EXHIBIT 10.31
Portions of this
agreement have been omitted and separately filed with the SEC with
a request for confidential treatment. The location of those
omissions have been noted by [**].
DISTRIBUTION
AGREEMENT
FOR FLUVIRAL™ (INFLUENZA VACCINE)
between
ID BIOMEDICAL
CORPORATION
and
HENRY SCHEIN,
INC.
TABLE OF
CONTENTS
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1.
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DEFINITIONS |
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2.
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APPOINTMENT AND AUTHORITY OF
DISTRIBUTOR |
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3.
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SUPPLY AND PURCHASE OF PRODUCT |
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4.
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PURCHASE PRICE AND PAYMENT |
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DELIVERY OF PRODUCT |
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MARKETING OF PRODUCT |
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7.
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REGULATORY COMPLIANCE |
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8.
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TRADEMARKS AND OTHER INTELLECTUAL
PROPERTY |
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9.
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CONFIDENTIAL INFORMATION;
PUBLICITY |
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10.
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FORCE MAJEURE |
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11.
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WARRANTIES OF IDB AND HSI |
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12.
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INDEMNIFICATION OBLIGATIONS OF IDB
AND HSI |
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13.
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INSURANCE OBLIGATIONS OF IDB AND
HSI |
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14.
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LIMITATION OF LIABILITY |
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15.
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TERM AND TERMINATION |
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16.
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NOTICES |
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17.
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ASSIGNMENT |
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18.
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GOVERNING LAW, JURISDICTION AND
VENUE |
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19.
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MISCELLANEOUS |
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SCHEDULES:
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SCHEDULE 1
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MINIMUM QUANTITY; PURCHASE PRICE AND
ADJUSTMENT; RESALE TO OTHER DISTRIBUTORS; AND PAYMENT TERMS |
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SCHEDULE 2
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TRADEMARK(S) |
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SCHEDULE 3
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COMMITMENTS TO GOVERNMENT OF
CANADA |
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SCHEDULE 4
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ADVERSE REACTION REPORTING |
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SCHEDULE 5
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PRODUCT RECALL PROCEDURE |
i
Portions of this
agreement have been omitted and separately filed with the SEC with
a request for confidential treatment. The location of those
omissions have been noted by [**].
DISTRIBUTION
AGREEMENT
This DISTRIBUTION AGREEMENT
(together with the attachments and exhibits hereto, the
“Agreement”) is entered into as of December 2,
2004 (the “Effective Date”) by and between ID
BIOMEDICAL CORPORATION , a corporation organized and existing
under the laws of the Company Act of British Columbia and having
its principal office at 1630 Waterfront Centre, 200 Burrard Street,
Vancouver, BC V6C 3L6 Canada (“IDB”), and HENRY
SCHEIN, INC. , a corporation organized and existing under the
laws of the State of Delaware, USA and having its principal office
at 135 Duryea Road, Melville, NY 11747 USA (“HSI”).
WHEREAS:
A. IDB develops and
manufactures proprietary vaccines, including an injectable vaccine
for the prevention of influenza virus infection in humans that is
approved in Canada and under development for the U.S. market, and
has all right, title and interest in the Product (as defined
below); and
B. HSI is a leading
distributor of vaccines in the Territory (as defined below), with
expertise in sales, marketing and cold chain logistics, and desires
to and has agreed to act as non-exclusive distributor of IDB for
sales of Product in the Territory; and
C. IDB is willing to
supply HSI with Product for resale in the Territory, and HSI is
willing to purchase Product for resale in the Territory, on the
terms and conditions of this Agreement.
Now, therefore, in
consideration of the foregoing premises and the mutual covenants
and undertakings set forth below, the Parties hereby agree as
follows:
1. DEFINITIONS
1.1 “ Affiliate
” means, with respect to a Party, any corporation or other
business entity that, directly or indirectly, is Controlled by,
Controls or is under common Control with such Party, but only for
so long as such relationship exists. “Control,” as used
in this Section 1.1, means having the power to direct, or
cause the direction of, the management and policies of any entity,
whether through ownership of voting securities, by contract, or
otherwise.
