EXECUTION VERSION Dated 7 March 2011 THE GAVI ALLIANCE and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT OFFER AGREEMENT relating to the Advance Market Commitment for Pneumococcal Vaccines Table of Contents Contents Page 1 Definitions, Interpretation and Construction ............................................................................ 1 2 Incorporation of AMC Terms and Conditions .......................................................................... 1 3 The Offer ................................................................................................................................. 2 4 Obligations Several ................................................................................................................. 3 5 Obligations of the Relevant Party Only ................................................................................... 3 6 Representations, Warranties and Undertakings ..................................................................... 4 7 Miscellaneous Provisions ........................................................................................................ 5 Schedule 1 AMC Terms and Conditions ............................................................................................ 9 1 Definitions, Interpretation and Construction .................................................................. 9 2 AMC Offer Amount and the Remaining AMC Offer Amount ......................................... 9 3 Registration by Vaccine Manufacturers ......................................................................... 9 4 Application for AMC Eligibility ...................................................................................... 10 5 GAVI Strategic Demand Forecast and Calls for Supply Offers ................................... 10 6 Entry into Supply Agreements ..................................................................................... 10 7 AMC Period and Vaccine Purchase Price ................................................................... 12 8 Tail Period, Tail Price, Tail Price Cap and IAC Inflation Review ................................. 13 9 Independent Assessment Committee ......................................................................... 16 10 AMC Funds Suspension Events .................................................................................. 17 11 AMC Cancellation Events ............................................................................................ 18 12 Ongoing Industry Consultation .................................................................................... 19 13 Confidentiality .............................................................................................................. 19 ANNEX 1 Form of Supply Agreement ................................................................................ 20 ANNEX 1 TECHNICAL REQUIREMENTS ........................................................ 33 ANNEX 2A Standard UNICEF Purchase Order as of [date] .............................. 37 ANNEX 2B Standard UNICEF General Terms and Conditions as of [date] ...... 38 ANNEX 2 Target Product Profile ........................................................................................ 41 ANNEX 3 Form of GAVI Payment Demand Notice ............................................................ 43 AMC Offer Agreement i This Offer Agreement (the “Agreement”) is made on 7 March 2011 between: (1) THE GAVI ALLIANCE, a non-profit foundation registered in the canton of Geneva (registry number CH-660-1699006-1) with offices at 2, Chemin des Mines, Geneva, Switzerland (the “GAVI Alliance”); and (2) INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, an international organisation which maintains its headquarters at 1818 H Street, N.W., Washington, D.C., 20433, United States of America (“IBRD”); each a “Party” and together the “Parties”. Whereas: (A) IBRD has entered into grant agreements with certain grantors to receive funds from such grantors in a total amount equivalent to USD 1.5 billion over a specified period in order to establish a pilot advance market commitment for pneumococcal vaccines. (B) In support of this initiative, IBRD wishes to make an offer, subject to the AMC Terms and Conditions, to vaccine manufacturers to pay a certain portion of the Vaccine Purchase Price in respect of an AMC-Eligible Vaccine to be supplied by such vaccine manufacturer pursuant to a Supply Agreement. The IBRD offer is limited in amount and is valid for a limited period only. (C) In support of this initiative, the GAVI Alliance wishes to make an offer and solicitation, subject to the AMC Terms and Conditions, for written requests by AMC-Eligible Manufacturers to negotiate in good faith and to