Manufacturing And Distribution Agreement: Definition & Sample

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What is a Manufacturing And Distribution Agreement?

A manufacturing and distribution agreement is a legally binding contract between a supplier or manufacturer and distributor of a product. The agreement sets forth certain roles, duties, and obligations which each party must uphold as long as the agreement is in effect. At its core, the manufacturing and distribution agreement says that a supplier or manufacturer will sell products to a distributor for and agreed-upon price. The distributor then agrees to sell the product for-profiit to certain predetermined geographical locations.

An important part of a manufacturing and distribution agreement are called wholesale distribution agreements, which allow distributors to purchase large quantities of products from suppliers or manufacturers at a discounted rate.

Common Sections in Manufacturing And Distribution Agreements

Below is a list of common sections included in Manufacturing And Distribution Agreements. These sections are linked to the below sample agreement for you to explore.

Manufacturing And Distribution Agreement Sample

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

MANUFACTURE AND DISTRIBUTION AGREEMENT

This Manufacture and Distribution Agreement (“Agreement”) made effective as of 12 October, 2005 (“Effective Date”) is made between Gilead Sciences, Inc., a Delaware corporation (“Gilead”), with its principal place of business at 333 Lakeside Drive, Foster City, CA 94404, and Aspen Pharmacare Holdings Limited, a South African company (“Aspen”), with its principal place of business at Building 8, Healthcare Park, Woodlands Drive, Woodmead, Sandton 2052, Gauteng, Republic of South Africa. Gilead and Aspen are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

A. Aspen wishes to manufacture and distribute commercial supplies of Gilead’s proprietary products ( “Products” ).

B. Aspen has the capabilities to manufacture and distribute the Products and wishes to receive the manufacturing process for the Products to manufacture and distribute Products.

C. Gilead wishes to provide Aspen a license to manufacture and distribute Products in the Territories listed on Attachment B.

D. Gilead wishes to obtain commercial supplies of Products from Aspen for distribution by Gilead in the Territories listed in Attachment C.

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In addition to the other terms defined elsewhere in this Agreement, the following terms will have the following meanings when used herein (any term defined in the singular will have the same meaning when used in the plural and vice versa, unless stated otherwise):

1.1. “Affiliate” means an entity that, directly or indirectly, through one (1) or more intermediaries, controls, is controlled by, or is under common control with a Party. For purposes of this definition, “control” means the legal or beneficial ownership of more than fifty percent (50%) of the voting or equity interests, or the power or right to direct the management and affairs of the business (including acting as the general partner of a limited partnership).

1.2. “API” means, for each Product, the active pharmaceutical ingredient(s) of that Product for use in and prior to Manufacture, as listed in the relevant Product Appendix.

1.3. “Applicable Law” means the applicable laws, rules, and regulations, including, without limitation, any rules, regulations, guidelines or other requirements of Regulatory Authorities relating to the Manufacture, use, marketing, storage, distribution and sale of the

Products, that may be in effect from time to time in a jurisdiction in which a Product is Manufactured, used, distributed, stored, marketed or sold.

1.4. “Aspen Forecast” has the meaning set forth in Section 2.3(a).

1.5. “Batch” means a defined quantity of a Product that is (a) uniform in character and in quality; (b) identified by a unique identifier (either through a unique number or a number in combination with the relevant Product code); (c) of a certain amount; and (d) Manufactured during a defined cycle of Manufacture. The specific definition of a Batch will be consistent with Aspen’s customary practices for Products and will be set by Aspen for each type of Product to be supplied by Aspen.

1.6. “Binding Amount” has the meaning set forth in Section 4.3(c).

1.7. “Broader Improvement” has the meaning set forth in Section 5.2(c).

1.8. “Business Day” means all days excluding Saturdays, Sundays, and any other public holidays in the country to which the notice or other document is being sent.

1.9. “Certificate of Analysis” means a certificate in form and substance typically used by Aspen and reasonably satisfactory to Gilead that is signed by the relevant Aspen employee responsible for quality assurance stating the pharmaceutical analysis of each Batch with respect to the Product Specifications.

1.10. “Certificate of Compliance” means a certificate in form and substance typically used by Aspen, and reasonably satisfactory to Gilead, with respect to a Product that certifies that the method, facilities and controls used for the Manufacturing and packaging of the Product are in conformance with GMP and requirements contained in Regulatory Approvals for the Distribution Territory and Manufacturing Territory and that is signed by the relevant Aspen employee responsible for quality assurance.

