Provision Language
15. Consequences Of Termination
15.1 Opt–Out by CureVac. GSK shall notify CureVac in writing within [*****] of receipt of notice of an opt–out decision by CureVac in accordance with Section 14.3, it GSK wishes to:
(i) cease the Development and Commercialization of the relevant COVID Product(s) and decline the transfer of any rights and be released from all obligations under this Agreement in relation to the Development, Manufacture and Commercialization of the relevant COVID Products under this Agreement (the “GSK COVID Cease Option”); or
(ii) continue the Development and Commercialization of the COVID Product(s) (the “GSK COVID Continue Option”).
15.2 Election by CureVac on Termination by GSK at Will or Termination by CureVac for Cause. CureVac shall notify GSK in writing within [*****] of notice of termination in accordance with Sections 14.2, 14.4, 14.5, or 14.6 if CureVac wishes to: (iii) cease the Development and Commercialization of the COVID Products and decline the transfer of any rights in relation to the Development, Manufacture and Commercialization of the COVID Products under this Agreement (the “CureVac Cease Option”); or (iv) continue, itself or with a Third Party, with the Development and Commercialization of the COVID Product(s) (the “CureVac Continue Option”).
15.3 Election by GSK on Termination by GSK for Cause. GSK shall notify CureVac in writing within [*****] of notice of termination in accordance with Sections 14.4, 14.5, or 14.6 if GSK wishes to: (i) cease the Development and Commercialization of the COVID Products and decline the transfer of any rights in relation to Development, Manufacture and Commercialization of the COVID Products under this Agreement, (the “GSK Cease Option”); or (ii) continue with the Development and Commercialization of the COVID Products (the “GSK Continue Option”).
15.4 Specific consequences of CureVac Cease Option, the GSK Cease Option and the GSK COVID Cease Option. If CureVac elects the CureVac Cease Option or GSK elects the GSK Cease Option or the GSK COVID Cease Option, then:
(i) Reversion of Rights: At the effective date of termination, all of CureVac’s rights to the CureVac Technology and LNP Technology shall automatically revert back to CureVac and all of GSK’s rights to the GSK Technology shall automatically revert back to GSK.
(ii) Wind–Down (including costs): Each Party shall, at its own cost (subject to Sections 15.4(iii) and 15.4(iv)), wind–down any on–going activities and commitments in connection with this Agreement and the Ancillary Agreements and use all reasonable efforts (obligation de moyen) to do so by the effective date of termination. If GSK exercises the GSK COVID Cease Option, the Parties will work towards completion of those activities within [*****] after the date of the GSK COVID Cease Option.
(iii) Costs (On Opt–Out by CureVac): If CureVac gives notice of an opt–out decision by CureVac in accordance with Section 14.3 and GSK exercises the GSK COVID Cease Option, neither party shall have any further obligation to reimburse Development Costs, from the date of notice of the opt–out decision by CureVac in accordance with Section 14.3.
(iv) Costs (On Termination by GSK at Will): If CureVac elects the CureVac Cease Option following a termination by GSK in accordance with Section 14.2 while the COVID R&D Plan for a COVID Product has not been completed, GSK shall reimburse CureVac for the Development Costs until the effective date of termination.
(v) Costs (On Termination by CureVac for Cause): If CureVac elects the CureVac Cease Option following a termination by CureVac for cause in accordance with Section 14.4, 14.5 or 14.6, GSK shall reimburse CureVac for the Development Costs until the effective date of termination and reimburse CureVac for its demonstrable stranded costs arising from the early termination of the COVID R&D Plan(s). CureVac shall use reasonable endeavors to mitigate those stranded costs.
15.5 Specific consequences of the CureVac Continue Option. If CureVac elects the CureVac Continue Option, then the following shall apply:
(i) Transition: The JSC shall promptly meet to devise a transition plan, which provides for an orderly and cost–effective transition of, and which sets forth the responsibilities and a timetable for transferring, all Development, Manufacturing and Commercialization responsibilities to CureVac or a Third Party selected by CureVac for this purpose (the “Transition Plan”). Each Party will bear its own costs to agree and implement the Transition Plan unless CureVac has terminated this Agreement for cause in accordance with Section 14.4, 14.5 or 14.6, in which case GSK shall reimburse CureVac for its reasonable and demonstrable direct costs incurred to implement the Transition Plan.
