK would not otherwise be entitled to make hereunder, in the same manner as it does to GSK's requests that Gilead disclose and GSK be permitted to use any information to the
disclosure of which GSK would not otherwise be entitled hereunder  [ * ]

        4.12    Gilead Transition Assistance.    The Parties recognize that in relation to the transfer of responsibility for
the Licensed Products for Licensed Indications for the GSK Territory from Gilead to GSK in accordance with this Agreement: (a) GSK will require certain assistance from Gilead; (b) Gilead
is required to provide certain assistance to GSK as set forth in Sections 3.3(d), 4.2(a), 4.3, 4.11, 10.2(e) and other Sections of this Agreement in the nature of advice, analysis, consultation,
visits with Regulatory Authorities and any other activities set forth in such Sections, but specifically excluding any activities of Gilead in relation to its responsibilities under Section 2.5
and the disclosure to GSK of Gilead information (including without limitation regulatory filings and Regulatory Approvals for Licensed Products) that Gilead is required to disclose to GSK hereunder
(collectively, such assistance that is not excluded, "Assistance"); and (c) certain Assistance shall be  [ * ] to the extent set forth in
Sections 4.12(c) and
(d) below. The Parties further recognize that because much of the Assistance relates to transitional matters, GSK's needs for Assistance may be expected to be greatest shortly after the
Effective Date, and thereafter diminish. 

        (a)    Initial.    During the first  [ * ] following the Effective Date, Gilead shall provide GSK with
reasonable amounts of Assistance at [ * ] The reasonableness of
such amounts of Assistance shall be evaluated giving due regard to the proportion of any individual Gilead person's time that is devoted to rendering Assistance to GSK. 

        (b)    Extended.    During the  [ * ] period beginning  [ * ] following the Effective Date (the "Extended Transition
Period"), Gilead shall provide Assistance in the amount of up to the following numbers per month of Gilead person hours in each of the following categories of Gilead people at  [ * ]: 

[ * ]

Numbers
of [ * ] any of the foregoing categories that GSK does not
require Gilead to expend in such category in a particular calendar month shall  [ * ] to GSK in any of the other such categories 

22

 

or in subsequent calendar months. At the request of either Party, the Joint Committee shall review the appropriateness of the  [ * ] in each such
category. 

        (c)    Additional.    During the Extended Transition Period, Gilead shall also provide GSK with reasonable additional
amounts of Assistance in excess of [ * ], and after the Extended
Transition Period, Gilead shall also provide GSK with reasonable additional amounts of Assistance, at  [ * ] for specific Assistance after the
Extended Transition Period
that [ * ] The  [ * ] beyond that set
forth in subsections (a), (b) and
(d) shall be at [ * ] with the time of the Gilead people
whose Assistance is provided to GSK. (The reasonableness of any such amounts of additional Assistance shall be evaluated (i) giving due regard to the proportion of any individual Gilead
person's time that is devoted to such activities, and to ensuring that no such individual's ongoing responsibilities at Gilead are unduly interfered with by such activities, and (ii) in
recognition that Gilead's support role shall diminish over time and GSK shall take on primary responsibility for clinical and regulatory matters relating to its development and Commercialization of
Licensed Products for Licensed Indications in the GSK Territory.) 

        (d)    Particular Categories of Assistance After the Extended Transition Period.    The Parties recognize that given
the current regulatory status of the Current Product in each of Japan and China, particular Assistance in relation to regulatory matters in such countries may not be capable of occurring prior to the
end of the Extended Transition Period. Therefore, within the following categories of Assistance after the Extended Transition Period but prior to the corresponding end date set forth below, Gilead
shall provide Assistance in the amount of up to the following numbers  [ * ] in each of the following categories of Gilead people, up to
the following maximum number of hours per year in each category, at  [ * ]: 

[ * ]

"Assistance
Year" shall mean any twelve (12) month period commencing the day after the Extended Transition Period ends or any anniversary thereof. 

Numbers
of [ * ] from any of the foregoing categories that GSK
does not require Gilead to expend in such category in a particular  [ * ] to GSK in any of the other such categories or in subsequent 
[ * ] GSK shall provide Gilead with reasonable notice in advance
of requiring Assistance pursuant to this Section 4.12(d). For the avoidance of doubt, after the end date specified for each such category,  [ * ]

        (e)    [ * ].    For clarity,
the foregoing in this Section 4.12 addresses the [ * ] in
relation to the assistance provided by Gilead hereunder. In addition to those  [ * ] as set forth in Section 4.12(c), GSK shall  [ * ] by Gilead in relation to the personnel and other items it
provides to GSK in connection with the assistance set forth in this Section 4.3, without regard to whether the  [ * ] for such assistance are
required hereunder to be  [ * ]

        (f)    Mechanics.    Gilead may invoice GSK no more frequently than  [ * ] for any costs that GSK is required to reimburse to Gilead or
bear in accordance with this Section 4.12, and each such invoice shall be payable within thirty (30) days after the date GSK receives such invoice. 

        (g)    Clarification Regarding Gilead Legal Personnel.    Notwithstanding anything express or implied to the contrary
in this Agreement, the time, interaction and communication of Gilead personnel specializing in patent, intellectual property or other legal matters which time, interaction and communication is
provided hereunder is intended to serve solely an information-sharing purpose and does not constitute the provision of legal opinions, legal services or legal advice of any kind. 

23

 

 
 

ARTICLE 5    
    
    COMMERCIALIZATION    
  

        5.1    Commercialization.    During the Term, GSK shall devote Diligent Efforts to Commercialize (i) the
Current Product for the Licensed Indication [ * ] and
(ii) the Current Pediatric Product for the Licensed Indication  [ * ] pursuant to GSK's development efforts to develop the Current
Pediatric Product therefor in accordance with (and beginning at the time set forth in) Section 3.3(a). The Marketing Committee shall monitor and provide a forum for Gilead to review  [ * ] in the GSK Territory, including without limitation  [ * ] GSK shall perform all
Commercialization activities with
respect to Licensed Products in a manner consistent with the Commercialization Plan. GSK shall be responsible for all costs and expenses associated with its Commercialization activities in the GSK
Territory. Gilead shall not be responsible for any such costs or expenses. 

        5.2    Commercialization Plan.    

        (a)  Within  [ * ] after the Effective Date,
GSK shall submit a written plan
for the Commercialization of the Licensed Product in the GSK Territory (the "Commercialization Plan") to the Marketing Committee. GSK shall update the Commercialization Plan annually thereafter as set
forth in Section 5.2(b). The Commercialization Plan shall contain at least the following: 

          (i)  A  [ * ] and such other
information regarding  [ * ] for Licensed Products for the GSK Territory  [ * ]; 

        (ii)  Commencing no later than  [ * ] prior
to the anticipated date of Commercial Launch for any
Licensed Product in each Major GSK Country in the GSK Territory, a pre-launch plan for such country, which shall include  [ * ]; 

        (iii)  Commencing no later than  [ * ] in
advance of the anticipated date of Commercial Launch in
each Major GSK Country, a marketing plan, which shall include  [ * ]; 

        (iv)  Commencing no later than  [ * ] in
advance of the anticipated date of Commercial Launch in
each Major GSK Country, a sales plan, which shall include [ * ];
and 

        (v)  Commencing no later than  [ * ] in
advance of the anticipated date of Commercial Launch in
each Major GSK Country, a distribution plan, which shall [ * ]

Each
of the foregoing reports provided pursuant to subsections (ii) through (v) shall provide information on the activities covered by each report on a  [ * ]
 As Regulatory Approval of a Licensed Product is obtained,
and other significant events occur in relation thereto, in each country in the GSK Territory, GSK shall update  [ * ] in (i) above, and
 [ * ] The Commercialization Plan shall  [ * ] For the avoidance of doubt the Parties acknowledge and agree
that it may not be normal practice for all elements of the Commercialization Plan to be completed within the timelines set out in this Section 5.2  [ * ]
 GSK shall generate plans for  [ * ] required to be included in the Commercialization Plan  
[ * ]. GSK shall include in the Commercialization Plan any such
element that it had not formulated for itself as of the time that such element is set forth above to be included in the Commercialization Plan,  [ * ]

        (b)  Following the submission of the original Commercialization Plan GSK shall, no later than  [ * ], submit to the Marketing Committee an updated
Commercialization Plan for the upcoming year, which shall be discussed in full by the Marketing Committee at its next scheduled meeting in that calendar year. 

        (c)  If Gilead believes that any  [ * ] that
GSK includes in the Commercialization Plan as required
pursuant to Section 5.2(a) is [ * ], considering that such  [ * ] are to be used to determine the extent of any  [ * ] then Gilead may refer the matter first to the Marketing

24

 

Committee for discussion, and if the Marketing Committee cannot reach consensus as to the appropriate  [ * ] then  
[ * ]

        (d)  Notwithstanding anything in this Agreement express or implied to the contrary, Gilead shall not have any right to direct,
control or approve GSK's pricing of Licensed Products for the GSK Territory. The provision of any pricing data in connection with the Commercialization Plan is for informational purposes only. 

        5.3    Promotional Materials.    

        (a)  GSK shall prepare or have prepared Promotional Materials for the Licensed Product in each country of the GSK Territory
where GSK will Commercialize the Licensed Product. Consistent with
applicable law and subject to the limitations set forth in this Section 5.3(a), the Marketing Committee shall have the right to review exemplars and/or representative samples of all Promotional
Materials for the Licensed Product pursuant to mutually agreed-upon procedures and timelines, which shall be coordinated with both GSK's clearance procedures and Gilead's clearance
procedures, to the extent practicable. 

        (b)  To the extent required by applicable regulatory requirements, GSK shall file all Promotional Materials with the
appropriate Regulatory Authority. GSK shall establish a tracking system to ensure that all Promotional Materials are accurately and timely tracked and submitted to the relevant Regulatory Authority. 

        (c)  All Promotional Materials and Product Labelling shall,  [ * ] identify Gilead as the developer and licensor of the
Licensed Product. In any country where [ * ] Gilead be identified
as the developer and licensor of any Licensed Product in any Promotional Materials or Product Labelling, then (i) GSK shall notify Gilead if, in any of its Promotional Materials or Product
Labelling for Licensed Products for Licensed Indications in such country,  [ * ] and  [ * ] Gilead be  [ * ] attributed in such materials. The Marketing Committee shall
discuss any such [ * ] promptly after  [ * ] members of the Marketing Committee  [ * ] If the  [ * ] shall so identify Gilead in accordance with such approval. 

        (d)  GSK shall  [ * ] in all Promotional
Materials that it develops or has
developed. In the event that Gilead wishes to [ * ] the
Promotional Materials and [ * ] and to  [ * ] based on the Promotional Materials, for use in the Gilead
Territory [ * ]

        5.4    Training of Sales Force.    GSK shall supervise, train and maintain such competent and qualified sales
representatives, including Third-Party contractors, as may be required to promote and detail the Licensed Product in the GSK Territory as provided in the Commercialization Plan and consistent with
GSK's overall diligence obligations pursuant to Article 6. 

        5.5    Compliance.    GSK shall in all material respects comply with all applicable laws, regulations and guidelines
in developing and Commercializing Licensed Products in the GSK Territory under this Agreement, including without limitation the Foreign Corrupt Practices Act of 1977, as amended ("FCPA"). GSK
represents and warrants to Gilead that, as of the Effective Date, GSK and its Affiliates have adequate procedures in place to ensure their compliance with the FCPA, as well as the compliance therewith
of any Permitted Sublicensees and Distributors it may engage; to bring any noncompliance therewith (should it ever occur) by any of the foregoing entities to GSK's attention; and to promptly remedy
any such noncompliance. Annually, GSK shall certify to Gilead in writing  [ * ]

        5.6    Product Trademarks.    The Marketing Committee shall discuss, on a country-by-country
basis reasonably in advance of Commercial Launch in such country, or as otherwise requested by GSK, whether it is desirable for GSK to employ the counterpart within such country to any Gilead Product
Mark that Gilead uses solely with any Licensed Product in the Gilead Territory. If the Marketing Committee agrees (by consensus, in accordance with Section 2.5(d)) that GSK shall use such a 

25

 

trademark or tradename, then such trademark or tradename in such country shall thereafter be deemed to be included within the definition of the "Gilead Product Marks." GSK shall use such tradenames
and trademarks solely in conformity with Gilead's written instructions for the appearance and use of such trademark or tradename, as well as those policies Gilead may provide pursuant to
Section 7.6. Gilead explicitly disclaims all representations and warranties relating to the Gilead Product Marks that may exist now and in the future, including without limitation, any warranty
of noninfringement. GSK's (and its Affiliates' Distributors' and Permitted Sublicensees') use of the Gilead Product Marks shall be entirely at GSK's risk and GSK shall hold Gilead, its Affiliates and
Other Licensees harmless from any such use by GSK, its Affiliates, Distributors or Permitted Sublicensee, as set forth in Section 12.2. 

        5.7    No Misappropriation.    GSK shall not misappropriate any trade secret of Gilead or any Third Party in its
activities to develop or Commercialize the Licensed Product pursuant to this Agreement. 

        5.8    Use of Distributors.    GSK shall have the right to engage Distributors to distribute the Licensed Product in
particular countries of the GSK Territory [ * ] GSK shall include
in the Commercialization Plan (and GSK's updates thereto) a list prepared in good faith of any Distributors that it (or its Affiliate) is, to its knowledge,  [ * ]
 In addition, GSK shall reasonably cooperate and respond to
Gilead's reasonable inquiries regarding GSK's use of Distributors in other countries in the GSK Territory as necessary or reasonably useful  [ * ]
to respond to any governmental inquiry that Gilead may
receive regarding such Distributors. 

 
 

ARTICLE 6    
    
    DILIGENCE    
  

        6.1    Clinical Development Diligence.    

        (a)    Level of Effort.    In accordance with Section 3.3, GSK shall devote Diligent Efforts to clinically and
regulatorily develop and seek Regulatory Approval for the Current Product and the Current Pediatric Product (beginning at the time that GSK's diligence obligations with respect to the Current
Pediatric Product become effective pursuant to such Section) for Licensed Indications  [ * ] undertaking shall include carrying out the GSK
Development
Plan (as updated pursuant to Section 3.3). 

        (b)    Timetable.    Without limiting GSK's obligations pursuant to Section 6.1(a), GSK shall  [ * ] Notwithstanding the foregoing, if GSK's ability to achieve  [ * ]
 then the timeline provided below for achieving the affected
milestone(s) will be extended by a period of time equivalent to the length of such delay. The Clinical Development Committee shall reasonably determine any such extension. 

        6.2    Regular Reports on Development Activities.    GSK shall informally update the Clinical Development Committee
periodically regarding GSK's significant development and regulatory activities with Licensed Products for the Licensed Indication. In addition, GSK shall  [ * ]
 to the Clinical Development Committee at least  [ * ] summarizing GSK's significant clinical and regulatory
activities with respect to Licensed Products and Licensed Indications in the GSK Territory pursuant to this Agreement, covering subject matter at a level of detail reasonably sufficient to enable
Gilead to determine GSK's compliance with its diligence obligation pursuant to Section 6.1. Gilead, via its participation in the Clinical Development Committee, may request that GSK provide
additional updates to the GSK Development Plan, and ask GSK questions regarding any update to the GSK Development Plan. GSK shall, via its participation in the Clinical Development Committee, provide
any such update reasonably requested by Gilead, shall discuss with Gilead any such questions posed by Gilead and shall provide reasonable amounts and types of additional information to respond to such
questions. 

26

 

        6.3    Commercialization Diligence.    

        (a)    Level of Efforts.    To the extent set forth in Section 5.1, GSK shall devote Diligent Efforts to
Commercialize the Current Product and the Current Pediatric Product for Licensed Indications in the GSK Territory. 

        (b)    Time to Launch Licensed Product.    GSK shall achieve Commercial Launch of the Licensed Product  [ * ] for the Licensed Indication promptly after, and in any case
not later than [ * ] after, the date on which such Regulatory
Approval is granted, and shall use [ * ] If GSK fails to achieve
Commercial Launch of a first Licensed Product in any [ * ] after
the date on which Regulatory Approval for such Licensed Product is granted for such product in such country, and except where such failure results from  [ * ]
, then GSK shall pay to Gilead the  [ * ], based on the  [ * ] for the relevant  [ * ] set forth in the Commercialization Plan as it 
[ * ] that such Regulatory Approval was granted. Once GSK achieves
Commercial Launch [ * ]

        6.4    Non-diligence.    

        (a)    Special Meeting of Collaboration Committee.    If Gilead believes that GSK has failed to comply with its
diligence obligations under this Article 6, then Gilead may convene a special meeting of the Joint Committee to discuss the matter (a "Special Meeting") by written notice to GSK. Such notice
shall include a general statement of the areas of concern to Gilead. The Special Meeting shall be convened
not later than [ * ] after such notice is given to GSK. At the
Special Meeting, the Joint Committee will discuss any areas of concern to Gilead, GSK's efforts in such areas and any additional actions GSK should take to meet Gilead's concerns. 

        (b)    Supplemental Plan.    If, after a Special Meeting, Gilead continues to believe that GSK is not meeting its
diligence obligations pursuant to this Article 6, or if Gilead wishes to formalize GSK's commitment to take such additional actions discussed in the Special Meeting, then Gilead may so notify
GSK in writing. Within [ * ] after the date of any such notice,
GSK shall either (i) provide Gilead with a written plan describing the actions that GSK proposes to take to meet such obligation, or (ii) notify Gilead that GSK does not believe that any
such additional actions are required in order for GSK to comply with its diligence obligations pursuant to this Article 6, and chooses not to provide such a plan. If GSK provides such a plan
and Gilead notifies GSK in writing that Gilead agrees with GSK that such plan describes actions sufficient to meet such obligation, then such plan shall be a "Supplemental Plan." In such event, GSK
shall carry out the actions described in such plan. Each Supplemental Plan shall include a specific timeline for GSK to take the steps described in such plan. If Gilead disagrees with GSK as to the
sufficiency of the actions described in such plan to meet such obligation, or if GSK notifies Gilead as provided for above that GSK chooses not to provide such a plan, and the Parties are unable to
resolve such disagreement within [ * ] additional days, then
either Party may proceed pursuant to Section 16.1. If GSK has materially breached its obligations under this Article 6, Gilead shall be entitled to terminate this Agreement pursuant to
Section 15.3. 

        (c)    Non-Limitation of Remedies.    If the Parties agree on a Supplemental Plan including a timeline for
GSK to take the actions described therein, then so long as GSK complies with such Supplemental Plan, Gilead shall be prohibited pursuant to this Section 6.4(c) from pursuing any other remedies
it may have available to it under this Agreement, at law or in equity for GSK's failure to diligently develop and seek Regulatory Approval for the Licensed Product, or to diligently Commercialize the
Licensed Product, in each case with respect to areas specifically addressed by the Supplemental Plan. If GSK fails to comply with any Supplemental Plan, or fails to achieve the goals set forth therein
for reasons not beyond GSK's control or reasonable ability to plan for, then Gilead shall no longer be prohibited from pursuing any remedies available to it pursuant to this Agreement, at law or in
equity, and GSK's diligence will be measured against its obligations hereunder as originally stated, without reference to any Supplemental Plan  [ * ]

27

 

 
 

ARTICLE 7    
    
    LICENSES    
  

        7.1    Patent Licenses to GSK.    Subject to the terms and conditions of this Agreement, Gilead hereby grants to GSK
an exclusive, royalty-bearing (in accordance with Article 9) license under the Gilead Patents to develop, use, sell, offer for sale and import Licensed Products for use in the Licensed
Indications in the GSK Territory, [ * ] to the extent otherwise
consistent with this Agreement, and to make Licensed Products anywhere in the world for such development, use, sale, offering for sale or importation, subject to the terms that will be set forth in
the Commercial Supply Agreement. Such license shall be sublicenseable solely as provided in Section 7.10. Section 7.5 sets forth certain conditions under which GSK may develop and
Commercialize Licensed Products for the Licensed Indications for patient populations consisting of people co-infected with HBV and another infectious agent. 