enter into one or more Supply Agreements for AMC-Eligible Vaccines. (D) IBRD and the GAVI Alliance wish to record the terms of their respective offers as set out herein. NOW THEREFORE in consideration of the mutual benefits to be derived and the conditions and promises contained herein, the parties to this Agreement agree as follows: 1 Definitions, Interpretation and Construction 1.1 Definitions Unless otherwise expressly defined in this Agreement (including the recitals and the AMC Terms and Conditions scheduled hereto) all capitalised terms shall have the meaning (if any) given to them in the master definitions schedule dated the date hereof and signed by, amongst others, the parties hereto (the “Master Definitions Schedule”), and the provisions of Clause 2 of the Master Definitions Schedule shall apply to this Agreement as if they were set out herein. 1.2 Interpretation The provisions of Clause 1 of the Master Definitions Schedule shall apply to this Agreement as if they were set out herein. 2 Incorporation of AMC Terms and Conditions This Agreement expressly and specifically incorporates by reference the AMC Terms and Conditions set out in Schedule 1, as though the same were set out in full in this Agreement. In the event of any conflict between the provisions of this Agreement (including the AMC AMC Offer Agreement 1 Terms and Conditions), and the provisions of Supply Agreements, the provisions of this Agreement (including the AMC Terms and Conditions) shall prevail. All references to “this Agreement” herein shall be construed to mean this Agreement including the AMC Terms and Conditions. 3 The Offer 3.1 IBRD Offer 3.1.1 During an AMC Period and subject at all times to the AMC Terms and Conditions, IBRD hereby agrees to pay to the GAVI Alliance, or to such party as the GAVI Alliance may from time to time direct, from Grant Payment Amounts due and payable under the respective Grant Agreements (after giving effect to any applicable Hedging Transactions) such amounts as may be requested by the GAVI Alliance from IBRD in order to meet the AMC-Funded Price portion of the Vaccine Purchase Price where such amount is due and payable in connection with the Supply Agreements. For the avoidance of doubt, IBRD’s payment obligations under this Clause 3.1.1 are not reduced or eliminated by a counterparty’s failure to pay IBRD under an applicable Hedging Transaction. 3.1.2 As and when requested by the GAVI Alliance in accordance with Clause 3.1.1 above, IBRD shall pay in accordance with the provisions of Condition 7, to the GAVI Alliance, or such other party as the GAVI Alliance may direct, the AMC Offer Amount of USD 1.5 billion. For the avoidance of doubt and notwithstanding any other provision contained in this Agreement or under the AMC Terms and Conditions, the maximum cumulative amount that IBRD shall be obliged to pay under Section 3.1.1 shall not exceed the AMC Offer Amount of USD 1.5 billion. 3.1.3 IBRD hereby agrees to perform its obligations in connection with the AMC Pneumo Initiative in accordance with the terms of this Agreement, including the AMC Terms and Conditions set out in Schedule 1. 3.2 The GAVI Alliance Offer 3.2.1 Subject to prior approval of the applicable budget for each Supply Agreement by the GAVI Alliance Board, the GAVI Alliance shall request that UNICEF, or another procurement agency acting on its behalf, negotiates each Supply Offer, in good faith with each AMC-Eligible Manufacturer for a reasonable period of time not exceeding 60 IBRD Business Days, provided that the aggregate Supply Commitment in Supply Agreements and Provisional Supply Agreements does not at any time exceed 200,000,000 doses of AMC-Eligible Vaccine annually prior to the end of such negotiation period. Where Supply Commitments equal 200,000,000 doses of AMC-Eligible Vaccine annually prior to the end of such negotiation period, any ongoing negotiations shall be terminated. 3.2.2 Subject to the AMC Terms and Conditions and the execution of a Supply Agreement, the GAVI Alliance shall pay, or procure the payment to, each AMC-Eligible Manufacturer the portion of the Co-Payment attributable to it during the AMC Period under each Supply Agreement. 3.2.3 The GAVI Alliance shall promptly advise IBRD, in accordance with Condition 7.4 of the AMC Terms and Conditions, of the relevant amounts from time to time payable by IBRD under Clause 3.1.1. AMC Offer Agreement 2 3.2.4 The GAVI Alliance hereby agrees to perform its obligations in connection with the AMC Pneumo Initiative in accordance with the terms of this Agreement, including the AMC Terms and Conditions set out in Schedule 1. 