Provision Language
Definitions
“Customer” shall mean a hospital, government, or alternative site of care that is located in the Territory and properly licensed under local law to receive and dispense Product and that purchases Product pursuant to a written agreement with Licensee or Licensee’s Third Party Reseller requiring Customer to: (a) comply with the applicable terms of this Agreement, (b) purchase Product directly and exclusively from Licensee or Licensee’s Third Party Reseller for use within the Territory, (c) not purchase or accept any such Product from any entity or person other than Licensee or Licensee’s Third Party Reseller, (d) not sell Product to any entity or individual outside of the Territory, and (e) not sell Product to any entity or individual that supports use of the Product outside the Territory.
“Distributor” shall mean a third-party wholesaler or distributor that is not a Gilead Distributor and that is operating under a written agreement with Licensee for the distribution and sale of Product in the Territory.
“Gilead Distributor” shall mean any third-party distributor that is currently operating under an agreement with Gilead for the distribution and sale of Gilead Lenacapavir Product in the Territory. No more frequently than once per calendar year, upon request by Licensee, Gilead will provide Licensee with a list, which may be updated by Gilead from time to time, of the identity of any such Gilead Distributors and their authorized territory(ies) within the Territory.
“Gilead Supplier” shall mean, individually and collectively, Gilead’s contract manufacturing organization(s) and supplier(s) for Lenacapavir and/or Gilead Lenacapavir Product (including intermediates, raw materials, components for primary and secondary packaging and components of the vial kit), as may be designated by Gilead from time to time.
“Licensed Lenacapavir Supplier” shall mean an entity (other than Licensee) that is licensed directly or indirectly by Gilead to manufacture Lenacapavir throughout the world and sell such Lenacapavir to Licensed Product Suppliers, but in each case excluding Gilead Suppliers.
“Licensed Product Supplier” shall mean an entity (other than Licensee) that is licensed by Gilead to make and have made Lenacapavir throughout the world solely to use, sell, have sold and offer for sale Product in the Field in the Territory, for use in the Territory only; but in each case excluding Gilead Suppliers.
“Third Party Reseller(s)” shall mean, individually and collectively, Distributor(s) and Gilead Distributor(s).
2. License Grant
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2.5 Licensee Right to Sell
(a) Lenacapavir Sales. Licensee agrees that it will not sell or offer to sell Lenacapavir to any entity other than Licensed Product Suppliers that have been approved by Gilead in accordance with Section 2.5(f).
(b) Product Sales. Licensee agrees that it will not sell, offer to sell or provide Product to any entity other than a Third Party Reseller or a direct Customer or as otherwise provided under this Agreement, sales to such entities being exclusively reserved to Gilead. Licensee agrees that neither it, nor its Affiliates, will sell, offer for sale, or permit third parties (including any Third Party Reseller or Customer) to sell or distribute Product in or to any country outside of the Territory or for any use outside the Field, such outside territories and/or fields being exclusively reserved to Gilead. Licensee agrees that it will prohibit its direct trading partners, including Third Party Resellers or Customers, from selling Product (i) to any other reseller, wholesaler or distributor, (ii) outside the Territory, or (iii) for any purpose outside the Field. If Licensee’s direct trading partner is a Customer, Licensee will prohibit its Customer from reselling the Product; unsold/unused Product must be returned to Licensee.
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(e) Terms of Agreements with Third Party Resellers
(i) Gilead Distributors. Licensee may elect to sell Product in the Territory via a written agreement with any Gilead Distributor, provided, however, that Licensee may only sell and offer for sale Product to Gilead Distributors to sell in the Territory, and may not sell or offer for sale Product outside the Territory, and may not import Product into any country outside the Territory. Licensee shall only allow such Gilead Distributor to sell such Product to Customers in the country(ies) of the applicable Territory for which such Gilead Distributor has the right to sell Gilead Lenacapavir Product.