1.2 “ Average Sell
Price ” shall mean [**]
1.3 “ Commencement
Date ” shall mean the date that IDB receives the initial
Marketing Authorization from the Regulatory Authority required to
market Product in the Territory in the first Flu Season, which
shall in no event be later than April 1, 2008 or, if such
initial Marketing Authorization is received prior to such date,
then the Commencement Date shall be as provided in Section 7.2
below.
[**] - Confidential
or proprietary information redacted.
1.4 “ Confidential
Information ” shall mean any confidential or proprietary
information (including, without limitation, know-how, trade
secrets, and other confidential or proprietary information relating
to Product research, development, manufacturing, marketing, sales
and financial information related thereto), whether oral, visual or
written, that is disclosed by one Party hereto (the “
Disclosing Party ”) to the other (the “
Receiving Party ”) in connection with this Agreement,
including, without limitation, reports provided by HSI to IDB
pursuant to Section 2.3 below.
1.5 “ Flu Season
” shall mean the period from approximately October 1 through
March 31.
1.6 “ Intellectual
Property ” shall mean any patent, copyright, trade
secret, know-how, trademark, tradename, design right, moral rights
or other intellectual property right related to the Product under
the laws of any governmental authority, domestic or foreign,
including all applications and registrations related to any of the
foregoing.
1.7 “ Marketing
Authorization ” shall mean the Biologics License
Application (BLA) approved by the Regulatory Authority and
required to distribute or to deliver for distribution Product
lawfully in the Territory, together with any renewals and
replacements thereof and amendments thereto.
1.8 “ Minimum
Doses ” shall mean the number of doses of Product set
forth in clause (i) of Paragraph 1 of Schedule 1 to
this Agreement.
1.9 “ Minimum
Percentage ” shall mean the percentage set forth in
clause (ii) of Paragraph 1 of Schedule 1 to this
Agreement.
1.10 “ Minimum
Quantity ” shall mean the quantity of Product that the
Parties have agreed shall be the minimum quantity to be purchased
by HSI from IDB for each Flu Season, as specified in
Paragraph 1 of Schedule 1 to this Agreement, as such
Minimum Quantity may be modified from time to time in accordance
with the terms of this Agreement; such Minimum Quantity shall be
subject to IDB’s annual influenza vaccine commitments and
pandemic commitments to the Government of Canada during the Term
(as provided in Section 3.2).
1.11 “ Net Sales
Revenue ” shall mean [**]
1.12 “ Other
Distributors ” shall mean sub-distributors, wholesalers
and other resellers to which HSI may sell Product in accordance
with Paragraph 3 of Schedule 1 to this Agreement.
1.13 “ Parties
” shall mean IDB and HSI, and “Party” shall mean
either of them as the context indicates.
1.14 “ Product
” shall mean IDB’s injectable influenza virus vaccine
product [**]
1.15 “ Purchase
Price ” shall mean the price to be paid by HSI to IDB for
all doses of Product supplied to HSI under this Agreement, as set
forth in Paragraph 2 of Schedule 1 to this Agreement.
[**] - Confidential
or proprietary information redacted.
2
1.16 “ Regulatory
Authority ” shall mean the United States Food and Drug
Administration, an agency of the U.S. Department for Health and
Human Services, and any successor agency thereto.
1.17 “ Shipping
Point ” shall mean a single distribution center located
in the continental United States to which Product shall be shipped
under this Agreement, which single distribution center shall be
nominated by HSI in its discretion from time to time, but not more
than once for any given Flu Season.
1.18 “
Specifications ” shall mean the specifications
provided in the Marketing Authorization, including, but not limited
to, those specifications to ensure that the Product is and will
continue to be safe, pure and potent, as such specifications may be
modified from time to time in accordance with the terms of this
Agreement or so as to comply with the requirements of the
Regulatory Authority.
1.19 “ Term
” shall mean the duration of this Agreement as specified in
Section 15.1.
1.20 “ Territory
” shall mean the United States of America, including all
fifty (50) states and the District of Columbia, and all of its
territories and possessions.
