Gavi Alliance – Novavax, COVID-19 Vaccine Advance Purchase Agreement

Term & termination | Effects of termination

Summary of Approaches

What are the effects of termination or withdrawal by a party?
- If Gavi terminates the Agreement, Novavax must refund the portion of the Advance Payment Amount not yet credited toward a COVAX buyer’s purchase of Novavax vaccine.
- Except for any commitments or liabilities already accrued, all rights and obligations under the Agreement terminate.
- If Gavi terminates the Agreement, Novavax is not entitled to any further balancing payments.
- Termination does not affect supply agreements with COVAX buyers.
- A number of provisions survive termination, including Novavax’s obligation to provide a backup supply in the event SII fails to supply Covovax doses in accordance with SII’s separate agreement with Gavi.

Annotations

This Advance Purchase Agreement governs the supply of about 350 million doses of developer Novavax’s COVID-19 vaccine to participants in the Global COVID-19 Vaccine Facility (“COVAX Facility”), which was established to equitably distribute such vaccines worldwide. The parties to the Agreement are Novavax, which agrees to supply the doses, and the Gavi Alliance, a global health nonprofit organization, which agrees to make an advance payment and facilitate the sale of doses to COVAX buyers. The Agreement is effective as of May 5, 2021. The Parties intend that Novavax will deliver all doses to COVAX participants by the end of Q2 2022.

The Agreement facilitates Novavax’s fulfilment of its obligation in a funding agreement with the Coalition for Epidemic Preparedness Innovations (“CEPI”) to supply its vaccine to a then-unnamed “Global Allocation Body” for distribution to Lower- and Middle-income Countries (LMICs) and other nations. The purpose of Gavi’s advance payment is to “provide demand certainty” for Novavax and secure doses on behalf of COVAX participants with whom Novavax will enter into separate supply agreements. Gavi’s advance payment reduces the price they must pay on delivery. Gavi allocates Novavax doses between COVAX participants.

The Agreement contemplates that the Novavax licensee Serum Institute of India (“SII”) will be the primary source of Novavax vaccine to low- and middle-income countries, under the SII brand name “Covovax.” SII has a separate advance purchase agreement with Gavi for this purpose. The parties expect that Novavax and SII, collectively, will supply 1,092,000,000 vaccine doses under a tiered pricing framework. If SII is unable to meet its supply obligations, then Novavax must provide a ‘backstop supply’ to make up the shortfall.

Many key provisions and details have been redacted from this publicly available copy of the agreement.

Provision Language

13. Term and Terminationstrong>span>p>
13.3 Effects of Expiry and Terminationb>p>
13.3.1 Where Gavi terminates this Agreement pursuant to <a href=”https://ghiaa.org/provision_document/gavi–alliance–novavax–covid–19–vaccine–advance–purchase–agreement–10/” target=”_blank” rel=”noopener“>Clause 13.2a>span>, Novavax shall promptly refund Gavi any portion of the <a href=”https://ghiaa.org/provision_document/gavi–alliance–novavax–covid–19–vaccine–advance–purchase–agreement–2/” target=”_blank” rel=”noopener“>Advance Payment Amounta>span> which has not already been credited against the Purchase Price for a Binding Purchase Order placed by a COVAX Buyer.span>p>
13.3.2 Expiry or Termination of this Agreement shall not release either Party from any commitment under this Agreement or any liability that, at the Termination Effective Date, has already accrued to the other Party, or release Novavax from any obligations under a Supply Agreement.span>p>
13.3.3 Subject to Clause 13.3.2, the Parties acknowledge and agree that the Parties’ rights and obligations under this Agreement shall terminate conclusively from and after the Termination Effective Date. For clarity, in the event of a Termination by Gavi under Clause 13.2.1 or Clause 13.2.2 of this Agreement, Gavi shall not be obliged to make any Balancing Payments for Remaining Doses.span>p>
13.3.4 A Party shall not be entitled to any compensation for any loss, damage, liability or expense incurred as a result of the proper exercise by the other Party of any right to terminate this Agreement.span>p>
13.4 Survival of Clauses.b>Any other term of this Agreement by its nature intended to survive Termination of this Agreement survives Termination of this Agreement, including this Clause 13.4 (span>Survival of Clausesspan>i>) and Clauses 3 (span>Vaccine Variationspan>i>), 4.4 (span>Novavax Supplyspan>i>), 7.2 (span>Delivery, Variance, Short Supplyspan>i>), 8.2(span>Fulfilment of Gavi Obligationsspan>i>), 9 (span>Provision of Informationspan>i>), 10 (span>Auditspan>i>), 12 (span>Liability, Insurance, Indemnificationspan>i>), 13.3 (span>Effects of Expiry and Terminationspan>i>), 13.5 (span>Public Health Licensespan>i>), 14(span>Disputes, Arbitration, Expert Determinationspan>i>), and 16 (span>Generalspan>i>).span>p>

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