EXHIBIT 10.36
[*] Certain information in this
document has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
DISTRIBUTION
AGREEMENT
THIS DISTRIBUTION
AGREEMENT (“ Agreement ”), effective as of the
first (1 st ) day of October 2008
(“ Effective Date ”), is by and between Celera
Corporation, a Delaware corporation having its principal office at
1401 Harbor Bay Parkway, Alameda, CA 94502 (“ Celera
”) and Abbott Molecular Inc., a Delaware corporation having
its principal office at 1300 East Touhy Avenue, Des Plaines, IL
60018-3315 (“ AMI ”).
Recitals
WHEREAS, Abbott Laboratories, the
parent corporation of AMI (“Abbott”), and Celera (as
assignee of Applera Corporation and corporate parent of Celera
Diagnostics LLC) are parties to a Restated Strategic Alliance
Agreement effective as of January 9, 2006 (“ Alliance
Agreement ”) which is directed to a collaborative program
for the discovery, research, development and commercialization
worldwide of novel molecular in vitro diagnostic products
and diagnostic testing services;
WHEREAS, pursuant to the Alliance
Agreement, Abbott and its Affiliates (as defined below) distribute
certain diagnostic products including products originally
contributed by Celera, products originally contributed by Abbott
and products developed jointly by the Parties pursuant to the
Alliance Agreement;
WHEREAS, pursuant to the Alliance
Agreement, Celera provided partial funding for the development of
the m2000 Instrument (as defined below) and the m2000 Software (as
defined below) used in conjunction with certain diagnostic
products, which Abbott and its Affiliates place with customers, and
Abbott provided partial funding for the development of sequencing
products and instruments and other products developed by Celera
pursuant to the Alliance (as defined below) which Abbott and its
Affiliates place with or sell to customers;
WHEREAS, concurrently with this
Agreement, Abbott and Celera are executing a Royalty Agreement by
which they will terminate the Alliance Agreement;
WHEREAS, AMI desires to distribute
the diagnostic products manufactured by or for Celera and
distributed by Abbott pursuant to the Alliance Agreement, as well
as HLA products Abbott distributes pursuant to the Distribution
Agreement between Celera (as assignee of Atria Genetics,
Incorporated) and Abbott dated December 23, 2003, as amended
(“ Atria Distribution Agreement ”) (all such
diagnostic products are hereinafter referred to as “Celera
Products” as defined below); and
WHEREAS, Celera desires AMI to
distribute the Celera Products.
NOW, THEREFORE, subject to the terms
of this Agreement, Celera and AMI hereby agree as
follows:
ARTICLE 1.
DEFINITIONS
In addition to the terms defined
elsewhere in this Agreement, the following words and phrases,
whenever capitalized in this Agreement, will have the following
meanings:
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1.1
|
“
Actual Purchase Price ” means, with respect to each
Specific Celera Product, [*] percent ([*]%) of the Net Sales of all
such Specific Celera Products sold or used by or for AMI or its
Affiliates in a Calendar Quarter or Calendar Year (as the case may
be) divided by the number of such Specific Celera Products sold or
used by or for AMI or its Affiliates during such Calendar Quarter
or Calendar Year. Free Products and Specific Celera Products for
Internal Use will be excluded from the calculation of Actual
Purchase Price.
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1.2
|
“
Affiliate ” means, with respect to any person or
entity, any other person or entity, which controls, is controlled
by or is under common control with such person or entity. For
purposes of this definition, a person or entity is in
“control” of an entity if it owns or controls more than
fifty percent (50%) of the equity securities of the subject
entity entitled to vote in the election of directors (or, in the
case of an entity that is not a corporation, for the election of
the corresponding managing authority), or otherwise has the power
to control the management and policies of such other entity. An
entity only retains the rights and is subject to the obligations of
an Affiliate for so long as such entity continues to satisfy the
definition in this Section 1.2.
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1.3
|
“
Alliance ” means the cooperative arrangement created
by the Alliance Agreement.
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1.4
|
“ AMI
Instrument ” means any m2000rt Instrument or m2000sp
Instrument sold, leased or placed under a RAP contract by or for
AMI or its Affiliates.
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1.5
|
“ AMI
Product ” means any Molecular Diagnostic Product (as
defined below) listed on Appendix 1.5 that: (a) is made by or
for AMI or its Affiliates or acquired by AMI or its Affiliates from
a source other than Celera; and (b) addresses the Product
Indication using the associated Platform Technology (as hereinafter
defined) listed on Appendix 1.5. AMI Products include Upgrades
thereof that are first Commercialized after the Effective Date. In
no event will any of the following be considered an AMI Product:
(i) a Molecular Diagnostic Product to the extent
Commercialized in the Decentralized Market; (ii) a Molecular
Diagnostic Product Commercialized for use on a Platform Technology
other than that listed on Appendix 1.5 addressing the Product
Indication listed on Appendix 1.5 of such Molecular Diagnostic
Product; or (iii) any existing or future diagnostic product
using in situ hybridization (including Fluorescence In Situ
Hybridization).
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1.6
|
“
Analyte ” means an individual nucleic acid sequence
which is the target of quantitative or qualitative
measurement.
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[*]
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Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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1.7
|
“
Analyte Specific Reagent ” or “ ASR
” means nucleic acid sequences and similar reagents which,
through specific binding or chemical reactions with substances in a
specimen, are intended for use in a diagnostic application for
identification and/or quantification of an individual chemical
substance in a biological specimen, as further defined in 21 CFR
864.4020(a), as such regulation may be amended or replaced from
time to time, or as defined in equivalent foreign
regulations.
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1.8
|
“
Calendar Quarter ” means each three (3) month
period ending on March 31,
June 30, September 30 and December 31 during
the Distribution Term; provided , the first Calendar Quarter
during the Distribution Term after the Transition Period will be
December 28, 2008 through March 31, 2009.
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1.9
|
“
Calendar Year ” means a period of twelve
(12) consecutive months during the Distribution Term
commencing on each January 1 and ending at midnight Eastern
Standard Time on each December 31.
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1.10
|
“
Cannibalizing Product ” means any Molecular Diagnostic
Product that: (a) is designed to detect the same Analyte
detected by a Celera Product, and (b) is intended to address
the same Product Indication as a Celera Product; and (c) uses
a Platform Technology different than that used by such Celera
Product.
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1.11
|
“
Celera Development Product ” means a Celera Product
under development by Celera as of the Effective Date. The Parties
agree that there are [*] Celera Development Products, addressing
the following Product Indications using the associated Platform
Technology listed on Exhibit 1.13: [*].
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1.12
|
“
Celera Pipeline Product ” means a Molecular Diagnostic
Product that, as of the Effective Date, had been at least partially
funded by the Parties in the Alliance, has not been developed or
Commercialized by Celera or its Affiliates, and is not currently
under development by Celera or its Affiliates. The Parties agree
there is only one Celera Pipeline Product, which is [*].
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1.13
|
“
Celera Product ” means any Molecular Diagnostic
Product listed on Appendix 1.13 that: (a) is or will be
manufactured by or for Celera or its Affiliates, and
(b) addresses the Product Indication using the associated
Platform Technology listed on Appendix 1.13. In no event will
either of the following be considered a Celera Product: (a) a
Molecular Diagnostic Product to the extent Commercialized in the
Decentralized Market; or (b) a Molecular Diagnostic Product
Commercialized for use on a Platform Technology other than that
listed on Appendix 1.13 addressing the Product Indication listed on
Appendix 1.13 of such Molecular Diagnostic Product. Celera Products
include Upgrades thereof that are first Commercialized after the
Effective Date and New Celera Products added by agreement of the
Parties pursuant to Sections 2.13 or 2.14.
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1.14
|
“
Celera Product Group ” means all Specific Celera
Products related to a particular Product Indication as specified by
Celera in Appendix 1.67.
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[*]
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Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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1.15
|
“ CE
Mark ” means a symbol indicating that each Celera Product
complies with the applicable European laws and/or Directives
(including but not limited to the IVD Directive) and is in
conformity to the legal requirements of the European Union
Directives with respect to safety, health, environment, and
consumer protection and can be marketed in the European
Union.
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1.16
|
“
Certificate of Compliance ” means a written statement
made by Celera that enables Celera to make a Declaration of
Conformity (as hereinafter defined).
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1.17
|
“
Commercialize ” and cognates thereof mean the sale,
transfer or promotion of a product or diagnostic testing service to
a Third Party for cash or other consideration or the sale or
transfer of a product to an Affiliate for use by such Affiliate in
performing a diagnostic testing service.
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1.18
|
“
Combination Product ” means a Specific Celera Product
that, as sold, is bundled or otherwise combined with one
(1) or more other diagnostic products that have independent
diagnostic utility and that are not Celera Products.
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1.19
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“
Competent Authority ” means the governmental authority
in a member state of the European Union that has competence with
respect to the IVD Directive (as hereinafter defined).
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1.20
|
“
Competing Product ” means any Molecular Diagnostic
Product that is not a Product but that: (a) is designed to
detect the same Analyte detected by a Product using the same
Platform Technology; and (b) is intended to address the same
Product Indication using the same Platform Technology as a Product.
In no event will any of the following be considered a Competing
Product: (i) a Molecular Diagnostic Product to the extent
Commercialized in the Decentralized Market; (ii) any existing
or future product using in situ hybridization (including
Fluorescence In Situ Hybridization); (iii) a Molecular
Diagnostic Product, regardless of Product Indication or Analyte,
Commercialized for use on a Platform Technology other than those
listed on Appendices 1.5 and 1.13; and (iv) any Luminex-based
product other than those listed on Appendix 1.13.
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1.21
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“
Confidential Information ” means the terms of this
Agreement and all other information disclosed in writing by one
Party to the other pursuant to this Agreement and identified as
“CONFIDENTIAL”, as well as information disclosed orally
and identified as “Confidential” at the time of
disclosure, but only to the extent such oral disclosure is reduced
to writing, identified as “CONFIDENTIAL” and provided
to the other Party within thirty (30) days after oral
disclosure. Confidential Information does not include any such
information which:
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(a)
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is known to the
receiving Party before receipt thereof under this Agreement, as
evidenced by the receiving Party’s written records,
except that any information defined as “Confidential
Information” under the Alliance Agreement or the Atria
Distribution Agreement will remain Confidential Information
hereunder; or
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[*]
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Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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(b)
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is disclosed to
the receiving Party without restriction by a Third Party lawfully
in possession of such information and not under an obligation of
nondisclosure; or
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(c)
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is or becomes
part of the public domain through no breach of this Agreement;
or
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(d)
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is
independently developed by or for the receiving Party without
reference to Confidential Information of the other Party, as
evidenced by such receiving Party’s written
records.
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1.22
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“
Decentralized Market ” means markets for the sale and
use of amplification systems and reagents with random access
testing or Stat Testing (as defined below) capability developed and
manufactured for use at Third Party sites; provided , an
m2000rt Instrument with Stat Testing capability is specifically
excluded from this definition.
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1.23
|
“
Declaration of Conformity ” means a declaration by
Celera regarding the conformity of Celera Products with the
relevant national laws implementing the IVD Directive.
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1.24
|
“
Device History Record ” has the meaning set forth in
21 C.F.R. 820.3(i).
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1.25
|
“
Device Master Record ” has the meaning set forth in 21
C.F.R. 820.3(j).
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1.26
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“
Distribution Term ” means the term of this Agreement
as defined in Section 13.1 unless otherwise terminated
pursuant to the terms of this Agreement.
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1.27
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“
Distributor ” means each Third Party with whom AMI or
its Affiliates have a contract for distribution of
Products.