1.21 “ Third-Party
Vaccine Products ” shall mean injectable influenza virus
vaccine products, manufactured by or on behalf of any person or
entity other than IDB or its Affiliates, [**]
1.22 “
Trademark(s) ” shall mean the trademark(s), trade
names, service marks and logos identified in Schedule 2 to
this Agreement, and such other trademark(s), trade names, service
marks and logos as may be identified and indicated to HSI by IDB in
writing from time to time during the Term.
1.23 “ Transfer
Price ” shall have the meaning given in
Paragraph 2(B) of Schedule 1 to this Agreement.
2. APPOINTMENT AND
AUTHORITY OF DISTRIBUTOR
2.1 Subject to the terms and
conditions of this Agreement, IDB hereby appoints HSI as its
non-exclusive distributor for the resale of Product in the
Territory, and HSI hereby agrees to act in that capacity beginning
on the Commencement Date. HSI hereby agrees that [**] . HSI
shall have the non-exclusive, non-assignable (except in accordance
with Section 17 below), non-licensable and non-sublicensable
right, after the Commencement Date and throughout the Term, to
promote, sell, market and distribute Product to customers (either
directly or through Affiliates or Other Distributors) in the
Territory; provided, however, HSI shall not resell to Other
Distributors more than the allowable maximum number of doses of
Product specified in Paragraph 3 of Schedule 1. HSI may,
on and after the Commencement Date, describe itself as a
distributor of Product for IDB in the Territory but it shall not
hold itself out as IDB’s agent or representative or as
otherwise being authorized to bind IDB in any way. IDB hereby
grants to each of HSI’s Affiliates and Other Distributors the
rights granted to HSI in this Section 2.1 solely to the extent
necessary to perform their obligations with respect to the
Product.
[**] - Confidential
or proprietary information redacted.
3
2.2 HSI shall actively promote,
distribute and sell Product only within the Territory, and neither
HSI nor its Affiliates or Other Distributors shall promote or
solicit orders for Product or donate, sell, offer to sell or
otherwise distribute Product outside the Territory, or where they
ought reasonably to be aware that the ultimate destination for
Product is outside the Territory. HSI and its Affiliates and Other
Distributors and their respective employees and agents shall not
promote Product for any indications not approved for such Product
by the Regulatory Authority. HSI shall forward to IDB all inquiries
relating to Product from customers or potential customers outside
the Territory.
2.3 As Product distributor, HSI
shall determine the prices and other terms and conditions under
which it offers Product for sale and sells Product to customers
within the Territory. On or prior to the Commencement Date, HSI
shall provide IDB with a resale certificate in such form, and
containing such information, as required by IDB. On a monthly basis
during the Term, beginning after the Commencement Date, HSI shall
provide a detailed written report to IDB, in a mutually agreeable
format, describing [**]. HSI shall deliver such reports to
IDB in connection with the monthly meetings conducted pursuant to
Section 6.3. Notwithstanding the foregoing, HSI shall not be
required to identify names or addresses of customers of Product or
Third-Party Vaccine Products and shall not be required to provide
information which HSI is prohibited by contract or law from
providing to third parties.
2.4 HSI shall not make any
alterations or knowingly permit any alterations to be made to
Product without IDB’s express written consent, which consent
may be withheld in IDB’s sole discretion.
2.5 The Parties acknowledge and
agree that IDB may sell Product to any United States governmental
agency or body at any time between the Effective Date and the
Commencement Date under a special procurement process to address
influenza vaccine shortages or other immediate needs of the U.S.
government, and such sales shall not be subject to the terms of
this Agreement; provided, however, that IDB may indicate to the
U.S. government a preference for distribution of some quantity of
Product under such circumstances by and through HSI, although IDB
shall not be deemed to be in breach of this Agreement or to have
any liability to HSI, and HSI shall have no right to terminate this
Agreement or exercise any other remedies against IDB, if IDB does
not indicate such preference to the U.S. government or the U.S.
government fails to distribute Product under such circumstances by
or through HSI.
