Provision Language
Definitions
“Charitability Default” means that:
(i) the Company materially breaches any of the Global Access Commitments other than for reasons of technical or scientific failure not within the control of the Company and not known to the Company at or before Closing of the Foundation Investment. The Company is required to use reasonable best efforts (as further detailed in Section 3(c)) to perform the Global Access Commitments, but cannot guarantee the outcome or timeline given the experimental nature of the Projects,
(ii) the Company fails to comply with the restrictions in Sections 2 and 8 of this Letter Agreement on the use of proceeds from the Foundation Investment,
(iii) the Company fails to comply with the other U.S. legal obligations set forth in this Letter Agreement, including the requirements set forth in Sections 6, 10 or 11, or
(iv) [***];
in each case (i) and (iii) to the extent such breach or failure continues to exist [***] days after the Company becomes aware of the relevant breach or failure. For the avoidance of doubt, no such cure period shall apply in the event of a breach or failure in case of (ii) or (iv). Each party agrees to promptly notify the other party in writing if it becomes aware of any breach or failure as set forth under (i) to (iv) above. Notwithstanding the foregoing, the Foundation will not lose any rights or remedies solely as a result of a failure to notify the Company after it becomes aware of any breach or failure as set forth under (i) to (iv) above.
3. Global Access Commitments
As a condition to the Foundation making the Foundation Investment and to ensure satisfaction of the Charitable Purpose and Global Access, the Company agrees to the following (collectively “Global Access Commitments”): […]
(d) Further Development
(i) If the Foundation elects at any time to proceed either with additional work on the HIV Project, TB Project or any Additional Project, the Foundation and the Company will agree in good faith on one or more subsequent statements of work, which may include applicable development, commercialization and associated activities conducted by the Company and potentially one or more partner(s) that are not Direct Competitors as agreed by the Company and the Foundation, including seeking applicable country-level regulatory approvals. Such partner may include the Gates MRI if requested by the Foundation and agreed to by the Gates MRI and the Company.
(ii) If the Foundation requests the Company to continue work on the HIV Project, the TB Project and/or any Additional Project, any additional funding from the Foundation or a Foundation-supported Entity will be provided pursuant to the Foundation’s standard funding terms and processes. The specific level and allocation of funding responsibilities between the parties (and potentially Foundation-supported Entities) for any such Project will be mutually agreed in good faith in writing by the parties to fairly allocate the expected benefits between Developing Countries and developed countries.
(iii) Any agreements for further work relating to the HIV Project and/or TB Project or for an Additional Project will include a proposal describing the relevant work (including specific Global Access Commitments) and other related documents acceptable to the Foundation and the Company including a manufacturing, commercialization and distribution plan for the Developing Countries taking into account the Company’s actual and projected capabilities at the time of developing such plan, and will be consistent with the HIV TPP, the TB POI TPP, the TB POD TPP and/or any TPP relating to an Additional Project, as applicable. The applicable funding agreements will also include a mutually acceptable license to the Funded Developments developed or acquired (including in-licensed) by the Company in connection with the Company’s conduct of such work and the Platform Technology to the extent required to further develop and commercialize the relevant Product(s). The terms of such license will be no less favorable to the Foundation than the terms of the Global Health License, unless mutually agreed otherwise by the parties in their respective discretion.
(iv) If the Foundation desires to continue funding as set forth herein to advance the HIV Project, TB Project and/or any Additional Project through commercialization and distribution of a final product, but the Company reasonably believes that such further product development is not feasible due to scientific or technical failure or would cause a material adverse effect on the Company, then the matter will be submitted to the Joint Steering Committee. If the members of the Joint Steering Committee do not mutually agree with the Company’s determination then the matter will be resolved in accordance with the dispute resolution process set forth in Section 20 below.
(v) Notwithstanding the foregoing, the Company will have the right to decline any additional funding or extension of (1) the TB Project following completion of the Initial TB SOW and either the occurrence of an Event Stamp TB or in accordance with Section 3(d)(vi)(B), (2) the HIV Project following completion of the Initial HIV SOW and either the occurrence of an Event Stamp HIV or in accordance with Section 3(d)(vi)(B) and (3) any Additional Project following the Completion Date or in accordance with Section 3(d)(vi)(B). If the Foundation desires to continue funding the HIV Project, the TB Project and/or any Additional Project and the Company does not agree to accept such additional funding and continue development of the applicable Project to the extent permitted by (1), (2) or (3) above (each such case a “Company Election Not to Proceed”), then the commitments described in Sections 3(d)(v)(A) and 3(d)(v)(B) will apply.