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1.28
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“
EEA ” means the European Union, the European Economic
Area and European accessing countries, as the member states
constituting the European Union, the European Economic Area and
accessing countries change from time to time during the
Distribution Term.
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1.29
|
“
Estimated Purchase Price ” means, with respect to each
Specific Celera Product, the average Actual Purchase Price for all
such Specific Celera Products purchased by AMI from Celera
hereunder as determined pursuant to Section 3.2.
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1.30
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“
FDA ” means the United States Food and Drug
Administration or any successor agency thereof.
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1.31
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“
Force Majeure Event ” means acts of God, fire,
explosion, flood, drought, war, riot, sabotage, embargo, strikes or
other labor trouble, or compliance with any law, order or
regulation of any government entity, or any other circumstance
outside the control of, but affecting performance of, a Party under
this Agreement.
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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1.32
|
“
Fully Loaded Product Cost ” means, with respect to a
Product Indication, the fully-burdened costs actually and
reasonably incurred by Celera to manufacture the Specific Celera
Products related to such Product Indication, together with the
packaging thereof, including the cost of materials, labor, quality
control, and overhead (excluding royalties paid or payable to Third
Parties), all as determined in accordance with United States
generally accepted accounting principles or International Financial
Reporting Standards when required in the United States (“
GAAP ”) as consistently applied by Celera from year to
year starting with 2008 methodology. In the event that GAAP
requires a different accounting methodology or Celera elects to
change its accounting methodology, then the Parties will negotiate
in good faith a change to the applicable percentages set forth in
Section 3.2(c)(i) such that neither Party is
disadvantaged.
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1.33
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“
Fully Loaded Software Cost ” means, with respect to
Software, the fully-burdened full-time equivalent and related
expenses actually and reasonably incurred by a Party to design,
validate and verify such Software for use with a Product and/or an
Agreement Instrument.
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1.34
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“
Internal Use ” means use of a Molecular Diagnostic
Product by or for a Party for such Party’s research,
development or clinical activities that do not involve generation
of revenue from use or sale of the Molecular Diagnostic
Product.
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1.35
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“
Instrument ” means any hardware, Software, device,
platform or any combination or component thereof, including any
uniquely associated accessories and consumables, that facilitates
or automates use of a Molecular Diagnostic Product. “
Agreement Instrument ” means any Instrument except for
all existing and future systems useful in any part of in situ
hybridization (including Fluorescence In Situ Hybridization), and
any and all systems to the extent used in the Decentralized
Market.
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1.36
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“ IVD
Directive ” means the In Vitro Diagnostic
Directive 98-79-EC and any amendments thereto governing in
vitro diagnostic devices in the European Union.
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1.37
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“
Kit ” means the finished, packaged and labeled
assembly of a Product configured in accordance with such
Product’s Specifications.
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1.38
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“
m2000 Instruments ” means both m2000rt Instruments and
m2000sp Instruments.
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1.39
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“
m2000rt Instrument ” means the Instrument that is
designated by AMI as of the Effective Date as “m2000rt”
and any Similar Diagnostic Instrument (as defined below) that is
distributed by AMI or its Affiliates.
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1.40
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“
m2000sp Instrument ” means the Instrument that is
designated by AMI as of the Effective Date as “m2000sp”
and any Similar Diagnostic Instrument that is distributed by AMI or
its Affiliates.
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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1.41
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“
m2000 Platform Technology ” means the real time PCR
and sample preparation technology used on the m2000
Instruments.
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1.42
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“
m2000 Product Software ” means any Software that
provides a specific interface between a Molecular Diagnostic
Product, an m2000 Instrument and associated m2000
Software.
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1.43
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“
m2000 Software ” means the Software that implements
the m2000 Platform Technology, including any upgrades or updates
thereto.
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1.44
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“
m3000sp Instrument ” means the Instrument as defined
in the NPCD entitled “[*]” submitted by Abbott under
the Alliance to the JRB on February 6, 2006, and any Similar
Diagnostic Instrument that is distributed by AMI or its
Affiliates.
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1.45
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“
Molecular Diagnostic Product ” means any product
intended or designed for use on an Instrument in in vitro
amplification, detection, quantification, extraction or sequencing
of a nucleic acid in or from a human biological sample.
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1.46
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“ Net
Sales ” means, with respect to any particular period, the
total of OUS Sales and U.S. Sales in that period. Net Sales
excludes Specific Celera Products for Internal Use and Free
Products (as defined in Section 2.5), so long as AMI and its
Affiliates receive no monetary compensation in any form for
Internal Use or Free Products.
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1.47
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“ New
Celera Product ” means a Proposed Celera Product accepted
pursuant to Section 2.13(a), a New m2000 Product accepted
pursuant to Section 2.13(b), a Celera Pipeline Product
accepted pursuant to Section 2.14 or a Celera Development
Product.
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1.48
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“ New
m2000 Product ” means a Molecular Diagnostic Product
that: (a) is designed to be used with Platform Technology of
the m2000rt Instrument; and (b) is not a Product, a Competing
Product, or a Celera Pipeline Product. A New m2000 Product may be a
Proposed Celera Product.
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1.49
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“ New
Seq Instrument ” means a sequencing Instrument using
capillary electrophoresis Platform Technology and associated
Software with such sequencing Instrument (hereinafter “
New Seq Instrument Software ”), if any, that bear a CE
Mark and/or are cleared or approved by the FDA as part of an IVD
assay system or independently.
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1.50
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“ New
Seq Product ” means a Molecular Diagnostic Product that
is designed for use on a New Seq Instrument and is not a Product or
Competing Product.
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1.51
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“ New
Seq Product Software ” means any Software that provides a
specific interface between a New Seq Product and a New Seq
Instrument and associated New Seq Instrument Software, including
any upgrades or updates thereto.
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1.52
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“ OUS
Sales ” means:
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(a)
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With respect to
any Specific Celera Product purchased by AMI and sold or otherwise
disposed of by or for AMI or an AMI Affiliate to a Third Party
outside the United States, the gross amount billed to such Third
Party for such Specific Celera Product, less the following
Subsections (i)-(v) to the extent separately identified on an
invoice, credit memo, debit memo or a written document specific to
rebates to or with such Third Party:
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(i)
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credits,
allowances, discounts and rebates actually given to such Third
Party and charge backs from the account of such Third Party for
spoiled, damaged, out-dated, rejected or returned Specific Celera
Products; provided, if AMI or its Affiliates actually give a rebate
to a Third Party for both Specific Celera Product(s) and other
diagnostic products, AMI will allocate the rebate based on the
gross billings for such Specific Celera Product(s) relative to the
gross billings of such other diagnostic products;
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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(ii)
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actual freight,
postage, transportation and insurance costs incurred in delivering
Specific Celera Products to the extent billed to such Third
Party;
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(iii)
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reasonable and
customary cash, quantity and trade discounts actually given to such
Third Party;
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(iv)
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sales, use,
value-added and other direct taxes to the extent billed to such
Third Party; and
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(v)
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customs duties,
surcharges and other governmental charges incurred in connection
with the exportation or importation of such Specific Celera
Products to the extent billed to such Third Party.
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(b)
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With respect to
a Combination Product, OUS Sales will be the amount billed for such
Combination Product to the Third Party, less the allowances and
adjustments referred to in Sections 1.52(a)(i)-(v), multiplied by
the fraction A/A+B, where A is the OUS Sales of the Specific Celera
Product sold separately during the royalty period in question, and
B is OUS Sales of the other diagnostic products in the Combination
Product sold separately during the royalty period in question. If
there are no sales of the Specific Celera Product or for the other
diagnostic products, then for the purposes of calculating OUS
Sales, the Parties will discuss in good faith the relative values
of Specific Celera Product and the other diagnostic products so as
to arrive at a fair allocation for Combination Products upon which
to base the OUS Sales thereof.
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(c)
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In the event
AMI or its Affiliates provide a diagnostic testing service using a
Specific Celera Product or otherwise transfer a Specific Celera
Product to an end user that is AMI itself or an AMI Affiliate or to
an end user that enjoys other than an arms-length relationship with
one or more of AMI or its Affiliates:
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(i)
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OUS Sales for
such Specific Celera Product will equal an average of OUS Sales for
similar quantities of such Specific Celera Products sold to all
Third Parties in the same country where such services were rendered
or such transfer occurred during the twelve (12) months
preceding the transaction.
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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(ii)
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If information
relating to the average specified in Section 1.52(c)(i) is
unavailable, OUS Sales for such Specific Celera Product will equal
the published list price of such Specific Celera Product offered to
Third Parties in the same country where such services were rendered
or such transfer occurred.
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1.53
|
“
Party ” means AMI or Celera, and “
Parties ” means AMI and Celera.
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1.54
|
“
Patent Rights ” means: (a) patent applications
filed in any country; (b) all patents including supplemental
protection certificates that have issued or in the future issue
from any of the foregoing applications in (a), including, without
limitation, utility models, design patents and certificates of
invention; and (c) all divisionals, continuations,
continuations-in-part, reissues, re-examination certificates,
renewals, extensions or additions to any such patents and patent
applications in (a) and (b).
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1.55
|
“
Platform Technology ” means the mode of operation of
an Instrument.
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1.56
|
“
Product ” means a Celera Product or an AMI Product, as
the context requires, and “ Products ” means
Celera Products or AMI Products, or both, as the context
requires.
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1.57
|
“
Product Indication ” means the clinical utility or
intended use of a particular Molecular Diagnostic Product,
including, for example, the Product Indications identified in
Appendices 1.5 and 1.13.
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1.58
|
“
Quality Systems and GMP Requirements ” means the
current and any future quality system and good manufacturing
practices regulations under 21 C.F.R. Part 820 to the extent that
such regulations are applicable to a Celera Product, as such
regulations are promulgated by the FDA. The applicable Quality
Systems and GMP Requirements for any lot of Celera Product will be
those regulations in effect when such lot is manufactured by Celera
for AMI.
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1.59
|
“
RAP ” means a program for the Commercialization of
Molecular Diagnostic Products in conjunction with an Instrument
whereby the price for the Molecular Diagnostic Products includes
the amortization cost or leasing cost of the Instrument, the cost
of servicing the Instrument and/or other items of cost recovery in
connection with supply and support of the Instrument.
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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1.60
|
“
Rebate Amount ” means an amount of money payable by
AMI or an AMI Affiliate to a Third Party end user that (a) is
conditioned on such Third Party purchasing in the United States
during a defined time period from AMI or an AMI Affiliate a
specified volume of Specific Celera Products, (b) is required
by a written agreement between AMI or its Affiliate and such Third
Party, and (c) had been reported to Celera pursuant to
Section 3.3(d).
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1.61
|
“
Regulatory Approval ” means the technical, medical and
scientific licenses, registrations, authorizations, clearances and
approvals required for marketing or use of a Molecular Diagnostic
Product (including, without limitation, approvals of CE Mark,
Pre-Market Approval Applications, Investigational Device
Exemptions, Biologic License Applications, Investigational New Drug
Applications, 510k notices, pre- and post- approvals, pricing and
Third Party reimbursement approvals, and labeling approvals and any
supplements and amendments to any of such approvals) of any
national, supra-national (e.g., the European Commission, the
Council of the European Union, or the European Agency for the
Evaluation of Medicinal Products), regional, state or local
regulatory agency, department, bureau, commission, council or other
governmental entity, necessary for the manufacture, distribution,
marketing, promotion, offer for sale, use, import, export or sale
of Products in a regulatory jurisdiction.
