Provision Language
10. Term and Termination
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10.2 Termination for Breach. Each of Gilead, MPP or Licensee (“non–breaching party”) shall have the right to terminate this Agreement in the event that Licensee, MPP or Gilead (“breaching party”), respectively, is in material breach of any of its material obligations under this Agreement. The non–breaching party shall provide written notice to the breaching party. The breaching party shall have a period of thirty (30) days after such written notice is provided to cure such breach. If such breach is not cured within the thirty day period, this Agreement shall effectively terminate.
10.3 Gilead Right to Terminate
(a) Gilead and/or MPP shall have the right to terminate this Agreement and/or one or both of the licenses granted pursuant to Section 2.1 or Section 2.2 (whether or not such event constitutes a right of termination pursuant to Section 10.2), immediately if in the reasonable opinion of Gilead and/or MPP, control (through ownership or otherwise) of Licensee changes.
(b) Gilead and/or MPP shall have the right to terminate this Agreement, the covenant contained in Section 7.5 and/or one or both of the licenses granted pursuant to Section 2.1 or Section 2.2 (whether or not such event constitutes a right of termination pursuant to Section 10.2), if:
(i) Gilead determines in good faith that (A) a material quantity of API made or sold by Licensee has been diverted outside of South Africa, China or India, or to third parties that are not Licensed Product Suppliers, (B) a material quantity of Product made and/or sold by Licensee has been diverted to countries outside the Territory (other than with respect to
such diversions occurring solely as a result of the circumstances expressly contemplated in Sections 7.3(c), 10.3(c) and 10.3(d) below), or (C) any of the prohibited activies described in Section 7.2(a)i)-(vii) has occurred;
(ii) Gilead and/or MPP determines in good faith that, due to material deficiencies in Licensee’s compliance, or repeated failure to comply, with the Minimum Quality Standards, Licensee is unable to reliably and consistently manufacture API or Product in accordance with the Minimum Quality Standards;
(iii) Gilead determines in good faith that Licensee has obtained material quantities of API from sources outside of India, South Africa or China (subject to the provisions set forth in Sections 7.3(c) and 10.3(c)), or in ways that are inconsistent with the terms and conditions of Section 3; or
(iv) Gilead’s rights to EVG terminate due to the termination of the Japan Tobacco Agreement, provided, however, that in such event, such termination would only apply on a Product–by–Product basis and only with respect to Products containing EVG that are subject to the sublicense granted by Gilead under the Japan Tobacco Agreement.
Gilead shall give Licensee and MPP written notice of any such event and provide Licensee with a period of thirty (30) days after such notice to demonstrate that the conditions giving rise to Gilead’s determination no longer exist to Gilead’s reasonable satisfaction. If Licensee is unable to do so, this Agreement shall be terminated effective upon the thirtieth (30th) day following such notice. In the event that MPP independently exercises its right to terminate this Agreement pursuant to Sections 10.2 or 10.3, MPP shall provide notice to Gilead of such intent to terminate.
(c) For clarity, and notwithstanding anything to the contrary in this Agreement, with respect to a particular API or Product, and on an API–by–API and Product–by–Product basis, if all patents and patent applications containing a valid claim covering the manufacture, use, import, offer for sale or sale of an API or a Product have been held invalid or unenforceable beyond the possibility of any further appeal in the country(ies) within the Expanded Manufacturing Territory in which such API or Product (or the API incorporated therein) is manufactured and in a country outside the Territory, it shall not be deemed to be a breach of this Agreement for Licensee to supply such API or Product in such country; provided that Licensee obtained applicable regulatory approval in such country. As used herein, the “Expanded Manufacturing Territory” means, individually and collectively, India, China and South Africa.
(d) For further clarity, and notwithstanding anything to the contrary in this Agreement, it shall not be deemed to be a breach of the Agreement for Licensee to supply an API or Product outside the Territory into a country where: (i) the government of such country has issued a compulsory license relating to such API or Product allowing for the importation of such API or Product into such country, provided that Licensee’s supply of Product or API into such country is solely within the scope and geographic range of such compulsory license and only for the duration that such compulsory license is in effect; or (ii) the Government of India has issued a compulsory license allowing for the export of an API or Product from India and into such country, provided that: (Y) there are no patents owned or controlled by Gilead (or its Affiliates) issued in such country and (Z) Licensee’s supply of Product or API into such country is solely within the scope and geographic range of the compulsory license issued by the Government of India, and only for the duration that such compulsory license is in effect.
10.4 Licensee Right to Terminate Agreement. Licensee shall have the right to terminate this Agreement in its entirety upon thirty (30) days prior written notice to Gilead and MPP.
10.5 Licensee Right to Terminate License on an API Basis. Licensee shall have the right at its sole discretion, to terminate the licenses granted under Article 2 with respect to any particular API at any time by notifying Gilead and MPP in writing. Any such written notice shall expressly identify the API or APIs for which Licensee desires to terminate its license from Gilead and MPP (each, a “Terminated API”). Any such termination shall become effective immediately upon receipt of such written notice by both Gilead and MPP (the “API Termination Date”). In the event of any such termination, and with respect to any such Terminated API, and in each case subject to Section 10.8, the following terms shall apply as of the API Termination Date.