1.11. “Change” means any major or regulatory changes to any Materials, Specifications, quantitative formulae or any other aspect of Manufacturing process and testing methods.

1.12. “Change Control” means the procedure described in Section 2.8 by which Changes are made to any part of the Manufacturing process or Specifications or the procedure for making those Changes that may potentially impact the regulatory status of a Product.

1.13. “Confidential Information” means (i) all information and materials received by either Party from the other Party pursuant to this Agreement, (ii) all Confidential Information disclosed pursuant to the Mutual Confidential Disclosure Agreement between the Parties dated August 24, 2004 and the Technology Transfer Agreement dated June 22, 2005, and (iii) the terms of this Agreement, in each case other than that portion of such information or materials that:

(a) is publicly disclosed by the disclosing Party, either before or after it becomes known to the receiving Party;

(b) was known to the receiving Party, without obligation to keep it confidential, prior to when it was received from the disclosing Party, as evidenced by competent written proof;

(c) is subsequently disclosed to the receiving Party by a Third Party lawfully in possession of and not in breach of any obligation to keep it confidential;

(d) has been publicly disclosed other than by the disclosing Party and without breach of an obligation of confidentiality with respect thereto; or

(e) has been independently developed by the receiving Party without the aid, application or use of Confidential Information of the disclosing Party, as evidenced by competent written proof.

1.14. “Contract Manufacturer” means the manufacturer of API for the applicable Product authorized by Gilead to receive orders of API from Aspen, as identified in Attachment A, as may be amended from time to time.

1.15. “Control”, “Controls” and “Controlled” means, for a particular item of information or intellectual property right, ownership or possession of the ability to grant a license or sublicense without violating the terms of any agreement or other arrangement with any Third Party (if the relevant entity is a Party) or any other entity (if the relevant entity is a Third Party).

1.16. “Dispute” has the meaning set forth in Section 11.6.

1.17. “Distribution Territory” means those countries listed in Attachment B hereto, as amended from time to time.

1.18. “Documentation” has the meaning set forth in Section 2.6.

1.19. “Facility” means, for a given Product, the Aspen manufacturing facility identified in the Product Appendix for that Product, or any other Aspen facility used for the Manufacture of that Product that Gilead has approved in writing.

1.20. “FDA” means the United States government agency known as the Food and Drug Administration or any successor thereto.

1.21. “Force Majeure” means conditions beyond the reasonable control of the Parties, including without limitation, an act of nature or terrorism, voluntary or involuntary compliance with any regulation, law or order of any government, war, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, shortages of Materials beyond the reasonable control of the parties, or destruction of production facilities or Materials by fire, earthquake, storm or like catastrophe.

1.22. “Gilead Access Program” means Gilead’s program designed to offer Truvada ® and Viread ® at no-profit prices to treatment programs in eligible developing countries.

1.23. “Gilead Intellectual Property” means the Intellectual Property Controlled by Gilead, including the Gilead Marks.

1.24. “Gilead Marks” has the meaning set forth in Section 5.1(a).

1.25. “Good Manufacturing Practices” or “GMP” means the current good manufacturing practices for manufacturing finished products required by any relevant Regulatory Authority and Applicable Laws in the United States and South Africa for the manufacture and testing of pharmaceutical materials or products.

1.26. “Improvement” has the meaning set forth in Section 5.2(a).

1.27. “Intellectual Property” means any intellectual property rights including, without limitation, rights in patents, patent applications, trade-marks, trade-mark applications, trade secrets, copyright and industrial designs.

1.28. “Know-How” means (i) all information, techniques and data specifically relating to Manufacture of a Product, including, but not limited to, inventions, practices, methods, knowledge, know-how, skill, experience, test data (including without limitation pharmacological, toxicological, clinical, analytical and quality control data, regulatory submissions, correspondence and communications, and marketing, pricing, distribution, cost, sales, manufacturing, patent and legal data or descriptions), and (ii) compositions of matter, assays and biological materials specifically relating to development, Manufacture, use or sale of Products.

1.29. “Latent Defect” has the meaning set forth in Section 4.4(d).

1.30. “Licensee” means a licensee or distributor other than Aspen to which Gilead has granted rights to market or commercialize a Product in a specific territory in the Distribution Territory.