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1.62
|
“
Regulatory Authority ” means the FDA and/or any
national, supra-national, regional, state or local regulatory
agency, department, bureau, commission, council or other
governmental entity in each country or supra-national territory of
the world having jurisdiction over granting a Regulatory Approval
for a Celera Product.
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1.63
|
“
Royalty Agreement ” means the agreement dated on even
date herewith between Abbott and Celera relating to termination of
the Alliance Agreement.
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1.64
|
“
Sales Minimums ” means the annual sales targets for
Celera Products as set forth in Section 2.15, as may be
adjusted pursuant to Section 2.17.
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1.65
|
“
Serious Incident ” means an incident involving a
Celera Product that is reportable to a Competent Authority as
defined in Section 5 of Annex III of the IVD Directive and the
European Commission Medical Device Vigilance Guidelines or such
other guidelines as may be issued from time to time.
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1.66
|
“
Signature Date ” means the date of signature of the
last Party to sign this Agreement.
|
|
1.67
|
“ Similar Diagnostic
Instrument ” means any Agreement Instrument that is
developed and manufactured pursuant to quality system and good
manufacturing practices regulations promulgated by FDA or
comparable regulatory entities outside the United States and that
(a) differs from an m2000 Instrument in a manner that does not
constitute a significant change or modification as defined in 21
C.F.R. Section 807.81(a)(3)(i) and (ii) as in effect on
the Effective Date, or (b)
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|
|
|
|
|
|
Distribution
Agreement
|
|
10
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
regardless of whether regulatory
submissions would be required, differs from an m2000 Instrument
(i) because of required changes or upgrades necessary to
maintain manufacturability or functionality of the m2000
Instrument, or (ii) because of upgrades in Software that may
expand functionality of the m2000 Instrument.
|
|
1.68
|
“
Software ” means computer programs.
|
|
1.69
|
“
Specific Celera Product ” means, individually, a
Celera Product having a product number as listed on Appendix 1.69,
which Appendix may from time to time be amended by the written
agreement of the Parties to add or delete Specific Celera Products.
Such amended Appendix will become a part of this Agreement as if
originally incorporated herein.
|
|
1.70
|
“
Specifications ” means those product, labeling,
packaging and performance specifications for each Specific Celera
Product that is to be purchased and supplied under this Agreement,
the number and title of which are set forth on Appendix 1.70. The
Specifications may from time to time be amended by the written
agreement of the Parties and the full document for which will be
provided to AMI upon request. Any amended Specifications agreed
upon by the Parties will become a part of this Agreement as if
originally incorporated herein.
|
|
1.71
|
“ Stat
Testing ” means the performance of an individual
diagnostic test on an instrument without pre-scheduling use of the
instrument and which allows prioritization of the next
sample.
|
|
1.72
|
“
Technical File ” means the documentation relating to
the Celera Products that contain information on the Celera Products
as required by the IVD Directive in Annex III,
Section 3.
|
|
1.73
|
“
Technology ” means conceptions, ideas, innovations,
discoveries, inventions, processes, machines, biological materials,
formulae, equipment, compositions of matter, improvements,
enhancements, modifications, technological developments, know-how,
show-how, methods, techniques, systems, designs, production systems
and plans, Software, documentation, data, programs and information
(irrespective of whether in human or machine-readable form) and
works of authorship, whether or not patentable, copyrightable, or
susceptible to any other form of legal protection.
|
|
1.74
|
“
Territory ” means the entire world.
|
|
1.75
|
“
Third Party ” means any individual, corporation,
partnership, trust or other business or government organization or
entity, and any other recognized organization or entity other than
AMI, Abbott, Celera and their respective Affiliates.
|
|
|
|
|
|
|
Distribution
Agreement
|
|
11
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
1.76
|
“
Transition Period ” means the period starting
October 1, 2008 and ending on December 27,
2008.
|
|
1.77
|
“ U.S.
Sales ” means:
|
|
|
(a)
|
With respect to
any Specific Celera Product sold or otherwise disposed of by or for
AMI or an AMI Affiliate to a Third Party in the United States, the
gross amount billed to such Third Party for such Specific Celera
Product, less the following Subsections (i)-(iv) to the extent
separately identified on an invoice, credit memo or debit memo to
such Third Party:
|
|
|
(i)
|
actual freight,
postage, transportation and insurance costs incurred in delivering
Specific Celera Products to the extent billed to such Third
Party;
|
|
|
(ii)
|
sales, use,
value-added and other direct taxes to the extent billed to such
Third Party;
|
|
|
(iii)
|
customs duties,
surcharges and other governmental charges incurred in connection
with the exportation or importation of such Specific Celera
Products to the extent billed to such Third Party; and
|
|
|
(iv)
|
shipping and
billing errors actually billed to or credited against such Third
Party.
|
|
|
(b)
|
If Rebate
Amounts are disclosed pursuant to Section 3.2(e) or 3.2(f),
then with respect to a Third Party end user purchaser of Specific
Celera Products from AMI or an AMI Affiliate, in addition to the
applicable deductions provided in Sections 1.77(a)(i)-(iv) for
specific sales transactions, AMI may deduct from the total amount
billed to such Third Party for Specific Celera Products in an
applicable Calendar Quarter any Rebate Amount actually accrued or
paid by AMI or its Affiliates to such Third Party during the
applicable Calendar Quarter.
|
|
|
(c)
|
With respect to
a Combination Product, U.S. Sales will be the amount billed for
such Combination Product to the Third Party, less the allowances
and adjustments referred to in Sections 1.77(a)(i)-(iv), multiplied
by the fraction A/A+B, where A is the U.S. Sales of the Specific
Celera Product sold separately during the royalty period in
question, and B is the U.S. Sales of the other diagnostic products
in the Combination Product sold separately during the royalty
period in question. If there are no sales of the Specific Celera
Product or of the other diagnostic products during the royalty
period in question, then for the purposes of calculating U.S.
Sales, the Parties will discuss in good faith the relative values
of Specific Celera Product and the other diagnostic products so as
to arrive at a fair allocation for Combination Products upon which
to base the U.S. Sales thereof.
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|
|
|
|
|
|
Distribution
Agreement
|
|
12
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(d)
|
In the event
AMI or its Affiliates provide a diagnostic testing service using a
Specific Celera Product or otherwise transfers a Specific Celera
Product to an end user that is AMI itself or an AMI Affiliate or to
an end user that enjoys other than an arms-length relationship with
one or more of AMI or its Affiliates:
|
|
|
(i)
|
U.S. Sales for
such Specific Celera Product will equal an average of U.S. Sales
for similar quantities of such Specific Celera Products sold to all
Third Parties during the twelve (12) months preceding the
transaction in the United States.
|
|
|
(ii)
|
If information
relating to the average specified in Section 1.77(d)(i) is
unavailable, U.S. Sales for such Specific Celera Product will equal
the published list price of such Specific Celera Product offered to
Third Parties in the United States.
|
|
1.78
|
“
Upgrade ” means a modified or improved Product for use
on the same Platform Technology.
|
|
1.79
|
Additional
Defined Terms . The
following terms are defined in the Sections indicated:
|
|
|
|
|
“874
Collaboration”
|
|
Section
2.13(c)
|
|
“AMI
Inventory”
|
|
Section
3.2
|
|
“Act”
|
|
Section
6.7
|
|
“Additional Units”
|
|
Section
3.3(e)
|
|
“Adopted
AMI License”
|
|
Section
3.8
|
|
“ADR”
|
|
Section
14.7
|
|
“Agreement Instrument”
|
|
Section
1.35
|
|
“Alliance
Agreement”
|
|
Recitals
|
|
“Atria
Distribution Agreement”
|
|
Recitals
|
|
“Breakeven Sales Price”
|
|
Section
2.2(d)
|
|
“[*]”
|
|
Appendix
1.13
|
|
“[*]”
|
|
Appendix
1.13
|
|
“Celera
Materials”
|
|
Section
9.5
|
|
“Celera
Trademarks”
|
|
Section
9.5(b)
|
|
“CoA”
|
|
Section
4.2(b)
|
|
“CoC”
|
|
Section
4.3(b)
|
|
“Competing Service”
|
|
Section
3.1(c)
|
|
“Components”
|
|
Section
3.5
|
|
“Damages”
|
|
Section
12.5
|
|
“Difference Payment”
|
|
Section
2.16(a)
|
|
“Direct
Costs”
|
|
Section
6.6(c)
|
|
“Discounted Products”
|
|
Section
2.5
|
|
|
|
|
|
|
Distribution
Agreement
|
|
13
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
|
|
“Field
Correction”
|
|
Section
6.6(a)
|
|
“Free
Products”
|
|
Section
2.5
|
|
“GAAP”
|
|
Section
1.32
|
|
“[*]”
|
|
Section
1.12
|
|
“Initial
Term”
|
|
Section
13.1
|
|
“Intent
Notice”
|
|
Section
2.16(a)
|
|
“MDR”
|
|
Section
6.7
|
|
“Minimum
Resale Price”
|
|
Section
2.2(c)
|
|
“MSDSs”
|
|
Section
4.10
|
|
“New Seq
Instrument Software”
|
|
Section
1.49
|
|
“Non-Publishing Party”
|
|
Section
10.6
|
|
“Product
Actions”
|
|
Section
6.6(a)
|
|
“Proposed
Celera Product”
|
|
Section
2.13(a)
|
|
“Prorated
Difference Payment”
|
|
Section
2.16(a)
|
|
“Publishing Party”
|
|
Section
10.6
|
|
“Quarterly Report”
|
|
Section
3.9
|
|
“Recall”
|
|
Section
6.7(a)
|
|
“Release
Testing”
|
|
Section
4.3(a)
|
|
“Renewal
Term”
|
|
Section
13.1
|
|
“Third
Party Royalties”
|
|
Section
3.8(b)
|
|
1.80
|
Rules of
Construction . For the
purposes of this Agreement, unless the context otherwise
requires:
|
|
|
(a)
|
In any
provision, (i) “including” and
“include” are not exclusive and are deemed to be
followed by the words “without limitation”;
(ii) “herein” or “hereof” refer to
this Agreement; (iii) an accounting term not otherwise defined
has the meaning assigned to it in accordance with accounting
principles that are generally accepted in the United States of
America; (iv) words in the singular include the plural and
words in the plural include the singular; (v) reference to any
gender includes the other gender; and (vi) any date specified
for any action that is not a business day means the first business
day after such date.
|
|
|
(b)
|
References to
Articles and Sections without identifying a specific agreement will
be deemed references to Articles and Sections of this Agreement.
The captions of Articles and Sections are for convenience of
reference only and will not be used in the interpretation of this
Agreement.
|
|
|
(c)
|
References to
this Agreement will include any amendment made to this Agreement in
accordance with the terms hereof, and will include any schedules,
exhibits, appendices or other materials incorporated into this
Agreement.
|
|
|
|
|
|
|
Distribution
Agreement
|
|
14
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
Article 2.
