\n[<\/p>\n ]<\/p>\n
<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
– —————————–<\/p>\n
(1) Each of the milestone payments provided for in this Section 5.2 shall
\nbe payable no more than once and shall encompass all Products taken together.<\/p>\n
(2) Payable regardless of the territory in which such trial is conducted.
\nThis milestone shall be satisfied in any event by a decision to proceed to a
\nPhase II clinical trial in influenza-infected patients.<\/p>\n
(3) Payable for any such trial that would qualify as a Phase III Clinical
\nTrial for a U.S. NDA, even if such trial is conducted outside the U.S.<\/p>\n
(4) [<\/p>\n
]<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
14.<\/p>\n
5.3 ROYALTY PAYMENTS; ADJUSTMENTS.<\/p>\n
(a) ROYALTY ON PRODUCTS. Roche shall pay Gilead a royalty
\npayment on Net Sales of Product sold by Roche, its Affiliates or licensees (the
\n“Royalty”) according to the following rates, as adjusted in accordance with
\nsubsections (c), (d), (e) and (f) below:<\/p>\n
(i) [ ] of worldwide Net Sales for the
\nfirst [ ] in Net Sales in a given calendar year;<\/p>\n
(ii) [ ] of worldwide Net Sales for the
\n[ ] in Net Sales during the same calendar year; and<\/p>\n
(iii) [ ] of worldwide Net Sales
\nfor Net Sales in excess of [ ] during the same calendar year.<\/p>\n
By way of example, if, in the year 2005, Roche’s total Net Sales equal
\n[ ] then the Royalty payable to Gilead hereunder shall equal
\n[ ] calculated in the following manner:<\/p>\n
AMOUNT OF NET SALES ROYALTY RATE ROYALTY PAYMENT<\/p>\n
First [ ]<\/p>\n
Next [ ]<\/p>\n
Next [ ]
\n —————
\n Total Royalty [ ]<\/p>\n
(b) ROYALTY PAYMENT SCHEDULE. For the first calendar year of
\nNet Sales, the Royalty shall be paid to Gilead in accordance with the schedule
\nset forth in subsection (a) above. Beginning in the second calendar year of Net
\nSales, Roche’s first three (3) quarterly payments shall be based upon the
\naverage royalty rate payable with respect to the previous calendar year.
\nFollowing the fourth (4th) quarter of each calendar year, Roche shall pay Gilead
\nthe Royalty owing for the full year minus the aggregate payments made for the
\nfirst three quarters or, if the aggregate payments made for the first three
\nquarters exceed the Royalty owing for the full year, Gilead shall refund the
\ndifference to Roche.<\/p>\n
(c) UNLICENSED COMPETITION ADJUSTMENT. Except as provided
\nbelow, if a Third Party not under license from Roche sells a Generically
\nEquivalent Product in a country or countries in which Roche, an Affiliate or
\nsublicensee is selling<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
15.<\/p>\n
Product and the monetary value of such Third Party’s sales of Generically
\nEquivalent Product, as determined by a reliable Third Party and measured in a
\nmanner as near as practicable to the sales of Product in the same country,
\nare equal to or greater than [ ] of the monetary value of
\nthe Adjusted Gross Sales of Product in such country or countries, then the
\nroyalty payable by Roche to Gilead on Net Sales of Product in such
\ncountry(ies) shall be reduced by [ ] of the Royalty set
\nforth in subsection (a), until such time as the Third Party’s sales drop
\nbelow [ ] of the Adjusted Gross Sales in such
\ncountry(ies). The royalty reduction provided for in this paragraph (c) shall
\nbe inapplicable during any period of time that Gilead is diligently pursuing
\nlitigation to enforce Gilead Patent Rights or Joint Patent Rights to stop the
\nsale of the Generically Equivalent Product in question in such country.<\/p>\n
(d) COST OF GOODS SOLD ADJUSTMENT. Except as provided below,
\nif the Cost of Goods Sold for a Product exceeds [ ] of the
\nNet Sales of such Product in any particular calendar quarter, each measured
\non a worldwide basis, then the Royalty payable for such quarter shall be
\nreduced by [ ] of the amount by which such Cost of Goods Sold exceeds
\n[ ] of Net Sales. Any Royalty reductions effected under this
\nparagraph (d) shall be known as a “COGS Adjustment Amount”, and shall become
\npayable to Gilead in the future in any time period(s) in which the Cost of
\nGoods Sold for the Product in question is less than [ ] of the
\nNet Sales of such Product, each measured on a worldwide basis. In such time
\nperiods, Gilead shall recover [ ] of the amount by which the Cost of
\nGoods Sold is less than [ ] of Net Sales, until it has fully
\nrecovered the COGS Adjustment Amount, without interest. This paragraph (d)
\nshall not effect any reduction in the Royalty rate to less than [
\n ] of the rate set forth in paragraph (a), and shall be inapplicable with
\nrespect to Product sales as to which adjustment is separately provided for
\nunder paragraph (c) or (e).<\/p>\n
(e) SECONDARY PATENT COVERAGE. The Royalty rates set forth in
\nparagraph (a) above are based on the assumption that one or more Valid Claims of
\nthe Gilead Patent Rights, Roche Patent Rights or Joint Patent Rights, if any,
\napplicable to the Product in question will Cover the composition of matter of
\nthe neuraminidase inhibitor which is an active ingredient in the Product. If,
\nhowever, one or more Gilead Patent Rights, Roche Patent Rights or Joint Patent
\nRights Cover the manufacture, use or sale of such Product, but there is no Valid
\nClaim Covering the composition of matter of the influenza neuraminidase
\ninhibitor which is an active ingredient in the Product, then the following
\nRoyalty rates shall apply. In the event a sale of a particular Product in a
\nparticular country might be described in more than one of the following
\nsubparagraphs, the highest royalty rate shall apply to such sale.<\/p>\n
(i) In any event, regardless of patent Coverage, each
\nProduct shall be royalty-bearing at the rate set forth in paragraph (a), subject
\nto<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
16.<\/p>\n
adjustment as provided elsewhere under this Agreement but not under this
\nparagraph (e), for the first [ ] following First Commercial Sale
\nin each country. If following such [ ] period there is no patent
\nCoverage for the manufacture, use or sale of the Product in a particular
\ncountry, sales of such Product shall thereafter be royalty-free in that
\ncountry. If, however, after such [ ] period there is patent Coverage
\nfor the manufacture, use or sale of the Product, but not the composition of
\nmatter of the influenza neuraminidase inhibitor which is an active ingredient
\nof the Product, then the royalties set forth in Sections 5.3(e)(ii)-(v) shall
\napply.<\/p>\n
(ii) If the manufacture, use or sale of the Product (but not
\nthe composition of matter of the influenza neuraminidase inhibitor which is an
\nactive ingredient of the Product) is Covered by a Gilead Patent Right, then the
\nroyalty rates set forth in paragraph (a) shall be reduced by [ ] Such
\nreduced rate shall remain subject to further reduction pursuant to paragraph
\n(c), in which case the royalty rate could be reduced to [ ] of the rate set
\nforth in paragraph (a), but there shall not be any reduction pursuant to
\nparagraph (d) or by reason of Third Party license fees as described in Section
\n10.4.<\/p>\n
(iii) If the manufacture, use, or sale of the Product
\n(but not the composition of matter of the influenza neuraminidase inhibitor
\nwhich is an active ingredient of the Product) is Covered By a Joint Patent
\nRight, then the royalty rates set forth in paragraph (a) shall be reduced to
\n[ ] of such rate. Such reduced rate shall remain subject to further
\nreduction pursuant to paragraph (c) but only to a royalty rate which is [ ]
\nof the rate set forth in paragraph (a), and there shall not be any reduction
\npursuant to paragraph (d) or by reason of Third Party license fees as
\ndescribed in Section 10.4.<\/p>\n
(iv) If the manufacture, use or sale of the Product (but
\nnot the composition of matter of the influenza neuraminidase inhibitor which
\nis an active ingredient of the Product) is Covered by a Roche Patent Right
\nbased on an invention made or obtained in connection with Roche’s work
\nrelated to Products, then the royalty rate set forth in paragraph (a) shall