(A) Further Development Activities Following a Company Election Not to Proceed
(1) If elected by the Foundation, and subject to the agreement of the Gates MRI, the Company will grant a license equivalent to the Global Health License to the Gates MRI and a license in accordance with Section 3(d)(v)(B)(3) to the Manufacturing Partner identified pursuant to the process set forth below and will undertake associated technology transfer activities to the extent reasonably required for the further development and manufacturing (if applicable) of the applicable Product pursuant to a development plan on reasonable market terms.
(2) If the Foundation does not make the election set forth in Section 3(d)(v)(A)(1) above, the Company will use reasonable best efforts to identify a third party that is reasonably acceptable to the Foundation to continue development of the applicable Product (which third party may also be the Manufacturing Partner identified below). If a third party is not selected to continue development of the applicable Product pursuant to the previous sentence, the Foundation will have the right to identify a third party that is not a Direct Competitor to continue development of the applicable Product (which third party may also be the Manufacturing Partner identified below). The Gates MRI or the third-party identified pursuant to this clause 3(d)(v)(A)(2) is referred to as the “Development Partner”.
(3) The Company will grant a license equivalent to the Global Health License to the Development Partner and, unless the Company is manufacturing all Product required by the Development Partner, a license in accordance with Section 3(d)(v)(B)(3) to the Manufacturing Partner identified pursuant to the process set forth below if the Development Partner is not also the Manufacturing Partner, and will undertake associated technology transfer activities to the extent reasonably required for the further development of the Product. In addition, [***]. The Company will notify the Foundation at least 10 days [***]. The Company may request from any Development Partner that (1) its name and/or logo must be appropriately displayed on any Product (or any related marketing materials, leaflets or packaging) that will be distributed by any Foundation-supported Entity (which may include the Development Partners, Manufacturing Partners or sublicensees) under this Letter Agreement and (2) the Development Partner adequately mentions the Company as the technology provider to the extent applicable in any public statements or disclosures relating to any Product.
(B) Further Manufacturing Activities Following a Company Election Not to Proceed:
(1) If requested by the Company, the Company shall have the right to manufacture all Product required by the Development Partner under a manufacturing agreement to be concluded between the Company and the Development Partner.
(2) If the Company does not request to manufacture the Product and the Development Partner identified above is unable or unwilling to manufacture the applicable Product, the Company will use reasonable best efforts to identify a third party that is reasonably acceptable to the Foundation to manufacture the Product, including considering in good faith potential manufacturers proposed by the Foundation. The third-party identified pursuant to this Section 3(d)(v)(B)(2) with whom the Development Partner has concluded an agreement with respect to the manufacture of the Product is referred to as the “Manufacturing Partner”.
(3) The Company will grant a non-exclusive license to the Manufacturing Partner to the extent required for the Manufacturing Partner to fulfill its manufacturing obligations related to the Product for the Development Partner for Developing Countries and will undertake associated technology transfer activities on reasonable market terms to the extent reasonably required for the manufacturing of the Product. If [***]. The Company may request from any Manufacturing Partner that (i) its name and/or logo must be appropriately displayed on any Product (or any related marketing materials, leaflets or packaging) manufactured by such Manufacturing Partner and (ii) the Manufacturing Partner adequately mentions the Company as the technology provider to the extent applicable in any public statements or disclosures relating to any Product.
(4) If a Manufacturing Partner is not identified pursuant to Section 3(d)(v)(B)(2) , the Company will manufacture the initial supply of the relevant Product required for the immediate planned clinical study and will continue to supply Product for subsequent trials until a Manufacturing Partner is identified. The Company will continue to apply reasonable best efforts to identify a Manufacturing Partner during this time.