3. SUPPLY AND PURCHASE
OF PRODUCT
3.1 Subject to Section 3.2
and Paragraph 2(C) of Schedule 1 to this Agreement, IDB
agrees to use commercially reasonable efforts to develop,
manufacture, apply for Marketing Authorization of, apply for the
release of and deliver to HSI, on or before the delivery dates
specified in Schedule 1, the Minimum Quantity of Product as a
final, packaged product. HSI hereby commits to purchase the Minimum
Quantity of Product provided by IDB to HSI for each Flu Season from
and after the Commencement Date during the Term, for the Purchase
Price described in Schedule 1, provided delivery and release
of the Minimum Quantity occurs on or before [**] of such Flu
Season. IDB agrees to notify HSI promptly of any delay in the
manufacturing and shipping schedule, the cause of such delay and
the anticipated extent of such delay, or in the event IDB is unable
to manufacture (and the cause for such inability to
[**] - Confidential
or proprietary information redacted.
4
manufacture) some or all of
the Minimum Quantity of Product for any given Flu Season.
Recognizing the difficulties involved in vaccine manufacturing, the
Parties acknowledge and agree that IDB shall not be deemed to be in
breach of this Agreement or to have any liability to HSI, and HSI
shall have no right to terminate this Agreement under this
Section 3.1 or exercise any other remedies against IDB, if IDB
fails to manufacture any or all of the Minimum Quantity of Product
for any given Flu Season provided that IDB has used commercially
reasonable efforts to develop, manufacture, apply for Marketing
Authorization of, apply for the release of and deliver to HSI, on
or before the delivery dates specified in Schedule 1, the
Minimum Quantity of Product as a final, packaged product.
[**]
3.2 Notwithstanding anything to
the contrary in this Agreement, HSI acknowledges and agrees that
IDB’s obligation to supply the Minimum Quantity of Product to
HSI under this Agreement is subject to, and the Minimum Quantity
shall be reduced by, IDB’s contractual annual commitments to
provide Product to the Government of Canada and additional
contractual commitments to provide Product to the Government of
Canada in the event of influenza pandemics in Canada, if any, which
commitments shall have priority over IDB’s commitments to HSI
hereunder. Such commitments to the Government of Canada are
described further on Schedule 3. The Parties agree that IDB
shall not be deemed to be in breach of this Agreement or to have
any liability to HSI, and HSI shall have no right to terminate this
Agreement, in the event IDB is unable to supply HSI with the
Minimum Quantity of Product because of such commitments to the
Government of Canada. IDB shall keep HSI informed, in the monthly
meetings described in Section 6.3, of the quantity (if any) of
Product necessary to meet such commitments to the Government of
Canada for a given Flu Season and the impact on the Minimum
Quantity of Product available to HSI with respect to such Flu
Season.
3.3 Except as otherwise
specified in Section 3.4 below, IDB agrees that, with respect
to the timing of shipment of a given quantity of Product into the
Territory, IDB will allocate such quantity of Product among HSI and
IDB’s other distributors in the Territory on a pro rata
basis, based on HSI’s and each such other distributor’s
respective Minimum Percentage. Thus, IDB will supply HSI with a
percentage of each lot of Product that is shipped into the
Territory that is approximately equal to HSI’s Minimum
Percentage, subject to the overall Minimum Quantity limitations set
forth in this Agreement.
3.4 HSI shall be granted a
first right of refusal to acquire a percentage of increased
production of Product as provided in this Section 3.4.
[**]
3.5 All Product shall be
packaged and labeled for sale and delivered by IDB to HSI in
accordance with the regulations of the Regulatory Authority, such
packaging indicating that the Product is manufactured by IDB and
that the Trademarks are registered trademarks of IDB. Subject to
compliance with applicable regulations of the Regulatory Authority,
IDB may at any time withdraw the Product from the market or alter
the Specifications as it deems necessary or appropriate and/or as
may be required by the Regulatory Authority, including without
limitation changes in design, production or packaging of
Product.
3.6 IDB shall be responsible
for exporting Product from any location in which IDB may
manufacture or have manufactured Product and shall obtain any
necessary export licenses required for such export. IDB shall be
responsible for obtaining any necessary licenses or
[**] - Confidential
or proprietary information redacted.
5
approvals of applicable
regulatory agencies in the Territory required for the importation
of Product into the Territory and for the payment of all duties,
fees and charges required for such importation; provided ,
that, HSI shall be the importer of record of Product into the
Territory and HSI shall cooperate with and assist IDB, upon
IDB’s written request and at IDB’s expense, in
obtaining approvals of regulatory agencies in the Territory
required for the importation of Product into the Territory.
