PARTNERSHIP AGREEMENT OF BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING PARTNERSHIP

Exhibit 10.3

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PARTNERSHIP AGREEMENT

OF

BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING PARTNERSHIP

between

SANOFI PHARMACEUTICALS, INC.

and

BRISTOL-MYERS SQUIBB COMPANY INVESTCO, INC.

dated as of January 1, 1997

 

 

TABLE OF CONTENTS

 

 

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SCHEDULES

 

 

 

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PARTNERSHIP AGREEMENT dated as of January 1, 1997 between Sanofi Pharmaceuticals, Inc., a Delaware corporation (“ Sanofi Partner ”) and an indirect wholly owned subsidiary of Sanofi, a société anonyme organized under the laws of the French Republic (“ Sanofi ”), and Bristol-Myers Squibb Company Investco, Inc. (“ BMS Partner ” and, together with Sanofi Partner, the “ Partners ” and, individually, each a “ Partner ”), a Delaware corporation and a direct wholly owned subsidiary of Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ”).

W I T N E S S E T H :

WHEREAS, BMS, Sanofi and Sterling Winthrop Inc., a Delaware corporation (“ Sterling ”), entered into a Development Agreement dated as of July 29, 1993 (the “ Development Agreement ”) concerning the development of two new chemical entities discovered and patented by Sanofi, one known as SR 47436, with the international non-proprietary name Irbesartan (“ Irbesartan ”) and one known as SR 25990C, with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”), each with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;

WHEREAS, BMS, Sanofi and Sterling entered into a Master Territory B Agreement dated as of July 29, 1993 (the “ Master Territory B Agreement ”) for the commercialization of the Products in Territory B (as such terms are defined herein);

WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Sanofi and Sterling, Sanofi acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Master Territory B Agreement and the Development Agreement;

WHEREAS, in accordance with Section 4.1.1 of the Master Territory B Agreement, BMS and Sanofi agreed to determine an appropriate legal structure to be implemented for the commercialization of the Products in Territory B;

WHEREAS, as of the date hereof, BMS and Sanofi have entered into a Territory B Alliance Support Agreement (the “ Alliance Support Agreement ”) and certain other agreements for the commercialization of the Products in Territory B; and

WHEREAS, in determining such appropriate legal structure, BMS and Sanofi have agreed that the United States of America would no longer be included within the definition of Territory B solely with respect to Irbesartan and Irbesartan Products (as defined herein) and intend to enter into a license agreement concerning the manufacture, sale and commercialization of Irbesartan Products in the United States of America (the “ U.S. Irbesartan License ”);

 

 

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NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions contained herein, and for other good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms . As used in this Agreement, the following terms shall have the following meanings:

“ Act ” means the Delaware Uniform Partnership Law, set forth as Title 6 of the Delaware Code Annotated, as amended from time to time, and any applicable successor statutes thereto.

“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Product of which any Partner or any of its Affiliates becomes aware, whether or not considered drug related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.

“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Sanofi, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Sanofi that would be an Affiliate of Sanofi solely by reason of its being controlled by Elf Aquitaine. For the purposes of this definition, “ control ” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Partners confirm that each Co-Promotion Entity in Territory B shall be considered to be an Affiliate of BMS.

“ Agreement ” means this Partnership Agreement, as originally executed and as amended, modified, supplemented or restated from time to time, in accordance with Section 12.11 hereof.

 

 

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“ Alliance Strategic Committee ” has the meaning set forth in the Alliance Support Agreement.

“ beneficial owner ” has the meaning set forth in Rule 13d-3 of the U.S. Securities Exchange Act of 1934, as amended,

“ Capital Account ” means, with respect to each Partner, the capital account maintained for such Partner as set forth in Article III hereof.

“ Capital Contribution ” means, with respect to each Partner, the amount of money contributed to the Partnership by such Partner (or such Partner’s predecessors in interest) with respect to the Partnership Interest held by such Partner.