(5) If a Manufacturing Partner is not identified by the Company within a reasonable time prior to market approval of the applicable Product, the Company will, provided it has a facility to provide commercial manufacturing quantities for the applicable Product, manufacture the commercial supply of the Product under a contract manufacturing agreement to be concluded on reasonable market terms between the Company and the Development Partner until a suitable Manufacturing Partner is identified. If the Company does not have an adequate commercial manufacturing capability to manufacture a sufficient quantity of the applicable Product and a Manufacturing Partner has not been identified, the Company will build such a facility (or increase the capacity of an existing facility) to meet the manufacturing, commercialization and distribution requirements agreed by the Foundation and the Company in good faith in the relevant grant proposal document for the relevant Product. The funding for such build will be mutually agreed in good faith in writing by the Foundation and the Company to fairly allocate the expected benefits between Developing Countries and developed countries. If at any time following the commencement of such build a Manufacturing Partner is identified, the Company may choose (in its sole discretion) to either (X) initiate or continue (as the case may be) the manufacturing or (Y) grant a manufacturing license to such Manufacturing Partner and to provide technology transfer activities on reasonable market terms to such Manufacturing Partner to the extent reasonably required for such manufacturing. For the avoidance of doubt, during the time that the Company is building a facility or increasing the capacity of an existing facility pursuant to this Section 3(d)(v)(B)(5) , it will not be required to reduce the commercial manufacturing output at its existing facilities in order to accommodate manufacturing additional Products beyond what it has already committed to manufacture.
(6) For clarity, the licenses granted pursuant to Sections 3(d)(v)(A) and 3(d)(v)(B) (and associated technology transfer obligations) will not be subject to any Exercise Events. These licenses and activities will be documented in agreements between the Company and the relevant party entered into as soon as reasonably possible. When a license is required to be granted under the terms stated above, the relevant parties may agree to a broader license but under no circumstance (except for the license granted pursuant to Section 3(d)(v)(B)(3) ) will the license be more restrictive than the Global Health License required under this Letter Agreement. All manufacturing and related activities to be performed by the Company under this Section 3(d)(v)(B) (including logistics, warehousing, transport, etc.) shall be charged by the Company at Fully Loaded Costs of the relevant Product (excluding, for the avoidance of doubt, the manufacturing for developed countries which have been licensed to the Development Partner).
(vi) Prior to [***], as applicable:
(A) If [***].
(B) If [***].
(vii) If at any time the Foundation does not elect to proceed with additional work on a Project or further development of a Product, including following a Foundation Election Not to Proceed, (A) the Global Access Commitments shall continue to apply with respect to the Funded Developments (and to the Platform Technology to the extent required to further develop and commercialize the Funded Developments in accordance with this Letter Agreement) developed to, or existing at the time the Foundation ceases to proceed with funding additional work or further development (but, for the avoidance of doubt, not with respect to any developments made by or on behalf of the Company after such point if the Company decides to continue the development outside of the scope of this Letter Agreement), (B) the Foundation will have the right at any time to elect to proceed with additional work on such Project or further development of such Product in accordance with this Section 3(d) and the Company will continue such development or, if the Company declines to continue such development as permitted in Section 3(d)(v), the commitments described in Sections 3(d)(v)(A) and 3(d)(v)(B) will apply and (C) the Company will not grant to a third-party any rights or enter into any arrangements or agreements or otherwise take any actions that would limit or restrict the Global Access Commitments with respect to the Funded Developments, including as described in subsections (A) and (B) above.
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(l) No Inconsistent Rights. The Company will not grant to a third-party any rights or enter into any arrangements or agreements that would limit or restrict the Foundation’s or a Foundation-supported Entity’s ability to exercise its rights or the Company’s ability to perform its obligations under this Letter Agreement (including the Global Health License and the Foundation’s right to require Additional Projects from the list of diseases set forth in Part A of Appendix C). The Foundation will not be required to take any action or enter into any arrangement or agreement that would limit or restrict the Foundation’s ability to exercise its rights under this Letter Agreement.
(m) Global Health License
(i) Global Health License. In connection with and relating to the Projects, the Company hereby grants the Foundation, effective immediately, a worldwide, non-exclusive, non-terminable (subject to the terms of any relevant in-licenses), perpetual, royalty-free license (with the right to sublicense with the limitations specified in this Letter Agreement) under the Funded Developments and the Platform Technology to the extent required to use, reproduce, modify, make, distribute, sell, offer-for-sale, import, and otherwise dispose of any Product for the purpose of benefiting poor and needy people in Developing Countries (“Global Health License”). The Global Health License is a presently granted license. To the extent the foregoing Global Health License includes the grant of sublicense rights under intellectual property rights owned by a third party, the grant of such rights is made subject to the terms and conditions of the in-license agreements that are in existence and disclosed to the Foundation prior to the date of this Letter Agreement and set forth in Appendix F. As consideration for the Global Health License and the licenses granted pursuant to Sections 3(d)(v)(A) and 3(d)(v)(B) only, the Foundation will make a onetime lump sum payment to the Company in the amount of [***] (the “License Fee”). The License Fee is due and payable within ten (10) Business Days after Closing of the Foundation Investment.
