7. Representations, Warranties and Covenants
7.1 Ability to Perform. Each of the parties hereby represents and warrants that:
(a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of their incorporation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;
(b) this Agreement has been duly executed and delivered, and constitutes a legal, valid, binding obligation, enforceable against it in accordance with the terms hereof; and
(c) the execution, delivery and performance of this Agreement does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over such party.
7.2 Diversion of Product and Technology [as amended by Amendment 1].
Licensee covenants and agrees that Licensee and its Affiliates shall not, and shall require its Distributors and Third party Resellers not to: (i) divert or allow the diversion of APl outside of India, China or South Africa, or to third parties that do not constitute Licensed Product Suppliers, (i) divert or allow the diversion of TDF Product, TDF Combination Product, TAF Product or TAF Combination Product outside the TDF-TAF Territory, (ii) divert or allow the diversion of COBI Product or COBI Combination Product outside the COBI Teritory, (iv) divert or allow the diversion of EVG Product, EVG Combination Product or Quad Product outside the EVG-Quad Territory, (v) divert or allow the diversion of BIC Product or BIC Combination Product outside the BIC Territory, (vi) divert or allow the diversion of Licensed Technology to any third party, except as expressly permitted under this Agreement, (vii) take any action that Gilead determines in good faith to be in furtherance of the activities described in clauses (i)-(vi), or (viii) assist or support, directly or indirectly, any third party in the conduct of the activities described in clauses (i)-(vii). The parties agree that it shall not be a breach of Section 3.1 or this Section 7.2 for Licensee or its Affiliate to file marketing approval applications for any Product in a country outside of the Territory as required by applicable regulatory authorities in such country for the commercialization of such Product in such country, or for Licensee or its Affiliate to provide developmental quantities of APl or Product in support of its Own marketing approval applications or a third party’s application for marketing approval, in each case, as required by applicable regulatory authorities in such country, it being understood that this provision shall not be construed as expressly or implicitly granting Licensee any right or license under any Gilead intellectual property rights beyond the licenses granted in Section 2 of this Agreement or otherwise providing any authorization by Gilead to do so, and does not constitute a waiver of any rights of Gilead under law that it may have to contest the filing or granting of such marketing approval applications.
(b) Damages. In the event (i) any Product is diverted (x) by Licensee or its Affiliate sublicensees, or (y) by another party with the assistance of the Licensee or its Affiliate sublicensees, in each case to any country outside the Territory in any manner described in Section 7.2(a), and (i) a patent covering such Product has been granted in such country or in the country(ies) outside the Teritory in which such Product is manufactured (collectively the circumstance described by clause (i) and (ii), a “Diversion Event“), then in addition to any other remedies Gilead may be entitled to at law or in equity, Gilead shall be entitled to injunctive relief and to receive lost profits associated with the Diversion Event, which such lost profits will be determined by taking into consideration the following factors: (1) the quantity of Product that is the subject of such Diversion Event; (2) the average profit Gilead receives from its sale of such Product in the country(ies) outside the Teritory into which such Product was sold or otherwise transferred, and (3) any erosion in Gilead’s market share in such country(ies) outside the Territory as a result of such Diversion Event. This Section 7.2(b) shall survive the expiration or termination of the Agreement with respect to Products sold prior to such expiration or termination.
[Added by Amendment 1] If any party becomes aware of a suspected occurrence of any prohibited activity described in Section 7.2(a)(i)-(vii), such party will notify the other parties promptly, and following such notification, the parties will confer. Gilead (except in the case of Patents relating to EVG, EVG Product, EVG Combination Product or TAF Quad that are subject to the Japan Tobacco Agreement and controlled by Japan Tobacco) will have the right, but not the obligation, to bring an infringement or other action at its own expense, in its own name, and entirely under its own direction and control. Licensee will reasonably assist Gilead (or, where applicable, Japan Tobacco) in such actions or proceedings if so requested, and will lend its name to such actions or proceedings if required by law in order for Gilead (or Japan Tobacco) to bring such an action, which obligations shall survive the expiration or termination of the Agreement.
7.3 Law Compliance [As amended by Amendment 1]
(a) General. Licensee covenants and agrees that it shall perform all activities under this Agreement in accordance with all applicable laws, rules, and regulations, including, without limitation, with respect to privacy, data protection, recalls, safety and reporting requirements and shall obtain, have and maintain all necessary regulatory approvals (including in India), marketing authorizations, permits and licenses, at Licensee’s expense for the manufacture and sale of API and/or Product and any other Licensee activities contemplated hereby.
(b) FCPA and UK Bribery Act. Licensee covenants and agrees that neither the Licensee, nor any of its affiliates, nor any of their respective directors, officers, employees or agents (all of the foregoing, including affiliates collectively, “Licensee Representatives“) has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended (such act, including the rules and regulations thereunder, the “FCPA“), the U.K. Bribery Act of 2010 (“Bribery Act“), or any other applicable
antibribery or anticorruption laws, rules or regulations (collectively with the FCPA and the Bribery Act, the “Anticorruption Laws“). Licensee covenants and agrees that Licensee and Licensee Representatives have conducted and will conduct their businesses in compliance with the Anticorruption Laws. Licensee covenants and agrees that it shall provide to Gilead on the Amendment Effective Date and within thirty (30) days after the beginning of each calendar year thereafter, certification in writing by Licensee of Licensee’s compliance with the Anticorruption Laws.
(c) Conflicts. None of the parties shall be required to take any action or perform any obligation under this Agreement to the extent that such action or obligation is in direct conflict with any applicable law, rule or regulation.
7.4 Patent Infringement. Licensee covenants and agrees that it shall not infringe the Patents outside the scope of the licenses granted to it pursuant to Section 2, and shall not infringe the Emtricitabine Patents outside the scope of the covenant not to sue set forth in Section 7.5.
7.5 Covenant Concerning Certain Gilead Patents. Gilead covenants and agrees that it shall not, at any time during the term of this Agreement, bring any claim or proceeding of any kind or nature against Licensee in relation to any of the pending and issued patents identified in Appendix 4 hereto (the “Emtricitabine Patents”) to the extent that Licensee decides to make, use, sell, have sold and export any Product in the Territory that may infringe any claims covering the manufacture, use and sale of emtricitabine (or “FTC”) contained in such Emtricitabine Patents. In the event Licensee terminates its license with respect to TDF pursuant to Section 10.5 (a “TDF Termination”), Gilead covenants and agrees that it shall not, during the term of this Agreement, bring a claim or proceeding of any kind against Licensee in relation to the Emtricitabine Patents with respect to Licensee’s manufacture, use or sale of Products that incorporate TDF and FTC as active pharmaceutical ingredients (such Products, “TDF/FTC Products”) in the TDF Territory. For clarity, upon a TDF Termination, nothing set forth in this Section 7.5 shall be interpreted to prevent Gilead from enforcing any right, title or interest in any of its proprietary rights covering TDF (including the TDF Patents) against Licensee with respect to its activities related to TDF/FTC Products in the TDF-TAF Territory, or from enforcing any right, title or interest in any of its proprietary rights covering FTC (including the Emtricitabine Patents) against Licensee with respect to its activities related to TDF/FTC Products outside the TDF-TAF Territory.
7.6 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER GILEAD NOR MPP MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED TECHNOLOGY, PRODUCTS, OR ANY OTHER MATTER UNDER THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, WARRANTIES OF NON-INFRINGEMENT IN THE TERRITORY. Gilead and MPP also do not give any warranty, express or implied, with regard to the safety or efficacy of API or the Product and it shall be the sole responsibility of the Licensee to ensure such safety or efficacy.