1.31. “Losses” has the meaning set forth in Section 10.2.

1.32. “Manufacture, Manufactured or Manufacturing” means all such activities as may be required for the manufacture of each Product, respectively, from API supplied by a Contract Manufacturer including (as appropriate) the planning, purchasing, manufacture, processing, compounding, storage, filling, packaging, labeling, testing, sample retention, stability testing, release and dispatch of Product, and the disposal of waste material and such other matters as may be prescribed for the manufacture and supply of Product by the relevant Specifications and regulatory submissions requirements.

1.33. “Manufacturing Territory” means the countries listed in Attachment C hereto, as amended from time to time.

1.34. “Manufacturing Territory Forecast” has the meaning set forth in Section 4.3(a).

1.35. “Master Batch Record” means, for a given Product, the then-current Procedures to be followed by Aspen with respect to the Manufacture, handling and storage of that Product and the corresponding API and Materials.

1.36. “Materials” means all excipients, raw materials, intermediate and active compounds and packaging components used in the Manufacture and transportation of Product, excluding API.

1.37. “Patent” means (i) unexpired letters patent (including inventor’s certificates) that have not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period, including without limitation any substitution, extension, registration, confirmation, reissue, re-examination, renewal or any like filing thereof and (ii) pending applications for letters patent, including without limitation any provisional, converted provisional, continued prosecution application, continuation, divisional or continuation-in-part thereof.

1.38. “Procedures” means the processing steps required to Manufacture Product.

1.39. “Product” means one or all of the bulk tablets and finished products described in Attachment A hereto, as amended from time to time.

1.40. “Product Appendix” means an appendix to and part of this Agreement identifying a specific Product and setting forth the required information for such Product as stated in this Agreement and any other mutually agreed information or parameters relating to Manufacture and distribution of such Product pursuant to this Agreement, including without limitation an effective date and term for such Product Appendix.

1.41. “Product Specific Improvement” has the meaning set forth in Section 5.2(b).

1.42. “Production Standards” has the meaning set forth in Section 2.2(a).

1.43. “Quantity Statement” has the meaning set forth in Section 4.2(a).

1.44. “Regulatory Applications” means all applications for Regulatory Approval submitted to or filed with a Regulatory Authority with respect to a Product.

1.45. “Regulatory Approval” means all approvals (including without limitation supplements, amendments and pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, necessary for the manufacture, distribution, use or sale of a Product in a regulatory jurisdiction.

1.46. “Regulatory Authority” means the Food and Drug Administration in the United States of America or the Medicines Control Council of South Africa or any other similar

agencies in the Distribution Territory or the Manufacturing Territory, or any successor agencies to the foregoing, in each case with jurisdiction over Regulatory Approvals or the Manufacture of Product.

1.47. “Required Change” has the meaning set forth in Section 2.8(a).

1.48. “Safety Data Exchange Agreement” means the Safety Data Exchange Agreement to be entered into by Gilead and Aspen with respect to safety data with respect to the Products. The Parties shall use their best efforts to ensure that the Safety Data Exchange Agreement is entered into within sixty (60) days of the Effective Date.

1.49. “Shelf Life” means a period measured from the initiation of Manufacture beyond which a Product must not be used, as set by Gilead consistent with regulatory filings for such Product, with the specific Shelf Life for a Product being set forth in the Product Appendix for such Product.

1.50. “Specifications” means the procedures, test results, requirements, standards and other data and documentation with respect to a Product, and the excipients and components therefor, as set forth in the Product Appendix for that Product, as may be amended from time to time pursuant to Section 2.8.

1.51. “Technical Agreement” has the meaning set forth in Section 2.2(b).

1.52. “Third Party” means any entity other than Aspen or Gilead or an Affiliate of either of Aspen or Gilead.

1.53. “Warranty” has the meaning set forth in Section 10.1.

1.54. “Year” means, for each Product, the period between the effective date of the Product Appendix for that Product until December 31 of the year of such effective date, and thereafter, the twelve-month period commencing upon the completion of the immediately preceding Year and ending the following December 31.

For clarity, in this Agreement and all Exhibits and Product Appendices to this Agreement, the United States convention shall be used with respect to commas and decimal points in numbers. For example, 5,250 shall mean five thousand two hundred fifty, and 5.250 shall mean five and two hundred fifty thousandths.