3.7 The Regulatory
Authority’s release of each lot of Product is necessary
before HSI is allowed to distribute Product. The Parties recognize
that the timing for obtaining Regulatory Authority release is
uncertain. However, IDB shall use its commercially reasonable
efforts to obtain the necessary Regulatory Authority releases as
soon as reasonably possible each Flu Season and, to the extent
reasonably possible, by [**] of each Flu Season after the
Commencement Date for [**] of the Minimum Quantity and by
[**] of each Flu Season after the Commencement Date for
[**] of the Minimum Quantity; provided , that, if and
to the extent that Product is not manufactured or available for
release, or that some or all Regulatory Authority releases are not
obtained, on or before either [**] in a given Flu Season
after the Commencement Date, irrespective of the reason therefor,
(i) IDB shall not be deemed to have breached any obligations
under this Agreement or to be liable to HSI hereunder provided that
IDB has used its commercially reasonable efforts to obtain the
necessary Regulatory Authority releases as soon as reasonably
possible each Flu Season, and (ii) notwithstanding the
provisions of Section 10 below, if [**] of the Minimum
Quantity of Product is not released by [**] in such Flu
Season, HSI shall not be obligated to purchase the amount of
Product that was not released by such date. Notwithstanding the
foregoing, HSI may elect to purchase Product released after
[**] (provided release is obtained by a date acceptable to
HSI), in which case it shall notify IDB in writing of HSI’s
decision to acquire Product released after [**] within five
(5) business days after [**] , which notice shall
include the quantity of Product HSI desires to purchase and the
acceptable post- [**] release date for such Product. If IDB
reasonably believes such release date is achievable, IDB shall use
its commercially reasonable efforts to obtain Product release by
such date (or by such other date as the Parties may mutually agree
in writing). HSI shall return to IDB (at IDB’s expense) any
Product not released by [**] that HSI decides not to
purchase. HSI shall pay IDB the Purchase Price for all Product
released by [**] , as well as all Product released after
[**] that HSI elects to purchase, in accordance with the
terms and conditions of this Agreement, with no right to return
such Product to IDB (except only as set forth in Sections 5.2
and 5.3) even if HSI is unable to sell such Product.
3.8 IDB will provide HSI with a
copy of IDB’s key clinical development milestones for Product
in the Territory (the “Milestones”) promptly after
execution of this Agreement, which Milestones shall be subject to
modification by IDB from time to time. IDB will provide HSI with
written reports regarding progress made with respect to the
Milestones (as modified) as of June 30, 2005,
December 31, 2005, and quarterly thereafter through
December 31, 2006. HSI agrees that the Milestones and progress
reports are being provided by IDB for informational purposes only,
and that IDB shall not be deemed to be in breach of this Agreement
or to have any liability to HSI, and HSI shall have no right to
terminate this Agreement under this Section 3.8 or exercise
any other remedies against IDB, in the event the development of
Product does not proceed in accordance with the Milestones. HSI
further agrees that the Milestones and all progress reports shall
be considered Confidential Information of IDB under this
Agreement.
[**] - Confidential
or proprietary information redacted.
6
3.9 [**]
4. PURCHASE PRICE AND
PAYMENT
4.1 HSI shall pay IDB the
Purchase Price for the Minimum Quantity of Product, and all other
Product supplied by IDB to HSI under this Agreement, as the
Purchase Price is described and calculated in accordance with
Paragraph 2 of Schedule 1.
4.2 IDB may invoice HSI at any
time after Product has been delivered to the Shipping Point.
Payment in full of the Transfer Price of all Product in each
shipment shall be due and paid by HSI to IDB within thirty
(30) days after the later of (i) the date of delivery of
such Product to the Shipping Point or (ii) the date of release
of such Product by the Regulatory Authority. Reconciliation and
payment or credit of the final Purchase Price (the Transfer Price
as adjusted in accordance with Paragraph 2(B) of
Schedule 1) shall be made as provided in Paragraph 2(D)
of Schedule 1. Should HSI fail to pay IDB any amount due IDB
on or before the due date for payment, HSI shall pay IDB the full
amount due plus interest on such unpaid amount from its original
due date until the date IDB receives full payment, such interest to
be at the rate specified in Paragraph 5 of Schedule 1.