(ii) [***].
(iii) Exercise Events. The Foundation will not exercise its rights under the Global Health License (including its sublicensing rights) unless at least one of the following occurs (each, an “Exercise Event”):
(A) a Charitability Default; or
(B) the Company (including any successors or assigns or Affiliates holding intellectual property rights applicable to the Projects) (1) institutes any bankruptcy, insolvency proceeding, appointment of a receiver, trustee and/or (preliminary) insolvency administrator or (preliminary) custodian, or legal proceedings in relation to a suspension of payments, moratorium of any indebtedness, reorganization (in either case for the release of financially distressed debtors), general assignment for the benefit of creditors, winding-up, dissolution, liquidation or similar proceeding relating to it under the laws of any jurisdiction or (2) any such proceeding is instituted against the Company which remains undismissed or unstayed for a period of [***] days or (3) ceases to conduct business in the ordinary course or is determined to no longer be a going concern, or – in case German insolvency laws do apply, is unable to pay its debts as they fall due within the meaning of Section 17 of the German Insolvency Code or is over-indebted within the meaning of Section 19 of the German Insolvency Code.
If either the Foundation or the Company becomes aware of an Exercise Event, it will promptly notify the other party in writing of the occurrence of such Exercise Event; provided that failure by the Foundation to provide such notice will not affect the Foundation’s rights hereunder.
(iv) Limitations on Sublicense Rights. The right to sublicense included in the Global Health License is to (A) the Funded Developments and (B) Platform Technology; provided that in the case of Platform Technology, the right to sublicense is limited to the Platform Technology that is required to exploit the applicable Product(s). In addition, the Foundation will notify the Company in advance of granting a sublicense to such Funded Developments and/or Platform Technology and the Company will have the right to object to such sublicense if (1) [***] or (2) [***]. The Foundation will require any sublicensee to agree to comply with the applicable terms of this Letter Agreement, including the obligations related to the de-blocking license pursuant to Section 3(m)(ii) above.
(n) Cooperation; Technology Transfer. In connection with the Foundation’s exercise of the Global Health License and subject to the limitations in this Section 3(n), the Company will take further actions, including technology transfer (subject to appropriate confidentiality obligations), as would be commercially reasonable industry practice at the time with respect to enabling the Foundation or a proposed sub-licensee to effectively exercise the applicable Global Health License for the sole purpose of using the licensed technology in order to develop and manufacture the relevant Products for the purpose of benefiting people in Developing Countries (including the right to reference regulatory filings related to the applicable Products).
The technology transfer commitments described above apply to (i) the Funded Developments and (ii) Platform Technology; provided that in the case of Platform Technology, the technology transfer commitments will only apply to Platform Technology that is required to exploit the applicable Product(s). In addition, the Company will have the right to object to the technology transfer obligations with respect to the Funded Developments and relevant Platform Technology listed above [***].
If the Foundation is not able to identify a potential sublicensee, [***], then [***] will apply.
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(p) Duration of Global Access Commitments. The Global Access Commitments (including with respect to the Funded Developments (and to the Platform Technology to the extent covered by the Global Health License and the licenses granted pursuant to Sections 3(d)(v)(A) and 3(d)(v)(B))) will be ongoing and will continue for as long as the Foundation exists.
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4. Survival of Global Access Commitments.
In the event of (i) any Acquisition Transaction or (ii) the sale, exclusive license, or other transfer of the Platform Technology or the Funded Developments, the Global Access Commitments will survive and be assumed in full by the purchaser, transferee, licensee, or acquirer either in a written agreement that is reasonably acceptable to the Foundation or by operation of law (if the Company is the surviving entity in the Acquisition Transaction) and the Company will take all action necessary to ensure such assumption. Upon request, the Company will provide a redacted copy of the underlying transaction documents to the Foundation evidencing such assumption (or continuation of the Company as the surviving entity). For clarity, notwithstanding anything to the contrary in this Letter Agreement, the Foundation’s rights hereunder that exist on the date of the Acquisition Transaction or sale, exclusive license, or other transfer of the Platform Technology or the Funded Developments will not be terminated by such transaction.