2.1 License. Subject to the terms and conditions of this Agreement, Gilead grants to Aspen a non-exclusive royalty-free non-sublicensable non-transferable license for each Product, for the period that such Product is included in this Agreement, to Manufacture such Product pursuant to this Agreement using API purchased from the designated Contract Manufacturer, using the Procedures at the designated Aspen Facility and to import, offer for sale and sell the Products in the Distribution Territory, under all Patents and Know-How that Gilead Controls

during the term of such license that, but for the grant of such license would be infringed or misappropriated by the Manufacture of such Product by Aspen. [ * ].

2.2 General Manufacturing Obligations.

(a) Manufacturing. Aspen will Manufacture the Products only at the applicable facility(ies) in accordance with the Specifications, Technical Agreement, GMP and Applicable Law using only API supplied by the Contract Manufacturer (collectively the “Production Standards”). Aspen will maintain sufficient Manufacturing capacity at the Facility to satisfy the Product requirements set out in the then-current Aspen Forecast and Manufacturing Territory Forecast provided pursuant to Sections 2.3(a) and 4.3(a).

(b) Technical Agreement. The Parties have entered or will enter into one or more agreements, within 90 days of the Effective Date, collectively covering all Products containing the policies, procedures, and standards by which the Parties will coordinate and implement the operational and quality assurance activities and regulatory compliance objectives contemplated under this Agreement with respect to each of the Products (each, a “Technical Agreement”). Each Party will allocate, use and expend the resources necessary to perform the division of responsibilities assigned to such Party as defined in the Technical Agreement(s). The Parties will negotiate in good faith to modify the Technical Agreement(s) from time to time as necessary or appropriate in light of Applicable Laws, or at Gilead’s or Aspen’s reasonable request.

(c) Initial Costs. [ * ] Aspen’s cost for API used in the Manufacture of both the pilot and validation Batches of each Product; provided however that [ * ] will be responsible for the cost of validation Batches which are put into inventory for commercial sale. Aspen will manufacture all other Batches [ * ].

(a) Aspen Forecast. On the first Business Day of each calendar quarter, Aspen will, subject to Gilead having provided to Aspen Gilead’s forecast described in Section 4.3(a), provide to Gilead a forecast of its projected need for API required for each Product and its projected need for Products for each month of the [ * ] period commencing with the date of the forecast (“Aspen Forecast”) for Gilead’s review and approval of the quantity of API required for each Product. Gilead will respond to each Aspen Forecast within [ * ] of its receipt.

(b) Supply of API. Gilead or its affiliate will authorize the Contract Manufacturers (as determined by Gilead and included in the Dossier) to sell API to Aspen at [ * ] price as set forth in Attachment A hereto. [ * ]. The Parties shall use their [ * ] ensure that Aspen and the Contract Manufacturer conclude a Supply Agreement in respect of the API within [ * ] of the Effective Date, the terms and conditions of such Supply Agreement will inter-alia provide for the provisions of this Article 2.3.

(c) In the event that a third party’s sale of API (which API is produced at an FDA approved facility meeting equivalent quality standards as API supplied by Gilead’s contract manufacturers) which can demonstrate an ability to produce [ * ] API at [ * ] Aspen’s sales of Products in the Distribution Territory during a calendar quarter by more than [ * ] of sales of such Product during [ * ], Gilead will agree to meet with Aspen to renegotiate the price at which Aspen will purchase the relevant API(s). If the Parties are unable to agree after good faith negotiations, the Parties will consider other options with respect to the acquisition of API. Aspen shall be entitled, subject to Gilead’s consent [ * ] .

(d) If a Contract Manufacturer is unable to supply API to fulfill Gilead’s and Aspen’s aggregate purchase orders, [ * ] will develop a plan for rationing API between the Parties (“Shortage Plan”) and present the Shortage Plan to [ * ]. The Parties will meet to discuss the implementation of the Shortage Plan as soon as reasonably possible after receiving notice from the Contract Manufacturer. The Parties will also discuss [ * ].

(e) Territorial Protections. Aspen agrees that any API it purchases under this Agreement will be used only for manufacture of Products in accordance with Gilead-supplied specifications and processes for distribution and sale in the Distribution Territory by or on behalf of Aspen or for supply to Gilead or Gilead’s designees for the Manufacturing Territory.