(ii) Reversion of Rights: All of CureVac’s rights to the CureVac Technology and LNP Technology shall automatically revert back to CureVac, except that if the date of termination occurs after the First Commercial Sale of a COVID Product, (i) the termination of the rights and obligations of the Parties, and the transfer and/or return of rights pursuant to this Section 15, shall take effect on a country–by–country basis, at time as CureVac is able to take over the Commercialization of the COVID Product in such country where that COVID Product is sold with no adverse impact on the continuous availability of COVID Products in that country (the “Cut–Over Date”) and (ii) until such date in such country, the licenses granted to GSK under this Agreement (including Article 2) and any rights and obligations associated with such licenses (including GSK’s payment obligations under Section 8) shall survive.
(iii) Transfer of Development Data and Regulatory Approvals. CureVac shall have the right to request in writing, as part of the Transition Plan:
(a) a complete copy of all Development Data Controlled by GSK to be provided in original form and access to all other Know-How in GSK’s possession or under its Control relating to the COVID Products, such Development Data and other Know-How to be provided within [*****] of such request; and
(b) the transfer of Regulatory Approvals held by GSK, its Affiliates or Sublicensees, and if Regulatory Approvals have not been obtained by GSK, its Affiliates or Sublicensees, CureVac may require that GSK transfers to CureVac the status of any application for the Regulatory Approvals and notifies the competent Regulatory Authority thereof and supplies CureVac with all documents and clinical data already prepared by GSK, its Affiliates or Sublicensees for the filing of applications for Regulatory Approvals (with GSK using its good faith efforts to promptly undertake such actions).
(iv) GSK Trademark License: As part of the Transition Plan, on receipt of a written request from CureVac, GSK grants to CureVac an exclusive (even as to GSK), cost–free, perpetual and worldwide license (with the right to sublicense in multiple tiers) under the trademarks Controlled by GSK and used for the COVID Products in the relevant jurisdiction(s) for the Manufacture and Commercialization of the COVID Products in the Territory, excluding, however, any such trademarks – or such parts of a trademark – that include, in whole or part, any corporate name or logo of GSK, its Affiliates or Sublicensees, and excluding any trademark – or such part of a trademark – which contains the letters “[*****]” as prefix or suffix (in which case GSK will not oppose any application by CureVac to register a trademark which is similar to any trademark owned by GSK but does not use the letters “[*****]” as prefix or suffix).
(v) GSK Technology License. On a COVID Product–by–COVID Product and country–by–country basis effective from the Cut–Over Date, GSK grants to CureVac (i) an exclusive (even as to GSK), perpetual and worldwide license (with the right to sublicense in multiple tiers) under GSK’s interest in Joint Product Inventions and Joint Other Inventions, and, upon CureVac’s election, to be exercised no later than [*****] after the effective date of termination, (ii) a non-exclusive royalty-bearing, perpetual and worldwide license (with the right to sublicense in multiple tiers) under the other GSK Technology which has been used by GSK for the Development, Manufacture and/or Commercialization of the terminated COVID Products and is required for the further Development, Manufacture and/or Commercialization of such COVID Products, in each case of (i) and (ii) for the continued Development, Manufacture and Commercialization of the COVID Products in the Territory.
(vi) Post–Termination Financial Terms (Termination by GSK at Will): If GSK terminates this Agreement in its entirety in accordance with Section 14.2 and CureVac elects the CureVac Continue Option and the license to the GSK Technology under Section 15.5(ii), then, on a COVID Product–by–COVID Product basis, effective from the Cut–Over Date, in consideration of the licenses granted in Section 15.5(ii), CureVac shall pay GSK royalties as forth in Exhibit 15.5.
(vii) Post–Termination Financial Terms (Termination by CureVac for Cause): If CureVac terminates this Agreement for cause in accordance with Section 14.4, 14.5 or 14.6, CureVac shall pay GSK the fair market value for acquisition by CureVac of the COVID Product(s) and the associated exclusive license rights and benefits pursuant to this Section 15.5, provided that CureVac may, if CureVac claims or seeks to claim damages in relation to breach of this Agreement by GSK, suspend the payment of such fair market value until the amount of damages suffered or incurred by CureVac has been agreed between the Parties or determined by an arbitration panel in accordance with Section 16.5, at which point those damages (if any) shall be set off against such fair market value payment (and any fair market value payment which would remain outstanding after the set off of damages shall become due and payable within [*****] after the agreement or determination of the amount of damages).