\nbe reduced to [ ] of such rate. Such reduced rate shall not be subject to
\nany further reduction under this Agreement.<\/p>\n
(v) If the manufacture, use or sale of the Product (but not
\nthe composition of matter of the influenza neuraminidase inhibitor which is an
\nactive ingredient of the Product) is Covered only by a Valid Claim of a Roche
\npatent based on an invention by Roche, which invention was made independently of
\nRoche’s work related to Products resulting from the Development Plan, then no
\nroyalty shall be due under this Agreement.<\/p>\n
(f) SUMMARY OF RULES REGARDING ROYALTY ADJUSTMENTS. In
\nimplementing the various Royalty adjustment provisions of this Agreement:<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
17.<\/p>\n
(i) Royalty reductions under paragraphs (c) and (e)
\nshall be determined on a country by country basis. If a Royalty adjustment
\nis called for in one or more countries, but not worldwide, then the Royalty
\nshall be calculated initially as set forth in paragraph (a), and the Royalty
\nreduction shall be applied on the basis of the average worldwide Royalty rate
\notherwise payable.<\/p>\n
(ii) If an adjustment is made under paragraph (c)
\n(Unlicensed Competition Adjustment), then there shall not be any adjustment
\nunder paragraph (d) (Cost of Goods Sold Adjustment) with respect to the same
\nsale of Product.<\/p>\n
(iii) If an adjustment is made under paragraph (e)
\n(Secondary Patent Coverage), then such reduced rate shall still be subject to
\nfurther reduction as provided in paragraph (c) (Unlicensed Competition
\nAdjustment), in which case the Royalty could be reduced to [ ] of the rate set
\nforth in paragraph (a), but there shall not be any reduction under paragraph (d)
\n(Cost of Goods Sold Adjustment) or by reason of Third Party license fees as
\ndescribed in Section 10.4.<\/p>\n
(iv) Except as expressly provided in Sections 5.3(e)(ii)-
\n(v), the Royalty rate shall not be reduced to less than [ ] of
\nthe rate set forth in Section 5.3(a).<\/p>\n
(g) EXPIRATION OF ROYALTY OBLIGATIONS. The royalty obligations
\nset forth in subsection (a) above shall expire on a country-by-country basis
\nupon the later of: (i) in those countries in which a Gilead Patent Right, Joint
\nPatent Right or Roche Patent Right covers the manufacture, use or sale of a
\nProduct sold by Roche, its Affiliate or a licensee, the date upon which the
\nmanufacture, use or sale of such Product would no longer infringe a Valid Claim
\nof a Gilead Patent Right, Joint Patent Right or Roche Patent Right in the
\nabsence of rights thereunder; and (ii) [ ] after the date of First
\nCommercial Sale of the Licensed Product in such country(ies).<\/p>\n
5.4 SUBLICENSE. In the event Roche sublicenses its right to sell a
\nProduct, such sublicenses shall include an obligation for the sublicensee to
\naccount for and report its Net Sales of such Product on the same basis as if
\nsuch sales were Net Sales of Product by Roche, and Roche shall pay the
\napplicable Royalty to Gilead as if the Net Sales of the sublicensee were Net
\nSales of Roche.<\/p>\n
5.5 PAYMENT STRUCTURE. The effect of this Article 5 is to provide for a
\nroyalty payment to Gilead for any Product discovered, developed or acquired by
\neither party prior to the fifth anniversary of the Effective Date of this
\nAgreement, whether or not such Product is Covered by a patent and irrespective
\nof which party owns or controls any relevant patents. In establishing this
\npayment structure, the parties seek to create incentives for a highly effective
\ncollaboration relating to Products with minimum potential for disputes,
\nincluding by way of example possible disagreements related to the<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
18.<\/p>\n
allocation of work and the determination of inventorship; to recognize that
\ndiscoveries and developments related to influenza neuraminidase inhibitors after
\nthe Effective Date are likely to constitute improvements on existing Gilead
\nKnow-How, whether or not such new developments are within the scope of Gilead
\nPatents; and to provide incentive compensation to Gilead for its anticipated
\nwork during the term of this Agreement, in addition to the grant of a patent
\nlicense, to enable the rapid and effective market introduction of Products
\nworldwide. Roche acknowledges that Gilead has offered, and Roche has
\nvoluntarily declined, a royalty arrangement under which Roche would pay
\nindependent royalties on Gilead Know-How and Gilead Patent Rights, and that
\ninstead of such independent royalties Roche has negotiated the royalty
\nadjustment provisions of this Section 5.3.<\/p>\n
ARTICLE 6<\/p>\n
MANUFACTURING<\/p>\n
6.1 PRE-COMMERCIAL MANUFACTURING. It is the intention of the parties that
\ninitial pre-clinical and clinical Products, including the bulk drug substance
\ncontained therein, will be produced by Gilead, and that so long as it shall do
\nso the cost of such manufacturing will be included in Development Costs. The
\nparties also understand that as part of the Development Plan and the Budget they
\nwill cooperate to improve the manufacturing process in existence as of the
\nEffective Date. Roche may assume full control of clinical manufacturing of
\nProducts at its own expense at any time it desires upon written notice to
\nGilead, and shall in any event have the sole and exclusive responsibility for
\nthe manufacture of clinical Products not later than the commencement of Phase
\nIII Clinical Trials for the initial Product.<\/p>\n
6.2 COMMERCIAL MANUFACTURING. Roche shall be solely and exclusively
\nresponsible at its own expense for commercial manufacture of Products, either
\nitself or through Third Parties.<\/p>\n
19.<\/p>\n
ARTICLE 7<\/p>\n
MARKETING<\/p>\n
7.1 PRICING. Roche shall determine, in its sole discretion, the pricing,
\ndiscounting policy and other commercial terms relating to Products.<\/p>\n
7.2 USE OF THE GILEAD NAME. Gilead and Roche agree that the packaging and
\npromotional materials for the Product marketed by Roche and\/or Roche’s
\nsublicensees shall identify Gilead as licensor. Roche hereby acknowledges
\nGilead’s ownership of the Gilead Sciences name. Gilead hereby agrees to
\nindemnify and hold Roche harmless from any use hereunder of the Gilead Sciences
\nname which occurs with the consent of Gilead, provided that Roche provides
\nGilead prompt notice of any such claim and grants to Gilead the exclusive
\nability to defend (with the reasonable cooperation of Roche) and settle any such
\nclaim. If only one name is allowed to be in any specific item of packaging or
\npromotional material pursuant to governmental laws or regulations, then Roche
\nmay use its name alone on such item, without identifying Gilead as licensor.<\/p>\n
ARTICLE 8<\/p>\n
PAYMENTS; RECORDS; AUDIT<\/p>\n
8.1 PAYMENT; REPORT. All amounts payable to either party under this
\nAgreement shall be paid in U.S. dollars within [ ] of the end of
\neach calendar quarter or as otherwise specifically provided herein. Each
\npayment of royalties owing to Gilead shall be accompanied by a statement, on a
\ncountry-by-country basis, of the amount of gross sales, an itemized calculation
\nof Adjusted Gross Sales and Net Sales showing deductions provided for in Section
\n1.15 during such quarter, the amount of aggregate worldwide gross sales,
\nAdjusted Gross Sales and Net Sales during such quarter and on a cumulative basis
\nfor the current year and the amount of Royalty or other payments due on such
\nsales. If any Royalty reductions are claimed by Roche under this Agreement from
\nthe full rates set forth in Section 5.3(a), then the report shall set forth in
\ndetail the claimed reduction and the related facts.<\/p>\n
8.2 EXCHANGE RATE; MANNER AND PLACE OF PAYMENT. All payments due
\nhereunder from time to time shall be paid in U.S. Dollars. For purposes of
\ncomputing such payments, the Net Sales of Product in countries other than the
\nUnited States shall be converted into U.S. Dollars as computed in the central
\nRoche currency conversion system, using the average monthly rate of exchange at
\nthe time for such currencies as retrieved from the Reuters System used by Roche.