        7.2    Patent Licenses to Gilead.    Subject to the terms and conditions of this Agreement, GSK hereby grants to
Gilead an exclusive, fully paid license under the GSK Patents to develop, use, sell, offer for sale and import  [ * ] (subject to Section 3.5
regarding GSK access to Other
Formulations and Other Indications and Section 3.8 regarding certain Gilead clinical trials in the GSK Territory), and to make Licensed Products and Other Formulations anywhere in the world for
such development, use, sale, offering for sale or importation. Such license shall be  [ * ]. For the avoidance of doubt, the foregoing license
applies
only to Licensed Products and Other Formulations, and not to any other products, and in accordance with and as more fully set forth in Section 7.15, there are no implied licenses pursuant to
this Agreement. 

        7.3    Know-How License to GSK.    Subject to the terms and conditions of this Agreement, Gilead hereby
grants to GSK a non-exclusive, royalty-bearing (in accordance with Article 9) license under the Gilead Know-How to develop, use, sell, offer for sale, import and
otherwise Commercialize Licensed Products for use in the Licensed Indications in the GSK Territory,  [ * ] to the extent otherwise consistent with
this Agreement, and
to make Licensed Products anywhere in the world for such development, use, sale, offering for sale or importation, subject to the terms that will be set forth in the Commercial Supply Agreement. Such
license shall be sublicenseable solely as provided in Section 7.10. Section 7.5 sets forth certain conditions under which GSK may develop and Commercialize Licensed Products for the
Licensed Indications for patient populations consisting of people co-infected with HBV and another infectious agent. 

        7.4    Know-How License to Gilead.    Subject to the terms and conditions of this Agreement, GSK hereby
grants Gilead a non-exclusive, fully paid license under the GSK Know-How to research, develop, make, use, sell, offer for sale, import and otherwise Commercialize  [ * ] (subject to Section 3.5 regarding GSK access to Other
Formulations and Other Indications and Section 3.8 regarding certain Gilead clinical trials in the GSK Territory), and to make Licensed Products and Other Formulations anywhere in the world for
such development, use, sale, offering for sale or importation. Such license shall be  [ * ]. For the avoidance of doubt, the foregoing license
applies
only to Licensed Products and Other Formulations, and not to any other products, and in accordance with and as more fully set forth in Section 7.15, there are no implied licenses pursuant to
this Agreement. 

        7.5    Clarification of License Scope.    For clarity, the scope of the licenses granted to GSK pursuant to Sections
7.1 and 7.3 is limited to activities conducted with respect to the Licensed Products for the Licensed Indications. The Parties intend that the scope of such licenses shall encompass the right for GSK  [ * ] for use in any Licensed Indication in patients
[ * ] that includes the use of the Licensed Product  [ * ]
 to sell  [ * ] Licensed Product  [ * ]

28

           7.6    Trademark License and Covenants.    

        (a)    Limited License for Gilead Marks.    In connection with the Commercialization of Licensed Products for Licensed
Indications within the GSK Territory as permitted under this Agreement, Gilead hereby grants GSK an exclusive, royalty-free license within the GSK Territory to use and display the Gilead
Marks only by use of the following phase on Licensed Product packaging labelling or Promotional Materials: "This product manufactured under license from," followed by the applicable Gilead Mark. 

        (b)    Licensed Gilead Product Marks.    Gilead hereby grants GSK an exclusive, royalty-free license to
use and display the Gilead Product Marks in connection with the commercialization of Licensed Products for Licensed Indications within the GSK Territory, as otherwise permitted under this Agreement. 

        (c)    Standards for Using the Marks.    GSK shall provide Gilead with copies of any materials containing any Gilead
Mark or Gilead Product Mark prior to using or disseminating such materials. Gilead shall have the right to make reasonable objections to any such materials within  [ * ] of Gilead's receipt of such copies  [ * ] associated with the Gilead Marks or Gilead Product Marks.
GSK shall [ * ] in accordance with  [ * ]
GSK shall not use the Gilead Product Marks or the Gilead
Marks in a way that would adversely affect their value, and GSK shall not use a trademark confusingly similar to one of the Gilead Product Marks or the Gilead Marks with any of its products. GSK shall
comply with reasonable policies provided by Gilead from time to time to maintain the goodwill and value of the Gilead Product Marks and the Gilead Marks. In any GSK materials in which the Gilead Marks
or the Gilead Product Marks appear, GSK shall display a trademark legend in substantially the following form (tailored to reflect which trademark or tradename is being used): "GILEAD, the GILEAD logo,
REPSUR and the Liver Design are trademarks or registered trademarks of Gilead Sciences, Inc. or its affiliates in the United States and other countries." GSK may, as an alternative or in
addition to the Gilead Product Marks, select, create and use its own trade names and marks for its use in connection with the Commercialization of Licensed Products (including without limitation as
part of any Combination Products that are approved by Gilead as set forth in Section 9.6) in the GSK Territory in a manner that is otherwise in accordance with this Section 7.6.  [ * ]

        7.7    Third-Party Technology.    Either Party, if it becomes aware of Third-Party intellectual property which may be
useful for the development or Commercialization of Licensed Products, may propose that the Joint Committee consider (i) whether the Parties should seek a license thereunder to allow either or
both Parties to practice such right in connection with the development, manufacture, use, sale, offer for sale or import of Licensed Products in their respective Territories, (ii) how to
allocate the costs of obtaining and maintaining such a global license between the Parties (taking into account the Parties'
relative interests therein inside and outside of the GSK Territory and within and outside of the Licensed Indications) and (iii) how the Parties should proceed to seek such license. If the
Joint Committee is unable to reach consensus with respect to the seeking of such license, then either Party shall be free itself to seek a license under such right at its sole cost and expense, with
no obligation to make such license or right available to the other Party; provided, however, that neither Party shall enter into an agreement with a
Third Party which prohibits or restricts the other Party from obtaining a license from such Third Party under such intellectual property for such other Party's development and Commercialization of
Licensed Products in its Territory (within the scope of the licenses granted in Sections 7.1 and 7.3, where GSK is such other Party). 

        7.8    Sublicensed Technology.    The licenses granted under this Article 7, to the extent they include
sublicenses of Third-Party technology, shall be subject to the terms and conditions of the agreement governing the license under which the sublicense is granted. Each Party shall faithfully and timely
perform and discharge its obligations under each such Third-Party license under which a sublicense is 

29

 

granted, and shall not permit any action to be taken or event to occur, in each case, to the extent within such Party's reasonable control, that would give such Third Party the right to terminate
such Third Party license. Notwithstanding the provisions of the foregoing sentence,  [ * ]. If the Party that is a party to any such Third-Party
license [ * ] or otherwise  [ * ], it
shall promptly notify the other Party. The Parties shall
promptly confer regarding [ * ] within the time allotted by  [ * ]. If the Party that is a party to any such Third-Party
license [ * ] within the designated time, then the  [ * ]
 for  [ * ] for  [ * ]. Any  [ * ] shall be  [ * ]. If a
good faith dispute between a Third Party and the Party
that entered into a Third-Party license about the interpretation of any provision of the agreement governing such license arises, the other Party shall use reasonable efforts to ensure that its
actions, if any, under this Section 7.8 do not detrimentally affect the ability of the allegedly breaching Party to contest the interpretation advanced by such Third Party. Without limitation,
Gilead's responsibilities pursuant to this Section 7.8 shall extend to Gilead's performance pursuant to the IOCB/Rega License. 

        7.9    Grants Back.    Each Party shall require each of its Other Licensees, Affiliates, Distributors and Permitted
Sublicensees (as applicable) (each, a "Practicing Entity") to allow such Party the ability to grant the other Party a license under such Practicing Entity's Patents and Know-How  [ * ] for such other Party and its Practicing Parties to
(i) if such other Party is GSK, conduct its development and Commercialization activities under this Agreement and to exercise otherwise its rights hereunder, or (ii) if such other Party
is Gilead, develop, make, have made, use, sell, offer for sale, import or export  [ * ]

        7.10    Sublicensing by GSK.    GSK shall have the right to grant sublicenses under the licenses granted to it
pursuant to this Article 7 [ * ] Any sublicensee  [ * ]
 to grant sublicenses pursuant to Section 7.1 and
Section 7.3 shall be referred to herein as a "Permitted Sublicensee".  [ * ]

        7.11    Use of Patents and Know-How.    

        (a)  Each Party covenants to the other that such first Party (the "Covenanting Party") shall not practice the Patents or
Know-How Controlled by such other Party and licensed to the Covenanting Party hereunder outside the scope of the licenses granted in this Article 7 to the Covenanting Party.  [ * ]

        (b)  In particular, and without limiting the generality of GSK's covenant pursuant to Section 7.11(a), GSK covenants to
Gilead that GSK shall not seek Regulatory Approval, or knowingly sell or promote any Licensed Product, for use in any indication that is not a Licensed Indication. As an illustration, without limiting
the foregoing, GSK shall not seek Regulatory Approval for, sell or promote a Licensed Product to treat HIV (as defined in Section 7.5) in individuals suffering from both HIV and HBV (although
GSK may seek Regulatory Approval for, sell and promote Licensed Product to treat HBV in such individuals). 

        7.12    Cross-Territory Sales.    The Parties recognize that it is possible that: 

        (a)  Licensed Products originally sold by GSK (or its Affiliate, Sublicensee or Distributor) in the GSK Territory may be
imported and resold in the Gilead Territory, to Gilead's detriment in that this would diminish sales of Licensed Products by Gilead (and its Affiliates, distributors and Other Licensees) in the Gilead
Territory; or 

        (b)  Licensed Products sold by Gilead in the Gilead Territory may be imported and resold in the GSK Territory, to GSK's
detriment in that this would diminish sales of Licensed Products by GSK (and its Affiliates, Distributors and Permitted Sublicensees) in the GSK Territory. 

Both
GSK and Gilead shall [ * ] to the extent permitted by law,
including without limitation by: (i) [ * ] quantities of
Licensed Products to [ * ], (ii) contractually requiring
each of its sublicensees and distributors of Licensed Products to  [ * ] quantities of Licensed Products to any  
[ * ] of the Party with which it is not in privity,
(iii) [ * ] of Licensed Product sold by it  [ * ]
 Territory or specified countries thereof, and
(iv) contractually requiring its sublicensees and distributors to  [ * ] such 

30

 

quantities of Licensed Product (to the extent that they, instead of GSK or Gilead as the case may be, are  [ * ] of Licensed Product that 
[ * ]). If, however, either Gilead or GSK believes that such
importation into or reselling in its Territory of quantities of Licensed Products originally sold in the other Party's Territory is occurring  [ * ], the Joint Committee shall discuss the matter in good faith
and examine any market data that is available, and shall determine whether any such cross-Territory importation and sales of Licensed Products is occurring. If the Joint Committee determines in good
faith that such cross-Territory sales are occurring, then (i) it shall establish an  [ * ] of such sales, and (ii) it shall discuss any
 [ * ] that GSK or Gilead  [ * ] such
cross-Territory sales. In addition, GSK or Gilead (and
their respective Affiliates, and distributors and sublicensees for Licensed Products) shall  [ * ] Licensed Product to  [ * ] Licensed Products the applicable Territory that to either
GSK's or Gilead's knowledge (including without limitation by notice from the other Party)  [ * ] Licensed Products  
[ * ] hereunder. 

        7.13    Exclusivity Commitment.    During the Term, GSK and its Affiliates shall not, in the GSK Territory 
[ * ], except where such product
[ * ] the Licensed Product, and shall not license a Third Party
(or grant a covenant not to sue relating to or otherwise actively permit a Third Party) to take any of the foregoing actions during the Term. During the  [ * ]
 GSK shall not itself or through any Affiliate or Permitted
Sublicensee [ * ] in the GSK Territory any  [ * ] that is  [ * ] therefor is  [ * ]

        7.14    Right Relating to the HBV Indication.    

        (a)  As used in this Section 7.14: 

          (i)  [ * ]
shall mean any [ * ]; and 

        (ii)  [ * ]
shall mean the treatment of HBV infection [ * ] that are  [ * ]

        (b)  Gilead grants GSK a right of first refusal relating to the commercialization of  [ * ] for the  [ * ] in the GSK Territory as follows: Prior to Gilead or its
Affiliate [ * ] in any country of the GSK Territory or permitting
any Third Party to do so, Gilead shall notify GSK of the countries in which Gilead  [ * ], or to permit a Third Party to do so. Within 
[ * ] after the date GSK receives any such notice, GSK shall
notify Gilead in writing (i) whether GSK wishes to negotiate with Gilead the terms upon which Gilead would grant GSK the right to  [ * ] in
one or more countries of the GSK Territory that were the
subject of Gilead's notice to GSK (such countries, the "Notice Countries" and  [ * ] with respect to such Notice Countries); and (ii) if
so, the [ * ] for such Notice Countries that GSK proposes. If
Gilead would propose to permit a Third Party to [ * ] then Gilead
shall disclose to GSK [ * ] Within  [ * ]
after the timely date of such a notice from GSK to Gilead,
the Parties shall negotiate [ * ] in good faith for a period of no
less than [ * ]

        If,
at the end of the [ * ] the Parties have not
agreed to such [ * ] and GSK does not within  [ * ]
 after the expiration of the  [ * ] notify Gilead in writing that GSK  [ * ] to obtain such rights to
[ * ] for the  [ * ] in such Notice
Countries, then either Party may  [ * ] within  [ * ]
 after the expiration of the  [ * ]

        If
either Party so refers such matter, then, notwithstanding any conflicting procedures set forth in such Section,  [ * ] and shall  [ * ] in its
[ * ] of the  [ * ] that the  [ * ] to be the  [ * ] The  [ * ] based upon the  [ * ] to GSK pursuant to the
proposal, the  [ * ] for the HBV Indication  [ * ], the  [ * ] for the
[ * ] in such Notice Countries, the consistency of  [ * ]
, and the consistency of  [ * ] with the  [ * ] in relation to  [ * ] in such Notice Countries. The  [ * ] shall  [ * ] from one  [ * ] proposal.
[ * ]

        If
the Parties do not agree [ * ] or if GSK either  [ * ]
 or  [ * ] set forth above, then Gilead shall be free to:
(i) itself, or through an Affiliate, [ * ] in such Notice
Countries; (ii) permit a Third Party or Third Parties to do so,  [ * ] and/or (iii) permit a Third Party or Third Parties to
do so, on [ * ]

31

  

        (c)  GSK's rights pursuant to Section 7.14(b) shall not apply to the development or commercialization of  
[ * ]. Furthermore, GSK's rights pursuant to
Section 7.14(b) shall not apply to the [ * ].
Notwithstanding the foregoing in this Section 7.14, Gilead may  [ * ] within the GSK Territory (or any portion thereof);  provided that the  [ * ] are explicitly made  [ * ] and such  [ * ]. 

        (d)  Except in countries where Gilead elects to  [ * ]
 or to permit a Third Party to do so, in a manner that is in
accordance with and permitted by Section 7.14(b) (i.e., in Notice Countries with respect to which either GSK  [ * ]: 

          (i)  Gilead (and its Affiliates) shall  [ * ]
, anywhere in the GSK Territory,  [ * ] in
[ * ] that are  [ * ]; and 

        (ii)  Gilead (and its Affiliates) shall include in any written contract between any of them and a Third Party granting such
Third Party the right to [ * ] in any country of the GSK Territory
for any indication, [ * ] in any country of the GSK Territory in
which such Third Party has rights to [ * ]

        7.15    No Implied Licenses.    Except as explicitly set forth in this Agreement, neither Party grants under its
intellectual property (including without limitation Patents) any license, express or implied, to the other Party. Without limiting the generality of the foregoing, the licenses granted to GSK pursuant
to Sections 7.1 and 7.3 apply solely to Licensed Products and not to any other product intellectual property in which Gilead owns or controls, and the licenses granted to Gilead pursuant to Sections
7.2 and 7.4 apply solely to Licensed Products and Other Formulations and not to any other product intellectual property in which GSK owns or controls  [ * ]
. 

 
 

ARTICLE 8    
    
    MANUFACTURE AND SUPPLY    
  

        8.1    Supply by Gilead.    As of the Effective Date, Gilead has  [ * ] GSK shall have the right to purchase from Gilead quantities
of Licensed Products (i) for GSK's use for GSK's clinical trials of Licensed Products in the GSK Territory under this Agreement pursuant to the Clinical Supply Agreement to be entered into by
the Parties pursuant to Section 8.2, and (ii) for GSK's use for Commercialization of Licensed Products in the GSK Territory under this Agreement pursuant to the Commercial Supply
Agreement to be entered into by the Parties pursuant to Section 8.3. 

        8.2    GSK Manufacturing Right.    The Parties recognize that it may be necessary or desirable, from legal, regulatory
and/or commercial perspectives, for GSK to manufacture (or procure the manufacture of) its requirements of bulk ADV and/or Licensed Products for particular countries of the GSK Territory itself,
independently of Gilead. Pursuant to and as more specifically set forth in the Commercial Supply Agreement, GSK may elect to establish, independently of Gilead, manufacture of bulk ADV and/or Licensed
Product to meet GSK's requirements in particular countries of the GSK Territory, and to receive technology transfer from Gilead of the manufacturing processes for bulk ADV and/or Licensed Products in
place at the time of such election by GSK consistent with the provisions of this Article 8. 

        8.3    Clinical Supply Agreement.    The Parties will enter into a Clinical Supply Agreement providing for Gilead to
supply to GSK (or arrange for the supply to GSK of) amounts of Licensed Products and matching placebo properly forecasted under the terms of such agreement for use in GSK's clinical trials of Licensed
Products in the GSK Territory in exercise of the license granted to it pursuant to this Agreement. The Parties will use good faith efforts to enter into the Clinical Supply Agreement as promptly as
reasonably practicable, with the expectation of entering into such agreement within  [ * ] after the Effective Date. The price at which Gilead
will
arrange for supply of Licensed Product to GSK under such Clinical Supply Agreement shall be equal to  [ * ] obtain such supply. Such  [ * ] shall comprise  [ * ] the manufacture of Licensed
Product, including without
limitation any [ * ]

32

 

as defined more specifically in the Clinical Supply Agreement. Such  [ * ] shall also be documented and subject to audit by GSK. Gilead
shall [ * ] for similar products under similar circumstances.
Gilead shall keep [ * ] of Licensed Products for clinical purposes
that will be supplied to GSK pursuant to the Clinical Supply Agreement, and shall  [ * ] with  [ * ] GSK shall have the  [ * ] with a
[ * ] of Licensed Products for clinical purposes that will be
supplied to GSK pursuant to the Clinical Supply Agreement, with  [ * ] The Clinical Supply Agreement will include forecasting,
ordering and other provisions that provide Gilead with sufficient notice and information to permit it to provide forecasts, orders and other information to its Third-Party suppliers on a schedule
permitting timely delivery of Licensed Products ordered by GSK pursuant to the terms of the Clinical Supply Agreement and the GSK Development Plan. 

