Provision Language
Definitions
“Commitment Period” means the period beginning on the Closing Date (as defined in the SPA) and ending on the earliest to occur of (i) the later of such time as ACTs are no longer the WHO’s recommended first line treatment for malaria or the Foundation no longer owns any Foundation Stock, and (ii) such time as both the Company’s Strain development program under this LetterAgreement has concluded (the Company has incurred expenditures related to its Global Access Commitments which, in the aggregate, are equal to or greater than the Foundation Investment) and the Foundation has sublicensed, under Section 3(d)(ii), at least three (3) sublicensees to make AA or AD from the Escrowed Materials and any two (2) of these sublicensees Comes to Market.
“Comes to Market” means the sublicensee commences commercial launch of AA or AD that meets applicable WHO standards, asdemonstrated by a purchase of such AA or AD by a Purchaser, which purchase is confirmed by the Foundation in its discretion.
“COGS” means Amyris’s standard cost of production of AA or AD, as determined in accordance with Amyris’s usual and customary accounting methods, which are in accordance with GAAP; provided that this amount is not greater than the “total cost of ownership” as determined by the Foundation’s methodology in the Total Cost of Ownership Handbook for Pharmaceuticals.
“Purchasers” – Companies qualified to convert AA or AD to artemisinin for anti-malarial uses and/or that produce ACTs that meet applicable WHO standards (§1(c)).
3. Global Access Commitments
The following paragraphs are intended to ensure satisfaction of the Charitable Purposes. In consideration of the Foundation Investment, the Company agrees to the following (collectively “Global Access Commitments”) effective as of the Closing Date (as defined in the SPA):
[…]
(b) Affordability
(i) During the Commitment Period, the Company will supply the AA or AD to Purchasers at a price not to exceed COGS plus ten percent (10%).
(ii) During the Commitment Period, the Company will include the following binding commitment, using language substantially similar to the following, in each purchase and/or supply agreement with a Purchaser for the purchase of the Company’s AA or AD that will be converted into artemisinin and included into ACTs:
“[Purchaser] agrees that it (i) will sell artemisinin and/or ACTs produced using any of the AA or AD produced by the Company at a price that is affordable for public sector purchasers of ACTs such as the Global Fund to Fight AIDS, TB and Malaria or the President’s Malaria Initiative and (ii) will take into account any savings in the cost of its production resulting from the lower price of AA or AD produced by the Company when setting the price of its artemisinin and/or ACTs.”
The Company will take reasonably necessary steps to ensure that its Purchasers comply with such binding commitments. The Company and the Foundation acknowledge that the intent of the foregoing provision is to try to ensure that any cost savings in the price of AA or AD produced by the Company relative to AA or AD market prices as of the date of this Letter Agreement will result in a lower cost of artemisinin and/or ACTs for end users, and the Company and the Foundation will cooperate in good faith during the Commitment Period to modify these provisions as needed to best achieve this objective.
8. Access to Records
The Company shall maintain books and records adequate to provide such information as is necessary to comply with Treasury Regulations section 53.4945-5(b)(4), as amended from time to time. The Company shall provide the Foundation access to such books and records at reasonable times for a period beginning on the Closing Date (as defined in the SPA) and ending four years after the date on which the Foundation no longer holds any Foundation Stock. For the avoidance of doubt, the Foundation’s access shall not be dependent upon the Foundation’s percentage ownership in the Company.
Without limiting the generality of the foregoing paragraph, the Company agrees to permit employees or agents of the Foundation, all of whom are bound by written confidentiality obligations or policies substantially similar to the Foundation’s obligations under the CDA, at any reasonable time and upon reasonable prior notice, during normal business hours, to examine or audit the Company’s relevant books and accounts of record and to make copies and memoranda of the same, in each case at the Foundation’s expense to audit the Company’s compliance with the use of the Foundation Investment, the Global Access Commitments (including COGS and total cost of ownership) and the reporting requirements set forth herein; provided that the Foundation will not conduct such an examination or audit more frequently than once per calendar year unless required due to any audit, request or inquiry of the Foundation by the Internal Revenue Service or because the Company previously materially failed such an annual audit. If the Company maintains any relevant records (including computer-generated records and computer software programs for the generation of such records) in possession of a third party, the Company, upon request of the Foundation, will notify such party to permit the Foundation free access to such records at all reasonable times and to provide the Foundation with copies of any records it may reasonably request in connection with such audit, request or inquiry, all at the Foundation’s expense. All such information provided or disclosed hereunder that constitutes Proprietary Information as defined in the CDA is subject to the CDA.