\nIf convenient for Roche, such conversion may be made initially into Swiss Francs
\nand then into U.S. Dollars for purposes of calculating the Royalty, provided
\nthat Gilead is not disadvantaged by reason<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
20.<\/p>\n
of such multiple conversions (e.g., that the conversion rates used by Roche do
\nnot reflect transaction costs of conversion). The currency conversion system
\nused by Roche shall be subject to audit by Gilead as described in Section 8.3
\nand, if not determined to be a system reflecting the fair market value of the
\ncurrencies in question, shall be modified as necessary to effect currency
\nconversion at fair market value.<\/p>\n
Notwithstanding the foregoing, if by reason of any restrictive exchange
\nlaws or regulations, Roche shall be unable to convert to U.S. Dollars the
\namount, determined as above, equivalent to the amount due by Roche hereunder,
\nthen Roche shall so notify Gilead promptly and provide an explanation of the
\ncircumstances. In such event, Roche shall make all such payments or the balance
\nthereof due hereunder and which is not paid in foreign currency as provided
\nbelow, in U.S. Dollars as soon as reasonably possible after and to the extent
\nthat such restrictive exchange laws or regulations are lifted so as to permit
\nRoche to pay amounts due under this Section 8.2 in U.S. Dollars. Roche shall
\npromptly notify Gilead if such restrictions are so lifted. At its option Gilead
\nshall meanwhile have the right to request the payment (to it or to its nominee),
\nand, upon request, Roche shall pay or cause to be paid amounts due (or such
\nportions thereof as are specified by Gilead) in the currency of any other
\ncountry designated by Gilead and legally available to Roche under the then-
\nexisting laws of regulations. Any payments shall be payable to Gilead by wire
\ntransfer at such bank in the United States as Gilead shall specify from time to
\ntime. Not less than one (1) business day prior to such wire transfer, the
\nremitting party shall telefax the receiving party advising it of the amount and
\nof the payment to be made.<\/p>\n
8.3 RECORDS AND AUDIT. Roche shall keep, and shall cause its Affiliates
\nand sublicensees to keep, complete and accurate records pertaining to the sale
\nor other disposition of Product and of the Royalty and other amounts payable
\nunder this Agreement in sufficient detail to permit Gilead to confirm the
\naccuracy of all payments due hereunder. At Gilead’s request, Roche will cause
\nits independent certified public accountants to prepare abstracts of Roche’s
\nrelevant business records for review by Gilead’s independent certified public
\naccountants. If, based on a review of such abstracts, Gilead reasonably
\nbelieves that a full audit of said business records would be necessary for the
\nconfirmation of the accuracy of all payments due hereunder, Gilead’s independent
\ncertified public accountants shall have full access to review all work papers
\nand supporting documents pertinent to such abstracts, and shall have the right
\nto discuss such documentation with Roche’s independent certified public
\naccountants. [<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
21.<\/p>\n
]
\nSuch audit rights may be exercised no more often than once a year, within three
\n(3) years after the payment period to which such records relate, upon notice to
\nRoche and during normal business hours. Gilead will bear the full cost of such
\naudit unless such audit discloses an underpayment of more than five percent (5%)
\nfrom the amount of royalties due. Roche shall promptly make up any underpayment.
\nThe terms of this Section 8.3 shall survive any termination or expiration of
\nthis Agreement for a period of three (3) years.<\/p>\n
8.4 WITHHOLDING TAXES. Any and all taxes levied on account of royalty
\npayments paid or owed from a country in which provision is made in the law or by
\nregulation for withholding will be deducted from royalty payments made to Gilead
\nhereunder. Roche shall cooperate with Gilead to claim exemption from such
\ndeductions or withholdings under any double taxation or similar agreement in
\nforce from time to time. In addition, Roche shall cooperate with Gilead in all
\nproper respects to minimize any taxes on royalties hereunder. If Roche makes
\nany payment without reduction for withholding and it later transpires that an
\namount of tax should have been withheld on such royalty payment (“underwithheld
\ntax”), Roche shall be entitled to recover the underwithheld tax by an additional
\nwithholding from any payment due to Gilead under this Agreement. Similarly, if
\nRoche withholds an amount of tax which is later determined to have not been due,
\nRoche shall reimburse Gilead for such over withheld amounts. Gilead shall have
\nthe right to audit correspondence and records relating to such tax issues on the
\nsame terms as described in Section 8.3 above.<\/p>\n
ARTICLE 9<\/p>\n
TERM AND TERMINATION<\/p>\n
9.1 TERM. The term of this Agreement shall commence upon the Effective
\nDate and, unless sooner terminated as provided in this Article 9, expire on the
\nexpiration of royalty obligations set forth herein.<\/p>\n
9.2 LICENSES UPON EXPIRATION. In the event that the Agreement expires as
\nset forth in Section 9.1 above without early termination, the license granted
\nunder Section 2.1 with respect to the Gilead Patents and Gilead Know-How shall
\nautomatically become a non-exclusive, irrevocable, fully-paid license to use
\nand\/or sublicense the use of Gilead Know-How to manufacture, use and sell
\nProducts in each country where such license had previously been in effect. In
\nthe event one or more countries are eliminated from the <\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
22.<\/p>\n
scope of the Roche license pursuant to Section 4.2 or 9.6, the license to
\nRoche in this Section 9.2 shall not apply to such countries.<\/p>\n
9.3 TERMINATION FOR BREACH. Each party shall have the right to terminate
\nthis Agreement and its obligations hereunder for material breach by the other
\nparty, which breach remains uncured for ninety (90) days after written notice is
\nprovided to the breaching party, or in the case of an obligation to pay a
\nRoyalty or other payments owing under this Agreement, which breach remains
\nuncured for thirty (30) days after written notice to the breaching party unless
\nthere exists a bona fide dispute as to whether such Royalty or other payments
\nare owing. Notwithstanding any termination under this Section 9.3, any
\nobligation to pay Royalty or other payments which had accrued or become payable
\nas of the date of termination shall survive termination of this Agreement.<\/p>\n
9.4 TERMINATION FOR GILEAD’S BREACH. In the event Roche terminates this
\nAgreement pursuant to Section 9.3 above, all licenses granted to Roche under
\nthis Agreement shall survive, subject to Roche’s continued obligation to pay
\nRoyalties to Gilead hereunder. Roche shall retain all of its rights to bring an
\naction against Gilead under Article 14, including all of its rights for recovery
\nof damages.<\/p>\n
9.5 PRODUCT REVERSION. In the event Gilead terminates this Agreement
\npursuant to Section 9.3 above, or Roche terminates this Agreement pursuant to
\nSection 9.6, all licenses granted to Roche under Section 2.1 hereof shall
\nterminate, all rights to Products shall automatically revert to Gilead, and
\nRoche shall cooperate with Gilead in all respects to effect the prompt and
\nefficient transfer to Gilead of Product development and marketing activities.
