II.14 Termination of the APA
II.14.1 Grounds for Automatic Termination of the APA
The APA will be automatically terminated if and when the contractor notifies the Commission of its inability to provide the Product because of, and only because of, the following reasons: (i) the clinical trial results not being satisfactory, (ii) the clinical trial results not meeting their end point in terms of efficacy or safety or (iii) the EU marketing authorisation not being granted. The notification of the contractor shall set out in detail the underlying reasons for automatic termination of the APA. The termination will be effective unless the Commission objects in writing within thirty (30) calendar days following the notification by the contractor, such objection may only be issued based on reasonable grounds given the evidence of one the three reasons (points (i) through (iii)) stated above and taking into account the severity of the impact that the continuation of the APA would have on the contractors business. If and once the termination becomes effective the contractor may not sell and/or deliver the Product to any third party.
II.14.2 Grounds for Termination by the Commission or the Participating Member State
The Commission, acting on behalf and in the name of the participating Member States, may terminate the APA in the following circumstances (a) through (h), and the participating Member States may terminate their respective Vaccine Order Forms in the following circumstances (b) through (h). Except for the termination right in case of (a) below, a right of termination only exists if the reason giving rise of the right to terminate is not cured, removed or otherwise no longer existent within [redacted content] calendar days of receipt by the contractor of formal notification from the Commission of the intention to terminate the APA or participating Member States to terminate the respective Vaccine Order Forms, which formal notification shall include a reasonably detailed description of the alleged breach.
(a) If no EU marketing authorisation is granted by [redacted content], or any other day mutually agreed upon by the Commission and the contractor in writing or if by that date no doses of the Initial European Doses have been supplied to any of the participating Member States. If the contractor expects that such a situation may occur, it will inform the Commission well in advance of such possibility, explain the reasons behind such delays and, if possible, propose a remedy for the situation, including a revised delivery schedule.
(b) If the contractor is in material breach of obligations (i) in relation to the main performance obligations such as the obligations under [redacted content] (ii) in relation to the obligations under [redacted content] or (iii), in the case of a participating Member State, in relation to the obligations under a Vaccine Order Form, or if the contractor [redacted content] refuses to sign one or several Vaccine Order Form(s).
(c) If the contractor is in one of the situations provided for in points (a) and (b) of Article 136(1) of the Financial Regulation.
(d) If the contractor, any of the members of its management board or any of its key employees involved in the performance of this APA is in one of the situations provided for in points (c) to (h) of Article 136(1) or to Article 136(2) of the Financial Regulation.
(e) If the procedure for awarding the APA or the performance of the APA prove to have been subject to irregularities or fraud on the part of the contractor.
(f) If the contractor is in a situation that constitutes a conflict of interest or a professional conflicting interest and such situation is not resolved by the contractor in accordance with Article II.5.2.
(g) If a change to the contractor’s legal, financial, technical, organisational or ownership situation substantially affects the performance of the APA or substantially modify the conditions under which the APA was initially awarded or a change regarding the exclusion situations listed in Article 136 of Regulation (EU) 2018/1046 that calls into question the decision to award the contract.
(h) In the event of force majeure, where either resuming implementation is impossible or the necessary ensuing amendments to the APA or a Vaccine Order Form would mean that the tender specifications are no longer fulfilled or result in unequal treatment of tenderers or contractors.
II.14.3 Grounds for Termination by the Contractor
The contractor may terminate the APA or the respective Vaccine Order Form in the following circumstances:
(a) If the Commission or any of the participating Member States [redacted content].
(b) In the event of force majeure, where either resuming implementation is impossible or the necessary ensuing amendments to the APA or a Vaccine Order Form would mean that the tender specifications are no longer fulfilled or result in unequal treatment of tenderers or contractors.
II.14.4 Procedure for Termination
The contractor or the Commission (as the case may be) must formally notify the Commission or the contractor (as the case may be) of its intention to terminate the APA. The foregoing sentence shall apply mutatis mutandis to the Vaccine Order Forms, it being understood, however, that formal notification shall be issued by or to (as the case may be) the relevant participating Member State.
