“Authorized Supplier” shall mean a Third Party that has entered into a written agreement with MSD regarding the right to supply Substance and/or Product to other (receiving) third parties who have also entered into a written license agreement with MSD regarding the right to supply Substance and/or Product.
“Non-Territory Patents” shall mean any Patents, granted or pending, in any country that is not included in the Territory (as hereinafter defined). For the avoidance of doubt, to the extent international and regional patent applications are included in Patents, such international and regional patent applications are Non-Territory Patents only with respect to countries not included in the Territory.
Form Sublicense Agreement
3B. Purchase Of Substance Or Product
3B.1. Licensee hereby agrees to supply the Substance and/or the Product, as requested by MSD in writing, to MSD or its Affiliates at the actual cost of goods (verifiable via Third Party audit) plus a reasonable markup (to be negotiated) under a supply agreement containing such other reasonable and customary terms and conditions as are agreed by the Parties in good faith.
3B.2 If Licensee wishes to obtain Substance and/or Product from a Third Party source, Licensee shall notify MSD through MPP of the intended source prior to making any commitments to purchase the Substance and/or Product. MSD will determine at its sole discretion whether and on what terms to grant a license to the intended source to produce the Substance and/or Product or inform Licensee whether such license already exists.
3B.3 Subject to Sections 3B.2 and 3B.4 below, the Licensee shall have the right to source the Substance and/or Product in its finished form from an Authorized Supplier or MPP Licensee. Licensee’s Commercialization of any Product sourced from an Authorized Supplier or MPP Licensee shall be subject to the terms and conditions of this Agreement and be royalty-bearing in accordance with Section 5A of this Agreement.
3B.4 Licensee shall not enter into any agreements with an Authorized Supplier or MPP Licensee with respect to Substance and/or Product without providing prior notice to MSD through MPP. All terms of the agreement between Licensee and Authorized Supplier or MPP Licensee must be consistent with this Agreement or written approval needs to be obtained by MSD. Licensee shall certify to MSD through MPP in writing that its arrangement(s) with each Authorized Supplier with respect to Substance and/or Product is consistent with the terms and conditions of this Agreement. MSD shall have the right to review all such agreements to verify consistency with the terms and conditions of this Agreement. If any inconsistency is found which had not been specifically discussed and agreed with MSD, MSD shall have the right to require Licensee to terminate its agreement(s) with such Authorized Supplier.
3B.5 Licensee shall not be obliged to disclose to MPP the financial terms of its agreement(s) with Authorized Suppliers, but shall provide MPP with quarterly reports in accordance with Section 5A of the Agreement that shall include the quantities of Substance and/or Product being supplied to Licensee by each Authorized Supplier (on an Authorized Supplier-by-Authorized Supplier basis), which will be shared by MPP with MSD.
3B.6 Licensee’s right to source from/sell to Substance and/or Product a particular Authorized Supplier hereunder shall remain in effect solely for so long as such Authorized Supplier remains compliant with the terms and conditions of the agreement between such Authorized Supplier and MSD, and provided that such agreement between such Authorized Supplier and MSD has not expired or been terminated.
3B.7 The Licensee hereby grants MPP the right to disclose its contact information to MSD, an Authorized Supplier or an MPP Licensee for the fulfilment of Section 3B of this Agreement (“Disclosure Right”). Licensee shall receive reciprocal information of other Authorized Supplier or MPP Licensee to the extent that the Disclosure Right had been similarly granted by such Authorized Suppliers or an MPP Licensee.
3B.8 The Licensee confirms and warrants that it shall not engage in any anti-competitive behavior if it exercises its rights under this Section 3B and shall be fully compliant of all applicable laws.
4.1 Diversion. Licensee shall not, directly or indirectly, divert Substance and/or Product outside the Territory. Without limitation of the foregoing, except to the extent provided under this Agreement, the Licensee shall not, directly or indirectly, sell, or supply:
(a) Products or Substance outside the Territory where there is a Non-Territory Patent, for the duration of the relevant Non-Territory Patent;
(b) Substance to any Third Party in the Territory that the Licensee knows, believes or ought reasonably to suspect will sell or supply Substance outside the Territory where there is a Non-Territory Patent, for the duration of the relevant Non-Territory Patent; and/or
(c) Products to any Third Party in the Territory that the Licensee knows, believes or ought reasonably to suspect will sell or supply Products outside the Territory where there is a Non-Territory Patent, for the duration of the relevant Non- Territory Patent.
4.2 Product Labelling. The labelling of all Products sold or offered for sale under this Agreement shall expressly state that
(a) the Product is manufactured under a license from the Medicines Patent Pool; and
(b) any other use, beyond the Field, is not authorized.
4.3 Notice to Third Parties. The Licensee shall give written notice, prior to the first sale of Products, to any Third Party to which it sells Products of the restrictions contained in this Clause 4 and the Licensee shall use its best endeavors, without prejudice to any other provision of this Agreement, to ensure that such Third Parties will undertake to abide by the restrictions contained in this Clause 4 and will assist the MPP and MSD in securing compliance with this Clause 4 and the restrictions which it contemplates.