\nIn the event of such termination, Roche hereby assigns to Gilead all right,
\ntitle and interest in and to all regulatory filings and approvals pertaining
\nto Products. In addition, contingent upon such termination, Roche hereby
\ngrants to Gilead an exclusive, royalty-free license under the Roche Patents
\nand the Roche Know-How which are necessary or useful for the manufacture, use
\nor sale of the Product(s) as such product(s) exist as of the date of
\ntermination. Gilead’s rights to practice such Roche technology shall be
\nlimited exclusively to the purpose of development and commercialization of
\nproducts that would be Products hereunder. If Roche terminates its rights in
\none or more countries under Section 9.6, or loses its rights in one or more
\ncountries pursuant to Section 4.2, this Section 9.5 shall apply only in the
\ncountries in which such termination is effective. If such termination occurs
\non less than a worldwide basis, Roche shall (i) supply the requirements of
\nGilead or its subsequent licensee for Product (in bulk or finished form), or
\nintermediates of such Product, at Roche’s Cost of Goods Sold, so long as
\nRoche manufactures or procures the Product or intermediate for its own
\naccount, and (ii) at Gilead’s request, assist reasonably in the transfer of
\nmanufacturing processes to new suppliers. If such termination occurs on a
\nworldwide basis, then Roche shall (i) provide such supply, to the extent it
\nhad established it for its own account prior to such termination, and (ii) at
\nGilead’s request, assist reasonably in <\/p>\n
23.<\/p>\n
the transfer of manufacturing processes to new suppliers. Gilead agrees that
\nin the event this Section 9.5 comes into effect, it will use diligent efforts
\nto effect the transfer of Product manufacturing activities to Third Parties
\nas soon as practicable. Roche’s supply obligation under this Section 9.5
\nshall in any event not continue for more than two (2) years after such
\ntermination.<\/p>\n
9.6 TERMINATION BY ROCHE FOR CONVENIENCE. Roche shall also have the
\nright in its discretion to terminate this Agreement on a worldwide basis or
\non a country by country basis, on [ ] advance written
\nnotice, provided that (i) Roche shall remain responsible for its performance
\nof this Agreement during the [ ] period following the giving of such
\nnotice, (ii) Roche shall remain responsible for the completion of any
\nclinical trials of Product which commenced prior to the giving of such
\nnotice, even if such trial continued beyond such [ ] period,
\nand (iii) on a worldwide or country by country basis, as the case may be,
\nRoche shall grant the licenses and effect the transfers provided for in
\nSection 9.5. In such event, if Gilead grants a license to a Third Party to
\nthe Product rights surrendered by Roche prior to the end of such
\n[ ] period, Gilead shall use diligent efforts to cause such
\nnew licensee to assume its PRO RATA share of the costs for which Roche is
\nresponsible under this Section 9.6 in respect of the Product rights being
\nobtained by the new licensee (where “PRO RATA” refers to the period of time
\nremaining in the [ ] notice period at the time Gilead enters
\ninto such new agreement).<\/p>\n
9.7 SURVIVAL. Articles 1, 5, 9, 10, 11, 12, 14 and 15 and Sections 3.3(b)
\nand 8.3 of this Agreement shall survive termination of this Agreement for any
\nreason (subject to any subsequent dates of termination referred to in such
\nindividual Articles).<\/p>\n
ARTICLE 10<\/p>\n
INTELLECTUAL PROPERTY<\/p>\n
10.1 OWNERSHIP OF INVENTIONS. Each party shall own any inventions made
\nsolely by its employees or agents. Inventions made jointly by employees or
\nagents of each party shall be owned jointly by the parties (“Joint Inventions”).
\nInventorship shall be determined in accordance with U.S. patent laws.<\/p>\n
10.2 PROSECUTION OF PATENTS.<\/p>\n
(a) GILEAD PATENTS. Gilead Patents shall be prosecuted
\n(including the handling of interferences) and maintained by Gilead or its
\nlicensors. Gilead shall furnish Roche with copies of draft submissions to the
\nrelevant patent authorities and will consider Roche’s comments. If Roche does
\nnot provide Gilead with comments within thirty (30) days of receipt of a draft,
\nGilead shall be free to proceed with its submission or other contemplated
\naction. Further, Gilead shall always be entitled<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
24.<\/p>\n
to proceed with any submission or other contemplated action if it determines
\ntime is of the essence, provided that Gilead makes reasonable efforts to
\ninform Roche as early as practicable and to consider its comments where
\npossible. In the event that Gilead elects not to maintain any issued patent
\nwithin the Gilead Patents or not to file any patent term extensions to the
\nGilead Patents which Roche believes are appropriate to obtain an extended
\nperiod of market exclusivity for Product, Roche shall have the right to elect
\nto have Gilead or its licensors maintain such patents or file for such patent
\nterm extensions at Roche’s sole expense. Gilead shall bear the costs
\nincurred in connection with the prosecution and maintenance of Gilead
\nPatents, except that Roche shall make a one-time nonaccountable and
\nnoncreditable payment to Gilead in the amount of [ ] within ten (10)
\ndays of the Effective Date as an additional license fee in consideration of
\nGilead’s obligation to prosecute and maintain the Gilead Patents after the
\nEffective Date.<\/p>\n
(b) ROCHE PATENTS COVERING PRODUCTS. It is anticipated that as
\npart of this collaborative development program, patents may be filed by and
\nissued to Roche that may cover compositions of matter (including formulations)
\nof Products as well as biological uses or processes for the manufacture of
\nProducts. These patents shall be prosecuted (including the handling of
\ninterferences) and maintained by Roche, at its expense. Roche shall furnish
\nGilead with copies of draft submissions to the relevant patent authorities and
\nwill consider Gilead’s comments. If Gilead does not provide Roche with
\ncomments within thirty (30) days of receipt of a draft, Roche shall be free to
\nproceed with its submission or other contemplated action. Further, Roche shall
\nalways be entitled to proceed with any submission or other contemplated action
\nif it determines time is of the essence, provided that Roche makes reasonable
\nefforts to inform Gilead as early as practicable and to consider its comments
\nwhere possible. Roche shall not abandon claims Covering Products without prior
\nnotice to and consultation with Gilead, and shall not abandon patent
\napplications covering Products without first offering assignment of such
\napplications to Gilead, which if it accepts such assignment shall thereafter
\nprosecute such applications at its sole expense and in its sole discretion. In
\nthe event such applications are assigned to Gilead, Roche shall retain a
\nnonexclusive license. Such license shall be royalty free outside of the field
\nof neuraminidase inhibitors, and shall be subject to the Royalties set forth in
\nSection 5.3 within the field of neuraminidase inhibitors.<\/p>\n
(c) JOINT PATENTS. With respect to Joint Inventions, the
\nparties shall meet and agree upon which party shall prosecute patent
\napplications Covering such Joint Invention. If either party prosecutes a patent
\napplication on a Joint Invention, such party shall bear its own internal costs,
\nand the external costs for outside counsel, filing fees, etc. shall be borne
\nequally by the parties, except as provided in the final sentence of this
\nparagraph. Except for the licenses granted herein, each party shall be entitled
\nto practice and sublicense Joint Inventions without restriction or an obligation
\nto account to the other party. Either party may disclaim its interest in any
\nparticular patent or patent<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
25.<\/p>\n
application covering a Joint Invention, in which case (i) the disclaiming party
\nshall assign its ownership interest in such patent or patent application to the
\nother party without consideration, (ii) the party which is then the sole owner
\nshall be solely responsible for all future costs of such patent or patent
\napplication, and (iii) the disclaiming party shall hold no further rights
\nthereunder, except for a nonexclusive license. Such license shall be royalty
\nfree outside of the field of neuraminidase inhibitors, and shall be subject to
\nthe Royalties set forth in Section 5.3 within the field of neuraminidase
\ninhibitors.<\/p>\n
10.3 INFRINGEMENT OF PATENTS BY THIRD PARTIES.<\/p>\n
(a) NOTIFICATION. Each party shall promptly notify the other in
\nwriting of any alleged or threatened infringement of the Gilead Patent Rights,
\nJoint Patent Rights or Roche Patent Rights of which it becomes aware.<\/p>\n
(b) GILEAD PATENT RIGHTS. Gilead shall have the right, but not
\nthe obligation, to bring, at Gilead’s expense and in its sole control, an
\nappropriate action against any person or entity infringing a Gilead Patent Right
\ndirectly or contributorily. If Gilead does not bring such action within ninety
\n(90) days (forty five (45) days in the case of an action brought under the
\nHatch-Waxman Act) of notification thereof to or by Roche, Roche shall have the
\nright, but not the obligation, to bring at Roche’s expense and in its sole
\ncontrol, such appropriate action. The party not bringing an action under this
\nparagraph (b) shall be entitled to separate representation in such matter by
\ncounsel of its own choice and at its own expense, but such party shall cooperate
\nfully with the party bringing such action.<\/p>\n
(c) ROCHE PATENT RIGHTS. With respect to Roche Patent Rights,
\nRoche may take such action as it deems in its best interests. Gilead shall not
\nhave any right to bring an action under Roche Patent Rights, but shall have the
\nright to be fully informed regarding any litigation brought thereunder by Roche,
\nincluding the status of any settlement activity.<\/p>\n
(d) JOINT PATENT RIGHTS. With respect to Third Party
\ninfringement of Joint Patent Rights, the parties shall confer and take such
\naction, and allocate expenses and recoveries in such manner, as they may agree.
