12. Term and Termination
12.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated as provided in Section 12.2 or 12.3 below, shall remain in effect until the last Initial Europe Doses, Optional Doses (if Optional Doses are ordered pursuant to Section 5.2) and Additional Doses (if any are mutually agreed to be ordered pursuant to Section 5.3) are delivered to the Participating Member States pursuant to Article 5. For the avoidance of doubt, this Agreement does not govern the sale of any Doses of Vaccine that do not constitute Initial Europe Doses, Optional Doses or Additional Doses and the terms of this Agreement shall not bind the Parties if they determine to enter into a new agreement governing Doses that do not constitute Initial Europe Doses, Optional Doses or Additional Doses.
12.2 Termination for Abandonment
(a) In the event that AstraZeneca abandons the development, manufacturing and other efforts hereunder (whether as a result of its determination that the Vaccine cannot be safely or efficaciously developed, manufactured, distributed, or administered or the determination that regulatory approvals for the Vaccine cannot or will not be obtained in a timely manner) AstraZeneca shall notify the Commission of such abandonment and the reasons justifying it and (i) the Commission will have the right to terminate this Agreement upon ten (10) days prior written notice to AstraZeneca, and (ii) AstraZeneca will have the right to terminate this Agreement upon ten (10) days prior written notice to the Commission.
(b) In addition, the Commission can terminate this Agreement if AstraZeneca reasonably determines that the ongoing or planned clinical trials by AstraZeneca and its partners are not likely to be sufficient for approval of the Vaccine as set out in Section 10.2 of this Agreement.
(c) In the event either Party terminates this Agreement pursuant to Section 12.2 (a), upon the request of the Commission, AstraZeneca shall use Best Reasonable Efforts to:
- Ensure the transfer of all purchased vials and stoppers to the Commission (or its designee) to be repurposed;
- Assign the Commission (or its designee) all purchased or reserved drug product manufacturing capacity from the applicable CMO (to the extent permitted by the agreement between AstraZeneca and such CMO); and
- Return to the Commission (or its designee), within thirty (30) days after the date of termination of this Agreement, any portion of the Funding that is unspent, if any, after deducting all expenses incurred by AstraZeneca including any non-cancellable expenses relating to the activities under this Agreement.
(d) Within thirty (30) days following the date of termination of this Agreement, the Commission (with respect to the Initial Funding) and the Participating Member States (with respect to the Subsequent Funding and any other payment, pro rata to the Binding Allocation pursuant to Section 8.3(a) or if there is no Binding Allocation, then pro rata in accordance with the method for allocation set forth in Section 8.3(b)) shall reimburse AstraZeneca for all reasonably incurred unpaid expenses and any non-cancellable expenses relating to the activities under this Agreement for which Funding has not yet been provided.
Without prejudice to the indemnification rights of AstraZeneca and the other Indemnified Persons under Article 14, no additional compensation shall be claimed from the Commission or any Participating Member State for any damages AstraZeneca might incur due to the termination.
12.3 Termination for cause
The Commission on behalf of the Participating Member States may terminate this Agreement in the following circumstances:
(a) if AstraZeneca is in material breach of its obligations (considered as a whole) of this Agreement following notice and an opportunity to cure as set forth below;
(b) if the contractor or any person that assumes unlimited liability for the debts of the contractor is in one of the situations provided for in points (a) and (b) of Article 136(1) of the Financial Regulation;
Prior to any termination under this Section 12.3, the Commission must formally notify AstraZeneca of its intention to terminate the Agreement and the grounds for termination as set forth below AstraZeneca shall have 30 days following the date of receipt of the formal notification to cure such material breach or dispute the existence of such underlying breach by submitting observations, including the measures it has taken or will take to continue fulfilling its contractual obligations. If the Commission confirms that the measures AstraZeneca has taken or will take cure such breach within such 30 days period, the notice of termination submitted by the Commission on behalf of the Participating Member States shall become null and void. In the event of a dispute of the existence or cure status of any material breach, such dispute shall be subject to Section 18.5 of this Agreement prior to any termination of this Agreement.