Distribution
|
2.1
|
Appointment . Subject to the terms of this Agreement, Celera
hereby appoints AMI: (a) as its exclusive distributor (even as
to Celera and its Affiliates) for the marketing, promotion,
solicitation, sales, distribution and support of Celera Products
(i) in the Territory for the Initial Term, and (ii) in
the Territory outside the EEA during any Renewal Term; and
(b) as its non-exclusive distributor for the marketing,
promotion, solicitation, sales, distribution and support of Celera
Products in the EEA during any Renewal Term. AMI may sell or
otherwise distribute Celera Products directly to customers or
through AMI Affiliates or Distributors, provided in each case AMI
retains control of and responsibility for actions of such
Affiliates and Distributors with respect to Celera Products. Within
sixty (60) days after the Signature Date, AMI will list in
Appendix 2.1 all countries in which it uses Distributors for
distribution of Products as of the Signature Date. In the event,
during the Distribution Term, AMI or its Affiliates wish to
increase or change the countries in which AMI uses Distributors for
distributing Products, AMI will give Celera sixty
(60) days’ advance written notice thereof and will
refrain from such increase or change until approved by Celera,
which approval will occur within sixty (60) days and which
will not be unreasonably withheld.
|
|
2.2
|
Selling
Price . AMI, in its sole
discretion, will determine the final sales price of each Specific
Celera Product.
|
|
|
(a)
|
The pricing
policy and structure applied by AMI to Specific Celera Products
will be the same as applied to other comparable products and
services offered by AMI in comparable markets, and any discounts,
rebate or pricing adjustments AMI establishes for Specific Celera
Products will not disproportionately reduce the price of Specific
Celera Products versus other AMI products and services.
|
|
|
(b)
|
Any discount to
the sales price of a Specific Celera Product will be consistent
with the overall discounting policy of AMI in connection with the
sale of its other Molecular Diagnostic Products (including AMI
Products) and, when considered in relation to the percentage
discount applicable to AMI’s Molecular Diagnostic Products
which are sold together with or in connection with a Specific
Celera Product, will not materially adversely affect Net
Sales.
|
|
2.3
|
Marketing
and New m2000 Product Development . The Parties will meet at least twice per
Calendar Year to discuss marketing and sales activities for Celera
Products, to discuss Celera’s programs for New m2000 Product
development, and to discuss any Celera Product that AMI believes is
or may become non-competitive. Either Party may call additional
meetings for good cause.
|
|
2.4
|
Promotion Material.
Celera will provide to AMI, at no
cost, any available promotional materials developed by or for
Celera relating to the Celera Products, for use by AMI. Further,
AMI may, at its own cost and expense, develop
|
|
|
|
|
|
|
Distribution
Agreement
|
|
15
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
guidelines, promotion aids,
reference materials, training and sales documentation and
promotional materials for Celera Products (“ AMI
Materials ”), including any AMI Materials that may be
made available on AMI’s website, the use of which will be
subject to reasonable prior review by Celera. Celera will review
and comment on any AMI Materials related to the Celera Products
within thirty (30) days after receipt thereof. AMI Materials
will be deemed as approved by Celera if AMI does not receive
comments from Celera within thirty (30) days after delivery of
AMI Materials to Celera.
|
|
2.5
|
Free
Products. In conjunction
with the marketing and promotion of Celera Products, AMI may
distribute a limited amount of Specific Celera Products to
customers or prospective customers at no charge (“ Free
Products ”) as an introduction to a New Celera Product
that has been accepted by AMI pursuant to Section 2.13(a) or
an introduction of a new customer to Celera Products, consistent
with the overall free product policy of AMI in connection with the
sale of its other Molecular Diagnostic Products. AMI will limit the
Free Products to [*] ([*]) Kits or Kit equivalents per Celera
Product Group per new customer or per New Celera Product per
customer. If AMI exceeds such limit, it will discuss the reason
with Celera, and Celera will either approve such excess Celera
Products for accounting treatment as Free Products per
Section 3.10(a), or not approve AMI’s reason for
exceeding such limits. If not approved by Celera, AMI will pay the
Estimated Purchase Price for each Specific Celera Product
distributed as a Free Product over the limit or choose not to
supply such Specific Celera Product to the prospective
customer.
|
|
2.6
|
Diligence . AMI will use commercially reasonable efforts
to promote, market, sell, distribute and support Celera Products.
Such efforts will be no less than those used by AMI with respect to
its other Molecular Diagnostic Products, including AMI Products,
which have the same or similar market potential.
|
|
2.7
|
AMI
Instruments to Customers . AMI will be responsible, in its sole
discretion, for providing AMI Instruments, by sale, lease or RAP,
to customers for use of Celera Products.
|
|
2.8
|
Service and
Support . AMI will use,
and will cause its Affiliates and Distributors to use, commercially
reasonable efforts to provide service and support to customers
purchasing Celera Products sold or otherwise distributed by or for
AMI, its Affiliates or Distributors and for associated AMI
Instruments used by such customers, so long as such AMI Instruments
are owned by AMI or its Affiliates and placed with the customer
under RAP, or a customer has purchased a service contract with AMI,
its Affiliates or Distributors. These efforts will be consistent
with the commercially reasonable efforts used by AMI with respect
to other Molecular Diagnostic Products and Agreement Instruments it
markets and distributes for which it provides service and support
and which have the same or similar market potential. AMI will not
be responsible for providing service or support for any AMI
Instrument placed by Celera unless the customer has purchased a
service contract with AMI, its Affiliate or Distributor.
|
|
|
|
|
|
|
Distribution
Agreement
|
|
16
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
2.9
|
AMI’s
Responsibilities . Except
as otherwise provided herein and without limiting the generality of
the foregoing, AMI will, at its own cost and expense:
|
|
|
(a)
|
conduct
advertising and sales promotional activities of a nature consistent
with industry standards and norms as it deems reasonably
appropriate to sell Celera Products; provided , that Celera
also may promote Celera Products for distribution by AMI, subject
to the consent of AMI, which consent will not be unreasonably
withheld; and
|
|
|
(b)
|
exercise
reasonable care in the storage, shipping and handling of Celera
Products and comply with all reasonable instructions of Celera with
respect to such storage, shipping and handling.
|
|
2.10
|
Celera
Product Support.
|
|
|
(a)
|
Celera, at its
expense, will offer three (3) initial technical training
programs for AMI personnel, Distributors or customers for each
Celera Product. If AMI desires to have additional training courses,
Celera will provide such training at AMI’s expense at site(s)
to be determined by mutual agreement.
|
|
|
(b)
|
AMI will bear
the travel, lodging and subsistence expenses that are incurred by
its personnel, Distributors or customers in conjunction with any of
the training programs offered by Celera.
|
|
|
(c)
|
Upon
AMI’s reasonable request, Celera will provide, up to three
(3) times per Calendar Year during the Distribution Term, at
Celera’s reasonable cost and expense, reasonable technical
assistance and support, to the extent requested by AMI, in
connection with any trade show or exhibition at which AMI elects to
participate and to promote Celera Products.
|
|
2.11
|
Compliance . Each Party will comply, and use commercially
reasonable efforts to cause its Affiliates and distributors to
comply, in all material respects with all applicable treaties, laws
and regulations related to its, its Affiliates’ and its
distributors’ activities under this Agreement, including,
without limitation, Quality Systems and GMP Requirements,
applicable food and drug and export laws of the United States and
applicable food and drug and import laws of foreign countries in
which Celera Products are sold or otherwise distributed, and will
not be required to perform or omit to perform any act required or
permitted under this Agreement if such performance or omission
would violate the provisions of any such treaty, law or
regulation.
|
|
2.12
|
Commercially Reasonable
Efforts . Celera will
exercise commercially reasonable efforts to keep all Celera
Products competitive in their intended market in terms of
performance and quality, and AMI will exercise commercially
reasonable efforts to keep all Celera Products competitive in terms
of price. In each case, such efforts will be no less than those
used by the respective Party with respect
|
|
|
|
|
|
|
Distribution
Agreement
|
|
17
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
to its other Molecular Diagnostic
Products which have the same or similar market potential. During a
meeting of the Parties pursuant to Section 2.3, AMI may raise
the potential non-competitiveness of a Specific Celera Product,
and, in such event, Celera will consult with AMI within ninety
(90) days thereafter concerning the basis for AMI’s
belief and possible remedies. If Celera disagrees with AMI’s
characterization that a Specific Celera Product is non-competitive,
the dispute will be resolved pursuant to Section 14.7. If the
Parties agree that an Upgrade to such Specific Celera Product is a
remedy, the Parties will agree on a plan and schedule for
development of such an Upgrade while AMI continues to distribute
the current Specific Celera Product; provided ,
however , if Celera does not meet such plan or schedule and
the Parties do not agree to modify the plan or schedule, AMI may
develop and Commercialize a Competing Product to such Specific
Celera Product; provided , further , the Sales
Minimums will be reduced on a prorata basis. If the Parties agree
that the Specific Celera Product is not competitive but cannot
agree on a remedy, AMI may develop and Commercialize a Competing
Product to such Specific Celera Product; provided , the
Sales Minimums will be reduced on a prorata basis. In either of the
cases in which AMI Commercializes a Competing Product pursuant to
this Section 2.12, AMI will pay Celera a royalty pursuant to
the provisions of the Royalty Agreement and Celera may distribute
the Specific Celera Product directly or through a Third Party
subject to royalties payable under Section 4.1(m) of the
Royalty Agreement.
|
|
2.13
|
New Celera
Products .
|
|
|
(a)
|
Either Party
may propose to the other Party the addition to this Agreement of a
Molecular Diagnostic Product that was not a Celera Product as of
the Effective Date and is not a Competing Product (“
Proposed Celera Product ”). Any such proposal will be
by written notice to the other Party and will identify the Proposed
Celera Product, the Platform Technology of the Agreement Instrument
on which such Proposed Celera Product is run, the Product
Indication addressed thereby, and the proposed launch date. The
other Party, in its sole discretion, may accept or reject the
proposal by written notice to the proposing Party not less than
sixty (60) days after the date such proposal was received. If
rejected, the proposing Party thereafter may make, have made, use,
sell or otherwise distribute the Proposed Celera Product;
provided , however , notwithstanding
Section 9.1, no rights under any Patent Rights owned by the
other Party or its Affiliates are granted herein with respect to a
rejected Proposed Celera Product, except to the extent the Proposed
Celera Product is subject to the Royalty Agreement, in which event,
the proposing Party will be obligated to pay to the other Party a
royalty based upon Commercialization of such rejected Proposed
Celera Product by the proposing Party or its Affiliates. If
accepted, the Parties will negotiate in good faith on
(i) consideration payable by AMI to Celera for distribution
rights, (ii) the adjustment to Sales Minimums for each
Calendar Year or part thereof following such acceptance and
(iii) application of Article 3 to the accepted Proposed Celera
Product.
|
|
|
|
|
|
|
Distribution
Agreement
|
|
18
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(b)
|
Each Party will
have the right to develop New m2000 Products. Notwithstanding
Section 2.13(a), in the event, during the Distribution Term,
(i) Celera develops or acquires a New m2000 Product, and
(ii) Celera proposes to make the New m2000 Product available
other than as a diagnostic testing service, then Celera
(y) may itself distribute the New m2000 Product, or
(z) may propose terms to AMI in writing for the right to
distribute the New m2000 Product pursuant to this Agreement. If
Celera proposes terms to AMI for distribution of such New m2000
Product, AMI may accept or reject such terms or propose alternative
terms within sixty (60) days after receipt of such written
proposal. Upon AMI’s acceptance of the New m2000 Product
under mutually agreed terms, such product will become a Celera
Product hereunder. If AMI rejects the proposed terms, the Parties
do not agree to alternative terms, or AMI fails to respond within
the sixty (60)-day period, Celera will be free to negotiate with
any Third Party for distribution of the New m2000 Product. If
Celera elects to distribute such New m2000 Product itself, or AMI
rejects the proposed terms or the Parties do not agree to
alternative terms and Celera distributes the New m2000 Product
through a Third Party, Celera will pay AMI a royalty for each New
m2000 Product as provided in the Royalty Agreement.
|
|
|
(c)
|
Subject to the
terms and conditions of the Collaboration Agreement between Abbott
and Celera dated November 4, 2008 (“ 874
Collaboration ”), a Diagnostic Product as defined in the
874 Collaboration will be a Proposed Celera Product if Abbott and
Celera reach agreement under Section 7.3(a) of the 874
Collaboration, and, if Celera accepts the Diagnostic Product
pursuant to Section 2.13(a) hereof, this Agreement will be the
Future Distribution Agreement contemplated by Section 7.3(b)
of the 874 Collaboration. If Celera rejects the Diagnostic Product,
Abbott’s rights to Commercialize the Diagnostic Product will
be subject to the 874 Collaboration.