(f) Storage of API. Aspen will store and handle all API and Materials, whether held by Aspen for Manufacture or as used by Aspen in the course of Manufacture, as set forth in the applicable Master Batch Records and Specifications and in accordance with GMP, and will conform to established safety practices and procedures set forth in Gilead’s then-current applicable material safety data sheet(s) and storage conditions as defined in the applicable commercial product manual, as Gilead shall have provided to Aspen from time to time.

(g) Inventory Reports. Aspen will provide quarterly reports or information on API inventory levels at its facility and its use in Manufacture of Product and monthly reports on finished Product inventory levels.

(h) Audits. Gilead will be responsible for complete audits of the Contract Manufacturers. Aspen will have the right, after coordinating with Gilead, to perform GMP compliance audits at the Contract Manufacturers but will not have access to batch records or other detailed API manufacturing information, and Gilead will be present at any such audit by Aspen. Aspen will use all commercially reasonable efforts to conduct its audit of the Contract Manufacturer simultaneously with Gilead’s.

(i) Administrative Fee. Aspen will pay Gilead a [ * ] administration fee on all Aspen’s purchases of API to compensate Gilead for administrative services including qualifying the Contract Manufacturers to be able to release API to Aspen, regularly auditing Contract Manufacturers, monitoring API supply capacity, and assisting with forecasts. [ * ]. Aspen will pay the administrative fee to Gilead on a quarterly basis,

based on Aspen’s invoices for API from the API contract manufacturers. All payments due hereunder to Gilead shall be paid [ * ].

(a) Purchase and Testing. Aspen will purchase all Materials [ * ]. All materials, including excipients and components, shall meet the applicable Specifications as described in the applicable Product Appendix for each Product, as amended or supplemented from time to time. Aspen will test all Materials at [ * ] in accordance with the applicable Specifications.

(b) Suppliers. Aspen shall be entitled to either purchase all Materials from a Third Party [ * ]. Gilead may recommend a Materials supplier not on Aspen’s preferred supplier list by written notice to Aspen. Each such notice will specify either that (a) an audit of such supplier is not required by Gilead [ * ]; or (b) Gilead will conduct an audit of such supplier [ * ]. [ * ]. Gilead may request API, inactive ingredients and packaging materials for analysis, and based on an agreed-upon schedule and volume, Aspen will provide Gilead with such materials at Gilead’s expense.

(a) Prior to release for shipment of each Product, Aspen shall perform or have performed identification testing and in-process and final quality testing, in accordance with the testing Specifications for such Product, to ensure that such shipment conforms with the then current Production Standards applicable thereto.

(b) Aspen shall, at Aspen’s expense, retain or have retained control samples of each batch of Product in quantities sufficient to conduct [ * ] rounds of testing of such Product in accordance with the Specifications applicable thereto. Records of such testing shall be retained by Aspen until the later of one (1) year after the expiration dating of the last combination Product in which such Product was used or as long as required by Applicable Law.

2.6 Documentation. Aspen will keep complete, accurate and authentic accounts, notes, data and records of the Manufacturing including but not limited to all relevant information and records relating to the Manufacture of Products under this Agreement that may be required from time to time to be provided to any Regulatory Authority pursuant to Applicable Laws, and all Manufacturing development information relating to Products (to the extent such information is in Aspen’s possession) (“Documentation”). Aspen will maintain complete and adequate records in accordance with and to the full extent required by Production Standards pertaining to the methods and the facility used for the Manufacture, holding and distribution of Products. Upon written request by Gilead with reasonable notice, Aspen will provide to representatives of Gilead or its Licensees or distributor(s) for Products, during normal business hours, reasonable access to Documentation, where such access is necessary or reasonably useful to permit Gilead or its Licensees to comply with Applicable Laws. Aspen will maintain Documentation until the later of (a) when such Documentation is no longer required by Applicable Law or other

obligation to be maintained by Gilead or Aspen, or (b) two (2) years after expiration of the Shelf Life for the applicable Batch.

2.7 Packaging and Labeling. The Parties will discuss and determine in good faith the appropriate packaging for Products in view of the optimal packaging for the Distribution and Manufacturing Territories and Aspen’s capabilities [ * ]. Any costs incurred by Aspen in acquiring or altering equipment as required to comply with these [ * ]. All labeling and packaging materials that Aspen proposes to use for the Products will be subject to Gilead review and approval prior to use, such approval will not be unreasonably withheld.