\nIn the absence of agreement, the rules applicable to Gilead Patent Rights shall
\napply to the Joint Patent Rights in question.<\/p>\n
(e) COSTS AND AWARDS. The party which is not in control of any
\naction brought pursuant to Section 10.3(b), (c) or (d) may elect to contribute
\nfifty percent (50%) of the costs of litigation against such Third Party
\ninfringer, by providing written notice to the controlling party within ninety
\n(90) days after such action is first brought. If<\/p>\n
26.<\/p>\n
the non-controlling party elects to bear fifty percent (50%) of such litigation
\ncosts, it shall receive fifty percent (50%) of any damage award or settlement
\nresulting from such action. If the non-controlling party does not elect to
\nshare such litigation costs, it shall not participate in any damage award or
\nsettlement resulting from such action.<\/p>\n
(f) SETTLEMENT; ALLOCATION OF PROCEEDS. Neither party shall
\nsettle a claim brought under this Section 10.3 without the consent of the other
\nparty. In the event of any recovery of monetary damages from the Third Party,
\nwhether such damages result from the infringement of Gilead Patents or Roche
\nPatents, such recovery shall be allocated first to the reimbursement of any
\nexpenses incurred by the parties in the litigation under this Section 10.3
\n(including, for the purpose, a reasonable allocation of internal counsel and
\nother expenses), and thereafter as provided in Section 10.3 (e). If the amount
\nrecovered from the Third Party is less than the aggregate expenses of the
\nparties incurred in connection with such litigation, the recovery shall be
\nshared pro rata between Gilead and Roche in proportion to their respective
\nexpenses.<\/p>\n
10.4 INFRINGEMENT OF THIRD PARTY RIGHTS. In the event that any Product
\nmanufactured, used or sold under this Agreement becomes the subject of a
\nThird Party claim or there is the potential for a claim for patent
\ninfringement anywhere in the world, and irrespective of whether Gilead or
\nRoche is charged with said infringement, the parties shall promptly meet to
\nconsider the claim and the appropriate course of action. Unless the parties
\notherwise agree, the party against which such Third Party infringement claim
\nis brought shall defend against such claim at its sole expense and the other
\nparty shall have the right, but not the obligation, to participate in any
\nsuch suit, at its sole option and at its own expense. Such other party shall
\nreasonably cooperate with the party conducting the defense of the claim,
\nincluding if required to conduct such defense, furnishing a power of
\nattorney. Neither party shall enter into any settlement that affects the
\nother party’s rights or interests without such other party’s written consent,
\nwhich consent shall not be unreasonably withheld. If in the opinion of
\nRoche’s counsel, a license with respect to such Third Party patents is
\nnecessary to avoid substantial risks which could prevent Roche from making,
\nusing, selling, offering for sale or importing Product, then Roche shall
\nnotify Gilead of such conclusion and the basis for it and give Gilead a
\nreasonable opportunity to discuss Roche’s opinion. If Gilead concurs in
\nRoche’s opinion, Roche shall have the right to negotiate directly with such
\nThird Party for a license, and Roche shall be entitled to apply
\n[ ] of Third Party Royalties for Net Sales in the country
\nwhere the claim exists, as a credit against royalties due under Section 5.3;
\nprovided, however, that the aggregate credit taken in any given calendar
\nquarter shall not exceed [ ] of the royalties payable to
\nGilead during that quarter, on a country-by-country basis, and shall be
\nsubject to further limitations as expressly set forth in Section 5.3. If
\nGilead does not concur with Roche’s opinion, the matter shall be submitted to
\nan independent counsel, selected by mutual consent and paid equally by Roche
\nand Gilead, to determine whether there is a substantial<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
27.<\/p>\n
risk of infringement of such Third Party rights. If such independent counsel
\ndetermines that a substantial risk exists, then Roche may negotiate directly
\nwith such Third Party and receive royalty credit as set forth above. If such
\nindependent counsel determines that a substantial risk does not exist, then
\nRoche may still negotiate for a license from such Third Party if it elects to do
\nso, but Roche shall not have the right of royalty reduction provided for in this
\nSection 10.4.<\/p>\n
10.5 PATENT MARKING. Products marketed and sold by Roche hereunder shall
\nbe marked with appropriate patent numbers or indicia at Gilead’s request,
\nsubject to Roche’s consent, not to be unreasonably withheld.<\/p>\n
ARTICLE 11<\/p>\n
INDEMNIFICATION<\/p>\n
11.1 INDEMNIFICATION BY GILEAD. Gilead hereby agrees to indemnify, hold
\nharmless and defend Roche against any and all expenses, costs of defense
\n(including without limitation attorneys’ fees, witness fees, damages, judgments,
\nfines and amounts paid in settlement) and any amounts Roche becomes legally
\nobligated to pay because of any claim or claims against it to the extent that
\nsuch claim or claims (i) arise out of the breach or alleged breach of any
\nrepresentation or warranty by Gilead hereunder, or (ii) are due to the
\nnegligence or misconduct of Gilead; provided that (a) Roche provides Gilead with
\nprompt notice of any such claim and the exclusive ability to defend (with the
\nreasonable cooperation of Roche) and settle any such claim and (b) such
\nindemnities shall not apply to the extent such claims are covered by Roche’s
\nindemnity set forth in Section 11.2 below.<\/p>\n
11.2 INDEMNIFICATION BY ROCHE. Roche hereby agrees to indemnify, hold
\nharmless and defend Gilead against any and all expenses, costs of defense
\n(including without limitation attorneys’ fees, witness fees, damages, judgments,
\nfines and amounts paid in settlement) and any amounts Gilead becomes legally
\nobligated to pay because of any claim or claims against it to the extent that
\nsuch claim or claims (i) result from Roche’s activities under this Agreement,
\n(ii) arise out of the breach or alleged breach of any representation or warranty
\nby Roche hereunder, (iii) are due to the negligence or misconduct of Roche, or
\n(iv) arise out of the possession, manufacture, use, sale or administration of
\nthe Product by Roche or Roche’s Affiliates or sublicensees; provided that (a)
\nGilead provides Roche with prompt notice of any such claim and the exclusive
\nability to defend (with the reasonable cooperation of Gilead) or settle any such
\nclaim and (b) such indemnities shall not apply to the extent such claims are
\ncovered by Gilead’s indemnity set forth in Section 11.1 above.<\/p>\n
11.3 MECHANICS. In the event that the parties cannot agree as to the
\napplication of Sections 11.1 and 11.2 above to any particular loss or claim, the
\nparties may conduct<\/p>\n
28.<\/p>\n
separate defenses of such claim. Each party further reserves the right to claim
\nindemnity from the other in accordance with Sections 11.1 and 11.2 above upon
\nresolution of the underlying claim, notwithstanding the provisions of Sections
\n11.1 and 11.2 above requiring the indemnified party to tender to the
\nindemnifying party the exclusive ability to defend such claim or suit.<\/p>\n
11.4 INSURANCE COVERAGE. Each party represents and warrants that it is
\ncovered and will continue to be covered by a comprehensive general liability
\ninsurance program which covers all of each Party’s activities and obligations
\nhereunder. Each party shall provide the other party with written notice at least
\nfifteen (15) days prior to any cancellation or material change in such insurance
\nprogram. Each party shall maintain such insurance program, or other program
\nwith comparable coverage, beyond the expiration or termination of this Agreement
\nduring (i) the period that any Product is being commercially distributed or sold
\nother than for the purpose of obtaining regulatory approvals by Roche or by a
\nsublicensee, Affiliate or agent of Roche and (ii) a commercially reasonable
\nperiod thereafter.<\/p>\n
29.<\/p>\n
ARTICLE 12<\/p>\n
CONFIDENTIALITY<\/p>\n
12.1 PROPRIETARY INFORMATION; EXCEPTIONS. Each party will maintain all
\nProprietary Information received by it under this Agreement in trust and
\nconfidence and will not disclose any such Proprietary Information to any Third
\nParty or use any such Proprietary Information for any purposes other than those
\nnecessary or permitted for performance under this Agreement. In particular,
\nRoche shall not use any Gilead Know-How for any purpose other than those
\nexpressly licensed under Section 2.1. Each party may use the other’s
\nProprietary Information only to the extent required to accomplish the purposes
\nof this Agreement. Proprietary Information shall not be used for any purpose or
\nin any manner that would constitute a violation of any laws or regulations,
\nincluding without limitation the export control laws of the United States.