“ Clopidogrel License and Supply Agreement ” means the Clopidogrel Intellectual Property License and Supply Agreement dated as of the date hereof between the Partnership and Sanofi for the license of certain patent, trademark and know how rights for Clopidogrel and Clopidogrel Products from Sanofi to the Partnership and the supply of active substance chemical bulk for Clopidogrel in exchange for the payment to Sanofi of the Discovery Royalty and the Supply Payment (as such terms are defined therein).

“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Co-Marketing ” means, for each Product and for any country in Territory B, the marketing of such Product in such country under two or more trademarks by the applicable Marketing Entities.

“ Co-Promotion ” means, for each Product and for any country in Territory B, the marketing of such Product in such country under one trademark by the applicable Marketing Entity.

“ Elf Aquitaine ” means Société Nationale Elf Aquitaine, a société anonyme organized under the laws of the French Republic.

“ Finance Committee ” has the meaning set forth in the Alliance Support Agreement.

 

 

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“ Functional Committees ” means the Alliance Functional Committees (as defined in the Alliance Support Agreement) and the License Functional Committees (as defined in the Know-How License Agreement).

“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.

“ Irbesartan License Agreement ” means the Irbesartan Intellectual Property License Agreement dated as of the date hereof between the Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Irbesartan and Irbesartan Products from Sanofi to the Partnership in exchange for the payment to Sanofi of the Discovery Royalty (as S uch term is defined therein).

“ Irbesartan Product ” means the product or products having as an active ingredient Irbesartan or any salt, ester, metabolite or pro-drug thereof.

“ Irbesartan Supply Agreement ” means the Irbesartan Supply Agreement to be entered into among BMS, Sanofi, the Partnership and Sanofi Pharma Bristol-Myers Squibb, a société en nom collectif organized under the laws of the French Republic, for the supply of active substance chemical bulk for Irbesartan.

“ Know-How License Agreement ” means the Product Know-How License Agreement dated as of the date hereof among the Partnership, Sanofi and BMS for the license of know-how developed by Sanofi and BMS pursuant to the Development Agreement, the use of corporate names by the Partnership and the development of Irbesartan and Clopidogrel on or after such date in exchange for the payment of the Development Royalty (as such term is defined therein) by the Partnership.

“ License Steering Committee ” has the meaning set forth in the Know-How License Agreement.

“ Marketing Working Group ” has the meaning set forth in the Know-How License Agreement.

“ Net Income ” and “ Net Loss ” mean, for each Fiscal Year, an amount equal to the Partnership’s taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(l) shall be included in taxable income or loss), with the following adjustments:

 

 

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(i) Any income of the Partnership that is [*] and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “ Net Income ” and “ Net Loss ” shall be [*] to such taxable income or loss;

(ii) Any expenditures of the Partnership [*]or treated as [*], and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “ Net Income ” and “ Net Loss ”, shall be [*] from such taxable income or loss; and

(iii) any Termination Gain or Termination Loss shall be [*] from the calculation of Net Income and Net Loss.

“ Net Sales ” means, for any given period and with respect to any Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Product.

“ New Drug Application ” means the application required to be filed with the relevant Governmental Authority in any country in order to obtain approval to market commercially a new drug in such country.

“ Non-Promotional Countries ” means the countries in Territory B where the utilization of personal promotion by sales personnel is not a significant factor in obtaining product usage and achieving sales or where selling is by tender or comparable non-promotional method of sale, as determined from time to time by the Finance Committee.

“ Partners ” means each of the BMS Partner and the Sanofi Partner and each of their permitted successors and assigns; provided, however, that any Partner that holds no Partnership Interest shall be deemed to have withdrawn as a Partner of the Partnership.

“ Partnership Interest ” means, for each Partner, all of such Partner’s interest as a Partner of the Partnership, including, without limitation, such Partner’s rights to profits, losses and voting rights in the Partnership and any and all benefits to which it

 

 

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may be entitled under this Agreement, together with the obligations of such Partner hereunder.

“ Person ” means any individual, partnership, firm, corporation, société anonyme, société en nom collectif, société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.

“ Puerto Rico Purchase and Sale Agreement ” means the Purchase and Sale Agreement to be entered into among the Partnership and Affiliate(s) of BMS for the sale of active substance chemical bulk to such Affiliate(s) and the purchase of finished Products packaged, if applicable, from such Affiliate(s).