        8.4    Commercial Supply Agreement.    

        (a)    General.    The Parties will enter into a Commercial Supply Agreement under which Gilead will supply to GSK (or
arrange for the supply to GSK of) amounts of Licensed Products and bulk ADV, as applicable, properly forecasted under the terms of such agreement for use in GSK's Commercialization of Licensed
Products in the GSK Territory in exercise of the license granted to it pursuant to this Agreement; provided, however, that Gilead shall not be
responsible for any secondary packaging or labeling of Licensed Product supplied pursuant to the Commercial Supply Agreement for the GSK
Territory. The Parties will [ * ] to enter into the Commercial
Supply Agreement as promptly as reasonably practicable, with the expectation of entering into such agreement within  [ * ] after the Effective
Date. 

        (b)    Financials.    The price at which Gilead will arrange for supply of Licensed Product and, as applicable, bulk
ADV to GSK under such Commercial Supply Agreement shall be equal to  [ * ] Such  [ * ] shall comprise  [ * ] manufacture of Licensed Product, including without
limitation any [ * ] as defined more specifically in the
Commercial Supply Agreement. Such [ * ] shall also be documented
and subject to audit by GSK. Gilead shall [ * ] for similar
products under similar circumstances. Gilead shall keep [ * ] of
Licensed Products or, if GSK elects to obtain only bulk ADV from Gilead, bulk ADV for commercial purposes that will be supplied to GSK pursuant to the Commercial Supply Agreement, and shall  [ * ] with  [ * ] GSK shall have the  [ * ] with a  [ * ] of Licensed Products or, if GSK elects to obtain supply of
bulk ADV from Gilead, bulk ADV for commercial purposes that will be supplied to GSK pursuant to the Commercial Supply Agreement, with  [ * ].
Gilead shall use  [ * ] in putting into place its arrangements with its Third-Party
suppliers for commercial purposes to arrange for [ * ] which  [ * ] would ultimately be reflected in the calculation of  [ * ] to supply GSK under the Commercial Supply
Agreement. 

        (c)    Forecasts; Orders.    The Commercial Supply Agreement will include forecasting, ordering and other provisions
that provide Gilead with sufficient notice and information to permit it to provide forecasts, orders and other information to its Third-Party suppliers on a schedule permitting timely delivery of
Licensed Products or, if applicable, bulk ADV ordered by GSK pursuant to the terms of the Commercial Supply Agreement. Such provisions shall be adequate to provide for supply to Gilead and GSK of
Licensed Products or, if applicable, bulk ADV for their respective commercial purposes otherwise consistent with this Agreement, such that an equitable sharing of available supply of Licensed Product
or, as applicable, bulk ADV, based on the Parties' respective needs is achieved, subject to the Parties' compliance with forecasting and other applicable obligations under the Commercial Supply
Agreement. 

        (d)    Technology Transfer.    Under the Commercial Supply Agreement, GSK will have the right, at its election, to
receive technology transfer from Gilead of the manufacturing processes for bulk ADV and Licensed Products used by Gilead's Third-Party suppliers  [ * ] if GSK makes an election to manufacture either bulk ADV or
finished Licensed Product either for China or for the GSK Territory as a whole as provided herein. GSK may elect to manufacture either bulk ADV and 

33

 

finished Licensed Product, or finished Licensed Product alone, in each case with respect to China alone, and also with respect to the entire GSK Territory (less China, if GSK made such election for
China prior to making such election for the entire GSK Territory). For an initial transfer of manufacturing processes as to which GSK has not elected to assume responsibility in the GSK Territory
previously, GSK shall give at least [ * ] written notice to
commence such transfer, and the Parties will complete transfer of all such relevant information to GSK within  [ * ] after the date of
commencement of transfer, subject to
acceptance criteria as more fully set forth in the Commercial Supply Agreement. GSK shall  [ * ] in relation to any such technology transfer. Such
 [ * ] shall comprise  [ * ] Such 
[ * ] shall also be documented and subject to audit by GSK. For
the avoidance of doubt, GSK shall remain obligated to purchase amounts of bulk ADV and Licensed Products for which it submits binding forecasts or orders pursuant to the Commercial Supply Agreement,
notwithstanding any election it makes hereunder. If GSK separately exercises its right to manufacture hereunder with respect to China, and later with respect to the remainder of the GSK Territory (or  vice versa), then Gilead shall only be obligated to
provide GSK with technology transfer of any improvements Controlled by Gilead to the manufacturing process earlier transferred to GSK that have been implemented by Gilead's Third-Party suppliers  [ * ] Similarly, if GSK separately exercises its right to
manufacture hereunder with respect to bulk ADV, and later with respect to finished Licensed Products, then Gilead shall only be obligated to provide GSK with technology transfer of any improvements
Controlled by Gilead to the manufacturing process earlier transferred to GSK that have been implemented by Gilead's Third-Party suppliers  [ * ]
Except as expressly provided herein, Gilead shall not be
required to provide further technology transfer for process changes that Gilead or its Third-Party suppliers develop or implement. 

        (e)    United States Manufacture.    GSK acknowledges and agrees that if it undertakes or arranges for manufacture of
Licensed Products within the United States, it shall be [ * ] such
manufacture pursuant to that certain [ * ] between an  [ * ]

        8.5    Consistency.    Each of the Clinical Supply Agreement and the Commercial Supply Agreement shall be consistent
with the terms of this Agreement. 

        8.6    Additional Products.    The Clinical Supply Agreement and the Commercial Supply Agreement shall govern the
supply of the Current Product. No later than [ * ] prior to the
time that GSK's development obligations pursuant to Section 3.3(a) relating to the Current Pediatric Product are anticipated by the Parties to become effective based upon Gilead's efforts with
the Current Pediatric Product for the Gilead Territory, as determined by the Clinical Development Committee, the Parties shall meet to negotiate in good faith the terms upon which Gilead would be
willing to supply to GSK quantities of the Current Pediatric Product for clinical and commercial purposes. In accordance with Section 3.5(c), prior to any Other Formulation becoming a Licensed
Product hereunder, the Parties shall execute a written agreement relating to its supply as further described in such Section. 

 
 

ARTICLE 9
  
    COMPENSATION    
  

        9.1    License Fee.    Within  [ * ] after the Effective Date, GSK shall pay a license fee of ten
million dollars ($10,000,000) in cash to Gilead by wire transfer of immediately available funds into an account designated by Gilead. Such license fee shall be nonrefundable and noncreditable against
any other payments due hereunder. 

        9.2    Milestone Payments.    

        (a)  GSK shall make milestone payments to Gilead based on achievement of regulatory and Commercialization milestone events for
Licensed Products as set forth in this Section 9.2. GSK shall pay to Gilead the amounts set forth below within  [ * ] after GSK's receipt of
notice from 

34

 

Gilead of the first achievement of the relevant milestone event with a Licensed Product (as documented by appropriate written and/or other materials) in the cases of milestone events  [ * ] and within  [ * ] after the first achievement of the relevant milestone event
in the case of milestone events [ * ] GSK shall notify Gilead
promptly in writing after first achievement of each of milestone events  [ * ] Each milestone payment by GSK to Gilead hereunder shall be
payable only once, regardless of the number of times achieved with one Licensed Product or multiple Licensed Products for use in the Licensed Indication. Each such payment shall be noncreditable
against any other payments due hereunder and nonrefundable. 

	Milestone Event
 
	 	Payment Amount

(in millions)

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

	 	Total Potential Milestone Payments	 	$	30 million

        (b)  As regards milestone event number  [ * ]
to the extent that the  [ * ] any Licensed Product or  [ * ]
 a Licensed Product  [ * ] of such milestone event, then, if for the calendar year in
which [ * ], milestone payment number  [ * ] shall  [ * ]. If following payment of such milestone upon the  [ * ], then GSK shall be  [ * ] of this milestone
payment based upon the [ * ] for the calendar year in which the
anniversary of the [ * ] occurs, on the following basis: 

[ * ]

Notwithstanding
the foregoing in this Section 9.2(b), if any  [ * ] of milestone event number  [ * ] other than a  [ * ], then  [ * ] shall be payable to Gilead if  [ * ] paid to Gilead, and the amount of any
[ * ] shall become payable to Gilead  [ * ]. 

        9.3    Royalty on Net Sales.    

        (a)    Rates.    For each Licensed Product, GSK shall pay Gilead a royalty on Net Sales of such Licensed Product sold
in each country of the GSK Territory during the Royalty Term for such Licensed Product in such country according to the following rates: 

          (i)  For the portion of aggregate annual Net Sales of such Licensed Product throughout the GSK Territory less than or equal
to [ * ] in any calendar year,  [ * ] of
the portion of such Net Sales  [ * ] provided that  [ * ] the  [ * ] (as set forth below in subsection (b) of this
Section 9.5) applied to the portion of such Net Sales that  [ * ] and  [ * ] of the portion of such Net Sales that occurs in the
countries of the GSK Territory [ * ] (hereinafter the term "Lower
Rate" shall refer to [ * ] of Net Sales); and 

        (ii)  For the portion of aggregate annual Net Sales of such Licensed Product throughout the GSK Territory in excess of  
[ * ] of such portion of such annual Net Sales anywhere in the GSK
Territory (such rate, the "Higher Rate"). 

        (b)    [ * ].    The royalty
rate applicable to Net Sales of each Licensed Product in [ * ]
contributing (as determined in accordance with Section 9.3(c)) to aggregate annual Net Sales in the GSK Territory of  [ * ] shall be:

          (i)  [ * ]

35

 

in
each case, only during the applicable Royalty Term. [ * ]. 

        (c)    Assumption Relating to Royalty Tier.    For purposes of calculating the royalties due on Net Sales of a
particular Licensed Product hereunder in a given calendar year, GSK shall employ the simplifying assumption that the portion of any Net Sales in  [ * ] that were achieved before and after the  [ * ] was achieved in the same  [ * ] of such Licensed Product throughout  [ * ] in such calendar year that were achieved
 [ * ].
 

        (d)    Term.    "Royalty Term" shall mean, with respect to a particular Licensed Product and particular country within
the GSK Territory, the period of time beginning upon the date of Commercial Launch of such Licensed Product in such country, subject to Section 6.3(b), and ending upon the latest of:
(i) the [ * ] anniversary of such date of Commercial
Launch; (ii) expiration of the last-to-expire issued Valid Claim within a Gilead Patent in such country claiming the manufacture, use or sale of such Licensed Product;
and (iii) solely in the case of [ * ] such Licensed
Product. 

        (e)    Payment for Non-Patent Benefits.    This Section 9.3 is intended to provide for  [ * ] of Net Sales set forth above for a  [ * ] from
Commercial Launch of each Licensed Product in each
country, or a longer period if patents or other forms of regulatory exclusivity extend longer. In establishing this payment structure, the Parties recognize, and GSK acknowledges, the substantial
value of the various actions and investments undertaken by Gilead prior to the Effective Date, and that Gilead will undertake under this Agreement, to preclinically and clinically develop the Current
Product and the Current Pediatric Product. Such value is significant and in addition to the value of Gilead's grant to GSK of a patent license pursuant to Section 7.1, as it enables the rapid
and effective market introduction of the Licensed Products for the Licensed Indication in the GSK Territory. These actions include, by way of example, the completion (to a sufficient extent) of Phase
III Clinical Trials of the Licensed Product to provide support for NDA and other Marketing Authorization Application filings in the GSK Territory; the rights set forth herein for GSK to have access to
Gilead's regulatory filings for the Licensed Product; the supply commitments and the willingness to transfer certain manufacturing Know-How as set forth in Article 8; the licenses
under the Gilead Know-How; and ongoing access to Other Formulations and Other Indications developed by Gilead during the Term as set forth in Section 3.5. The Parties agree that the
royalty payments calculated as a percentage of Net Sales and Other Sales (plus the license fee and the cost reimbursements provided for elsewhere herein) provide fair compensation to Gilead for these
additional benefits, and that because Gilead is not being otherwise compensated under this Agreement for such additional benefits, a reduced royalty rate is not appropriate for Net Sales of Licensed
Products at times when they are not covered by the Gilead Patents. The Parties have agreed to the payment structure set forth herein as a convenient and fair mechanism to compensate Gilead for these
additional benefits. 

        (f)    Example Calculation.    By way of example, if, in a single calendar year, aggregate Net Sales of a Licensed
Product for Licensed Indications throughout the GSK Territory were equal to  [ * ], Net Sales of such Licensed Product for the Licensed
Indications in [ * ], and  [ * ], then the
royalty payable to Gilead hereunder for such total
Net Sales would be calculated in the following manner: 

	Amount of Annual Net Sales

throughout the GSK Territories [ * ]
 
	 	Royalty Rate
	 	Royalty Payment

	[ * ]	 	[ * ]	 	[ * ]
	[ * ]	 	[ * ]	 	 
	[ * ]	 	[ * ]	 	[ * ]
	 	Total Royalty	 	[ * ]

36

 

        (g)    Quarterly Payments and Reconciliation.    For purposes of calculating royalties due for the first three
(3) quarters of Net Sales in a particular calendar year, GSK shall  [ * ] to Net Sales of such Licensed Product in the year achieved
prior to the time the Limit was reached in such year, and the Higher Rate to all Net Sales achieved thereafter in such year. In calculating the amount of the final royalty payment due hereunder in
respect of Net Sales of such Licensed Product in such calendar year, GSK shall follow the example set forth in Section 9.3(f) to calculate the total royalty due for the year based on total Net
Sales of such Licensed Product achieved in the year, and employing the simplifying assumption set forth in Section 9.3(c)  [ * ] GSK shall
subtract from such amount due for the year those
royalty payments in respect of Net Sales in such calendar year that it has already made during such year. GSK shall pay the resulting final royalty payment due in respect of Net Sales of such Licensed
Product in such calendar year in accordance with Section 9.5. 

        (h)    Cross-Border Sales.    The Parties recognize that it is possible that Licensed Products originally sold in one
country of the GSK Territory may be imported and resold in other countries of such Territory, and that pursuant to Section 9.3(a),  [ * ] If
Gilead believes that such activity  [ * ] the Joint Committee shall discuss the matter in good faith
and examine any market data that is available, and shall determine whether any such cross-border sales of Licensed Products is occurring. If the Joint Committee determines in good faith that such
cross-border sales are occurring, then it shall [ * ]

        (i)    Korea and Taiwan.    

          (i)  Notwithstanding the terms of Section 9.3(a), if in any one calendar year during the Term Net Sales of Licensed
Products in either Korea or Taiwan (each referred to below in this Section 9.3(i) as a "territory") are less than:
(1) [ * ] multiplied by (2) the  [ * ] (a) the Net Sales of the Licensed Products in such
calendar year in such territory and (b) the sales by any  [ * ] in such territory in such calendar year
pursuant to [ * ] with respect to such territory and calendar
year), then GSK may [ * ] give written notice to Gilead no later
than [ * ] after the end of such calendar year. 

        (ii)  GSK shall provide with any such notice suitable supporting documentation  [ * ] reasonably demonstrating that Net Sales in such territory in
such calendar year are [ * ] in such territory. If Gilead disputes
that such data supports GSK's assertion, such matter shall be resolved pursuant to Sections 16.1 and 16.2. If either Gilead agrees that such data supports such GSK assertion, or any such dispute
regarding whether such data supports such assertion is resolved in GSK's favor, then thereafter the royalty due on Net Sales of Licensed Products in such territory pursuant to Section 9.3 shall
be [ * ] of such Net Sales, and such royalties shall be due to
Gilead for the longer of the time period that would otherwise apply pursuant to Section 9.3(d), or upon the  [ * ] anniversary of the date
such  [ * ] became effective  [ * ]
 

For
clarity, any [ * ] shall be made, and any  [ * ] pursuant to Section 9.3(i)(ii) shall apply, on
a territory-by-territory basis, either as regards Korea, or as regards Taiwan, but not as aggregated across both such territories taken together. 

        9.4    Contract Revenue on
[ * ]    

        (a)    Rate.    GSK shall pay Gilead an amount equal to: 

          (i)  With respect to  [ * ]

        (1)  [ * ]

        (ii)  With respect to  [ * ]

37

 

in
the case of each of (i) and (ii), during the applicable Contract Revenue Term, as determined on  [ * ]

[ * ]

        (b)    Term.    "Contract Revenue Term" shall mean, on  [ * ] within the GSK Territory, the period
(i) [ * ] and (ii) ending upon  [ * ] in such country. 

        (c)    [ * ]    

        9.5    Annual Exclusivity Determination With Respect to China.    

        (a)    Annual Prospective Determination.    Whether Full Exclusivity, Semi-Exclusivity or
Non-Exclusivity exists shall be determined on a Licensed Product-by-Licensed Product and calendar year-by-calendar year basis as set forth
in this Section 9.5. Full Exclusivity shall be deemed to apply for each Licensed Product in each calendar year until a different level of Exclusivity is determined to apply with respect to such
Licensed Product as provided herein. By [ * ] of each year, GSK
shall submit to a senior executive of each Party with appropriate expertise designated by such Party, GSK's proposal for the type of Exclusivity  [ * ] of the following year for each Licensed Product in China,
which shall apply to [ * ] respect to sales in China during the  [ * ] commencing on such  [ * ]. GSK shall provide to such senior executives sufficient
written information to enable them to understand the basis for such proposal by GSK. Prior to  [ * ] of the year in which GSK submits such
proposal to Gilead,
such senior executives shall discuss GSK's proposal and determine the type of Exclusivity that will exist as of  [ * ] of the following year and,
accordingly, apply in the  [ * ] with respect to China. If prior to  [ * ] of such year, such senior executives have not made such
determination, then either Party may proceed pursuant to seek resolution of the matter as set forth in Section 16.2. 

        (b)    Market Share Determination.    If either Party believes that Semi-Exclusivity exists on the basis
of the Chinese Market Share (as defined in Section 1.82) as measured by the latest available version of IMS for  [ * ] with respect to a
given Licensed Product in a given calendar
year for which [ * ] then it shall give written notice to the
other Party promptly after such data becomes available along with a copy of the relevant IMS report. The Joint Committee shall determine whether Semi-Exclusivity existed with respect to
such calendar year based upon such IMS report. Any disputes among the Joint Committee with respect to whether Semi-Exclusivity shall be resolved pursuant to Sections 16.1 and 16.2. If it
is determined (by the Joint Committee or pursuant to Section 16.1 or 16.2) that Semi-Exclusivity applied on the basis of the Chinese Market Share in a year for which GSK had  [ * ] then GSK shall  [ * ] of (i) the  
[ * ] that would apply in the case of  [ * ] and the 
[ * ] that GSK applied to  [ * ] throughout such
year,
[ * ] (ii) the Net Sales in China of the relevant Licensed
Product in such calendar year. 