\nProprietary Information shall not be reproduced in any form except as required
\nto accomplish the intent of this Agreement. No Proprietary Information shall be
\ndisclosed to any employee, agent, consultant, Affiliate, or sublicensee who does
\nnot have a need for such information. To the extent that disclosure is
\nauthorized by this Agreement, the disclosing party will obtain prior agreement
\nfrom its employees, agents, consultants, Affiliates, sublicensees or clinical
\ninvestigators to whom disclosure is to be made to hold in confidence and not
\nmake use of such information for any purpose other than those permitted by this
\nAgreement. Each party will use at least the same standard of care as it uses to
\nprotect its own Proprietary Information of a similar nature to ensure that such
\nemployees, agents, consultants and clinical investigators do not disclose or
\nmake any unauthorized use of such Proprietary Information, but no less than
\nreasonable care. Each party will promptly notify the other upon discovery of
\nany unauthorized use or disclosure of the Proprietary Information.<\/p>\n
Proprietary Information shall not include any information which:<\/p>\n
(a) is now, or hereafter becomes, through no act or failure to
\nact on the part of the receiving party in breach hereof, generally known or
\navailable;<\/p>\n
(b) is known by the receiving party at the time of receiving
\nsuch information, as evidenced by its written records;<\/p>\n
(c) is hereafter furnished to the receiving party by a third
\nparty, as a matter of right and without restriction on disclosure;<\/p>\n
(d) is independently developed by the receiving party without
\nany breach of this Agreement; or<\/p>\n
30.<\/p>\n
(e) is the subject of a written permission to disclose provided
\nby the disclosing party.<\/p>\n
12.2 AUTHORIZED DISCLOSURE. The parties shall issue a joint press release
\nupon signing this Agreement. The parties agree that the material financial
\nterms of the Agreement, other than the initial payments provided in Sections
\n3.3(c) and 5.1 and the aggregate milestone payments provided for in Section 5.2,
\nwill be considered Proprietary Information of both parties. Notwithstanding the
\nforegoing, either party may make disclosures required by law or regulation,
\nprovided prior notice is given to the other party whenever possible, and may
\ndisclose the material financial terms of the Agreement to bona fide potential
\ncorporate partners, to the extent required or contemplated by this Agreement,
\nand to financial underwriters, prospective investors and other parties with a
\nneed to know such information. Any such disclosures, and any disclosure of the
\ndevelopment and marketing or Products or other developments under this
\nAgreement, including but not limited to press releases, will be reviewed and
\nconsented to by each party prior to such disclosure. Such consent shall not be
\nuntimely or unreasonably withheld by either party. All such disclosures shall
\nbe made only to parties under an obligation of confidentiality.<\/p>\n
Notwithstanding any other provision of this Agreement, each party may
\ndisclose Proprietary Information if such disclosure:<\/p>\n
(a) is in response to a valid order of a court or other
\ngovernmental body of the United States or a foreign country, or any political
\nsubdivision thereof; provided, however, that the responding party shall first
\nhave given notice to the other party hereto and shall have made a reasonable
\neffort to obtain a protective order requiring that the Proprietary Information
\nso disclosed be used only for the purposes for which the order was issued;<\/p>\n
(b) is otherwise required by law or regulation, including SEC
\nrelated documents; or<\/p>\n
(c) is otherwise necessary to file or prosecute patent
\napplications, prosecute or defend litigation or comply with applicable
\ngovernmental regulations or otherwise establish rights or enforce obligations
\nunder this Agreement, but only to the extent that any such disclosure is
\nnecessary.<\/p>\n
12.3 RETURN OF PROPRIETARY INFORMATION. In the event Roche loses its
\nlicense to Gilead Patents and Gilead Know-How which was granted to it under this
\nAgreement, Roche shall use diligent efforts (including without limitation a
\ndiligent search of files and computer storage devices) to return all Proprietary
\nInformation received by it from Gilead, provided, however, that Roche may keep
\none copy of such Proprietary Information for legal archival purposes. Access to
\nthe copy so retained by Roche’s legal<\/p>\n
31.<\/p>\n
department shall be restricted to counsel and such Proprietary Information shall
\nnot be used except in the resolution of any claims or disputes arising out of
\nthis Agreement.<\/p>\n
12.4 PUBLICATIONS. Except as required by law, neither Party shall publish
\nor present, or cause to be published or presented, the results of studies
\ncarried out with respect to Products without the opportunity for prior review by
\nthe other party. Each party shall provide to the other the opportunity to
\nreview any proposed abstracts, manuscripts or presentations which relate to
\nProducts at least thirty (30) days prior to their intended submission for
\npublication and such submitting party agrees, upon written request from the
\nother party, not to submit such abstract or manuscript for publication or to
\nmake such presentation until the other party is given a reasonable period of
\ntime to seek patent protection for any material in such publication or
\npresentation that it believes is patentable.<\/p>\n
ARTICLE 13<\/p>\n
REPRESENTATIONS AND WARRANTIES<\/p>\n
13.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each party hereby represents
\nand warrants:<\/p>\n
(a) CORPORATE POWER. Such party is duly organized and validly
\nexisting under the laws of the state of its incorporation and has full corporate
\npower and authority to enter into this Agreement and to carry out the provisions
\nhereof.<\/p>\n
(b) DUE AUTHORIZATION. Such party is duly authorized to execute
\nand deliver this Agreement and to perform its obligations hereunder.<\/p>\n
(c) BINDING AGREEMENT. This Agreement is a legal and valid
\nobligation binding upon it and is enforceable in accordance with its terms. The
\nexecution, delivery and performance of this Agreement by such party does not
\nconflict with any agreement, instrument or understanding, oral or written, to
\nwhich it is a party or by which it may be bound, nor violate any law or
\nregulation of any court, governmental body or administrative or other agency
\nhaving authority over it.<\/p>\n
13.2 GILEAD REPRESENTATIONS AND WARRANTIES. Gilead warrants and represents