“ Product ” means a Clopidogrel Product or an Irbesartan Product, and “ Products ” means a Clopidogrel Product and an Irbesartan Product.

“ Regulations ” means the United States Federal Income Tax Regulations, including temporary regulations, promulgated under the Code, as amended, modified or supplemented from time to time.

“ Safety Problem ” has the meaning set forth in the Alliance Support Agreement.

“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.

“ Termination Gain ” or “ Termination Loss ” means any gain or loss realized by the Partnership on the sale or other disposition of assets pursuant to Section 11.03(c) hereof (including any gain or loss realized by the Partnership in connection with [*] pursuant to Section [*] hereof).

“ Territory B ” means the countries and geographic areas described and listed in Schedule 1.01 attached hereto, which shall not include the United States of America for Irbesartan Products.

“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.

 

 

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“ Toll Manufacturing Agreements ” means (i) the Irbesartan Toll Manufacturing Agreement to be entered into for the contract manufacturing of active substance chemical bulk for Irbesartan into finished Irbesartan Products packaged, if applicable, and (ii) the Clopidogrel Toll Manufacturing Agreement to be entered into for the contract manufacturing of active substance chemical bulk for Clopidogrel into finished Clopidogrel Products packaged, if applicable.

“ United States of America ” means any State or Commonwealth of the United States of America, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and any other territory, possession or military base of the United States of America.

“ U.S. GAAP ” means generally accepted accounting principles in the United States of America in effect from time to time applied consistently throughout the periods involved.

SECTION 1. 02. Additional Defined Terms . The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:

 

 

 

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SECTION 1.03. Accounting Terms . Except as otherwise specifically provided herein or as otherwise agreed by the Partners, all terms herein that relate to accounting matters shall be interpreted in accordance with U.S. GAAP.

ARTICLE II

ORGANIZATION OF THE PARTNERSHIP

SECTION 2.01. The Partnership. The Partners do hereby form the partnership (the “ Partnership ”) by executing this Agreement with the intent to form the Partnership with effect as of January 1, 1997, the effective date of this Agreement (the “ Effective Date ”), and shall register the name of the Partnership and those of the Partners with the Prothonotary’s office in the State of Delaware.

SECTION 2.02. Name . The name of the Partnership is Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership. The business of the Partnership may be conducted under any other name designated in writing by the Partners in compliance with applicable law.

SECTION 2.03. Purpose . The businesses and purposes of the Partnership shall be (a) to carry on all activities related to the development, manufacturing, commercialization and sale of the Products in Territory B, specifically excepting the commercialization and sale of Irbesartan Products in the United States of America and (b) to enter into, make and perform all such contracts and other undertakings, and to engage in all such activities and transactions, as may be necessary or desirable to conduct such businesses and activities.

 

 

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SECTION 2.04. Principal Place of Business . The principal place of business of the Partnership shall be located at P.O. Box 4000, Route 206 and Province Line Road, Princeton, NJ 08543, United States of America, or at such other place in the United States of America as may be agreed by the Partners. The Partnership may maintain such other offices at such other places as the Partners deem advisable.

SECTION 2.05. Term . The Partnership shall continue in effect through December 2096, unless earlier terminated as provided in Section 11.01 hereof or extended by written agreement of each of the Partners not later than 24 months prior to such date.

SECTION 2.06. Registered Office and Agent . The name and address of the registered agent of the Partnership for service of process on the Partnership, as well as the registered office of the Partnership, in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, United States of America.

SECTION 2.07. Powers . The Partnership shall have the full power and authority to engage in all activities necessary, appropriate or incidental to any of the purposes of the Partnership described in Section 2.03 hereof, including, without limitation, the full power and authority to engage in all activities permitted to be conducted by a general partnership under Delaware law.