(ii) Third Party Resellers. Licensee shall require any Third Party Reseller to agree, in a written agreement with Licensee (i) to comply with the applicable terms of this Agreement, (ii) to provide Customer sales data, including name and address of Customer, date of transaction for Product(s), quantity and associated lot numbers and serial numbers (where applicable) sold (on a Customer by Customer basis) (“Customer Sales Data”) (iii) to prohibit Third Party Resellers from selling, offering to sell, or providing Product to another reseller, wholesaler or distributor or any entity other than a Customer providing Product within the Territory and to prohibit Customer via a written agreement between the Third Party Reseller and Customer from reselling the Product and require unsold/unused Product to be returned to the Third Party Reseller, and (iv) to report to Licensee the information described in Section 4.2, and allow Licensee to provide Gilead with such information. Gilead has the right to audit, on no less than thirty (30) days’ advance notice to Licensee, such records of Licensee solely to the extent necessary to verify such compliance. Gilead will bear the full cost of any such audit unless the audit reveals a failure to comply with this Agreement. Licensee shall not enter into any agreement, arrangement, or understanding (including with respect to confidentiality) with any such third party that would hinder the exercise of Gilead’s audit rights. By ensuring the most direct supply for the Product from Licensee to patients or individuals who would benefit medically from PrEP within the Territory, this section is intended to: (i) enable broad access for the Product while helping to ensure the pricing for the Product remains accessible to local patients and (ii) protect patients’ safety by mitigating risks from counterfeits and substandard versions of the Product.
(f) Gilead Approval of Third-Party Reseller Agreements and Direct Customer Agreements. Licensee shall not enter into any agreements with Third Party Resellers or direct Customers on terms inconsistent with this Agreement without obtaining Gilead’s prior written approval. Licensee shall notify Gilead in writing of all Third Party Resellers and any direct Customers promptly after entering into such arrangements and shall certify that its arrangement with such Third Party Reseller and/or direct Customer is consistent with the terms and conditions of this Agreement. Licensee shall provide Gilead with written copies of all agreements executed between Licensee and Third Party Resellers and Licensee and direct Customers relating to Lenacapavir or Product at the time it provides notice of such arrangements. Licensee shall name Gilead as a third-party beneficiary in any such agreements, and accordingly Licensee shall consent and hereby does consent to Gilead’s enforcement of such agreements to the extent relating to the obligations that Licensee is required hereunder to impose upon Third Party Resellers and direct Customers. Licensee shall be allowed to redact confidential financial terms from such agreements prior to sharing them with Gilead. Gilead shall have the right to review all such agreements to verify consistency with the terms and conditions of this Agreement. In the event that any inconsistency is found between any such agreement and the terms and conditions of this Agreement which had not been specifically discussed and agreed with Gilead, then Gilead shall have the right to require Licensee to amend or terminate such agreement and upon notice from Gilead to such effect, Licensee shall immediately terminate such agreement. All notices and copies of agreements provided under this Section 2.5(f) shall be sent to Gilead’s Voluntary Licensee Portal.
(g) Termination of Third Party Reseller and Direct Customer Agreements by Licensee. Licensee shall immediately terminate its agreement(s) with a Third Party Reseller or direct Customer in the event that Gilead believes in good faith that such Third Party Reseller has engaged in activities that Licensee is prohibited from performing under this Agreement, or that are inconsistent with Licensee’s covenants under this Agreement, including without limitation the unauthorized use, sale or a Diversion Event by such Third Party Reseller or direct Customer of (i) Lenacapavir in a manner inconsistent with this Agreement or (ii) Product outside the Field or the Territory, or upon Licensee first reasonably believing that such Third Party Reseller or direct Customer has engaged in such activities.
(h) Termination of Third Party Reseller or Direct Customer Agreements by Gilead. Gilead may terminate the right of Licensee to sell Product to any Third Party Reseller or direct Customer pursuant to this Section 2.5, if (i) in Gilead’s reasonable belief the Third Party Reseller or direct Customer is not acting in a way that is consistent with Licensee’s covenants under this Agreement; or (ii) if Licensee does not terminate Licensee’s agreement with such Third Party Reseller or direct Customer under the circumstances described in Section (f) or Section (g).