The Party receiving a termination notice pursuant to the foregoing paragraph shall have thirty (30) calendar days following the date of receipt to submit observations, including the measures it has taken or will take to continue fulfilling its contractual obligations. Failing that, the decision to terminate becomes enforceable the day after the time limit for submitting observations has elapsed.
If the other Party submits observations, the Party intending to terminate must formally notify it either of the withdrawal of its intention to terminate or of its final decision to terminate.
In the cases referred to in points (a) to (c), (f) and (g) of Article II.14.2 and in Article II.14.3, the date on which the termination takes effect must be specified in the formal notification.
In the cases referred to in points (d), (e) and (h) of Article II.14.2, the termination takes effect on the day following the date on which the contractor receives formal notification of termination.
II.14.5 Effects of Termination
(a) in case of an automatic termination pursuant to Article II.14.1
No liability is incurred by any Party in case of an automatic termination according to Article II.14.1.
The up-front payment and the second up-front payments shall [redacted content] in the following way:
The contractor shall send to the Commission within sixty (60) days from notifying the Commission about the automatic termination of the APA, a financial statement (the “Financial Statement”), detailing for which expenses the up-front payments have been used in relation to the purposes as set out in the APA. Expenses to be taken into account include the full amount of internal and/or external expenses which have been, or will be, incurred as well as such which have been committed by, or relate to commitments made by, the contractor at the time when the contractor notified the Commission, it being understood that such ‘expenses’ shall include, without limitation, costs, expenses and liabilities, write-offs and value adjustments in connection with research, development, ramp up, IP, real estate, construction, administration, manufacturing, production, packaging, delivery, preservation, transportation, personnel, redundancy, litigation, agreements, terminations of agreements, advice and services, penalties and fines, whether incurred directly or indirectly by the contractor, a provider, a contractor or a subcontractor of the contractor.
In the Financial Statement, the contractor will set out such amounts as well as those amounts of the up-front payments that have neither been incurred nor committed (“unspent amounts”). Such unspent amounts will be reimbursed by the contractor to the Commission and the participating Member States in proportion to their respective up-front payments within thirty (30) days from the receipt of the Financial Statement by the Commission, it being understood that the Financial Statement and the unspent amounts shall be final and binding upon all Parties to the extent the Commission and the participating Member States have not provided to the contractor a written statement of objections, specifying in reasonable detail the grounds of objections, within thirty (30) days from the receipt of the Financial Statement by the Commission.
In addition, the contractor will transfer, upon the Commission’s request to be provided within forty- five (45) days after the receipt of notification about the automatic termination, to the Commission, or a third party named by the Commission, any raw materials and primary components not used and paid for with the up-front payments (the “Refundable Items”). The contractor will also facilitate the discussion of a transfer of reserved capacity with CMOs paid for with the up-front payments to a third party selected by the Commission. [Redacted content.]
(b) in case of termination pursuant to Article II.14.2
In case of a termination by the Commission according to Article II.14.2(a), the provisions on the effect of the termination and refunding of the unspent amounts and the Refundable Items as set out in Article II.14.5(a) apply mutatis mutandis.
In case of a termination of the APA by the Commission or a Vaccine Order Form by a participating Member State according to Article II.14.2(b) to (g), the contractor may be liable for damage incurred by the Commission or the participating Member State [redacted content]. The Commission or the participating Member State may claim compensation for such damage, as allowed by applicable laws.
(c) in case of termination pursuant to Article II.14.3.
The contractor is not entitled to compensation for any damage resulting from the termination of the APA or a Vaccine Order Form, including loss of anticipated profits, if the contractor terminated the APA or the relevant Vaccine Order Form in accordance with Article II. 14.3(b).
The Commission and the participating Member State are liable for damage incurred by the contractor as a result of the termination of the APA or a Vaccine Order Form by the contractor on the basis of Article II.14.3(a). The contractor may claim compensation for such damage against the Commission and/or the participating Member State(s), as allowed by applicable laws.
The Parties must take all appropriate measures to minimise costs, prevent damage and cancel or reduce their commitments. Within sixty (60) calendar days of the date of termination, the contractor must submit any report and any invoice required for Products that were provided before the date of termination.
Articles I.10.3, I.10.4, I.10.5, I.23, II.6, II.7 and II.17 shall survive any termination of this APA and/or the Vaccine Order Forms.