        9.6    Combination and Bundled Products.    

        (a)    Combination Products.    If GSK wishes to sell any Licensed Product in the form of a combination product
containing one or more active ingredients in addition to ADV (each, an "Additional Active") (whether combined in a single formulation, or packaged as separate formulations sold as a single physical
package) (a "Combination Product"), then GSK shall provide a written proposal to Gilead regarding the proposed Combination Product. GSK's proposal shall set forth  [ * ] Gilead may  [ * ] written proposal regarding the Combination Product, and  
[ * ] If Gilead  [ * ] then the matter shall be submitted to
the Joint Committee [ * ] Gilead's members of the Joint Committee  [ * ] If Gilead's members of the Joint Committee  [ * ] then their  [ * ] be reasonable. If Gilead or the Joint Committee  [ * ] to sell a Licensed Product
as part of a Combination Product,
then the Parties shall execute a written amendment to this Agreement providing for mechanisms to calculate Net Sales of the Combination Product hereunder prior to such permission becoming effective. 

38

 

        (b)    Bundled Products.    If GSK, a GSK Affiliate or a Permitted Sublicensee wishes to sell a Licensed Product not
as part of a Combination Product, but rather as part of a "bundle" of products (i.e., a group of products not formulated or packaged together but nonetheless sold or priced together) priced
differently by virtue of being included in the bundle than they (or any of them) would be priced if sold separately (regardless of whether they are physically packaged together), then
Section 9.6(a) shall apply mutatis mutandis to the procedure by which GSK would seek permission to include the Licensed Product in the bundle,  [ * ] with respect thereto and the  [ * ] relating to the bundle  [ * ] as it does to the procedure by which GSK may  [ * ] with respect thereto and the  [ * ] relating to the Combination Product,
[ * ] by Gilead. 

        9.7    Other Payments by Distributors and Permitted Sublicensees.    If (i) any Distributor makes any payment
or provides any other consideration, or (ii) any Permitted Sublicensee makes any payment or provides any other consideration that is  [ * ]
in either case to GSK or any of its Affiliates in
consideration of being a distributor of or sublicensee for any Licensed Product,  [ * ] then the Parties shall negotiate in good faith via their
participation in the Joint Committee how such Other Payment shall be allocated between the Parties, giving due regard to the economic impact on Gilead relating to such Other Payment, and GSK shall pay
to Gilead the portion of the Other Payment that the Parties decide to allocate to Gilead. The Parties acknowledge that any Other Payment may impact the amount that the Distributor would otherwise have
to pay to GSK in consideration of the supply of Licensed Products, and/or how a Permitted Sublicensee may choose to price Licensed Products for purposes of making sales that will be included in the
calculation of Net Sales hereunder, and thereby impact Gilead's economic interests under this Agreement. If the Parties are unable to decide how to allocate a particular Other Payment between the
Parties within a period of [ * ] after the Joint Committee's
discussions of the matter commence, then [ * ]

        9.8    Third-Party Royalties and Other Payments.    The royalties payable by GSK to Gilead under Section 9.3
shall be [ * ] relating to the manufacture, use, sale, offer for
sale or importation of the Licensed Products by GSK, its Affiliates and Permitted Sublicensees as permitted hereunder. Gilead shall be responsible for  [ * ]
 with respect to Net Sales of Licensed Products.  [ * ] Except as provided above in this Section 9.7,  [ * ]

        9.9    Royalty Payments and Reports.    All amounts payable to Gilead pursuant to Section 9.3 or 9.4 shall be
paid in Dollars within [ * ] after the end of the calendar quarter
in which the Net Sales or Other Sales giving rise to the royalty payment obligation were achieved, except as otherwise specifically provided herein. Each payment of royalties due to Gilead shall be
accompanied by a statement, on a [ * ] in the GSK Territory, an  [ * ] in the GSK Territory showing deductions provided for in
Section 1.64 or 1.70 during such quarter, the [ * ] in the
GSK Territory, [ * ] in the GSK Territory during such quarter and
on a [ * ]
and a calculation of the [ * ] for this relevant calendar quarter.
The statement that must accompany the royalty payment that is due within  [ * ] after the end of any calendar year shall show the
calculations required under Section 9.3(g). 

        9.10    Taxes.    Gilead and GSK shall be responsible for any and all taxes levied on amounts it receives under this
Agreement, subject to the next sentence. If GSK or Gilead assigns this Agreement to an Affiliate or grants to an Affiliate a sublicense hereunder in a manner that adversely impacts Gilead or GSK
economically due to increased taxes on amounts due to Gilead or paid by GSK, then GSK or Gilead shall pay to Gilead or GSK as the case may be an amount equal to the difference between the amount
Gilead or GSK owes to the relevant tax authority on payments received or paid hereunder and the amount Gilead or GSK would have owed to such authority had this Agreement not been assigned or
sublicensed to such GSK or Gilead Affiliate [ * ] this Agreement  [ * ] it is  [ * ] for a Licensed Product, then  [ * ] If GSK is required by law, rule or regulation to withhold
taxes from payments due Gilead hereunder, GSK will (i) deduct those taxes from the amount remittable to Gilead hereunder, (ii) promptly pay the taxes to the proper taxing authority, and
(iii) send evidence of the obligation together with proof of payment to Gilead within  [ * ] following that payment. 

39

  

        9.11    Blocked Currency.    In any country where conversion of the local currency is blocked and such currency cannot
be removed from the country, GSK shall pay Gilead in local currency by deposit in a local bank designated by Gilead, to the extent that this is permitted under the law of such country. 

        9.12    Foreign Exchange.    For the purpose of computing the Net Sales of Licensed Products  [ * ], sold in a currency other than Dollars, such currency shall
be converted into Dollars as computed in the central GSK currency conversion system using the monthly rate of exchange established by GSK as part of its system for its own internal currency
conversions, as audited for accuracy by GSK's independent auditor. The currency conversion system used by GSK shall be subject to audit by Gilead as described in Section 13.1, and, if not
determined by the Joint Committee to be a system reflecting a reasonable average exchange rate of the currencies in question, shall be modified as necessary to effect currency conversion at a
reasonable average exchange rate. 

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

        9.14    Late Payments.    Any amounts not paid by GSK when due under this Agreement shall be subject to interest from
and including the date payment is due through and including the date upon which GSK has made a wire transfer of immediately available funds into an account designated by Gilead at a rate equal to the
sum of [ * ] in the Money Rates section of the West Coast edition
of the Wall Street Journal calculated daily on the basis of a 365-day year, or similar reputable data source, or, if lower, the highest rate permitted under applicable law. 

        9.15    Accounting.    Each Party shall determine any costs and expenses that may be reimbursed to a Party under this
Agreement or the Clinical Supply Agreement or Commercial Supply Agreement (including without limitation the amounts GSK shall pay to Gilead for supply of Licensed Products pursuant to the Clinical
Supply Agreement and the Commercial Supply Agreement), if any, using its standard accounting procedures, consistently applied, to the maximum extent practical as if such Licensed Product were a solely
owned product of the determining Party, except as specifically provided in this Agreement. The Parties also recognize that such procedures may change from time to time and that any such changes may
affect the calculation of such costs and expenses. The Parties agree that, where such changes are economically material to either Party, adjustments shall be made to compensate the affected Party in
order to preserve the same economics as reflected under this Agreement, the Clinical
Supply Agreement and/or the Commercial Supply Agreement under the accounting Party's accounting procedures in effect as of the Effective Date. 

        9.16    Third Party Licenses.    If, during the Term, GSK, in its sole discretion, deems it necessary to seek a
license from any Third Party in order to avoid infringing such Third Party's patent rights in the course of practicing the licenses granted to GSK under Article 7, then GSK may credit against
royalties otherwise due to Gilead in a particular calendar quarter pursuant to Section 9.3  [ * ] of any royalties GSK actually pays to such
Third Party under
such license net sales in such calendar quarter; provided, however, that in no event shall such credit
operate to reduce the royalty due to Gilead pursuant to Section 9.3 in any calendar quarter to less than  [ * ] of the royalty that would
otherwise be payable hereunder in
respect of such Net Sales, but for this Section 9.16. 

        9.17    Compulsory Licenses.    

        (a)  As used in this Section 9.17, "Compulsory License" shall mean a compulsory license under any Gilead Patent
obtained by a Third Party through the order, decree, or grant of a governmental authority of competent jurisdiction, authorizing such Third Party to manufacture, use, sell, offer for sale or import a
Substitutable ADV Product in any country within the GSK Territory. 

40

 

        (b)  If GSK or Gilead learns that a Third Party is seeking a Compulsory License, then it shall so notify the other Party and
the Parties shall use commercially reasonable efforts to oppose the granting of such Compulsory License. If either Party learns that a Third Party has obtained a Compulsory License, whether granted
directly by Gilead to the Third Party or by GSK to such Third Party as required by the governmental authority, then such Party that has learned of the Compulsory License being granted shall promptly
notify the other Party of such occurrence. If the [ * ] by the
grantee of the Compulsory License is [ * ] than the  [ * ]
 in the relevant country pursuant to  [ * ], or  [ * ] such Third Party with a  [ * ] GSK, then the  [ * ] with respect to Net Sales in such country of the Licensed
Product for which the relevant Substitutable ADV Product is Substitutable shall be  [ * ] applicable pursuant to such Compulsory License, the
 [ * ] in such country shall not apply and  [ * ] that provide such  [ * ] to the Third Party, respectively, in each case until such
Compulsory License is no longer in effect or such Third Party is no longer selling such Substitutable ADV Product. For the avoidance of doubt, in the event that GSK becomes the licensor in relation to
any Compulsory License issued above, then GSK's Net Sales in relation to the sales by such Third Party shall be  [ * ] by GSK under such
Compulsory License, and Gilead's  [ * ] of GSK shall be calculated in accordance with
Section 9.3. 

 
 

ARTICLE 10    
    
    INTELLECTUAL PROPERTY    
  

        10.1    Ownership of Inventions.    Each Party shall own any inventions made solely by its employees, agents or
independent contractors in their activities hereunder. Inventions hereunder made jointly by employees, agents or independent contractors of each Party in the course of performing under this Agreement
shall be owned jointly by the parties in accordance with joint ownership interests of co-inventors under U.S. patent laws ("Joint Inventions"). Inventorship shall be determined in
accordance with U.S. patent laws. 

        10.2    Prosecution of Patents.    

        (a)    Gilead Patents.    Except as set forth in Sections 10.2(a), or 10.2(c) or (d), Gilead shall be responsible for
the prosecution and maintenance of the Gilead Patents on a worldwide basis. GSK shall reimburse to Gilead  [ * ] incurred with respect to the GSK
Territory. GSK shall have
the right to review and comment upon such prosecution by Gilead of the Gilead Patents in the GSK Territory. Gilead shall provide GSK with a copy of each submission to a patent authority in the GSK
Territory regarding a Gilead Patent [ * ]after making such filing.
If Gilead determines in its sole discretion to abandon or not maintain any patent application within the Gilead Patents anywhere in the GSK Territory, then Gilead shall provide GSK with  [ * ] prior written notice of such determination (or such other
period of time reasonably necessary to allow GSK to assume such responsibilities) and shall provide GSK with the opportunity to prosecute and maintain such patent application in the GSK Territory on
behalf of Gilead [ * ]. 

        (b)    GSK Patents.    Except as set forth in this Section 10.2(b), or Section 10.2(c) or (d), GSK shall
be responsible for the prosecution and maintenance of the GSK Patents  [ * ]. Gilead shall have the right to review and comment upon
GSK's prosecution of the GSK Patents in the Gilead Territory. GSK shall provide Gilead with a copy of each submission made to a patent authority in the Gilead Territory regarding a GSK Patent  [ * ] after making such filing. If GSK determines in its sole
discretion to abandon or not maintain any claim or patent application within the GSK Patents anywhere in the Gilead Territory, then GSK shall provide Gilead with  [ * ] prior written notice of such determination (or such other
period of time reasonably necessary to allow Gilead to assume such responsibilities) and shall provide Gilead with the opportunity to prosecute and maintain such claim or patent application in the
Gilead Territory on behalf of GSK [ * ]

41

 

        (c)    Joint Patents.    Except as set forth in Section 10.2(d), with respect to Joint Inventions, the Parties
shall [ * ] covering such Joint Invention (any such patent
application and any patents issuing therefrom a "Joint Patent"). If either Party prosecutes a patent application covering a Joint Invention, such Party shall  [ * ]
 except as provided in the final sentence of this paragraph.
Except to the extent either Party is restricted by the licenses granted to the other Party and covenants contained herein, and to the extent permitted by law, each Party shall be entitled to  [ * ] to the other Party. Either Party may disclaim its interest
in any particular Patent or patent application covering a Joint Invention, in which case (i) the disclaiming Party shall assign its ownership interest in such Patent or patent application to
the other Party for [ * ], (ii) the Party that is then the
sole owner shall be solely responsible for all future costs of such Patent, and (iii) the disclaiming Party shall hold no further rights thereunder. 

        (d)    ADV Patents.    

          (i)  Subject to the licenses granted in Article 7, and except as provided in Section 10.2(d)(iii), GSK shall,
and hereby does, assign to Gilead all of GSK's right, title and interest in and to  [ * ] in the course of either Party's or the Parties'
performance
under this Agreement (each, an "ADV Patent"). 

        (ii)  Gilead shall prepare and file patent applications claiming such inventions owned by Gilead pursuant to
Section 10.2(d)(i) in such form and in such countries as  [ * ] and prosecute and maintain all related patents thereon in  [ * ] provided, however, that Gilead may  [ * ] such
prosecution or maintenance. In such case Gilead shall  [ * ] that was originally assigned to Gilead hereunder. Gilead
shall provide to the Joint Committee [ * ] assigned to Gilead
pursuant to Section 10.2(d)(i) at least [ * ] prior
to the intended filing dates therefor. Expenses of filing, prosecuting and maintaining a Patent claiming an Invention that GSK assigned in whole or in part pursuant to
Section 10.2(d)(i) to Gilead hereunder shall be borne as if such Patent were a Gilead Patent under Section 10.2(a) to the extent that such Patent otherwise meets the criteria set
forth in Section 1.34. 

        (iii)  With respect to ADV Patents that are granted in any jurisdiction within the European Union and ADV Patents that are
United States Patents (each, an "Excluded ADV Patent"), GSK shall not be required to make the assignment set forth in Section 10.2(d)(i). In lieu of such assignment as applied to Excluded ADV
Patents, GSK hereby grants Gilead a [ * ] license under the
Excluded ADV Patents to [ * ] the inventions claimed by such
Patents in the jurisdictions in which they are granted. Such license shall be  [ * ]

        (e)    Administrative Protection.    Administrative Protection for Licensed Products and applications therefor, in
light of their Patent-like nature and the fact that their availability will depend upon the status of various Gilead Patents, shall be applied for by Gilead as follows: Gilead shall apply
for and maintain any such Administrative Protection for Licensed Products in China, in cooperation with, and with input and guidance from, GSK. In furtherance of Gilead's applications for
Administrative Protection for Licensed Products, GSK shall [ * ]
to applying for Administrative Protections for any Licensed Product hereunder; shall  [ * ] in relation to such process; shall  [ * ] for Administrative Protections for Licensed Products; and
shall [ * ] that may be posed by reason of such activities by
Gilead that may [ * ] such consent not to be unreasonably
withheld. The Parties anticipate that they will interact regularly throughout such application process. In addition, Gilead shall  [ * ] that
Gilead makes with a Chinese governmental
authority regarding Administrative Protection for a Licensed Product  [ * ] To the extent that Chinese law does not allow Gilead to
apply for and maintain Administrative Protections for Licensed Products, then the Joint Committee shall discuss and the Parties shall mutually agree to alternative procedures to permit GSK to apply
for and maintain such Administrative Protections while allowing Gilead appropriate input into such process. Gilead shall use its  [ * ] to support
GSK in such process. 

42

 

GSK shall [ * ]associated with its activities in relation to
Administrative Protection, to the extent set forth in Section 4.13. 

        10.3    Patent Term Extensions.    The Joint Committee will determine for which, if any, of the Patents within the
Gilead Patents, GSK Patents and Joint Patents in the GSK Territory the Parties will apply to extend the patent term with respect to Licensed Products, pursuant to patent term extension laws or
regulations in the GSK Territory similar to the Patent Term Restoration Act or other similar laws and regulations affording an extension or restoration of patent terms in the United States (including
without limitation any Supplementary Protection Certificates). Gilead or GSK (as directed by the Joint Committee) shall act with reasonable promptness in light of the development stage of Licensed
Products to apply for any such extension. The Party that does not apply for an extension hereunder will cooperate fully with the other Party in making such filings, for example and without limitation,
making available regulatory data and information. All activities of the Parties pursuant to this Section 10.3 shall be at  [ * ].GSK shall
 [ * ] to comply with this Section 10.3. 

        10.4    Non-Patent Regulatory Exclusivity.    GSK shall have the right to apply for regulatory exclusivity
for the Licensed Products in the GSK Territory as provided in Section 4.7. 

        10.5    Infringement of Patents by Third Parties.    

        (a)    Notification.    Each Party shall promptly notify the other Party in writing of any alleged or threatened
infringement of the Gilead Patents or GSK Patents of which it becomes aware (such infringement, "Infringement", and "Infringe" shall be interpreted accordingly). 

        (b)    Competitive Infringement of Gilead Patents.    

          (i)  First Right. Gilead shall have the first right, but not the obligation,
to prosecute Infringement of the Gilead Patents in the GSK Territory by activities with products that are or would be competitive with Licensed Products ("Competitive Infringement"). Gilead shall  [ * ] GSK's comments on any such prosecution. The Parties shall
[ * ]incurred by Gilead with respect to any such prosecution. 

        (ii)  Back-up Right for Competitive Infringement in the GSK
Territory. If Gilead does not bring action to prosecute Competitive Infringement within  [ * ] after notification thereof
to or by Gilead pursuant to
Section 10.5(a) (or within [ * ] after the date upon which
notification thereof to GSK should have been
given by Gilead pursuant to Section 10.5(a) hereof), then GSK shall have the right, but not the obligation, to bring,  [ * ], an appropriate
action against any person or entity engaged
in such Infringement directly or contributorily; provided, however, that such action is brought in the GSK Territory and is exclusively to prevent
products that are or would be competitive with any Licensed Product from being marketed or sold in the GSK Territory. 

        (iii)  Participation with Respect to Competitive Infringement. The Party not
bringing an action with respect to Competitive Infringement under this Section 10.5(b) shall be entitled to separate representation in such matter by counsel of its own choice and at its own
expense, but such Party shall cooperate fully with the Party bringing such action. 

        (c)    Other Infringement of Gilead Patents.    For all Infringement of Gilead Patents anywhere in the world
(including without limitation in the GSK Territory) other than that described in Section 10.5(b), Gilead shall  [ * ] to prosecute such
Infringement, and as between the Parties
shall [ * ]. GSK shall reasonably cooperate with Gilead, at
Gilead's request, in any such action. 

        (d)    Joint Patents.    With respect to Third Party Infringement of Joint Patents other than that Infringement
described in Sections 10.5(a) and (b), the Parties shall confer and take such action in such manner as they shall agree. If the Parties are unable after a reasonable period of time to agree on how to
proceed, then each Party may exercise its rights as joint owner of the affected Joint Patent in accordance with Section 10.1. The Parties shall allocate their expenses and 

43

 

recoveries in relation to such actions as they shall agree, provided that unless the Parties otherwise agree in writing, they shall divide such
recoveries as set forth in Section 10.5(h). 