2.8 Change Control Procedures.

(a) Both Parties will promptly notify each other of any new Change required pursuant to an Applicable Law (“Required Change”) and will confer with each other as to appropriate means to comply with such new or potential Required Change. Aspen will implement any Required Change requested by Gilead [ * ] after the approval for the Required Change is granted by the Regulatory Authority.

(b) Gilead may request any other Change in a Manufacturing process by submitting such request in writing to Aspen. Upon receipt of the requisite approvals by the Regulatory Authority, Aspen [ * ].

(c) For any Changes in Manufacture of Products not addressed in Section 2.8(b), Aspen will notify Gilead and obtain Gilead’s prior written approval before Aspen implements any of the following: [ * ] including without limitation, [ * ]; and (ii) changes that require regulatory submission to Regulatory Authorities, relating to the raw Materials or API used in manufacture of Product. Gilead’s consent with respect to such Changes will not be unreasonably withheld or delayed.

(d) For any Changes pursuant to Section 2.8(c), Gilead will review any such proposed changes and agree to a [ * ] schedule and process for implementation for such changes. In the event that the Gilead reasonably determines that any such proposed changes would materially adversely affect the Product, it will notify Aspen and Aspen will continue to manufacture the Product in accordance with the applicable existing Specifications or testing Specifications.

(e) Aspen will make any Changes permitted under this Section 2.8 in compliance with all Applicable Laws, including GMPs, and Aspen’s change control procedure, in accordance with a reasonable schedule agreed by the Parties in good faith.

2.9 Audit and Observation of Manufacturing Facilities. Gilead will have the right, on reasonable notice, to audit Aspen’s facilities used for Manufacturing or testing Product and to test Product Manufactured by Aspen for purposes of determining compliance with the Production Standards and Aspen will comply with Gilead’s reasonable requests resulting from such audits. Aspen will cooperate with and enable audits of its manufacturing facility for Products by Regulatory Authorities and duly authorized representatives of Gilead’s distributors.

Upon prior written request, Aspen will permit duly authorized representatives of Gilead and its Licensees for any Product to observe the Manufacture of such Product; provided that Licensees’ representatives will be granted access to Aspen’s facility at the same time and to the same extent as Gilead’s representatives. Such representatives will comply with all Aspen standard operating policies and procedures while within Aspen’s facility. Aspen shall promptly comply with Gilead’s reasonable written directions for the correction of, or otherwise reasonably resolve, any GMP compliance or other deficiencies noted by Gilead representatives after good faith consultation with Gilead. Gilead’s direction under this paragraph shall not diminish or relieve Aspen of its obligations under this Agreement and all such corrections or resolutions will be implemented in accordance with the applicable terms of this Agreement. Notwithstanding the aforementioned, Aspen shall not be obliged to permit any duly authorized representatives of Gilead’s distributors or any Licensees of any Product to have any access to its manufacturing facility [ * ].

2.10 Compliance with Laws. Aspen will comply with all Applicable Laws for including, without limitation, those applicable to (a) the transportation, storage, use, handling and disposal of hazardous materials, (b) the Manufacture of Products and (c) Aspen’s performance of its obligations under this Agreement. Aspen specifically represents and warrants that it does not and will not use, in any capacity, the services of any person that is debarred under the provisions of the United States Generic Drug Diversion Act or applicable regulations under that law. Aspen represents and warrants to Gilead that it has and will maintain during the term of this Agreement, all government permits, licenses, registrations and approvals, including without limitation, health, safety and environmental permits, legally required for the conduct of the actions and procedures that it undertakes pursuant to this Agreement.

(a) Appointment of Aspen. Gilead appoints Aspen and Aspen accepts appointment as non-exclusive distributor of the Products in the Distribution Territory.

(b) Appointment of Subdistributors. Aspen may appoint subdistributors with Gilead’s prior written approval, not to be unreasonably withheld. Such approval may be conditioned on [ * ]. Before granting or withholding approval Gilead may also consider any potential subdistributor’s experiences and policies compared to global norms and standards. Gilead may conduct an investigation into the background, qualification and capabilities of any proposed subdistributor before granting its consent. Any such subdistributor shall be required to perform its obligations in accordance with the applicable provisions of Section 3.2 below.