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2.14
|
Celera
Development .
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|
|
(a)
|
The project plans and schedules
for development of each Celera Development Product are attached as
Appendix 2.14(a). At least twice each Calendar Year during the
Distribution Term, Celera will advise AMI of the status of
development of each Celera Development Product, including a report
regarding the date each such Celera Development Product will be
ready for Commercialization and the date Celera will be ready to
manufacture such Celera Development Product for distribution by
AMI. Should Celera not meet, or notify AMI after reasonable
development efforts that it will not meet, the schedule for such
Commercialization or manufacture of any Celera Development Product,
(i) AMI may develop
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Distribution
Agreement
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19
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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|
and Commercialize a product
similar to such Celera Development Product and such similar product
will not be considered a Competing Product, and (ii) such
Celera Development Product will be deleted from Appendix 1.13. If
Celera thereafter Commercializes such Celera Development Product
(including through its Affiliates) or through a Third Party
distributor, Celera will pay to AMI the royalty on the Celera
Development Product as provided in Section 4.1(l) of the
Royalty Agreement.
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|
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(b)
|
If Celera
completes development of a Celera Development Product within the
schedule set forth in Appendix 2.14(a), Celera will notify AMI in
writing that such Celera Development Product is ready for
distribution pursuant to this Agreement. Within sixty
(60) days after such notice, the Parties will negotiate in
good faith (i) the adjustment to Sales Minimums for each
Calendar Year or part thereof, and (ii) application of Article
3 to the Celera Development Product.
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|
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(c)
|
When Celera
completes development of the Celera Pipeline Product, Celera will
offer in writing to AMI the right to distribute hereunder such
Celera Pipeline Product, which AMI may accept or reject within
sixty (60) days of receipt of such offer. If AMI elects not to
accept the offer or fails to respond within the sixty (60)-day
period, Celera will be free to negotiate with any Third Party for
distribution of the Celera Pipeline Product or distribute such
Celera Pipeline Product itself. In the event AMI has Commercialized
a product designed to detect the same Analyte detected by such
Celera Pipeline Product using the same Platform Technology and
intended to address the same Product Indication using the same
Platform Technology as such Celera Pipeline Product at the time
that Celera offers distribution rights to AMI under this
Section 2.14(c), AMI may continue to Commercialize such
Molecular Diagnostic Product, which will not be considered a
Competing Product and for which no royalties or other payment will
be due to Celera as a result of AMI’s sales thereof. If AMI
rejects Celera’s offer to distribute the Celera Pipeline
Product and Celera thereafter Commercializes it directly (including
through its Affiliates) or through a Third Party distributor,
Celera will pay to AMI the royalty on the Celera Pipeline Product
as provided in Section 4.1(h) of the Royalty Agreement. If AMI
accepts the offer to distribute the Celera Pipeline Product, such
product will be a Celera Product hereunder.
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(d)
|
Nothing in this
Section 2.14 is intended to expressly or impliedly grant to
either Party rights under any intellectual property owned by the
other Party.
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2.15
|
Sales
Minimums . Subject to
Section 2.17, AMI will exercise commercially reasonable
efforts to achieve the Sales Minimum specified below for the
specified period:
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(a)
|
For Calendar
Year 2009, either
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|
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(i)
|
if AMI or its
Affiliates Commercialize a Cannibalizing Product in 2009, a Sales
Minimum of [*] U.S. Dollars (US$[*]); or
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Distribution
Agreement
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20
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(ii)
|
if AMI or its
Affiliates do not Commercialize a Cannibalizing Product in 2009
there will be no Sales Minimum.
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|
(b)
|
For Calendar
Year 2010, either
|
|
|
(i)
|
if AMI or its
Affiliates Commercialize a Cannibalizing Product in 2010, a Sales
Minimum of [*] U.S. Dollars (US$[*]); or
|
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(ii)
|
if AMI or its
Affiliates do not Commercialize a Cannibalizing Product in 2010,
there will be no Sales Minimum.
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|
|
(c)
|
For Calendar
Year 2011 and each subsequent Calendar Year during the Initial
Term, the Sales Minimum will be the greater of [*] U.S. Dollars
(US$[*]) or [*] percent ([*]%) of AMI’s long-range plan
forecast for Celera Products for such Calendar Year, as determined
six (6) months prior to the start of such Calendar Year;
provided , the Sales Minimum for each Calendar Year after
the Initial Term, if any, will be adjusted pro rata based upon
AMI’s purchases for distribution in the EEA pursuant to
Section 3.1.
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(d)
|
By
August 31, 2012, AMI will provide to Celera a non-binding
forecast for Celera Products in the Territory for the first Renewal
Term for the purpose of agreement by the Parties on the Sales
Minimums for such first Renewal Term, if any.
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(e)
|
By
August 31, 2014, AMI will provide to Celera a non-binding
forecast for Celera Products in the Territory for the second
Renewal Term for the purpose of agreement by the Parties on the
Sales Minimums for such second Renewal Term, if any.
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2.16
|
Failure to
Meet Sales Minimums.
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|
|
(a)
|
If, at the end
of a Calendar Quarter during Calendar Years 2009 or 2010, if AMI or
its Affiliates has Commercialized a Cannibalizing Product and AMI
has not achieved at least [*] percent ([*]%) of the prorated
portion of the Sales Minimum for the then-current Calendar Year
pursuant to Section 2.15 (to the extent effective), as such
Sales Minimum may have been adjusted pursuant to Section 2.17,
Celera, at its option within fifteen (15) days after receipt
by Celera of the applicable Quarterly Report required by
Section 3.9, may give AMI written notice of an intent to
terminate this Agreement (“ Intent Notice ”).
Within fifteen (15) days after the Intent Notice, the Parties
will discuss the probability that AMI will meet the Sales Minimum
for such Calendar Year. If, after such discussion, Celera believes
in good faith that AMI will not meet the Sales Minimum for the
Calendar Year, Celera may, within thirty (30) days after the
date of the Intent Notice, give AMI written notice of termination,
which termination will be effective [*] ([*]) months after the date
of the Intent Notice.
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Distribution
Agreement
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21
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
Within thirty (30) days after
such notice of termination, AMI at its sole discretion may notify
Celera in writing that AMI will pay Celera the difference between
AMI’s sales of Celera Products for the then-current Calendar
Year and the prorated applicable Sales Minimum for such Calendar
Year, as may have been adjusted pursuant to Section 2.17
(“ Prorated Difference Payment ”);
provided , this option is available only if AMI has achieved
at least [*] percent ([*]%) of the prorated portion of the
applicable Sales Minimum for the then-current Calendar Year
pursuant to Section 2.15, as such Sales Minimum may have been
adjusted pursuant to Section 2.17.
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(b)
|
If, at the end
of Calendar Year 2011 or each subsequent Calendar Year during the
Distribution Term, AMI has not satisfied the Sales Minimum, for the
just-concluded Calendar Year pursuant to Section 2.15, as such
Sales Minimum may have been adjusted pursuant to Section 2.17,
Celera, at its option, may give AMI written notice of termination
which termination will be effective [*] ([*]) months after the date
of the notice of termination. Celera will give AMI such notice of
termination within forty-five (45) days after receipt by
Celera of the Quarterly Report required by Section 3.9 for the
fourth Calendar Quarter of the just-concluded Calendar
Year.
|
Within thirty (30) days after
such notice of termination, AMI at its sole discretion may notify
Celera in writing that AMI will pay Celera the difference between
AMI’s sales of Celera Products for the just concluded
Calendar Year and the applicable Sales Minimum for such Calendar
Year, as may have been adjusted pursuant to Section 2.17
(“ Difference Payment ”); provided , this
option is available only if:
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|
(i)
|
AMI has
achieved at least [*] percent ([*]%) of the applicable Sales
Minimum for the just concluded Calendar Year pursuant to
Section 2.15, as such Sales Minimum may have been adjusted
pursuant to Section 2.17; or
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(ii)
|
AMI has
achieved at least [*] percent ([*]%) of the applicable Sales
Minimum for the just concluded Calendar Year and at least [*]
percent ([*]%) of the applicable Sales Minimum for each of the
immediately preceding two (2) Calendar Years, all such Sales
Minimums being as specified in Section 2.15 (even if there was
no Commercialization of a Cannibalizing Product) and as may have
been adjusted pursuant to Section 2.17.
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(c)
|
Even if AMI has
not met the options of Sections 2.16(a) or (b), AMI may offer to
pay Celera within thirty (30) days after a notice of
termination, the applicable Prorated Difference Payment or
Difference Payment, and Celera may, in its sole discretion, accept
such Prorated Difference Payment or Difference Payment from
AMI.
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Distribution
Agreement
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22
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|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
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(d)
|
AMI will pay
any Prorated Difference Payment or Difference Payment within thirty
(30) days after (i) AMI notifies Celera that it will make
such Prorated Difference Payment pursuant to Section 2.16(a)
or (ii) AMI notifies Celera that it will make such Difference
Payment pursuant to Section 2.16(b), as applicable, or after
Celera accepts such Prorated Difference Payment or Difference
Payment pursuant to Section 2.16(c). If AMI makes a Prorated
Difference Payment or Difference Payment pursuant to this
Section 2.16, any associated notice of termination will be
void and of no effect, and this Agreement will continue in full
force and effect.
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|
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(e)
|
If AMI
(i) notifies Celera that it will not make the Prorated
Difference Payment or Difference Payment, (ii) fails to notify
Celera of its agreement to pay the Prorated Difference Payment or
Difference Payment within the 30-day period, (iii) is
ineligible for the option pursuant to Section 2.16(a) or (b),
or (iv) fails to pay the Prorated Difference Payment or
Difference Payment in accordance with Section 2.16(d), or if
Celera does not accept a Prorated Difference Payment or Difference
Payment offered pursuant to Section 2.16(c), termination of
this Agreement will become effective [*] ([*]) months after the
date of Celera’s notice of termination.
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(f)
|
On the
effective date of termination, all rights and obligations of each
Party under this Agreement will cease. Such termination will not
affect the rights and obligations provided in the Royalty
Agreement.
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(g)
|
This
Section 2.16 will apply to each Calendar Quarter or Calendar
Year, as applicable, for which Prorated Sales Minimums or Sales
Minimums are applicable. Payment by AMI and acceptance by Celera of
a Prorated Difference Payment or a Difference Payment for a
Calendar Quarter or a Calendar Year will not be construed to modify
the terms of this Section 2.16 for subsequent Calendar
Quarters or Calendar Years.