3.3 Offer Period 3.3.1 Subject to the provisions in this Clause 3.3, the offers in Clauses 3.1 and 3.2 shall be valid from the date of this Agreement up to and including the earlier to occur of: (i) the date upon which aggregate Supply Commitments equal 200,000,000 doses of AMC-Eligible Vaccine annually; (ii) the AMC Total Cancellation Date; and (iii) 31 December 2020 (the “Offer Period”). 3.3.2 If at 31 December 2020 the cumulative Supply Commitment of all Supply Agreements entered into is less than 200,000,000 doses of AMC-Eligible Vaccine annually and an AMC Total Cancellation Notice has not been delivered, then IBRD and the GAVI Alliance may in their sole discretion agree to extend the duration of the offers in Clauses 3.1 and 3.2 for a period to be determined by IBRD and the GAVI Alliance, in consultation with the IAC. 3.3.3 If as at the earlier of: (i) the date on which the Remaining AMC Offer Amount is reduced to zero; (ii) the 31 December 2020; and (iii) the AMC Total Cancellation Date: (a) all amounts payable by IBRD under the Offer Agreement and the AMC Terms and Conditions up to but not exceeding the AMC Offer Amount have been paid and discharged; (b) any amounts payable to IBRD under this Agreement have been paid; and (c) IBRD has Surplus Funds, then IBRD shall: (i) calculate, on a pro rata basis taking into account any Grantor Default, the amount of funds attributable to each Grantor; and (ii) convene a meeting of all Grantors to consult and discuss in good faith how such remaining funds shall be applied. 3.3.4 In the event that a Supply Agreement is terminated for any reason, the Offer Period may be recalculated to enable the Supply Commitment in respect of such Supply Agreement to be reallocated to another AMC Eligible Manufacturer. 4 Obligations Several 4.1 Neither Party to this Agreement is responsible for the obligations of the other Party to this Agreement. 4.2 The rights and obligations of each Party under or in connection with this Agreement are separate and independent. 5 Obligations of the Relevant Party Only The obligations of each of the Parties under this Agreement shall not be obligations or responsibilities of, nor guaranteed by, the other Party, nor of or by any other person, entity, sovereign, state, organisation or alliance. AMC Offer Agreement 3 6 Representations, Warranties and Undertakings 6.1 The GAVI Alliance represents and warrants to IBRD upon the date of this Agreement that: 6.1.1 it is duly established and validly existing under the laws of its place of incorporation and that it has full power and authority to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of this Agreement and the transaction contemplated herein; 6.1.2 this Agreement has been duly authorised, executed and delivered by it and constitutes valid and legally binding obligations of it and enforceable against it in accordance with its terms; 6.1.3 all actions or things required to be taken, fulfilled or done (including, without limitation, the obtaining of any consent or licence or the making of any filing or registration) for the entry by it into this Agreement, the carrying out of the other transactions contemplated herein (save for specific matters required at the time of specific transactions or other events in the future), or for the compliance by it with the terms thereof, as the case may be, have been obtained and are in full force and effect; and 6.1.4 the execution and delivery of this Agreement and the carrying out of the other transactions contemplated herein and compliance with its terms do not and will not: (a) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, the documents constituting it, or any indenture, trust deed, mortgage or other agreement or instrument to which it is a party or by which it or any of its properties is bound; or (b) infringe any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental body or court, domestic or foreign, having jurisdiction over it or any of its properties. 6.2 IBRD represents and warrants to the GAVI Alliance upon the date of this Agreement that: 6.2.1 it is duly established and existing under its constitutive articles of agreement; 6.2.2 this Agreement has been duly authorised, executed and delivered by it and constitutes valid and legally binding obligations of it, and will not result in a breach by IBRD of any terms of, or constitute a default under, any agreement or undertaking of IBRD; 6.2.3 all actions or things required to be taken, fulfilled or done (including without limitation the obtaining of any consent or licence or the making of any filing or registration) for the entry by it into this Agreement, the carrying out of the other transactions contemplated herein (save for specific matters required at the time of specific transactions or other events in the future), or for the compliance by it with the terms thereof, as the case may be, have