(a) All licenses granted by Gilead and MPP under this Agreement with respect to such Terminated API, and any other rights granted by Gilead or MPP with respect to such Terminated API, including without limitation Gilead’s obligation to conduct a technology transfer with respect to such API pursuant to Section 5.4, shall terminate and all Sections of this Agreement shall be interpreted to exclude such Terminated API therefrom (including with respect to rights granted to Gilead pursuant to Sections 5.2 and 6.2(e)(iii)).
(b) All licenses granted by Gilead and MPP under this Agreement with respect to any product containing such Terminated API, and any other rights granted by Gilead or MPP with respect to such product(s), shall terminate and all Sections of this Agreement shall be interpreted to exclude such product(s) therefrom (including with respect to rights granted to Gilead pursuant to Sections 5.2 and 6.2(e)(iii)). For the avoidance of doubt (i) any termination by Licensee of its license to TDF pursuant to this Section 10.5 shall in turn terminate Licensee’s rights and licenses under all Patents that claim TDF (alone or in combination with any other compounds) to manufacture, sell, use, export or import any Product that contains TDF; (ii) any termination by Licensee of its license to COBI pursuant to this Section 10.5 shall in turn terminate Licensee’s rights and licenses under all Patents that claim COBI (alone or in combination with any other compounds) to manufacture, sell, use, export or import any Product that contains COBI; (iii) any termination by Licensee of its license to EVG pursuant to this Section 10.5 shall in turn terminate Licensee’s rights and licenses under all Patents that claim EVG (alone or in combination with any other compounds) to manufacture, sell, use, export or import any Product that contains EVG and (iv) any termination by Licensee of its license to TAF pursuant to this Section 10.5 shall in turn terminate Licensee’s rights and licenses under all Patents that claim TAF (alone or in combination with any other compounds) to manufacture, sell, use, export or import any Product that contains TAF.
(c) For the avoidance of doubt, (i) nothing set forth in this Section 10.5 shall limit Licensee’s ability to manufacture and sell any API for which it retains a license under this Agreement in combination with any other active pharmaceutical ingredient(s), including without limitation a Terminated API, provided that (Y) Licensee has the legal right to manufacture and sell such other active pharmaceutical ingredient and products containing such other active pharmaceutical ingredient within the applicable country(ies) within the Territory and (Z) such manufacture and/or sale is in compliance with the licenses, rights and obligations granted herein, including without limitation Section 2.5(c); and (ii) Licensee will have no obligation to pay Gilead any royalties on Net Sales generated from any product containing a Terminated API and not containing any other API (“Terminated Product”) after the API Termination Date. Termination of any license with respect to any API under this Section 10.5 shall not relieve Licensee of any obligation accruing on or prior to the API Termination Date therefor, including the obligation to pay royalties pursuant to Article 4 on Net Sales of any Product sold prior to the API Termination Date. Upon termination of all API licensed to Licensee under this Agreement, this Agreement shall be deemed terminated in its entirety pursuant to Section 10.4. Nothing set forth in this Section 10.5 shall be deemed a waiver by Gilead to enforce any Patent or any other intellectual property right owned or controlled by Gilead against Licensee for any activities Licensee may undertake with respect to any Terminated API or Terminated Product after any such API Termination Date.
[Added by Amendment 1] For the avoidance of doubt any termination by Licensece of its license to BIC pursuant to Section 10.5 of the Agreement shall in turn terminate Licensee’s rights and licenses under all Patents that claim BIC (alone or in combination with any other compounds) to manufacture, sell, use, export or import any Product that contains BIC.
10.6 Insolvency. In the event that Licensee becomes insolvent, makes an assignment to the benefit of creditors, or has a petition in bankruptcy filed for or against it, Gilead shall have the right to treat such event as a material breach and exercise its rights under Section 10.2.
10.7 Waiver. The waiver by any party of any breach of any term or condition of this Agreement shall not be deemed a waiver as to any subsequent or similar breach.
10.8 Survival. Sections 1, 2.4 (with respect to Improvements developed prior to the effective date of expiration or termination), 2.6(b), 4.3 (with respect to API and Product manufactured and/or sold prior to the effective date of expiration or termination), 4.5 (for a period of 3 years following the effective date of expiration or termination), 4.6 (for a period of 3 years following the effective date of expiration or termination), 5.2 (for a period of 1 year following the effective date of expiration or termination of the Agreement, and solely with respect to Improvements developed prior to the effective date of expiration or termination), 5.3(a), 6.2(e)(iii), 6.3, 7.6, 8, 9, 10.1, 10.8, 11 and 12 shall survive (a) termination or expiry of this Agreement or (b) in the event Licensee terminates its license with respect to any API as provided in Section 10.5, the API Termination Date with respect to such Terminated API and Terminated Product; provided, however, that in the event of such a termination pursuant to this clause 10.8(b), (i) Sections 5.2 and 6.2(e)(iii) shall not survive with respect to such Terminated API or Terminated Product and (ii) Section 2.4 shall survive solely with respect to those Improvements relating to such Terminated API or Terminated Product first developed by Licensee prior to the API Termination Date therefor. In addition, if the MPP License Agreement is terminated, this Agreement shall survive provided that in such case MPP shall no longer be deemed a party to this Agreement and all references to “MPP” in this Agreement shall be replaced with “Gilead”.