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2.17
|
Sales
Minimum Adjustments . If
any New Celera Product is added to this Agreement, the Parties will
agree to an appropriate increase to the Sales Minimums, if any, for
the Calendar Year the New Celera Product is added and for each
Calendar Year thereafter. Conversely, the Parties will agree on an
appropriate decrease of Sales Minimums pro rata in proportion to
the effect any of the following events have on AMI’s ability
to meet such Sales Minimums for the particular Calendar Year(s)
affected:
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|
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(a)
|
failure by
Celera to supply (i) a Celera Product (including a failure due
to a Force Majeure Event) in the amounts specified by AMI in the
monthly forecasts (excluding Additional Units) or (ii) a
Celera Product that meets the Specifications for such Celera
Product or the representations, covenants or warranties given by
Celera under this Agreement;
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|
Distribution
Agreement
|
|
23
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|
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|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(b)
|
a Recall of a
Celera Product;
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|
|
(c)
|
any change in
the Specifications that adversely affects the performance of a
Celera Product;
|
|
|
(d)
|
any shortfall
in supply of a Celera Product (including shortfalls resulting from
AMI’s exercise of its rights in Sections 4.7 and
4.8;
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|
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(e)
|
the occurrence
of a Force Majeure Event affecting AMI’s ability to
distribute Celera Products;
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|
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(f)
|
a decision by
[*] not to purchase Celera Products pursuant to a bid pending as of
the Signature Date, despite AMI’s commercially reasonable
efforts to obtain such business;
|
|
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(g)
|
as described in
Section 2.12: (i) failure of Celera to meet a plan or
schedule for the development of an Upgrade to a Specific Celera
Product; or (ii) failure of the Parties to agree on a remedy
for a non-competitive Specific Celera Product;
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|
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(h)
|
a decision
pursuant to Section 9.4(c) to terminate AMI’s
distribution rights of a Celera Product due to infringement or
alleged infringement by AMI or Celera of a Third Party’s
intellectual property rights;
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(i)
|
distribution of
a material quantity of Competing Product or Cannibalizing Product
by a Third Party resulting from (i) the failure of Celera to
pursue Third Party infringement of a Celera Patent Right as set
forth in Section 9.2, or (ii) Celera’s grant to a
Third Party or a Celera Affiliate of a license(s) to Celera’s
Technology and Patent Rights as set forth in Section 9.6;
or
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|
|
(j)
|
as a
consequence of discontinuation or termination of a Celera Product
or as otherwise agreed to by the Parties.
|
Article 3. Purchase and Sale,
Purchase Price, Orders, Product Supply
|
|
(a)
|
Except as provided in the
following sentence relating to AMI’s distribution of Celera
Products in the EEA, during the Distribution Term and subject to
the terms and conditions contained herein, AMI will, and will cause
its Affiliates to, purchase all Celera Products exclusively from
Celera, and Celera will exclusively manufacture and supply, or
cause its Affiliates to exclusively manufacture and supply, to AMI
and its Affiliates such quantities of Celera Products as may be
ordered by AMI and its Affiliates
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|
Distribution
Agreement
|
|
24
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
as provided herein. Subsequent to
the Initial Term and during any Renewal Term, AMI will, and will
cause its Affiliates to, (i) purchase all Celera Products
exclusively from Celera for distribution outside the EEA, and
(ii) purchase Celera Products for distribution in the EEA on a
non-exclusive basis from Celera, and Celera will be free to sell
Celera Products in the EEA directly or through Third Party
distributors.
|
|
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(b)
|
For so long as
Celera exclusively manufactures or has manufactured Celera Products
for AMI under this Agreement, AMI, at its expense, will be
responsible for: (i) obtaining any necessary import license or
other import permits, and (ii) paying all custom duties, fees,
custom brokerage or any other clearance charges necessary to import
the Celera Products into the Territory.
|
|
|
(c)
|
Except as
otherwise provided in this Agreement, during the Distribution Term,
each Party will comply with restrictions on sale of Competing
Products or Competing Services as provided in Section 2.1 of
the Royalty Agreement. “ Competing Service ”
will have the definition set forth in Section 1.16 of the
Royalty Agreement.
|
|
3.2
|
Payment . For each unit of Specific Celera Product
purchased by AMI and its Affiliates, AMI for itself and its
Affiliates will pay to Celera the Actual Purchase Price for such
Specific Celera Product. AMI for itself and its Affiliates will
initially pay to Celera the Estimated Purchase Price for each
Specific Celera Product, calculated as set forth in this
Section 3.2. AMI will determine the difference, if any,
between the Actual Purchase Price and the Estimated Purchase Price
of each Specific Celera Product pursuant to the procedures set
forth in this Section 3.2 and Section 3.9. Any over
payment or under payment by AMI will be reconciled pursuant to
Section 3.11.
|
|
|
(a)
|
Estimated Purchase
Price . The Estimated
Purchase Price for each Specific Celera Product purchased by AMI
during the first Calendar Quarter of the Distribution Term will be
Celera’s Fully Loaded Cost for each such Specific Celera
Product, except for the Specific Celera Products for SBT HLA which
will be the average sales price charged by AMI or its Affiliates
multiplied by [*] percent ([*]%). Thereafter, during the first
Calendar Year of the Distribution Term, unless otherwise agreed by
the Parties, the Estimated Purchase Price for each Specific Celera
Product will be the average sales price charged by AMI or its
Affiliates for such Specific Celera Product during the twelve
(12) consecutive months preceding September 30, 2008,
multiplied by [*] percent ([*]%). Prior to first transfer to AMI
from Celera of any New Celera Product, the Parties will agree on an
Estimated Purchase Price for such New Celera Product for the
remainder of the then-current Calendar Year. Celera will make a
good faith effort to notify AMI promptly after Celera determines
that the average Estimated Purchase Price for a Celera Product
Group is within five percent (5%) of Celera’s Fully
Loaded Product Cost plus the
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|
Distribution
Agreement
|
|
25
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
applicable percentage rate as
determined in Section 3.2(c). Celera will immediately notify
AMI whenever Celera determines that the average Estimated Purchase
Price for a Celera Product Group is less than Celera’s Fully
Loaded Product Cost plus the applicable percentage rate as
determined in Section 3.2(c). If the Estimated Purchase Price
is less than Celera’s Fully Loaded Product Cost plus the
applicable percentage rate as determined in Section 3.2(c),
the Estimated Purchase Price will be adjusted upon mutual agreement
of the Parties to minimize the variance between the Estimated
Purchase Price and Celera’s Fully Loaded Product Cost plus
the applicable percentage rate as determined in
Section 3.2(c). By June 15 of each Calendar Year during
the Distribution Term, the Estimated Purchase Price for each
Specific Celera Product for the next Calendar Year will be
determined by AMI by calculating the average Actual Purchase Price
for each Specific Celera Product from the preceding twelve
(12) consecutive months, multiplied by [*] percent ([*]%). AMI
will deliver to Celera a written report of such determination not
later than June 30 of each Calendar Year.
|
|
|
(b)
|
Adjustment
to Estimated Purchase Price . In the event it is determined, in connection
with the preparation and delivery of any Quarterly Report, that the
Estimated Purchase Price varies from the Actual Purchase Price for
any Calendar Quarter by fifteen percent (15%) or greater, the
Estimated Purchase Price will, upon mutual agreement of the
Parties, be adjusted so as to minimize the variance for each
subsequent Calendar Quarter.
|
|
|
(c)
|
Actual
Purchase Price Protection .
|
|
|
(i)
|
If Celera
determines that the average Actual Purchase Price calculated by AMI
for a Calendar Quarter for: (x) all Celera Product Groups
(except as provided in Subsection (y) below) is less than the
average Estimated Purchase Price for all such Celera Product Groups
and is less than Celera’s Fully Loaded Product Cost plus [*]
percent ([*]%) for such Celera Product Groups in such Calendar
Quarter; or (y) all Celera Product Groups directed to Product
Indications Factor II, Factor V or MTHFR [*], is less than the
average Estimated Purchase Price for all such Celera Product Groups
and is less than Celera’s Fully Loaded Product Cost plus [*]
percent ([*]%) for such Celera Product Groups in such Calendar
Quarter; then (z) Celera may provide written notification to
AMI of such determination within ten (10) business days after
receipt of the Quarterly Report or the annual Estimated Purchase
Price calculation provided by AMI under this Section 3.2. An
example of an Actual Purchase Price protection calculation under
this Section 3.2(c)(i) is attached as Appendix 3.2(c)(i) for
illustration purposes only.
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|
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|
|
Distribution
Agreement
|
|
26
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(ii)
|
Celera’s
written notification pursuant to Section 3.2(c)(i)(z) will
include appropriate documentation supporting Celera’s claim
that the average Actual Purchase Price for all of the Celera
Product Groups is less than Celera’s Fully Loaded Product
Cost plus the applicable percentage noted in Sections 3.2(c)(i)(x)
or 3.2(c)(i)(y). AMI will have a reasonable opportunity to
investigate such claim and, at AMI’s sole expense, to have
audited Celera’s books and records with respect to such claim
by an independent auditor reasonably acceptable to Celera if AMI
deems such an audit necessary (such audit right to be in addition
to the right granted to AMI pursuant to Section 8.2). The
auditor will report to AMI only the accuracy of the cost
information supplied by Celera and will otherwise retain all
information learned from such investigation in
confidence.
|
|
|
(iii)
|
If the
investigation described in Section 3.2(c)(ii) establishes that
the average Actual Purchase Price for a Celera Product Group is
less than Celera’s Fully Loaded Product Cost plus the
applicable percentage set forth in Section 3.2(c)(i), then the
Estimated Purchase Price for such Specific Celera Product for
future Calendar Quarters will be adjusted such that the Estimated
Purchase Price and the Actual Purchase Price for such Celera
Product Group will be at least equal to such Fully Loaded Product
Cost plus the applicable percentage. In the event that AMI
determines that its distribution of a Specific Celera Product to
which Actual Purchase Price Protection applies is no longer
commercially viable, the Parties will discuss whether to modify the
terms of AMI’s distribution of such Specific Celera
Product.
|
|
|
(d)
|
In the event
AMI wishes to distribute Celera Products in an emerging nation for
philanthropic reasons, AMI will consult with Celera and Celera, in
good faith, will consider possible sharing with AMI of the cost and
benefit of such a program.
|
|
|
(e)
|
Within thirty
(30) days of the Signature Date, AMI will disclose to Celera
the Rebate Amount and associated specified volumes of Specific
Celera Product(s) by customer number as of the Effective Date. If
AMI subsequently enters into an additional Rebate Amount with a
Third Party, within thirty (30) days thereafter AMI will
disclose to Celera such Rebate Amount and associated specified
volumes of Specific Celera Product(s) by customer
number.
|
|
|
(f)
|
In the event of
a prior period accounting adjustment due to rebates, AMI will
provide Celera with documentation associated with such
adjustment.
|
|
3.3
|
Forecast and
Orders .
|
|
|
(a)
|
Within thirty
(30) days after the Signature Date, AMI will furnish to Celera
a twelve (12)-month forecast of the quantities of Specific Celera
Products AMI intends to order during 2009. AMI agrees to purchase
the quantities of Specific Celera Products estimated for the first
three (3) months of such forecast and, subject to
Section 3.3(d), AMI will submit purchase orders reflecting
such quantities for such first three (3) months by the end of
the first month of such three (3) month period. The balance of
such 12-month forecast will represent reasonable estimates for
planning purposes only and will not obligate AMI to purchase any
such amounts.
|
|
|
|
|
|
|
Distribution
Agreement
|
|
27
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(b)
|
AMI will update
such twelve (12)-month forecast quarterly, no later than the first
week of each Calendar Quarter during the Distribution Term. AMI
agrees to purchase the quantities of Specific Celera Products
estimated for the first three (3) months of each such updated
forecast and, subject to Section 3.3(d), AMI will submit
purchase orders reflecting such quantities for such first three
(3) months by the end of the first month of such three
(3) month period at the latest. The balance of each such
12-month forecast will represent reasonable estimates for planning
purposes only and will not obligate AMI to purchase any such
amounts.
|
|
|
(c)
|
In the event
AMI fails to deliver a twelve (12)-month forecast as required by
Section 3.3(b), Celera will give written notice to AMI. If AMI
has not delivered the missing twelve (12)-month forecast within
five (5) business days after such notice, AMI agrees that the
next three (3) months of the last delivered twelve (12)-month
forecast will be binding on AMI.
|
|
|
(d)
|
Except for the
initial order placed by AMI pursuant to Section 3.3(a) (which
delivery dates will be agreed upon by the Parties), AMI will place
each purchase order with Celera so that Celera receives the
purchase order for Specific Celera Products to be delivered
thereunder at least sixty (60) days (or longer if so provided
in Appendix 3.3(d)) prior to the delivery date specified in such
purchase order. If Celera reasonably believes it requires more than
sixty (60) days to deliver the Specific Celera Products
pursuant to such purchase order, Celera will request AMI’s
prior written approval for a reasonable extension of the delivery
date, which will not be unreasonably withheld. If the delivery date
is acceptable or the requested extension is granted, Celera will
accept each purchase order to the extent that the quantity of
Specific Celera Products set forth in such purchase order is less
than or equal to [*] percent ([*]%) of the then-current estimate
for the applicable forecast period. For that portion of a Specific
Celera Product order that exceeds [*] percent ([*]%) of the
then-current estimate for the applicable period (“
Additional Units ”), Celera will use its commercially
reasonable efforts to meet the specified delivery date in the
purchase order for the Additional Units. If Celera is unable to
deliver the Additional Units on the date specified by AMI in the
purchase order, Celera will notify AMI in writing as soon as
possible, but in any event within thirty (30) days after its
receipt of the purchase order.