        (e)    Infringement of GSK Patents Outside the GSK Territory by Competitive Product Infringement.    If the
Infringement is of a GSK Patent and involves or would involve a product that is or would be competitive with Licensed Products outside of the GSK Territory, GSK shall have the first right, but not the
obligation, to bring, [ * ], an appropriate action against the
person or entity Infringing a GSK Patent (including any Joint Patent) directly or contributorily. If GSK does not bring such action within  [ * ]
in the case of an action brought under the Hatch-Waxman Act)
of notification thereof to or by Gilead, Gilead shall have the right, but not the obligation, to bring at  [ * ], such appropriate action. The
Party not bringing an action
under this Section 10.5(e) shall be entitled to separate representation in such matter by counsel of its own choice and at its own expense, but such Party shall cooperate fully with the Party
bringing such action. 

        (f)    Other Infringement of GSK Patents.    For all Infringement other than that described in Section 10.5(e)
that involves a GSK Patent that is not a Joint Patent, GSK shall have the exclusive right, but not the obligation, to bring,  [ * ], an
appropriate action against any person or entity
Infringing a GSK Patent directly or contributorily. 

        (g)    Settlement.    Gilead shall not settle a claim brought under this Section 10.5 involving GSK Patents or
Gilead Patents in a manner that would [ * ], or impair the
exclusivity of GSK's rights hereunder, in each case without the prior written consent of GSK (which consent shall not be unreasonably withheld or delayed). GSK shall not settle a claim brought under
this Section 10.5 involving Gilead Patents or GSK Patents that would  [ * ] without the prior written consent of Gilead (which consent
shall not be unreasonably withheld or delayed). 

        (h)    Allocation of Proceeds.    If either Party recovers monetary damages from any Third Party in an action brought
under Section 10.5(b), Section 10.5(d) or Section 10.5(e),  [ * ], such recovery shall be allocated first to the  [ * ], and any remaining amounts shall be split as follows: 

          (i)  the portion of any such remaining amounts that represents recovery for Competitive Infringement ("Remaining Competitive
Recovery") shall be allocated to Gilead in an amount [ * ], and
the remaining portion of the Remaining Competitive Infringement shall be allocated to  [ * ]; 

        (ii)  the portion of any such remaining amounts that represents recovery for Infringement involving a product that  
[ * ], shall be allocated to the Parties in accordance with  [ * ] the underlying Infringement action; and 

        (iii)  the portion of any such remaining amounts that represents recovery for Infringement in an action brought pursuant to
Section 10.5(d) shall be split [ * ] to GSK and  [ * ]
 to Gilead, unless GSK and Gilead agree in writing to a
different allocation. 

        10.6    Infringement of Third Party Rights.    

        (a)    Notice. If any Licensed Product manufactured, used or sold by either Party, its Affiliates, licensees or sublicensees
becomes the subject of a Third Party's claim or assertion of infringement of a Patent granted by a jurisdiction within the GSK Territory relating to the manufacture, use, sale, offer for sale or
importation of Licensed Product, the Party first having notice of the claim or assertion shall promptly notify the other Party, and the Parties shall promptly meet to consider the claim or assertion
and the appropriate course of action. 

        (b)    Defense. [ * ] shall have the first
right, but not the obligation, to defend any such claim, with  [ * ] to conduct such defense being  [ * ].    If Gilead does not commence actions to defend
such claim within [ * ] after it receives notice thereof  [ * ] after it should have given notice thereof  [ * ] as required by Section 10.6(a)), then  [ * ] shall have the right, but not the obligation, to control the
defense of such claim by counsel of its choice, at  [ * ].    The non-defending Party shall
reasonably cooperate with the Party conducting the defense of the claim, including if required to conduct such defense, furnishing a power of attorney. 

44

  

        (c)    Settlement.    Neither Party shall enter into any settlement of any claim described in this Section 10.6
that affects the other Party's rights or interests without such other Party's written consent, which consent shall not be unreasonably withheld or delayed. Gilead shall have the  [ * ] to GSK upon reasonable notice, including without limitation
if GSK fails to agree to a settlement that Gilead proposes. 

        10.7    Patent Marking.    GSK (or its Affiliate, Permitted Sublicensee or Distributor) shall mark Licensed Products
marketed and sold by GSK (or its Affiliate, Permitted Sublicensee or Distributor) hereunder with appropriate patent numbers or indicia at Gilead's request to the extent permitted by law, in those
countries in which such markings such notices impact recoveries of damages or equitable remedies available with respect to infringements of patents. 

        10.8    Selection and Registration of Product Trademarks.    In accordance with Section 7.6, GSK may select and
own its own trademarks for use in connection with the sale of Licensed Products within the GSK Territory, in addition to the Gilead-owned trademarks to which GSK has a license pursuant to such
Section. Each Party shall be responsible for registering and maintaining its own trademarks, at its own expense. GSK shall cooperate with Gilead,  [ * ], in the preparation, execution or recording of any documents
necessary to register or otherwise protect the Gilead Marks and Gilead Product Marks. 

        10.9    Infringement of Trademarks by Third Parties.    With respect to any trademarks associated with Licensed
Products within the GSK Territory, each Party shall notify the Joint Committee promptly upon learning of any actual, alleged or threatened infringement of any trademark or of any unfair trade
practices, trade dress imitation, passing off of counterfeit goods, or like offenses, against such trademark (hereinafter "TM Infringement"). Upon learning of such TM Infringement, the Joint Committee  [ * ]. In the absence of other agreement  [ * ], to bring an action to address such TM
Infringement, in
which case such Party [ * ]. The Party who was granted a license
under the trademark in issue shall fully cooperate with the Party Controlling such trademark in any such litigation, at the expense of the Party owning such trademark. In the event that the Party
owning such trademark does not proceed with the litigation, the Party which has been granted a license of the trademark shall  [ * ] from such
litigation. 

        10.10    Patent Oppositions and Other Proceedings.    

        (a)    Third-Party Patent Rights.    If either Party desires to bring an opposition, action for declaratory judgment,
nullity action, interference, reexamination or other attack upon the validity, title or
enforceability of a Patent owned or Controlled by a Third Party that covers the manufacture, use for a Licensed Indication or sale of any Licensed Product, such Party shall so notify the other Party
and the Parties shall promptly confer to determine whether to bring such action or the manner in which to settle such action. Gilead shall have the exclusive right, but not the obligation, to bring at
its own expense and in its sole control such action in the Gilead Territory. Gilead shall have the first right, but not the obligation, to bring at its own expense and in its sole control such action
in the GSK Territory. If Gilead does not bring such an action within the GSK Territory, within  [ * ] of notification thereof pursuant to this
Section 10.10(a) (or earlier, if required by the nature of the proceeding), then GSK shall have the right, but not the obligation, to bring, at GSK's sole expense, such action. The Party not
bringing an action under this Section 10.10(a) shall be entitled to separate representation in such proceeding by counsel of its own choice and at its own expense, and shall cooperate fully
with the Party bringing such action. Any awards or amounts received in bringing any such action shall be first allocated to  [ * ]. 

        (b)    Parties' Patent Rights.    If a Gilead Patent or a GSK Patent becomes the subject of any proceeding commenced
by a Third Party within the GSK Territory in connection with an opposition, reexamination request, action for declaratory judgment, nullity action, interference or other attack upon the validity,
title or enforceability thereof, then the Party owning or Controlling such Patent shall control such defense at its sole cost; provided that if such
action relates to a Joint 

45

 

Patent, the Parties shall confer and determine which Party shall control such action. The controlling Party shall permit the non-controlling Party to participate in the proceeding to the
extent permissible under law, and to be represented by its own counsel in such proceeding, at the non-controlling Party's expense. If either Party decides that it does not wish to defend
against such action, then the other Party shall have a backup right to assume defense of such Third-Party action at its own expense. Any awards or amounts received in defending any such Third-Party
action shall be allocated [ * ]. 

        (c)    Noncontravention.    Nothing in this Section 10.10 shall be deemed to relieve either Party of its
obligations under Article 12. 

 
 

ARTICLE 11
  
    REPRESENTATIONS AND WARRANTIES    
  

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

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

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

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

        (d)    Regulatory Data.    The regulatory data it provides to the other Party as required under this Agreement shall
be complete and accurate in all material respects. 

        (e)    No Misappropriation.    It has not and shall not misappropriate the trade secret of another in the course of
performing its activities to develop or Commercialize Licensed Products. 

        (f)    No Debarment.    In the course of the development of Licensed Products, such Party shall not use, during the
term of this Agreement, any employee or consultant who has been debarred by the FDA or Regulatory Authorities, or, to the best of such Party's knowledge, who is the subject of debarment proceedings by
the FDA or Regulatory Authorities. 

        (g)    Rights in Technology.    As of the Effective Date, each of Gilead and GSK has sufficient right in and to its
Know-How and Patents, free and clear of any conflicting Third-Party rights, to grant the rights set forth in this Agreement. During the Term, each Party shall devote Diligent Efforts not
to diminish the rights (under Know-How and Patents owned or Controlled by it) granted to each other herein, including without limitation by not committing or permitting any acts 

46

 

or omissions which would cause the material breach of any agreements between itself and Third Parties which provide for intellectual property rights applicable to the development, manufacture, use or
sale of Licensed Products. Each Party agrees to provide promptly to the other Party notice of any such alleged breach. As of the Effective Date, each Party is in compliance in all material respects
with any such agreements with Third Parties. 

        11.2    Gilead.    Gilead represents and warrants to GSK as follows: 

        (a)    Non-Infringement of Gilead Technology by Third Parties.    As of the Effective Date,  [ * ], the Key Gilead Personnel have no actual knowledge of any
activities by Third Parties which would constitute infringement or misappropriation of the Gilead Technology within the GSK Territory. 

        (b)    Non-infringement of Third Party Rights.    As of the Effective Date, the Key Gilead Personnel have
not received any written notice of any claim that any Patent or trade secret right owned or controlled by a Third Party would be infringed or misappropriated by the manufacture, use, sale, offer for
sale or importation of the Current Product in the GSK Territory. 

        (c)    Claims.    To the knowledge of the Key Gilead Personnel, (i) Gilead has not received any written claim
or demand of any person or entity, (ii) no proceeding is pending that challenges Gilead's ownership or Control, as applicable, of the Gilead Patents, and (iii) the Gilead Patents are not
subject to any pending re-examination, opposition, interference or litigation proceedings. 

        (d)    Due Diligence.    The clinical and regulatory data regarding the Current Product that Gilead has provided to
GSK prior to the Effective Date is true and accurate in all material respects as of the date provided to GSK, and Gilead has, to its knowledge as of the Effective Date, provided GSK with access to  [ * ] clinical and regulatory data regarding the Current Product  [ * ].
 

        11.3    Disclaimer.    GSK understands that Licensed Products are the subjects of ongoing clinical research and
development and that Gilead cannot assure the safety or usefulness of Licensed Products. Gilead makes no warranty except as set forth in this Article 11 concerning its Patents or
Know-How. 

        11.4    No Other Representations.    THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS ARTICLE 11 AND
IN SECTION 5.5 ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. 

 
 

ARTICLE 12
  
    INDEMNIFICATION    
  

        12.1    Indemnification by Gilead.    Gilead hereby agrees to defend, hold harmless and indemnify (collectively
"Indemnify") GSK and its Affiliates, agents, directors, officers and employees (the "GSK Indemnitees") from and against any and all liabilities, expenses and/or losses, including without limitation
reasonable legal expenses and attorneys' fees (collectively "Losses") resulting from Third Party suits, claims, actions and demands (each, a "Third Party Claim") arising directly or indirectly out of
(i) a breach of any of Gilead's representations and warranties or covenants pursuant to Article 11 (including without limitation any conflict between Gilead's obligations and activities
under this Agreement and the IOCB/Rega. License); or (ii) the development, use, sale, offer for sale or importation of Licensed Products by Gilead or its Affiliates and licensees in the Gilead
Territory. Gilead's obligation to Indemnify the GSK Indemnitees pursuant to this Section 12.1 shall not apply to the extent that any such Losses (A) arise from the negligence or
intentional misconduct of any GSK 

47

 

Indemnitee (; (B) arise from any breach by GSK of this Agreement; or (C) are Losses for which GSK is obligated to Indemnify the Gilead Indemnitees pursuant to Section 12.2.
Notwithstanding any other term of this Section 12.1, Gilead hereby confirms that it shall remain liable to Indemnify GSK in accordance this Section 12.1 in relation to any  [ * ]. 

        12.2    Indemnification by GSK.    GSK hereby agrees to Indemnify Gilead and its Affiliates, agents, directors,
officers and employees (the "Gilead Indemnitees") from and against any and all Losses resulting from Third Party Claims arising directly or indirectly out of (i) a breach of any of GSK's
representations and warranties or covenants pursuant to Article 11;  [ * ]; (ii) the development, manufacture, storage,
handling, use, sale, offer for sale or importation of Licensed Products by GSK or its Affiliates, Permitted Sublicensees or Distributors in the GSK Territory; or (iii) GSK's (or its
Affiliates', Distributors' and Permitted Sublicensees') use of the Gilead Product Marks. GSK's obligation to Indemnify the Gilead Indemnitees pursuant to the foregoing sentence shall not apply to the
extent that any such Losses (A) arise from the negligence or intentional misconduct of any Gilead Indemnitee; (B) arise from any breach by Gilead of this Agreement; or (C) are
Losses for which Gilead is obligated to Indemnify the GSK Indemnitees pursuant to Section 12.1. Notwithstanding any other term of this Section 12.2, GSK hereby confirms that it shall
remain liable to Indemnify Gilead in accordance this article 12.2 in relation to any  [ * ]. 

        12.3    Procedure.    To be eligible to be Indemnified hereunder, the indemnified Party shall provide the indemnifying
Party with prompt notice of the claim giving rise to the indemnification obligation pursuant to this Article 12 and the exclusive ability to defend (with the reasonable cooperation of the
indemnified Party) or settle any such claim; provided, however, that the indemnifying Party shall not enter into any settlement for damages other than
monetary damages without the indemnified Party's written consent, such consent not to be unreasonably withheld or delayed. The indemnified Party shall have the right to participate, at its own expense
and with counsel of its choice, in the defense of any claim or suit that has been assumed by the indemnifying Party. If the Parties cannot agree as to the application of Sections 12.1 and 12.2 to any
particular Third Party Claim, the Parties may conduct separate defenses of such Third Party Claim. Each Party reserves the right to claim indemnity from the other in accordance with Sections 12.1 and
12.2 above upon resolution of the underlying claim, notwithstanding the provisions of this Section 12.3 requiring the indemnified Party to tender to the indemnifying Party the exclusive ability
to defend such claim or suit. 

        12.4    Insurance.    Each Party shall procure and maintain insurance, including product liability insurance, adequate
to cover its obligations hereunder and which are consistent with normal business practices of prudent companies similarly situated at all times during which any Licensed Product is being clinically
tested with human subjects or commercially distributed or sold. It is understood that such insurance shall not be construed to create a limit of either Party's liability with respect to its
indemnification obligations under this Article 12. Each Party shall provide the other with written evidence of such insurance upon request. Each Party shall provide the other with written
notice at least [ * ] prior to the cancellation,
non-renewal or material change in such insurance or self-insurance which materially adversely affects the rights of the other Party hereunder. 

        12.5    Limitation of Liability.    EXCEPT TO THE EXTENT SUCH PARTY MAY BE REQUIRED TO INDEMNIFY THE OTHER PARTY UNDER
THIS ARTICLE 12, NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES AND PERMITTED SUBLICENSEES SHALL BE LIABLE FOR SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER IN CONTRACT, WARRANTY,
TORT, STRICT LIABILITY OR OTHERWISE. 

48

 

 
 

ARTICLE 13
  
    RECORDS; AUDITS; PUBLICATIONS    
  

        13.1    Records; Audits.    Each Party shall keep or cause to be kept such records as are required to determine, in a
manner consistent with generally accepted accounting principles in the United States, the sums or credits due under this Agreement, including, but not limited to transfer prices under the Clinical
Supply Agreement and the Commercial Supply Agreement, Net Sales and Other Sales. At the request (and expense) of either Party, the other Party and its Affiliates and licensees and sublicensees shall
permit an independent certified public accountant appointed by such Party and reasonably acceptable to the other Party, accompanied by representatives of the financial department of the audited Party
at reasonable times, upon reasonable notice and no more frequently than once per calendar year, to examine only those records as may be necessary to determine, with respect to any calendar year ending
not more than [ * ] prior to such Party's request, the correctness
or completeness of any report or payment made under this Agreement. The auditor's reports of any such examination shall be (i) limited to information relating to the Licensed Products,
(ii) made available to both Parties, and (iii) subject to Article 14. The Party requesting the audit shall bear the full cost of the performance of any such audit, unless such
audit discloses an underpayment of more than [ * ] from the amount
of the original report, royalty or payment calculation. In such case, the Party being audited shall bear the full cost of the performance of such audit. 

        13.2    Publications.    [ * ]

shall not publish or present the results of studies carried out under this Agreement without the opportunity for prior review by  [ * ] the
opportunity to review any proposed abstracts,
manuscripts or presentations (including verbal presentations) which relate to any Licensed Product at least  [ * ] prior to their intended
submission for publication.  [ * ] agrees, upon request, not to submit any such abstract or
manuscript for publication, or to make such presentation, until  [ * ] is given a reasonable period of time to secure patent
protection for any material in such publication or presentation which it believes to be patentable.  [ * ] understands that a reasonable
commercial strategy may
require delay of publication or presentation of information or filing of patent applications.  [ * ] shall discuss such delays of publication or
presentation if
so requested by [ * ]. The Marketing Committee shall review such
requests and facilitate further discussions between the Parties.  [ * ] shall not have the right to publish or present  [ * ] Confidential Information. Nothing contained in this
Section 13.2 shall prohibit the inclusion of information necessary to file a patent application with a government authority, provided that  [ * ] is given a reasonable opportunity to review the information
to be included prior to submission of such patent application.  [ * ] shall  [ * ] by  [ * ] to  [ * ] regarding Licensed Products at  [ * ] and any of  
[ * ] for Licensed Products for Licensed Indications. 

 
 

ARTICLE 14
  
    CONFIDENTIALITY    
  

        14.1    Treatment of Confidential Information.    The Parties agree that during the Term, and for a period of 
[ * ] after this Agreement expires or terminates, a Party
receiving Confidential Information of the other Party shall (i) maintain in confidence such Confidential Information to the same extent such Party maintains its own proprietary industrial
information of similar kind and value (but at a minimum each Party shall use commercially reasonable efforts to maintain Confidential Information in confidence); (ii) not disclose such
Confidential Information to any Third Party without prior written consent of the disclosing Party, except for disclosures made in confidence to any Third Party pursuant to a plan approved by the Joint
Committee or to its licensees or sublicensees who agree to be bound by obligations of non-disclosure and non-use at least as stringent as those contained in this
Article 14; and (iii) not use such Confidential Information for any purpose except those purposes permitted by this Agreement. 

49

 

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

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

        (b)  to the extent and to the persons and entities required by rules of the National Association of Securities Dealers; 

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

        (d)  as required by the IOCB/Rega License. 