ARTICLE III

CAPITAL CONTRIBUTIONS, PARTNERSHIP INTERESTS

AND CAPITAL ACCOUNTS

SECTION 3.01. Initial Capital Contributions . Upon the execution and delivery of the Agreement, the BMS Partner and the Sanofi Partner shall each contribute to the Partnership cash in the amounts of $[*] and $[*], respectively, and the Partnership shall credit such amounts to the Capital Accounts of the BMS Partner and the Sanofi Partner.

SECTION 3.02. Partnership Interests . The Partnership Interest of the BMS Partner shall be 50.1%, and the Partnership Interest of the Sanofi Partner shall be 49.9%.

SECTION 3.03. Additional Capital Contributions . If it is determined by the Finance Committee that additional Capital Contributions are needed to cover development, launch and other costs or expenditures for which the Partnership’s own funds are not otherwise sufficient, each of the Partners shall contribute to the Partnership, as additional Capital Contributions, at the time and in the manner so determined by the Finance

 

 

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Committee, an amount equal to [*] multiplied by [*] to cover such costs or expenditures.

SECTION 3.04. Capital Accounts . (a) A separate Capital Account shall be maintained in respect of each Partner. Subsequent to the Effective Date, each Partner’s Capital Account shall be credited with:

(i) the amount of cash contributed by such Partner (or its predecessor in interest) to the Partnership in accordance with Sections 3.01 and 3.03 hereof; and

(ii) the amount of any Net Income and Termination Gain allocated to such Partner pursuant to Section 4.01 hereof;

and there shall be charged against each Partner’s Capital Account:

(x) the amount of any Net Losses and Termination Losses allocated to such Partner pursuant to Section 4.01 hereof; and

(y) the amount of cash distributed by the Partnership to such Partner pursuant to Section 5.01 hereof.

(b) In the event all or any portion of a Partnership Interest is transferred in accordance with Article IX hereof, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Partnership Interest.

SECTION 3.05. Partnership Property . All property and assets owned by or contributed to the Partnership (including, without limitation, the property and assets contributed to the Partnership pursuant to this Article III), whether real or personal, shall be (and shall be deemed to be) owned by the Partnership as an entity, and no Partner shall individually have any right, title or interest in any such property or assets or proceeds thereof, irrespective of whether any such property or asset is formally in the name of the Partnership or of any Partner (or any trade name or division thereof), any such property or asset being held by such Partner as a nominee of the Partnership for the benefit of the Partnership.

ARTICLE IV

ALLOCATIONS

SECTION 4.01. Allocations . The Partnership’s Net Income or Net Loss shall be allocated to the Partners pro rata in accordance with their respective Partnership Interests.

 

 

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The Partnership’s Termination Gain or Termination Loss shall be allocated to the Partners such that each Partner’s Capital Account shall equal the amount such Partner is entitled to receive pursuant to Section ll.03(d)(iii) hereof.

ARTICLE V

DISTRIBUTIONS

SECTION 5.01. Distributions to the Partners . The Partnership shall distribute to the Partners in proportion to their Partnership Interests (a) all cash that is not required for the ongoing business operations of the Partnership, as determined by the Finance Committee, and (b) such other amounts as the Partners collectively shall agree.

SECTION 5.02. Withdrawals of Capital . Except as otherwise provided herein, no portion of the capital of the Partnership may be withdrawn at any time without the approval of each of the Partners.

SECTION 5.03. Withholding. To the extent required by any law, the Partnership shall withhold from any income or gain allocated to each Partner and from amounts distributed to each Partner any amounts required to be remitted by the Partnership pursuant to such law and shall remit the amount withheld to the appropriate taxing authority by the due date for such remittance. The amounts so withheld shall be treated for purposes of this Agreement as having been distributed to such Partner. As between the Partners and the Partnership, any tax imposed on a Partner, whether collected by withholding or otherwise, shall remain the liability of such Partner, whether or not the Partnership properly withheld such tax, and such Partner shall in all cases indemnify and hold harmless the Partnership and each other Partner for the amount of such tax and any interest, penalties or additions to tax with respect thereto.