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Distribution
Agreement
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28
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
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(e)
|
For that
portion of a Specific Celera Product order that is less than
AMI’s then-current non-binding forecast under
Section 3.3(b) by the following percentages, and for which
materials used in the manufacture of such Specific Celera
Product(s) have been reasonably purchased in advance by Celera to
meet AMI’s forecast (i.e. Celera may not anticipate demand
beyond the forecast provided by AMI) and cannot be used to fulfill
future orders by AMI hereunder or cannot otherwise be used by
Celera, AMI will reimburse Celera the documented cost of such
materials:
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|
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(i)
|
For the fourth
through sixth months of the then-current twelve (12)-month
forecast, [*] percent ([*]%) per month less than the forecasted
amount; and
|
|
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(ii)
|
For the seventh
through twelfth months of the then-current twelve (12)-month
forecast, [*] percent ([*]%) per month less than the forecasted
amount.
|
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(f)
|
Orders will be
placed upon AMI’s purchase order form specifying quantities
ordered, delivery dates, and delivery and shipping instructions.
Celera will confirm shipping dates to AMI within fourteen
(14) days of receipt of the purchase order. The obligations
and rights of the Parties will be governed by the terms and
conditions of this Agreement. In the event there is any conflict
between the provisions of this Agreement and the purchase order or
any acknowledgment or acceptance document of Celera as to the
obligations of the Parties regarding any Specific Celera Product
order, the Parties agree that the resolution of such issue will be
controlled first by the terms of this Agreement, then the terms of
the subject purchase order, and finally the terms of any
acknowledgement or acceptance document. If, after the Effective
Date, any changes are made to any of the terms or conditions
contained on AMI’s form of purchase order that are adverse to
Celera, the Parties agree that such new or different terms will not
be binding upon Celera unless Celera expressly agrees to such
terms.
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(g)
|
With respect to
any New Celera Products that become subject to this Agreement, AMI
will submit its first monthly purchase order for such product at
least ninety (90) days in advance of the desired delivery date
and will submit, along with such purchase order, a non-binding
estimate of its future requirements for such New Celera Product for
the next twelve (12) months. Thereafter, the forecasting, and
beginning after the first month of delivery of such New Celera
Product, the ordering, for such New Celera Product will be governed
by Article 3 of this Agreement.
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3.4
|
Delivery and
Invoicing .
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(a)
|
Celera will ship Specific Celera
Products which are ordered by AMI, FCA (Incoterms 2000)
Celera’s facility in Alameda, California or another
facility
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Distribution
Agreement
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29
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|
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|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
designated by Celera (freight
pre-paid and added to invoice), in accordance with the quantities,
delivery dates, and delivery and shipping instructions specified in
AMI’s purchase orders. In the event that AMI designates no
carrier or if the designated carrier is not available or not
feasible, then Celera will select a reasonable alternative mode of
shipment with prior approval of AMI. Celera’s responsibility
will be to deposit the ordered Specific Celera Product with the
carrier in accordance with the purchase order, and Celera will not
be liable for late delivery to AMI if so accomplished. Title and
risk of loss with regard to a Specific Celera Product will pass to
AMI upon delivery of such Specific Celera Product to the
AMI-designated or AMI-approved carrier for shipment to the
recipient as specified in the applicable purchase order from AMI to
Celera. Notwithstanding the above, as directed by AMI or its
Affiliates during the Distribution Term or as otherwise agreed by
the Parties, Celera or its Affiliates will continue to be drop ship
any Specific Celera Product that had been drop shipped by Celera or
its Affiliates prior to the Signature Date.
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(b)
|
Upon delivery
of Specific Celera Product to the AMI-designated or AMI-approved
carrier as set forth in Section 3.4(a), Celera will invoice
AMI for the Specific Celera Products supplied at the then-current
Estimated Purchase Price for such Specific Celera Products plus any
pre-paid freight charges, except for Products for Internal Use
which will be invoiced at the cost set forth in Section 3.7,
AMI will pay such invoices within thirty (30) days of receipt
by AMI. All payments will be made via check or wire transfer. Wire
transfer payments will be made pursuant to the following
information:
|
Beneficiary Bank
ABA # [*]
Swift # [*]
Name: JP Morgan Chase
Bank
Address: 1 Chase Manhattan Plaza,
New York, NY 10005
Ultimate Beneficiary
:
Bank Acct. # [*]
Name: [*]
Reference field: Invoice No.
]
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(c)
|
Unless the
Parties expressly agree in writing to use a different currency, all
invoices under this Agreement will be paid in U.S.
Dollars.
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|
3.5
|
Safety Stock
. Celera will maintain a safety
stock of the following Specific Celera Product components: rare
reagents, such as nucleic acid primers and probes (collectively,
the “ Components ”) in a quantity equivalent to
AMI’s forecasted purchases for Specific Celera Products for
the immediately succeeding [*] ([*]) month forecast period. Celera
will use the safety stock to manufacture Specific
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Distribution
Agreement
|
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30
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
Celera Products, and will
maintain the appropriate level of safety stock by promptly
replenishing that quantity of Components used in such manufacture.
AMI will have no obligation to purchase the safety stock in the
event of an AMI adjustment to the forecast in accordance with
Section 3.3. Notwithstanding the foregoing, if AMI has failed,
for a period of [*] consecutive calendar months to purchase a
quantity of Specific Celera Products equal to or greater than the
quantity forecast at the commencement of the Calendar Year for such
months, then Celera may adjust the safety stock to reflect a
reduced forecast based upon the difference between the forecast and
actual for the preceding [*] consecutive months. Upon early
termination of this Agreement by AMI, AMI will purchase the
Components in such quantities that would have been utilized in the
manufacture of the quantity of Specific Celera Products specified
in AMI’s firm purchase orders accepted by Celera as of the
date of termination and at Celera’s actual direct cost for
such Components; provided , that (a) the Components
meet the Specifications, (b) Celera determines in good faith
that it cannot use the Components in other manufacturing
operations, and (c) AMI’s termination of the Agreement
is not due to a breach of this Agreement or failure to supply by
Celera or a Force Majeure Event affecting Celera. In the event AMI
fails to provide forecasts as required in Section 3.3, Celera
will have no obligation under this Section 3.5.
|
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3.6
|
Interruption
of Supply .
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(a)
|
In the event
that Celera is unable or otherwise fails or the Parties determine
after reasonable consultation that Celera will fail, for any reason
(including a Force Majeure Event) to supply or deliver any Specific
Celera Product in accordance with the quantities and/or delivery
dates specified by AMI in an accepted purchase order or agreed-upon
delivery date within the forecasted amounts, Celera will promptly
notify AMI and will have a period of [*] days to cure such failure
to supply. During such [*] day period of failure to supply by
Celera: (i) AMI will be free to purchase a replacement product
from any vendor in order to provide its customers a continuous
supply of relevant product (such product will not be considered
Competing Product and no royalties or other payments will be due
Celera for AMI’s sale of such replacement product); and
(ii) Celera will use commercially reasonable efforts to find
an equivalent product, reasonably agreeable to AMI, as a
replacement to supply AMI under this Agreement. If the Parties
believe the interruption of supply will continue for more than [*]
days after such notice and equivalent products are unavailable, the
Parties will negotiate in good faith appropriate modifications to
this Agreement with respect to the Specific Celera Product(s)
affected. If as a result of the negotiation described in the prior
sentence, Celera cannot supply the Specific Celera Product(s), any
replacement product obtained after such [*]-day period will not be
considered a Competing Product and no royalties or other payment
will be due Celera for AMI’s sale thereof.
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Distribution
Agreement
|
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31
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|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(b)
|
If Celera has
the ability and capacity to supply Specific Celera Product(s) in
accordance with AMI purchase orders delivered to and accepted by
Celera pursuant to Section 3.3(d), but Celera voluntarily
chooses not to supply such Specific Celera Product, such failure to
supply will be a breach under this Agreement and AMI may terminate
its distribution under this Agreement for such Specific Celera
Product. AMI will be entitled to all remedies at law or equity
resulting from such breach. In the event Celera chooses not to
supply all Specific Celera Products to AMI, in addition to
AMI’s legal remedies, Celera will pay AMI royalties pursuant
to the Royalty Agreement on any such Specific Celera Products sold
by or for Celera.
|
|
|
(c)
|
If Celera is
unable to supply a Celera Product due to a change of the regulatory
requirements, Celera’s good faith inability to comply with
applicable regulatory requirements despite Celera’s best
efforts to do so and taking into consideration AMI’s
recommendations, or due to Celera’s good faith belief that
supplying such Celera Products would infringe a Third Party’s
rights as provided in Section 9.4(b), it will not be a failure
to supply. AMI may purchase replacement product and the Sales
Minimums will be reduced proportionately. Any such replacement
product purchased by AMI pursuant to this Subsection 3.6(c) will
not be considered a Competing Product and no royalties or other
payment will be due Celera for AMI’s sale thereof.
|
|
3.7
|
Internal
Use . Upon a
representation by AMI of intended use, Celera will sell Celera
Products to AMI for Internal Use only at Celera’s Fully
Loaded Product Cost plus [*] percent ([*]%).
|
|
3.8
|
Third Party
Royalties . During the
Distribution Term and to the extent allowed by the terms of the
applicable Third Party agreement:
|
|
|
(a)
|
AMI will identify to Celera all
patent license agreements between Abbott or AMI and a Third Party
that are in effect as of the Effective Date and that may apply to
use or sale of any Celera Product. Such identification will include
the applicable royalty terms and the countries and numbers of the
patents licensed so that Celera may determine, in its reasonable
opinion, whether it prefers or needs such a license for any of the
manufacture, use, sale, offer for sale, import and distribution of
Celera Products. All such information shared pursuant to this
Section 3.8(a) will be considered Confidential Information.