3.2. Registration, Sales and Distribution Activities.

(a) General. Aspen will:

(i) use its [ * ] to sell and distribute Products to promptly and adequately supply the demands of Aspen’s customers in the Distribution Territory;

(ii) use [ * ] to distribute Products and perform related activities (including protecting privacy of personal and health care information), ensure that it, its employees, agents and approved contractors comply with and adhere to the highest standards of operations, Gilead’s reasonable requirements, handling and storage limits in Product labeling and packaging, all Applicable Laws and the South African Medicines Control Council’s guidelines on Good Wholesaling Practice and Guidelines for Importation and Exportation of Medicines, and provide documentation of this compliance on Gilead’s reasonable request;

(iii) ensure all Products it sells or distributes include all information and material (including packaging, labeling, information sheets, product instructions, etc.) as agreed to by Aspen and Gilead; use only marketing and promotional materials for the Products that have been reviewed and approved by Gilead prior to use;

(iv) use appropriate methods customarily employed in pharmaceutical distribution in the Distribution Territory and furnish information on all these distribution activities relating to Products to Gilead for Gilead’s pre-approval and thereafter upon reasonable request, without charge;

(v) obtain and maintain all Regulatory Approvals and import and export authorizations required to Manufacture the Products and to provide, sell or distribute Products in the Distribution Territory and, on Gilead’s request, provide Gilead with copies and appropriate supporting documentation; and

(vi) notify Gilead and keep Gilead fully apprised of all local regulatory activity, including any governmental or regulatory inspections of Aspen facilities (including notifying Gilead of the outcome of any such inspections and providing Gilead with any regulatory agency reports and correspondence, upon Gilead’s request) that may reasonably be expected to impact Aspen’s obligations under this Agreement.

(b) Adverse Event Reporting. Aspen will maintain reasonable procedures to collect and report adverse events, other safety-related events and product complaints and permit Gilead to review such procedures and Aspen’s compliance with them. Aspen will provide to Gilead within one business day of receipt any report or other information of any adverse event, other safety-related event or product complaint associated with Products, including any such report or information received from its customers or end-users of Products, that Aspen receives, by email or facsimile as follows:

Gilead Global Drug Safety

333 Lakeside Drive, Foster City, California 94404, United States of America

Fax: +1-650-522-5477, Telephone: +1-650-574-3000/

The Parties will exchange safety data with respect to Products pursuant to the Safety Data Exchange Agreement.

(c) Compliance with Laws. Aspen represents, warrants and certifies to Gilead that none of Aspen and its officers or directors have ever been convicted of a criminal offense (including convictions resulting from guilty pleas), or been found civilly liable for fraud. Aspen has been informed of prohibitions imposed by the United States of America Foreign Corrupt Practices Act of 1977, as amended, and represents and warrants that it has not done and will not do the following: (i) use any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, or (ii) make any unlawful payment to government officials or employees or political parties or campaigns. Aspen will provide a certification to Gilead by January 31 of each year of its continued compliance with this Section.

(d) Drug Recall Procedure. Aspen will maintain a follow-up system and a standard operating procedure adequate to assist in any requested Product drug recall program as further described in the Technical Agreement. Aspen will be responsible for recalls of all Products distributed by Aspen or its sub-distributors in the Distribution Territory. [ * ].

(e) Product Registrations. Gilead authorizes Aspen to file in Aspen’s name any Regulatory Applications required in the Distribution Territory, using regulatory dossiers and information provided or approved in advance in writing by Gilead, and to accept and receive correspondence and communications regarding such Regulatory Applications; provided that such applications be limited to Regulatory Approvals in jurisdictions which permit the Gilead Marks to be included in the labeling and packaging of the Products. For those jurisdictions in the Distribution Territory in which the applicable laws prohibit the Gilead name and trademark to be included in the labeling and packaging of the Products without holding the Regulatory Approval, Gilead authorizes Aspen to file in Gilead’s name any Regulatory Applications using regulatory dossiers and information provided or approved in advance in writing by Gilead, to accept and receive correspondence and communications regarding these applications. Gilead will transfer to Aspen any Regulatory Approval and Regulatory Application when local law permits Gilead Marks to appear on the labeling and packing without Gilead holding such Regulatory Approval. Aspen will promptly notify Gilead of and provide copies of (or summaries of oral communications) (including validated English translations if applicable) of any communications from Regulatory Authorities relating to Products or Regulatory Applications or Regulatory Approvals. Aspen will obtain Gilead’s approval prior to filing any Regulatory Applications or making material communications with or commitments to Regulatory Authorities with respect to Regulatory Applications or Regulatory Approvals. Where Gilead has filed for Regulatory Approvals, it will transfer such applications or approvals to Aspen for countries in which Aspen is to hold such