ARTICLE VI

ACCOUNTING, INCOME TAX

RETURNS, TAX ELECTIONS

SECTION 6.01. Books and Records . At all times during the term hereof, the BMS Partner, at the Partnership’s expense, shall maintain or cause to be maintained (i) books and records of account which accurately and fairly reflect, in reasonable detail, all matters relating to the Partnership, including, without limitation, all income, expenditures, assets and liabilities thereof and (ii) an adequate system of internal accounting controls. Such books and records of account shall be maintained in accordance with U.S. GAAP, unless otherwise

 

 

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agreed by the Partners, and shall be maintained for at least ten years following the date of each transaction to which they relate or for any longer period as required by applicable law, unless the Partners otherwise agree; provided, however, that the Partnership shall not be required to maintain any such records for a period in excess of ten years from the date of the making or receipt thereof (except for those records, if any, required to be kept for a longer period under applicable law).

SECTION 6.02. Location and Rights of Inspection . The Partnership’s books and records of account shall be kept and maintained at all times at the place or places within the United States of America approved by the BMS Partner. Each Partner and their authorized representatives shall have the right to inspect, examine, copy and audit the books, records, files, securities and other documents of the Partnership at all reasonable times for any purpose reasonably related to such Partner’s interest in the Partnerership. No charges shall be made to a Partner by the Partnership for any such inspection, examination, copying and audit other than for out-of-pocket costs of the Partnership occasioned thereby.

SECTION 6.03. Fiscal Year . The fiscal year of the Partnership for both accounting and tax purposes (the “ Fiscal Year ”) shall begin on January 1 and end on December 31 of each year.

SECTION 6.04. Audit . The books of account, financial records and annual financial statements of the Partnership shall be audited annually at the Partnership’s expense by an internationally-recognized independent accounting firm selected by the BMS Partner.

SECTION 6.05. Statements of Financial Condition . (a) The BMS Partner and the Sanofi Partner shall jointly prepare, and the BMS Partner shall have the final authority to determine and to deliver to the Sanofi Partner in accordance with applicable law and regulations and at the Partnership’s expense:

(i) within 30 days after the end of each calendar month, a statement listing, for the preceding month and for the Fiscal Year through the last day of such month (x) country-by-country and aggregate territorial financial statements for the Co-Promotion Entities in Territory B, (y) Net Sales of the Products in the countries in Territory B in which there is Co-Marketing of the Products and (z) Territory-wide marketing and developmental expenses incurred by the Partnership;

(ii) by November 15 of each Fiscal Year, (x) the aggregate of annual budgets for the upcoming Fiscal Year for sales and pre-tax profits for the Co-Promotion Entities (the “ Annual Budgetary Targets ”) for each Product and projections for aggregate sales and aggregate pre-tax profits for the Co-Promotion Entities for the subsequent three Fiscal Years (“ Long-Range Plans ”) for each Product, which budgetary targets and projections shall be substantially in the form of Schedules

 

 

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7.01(a)(iii)-l and 7.01(a)(iii)-2 attached hereto; it being agreed that pre-tax profits shall be calculated by [*], and sales shall be calculated by [*], each in accordance with the methodology established by the Finance Committee, (y) a statement listing, (1) for each country where there is Co-Promotion of the Products, the expected Net Sales and pre-tax profits for each Product for the upcoming Fiscal Year, and projections for Net Sales and pre-tax profits of each Product for the subsequent three Fiscal Years and (2) for each country where there is Co-Marketing of the Products, the expected Net Sales of each Product for the upcoming Fiscal Year, and projections for Net Sales of each Product for the subsequent three Fiscal Years and (z) the annual budget for the Partnership;

(iii) during April, July and October of each Fiscal Year, a statement providing revised annual projections of aggregate sales and pre-tax profits for such Co-Promotion Entities for each Product for such Fiscal Year (which shall be calculated in the same manner as, and compared to, the Annual Budgetary Targets for such Fiscal Year approved by the Alliance Strategic Committee), revised, if necessary, to take into account the actual year-to-date results and any other relevant factors, together with an explanation of any material revisions in the projections relative to the budgeted amounts thereof approved by the Alliance Strategic Committee (each, a “ Revised Projection ”);

(iv) as promptly as reasonably practicable and in any event within 60 days of the end of each Fiscal Year, a copy of the aggregate audited annual financial statements for the Partnership; and

(v) as promptly as reasonably practicable and in any event within 30 days of the end of each fiscal quarter, a copy of the unaudited quarterly financial statements for the Partnership;

provided, however, that, with respect to sub-section (i) above, the BMS Partner shall provide such information to the Alliance Strategic Committee for information only and, with respect to subsections (ii) and (iii) above, the BMS Partner shall also provide such information to the Alliance Strategic Committee, which shall have the sole authority to approve the Annual Budgetary Targets, the Long-Range Plans and the budget of the Partnership.