        14.3    Publicity; Terms of Agreement.    

        (a)  The Parties agree that the material terms of this Agreement are included within the Confidential Information of both
Parties, subject to the special authorized disclosure provisions set forth below in this Section 14.3. The Parties have agreed to make a joint public announcement of the execution of this
Agreement substantially in the form of the press release attached as Exhibit F upon or after execution of this Agreement. 

        (b)  After release of such press release, if either Party desires to make a public announcement concerning the material terms
of this Agreement, such Party shall give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as otherwise provided
herein), such approval not to be unreasonably withheld. A Party commenting on such a proposed press release shall provide its comments, if any, within  [ * ]
 after receiving the press release for review. Gilead shall
have the right to make a press release announcing the achievement of each milestone under this Agreement as it is achieved, and the achievements of Regulatory Approvals in the GSK Territory as they
occur, subject only to the review procedure set forth in the preceding sentence. In relation to GSK's review of such an announcement, GSK may make specific, reasonable comments on such proposed press
release within the prescribed time for commentary, but shall not withhold its consent to disclosure of the information that the relevant milestone has been achieved and triggered a payment hereunder.
Neither Party shall be required to seek the permission of the other Party to repeat any information as to the terms of this Agreement that have already been publicly disclosed by such Party in
accordance with this Section 14.3 or by the other Party. Either Party may disclose the terms of this Agreement to potential investors who are bound in writing by obligations of
non-disclosure and non-use of the terms of this Agreement at least as stringent as those contained in this Article 14. 

        (c)  The Parties acknowledge that Gilead may be obligated to file a copy of this Agreement with the U.S. Securities and
Exchange Commission (the "SEC"). Gilead shall be entitled to make such a required filing, provided that it requests confidential treatment of at least the commercial terms and sensitive
technical terms hereof to the extent such confidential treatment is reasonably available to Gilead. In the event of any such filing, Gilead will provide GSK with a copy of the Agreement marked to show
provisions for which Gilead intends to seek confidential treatment and shall reasonably consider and incorporate GSK's comments thereon to the extent consistent with the legal requirements governing
redaction of information from material agreements that must be publicly filed. GSK recognizes that United States laws and SEC policies and regulations to which Gilead is subject may require Gilead to
publicly disclose certain terms of this Agreement that 

50

 

neither of the Parties wishes to disclose, and that Gilead is entitled hereunder to make such required disclosures. 

 
 

ARTICLE 15
  
    TERM AND TERMINATION    
  

        15.1    Term.    This Agreement shall become effective on the Effective Date and shall remain in effect, unless
earlier terminated pursuant to this Article 15, with respect to each Licensed Product in each country within the GSK Territory until the expiration of the last Royalty Term relating to sales of
such Licensed Product as provided in Article 9 in such country, and in its entirety upon the expiration of the last-to-expire Royalty Term for any Licensed product
hereunder. Upon expiration of the Royalty Term for a particular Licensed Product in a particular country of the GSK Territory, 

        (a)  GSK's license pursuant to Section 7.6(b) shall automatically become perpetual and shall be fully paid; 

        (b)  GSK's non-exclusive license under the Gilead Know-How pursuant to Section 7.3 shall
automatically become perpetual upon GSK's notice to Gilead that GSK elects to benefit from such perpetual license; and 

        (c)  Gilead's licenses pursuant to Sections 7.2 and 7.4 shall automatically become perpetual and non-exclusive
upon Gilead's notice to GSK that Gilead elects to benefit from such perpetual license. 

If
GSK notifies Gilead pursuant to subsection (b) that GSK  [ * ] from the license therein described, or Gilead notifies GSK
pursuant to subsection (c) that Gilead [ * ] from the
licenses therein described, then the Parties shall [ * ] under the
relevant body of intellectual property, based upon the [ * ] upon
the expiration of such Royalty Term or this Agreement, as applicable, promptly after the date of such a notice from one of the Parties. If the Parties are unable to reach agreement as to such  [ * ] after the date of such notice, then either Party may refer
the matter for resolution pursuant to Sections 16.1 and 16.2.  [ * ], GSK shall not owe Gilead any royalty in respect of sales of
a given Licensed Product in a given country in which the Royalty Term therefor has expired. 

        15.2    Elective Termination.    GSK shall have, at any time, the right to terminate this Agreement at will in its
entirety upon twelve (12) months written notice to Gilead. If GSK terminates this Agreement pursuant to this Section 15.2, GSK shall provide Gilead with all reasonable assistance during
the twelve (12) month notice period to effect the transfer of all regulatory activities, regulatory filings and Regulatory Approvals in the GSK Territory for Licensed Product(s), including
without limitation the other transition activities set forth in Section 15.4, all as further set forth in such Section. GSK shall not, during such twelve (12) month notice period, take
any action that could adversely affect or impair the further development and Commercialization of Licensed Products. The Joint Committee shall coordinate the wind-down of GSK's efforts
under this Section 15.2. 

        15.3    Termination for Breach.    

        (a)    Notice.    If either Party believes that the other is in material breach of this Agreement with respect to one
or more Licensed Products, then the Party holding such belief (the "Non-breaching Party") may deliver notice of such breach to the other Party (the "Notified Party"). The Notified Party
shall have [ * ] to cure such breach to the extent involving
non-payment of amounts due hereunder, and [ * ] to
either cure such breach for all other material breaches, or, if cure of such breach other than non-payment cannot reasonably be effected within such  [ * ]
 period, to deliver to the Non-breaching Party a
plan reasonably calculated to cure such breach within a timeframe that is reasonably prompt in light of the circumstances then prevailing. Following delivery of such a plan, the notified Party shall
devote Diligent Efforts to carry out the plan and cure the breach. This Section 15.3(a) shall not apply to any failure by GSK under Article 6, for which an alternative cure period is
provided in Section 6.4. 

51

  

        (b)    Failure to Cure.    If the Notified Party fails to cure a material breach of this Agreement as provided for in
Section 15.3(a) or Section 6.4, the Non-breaching Party may terminate this Agreement either in its entirety or with respect to one or more Licensed Products upon written
notice to the Notified Party; [ * ]. If Gilead elects to terminate
this Agreement with respect to a [ * ], then such country shall
not longer be included in the GSK Territory, the licenses granted GSK hereunder shall terminate with respect to such country, and the provisions of Section 15.6, which regard transitional
matters, shall apply with respect to such country. 

        (c)    Disputes.    If a Party gives notice of termination under this Section 15.3 and the other Party disputes
whether such termination is proper under this Section 15.3, then the issue of whether this Agreement may properly be terminated upon expiration of the notice period (unless such breach is cured
as provided in Section 15.3(a)) shall be resolved in accordance with Article 16. If as a result of such dispute resolution process it is determined that the notice of termination was
proper, then such termination shall be deemed to have been effective  [ * ] following the date of the notice of termination. If as a
result of such dispute resolution process it is determined that the notice of termination was improper, then no termination shall have occurred and this Agreement shall remain in effect. 

        15.4    Fee upon Certain Terminations.    If, prior to the later of (i) the  
[ * ] anniversary of the Effective Date and (ii) the date
by which [ * ]

        (a)  GSK notifies Gilead in writing that GSK is terminating this Agreement pursuant to Section 15.2, unless such notice
is provided within [ * ] after Gilead notifies GSK in writing that
Gilead (i) has received formal notification from the [ * ]
Regulatory Authority that the Current Product is not approvable in the  [ * ] (ii) has formally withdrawn its NDA for the Current
Product from consideration by the [ * ] or (iii) has
withdrawn the Current Product from commercial availability [ * ]
in such country (promptly after the occurrence of any of which events Gilead shall notify GSK); or 

        (b)  Gilead notifies GSK that it intends to terminate this Agreement in its entirety pursuant to Section 15.3 for GSK's
breach of its diligence obligations, and [ * ], and this Agreement
ultimately terminates as a result of such notice, 

then
GSK shall pay to Gilead an [ * ] equal to the  [ * ]
 for which the  [ * ] had not been  [ * ] (without  [ * ] in respect of  [ * ]. 

        15.5    Termination for Bankruptcy/Insolvency.    

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

        (b)  Notwithstanding the bankruptcy of Gilead, or the impairment of performance by Gilead of its obligations under this
Agreement as a result of bankruptcy or insolvency of Gilead, GSK shall be  [ * ], subject to Gilead's rights to terminate this Agreement for
reasons other than bankruptcy or insolvency as expressly provided in this Agreement. 

        (c)  All rights granted under or pursuant to this Agreement by Gilead to GSK are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses 

52

 

of rights to "intellectual property" as defined under Section 101(52) of the U.S. Bankruptcy Code. The Parties agree that GSK, as a licensee of such rights under this Agreement, shall retain
and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code, subject to performance by GSK of its pre-existing obligations under this Agreement. The Parties
further agree that, in the event of the commencement of a bankruptcy proceeding by or against Gilead under the U.S. Bankruptcy Code, GSK shall be entitled to a complete duplicate of (or complete
access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, and the same, if not already in its possession, shall be promptly delivered to GSK
(i) upon any such commencement of a bankruptcy proceeding upon written request therefor by GSK, unless Gilead elects to continue to perform all of its obligations under this Agreement, or
(ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of Gilead upon written request therefor by GSK; provided,
however, that upon Gilead's (or its successor's) written notification to GSK that it is again willing and able to perform all of its obligations under this Agreement, GSK shall
promptly return all such tangible materials to Gilead, but only to the extent that GSK does not require continued access to such materials to enable GSK to perform its obligations under this
Agreement. 

        15.6    Gilead Rights upon Certain Terminations of the Agreement or as to Certain Licensed Products.    If Gilead
terminates this Agreement pursuant to Section 15.3 for GSK's material breach of this Agreement, in whole or in part, or GSK terminates this Agreement pursuant to Section 15.2, then: 

        (a)    Reverted Products.    All Licensed Products shall thereafter be deemed to be "Reverted Products" in the country
or countries as to which this Agreement terminates. 

        (b)    Trademark License.    GSK hereby grants to Gilead a  [ * ], to use the GSK Product Marks in connection with the  [ * ] (collectively
"Permitted Uses"). Promptly after the
applicable termination of this Agreement, GSK shall immediately discontinue all use of the Gilead Marks, and the Gilead Product Marks in such country or countries. GSK shall execute any documents
required to assign its interest in the GSK Product Marks, Gilead Product Marks, Gilead Marks, and any goodwill that GSK has acquired or developed in any of the foregoing, to Gilead in the relevant
country or countries. 

        (c)    Regulatory Filings.    To the extent permitted by law, GSK shall transfer to Gilead all INDs, Marketing
Authorization Applications, Regulatory Approvals, Administrative Protections, Class I Certifications and Class II Certifications for Reverted Products that GSK holds as of the time of
such termination in the relevant country or countries. In the event of such a termination, GSK shall take all actions reasonably necessary to effect such transfer of such INDs, Marketing Authorization
Applications, Regulatory Approvals, Administrative Protections, Class I Certifications and Class II Certifications for Reverted Products to Gilead. 

        (d)    Technology Licenses.    The licenses granted by Gilead to GSK under Article 7 shall terminate with
respect to Reverted Products in the relevant country or countries. GSK shall,  [ * ] in the relevant country or countries. 

        (e)    No Further Representations.    GSK shall discontinue making any representation regarding its status as a
licensee of or distributor for Gilead in the GSK Territory or Major GSK Country, as applicable, for all Reverted Products, and shall cease conducting any activities with respect to the marketing,
promotion, sale or distribution of the Reverted Product in the GSK Territory, or Major GSK Country, as applicable. 

        (f)    Transition Assistance.    GSK shall also provide such assistance,  
[ * ], as may be reasonably necessary to transfer and/or
transition over a reasonable period of time to Gilead [ * ] in the
GSK Territory or Major GSK Country, as applicable, to the extent  [ * ], including without limitation  
[ * ]in the GSK Territory or Major GSK Country, as applicable. To
the extent that any [ * ] for the 

53

 

GSK Territory or Major GSK Country, as applicable, is [ * ], then
GSK shall reasonably cooperate with Gilead to [ * ] to Gilead. In
addition, to the extent that GSK or a GSK Affiliate is then manufacturing Licensed Products for the GSK Territory or Major GSK Country, as applicable, GSK shall continue to manufacture Licensed
Products for Gilead's use in the GSK Territory or Major GSK Country, as applicable, for  [ * ], as applicable, in addition to that which it had in
place
for its use outside the GSK Territory. Such period shall be no less than  [ * ] unless otherwise requested by Gilead. 

        (g)    Remaining Inventories.    If this Agreement is terminated in a country or countries, Gilead shall have the
right to purchase from GSK all of the inventory of Licensed Product held by GSK as of the effective date of such termination in such country or countries at a price  [ * ] such inventory. Gilead shall notify GSK within  [ * ] after notice pursuant to the applicable Section by a
Party
of such a termination whether Gilead elects to exercise such right. If Gilead does not exercise such right, then GSK shall  [ * ] after the
effective date of such termination. 

        15.7    GSK Rights upon Certain Terminations.    If GSK terminates this Agreement pursuant to Section 15.3,
then the licenses granted to it in Article 7 with respect to one or more Licensed Products (each, a "Surviving Product") shall survive such termination until the term of this Agreement would
otherwise expire under Section 15.1. After any such termination, GSK shall have no further obligations under this Agreement with respect to any such Surviving Product other than the payment of
royalties pursuant to Section 9.3 and provisions related to the payment of such royalties, which shall continue in effect for as long as GSK is required to pay such royalties as required by
Section 9.3 (the "Surviving Product Term"), together with any other obligations that survive termination of this Agreement as provided in Section 15.6. In addition, each Party's
indemnification obligations with respect to GSK's Commercialization of such Licensed Product(s) under Article 12 shall survive for the Surviving Product Term. 

        15.8    Survival.    The following provisions shall survive any expiration or termination of this Agreement for the
period of time specified: Articles 12, 14, 15, 16 and 17 and Sections 4.5 and 4.8 (each solely as applied to quantities of Licensed Product sold during the Term); 7.2 and 7.4 (as applied to GSK
Patents and GSK Know-How existing during the Term, but solely to the extent and on the terms set forth in Section 15.1 in the case of a survival after expiration of the Term in
accordance with such Section); 7.11; 10.1; 10.2(c); 10.2(d); 10.5, 10.6 and 10.9 (but solely with respect to infringement alleged to have occurred during the Term); and 13.1. In the case of any of the
foregoing and any other Section that by their terms explicitly survive beyond the Term, each such Section shall survive beyond the Term only for the length of time specified in such Section. The
foregoing provisions that survive in the event of any expiration or termination of this Agreement shall survive in addition to those that survive any termination under Section 15.4 or 15.5, as
specifically provided in such Sections. Termination of this Agreement shall not relieve the Parties of any liability which accrued hereunder prior to the effective date of such termination nor
preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement. The remedies provided in this Article 15
are not exclusive of any other remedies a Party may have in law or equity. 

 
 

ARTICLE 16    
    
    DISPUTE RESOLUTION    
  

        16.1    Disputes.    The Parties recognize that disputes as to certain matters may from time to time arise during the
term of this Agreement which relate to either Party's rights and/or obligations hereunder. It
is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to
litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in 

54

 

this Section 16.1 if and when a dispute arises under this Agreement. Subject to Section 16.4, all disputes arising under this Agreement shall be discussed first by the Joint Committee.
If the Joint Committee is unable to resolve any dispute within  [ * ] after such dispute is submitted to it, either Party may, by
written notice to the other Party, have such dispute referred to a senior executive officer for each Party for attempted resolution by good faith negotiations within  [ * ]after such notice is received. (Subject to
Section 16.4 each Party shall designate its own senior executive officer for such negotiations.) If the senior executive officers designated by the Parties are not able to resolve such dispute
within such [ * ] period, either Party may at any time thereafter
pursue any legal or equitable remedy available to it. 

        16.2    Governing Law; Judicial Resolution.    Resolution of all disputes arising out of or related to this Agreement
or the performance, enforcement, breach or termination of this Agreement and any remedies relating thereto, shall be governed by and construed under the substantive laws of the  [ * ] without regard to its conflicts of law rules. Any dispute
arising under this Agreement shall be submitted to a state or federal court of competent jurisdiction within the  [ * ] except as otherwise
expressly provided in this Agreement.
Each Party hereby waives any defenses it may have to the personal jurisdiction and venue of such courts including without limitation the defense of forum non
conveniens. 

        16.3    Patent and Trademark Dispute Resolution.    Any dispute, controversy or claim relating to the scope, validity,
enforceability or infringement of any patent rights covering the manufacture, use or sale of any Licensed Product or of any trademark rights relating to any Licensed Product shall be submitted to a
court of competent jurisdiction in the territory in which such patent or trademark rights were granted or arose. Without limitation, the Parties agree that a material breach of any obligations in
Section 7.6(c) of this Agreement is likely to cause irreparable harm to Gilead, for which damages would not be an adequate remedy. Therefore, in addition to its rights and remedies otherwise
available at law, including, without limitation, the recovery of damages for breach of this Agreement, upon an adequate showing of material breach of such Section, and without further proof of
irreparable harm other than this acknowledgement, Gilead shall be entitled to (a) immediate equitable relief, specifically including, but not limited to, both interim and permanent restraining
orders and injunctions, and (b) such other and further equitable relief as the court may deem proper under the circumstances. 

        16.4    Industry Expert Resolution of Certain Disputes.    

        (a)    Referable Issues.    The following issues shall be submitted for resolution and finally determined under this
Section 16.4 rather than under Section 16.2: [ * ]
(each such issue or matter, a "Referable Issue"). Only Referable Issues, and no other issues or disputes arising under this Agreement, shall be resolved as set forth in this Section 16.4. 

        (b)    Finality of Decision.    The resolutions of Referable Issues made pursuant to this Section 16.4 shall be
final resolutions and shall not be subsequently reviewable or justiciable in a court of law. 

        (c)    Industry Expert Resolutions.    Within  [ * ] after a Party refers a Referable Issue for Industry Expert
resolution, each Party shall [ * ] with either Party or with
either Party's Affiliates, sublicensees or business partners, and (iii) that does not have any direct or indirect interest of any kind in the resolution of the issue to be submitted for
Industry Expert resolution (a person having such characteristics, a "Qualified Individual"). If the Parties are able to agree as to one of the Qualified Individuals proposed by a Party to resolve the
Referable Issue within [ * ] after the date by which the Parties'
notices to identify Qualified Individuals are due pursuant to the foregoing sentence, then that person shall be the "Industry Expert." If the Parties are unable to agree as to such a person within
such [ * ] period, then within  [ * ]
after expiration of such  [ * ] period, the  [ * ] Qualified Individuals chosen by the Parties shall select
another Qualified Individual before whom such Referable Issue shall be resolved, and that person shall be the "Industry Expert." Each Party shall submit written materials to the other Party and to the
Industry Expert relating to the 

55

 

matters in issue within [ * ] after the selection of the Industry
Expert (whether by agreement of the Parties, or by the Qualified Individuals designated by them). Each Party shall then have  [ * ] to submit a
written rebuttal to the other Party's materials
to such other Party and to the Industry Expert. The Industry Expert shall have the  [ * ]; provided
that the Industry Expert and the Parties shall not engage in any ex parte communications, and the Industry Expert shall be bound by confidentiality to
the Parties. Each Party shall cooperate with the Industry Expert and facilitate her or his efforts. In accordance with Section 16.4(b)(ii), the Industry Expert's determination of any Referable
Issue before him or her shall be dispositive as to such Referable Issue, and such determination shall be given retroactive effect. 