Regulatory Approvals. Aspen will obtain Gilead’s approval prior to submission to Regulatory Authorities of any Regulatory Application or other documents, information or communications relating to Products. Gilead will supply appropriate documents in Gilead’s possession at its discretion as required to obtain Regulatory Approvals [ * ]. Aspen will permit Gilead to use information with respect to Manufacture by Aspen in any Regulatory Approval or Regulatory Application submitted or filed by Gilead. Aspen will cooperate with Gilead to enable Gilead to cross reference Aspen’s Regulatory Approvals and Regulatory Applications in any Regulatory Application submitted or filed by Gilead with respect to the Products. Gilead may revoke the authorizations in this Section 3.2(e) effective immediately on notice to Aspen. Aspen will transfer to Gilead any Regulatory Approval and Regulatory Application held in Aspen’s name upon termination or expiration of this Agreement and Aspen will provide Gilead with a power of attorney or a letter of cession, which is required, to effect such transfers. Whilst each Party will bear its own internal costs for regulatory activities, Gilead will bear all costs payable to the Regulatory Authorities for these activities, including, all fees charged by the Regulatory Authority with respect to the registration, transfer and maintenance of Regulatory Approvals.

(f) Upon the request of the other Party, Gilead and Aspen will each cooperate to include in Aspen’s Regulatory Approvals a qualified alternate manufacturer of each Product. In the event the Parties agree to qualify another manufacturer of finished product, the Parties will enter a written agreement identifying each Party’s roles and obligations.

(g) Aspen and Gilead will cooperate to obtain U.S. Food and Drug Administration approval of either (i) supplementary U.S. New Drug Applications for Product produced by Aspen, to be held in the name of Gilead, or (ii) U.S. New Drug Applications for Product produced by Aspen, for use outside the U.S. only, to be held in the name of Aspen, that will cross-reference the Gilead New Drug Applications for Products as determined by Gilead after consultation with Aspen. All external costs associated with the aforementioned approvals will be borne by both Parties on an equitable cost-sharing basis.

3.3 Distribution Territory Pricing.

(a) Aspen will sell the Products [ * ] the prices identified in Attachment A (the “Selling Prices”). [ * ].

(c) Other than as provided above and in Attachment A, Selling Prices will be changed only by mutual agreement between the Parties following good faith negotiation. [ * ]. Subject to the foregoing, prices will be consistent with Gilead’s announced pricing approach for Products in the Distribution Territory [ * ].

3.4 Reports on Sales within Distribution Territory. Aspen will provide Gilead reports on a calendar month basis of sales of Product in the Distribution Territory by number of units and total price, broken out by country and by distributor/subdistributor. Aspen and Gilead will review and discuss Aspen’s existing distribution arrangements and work in good faith to make reasonable modifications to improve the efficiency of Product distribution in the Distribution Territory.

3.5 Territorial Protections. Aspen will agree that (a) any API it purchases under this Agreement will be used only for manufacture of Products in accordance with Gilead-supplied specifications and processes for distribution and sale in the Distribution Territory by or on behalf of Aspen or for supply to Gilead or Gilead’s designees, (b) it will not distribute or sell Products for use or sale outside the Distribution Territory other than to Gilead or Gilead’s designees, (c) it will not continue sales or distribution to any entity (other than Gilead or Gilead’s designees) it had reason to believe was selling, distributing or otherwise providing Products for use outside the Distribution Territory, (d) it will not obtain API for any Products from any source other than Gilead’s designated Contract Manufacturer(s), (e) it will not manufacture, sell or distribute any generic versions of Products [ * ] (f) it will not solicit for hire or contract, or hire or contract, any employee or consultant of Gilead or Gilead’s Contract Manufacturers for Products, and (g) it will not obtain an equity position in Gilead’s Contract Manufacturers for Products or purchase or receive any assets of such contract manufacturers.

IV. Supply of Finished Product to Gilead .