(viii) Expert Panel. For the purposes of Section 15.4(iv), the “fair market value” shall be agreed by the Parties, or if the Parties are unable to agree within [*****] from the date of election in accordance with Section 15.2, either Party may refer the matter to be determined by a panel of experts in accordance with this Section 15.5. The Parties shall agree on the appointment of the panel of experts, comprising three (3) members experienced in the biopharmaceutical sector, in transactions within the biopharmaceutical sector, and the valuation of technology of the biopharmaceutical sector, and shall agree with the experts the terms of their appointment. If the Parties are unable to agree on the identity of the experts within [*****] after expiry of the aforementioned term [*****] term, or if any of the persons proposed is unable or unwilling to act, then each Party shall nominate one expert, which two experts shall together select the third and final expert, who shall preside the expert panel. The experts shall act on the following basis: (i) on their appointment, the experts shall confirm their neutrality, independence and the absence of conflicts in determining the fair market value for the rights granted pursuant to this Section 15; (ii) the experts shall act as experts and not arbitrators; (iii) the experts’ determination shall (in the absence of manifest error) be final and binding on the Parties and not subject to appeal; (iv) the experts shall decide the procedure to be followed in the determination in accordance with this Agreement; (v) the costs of the determination, including the fees and expenses of the experts (but excluding the parties’ own costs which shall be borne by the Party incurring those costs), shall be borne by GSK; and (vi) the expert determination and all matters connected with it shall be held in complete confidence by each of the Parties and shall not be disclosed to any other person except as permitted under Section 11.
15.6 Specific Consequences of the GSK Continue Option. If GSK terminates this Agreement under Sections 14.4, 14.5 or 14.6, the rights and obligations of the Parties hereunder shall terminate as at the effective date of such termination (or, if later, the Cut–Over Date) and the consequences set forth in this Section 15.6 shall apply:
(i) Survival of licenses: The licenses granted to GSK under this Agreement (including under Section 2) and any rights associated with such licenses shall survive the termination of this Agreement.
(ii) Post-Termination Financial Terms: Save as set out in Section 15.6(iii) below, GSK shall pay CureVac the fair market value for acquisition by GSK of the COVID Product(s) (other than any Pathogen Combination Product) and the associated exclusive license rights and benefits pursuant to this Section 15.6, provided that GSK may, if GSK claims or seeks to claim damages in relation to breach of this Agreement by CureVac, suspend the payment of such fair market value until the amount of damages suffered or incurred by GSK has been agreed between the Parties or determined by an arbitration panel in accordance with Section 16.5, at which point those damages (if any) shall be set off against such fair market value payment (and any fair market value payment which remains outstanding after the set off of damages shall become due and payable within [*****] after the agreement or determination of the amount of damages).
(iii) Post-Termination Financial Terms (Pathogen Combination Products): In relation to any Pathogen Combination Product, all payment obligations under Section 8 shall remain in effect. With respect to royalties arising after the effective date of termination, GSK may, if GSK also claims or seeks to claim damages in relation to breach of this Agreement by CureVac, suspend the payment of such royalty payments until the amount of damages suffered or incurred by GSK has been agreed between the Parties or determined by an arbitration panel in accordance with Section 16.5, at which point those damages (if any) shall be set off against such royalty payments (and royalty payment which would remain outstanding after the set off of damages shall become due and payable within [*****] after the agreement or determination of the amount of damages).
(iv) Costs (On Termination by GSK for Cause): CureVac shall undertake (at its own cost and without the right to be reimbursed) the transfer of Know-How in accordance with Sections 4.7 and 5.2.1, and shall reimburse all reasonable and demonstrable direct costs and expenses incurred by GSK in connection with those activities.
15.7 Specific Consequences of the GSK COVID Continue Option. If CureVac gives notice of an opt–out decision by CureVac in accordance with Section 14.3 and GSK exercises the GSK COVID Continue Option:
(i) Continuation under 2020 Collaboration Agreement: GSK shall have the right to continue the further Development, Manufacture and Commercialization of the COVID Products pursuant to the 2020 Collaboration Agreement, and the respective COVID Product shall be deemed an “Other Product” under the 2020 Collaboration Agreement, and all provisions of the 2020 Collaboration Agreement applying to Other Products shall apply to the COVID Products, including diligence obligations, decision making in the JSC and milestone and royalty payments to CureVac. For clarity, the Program(s) relating to each COVID Product which is subject to the GSK COVID Continue Option shall not count towards the limit on the number of concurrent Programs under the 2020 Collaboration Agreement.