        (d)    Interim Performance; Costs.    Until the determination of a Referable Issue is delivered to the Parties
pursuant to Section 16.4(c), the Parties shall continue to perform their obligations under this Agreement in good faith and make any applicable payments accordingly. The Parties shall bear all
expenses incurred pursuant to this Section 16.4 equally. 

 
 

ARTICLE 17    
    
    MISCELLANEOUS    
  

        17.1    Entire Agreement; Amendment.    This Agreement, including the Exhibits hereto and together with the Other
Clinical Trial Agreements, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the
Parties hereto with respect to the subject matter hereof and supersedes and terminates all prior agreements and understandings between the Parties with respect to the subject matter hereof, including
without limitation the Confidential Disclosure Agreement between Affiliates of the Parties dated October 26, 2000 and the Secrecy Undertaking between Affiliates of the Parties dated
April 30, 1998. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth
herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each
Party. 

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

        17.3    Notices.    Any notice required or permitted to be given under this Agreement shall be in writing, shall
specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if mailed by first class certified or registered mail, postage prepaid, express delivery 

56

 

service or personally delivered, or if sent by facsimile, electronic transmission confirmed. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below. 

	 	 	For Gilead:	 	Gilead World Markets, Limited

Queensgate House

South Church Street

P.O. Box 1234GT

Grand Cayman

Cayman Islands

Attn: Gregg H. Alton, Director

Fax: (650) 522-5537
	

 	
 	

With Copies to:	
 	

Gilead Sciences, Inc.

333 Lakeside Drive,

Foster City, CA 94404

Attn: Senior Vice President and Chief Financial Officer

Fax: (650) 522-5488

cc: Vice President and General Counsel

Fax: (650) 522-5537
	

 	
 	

 	
 	

and
	

 	
 	

 	
 	

Cooley Godward LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306

Fax: (650) 849-7400

Attention: Judith A. Hasko, Esq.
	

 	
 	

For GSK:	
 	

GlaxoSmithKline

980 Great West Road

Brentford

Middlesex

TW8 9GS

Attn: Peter Bains, Senior Vice President Legal Operations International

Fax: +44(0)20 8047 4719
	

 	
 	

With a Copy to:	
 	

GlaxoSmithKline

980 Great West Road

Brentford

Middlesex

TW8 9GS

Attn: Rodney Whittaker, Senior Vice President Legal Operations International

Fax: +44(0)20 8047 4719

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

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

57

 

        17.6    Assignment.    Neither Party may assign or transfer this Agreement or any rights or obligations hereunder
without the prior written consent of the other, except that a Party may make such an assignment without the other Party's consent to Affiliates or to a successor to substantially all of the business
of such Party in the field to which this Agreement relates, whether in a merger, sale of stock, sale of assets or other transaction. Any permitted successor or assignee of rights and/or obligations
hereunder shall, in a writing to the other Party, expressly assume performance of such rights and/or obligations. The Gilead Technology and the GSK Technology shall exclude any intellectual property
held or developed by a permitted successor of the relevant Party not in connection with Licensed Products. Any permitted assignment shall be binding on the successors of the assigning Party. Any
assignment or attempted assignment by either Party in violation of the terms of this Section 17.6 shall be null, void and of no legal effect. 

        17.7    Performance by Affiliates.    Each of Gilead and GSK acknowledge that their obligations under this Agreement
may be performed by Affiliates of Gilead and GSK, respectively. Obligations of the Party for which one of its Affiliates is performing hereunder shall be deemed to extend to such performing Affiliate.
Each of Gilead and GSK guarantee performance of this Agreement by its Affiliates. Wherever in this Agreement the Parties delegate responsibility to Affiliates or local operating entities, the Parties
agree that such entities shall not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way. Each Party shall provide to the other
Party a written guarantee by the providing Party's ultimate parent company, and/or, to the extent requested by the other Party, the providing Party's United States Affiliates, of the providing Party's
performance hereunder, in a form reasonably acceptable to such other Party. To such end, Gilead Sciences Inc. (a Delaware corporation) is executing this Agreement as guarantor of the
performance hereunder of Gilead and its Affiliates. 

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

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

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

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

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

58

 

        IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized officers as of the Effective
Date. 

	GILEAD WORLD MARKETS, LIMITED	 	GLAXO GROUP LIMITED
	

/s/ Gregg H. Alton
 By: Gregg H. Alton	
 	

/s/ James Stephen Crookes
 By: James Stephen Crookes, by power of attorney
	

Title: Director	
 	

Title: Commercial Development Director,

Pharmaceuticals International
	

Date: April 26, 2002	
 	

Date: April 26, 2002
	
GILEAD SCIENCES, INC., A DELAWARE CORPORATION LOCATED AT 333 LAKESIDE DRIVE, FOSTER CITY, CA 94404, AS GUARANTOR OF THE PERFORMANCE HEREUNDER OF GILEAD WORLD MARKETS, LIMITED, AND ITS
AFFILIATES.	
 	

 
	

/s/ John C. Martin
 By: John C. Martin	
 	

 
	

Title: President and Chief Executive Officer	
 	

 
	

Date: April 26, 2002	
 	

 

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

59

List of Exhibits  

	Exhibit A:	 	Current Gilead Clinical Trials
	

Exhibit B:	
 	

Gilead Names and Logo; Potential Gilead Product Mark
	

Exhibit C:	
 	

Countries of the Gilead Territory
	

Exhibit D:	
 	

Other Clinical Trial Agreements
	

Exhibit E:	
 	

Safety Data Exchange Protocol
	

Exhibit F:	
 	

Press Release
	

Exhibit G:	
 	

Committee Membership

  

 
 

EXHIBIT A    
    
    CURRENT GILEAD TRIALS    
  

	Clinical Trial Reference Number
 
	 	Countries of GSK Territory

Containing a Site of the Clinical Trial
 

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

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

A-1

  

 
 

EXHIBIT B    
    
    GILEAD NAMES AND LOGO; POTENTIAL GILEAD PRODUCT MARK    
  

GILEAD NAMES AND LOGO:  

GILEAD
SCIENCES 

GILEAD

  

  

  

POTENTIAL GILEAD PRODUCT MARKS:  

[ * ]

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

B-1

  

 
 

EXHIBIT C    
    
    COUNTRIES OF THE GILEAD TERRITORY    
  

	United States of America	 	Russia
	Canada	 	San Marino
	Albania	 	Slovakia
	Andorra	 	Slovenia
	Austria	 	Spain
	Australia	 	Sweden
	Belarus	 	Switzerland
	Belgium	 	Turkey
	Bosnia and Herzegovina	 	Ukraine
	Bulgaria	 	United Kingdom
	Croatia	 	Vatican City
	Cyprus	 	Yugoslavia (Serbia and Montenegro)
	Czech Republic	 	 
	Denmark	 	 
	Estonia	 	 
	Finland	 	 
	France	 	 
	Georgia	 	 
	Germany	 	 
	Greece	 	 
	Hungary	 	 
	Iceland	 	 
	Ireland	 	 
	Italy	 	 
	Latvia	 	 
	Liechtenstein	 	 
	Lithuania	 	 
	Luxembourg	 	 
	Macedonia	 	 
	Malta	 	 
	Moldova	 	 
	Monaco	 	 
	Netherlands	 	 
	Norway	 	 
	New Zealand	 	 
	Poland	 	 
	Portugal	 	 
	Romania	 	 

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

C-1

  

 
 

EXHIBIT D    
    
    OTHER CLINICAL TRIAL AGREEMENTS    
  

	1.
	[ * ]

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

D-1

  

 
 

EXHIBIT E    
    
    SAFETY DATA EXCHANGE PROTOCOL    
    
    Safety monitoring of adefovir dipivoxil
  between
  Global Clinical Safety & Pharmacovigilance,
GlaxoSmithKline
  And
  Global Drug Safety, Gilead Sciences    
  

This Safety Data Exchange Protocol is agreed by Glaxo Group Limited and Gilead World Markets, Limited in connection with the Licensing Agreement between them dated as of
April 2002 ("Licensing Agreement") and will govern safety data exchange for adefovir dipivoxil by them or by their Affiliates. "Gilead" shall refer to Gilead World Markets, Limited or its
Affiliates performing safety data exchange under this Protocol; "GlaxoSmithKline" shall refer to Glaxo Group Limited or its Affiliates performing safety data exchange under this Protocol. Capitalized
terms used but not otherwise defined herein shall have the meanings given such terms in the Licensing Agreement to the extent defined therein.

1.    DEFINITIONS (CONSISTENT WITH ICH GUIDELINE E2A)  

        a) [ * ]

2.    LANGUAGE AND MEANS OF EXCHANGE  

        [ * ]

3.    SAFETY DATABASE  

        [ * ]

4.    CORE SAFETY INFORMATION  

        [ * ]

5.    EXPEDITED REPORTING  

        [ * ]

6.    PERIODIC REPORTING  

        [ * ]

7.    REGULATORY ENQUIRIES  

        [ * ]

8.    GENERAL MANAGEMENT OF SAFETY  

        [ * ]

9.    REVIEW AND REVISIONS  

        [ * ]

E-1

 

10.  TERMINATION OF THE SDE PROTOCOL  

        [ * ]

11.  CONTACTS  

        [ * ]

        For
Gilead 

        [ * ]

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

E-2

  

 
 

EXHIBIT F
  
    PRESS RELEASE    
  

	[GILEAD LOGO]	 	 	 	 
	

[Glaxo SmithKline LOGO]	
 	

 	
 	

[GILEAD LOGO]
	 	 	CONTACTS:	 	Susan Hubbard, Investors

(650) 522-5715
	For Immediate Release	 	 	 	 
	 	 	 	 	Amy Flood, Media

(650) 522-5643

 
 

GILEAD AND GLAXOSMITHKLINE ANNOUNCE INTERNATIONAL LICENSING
  AGREEMENT FOR INVESTIGATIONAL CHRONIC HEPATITIS B DRUG
  ADEFOVIR DIPIVOXIL    
  

GSK Receives Exclusive Rights in Asia, Latin America and Other Territories

        Foster City, CA, April 29, 2002—Gilead Sciences, Inc. (Nasdaq: GILD) and GlaxoSmithKline (NYSE: GSK) today
announced the signing of a licensing agreement for the rights to commercialize adefovir
dipivoxil, Gilead's investigational antiviral for the treatment of chronic hepatitis B, in Asia, Latin America and other territories. 

        Under
the agreement, Gilead will retain rights to adefovir dipivoxil in the United States, Canada, Eastern and Western Europe, Australia and New Zealand. GSK will receive exclusive
rights to adefovir dipivoxil solely for the treatment of hepatitis B in all countries outside of the Gilead territories, the most significant of which include China, Korea, Japan and Taiwan. In these
markets, GSK plans to develop adefovir dipivoxil for patients with chronic hepatitis B who are naïve to therapy as well as for those patients who have developed lamivudine-resistant
HBV. 

        GSK
has agreed to pay Gilead an up-front licensing fee of $10 million, and Gilead is entitled to receive additional cash payments of up to $30 million upon
achievement of certain milestones. GSK also will pay Gilead an undisclosed royalty on net sales of adefovir dipivoxil. GSK will have full responsibility for development and commercialization of
adefovir dipivoxil in the covered territories. 

        "GSK
will be a strong sales and marketing partner for Gilead, and we are very pleased to have completed this agreement," said John C. Martin, PhD, President and Chief Executive Officer
of Gilead. "The international GSK team has made significant headway in building a HBV market and establishing customer relationships, especially in Asia where chronic hepatitis B is more prevalent
than in any other region of the world. Together, Gilead and GSK can help meet the urgent unmet medical needs of patients with chronic hepatitis B by rapidly advancing the development of adefovir
dipivoxil in this market." 

        Adefovir
dipivoxil is in Phase III development by Gilead for the treatment of chronic hepatitis B. Dosed as one oral 10 mg tablet, once daily, adefovir dipivoxil belongs to a novel class
of drugs called nucleotide analogues, which are designed to work by blocking HBV DNA polymerase, an enzyme involved in the replication of HBV in the body. 

        Gilead
recently filed a New Drug Application (NDA) for adefovir dipivoxil with the U.S. Food and Drug Administration (FDA) and a Marketing Authorisation Application (MAA) with the
European Medicines Evaluation Agency (EMEA). Based on the unmet medical needs of patients with chronic hepatitis B, Gilead has requested a priority, or six month, review in the United States, and
anticipates the European review of its MAA to be completed in 2003. The applications are supported by data from Phase III studies in hepatitis B "e" antigen-positive patients, hepatitis B "e"
antigen-negative patients 

F-1

 

and chronic hepatitis B patients with lamivudine-resistant HBV. Gilead is completing Phase I clinical trials for adefovir dipivoxil in China as part of a clinical trial program to support marketing
approval there. 

        Data
from two pivotal studies and a number of supportive studies of adefovir dipivoxil in a variety of chronic hepatitis B patient populations were presented in April at the
37th Annual Meeting of the European Association for the Study of the Liver (EASL). Presentations included data from studies of hepatitis B "e" antigen-positive patients, precore mutant
(hepatitis B "e" antigen-negative) patients, those with lamivudine-resistant HBV, patients post-liver transplantation and patients co-infected with HIV. Since 1999, Gilead has
provided access to adefovir dipivoxil through Study 435 to approximately 400 chronic hepatitis B patients with lamivudine-resistant HBV who are wait listed for or have received a liver transplant.
Adefovir dipivoxil is an investigational compound and has not yet been determined safe or efficacious in humans. 

        "Adefovir
dipivoxil will be a valuable addition to our portfolio," said Howard Pien, President, Pharmaceuticals International, GlaxoSmithKline. "Our experience of working with
hepatologists over many years, first with vaccines and more recently with lamivudine confirms that this is a complex disease. We hope adefovir dipivoxil will offer a valuable new treatment option to
physicians and will help improve the quality and duration of life of millions of hepatitis B patients across Asia, Latin America and other international areas." 

        GSK
markets Zeffix in 50 countries worldwide, including China (as Heptodin), the United States (as Epivir-HBV) and Europe, for the treatment of chronic hepatitis B. More than
200,000 patients have been treated with Zeffix since its first launch in November 1998. With total 2001 sales of US$148 million, Zeffix is currently the only licensed oral antiviral
treatment for chronic hepatitis B worldwide. The GSK vaccine unit also develops Energix-B® hepatitis B vaccine (Recombinant) and Twinrix® combined hepatitis A
(inactivated virus) and hepatitis B vaccine (genetically derived surface antigen). 

Chronic Hepatitis B  

        Worldwide, there are approximately 350 million chronic carriers of hepatitis B, of which approximately one million die each year from complications of the
disease, making chronic hepatitis B the 10th most common cause of death globally. Complications of chronic hepatitis B include cirrhosis (scarring of the liver), liver failure and
primary liver cancer (hepatocellular carcinoma). Between one-quarter and one-third of people with chronic hepatitis B are expected to develop progressive liver disease.
Patients infected with the precore mutant strain of hepatitis B may be predisposed to more severe and progressive liver injury. Precore mutant hepatitis B infects up to approximately 50 percent
of the 350 million chronic hepatitis B carriers worldwide and is most prevalent in countries of the Mediterranean and Southeast Asia, where between 30-80 percent of chronic
hepatitis B patients are estimated to be infected with this strain. 

Early Access Program Initiated  

        In March 2002, Gilead announced the initiation of an early access program in the United States to provide adefovir dipivoxil to chronic hepatitis B
patients with lamivudine-resistant HBV. Similar programs are open in Canada, Spain and France, the later of which has enrolled more than 320
patients to date. Additional programs in Australia and other countries in Europe will open in the coming months as appropriate regulatory approvals are obtained. For more information regarding the
adefovir dipivoxil early access program, or to request program registration materials, physicians may call 1-800-GILEAD-5 or
1-650-574-3000. 

F-2

 

        GlaxoSmithKline—one
of the world's leading research-based pharmaceutical and healthcare companies—is committed to improving the quality of human life by enabling
people to do more, feel better and live longer. 

        Gilead
Sciences, Inc. is a biopharmaceutical company that discovers, develops and commercializes therapeutics to advance the care of patients suffering from
life-threatening diseases worldwide. The company has five marketed products and focuses its research and clinical programs on anti-infectives, including antivirals, antifungals
and antibacterials. Headquartered in Foster City, CA, Gilead has operations in the United States, Europe and Australia. 

        Statements
contained herein that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from
those projected or suggested in any forward-looking statements made by Gilead or GlaxoSmithKline and that could affect whether and when Gilead would receive any milestone payments or royalties under
the agreement. These factors include, but are not limited to: (i) the ability of GlaxoSmithKline to successfully complete clinical development where required in its licensed territories,
including China and Japan, (ii) the ability of GlaxoSmithKline to obtain required governmental approvals, and (iii) the ability of GlaxoSmithKline to successfully commercialize adefovir
dipivoxil in its licensed territories. Additional factors that would cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in each
company's filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" for Gilead on Form 10-K for the year ended
December 31, 2001. 

#
# # 

Zeffix, Energix-B and Twinrix are registered trademarks of GlaxoSmithKline.  

For additional information, visit either of the companies' web sites at www.gilead.com or www.gsk.com 

F-3

  

Issued- April xx, 2002, London 

 
 

..........GLAXOSMITHKLINE AND GILEAD ANNOUNCE INTERNATIONAL LICENSING AGREEMENT TO COMMERCIALISE ADEFOVIR DIPIVOXIL FOR THE TREATMENT OF CHRONIC  HEPATITIS B

GSK Receives Exclusive Rights in Asia, Latin America and Other Territories  

        GlaxoSmithKline (NYSE: GSK) and Gilead Sciences, Inc. (Nasdaq: GILD) today announced the signing of a licensing agreement to commercialise adefovir
dipivoxil, an antiviral treatment for chronic hepatitis B currently in phase 3 development. 

        Under
the terms of the agreement, GSK will receive exclusive rights to develop and commercialise adefovir dipivoxil for the treatment of hepatitis B in markets across Asia, Latin America
and other territories, the most significant of which include China, Korea, Japan and Taiwan. In these markets, GSK plans to develop adefovir dipivoxil as a treatment for patients with chronic
hepatitis B, including patients who are naïve to therapy as well as those who have developed lamivudine-resistant HBV. GSK will be responsible for clinical development of adefovir
dipivoxil in the covered territories. Gilead will retain rights to adefovir dipivoxil in the United States, Canada, Eastern and Western Europe, Australia and New Zealand. GSK has agreed to pay Gilead
an up-front licensing fee of $10 million, and Gilead will receive additional cash payments of up to $30 million upon achievement of certain milestones. In addition, GSK will
pay to Gilead a royalty on net sales of adefovir dipivoxil and have full responsibility for development in its territory 

        'Adefovir
dipivoxil will be a valuable addition to our portfolio' said Howard Pien, President, Pharmaceuticals International, GlaxoSmithKline. "Our experience of working with
hepatologists over many years, first with vaccines and more recently with lamivudine confirms that this is a complex disease. We hope adefovir dipivoxil will offer a valuable new treatment option to
physicians and will help improve the quality and duration of life of millions of hepatitis B patients across Asia, Latin America and other international areas." 

