“Actual Production Costs” means (a) the Company’s recognized cost of goods sold as calculated in accordance with the Company’s usual and customary accounting methods, which are in accordance with GAAP, minus (b) the amount of any funding provided by the Foundation or any Foundation-supported Entity directly allocable to the production, supply and distribution of such product (except to the extent such funding has been deducted from the cost of goods sold as calculated under the foregoing clause (a)).
“Developing Countries” means the [list of countries in Appendix 1], which includes (i) countries eligible for GAVI support as of 2016, (ii) countries in the process of transitioning out of GAVI support in 2016, and (iii) Botswana, Brazil, Philippines, South Africa and Thailand. “Developing Countries” also means any countries reasonably requested by the Foundation that are part of the Foundation’s strategies to which the Company consents in writing, such consent not to be unreasonably withheld […].
3. Global Access Commitments
(e) Third Party Manufacturers. If the Foundation determines, in consultation with the Progress Review Group, during the Neonatal S. aureus Sepsis Candidate Development Program, Neonatal Sepsis Cocktail Development Program, or any Discovery Project that working with a third-party manufacturer (“TPM”) is reasonably necessary to achieve the price and volume commitments described below, the Company will agree to license and transfer the necessary technology and other intellectual property to such TPM (subject to such TPM entering into reasonable agreements with the Company with respect to confidentiality and use of the technology and licenses solely for the purposes contemplated herein) in order to allow the production of Products for the Developing Countries. The Foundation will be responsible for the reasonable costs payable for the license and technology transfer of the necessary intellectual property to such TPM.
(h) Pricing and Volume Commitments. The Company will work with the Foundation to develop (by the time of completion of Phase II clinical trials) and execute a manufacturing and supply plan that will enable to be met the reasonably expected demand in Developing Countries for any Products. The expected demand will be determined by The Foundation and the Company based upon review of the Foundation’s target markets for the applicable product and other relevant considerations, including cost-effectiveness. The price of the relevant Products in Developing Countries will be such that the Products are affordable to low income individuals in the Developing Countries, and in no case would the price charged by the Company to the relevant procurer or distributor of such products exceed Actual Production Costs plus [**]%. For clarity, the Company will in no event be required to offer the applicable Product to a procurer or distributor at a price that would be less than Actual Production Costs. The manufacturing and supply plan could involve the use of manufacturing partners and support from donors, and the specific level and allocation of funding responsibilities in such plan will be decided as mutually agreed in good faith in writing by the parties based on a fair allocation of the expected benefits between Developing Countries and developed countries. The Foundation will have the right to inspect the Company’s records to verify the Actual Production Costs. These commitments do not apply to sales of Products used outside of the Developing Countries.