3. Sourcing of Lenacapavir and Product
3.1 Sourcing of Lenacapavir and Product. Subject to Sections 3.2 and 3.3, if Licensee wishes to obtain supply of Lenacapavir and/or Product or any raw materials or intermediates or components of primary or secondary packaging, including components of vial kits thereof from a Licensed Lenacapavir Supplier, Licensed Product or Gilead Supplier, then Licensee may only do so in accordance with the process set out in Sections 3.2 and 3.3, and shall certify that its arrangement with such Licensed Lenacapavir Supplier, Licensed Product Supplier or Gilead Supplier (as applicable) is consistent with the terms and conditions of this Agreement. Licensee shall provide Gilead with written copies of all agreements between Licensee and such Licensed Lenacapavir Supplier, Licensed Product Supplier or Gilead Supplier (as applicable). Licensee shall name Gilead as a third-party beneficiary in any such agreements, and accordingly, Licensee shall consent and hereby does consent to Gilead’s enforcement of such agreements to the extent relating to the obligations that Licensee is required hereunder to impose upon Licensed Lenacapavir Supplier, Licensed Product Supplier or Gilead Supplier (as applicable). Licensee shall be allowed to redact confidential financial terms from such agreements prior to sharing them with Gilead. Gilead shall have the right to review all such agreements to verify consistency with the terms and conditions of this Agreement. In the event that any inconsistency is found which had not been specifically discussed and agreed in writing by Gilead, Gilead shall have the right to require Licensee to terminate such agreement with such Licensed Lenacapavir Supplier, Licensed Product Supplier or Gilead Supplier and upon notice from Gilead to such effect, Licensee shall immediately terminate such agreement.
3.2 Limitation with respect to Gilead Suppliers. Notwithstanding anything to the contrary, Licensee shall not obtain supply (directly or indirectly) of Lenacapavir, Product, or any raw materials or intermediates or components of primary or secondary packaging including components of vial kits therefor from any Gilead Supplier without Gilead’s prior written consent (in Gilead’s sole discretion). In any case, Gilead shall not be obligated to assist Licensee in procuring any supply of Lenacapavir and/or Product, or any raw materials or intermediates therefor, from a Licensed Lenacapavir Supplier, Licensed Product Supplier or Gilead Supplier (as applicable).
3.3 Conditions of Supply from Gilead Suppliers. Any agreement between Licensee and a Gilead Supplier that provides for the supply of Lenacapavir and/or Product, including but not limited to any raw materials or intermediates, or components for primary and secondary packaging, including vial kit components therefor, shall include and be subject to the following conditions:
(a) Gilead Supply Needs. Licensee shall not obtain Lenacapavir and/or Product, or any raw materials or intermediates or components for primary and secondary packaging, including vial kit components, therefor, from the Gilead Supplier until Gilead has received confirmation in writing from the Gilead Supplier of its ability to continue to supply Gilead with Gilead’s forecasted requirements of Lenacapavir and/or Product, or raw materials or intermediates or components for primary and secondary packaging, including vial kit components therefor, as reflected in Gilead’s then-current twelve (12) month forecast for Lenacapavir and/or Product, or any raw materials or intermediates or components for primary and secondary packaging therefor, provided to the Gilead Supplier.
(b) Consistency with Agreement. The Gilead Supplier shall be permitted to supply Lenacapavir and/or Product, or any raw materials or intermediates or components for primary and secondary packaging, including vial kit components, therefor, to Licensee only to the extent that any such supply does not (A) adversely affect its ability to meet Gilead’s forecasted requirements or (B) adversely affect the Gilead Supplier’s ability to supply Gilead’s requirements, whether or not such requirements are consistent with Gilead’s twelve (12) month forecast. Gilead shall have the right to terminate any agreement between Licensee and its Gilead Suppliers if the supply of Lenacapavir and/or Product, or any raw materials or intermediates or components for primary and secondary packaging, including vial kit components, therefor, from such Gilead Supplier to Licensee adversely affects Gilead’s supply requirements as set forth in this Section 3.3(b).
3.4 No Other Arrangements. Licensee agrees that it shall not enter into any agreements, nor amend any existing agreements, to obtain the supply of intermediates or Lenacapavir, or any raw materials therefor, or components for primary and secondary packaging, including vial kit components, on terms that are inconsistent with this Agreement without Gilead’s prior written approval as provided for in this Article 3.