been obtained and are in full force and effect; and 6.2.4 the execution and delivery of this Agreement and the carrying out of the other transactions contemplated herein and compliance with its terms do not and will not: (a) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, the documents constituting it, or any indenture, trust deed, mortgage or other agreement or instrument to which it is a party or by which it or any of its properties is bound; or (b) infringe any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental body or court, domestic or foreign, having jurisdiction over it or any of its properties. AMC Offer Agreement 4 6.3 At all times during the Offer Period, each of the GAVI Alliance and IBRD undertake not to enter into, or procure the entry into of, any supply and purchase arrangements of pneumococcal vaccines for GAVI Eligible Countries which have more favourable terms for vaccine manufacturers and suppliers than those set out in the Transaction Documents. The GAVI Alliance undertakes to obtain this same commitment from any procurement agent acting on its behalf. For the avoidance of doubt, the provisions of this Clause 6.3 shall only apply during the Offer Period. 7 Miscellaneous Provisions 7.1 Further Assurances Each of the Parties agrees to use its reasonable endeavours to perform (or procure the performance of) all further acts and things, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by law or as may be reasonably required to implement and/or give effect to this Agreement and the transactions contemplated hereby. 7.2 Variation 7.2.1 Any amendment to or variation of this agreement (including the AMC Terms and Conditions and the pro-forma Supply Agreement scheduled thereto) shall notwithstanding any provision thereof be subject to prior consultation with the Grantors. No amendment to or variation of this Agreement shall be effective unless in writing and signed by or on behalf of each of the parties. 7.2.2 Any amendment, modification or waiver of the Transaction Documents (other than this Agreement (as to which see Clause 7.2.1 above), or the Registered Manufacturer Agreement and the Transactions Documents to which the Grantors are party (as to which see Clause 7.2.3 below), may notwithstanding any provision of such Transaction Documents be agreed to in writing by the GAVI Alliance and IBRD provided that: (a) no amendment shall be permitted that would have a consequential greater liability for any Grantor; (b) the Grantors have been notified at least 20 Business Days prior to any such amendment, variation or waiver; and (c) any such amendment, variation or waiver corrects or is intended to correct clerical errors, including typographical mistakes, errors of grammar, words or numbers which, in the opinion of IBRD and the GAVI Alliance is proven. 7.2.3 For the avoidance of doubt, no Transaction Document to which any Grantor is a party, or the AMC Registered Manufacturer Agreement shall notwithstanding any provision thereof, be amended or varied without the prior written consent of such Grantor, or in the case of the Registered Manufacturer Agreement, all of the Grantors. 7.3 Communications Unless otherwise specifically provided in this Agreement, all notices, reports and communications hereunder shall be in writing, sent by facsimile or overnight courier to the receiving party at the respective address set forth below, or at such other address specified by notice similarly given: AMC Offer Agreement 5 7.3.1 if to the GAVI Alliance: The GAVI Alliance 2, Chemin des Mines, Geneva, 1202 Switzerland Attention: Managing Director Law & Governance Telephone: +41 (22) 909 6504 Fax: + 41 (22) 909 6550 7.3.2 if to IBRD: International Bank for Reconstruction and Development 1818 H Street, NW Washington, D.C. 20433 United States of America Director, Multilateral Trusteeship and Innovative Attention: Financing Department Telephone: + 1 202 458 0019 Fax: + 1 202 614 0249 7.4 Deemed Receipt The date on which any communication under this Agreement shall be deemed effective is as follows: 7.4.1 if delivered in person or by courier, on the date it is delivered; and 7.4.2 if sent by facsimile transmission, on the date that transmission is received by the recipient in legible form, unless the date of that delivery or receipt, as applicable, is not a business day (in the place of receipt of the relevant notice) or any communication is delivered or received, as applicable, after the close of business on a business day (in the place of receipt of the relevant notice), in which case that communication shall be deemed given and effective on the next business day (in the place of receipt of the relevant notice). 