(b) Each Partner shall provide, as promptly as reasonably practicable, (i) any additional financial information relating to the Partnership that is requested by the other Partner for preparation of such Partner’s income tax returns; and (ii) such other information that is reasonably requested in writing by the other Partner, including, without

 

 

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limitation, any information required by such Partner or its Affiliates for reporting or statutory purposes under U.S. or French securities or other applicable laws.

(c) The BMS Partner shall, in addition, advise the Sanofi Partner and the Alliance Strategic Committee promptly if the Revised Projection shows, or BMS concludes, at any time, that the annual aggregate pre-tax profits of the Co-Promotion Entities in Territory B will fall short of the annual aggregate pre-tax profit amount in the relevant Annual Budgetary Target approved by the Alliance Strategic Committee by [*]of such annual aggregate pre-tax profit.

SECTION 6.06. Bank Accounts and Investments . Funds of the Partnership shall be deposited in an account or accounts of a type, in form and name and in an institution or institutions within the United States of America, in each case as approved by the BMS Partner. Withdrawals from bank accounts shall be made by persons approved in writing by the Partners. Any funds of the Partnership that are not required to be disbursed shall be invested by the BMS Partner in accordance with and pursuant to guidelines therefor established by the Partners.

SECTION 6.07. Tax Matters Partner . [*] shall be designated as the Partnership’s tax matters partner (the “ Tax Matters Partner ”), as defined in section 6231(a)(7) of the Code, and shall have all of the powers and obligations of a tax matters partner pursuant to the Code and under this Agreement. All expenses incurred by the Tax Matters Partner in serving in such capacity (including, without limitation, [*]) shall be treated as [*] expenses and shall be paid by the Partnership. The Tax Matters Partner shall incur no liability to the Partnership or to [*] for actions taken in its capacity as the Tax Matters Partner, including, without limitation, any liability for any additional taxes (including withholding taxes), interest or penalties owed by the [*] due to adjustments of Partnership items of income, gain, loss or deduction at the Partnership level, except for actions that constitute gross negligence, fraud or willful misconduct. The Partnership shall indemnify the Tax Matters Partner (including the officers and directors of a corporate Tax Matters Partner) against judgments, fines, amounts paid in settlement and reasonable expenses (including reasonable attorneys’ fees) incurred in any civil or investigative proceeding in which the Tax Matters Partner is involved or threatened to be involved by reason of being the Tax Matters Partner, except to the extent that it is finally judicially determined that such judgments, fines, amounts and expenses arose out of or were related to actions or omissions of the Tax Matters Partner constituting gross negligence, fraud or willful misconduct.

SECTION 6.08. Duties of the Tax Matters Partner . The Tax Matters Partner shall cooperate with [*] and shall promptly provide the [*] with copies of notices or other materials from, and inform the [*] of discussions engaged in with, the Internal Revenue Service or state or local tax authorities and shall

 

 

SS_NYL2/121210 19 (PA_79524 2)

 

 

 

 

 

 

 

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

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provide [*] with notice of all scheduled administrative proceedings, including, without limitation, meetings with Internal Revenue Service agents, technical advice, conferences and appellate hearings, as soon as possible after receiving notice of the scheduling of such proceedings. The Tax Matters Partner shall not agree to [*] with respect to Partnership items of income, gain loss or deduction, without the prior written consent of the [*]. The Tax Matters Partner may request extensions to file any tax return or statement without the written consent of, but shall so inform, the [*]. The provisions of this Agreement regarding the Partnership’s tax returns shall survive the termination of the Partnership an