\nthat:<\/p>\n
(a) SAFETY DATA. To the best of its knowledge, Gilead has informed
\nRoche about all significant information in its possession or control concerning
\nside effects, injury, toxicity or sensitivity reaction and incidents or severity
\nthereof with respect to any Product tests conducted by Gilead or its
\ncontractors. Roche acknowledges<\/p>\n
32.<\/p>\n
that such tests have been entirely preclinical and may not be indicative of
\nresults that may be obtained in humans.<\/p>\n
(b) PATENT MATTERS. As of the Effective Date, Gilead has no
\nknowledge of the existence of any patent owned or controlled by a Third Party
\nwhich covers the lead compound identified by Gilead to Roche (GS 4104) and would
\nprevent Roche from making, using or selling such compound. To the best of
\nGilead’s knowledge and belief, as of the Effective Date, the patent applications
\nlisted in Exhibit A at the Effective Date are owned by Gilead and Gilead is not
\nin possession of information that would, in its opinion, render invalid and\/or
\nunenforceable claims directed specifically to GS 4104 that are presently in one
\nor more of such applications. Notwithstanding the foregoing, if at any time
\nprior to December 31, 1997, a patent or patent application held by a Third Party
\nis identified which covers the specific Product being developed by the parties
\npursuant to this Agreement, the parties will meet and discuss possible
\nresolutions of the patent situation. If the resolution involves a license from
\nthe Third Party to its patent rights and\/or a license to the Third Party under
\nGilead or Roche patent rights, the parties acknowledge that the economic
\nassumptions underlying this Agreement may no longer be valid, and in such case
\nthe parties will renegotiate the terms of this Agreement in good faith in order
\nto reflect such resolution.<\/p>\n
13.3 NO OTHER REPRESENTATIONS. THE EXPRESS REPRESENTATIONS AND WARRANTIES
\nSTATED IN THIS ARTICLE 13 ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND
\nWARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE WARRANTIES OF
\nMERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.<\/p>\n
ARTICLE 14<\/p>\n
DISPUTE RESOLUTIONS; VENUE AND GOVERNING LAW<\/p>\n
14.1 DISPUTES. The parties recognize that disputes as to certain matters
\nmay from time to time arise during the term of this Agreement which relate to
\neither party’s rights and\/or obligations hereunder or thereunder. It is the
\nobjective of the parties to establish procedures to facilitate the resolution of
\ndisputes arising under this Agreement in an expedient manner by mutual
\ncooperation and without resort to litigation. To accomplish this objective, the
\nparties agree to follow the procedures set forth in this Article 14 if and when
\na dispute arises under this Agreement.<\/p>\n
In the event of disputes between the parties, including disputes among the
\nmembers of the Steering Committee which such committee is unable to resolve, a
\nparty seeking to resolve such dispute will, by written notice to the other, have
\nsuch dispute referred to their respective executive officers designated below or
\ntheir successors, for<\/p>\n
33.<\/p>\n
attempted resolution by good faith negotiations within fourteen (14) days after
\nsuch notice is received. Said designated officers are as follows:<\/p>\n
For Roche: Head of the Pharma Division<\/p>\n
For Gilead: Chief Executive Officer<\/p>\n
In the event the designated executive officers are not able to resolve such
\ndispute, either party may at any time after the 14 day period invoke the
\nprovisions of Section 14.2 hereinafter.<\/p>\n
14.2 ALTERNATIVE DISPUTE RESOLUTION. Following settlement efforts pursuant
\nto Section 14.1, any dispute, controversy or claim arising out of or relating to
\nthe validity, construction, enforceability or performance of this Agreement,
\nincluding disputes relating to alleged breach or to termination of this
\nAgreement under Section 9.3, other than disputes which are expressly prohibited
\nherein from being resolved by this mechanism, shall be settled by binding
\nAlternative Dispute Resolution (“ADR”) in the manner described below:<\/p>\n
(a) ADR REQUEST. If a party intends to begin an ADR to resolve
\na dispute, such party shall provide written notice (the “ADR Request”) to
\ncounsel for the other party informing such other party of such intention and the
\nissues to be resolved. From the date of the ADR Request and until such time as
\nany matter has been finally settled by ADR, the running of the time periods
\ncontained in Section 9.3 as to which party must cure a breach of this Agreement
\nshall be suspended as to the subject matter of the dispute.<\/p>\n
(b) ADDITIONAL ISSUES. Within ten (10) business days after the
\nreceipt of the ADR Request, the other party may, by written notice to the
\ncounsel for the party initiating ADR, add additional issues to be resolved.<\/p>\n
(c) NO ADR OF PATENT ISSUES. Disputes regarding the scope,
\nvalidity and enforceability of patents shall not be subject to this Section
\n14.2, and shall be submitted to a court of competent jurisdiction.<\/p>\n
14.3 ARBITRATION PROCEDURE. The ADR shall be conducted pursuant to the
\nENDISPUTE Rules then in effect, except that notwithstanding those rules, the
\nfollowing provisions shall apply to the ADR hereunder:<\/p>\n
(a) ARBITRATOR. The arbitration shall be conducted by a panel
\nof three arbitrators (the “Panel”). The Panel shall be selected from a pool of
\nretired independent federal judges to be presented to the parties by ENDISPUTE.<\/p>\n
34.<\/p>\n
(b) PROCEEDINGS. The time periods set forth in the ENDISPUTE
\nrules shall be followed, unless a party can demonstrate to the Panel that the
\ncomplexity of the issues or other reasons warrant the extension of one or more
\nof the time tables. In such case, the Panel may extend such time tables, but in
\nno event shall the time tables being extended so that the ADR proceeding extends
\nmore than 18 months from its beginning to the Award. In regard to such time
\ntables, the parties (i) acknowledge that the issues that may arise in any
\ndispute involving this Agreement may involve a number of complex matters and
\n(ii) confirm their intention that each party will have the opportunity to
\nconduct complete discovery with respect to all material issues involved in a
\ndispute within the framework provided above. Within such time frames, each
\nparty shall have the right to conduct discovery in accordance with the Federal
\nRules of Civil Procedure. The Panel shall not award punitive damages to either
\nparty and the parties shall be deemed to have waived any right to such damages.