7.5 Privileges and Immunities Nothing in or relating to this Agreement shall be deemed to be or shall constitute a waiver of any of the privileges and immunities of IBRD or the GAVI Alliance, acting in any capacity under any articles of agreement, statutes or by laws or other constitutive documents as may be applicable, or any applicable law, all of which are expressly reserved. 7.6 Partial Invalidity If any provision of this Agreement is prohibited by or is unlawful, invalid or unenforceable under any applicable law of any jurisdiction, such provision shall, as to such jurisdiction (only), be ineffective to the extent of such prohibition without invalidating the remaining provisions hereof, unless the elimination of such provision substantially impairs either AMC Offer Agreement 6 Party’s rights or benefits arising under this Agreement. Any such prohibition in any jurisdiction shall not invalidate the affected provision in any other jurisdiction. 7.7 Disclosure Subject to the confidentiality provisions of Condition 13 of the Conditions, each of the Parties may disclose this Agreement, any amendments to this Agreement, as well as information relating to the transactions contemplated in connection with this Agreement. 7.8 Counterparts This Agreement may be executed in any number of counterparts and by the relevant parties on separate counterparts, each of which is an original but all of which together constitute one and the same instrument. 7.9 Governing Law This Agreement shall be governed by, and interpreted in accordance with, the laws of England and Wales. 7.10 Dispute Resolution 7.10.1 Negotiation Any dispute arising out of or in connection with this Agreement shall be referred first to each party who shall meet and endeavour to resolve the dispute between them within 20 IBRD Business Days of receiving notice of such dispute. For the avoidance of doubt, any notification of such dispute shall be made in accordance with Clause 7.3. Any joint written decision of the parties from such meeting shall be binding upon the parties. 7.10.2 Arbitration Any dispute, controversy or claim arising out of or relating to this Agreement including a dispute as to the validity or existence of this Agreement and/or this Clause 7.10, which has not been settled by agreement of the parties pursuant to Clause 7.10.1, shall be submitted to arbitration by three arbitrators in accordance with the UNCITRAL Arbitration Rules in effect on the date of this Agreement save that, unless the parties agree otherwise, the following provisions shall apply: (a) the arbitration shall be administered by the International Bureau of the Permanent Court of Arbitration; (b) the third arbitrator, who shall act as chairman of the tribunal, shall be chosen by the two arbitrators appointed by or on behalf of the parties. If he is not chosen by the two arbitrators within 30 days of the date of appointment of the later of the two party-appointed arbitrators to be appointed, he shall be appointed by the International Chamber of Commerce; (c) no arbitrator shall be of the same nationality as any party to this Agreement; (d) the parties shall not be required to give general discovery of documents, but may be required only to produce specific, identified documents which are relevant to the dispute; AMC Offer Agreement 7 (e) no information or documents acquired in the course of the arbitration may be disclosed to a third party without the consent of the arbitral tribunal; (f) where more than one dispute arises under this Agreement and under any associated contract which, in the reasonable opinion of the first arbitral tribunal to be appointed in any of the disputes, are so closely connected that it is expedient for them to be resolved in the same proceedings, the first arbitral tribunal shall have the power to consolidate the proceedings (whether or not proceedings to resolve those other disputes have yet been instituted), provided that no date for exchange of witness statements has been fixed. The parties shall comply with any such order for consolidation and the arbitral tribunal shall have the power to make a single award in respect of any number of arbitral proceedings which have been so consolidated. The parties shall not seek to challenge any award so rendered on the grounds that they were not a party to the arbitration or arbitrations under which the award was made; (g) the parties agree to waive any right of appeal against the arbitration award; (h) the place of arbitration shall be the Hague, the Netherlands; and (i) the language of the arbitral proceedings shall be English. 7.11 Effective Date This Agreement shall be effective and binding upon the parties hereto on June 12, 2009, provided that at such date, the Stakeholders Agreement has been signed by all the parties thereto. AMC Offer Agreement 8