(ii) Termination of this Agreement: For the avoidance of doubt, no further payment obligations shall arise under this Agreement (including Section 8).
15.8 General Consequences of Expiry and Termination. On any termination of this Agreement the rights and obligations of the Parties hereunder shall terminate as at the effective date of such termination (unless stated otherwise in this Section 15) and the following shall apply:
(i) Reversion of Rights on Expiry: Upon expiry of this Agreement in a country and provided and to the extent that this Agreement is not terminated after such expiry by CureVac in accordance with Section 14.4, Section 14.5, or Section 14.6, or by GSK pursuant to Section 14.2, the licenses granted to GSK under Section 2 for such country shall become a fully paid–up, perpetual, and non–exclusive license.
(ii) Reversion of Rights on Termination: Except as set forth in this Section 15, the rights and obligations of the Parties under this Agreement shall automatically lapse as at the effective date of the termination in question.
(iii) Return of Information: No later than [*****] after the effective date of termination, each Party shall return or cause to be returned to the other Party or, at the other Party’s option, destroy (and certify in writing the destruction of), all Confidential Information of the Disclosing Party in tangible form received from the other Party and all copies in any medium thereof; provided, however, that each Party may retain any Confidential Information reasonably necessary for such Party’s continued Development, Manufacture or Commercialization of the COVID Products pursuant to this Section 15, and may retain the Confidential Information solely for the purpose of ensuring its compliance with this Agreement and Applicable Law by electronic files created in the ordinary course of business during automatic system back–up procedures pursuant to its electronic record retention and destruction practices that apply to its own general electronic files and information so long as such electronic files are (i) maintained only on centralized storage servers (and not on personal computers or devices), (ii) not accessible by any of its personnel (other than its information technology specialists), and (iii) are not otherwise accessed subsequently except with the written consent of the other Party or as required by law. Such retained copies of documents and Confidential Information shall remain subject to the confidentiality and non–use obligations set forth in this Agreement.
(iv) Settlement of Outstanding Sums: Each Party shall pay all amounts then due and owing as at the termination effective date. Except in cases where (i) CureVac exercises its opt–out right pursuant to Section 14.3 or (ii) GSK terminates at will pursuant to Section 14.2 at a time when GSK commercializes a vaccine product in a Major Market targeting SARS–CoV–2 other than a COVID Product and CureVac elects the CureVac Cease Option, CureVac shall be required to pay GSK [*****] of any Development Costs exceeding the cap set out in Section 4.5, to the extent those Development Costs were incurred by GSK and, at the date of termination, CureVac’s share of those Development Costs has not been reimbursed by CureVac by way of offset against Net Profits in accordance with Section 4.5; provided that: (i) in cases where GSK has exercised the GSK Continue Option or the GSK COVID Continue Option, CureVac may offset such Development Costs against up to [*****] of the royalty payments to be made by GSK to CureVac under Section 15.6 or Section 15.7 (and the 2020 Collaboration Agreement), as applicable; and (ii) in all other cases, the Parties shall agree in good faith on instalment payments over a period of [*****] as of the effective date of termination.
(v) Continuation of Ongoing Clinical Trials: In any event of termination, each Party may complete any clinical trial involving a COVID Product it has initiated prior to the termination of this Agreement in accordance with the protocol for such trial, at its cost and such Party shall be granted by the other Party a cost free, non–exclusive, sublicensable (as set forth in this Agreement), worldwide license under the CureVac Technology and the LNP Technology or respectively the GSK Technology to complete such clinical trials in accordance with their protocols.
15.9 Effect of Expiry or Termination; Survival. Expiry or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiry or termination. Any expiry or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to expiry or termination. The provisions of Sections 1, 2.6, 4.6, 4.8.6, 8.7, 9.1, 9.3, 9.4, 11, 13.1, 13.2, 13.3, 13.8, 13.9, 15, 16.3, 16.4, 16.5, 16.7, 16.8, 16.11 and 16.12 and all other provisions contained in this Agreement that by their explicit terms or from which it is clear from the context survive expiry or termination of this Agreement, and any schedules contained in this Agreement to which reference is made in any surviving term, shall survive the expiry or termination of this Agreement. In the event of a termination of this Agreement with respect to only one of the COVID Products, and continuation of other COVID Products under this Agreement, the termination and consequences of termination provisions only apply to the terminated COVID Product, and the Agreement will remain in full force and effect with respect to the continuing COVID Products.