For the avoidance of doubt, in the event that Product is delivered
to HSI and invoiced by IDB, but subsequently is properly rejected
by HSI in accordance with Sections 5.2 and 5.3 of this Agreement,
then HSI shall pay the full Transfer Price, but IDB shall give
appropriate credit to HSI unless the rejected Product is replaced
by IDB at IDB’s expense in accordance with
Section 5.3.
4.3 During the term of this
Agreement and for a period of three (3) years thereafter, HSI
and its Affiliates shall keep accurate books and records with
respect to the sale and distribution of Product in accordance with
U.S. generally accepted accounting principles (“GAAP”)
consistently applied and in sufficient detail to enable IDB to
determine the correctness of all payments made to IDB hereunder.
Upon written request by IDB, HSI shall permit an independent
certified public account or IDB in-house auditor or accountant
(“Accountant”) (to be determined and selected by IDB
and reasonably acceptable to HSI), to inspect HSI’s books,
records and facilities, and copy such books and records, to the
extent such Accountant reasonably deems necessary or appropriate
for the sole purposes of verifying the completeness and accuracy of
the reports delivered and payments made under this Agreement and
ascertaining HSI’s compliance with its obligations under this
Agreement. The Accountant’s report based on such inspection
shall be limited to a detailed report on those subjects.
[**] HSI will pay IDB the amount of any such deficiency
within thirty (30) days of the date of the invoice therefor,
and shall pay interest at the rate specified in Paragraph 5 of
Schedule 1 for any past due amounts.
5. DELIVERY OF
PRODUCT
5.1 Subject to HSI’s
satisfaction of its importation obligations under Section 3.6,
IDB agrees to deliver all Product ordered by HSI hereunder FOB
Shipping Point.
5.2 All Product is shipped on a
non-returnable basis except only as set forth in Sections 3.7
and 5.3 and except if there is a Product recall. HSI shall pay IDB
the Purchase Price for all Product delivered to HSI and released by
the Regulatory Authority even if HSI is unable
[**] - Confidential
or proprietary information redacted.
7
to sell such Product,
subject only to HSI’s right to reject Product as provided
below. Not later than [**] days after its receipt of each
shipment of Product at the Shipping Point, and sooner if reasonably
possible, HSI shall notify IDB as provided in Section 5.3 of
any basis for rejecting any such Product (the only bases for
rejection being as specified in Section 5.3). If HSI fails to
give such notice to IDB within such period, then such Product shall
be deemed to be finally accepted by HSI. Notwithstanding the
foregoing, if HSI thereafter discovers a latent defect which could
not readily be identified upon a reasonable inspection of Product
at the time of delivery to the Shipping Point, and such latent
defect constitutes a Defective Product (as defined in
Section 11.4 below), HSI shall inform IDB of such Defective
Product within five (5) business days of such discovery, and
the provisions of Section 5.3 shall apply.
5.3 To reject Product, HSI
shall, within the rejection period specified in Section 5.2,
notify IDB of its rejection in writing, describing in detail the
basis for such rejection (which must be either, and shall be
limited to, (i) a Defective Product as defined in
Section 11.4 below, or (ii) physical damage to Product in the
course of shipment to HSI) and the amount of Product affected, and
request a return authorization (“RA”) number. IDB shall
provide the RA number to HSI within [**] days after receipt
of the request. Within [**] days after HSI’s receipt
of the RA number, HSI shall return to IDB the rejected Product,
freight prepaid, with the RA number displayed on the outside of the
carton. IDB reserves the right to refuse to accept any rejected
Product that does not bear an RA number on the outside of the
carton. As promptly as possible, and within [**] days after
receipt of properly rejected Product if reasonably possible, IDB
shall use commercially reasonable efforts to replace the Product,
at its expense, as provided in Section 5.4. IDB shall pay the
shipping charges back to HSI for properly rejected Product;
otherwise, HSI shall be responsible for the shipping charges.