\nThe Panel shall, in rendering its decision, apply the substantive law of the
\nState of California, without regard to its conflict of laws provisions, except
\nthat the interpretation of and enforcement of this Section 14.3(b) shall be
\ngoverned by the Federal Arbitration Act. The Panel shall apply the Federal
\nRules of Evidence to the hearing. The proceeding shall take place in the City
\nof New York. The fees of the Panels and ENDISPUTE shall be paid by the losing
\nParty which shall be designated by the Panel. If the Panel is unable to
\ndesignate a losing party, it shall so state and the fees shall be split equally
\nbetween the parties.<\/p>\n
(c) AWARD. The Panel is empowered to award any remedy allowed by
\nlaw, including money damages, multiple damages, prejudgment interest and
\nattorneys’ fee, and to grant final, complete, interim, or interlocutory relief,
\nincluding injunctive relief but excluding punitive damages.<\/p>\n
(d) COSTS. Except as set forth in Section 14.3(b), above, each
\nparty shall bear its own legal fees. The Panel shall assess its costs, fees and
\nexpenses against the party losing the ADR unless it believes that neither party
\nis the clear loser, in which case the Panel shall divide such fees, costs and
\nexpenses according to the Panel’s sole discretion.<\/p>\n
(e) CONFIDENTIALITY. The ADR proceeding shall be confidential
\nand the Panel shall issue appropriate protective orders to safeguard each
\nparty’s Proprietary Information. Except as required by law, no party shall make
\n(or instruct the Panel to make) any public announcement with respect to the
\nproceedings or decision of the Panel without prior written consent of each other
\nparty. The existence of any dispute submitted to ADR, and the award, shall be
\nkept in confidence by the parties and the Panel, except as required in
\nconnection with the enforcement of such award or as otherwise required by
\napplicable law.<\/p>\n
35.<\/p>\n
14.4 JUDICIAL ENFORCEMENT. The parties agree that judgment on any arbitral
\naward issued pursuant to this Article 14 shall be entered in the United States
\nDistrict Court for the Northern District of California or, in the event such
\ncourt does not have subject matter jurisdiction over the dispute in question,
\nsuch judgment shall be entered in the Superior Court of the State of California,
\nin the County of San Mateo.<\/p>\n
14.5 GOVERNING LAW. This Agreement is made in accordance with and shall be
\ngoverned and construed under the laws of the State of California, as such laws
\nare applied to contract entered into and to be performed within such state.<\/p>\n
ARTICLE 15<\/p>\n
MISCELLANEOUS<\/p>\n
15.1 AGENCY. Neither party is, nor will be deemed to be, an employee,
\nagent or legal representative of the other party for any purpose. Neither party
\nwill be entitled to enter into any contracts in the name of, or on behalf of the
\nother party, nor will a party be entitled to pledge the credit of the other
\nparty in any way or hold itself out as having authority to do so. This
\nAgreement is an arm’s-length license agreement between the parties and shall not
\nconstitute or be construed as a joint venture.<\/p>\n
15.2 ASSIGNMENT. Except as otherwise provided herein, neither this
\nAgreement nor any interest hereunder will be assignable in part or in whole by
\nany party without the prior written consent of the other; provided, however,
\nthat either party may assign this Agreement to any of its Affiliates or to any
\nsuccessor by merger or sale of all or substantially all of its business assets
\nto which this Agreement relates in a manner such that the assignor will remain
\nliable and responsible for the performance and observance of all its duties and
\nobligations hereunder. This Agreement will be binding upon the successors and
\npermitted assigns of the parties and the name of a party herein will be deemed
\nto include the names of such party’s successors and permitted assigns to the
\nextent necessary to carry out the intent of this Agreement. Any assignment
\nwhich is not in accordance with this Section 15.2 will be void.<\/p>\n
15.3 AMENDMENT. No amendment or modification hereof shall be valid or
\nbinding upon the parties unless made in writing and signed by both parties.<\/p>\n
15.4 NOTICES. Any notice or other communication required or permitted to
\nbe given to either party hereto shall be in writing unless otherwise specified
\nand shall be deemed to have been properly given and to be effective on the date
\nof delivery if delivered in person or by facsimile or three (3) days after
\nmailing by registered or certified mail, postage paid, to the other party at the
\nfollowing address:<\/p>\n
36.<\/p>\n
In the case of Gilead:<\/p>\n
Gilead Sciences, Inc.
\n 353 Lakeside Drive
\n Foster City, CA 94404
\n Telephone: (415) 574-3000
\n FAX: (415) 578-9264
\n Attention: Chief Executive Officer<\/p>\n
AND<\/p>\n
Gilead Sciences, Inc.
\n 353 Lakeside Drive
\n Foster City, CA 94404
\n Telephone: (415) 574-3000
\n Fax: (415) 572-6622
\n Attention: General Counsel<\/p>\n
In the case of Roche:<\/p>\n
F. Hoffmann-La Roche Ltd
\n CH-4070 Basel, Switzerland
\n Telephone: 41-61-688 30 60
\n FAX: 41-61-688 13 96
\n Attention: Corporate Law Department<\/p>\n
AND<\/p>\n
Hoffmann-La Roche Inc.
\n 340 Kingsland Street
\n Nutley, NJ 07110
\n Telephone: (201) 235-2165
\n FAX: (201) 235-3500
\n Attention: Corporate Secretary<\/p>\n
Either party may change its address for communications by a notice to the other
\nparty in accordance with this Section 15.4.<\/p>\n
15.5 FORCE MAJEURE. Any prevention, delay or interruption of performance
\nby any party under this Agreement shall not be considered a breach of this
\nAgreement if and to the extent caused by occurrences beyond the reasonable
\ncontrol of the party affected, including but not limited to acts of God,
\nembargoes, governmental restrictions, strikes or<\/p>\n
37.<\/p>\n
other concerted acts of workers, fire, flood, earthquake, explosion, riots,
\nwars, civil disorder, rebellion or sabotage. The party suffering such
\noccurrence shall immediately notify the other party and any time for performance
\nhereunder shall be extended by the actual time of prevention, delay, or
\ninterruption caused by the occurrence.<\/p>\n
15.6 AFFILIATES. The parties hereto acknowledge that Roche will carry out
\nmany of the activities required or permitted pursuant to this Agreement through
\nits Affiliates. Roche hereby represents and warrants to Gilead that this
\nAgreement shall be binding on its Affiliates and further guarantees the
\nperformance of its Affiliates in accordance with this Agreement as if such
\nAffiliates were parties to this Agreement. In the event either party to this
\nAgreement is acquired by another company, then the technology and programs of
\nthe acquiring company in existence at the time of such transaction shall not be
\nsubject to this Agreement.<\/p>\n
15.7 EXPORT CONTROL. This Agreement is made subject to any restrictions
\nconcerning the export of products or technical information from the United
\nStates of America or other countries which may be imposed upon or related to
\nGilead or Roche from time to time. Each party agrees that it will comply with
\nall applicable export laws and regulations in connection with its activities
\nunder this Agreement.<\/p>\n
15.8 SEVERABILITY. If any term, condition or provision of this Agreement
\nis held to be unenforceable for any reason, it shall, if possible, be
\ninterpreted, to achieve the intent of the parties to this Agreement to the
\nextent possible rather than voided. If not capable of such interpretation, the
\nparties shall in good faith seek to agree on an alternative provision reflecting
\nthe intent of the parties which is enforceable. In any event, all other terms,
\nconditions and provision of this Agreement shall be deemed valid and enforceable
\nto the full extent.<\/p>\n
15.9 CUMULATIVE RIGHTS. The rights, powers and remedies hereunder shall be
\nin addition to, and not in limitation of, all rights, powers and remedies
\nprovided at law or in equity, or under any other agreement between the parties.
\nAll of such rights, powers and remedies shall be cumulative, and may be
\nexercised successively or cumulatively.<\/p>\n
15.10 WAIVER. No waiver by either party hereto on any breach or
\ndefault of any of the covenants or agreements herein set forth shall be deemed a
\nwaiver as to any subsequent or similar breach or default.<\/p>\n
15.11 ENTIRE AGREEMENT. This Agreement, and all Exhibits and Schedules
\nreferred to herein, embody the entire understanding of the parties with respect
\nto the subject matter hereof and shall supersede all previous communications,
\nrepresentations or understandings, either oral or written, between the parties
\nrelating to the subject matter hereof.<\/p>\n
38.<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
\ntheir respective officer hereunto duly authorized.<\/p>\n
GILEAD SCIENCES, INC. F. HOFFMANN-LA ROCHE LTD<\/p>\n
By: \/s\/ John C. Martin By: \/s\/ W. Henrich
\n ————————- ——————————
\nName: John C. Martin Name: Werner Henrich
\n ———————– ——————————
\nTitle: CEO Title: Director
\n ———————- ——————————<\/p>\n
HOFFMANN-LA ROCHE INC.<\/p>\n
By: \/s\/ Stephen Sulovar
\n ———————————
\n Name: Stephen Sulovar
\n ——————————-
\n Title: Sr. Vice President
\n ——————————<\/p>\n
39.<\/p>\n
Filing
\n Case No. Title Country Appl. No. Date
\n ——– ——————— ——- ———- ——-
\n[<\/p>\n
]<\/p>\n
[*] CONFIDENTIAL TREATMENT REQUESTED<\/p>\n
EXHIBIT A<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7639],"corporate_contracts_industries":[9405],"corporate_contracts_types":[9613,9616],"class_list":["post-42224","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-gilead-sciences-inc","corporate_contracts_industries-drugs__biotech","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42224","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42224"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42224"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42224"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}