        "GSK
will be a strong sales and marketing partner for Gilead, and we are very pleased to have completed this agreement," said John C. Martin, PhD, President and Chief Executive Officer
of Gilead. "The international GSK team has made significant headway in building a HBV market and establishing customer relationships, especially in Asia where chronic hepatitis B is more prevalent
than in any other region of the world. Together, Gilead and GSK can help meet the urgent unmet medical needs of patients with chronic hepatitis B by rapidly advancing the development of adefovir
dipivoxil in this market." 

        Worldwide,
there are approximately 350 million chronic carriers of hepatitis B, of which approximately one million die each year from complications of the disease, making chronic
hepatitis B the 10th most common cause of death globally. Complications of chronic hepatitis B include cirrhosis (scarring of the liver), liver failure and primary liver cancer
(hepatocellular carcinoma). Between one-quarter and one-third of people with chronic hepatitis B are expected to develop progressive liver disease. Patients infected with the
precore mutant strain (hepatitis B "e" antigen-negative) of hepatitis B may be predisposed to more severe and progressive liver injury. Precore mutant hepatitis B infects up to approximately
50 percent of the 350 million chronic hepatitis B carriers worldwide and is most prevalent in countries of the Mediterranean and Southeast Asia, where between
30-80 percent of chronic hepatitis B patients are estimated to be infected with this strain. 

        Adefovir
dipivoxil is in Phase III development by Gilead for the treatment of chronic hepatitis B. and was recently submitted for approval in the USA and Europe. Dosed as one oral 10 mg
tablet, once daily, adefovir dipivoxil belongs to a class of drugs called nucleotide analogues, which are designed to work by blocking HBV DNA polymerase, an enzyme involved in the replication of HBV
in the body. 

F-4

 

        GlaxoSmithKline—one
of the world's leading research-based pharmaceutical and healthcare companies—is committed to improving the quality of human life by enabling
people to do more, feel better and live longer. 

        Gilead
Sciences, Inc. is a biopharmaceutical company that discovers, develops and commercializes therapeutics to advance the care of patients suffering from
life-threatening diseases worldwide. The company has five marketed products and focuses its research and clinical programs on anti-infectives, including antivirals, antifungals
and antibacterials. Headquartered in Foster City, CA, Gilead has operations in the United States, Europe and Australia. 

        Statements contained herein that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934, that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to
differ materially from those projected or suggested in any forward-looking statements made by Gilead or GlaxoSmithKline and that could affect whether and when Gilead would receive any milestone
payments or royalties under the agreement. These factors include, but are not limited
to: (i) the ability of GlaxoSmithKline to successfully complete clinical development where required in its licensed territories, including China and Japan, (ii) the ability of
GlaxoSmithKline to obtain required governmental approvals, and (iii) the ability of GlaxoSmithKline to successfully commercialize adefovir dipivoxil in its licensed territories. Additional
factors that would cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in each company's filings with the Securities and
Exchange Commission, including those factors discussed under the caption "Risk Factors" for GlaxoSmithKline on Annual Report on Form 10-K/A for the year ended December 31,
2001.

Zeffix, Energix-B and Twinrix are registered trademarks of GlaxoSmithKline.  

        For additional information, visit either of the companies' web sites at www.gilead.com or www.gsk.com

Enquiries:  

	UK Media enquiries:	 	Martin Sutton

Alan Chandler	 	(020) 8047 5502

(020) 8047 5502
	

US Media enquiries:	
 	

Nancy Pekarek

Mary Anne Rhyne	
 	

(215) 751 7709

(919) 483 2319
	

European Analyst/Investor enquiries:	
 	

Duncan Learmouth

Anita Kidgell

Philip Thomson	
 	

(020) 8047 5540

(020) 8047 5542

(020) 8047 5543
	

US Analyst/ Investor enquiries:	
 	

Frank Murdolo

Tom Curry	
 	

(215) 751 7002

(215) 751 5419
	

Gilead Media enquiries	
 	

Amy Flood	
 	

(650) 522-5643
	

Gilead Investor enquiries	
 	

Susan Hubbard	
 	

(650) 522-5715

GSK/Gilead Agreement for Adefovir Dipivoxil—Background  

Clinical Development  

        Gilead recently filed a New Drug Application (NDA) for adefovir dipivoxil with the U.S. Food and Drug Administration (FDA) and a Marketing Authorisation
Application (MAA) with the European Medicines Evaluation Agency (EMEA). Based on the unmet medical needs of patients with chronic hepatitis B, Gilead has requested a priority, or six month, review in
the United States, and anticipates the European review of its MAA to be completed in 2003. The applications are supported by data from 

F-5

 

Phase III studies in hepatitis B "e" antigen-positive patients, hepatitis B "e" antigen-negative patients and chronic hepatitis B patients with lamivudine-resistant HBV. Gilead is completing Phase I
clinical trials for adefovir dipivoxil in China as part of a clinical trial program to support marketing approval there. 

        Data
from two pivotal studies and a number of supportive studies of adefovir dipivoxil in a variety of chronic hepatitis B patient populations were presented in April at the
37th Annual Meeting of the European Association for the Study of the Liver (EASL). Presentations include data from studies of hepatitis B "e" antigen-positive patients, precore mutant
(hepatitis B "e" antigen-negative) patients, those with lamivudine-resistant HBV, patients post-liver transplantation and patients co-infected with HIV. Since 1999, Gilead has
provided access to adefovir dipivoxil through Study 435 to approximately 400 chronic hepatitis B patients with lamivudine-resistant HBV who are wait listed for or have received a liver transplant.
Adefovir dipivoxil is an investigational compound. 

GSK and Hepatitis B  

        GSK markets Zeffix in 50 countries worldwide, including China (as Heptodin), the United States (as Epivir-HBV) and Europe, for the treatment of
chronic hepatitis B. More than 200,000 patients have been treated with Zeffix since its first launch in November 1998. With total 2001 sales of US$148 million, Zeffix is currently the
only licensed oral antiviral treatment for chronic hepatitis B worldwide. The GSK vaccine unit has also developed and currently markets Energix-B® hepatitis B vaccine
(Recombinant) and Twinrix® combined hepatitis A (inactivated virus) and hepatitis B vaccine (genetically derived surface antigen). 

Early Access Program Initiated  

        In March 2002, Gilead announced the initiation of an early access program in the United States to provide adefovir dipivoxil to chronic hepatitis B
patients with lamivudine-resistant HBV. Similar programs are open in Canada, Spain and France, the later of which has enrolled more than 320 patients to date. Additional programs in Australia and
other countries in Europe will open in the coming months as appropriate regulatory approvals are obtained. 

        For
more information regarding the adefovir dipivoxil early access program, or to request program registration materials, physicians may call
1-800-GILEAD-5 or 1-650-574-3000. 

        Statements
contained herein that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from
those projected or suggested in any forward-looking statements made by Gilead or GlaxoSmithKline and that could affect whether and when Gilead would receive any milestone payments or royalties under
the agreement. These factors include, but are not limited to: (i) the ability of GlaxoSmithKline to successfully complete clinical development where required in its licensed territories,
including China and Japan, (ii) the ability of GlaxoSmithKline to obtain required governmental approvals, and (iii) the ability of GlaxoSmithKline to successfully commercialize adefovir
dipivoxil in its licensed territories. Additional factors that would cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in each
company's filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" for GlaxoSmithKline on Annual Report on Form 10-K/A
and for Gilead on Form 10-K for the year ended December 31, 2001. 

 
 

# # #    
  

F-6

  

 
 

EXHIBIT G    
    
    COMMITTEE MEMBERS    
  

	Joint Committee:	 	 
	

GSK:	
 	
[ * ]	
 	

 
	
Gilead:	
 	
[ * ]	
 	

 
	
Clinical Development Committee:	
 	

 
	

GSK:	
 	
[ * ]	
 	

 
	
Gilead:	
 	
[ * ]	
 	

 
	
Marketing Committee:	
 	

 
	

GSK:	
 	
[ * ]	
 	

 
	
Gilead:	
 	
[ * ]	
 	

 

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

G-1

QuickLinks

EXHIBIT 10.39

LICENSING AGREEMENT BY AND BETWEEN GILEAD WORLD MARKETS, LIMITED AND GLAXO GROUP LIMITED

Table of Contents

EXHIBIT 10.39

LICENSING AGREEMENT

RECITALS

ARTICLE 1 DEFINITIONS

ARTICLE 2 MANAGEMENT

ARTICLE 3 DEVELOPMENT

ARTICLE 4 REGULATORY

ARTICLE 5 COMMERCIALIZATION

ARTICLE 6 DILIGENCE

ARTICLE 7 LICENSES

ARTICLE 8 MANUFACTURE AND SUPPLY

ARTICLE 9 COMPENSATION

ARTICLE 10 INTELLECTUAL PROPERTY

ARTICLE 11 REPRESENTATIONS AND WARRANTIES

ARTICLE 12 INDEMNIFICATION

ARTICLE 13 RECORDS; AUDITS; PUBLICATIONS

ARTICLE 14 CONFIDENTIALITY

ARTICLE 15 TERM AND TERMINATION

ARTICLE 16 DISPUTE RESOLUTION

ARTICLE 17 MISCELLANEOUS

EXHIBIT A CURRENT GILEAD TRIALS

EXHIBIT B GILEAD NAMES AND LOGO; POTENTIAL GILEAD PRODUCT MARK

EXHIBIT C COUNTRIES OF THE GILEAD TERRITORY

EXHIBIT D OTHER CLINICAL TRIAL AGREEMENTS

EXHIBIT E SAFETY DATA EXCHANGE PROTOCOL Safety monitoring of adefovir dipivoxil between Global Clinical Safety & Pharmacovigilance, GlaxoSmithKline And Global Drug Safety, Gilead Sciences

EXHIBIT F PRESS RELEASE

GILEAD AND GLAXOSMITHKLINE ANNOUNCE INTERNATIONAL LICENSING AGREEMENT FOR INVESTIGATIONAL CHRONIC HEPATITIS B DRUG ADEFOVIR DIPIVOXIL

.......... GLAXOSMITHKLINE AND GILEAD ANNOUNCE INTERNATIONAL LICENSING AGREEMENT TO COMMERCIALISE ADEFOVIR DIPIVOXIL FOR THE TREATMENT OF CHRONIC HEPATITIS B

# # #

EXHIBIT G COMMITTEE MEMBERSQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.1    
  

EXECUTION COUNTERPART  

AMENDMENT NO. 1

TO

THIRD AMENDED AND RESTATED

CREDIT AGREEMENT  

        AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 7, 2002 among: UNITED STATIONERS SUPPLY CO., a corporation duly organized
and validly existing under the laws of the State of Illinois (together with its successors and assigns, the "Company"); UNITED STATIONERS INC., a
corporation duly organized and validly existing under the laws of the State of Delaware (together with its successors and assigns, the "Guarantor" and,
together with the Company, the "Obligors"); and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), as agent for the lenders party to the
Credit Agreement referred to below (in such capacity, together with its successors in such capacity, the "Administrative Agent"). 

        The
Company, the Guarantor, the lenders party thereto (the "Lenders") and the Administrative Agent are parties to a Third Amended and
Restated Credit Agreement dated as of June 29, 2000 (as amended, modified and supplemented and in effect, the "Credit Agreement"), providing,
subject to the terms and conditions thereof, for extensions of credit (by making of loans and issuing letters of credit) to be made by the Lenders to the Company. 

        The
Obligors have requested certain amendments to the Credit Agreement and, accordingly, the parties hereto hereby agree as follows: 

        Section 1.
Definitions. Terms defined in the Credit Agreement are used herein as defined therein. 

        Section 2.  Amendment. Effective as provided in Section 3 below, the Credit Agreement shall be amended as follows: 

        2.01.
References in the Credit Agreement (including references to the Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby",
"herein" and "hereof") shall be deemed to be references to the Credit Agreement as amended hereby. 

        2.02.
Section 1.01 of the Credit Agreement is hereby amended by adding the following new definitions (to the extent not already included in said Section 1.01) and inserting
the same in the appropriate alphabetical locations and by amending in their entirety the following definitions (to the extent already included in said Section 1.01), as follows: 

        "Amendment No. 1 Effective Date" shall mean the date as of which Amendment No. 1 dated as of May 7, 2002 to this
Agreement shall become effective. 

        "Permitted Investments" shall mean: (a) direct obligations of the United States of America, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 90 days from the date of acquisition
thereof; (b) certificates of deposit issued by any bank or trust company organized under the laws of the United States of America or any state thereof and having capital, surplus and undivided
profits of at least $500,000,000, maturing not more than 90 days from the date of acquisition thereof; (c) commercial paper rated A-1 or better or P-1 by
Standard & Poor's Ratings Services ("S&P") or Moody's Investors Services, Inc.
("Moody's"), respectively, maturing not more than 90 days from the date of acquisition thereof; and (d) money market funds that
(i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody's and (iii) have portfolio assets of at least $5,000,000,000; in each case so long as the same (x) provide for the payment of 

 

principal and interest (and not principal alone or interest alone) and (y) are not subject to any contingency regarding the payment of principal or interest. 

        2.03.
The last sentence of Section 1.02(a) of the Credit Agreement is hereby amended to read in its entirety as follows: 

        "Notwithstanding
the foregoing, all calculations made for the purpose of determining compliance with the financial covenants contained in this Agreement shall be prepared utilizing the
first-in-first-out basis of inventory valuation." 

        2.04.
Section 2.10(d) of the Credit Agreement is hereby amended to read in its entirety as follows: 

        (d)  Sale of Assets. Without limiting the obligation of the Company to obtain the consent of the Majority Lenders pursuant to
Section 9.05 hereof to any Disposition not otherwise permitted hereunder, in the event that the Net Available Proceeds of any Disposition occurring after the Amendment No. 1 Effective
Date (herein, the "Current Disposition"), and of all prior Dispositions occurring after the Amendment No. 1 Effective Date as to which a
prepayment has not yet been made under this Section 2.10(d), shall exceed $15,000,000 then, no later than five Business Days prior to the occurrence of the Current Disposition, the Company will
deliver to the Lenders a statement, certified by a Responsible Officer of the Company, in form and detail reasonably satisfactory to the Administrative Agent, of the amount of the anticipated Net
Available Proceeds of the Current Disposition and of all such prior Dispositions as to which a prepayment has not yet been made under this Section 2.10(d) and will prepay, upon receipt of such
Net Available Proceeds, Loans (and/or provide cover for Letter of Credit Liabilities as specified in paragraph (g) below), and the Commitments shall be subject to automatic reduction, in an
aggregate amount equal to 100% of the Net Available Proceeds of the Current Disposition and such prior Dispositions as to which a prepayment has not been made under this Section 2.10(d) in
excess of $15,000,000, such prepayment and reduction to be effected in each case in the manner and to the extent specified in paragraph (f) of this Section 2.10. Notwithstanding the
foregoing, neither the Disposition of Receivables by the Company or any of its Subsidiaries to the Receivables Company or to the United Stationers Receivables Master Trust in connection with the
Receivables Financing nor the Disposition for fair value of any Part A Property shall be a "Disposition" for purposes of the preceding sentence. If, however, any Part B Property is
disposed of within one year prior to or after the Disposition of Part A Property located in the same geographical area, the Company shall, within one year of the last of such Dispositions,
apply the Net Available Proceeds of such Dispositions to (i) the purchase or construction of a replacement facility or (ii) the prepayment of the Loans (and/or the provision of cover for
Letter of Credit Liabilities as specified in paragraph (g) below) and the reduction of Commitments as provided above." 

        2.05.
Section 8.09 of the Credit Agreement is hereby amended by deleting the last sentence of such Section in its entirety. 

        2.06.
Clause (v) of Section 9.05(c) of the Credit Agreement is hereby amended to read in its entirety as follows: 

        "(v) other
Properties sold for fair value, provided that at least 75% of the proceeds of each such sale shall be received in cash
and the aggregate Net Available Proceeds received from the sale of such Properties and all other Properties sold pursuant to this clause (v) after the Amendment No. 1 Effective Date
shall not exceed $15,000,000." 

        2.07.
Clause (i) of Section 9.05(d) of the Credit Agreement is hereby amended in its entirety to read as follows: 

        "(i) any
Subsidiary (including TOPCO) of the Company may be merged or consolidated with or into: (x) the Company if the Company shall be the continuing or surviving
corporation or 

2

 

(y) any other such Subsidiary; provided that if any such transaction shall be between a Subsidiary and a Wholly-Owned Subsidiary, the
Wholly-Owned Subsidiary shall be the continuing or surviving corporation;" 

        2.08.
Section 9.08(p) is hereby amended by deleting the reference therein to "$10,000,000" and replacing it with "$20,000,000". 

        2.09.
Clause (iii) of Section 9.09(a) of the Credit Agreement is hereby amended to read in its entirety as follows: 

        "(iii) acquire
shares of its common stock in an aggregate amount not exceeding $150,000,000," 

        2.10.
Part A of Schedule IV of the Credit Agreement is hereby supplemented by adding thereto the properties identified on Schedule A attached to this Amendment
No. 1 and each reference in the Credit Agreement to "Part A Property" shall be deemed to include the properties described on Schedule A attached to this Amendment No. 1. 

        Section 3.  Effectiveness. The amendments to the Credit Agreement set forth in Section 2 above shall become effective as of
the date hereof upon (i) receipt by the Administrative Agent of (x) the written consent of the Majority Lenders to this Amendment No. 1 and (y) one or more counterparts of
this Amendment No. 1 duly executed by each party hereto and (ii) payment by the Company of the amendment fee agreed in writing to be paid in connection with this Amendment No. 1
to the Administrative Agent for account of each Lender entitled thereto. 

        Section 4.
Miscellaneous. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This
Amendment No. 1 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this
Amendment No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed by, and construed in accordance with, the law of the State of New York. 

3

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered as of the day and year first above written. 

	 	 	UNITED STATIONERS SUPPLY CO.
	

 	
 	

By:	
 	

/s/  BRIAN S. COOPER      
 Brian S. Cooper
	 	 	Title:	 	Treasurer
	

 	
 	
UNITED STATIONERS INC.
	

 	
 	

By:	
 	

/s/  KATHLEEN S. DVORAK      
 Kathleen S. Dvorak
	 	 	Title:	 	CFO
	

 	
 	
ADMINISTRATIVE AGENT
	

 	
 	
JPMORGAN CHASE BANK,

as Administrative Agent
	

 	
 	

By:	
 	

/s/  RANDOLPH E. CATES      
 Randolph E. Cates
	 	 	Title:	 	Vice President

4

 
 

SCHEDULE A    
  

        Supplement to Schedule IV  

Georgia

Norcross—6448
Best Friend Road 

Ohio

Sharonville
(Cincinnati area)—9775 International Blvd. 

 
 

AUTHORIZATION AND CONSENT:    
  

        The undersigned Lender party to the Third Amended and Restated Credit Agreement dated as of June 29, 2000 with United Stationers Supply Co. referred to
above hereby authorizes and directs the Administrative Agent to execute and deliver on behalf of such Lender Amendment No. 1 to the Third Amended and Restated Credit Agreement substantially in
the form attached hereto. 

	Full Name of Lender:	
	 	 

	

By:	

	

 
	

Title:	

	

 
	

Name:	

	

 
	

Date:	

	

 

QuickLinks

Exhibit 4.1

SCHEDULE A

AUTHORIZATION AND CONSENT

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