Provision Language
<p><em><strong>Definitionsstrong>em>p>
<p class=”p1“>“<b>Canada Agreementb>” means the agreements between the Strategic Innovation Fund of Canada and Variation Biotechnologies Inc. executed Sept 16<span class=”s1“>th span>2020 including any extensions or amendments thereto, provided that any such amendment is consistent with CEPI’s rights hereunder.p>
<p class=”p1“>“<b>Cost of Goodsb>” (or “<b>COGsb>”) means the actual costs of manufacturing and supplying the Project Vaccine incurred byAwardee or its designee, the scope of which shall be determined pursuant to Section 15.3 and shall include the following costs to the extent attributable to the manufacture and supply of the Project Vaccine (unless otherwise agreed by theParties): (a) direct costs of raw materials, intermediates and components, reference materials or standards required for release testing and materials necessary to support stability studies (including methods and consumables); (b) fully loaded direct labour costs; (c) direct costs of drug substance and drug product manufacturing, quality assurance and stability testing, characterisation testing, quality control release testing of drug substance and drug product, quality assurance batch record review and release; (d) costs of interim packaging and labelling; (e) direct costs of insurance, storage and freight and shipping costs; (f) tariffs, sales and excise taxes, customs and duty and charges levied by governmental entities (including export fees) on the Project Vaccine; (g) a fair and reasonable allocation of identifiable internal and indirect costs incurred by Awardee in connection with and attributable to such manufacturing of the Project Vaccine, including, at a minimum, for process development, project management, manufacturing oversight, facilities, depreciation, utilities, insurance, and quality control and assurance, in conformity with relevant U.S. GAAP, IFRS or other local GAAP accounting principles, in each case, calculated by Awardee in a manner consistent with its treatment of such costs (including idle capacity) with respect to other products and without disadvantaging the Project Vaccine on account of the terms of thisAgreement or otherwise; (h) royalties, licensing fees, milestone fees and other costs and expenses directly attributable to rights to use theIntellectual Property and technology associated with the Project Vaccines and the Project Materials; (i) costs of compliance with regulatory requirements including reporting, audits and updates; (j) direct costs of product liability insurance, if not otherwise provided; and (k) costs and expenses for pharmacovigilance and medical affairs directly incurred for, or fairly allocable to, the Project Vaccine supplied pursuant to this Agreement.p>
<p>“<strong>Equitable Access Planstrong>” means the principles of Equitable Access under this Agreement including those set out in Clause 15 and the Equitable Access Policy (as defined in Clause 15.1).p>
<p><span style=”text–decoration: underline;”><strong>15. Equitable Accessstrong>span>p>
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<p><strong>15.3 Global Allocation and Purchase.strong> It is the Parties’ expectation that Gavi, pursuant to COVAX (or a similar purchasing entity as otherwise reasonably directed by CEPI), shall provide funding to purchase the Project Vaccine and be responsible for its allocation. Awardee shall respond promptly to any Gavi or UNICEF or CEPI identified Request for Proposal for a COVID–19 vaccine. Awardee shall negotiate in good faith with Gavi (or as otherwise reasonably directed by CEPI) to sign a purchase commitment or purchase order to supply Project Vaccine as maybe required by Gavi, CEPI or any designee of Gavi or CEPI whether during or after a <a class=”ghiaa–keyterm–link” title=”click for definition” href=”https://ghiaa.org/provision_document/cepi–vbi–covid–19–vaccine–development–funding–agreement–4/#” data–term–id=”295“>Pandemic Perioda>, in accordance with and subject to the provisions of Clauses 15.5 and 15.7. As part of the good faith negotiation, the Parties shall negotiate and settle the costs, expenses and other factors to be used in the calculation of COGs, such negotiation and settlement to, at all times, be guided by and reflect the principle that Awardee shall not suffer financial losses when supplying Project Vaccine to any market and take into account the amount of funding provided by CEPI and any other grants or public funding received by Awardee or Subawardee from third parties.p>