5.4 In the event HSI rejects
any shipment of Product in accordance with Sections 5.2 and
5.3 or in the event of failure to obtain Product releases from the
Regulatory Authority by [**] of a given Flu Season, then IDB
shall use commercially reasonable efforts to provide, but shall not
guarantee to provide, replacement Product, subject in all respects
to IDB’s commitments to the Government of Canada as provided
in Section 3.2. In the event IDB does not supply replacement
Product to HSI within a reasonable period (at least [**]
days) and HSI notifies IDB in writing that it elects not to wait
beyond such period for replacement Product, then IDB shall credit
HSI for the amount, if any, previously paid by HSI for such
rejected or unreleased Product, but IDB shall not be deemed to be
in breach of this Agreement or to have any liability to HSI because
it failed to supply replacement Product; provided, however, that if
HSI has not yet paid for such rejected or unreleased Product and
IDB fails to supply replacement Product, HSI shall have no
obligation to pay for such rejected or unreleased Product. If IDB
will not be able to supply replacement Product until after
[**] of a given Flu Season, then HSI may elect, at its
option, to accept such replacement Product after such date or to
receive a credit for the amount, if any, previously paid by HSI for
the rejected or unreleased Product, provided that HSI notifies IDB
in writing of its election within five (5) business days after
[**] . If HSI wrongfully rejects Product or wrongfully fails
to take delivery of any shipment of Product, then IDB shall be
entitled to invoice HSI for the Transfer Price and then the
Purchase Price of such Product as set forth in Schedule 1,
together with the cost of disposing of such Product, if applicable,
and HSI shall pay such invoiced amount within thirty (30) days
of the invoice date.
[**] - Confidential
or proprietary information redacted.
8
5.5 Risk of loss of or damage
to Product supplied by IDB to HSI shall pass to HSI at the time
Product is delivered to the Shipping Point. If HSI properly rejects
Product in accordance with Sections 5.2 and 5.3, then risk of
loss of or damage to Product will pass back to IDB upon delivery by
HSI to the first return carrier. Title to Product shall pass to HSI
at the time Product is delivered to the Shipping Point. If any
shipment of Product is delivered to the Shipping Point before such
Product is released by the Regulatory Authority, HSI shall
quarantine such Product, at its sole cost, until such Product is
released. HSI shall have title to, and shall bear all
responsibility and liability with respect to, all Product after it
is delivered to the Shipping Point, including all Product in
quarantine.
6. MARKETING OF
PRODUCT
6.1 Notwithstanding anything to
the contrary in this Agreement, HSI hereby agrees that [**]
. Without limiting HSI’s obligations under this Agreement,
HSI may promote, sell and distribute Third-Party Vaccine Products
provided that such promotion, sale and distribution are consistent
with this Section 6.1 and HSI’s other obligations under
this Agreement. [**]
6.2 Without limiting its other
obligations under this Agreement, HSI shall exercise commercially
reasonable efforts to actively promote the use and sale of Product
and the use of the Fluviral ™ brand name
(or other Trademark as may be indicated by IDB) throughout the
Territory. In this context, “commercially reasonable
efforts” means at least the quality and quantity of efforts
that HSI does or would use to promote the use and sale, and expand
the sale, of any influenza vaccine originated or sold by HSI that
is distributed in substantially the same quantities as the
quantities of Product contemplated in this Agreement (with at least
the same level of advertising, promotion and sales support). IDB
agrees to provide HSI with such technical and clinical data as HSI
may reasonably require in order to promote, distribute and sell
Product in the Territory, subject to the provisions of
Section 9.
6.3 HSI and IDB shall convene
by telephone, videoconference or in person, on a quarterly
basis—and more frequently if reasonably requested by either
Party— until the initial Marketing Authorization for Product
is received and then monthly thereafter—and more frequently
if reasonably requested by either Party—to discuss (as may be
relevant at the time) regulatory developments affecting Product,
HSI’s marketing plan, strategy and marketing and sales
efforts proposed for Product for a given Flu Season, IDB’s
Product supply issues, if any, IDB’s Product commitments to
the Government of Canada for a given Flu Season, as described in
Section 3.2, and such other relevant issues as either Party
may propose. [**] Each Party shall consider in good faith
the views expressed by the other Party during such meetings.
6.4 HSI shall, and shall
require its Affiliates and Other Distri
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