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<p><strong>15.9 Pricing Objectives.strong> The Parties acknowledge that the price of the Project Vaccine is critical to achieving Equitable Access. Accordingly, Awardee agrees that its pricing shall be as reasonably required to achieve both Equitable Access for populations in need of a Project Vaccine as well as an appropriate return on investment for vaccine manufacturers, and ensuring that on–going supply is commercially sustainable. The Parties acknowledge that the availability of pandemic insurance as described in<span style=”text–decoration: underline;”><a href=”https://ghiaa.org/provision_document/cepi–vbi–covid–19–vaccine–development–funding–agreement–14/” target=”_blank” rel=”noopener“> Clause 18.7a>span> shall be relevant to pricing. For clarity the following shall be considered to have satisfied the Equitable Access Plan for the relevant doses of Project Vaccine:p>
<p style=”padding–left: 25px;”>(a) the purchase of Project Vaccine by Gavi, CEPI or their respective designee during the <a href=”#kt“>Pandemic Perioda> as described above in <span style=”text–decoration: underline;”><a href=”https://ghiaa.org/provision_document/cepi–vbi–covid–19–vaccine–development–funding–agreement/” target=”_blank” rel=”noopener“>this Clause 15a>span>;p>
<p style=”padding–left: 25px;”>(b) during the Pandemic Period, and in respect of any region in which an epidemic is determined to exist according to Section 15.5(c), the sale of the Project Vaccine to Gavi, CEPI or their respective designee at no more than (i)** for allocation to <a href=”#kt“>LMICsa>; (ii) ** for allocation to <a href=”#kt“>UMICsa> and (iii) ** for allocation to <a href=”#kt“>HICsa>; provided always that in each case the sale of the Project Vaccine to Gavi, CEPI or their respective designee shall be at a price that is no higher than the lowest price at which Awardee sells the Project Vaccine to any third party in respect of the relevant country other than as contemplated by the Canada Agreement;p>
<p style=”padding–left: 25px;”>(c) after the Pandemic Period fora period ending on the later of (i) five years from the end of the Pandemic Period; or (ii) ten years from the Effective Date, the sale of the Project Vaccine to Gavi, CEPI or their respective designee at no more than ** for allocation to LMICs, provided always that in each case the sale of the Project Vaccine to Gavi, CEPI or their respective designee shall be at a price that is no higher than the lowest price at which Awardee sells the Project Vaccine to any third party in respect of the relevant country; andp>
<p style=”padding–left: 25px;”>(d) during the Pandemic Period and after the Pandemic Period for a period ending on the later of (i) five years from the end of the Pandemic Period; or (ii) ten years from the Effective Date, the sale of the Project Vaccine not acquired by Gavi, CEPI or their respective designee at no more than **for allocation to LMICs.p>
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<p><strong>15.11 Information about Production, Supply, Pricing and Sales. strong>At any time during the Term, and during any period after expiry of the Term that Awardee is making sales of Project Vaccine pursuant to Section 15.3, upon written request by CEPI, Awardee shall provide reasonable information about its COGs, production, supply, pricing and sales of Project Vaccine sufficient to enable CEPI to evaluate whether such activities meet the Equitable Access Policy.p>
<p><strong>15.12 Audit of Cost of Goods.strong> At any time during the Term, and during any period after expiry of the Term until the date that is five (5) years after the expiry of any pricing obligations pursuant to Clause 15.9, no more than once per twelve (12) month period and at CEPI’s reasonable cost, CEPI shall have the right to review or to designate an external auditor (which shall be an internationally recognised certified public accounting firm, not engaged on a contingent basis) to review Awardee’s financial records relevant to the information provided in Clause 15.9. Such audits will be conducted during normal operating hours in a manner which minimises disruption to Awardee’s business. In the event that the audit concludes that the COGs and production, allocation, supply or pricing of Project Vaccine doses are not substantially in accordance with the pricing obligations in Clause 15, then Awardee shall: (i) reimburse the reasonable costs of the audit; and (ii) take immediate steps, as advised by the auditors, to comply with the requirements of this Clause 5. The provisions of this Clause 15.12 shall also apply to any Subawardees and <a href=”#kt“>Trusted Collaboratorsa>.p>