Celera will promptly notify AMI of any such license agreement that
AMI should apply to Celera Products (“ Adopted AMI
License ”). In the event AMI is required to pay and pays
royalties to a Third Party under an Adopted AMI License for the
use, sale or importation of a Celera Product, Celera will reimburse
AMI for such royalties AMI has paid pursuant to the procedures set
forth in Sections 3.8(b) or 3.8(c); provided, however , that
the royalties paid were due and payable under the Adopted AMI
License because AMI reasonably believes the use or sale of the
Celera Product is covered by a valid and
|
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|
Distribution
Agreement
|
|
32
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
unexpired claim of a patent
subject to such Adopted AMI License, as determined by AMI. AMI will
notify Celera when an Adopted AMI License expires or is otherwise
terminated and when a Celera Product is no longer subject to an
Adopted AMI License. If Celera obtains a license directly from such
Third Party or discontinues manufacture or sale of the relevant
Product, Celera may notify AMI that Celera no longer needs the
benefit of the Adopted AMI License, after which notification Celera
will no longer be liable to AMI under this Section 3.8 with
respect to such Adopted AMI License. Any inadvertent payments made
by Celera under an Adopted AMI License which had expired or been
terminated or was not longer applicable will promptly be refunded
by AMI.
|
|
|
(b)
|
In conjunction
with each Quarterly Report, AMI will provide Celera with a written
statement of all such royalties paid by AMI to Third Parties under
an Adopted AMI License in the preceding Calendar Quarter (“
Third Party Royalties ”). Each such statement will
identify for each royalty paid the Adopted AMI License, the
Specific Celera Product on which the royalty was paid, and the
country of sale. Celera will reimburse AMI for all such paid
royalties under an Adopted AMI License within thirty (30) days
after receipt of the statement. Such reimbursement will be refunded
by AMI to Celera if Celera questions the royalty obligation and it
is agreed per Section 3.8(c) that no such royalty was
due.
|
|
|
(c)
|
By written
notice to AMI within thirty (30) days after receipt of any
statement received under Section 3.8(b), Celera may question
AMI’s obligation to pay any royalty on a Celera Product;
provided , that Celera has a reasonable basis on which to do
so. Celera will provide AMI the basis for Celera’s belief
that the royalty payment was not required, which basis may include
non-infringement or invalidity of the licensed patent. Within sixty
(60) days after any such notice, AMI and Celera will discuss
in good faith Celera’s position. If the Parties cannot
resolve the dispute, the Parties will refer the matter for final
resolution to an intellectual property expert selected by mutual
agreement. If such dispute is resolved against AMI and as a result
a patent infringement lawsuit is brought against AMI, Celera will
defend, indemnify and hold AMI and those set forth in
Section 9.4(a) harmless pursuant to
Section 9.4(a).
|
|
|
(d)
|
In the event
AMI reasonably believes that a new license from a Third Party is
required after the Effective Date in order to use or sell any
Celera Product, AMI will consult with Celera. If Celera agrees that
such license agreement is necessary, then Section 9.4(c) will
apply.
|
|
|
(e)
|
Except as
provided in this Section 3.8, Celera will be responsible for
any royalties payable under any agreement between Celera and a
Third Party with respect to any Celera Product distributed by AMI,
its Affiliates or Distributors pursuant to this
Agreement.
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|
Distribution
Agreement
|
|
33
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
3.9
|
Quarterly
Report . Within eight
(8) business days after the end of each Calendar Quarter
during the Distribution Term, AMI will deliver to Celera a written
report that provides for each Specific Celera Product sold or
otherwise distributed in the Calendar Quarter, the quantities and
Net Sales in U.S. dollars and location (U.S. or OUS) of such sales
or distributions, and within forty-five (45) days after the
end of each Calendar Quarter during the Distribution Term, AMI will
deliver to Celera a written report (“ Quarterly Report
”), in a format to which the Parties will agree to within
sixty (60) days after the Signature Date, containing as a
minimum data of the type currently provided under the Atria
Distribution Agreement, as applicable, including the
following:
|
|
|
(a)
|
For each
Specific Celera Product sold or otherwise distributed in the
Calendar Quarter, the quantity and location (U.S. or OUS) of such
sales or distributions;
|
|
|
(b)
|
The Specific
Celera Product and the number of Free Products distributed in the
Calendar Quarter; provided, if the value of the Free Products
distributed in the Calendar Quarter exceeds [*] percent ([*]%) of
Net Sales for such Celera Product Group in such Calendar Quarter,
AMI will provide to Celera a list of new customers that received
Free Products or customers that received Free Products as an
introduction to a New Celera Product during such Calendar Quarter,
all of such customers to be identified only by AMI customer
number;
|
|
|
(c)
|
The Net Sales
calculations for each Specific Celera Product sold or otherwise
distributed in the Calendar Quarter;
|
|
|
(d)
|
The calculation
of the Actual Purchase Price and any adjustments necessary per
Section 3.2(a) and (b);
|
|
|
(e)
|
A
reconciliation of the payments made to Celera based upon the
Estimated Purchase Price for the Calendar Quarter against the
Actual Purchase Price calculated in Section 3.9(d);
and
|
|
|
(f)
|
A statement in
accordance with Section 3.8(b) of Third Party Royalties paid
in the Calendar Quarter.
|
AMI will deliver to Celera a final
Quarterly Report within forty-five (45) days after termination
or expiration of this Agreement. The Parties will comply with
Sections 3.10 and 3.11 with respect to sales reported in the final
Quarterly Report.
|
3.10
|
AMI
Reimbursement . Celera
will offset any reimbursement payments hereunder against any
payments due from AMI above, per the quarterly reconciliation in
Section 3.11. Celera will reimburse AMI as follows:
|
|
|
(a)
|
Provided
distribution of Free Products in the Calendar Quarter did not
exceed the limitation in Section 2.5, for each Free Product
distributed by AMI in the Calendar Quarter, Celera will pay to AMI
the Estimated Purchase Price paid by AMI for such Free Product less
[*] percent ([*]%) of Celera’s Fully Loaded Product Cost for
each such Free Product.
|
|
|
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|
Distribution
Agreement
|
|
34
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(b)
|
Celera will pay
to AMI all Third Party Royalties paid by AMI during the Calendar
Quarter for an Adopted AMI License.
|
|
3.11
|
Quarterly
Reconciliation Payment .
AMI will aggregate the over and under payments and any
reimbursement payments set forth on the Quarterly Report and will
provide to Celera a quarterly reconciliation as part of such
Quarterly Report. To the extent that AMI owes Celera a net amount
per the quarterly reconciliation, AMI will pay Celera such amount
for such Calendar Quarter, within thirty (30) days of its
delivery of the Quarterly Report. To the extent that Celera owes
AMI a net amount per the quarterly reconciliation, Celera will pay
AMI such amount for such Calendar Quarter within thirty
(30) days of its receipt of the Quarterly Report.
|
|
|
(a)
|
Within fifteen
(15) days of the Signature Date, AMI will pay to Celera a
Transition Period equalization payment of [*] U.S. Dollars (US$[*])
in recognition of the difference between the Alliance Agreement and
this Agreement.
|
|
|
(b)
|
AMI will
deliver to Celera a written report that provides for each Specific
Celera Product sold or otherwise distributed during the Transition
Period, the quantities and Net Sales in U.S. dollars and location
(U.S. or OUS) of such sales or distributions for the Transition
Period, not later than January 15, 2009.
|
|
|
(c)
|
AMI will pay to
Celera the quarterly reconciliation payment pursuant to
Section 3.11 for the Transition Period not later than
January 31, 2009.
|
Article 4. Manufacture and
Quality Assurance
|
4.1
|
Manufacture . Celera will manufacture Celera Products in
accordance with: (a) the applicable Quality Systems and GMP
Requirements; (b) all pertinent rules and regulations of the
FDA, as the same may be amended from time to time (but only to the
extent that the Celera Products are subject to FDA regulations);
and (c) any equivalent foreign requirements and regulations,
as applicable. Celera will be responsible for all costs associated
with Celera Product development, manufacturing, and quality
control. For the avoidance of doubt, any such costs incurred prior
to the Effective Date will be subject to the terms of the Alliance
Agreement. Celera agrees to comply with all of the requirements of
the IVD Directive and undertakes to ensure that the manufacture of
the Celera Products is performed strictly in conformity with the
requirements of the IVD Directive.
|
|
|
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|
Distribution
Agreement
|
|
35
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
4.2
|
IVD
Directive . The Parties
will have the following responsibilities with respect to the IVD
Directive:
|
|
|
(a)
|
Celera will be
the legal manufacturer, as defined in the IVD Directive, for Celera
Products;
|
|
|
(b)
|
At AMI’s
request, Celera will provide AMI with a copy of
(i) appropriate sections of its Product Technical Files
necessary to support product registrations and any such sections
will be deemed Confidential Information, (ii) the Certificate
of Analysis (“CoA”) for each Celera Product delivered,
and (iii) the Declaration of Conformity for each Celera
Product delivered;
|
|
|
(c)
|
Celera will be
responsible for ensuring that the Celera Products meet the
essential requirements of the IVD Directive and to compile
Declarations of Conformity;
|
|
|
(d)
|
Celera will be
responsible for the design and content of the labeling, including
the CE Mark, and for the conformity of the packaging of the Celera
Products with the IVD Directive;
|
|
|
(e)
|
Celera will be
responsible for all costs associated with translating all required
materials into English, French, German, Italian, Portuguese,
Spanish, Danish, Swedish and Greek. AMI may assist Celera in the
translation of all required materials into the foregoing languages
and will provide these services to Celera at their fully-burdened
cost plus [*] percent ([*]%). If AMI believes that such materials
must be translated into additional language(s), the Parties
promptly will discuss whether Celera will bear the cost of such
translation(s). If Celera does not agree to bear such cost, AMI may
pay for such translation(s), including the cost of Celera’s
required review and approval; provided, if Celera desires to use
any such translation after expiration or termination of this
Agreement, Celera promptly will reimburse AMI for AMI’s
amortized cost of each such translation, which amortized cost will
be calculated from the first Commercialization date of the Specific
Celera Product in such language through the date that is seven
(7) calendar years thereafter;
|
|
|
(f)
|
Celera will
allow AMI to audit the documentation supporting the Technical File
pertaining to any Celera Product during normal business hours with
reasonable advance notice and will provide access to relevant
portions of the Technical File documentation to a Competent
Authority or other regulatory body as may be required to be in
compliance with all appropriate regulations and laws. Such
documentation will be considered Confidential
Information;
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|
Distribution
Agreement
|
|
36
|
|
|
|
[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
|
|
|
(g)
|
Celera will be
responsible for maintaining the Device Master Record and the Device
History Record for each Celera Product; and
|
|
|
(h)
|
If either Party
receives a complaint from any Competent Authority, the relevant
Party will immediately inform the other Party and Celera will have
the responsibility of corresponding with the Competent Authority.
Celera will also report all Serious Incidents relating to the
Celera Products to the relevant Competent Authority.
|
|
|
(a)
|
Celera will
test or cause to be tested each lot of Celera Product in accordance
with its standard operating procedures (“Release
Testing”).
|
|
|
(b)
|
Each lot of
Celera Products for ex-US distribution delivered to AMI will be
accompanied by a CoA. Each lot of Celera Products for U.S.
distribution delivered to AMI will be accompanied by a Certificate
of Conformance (“CoC”). The CoA or CoC, as the case may
be, will be lot specific, reflect the lot number for the Celera
Product, and conform to the requirements in the Specifications. The
CoA or CoC, as the case may be, must show a summary of the physical
inspection, Release Testing and performance testing results (if
different from Release Testing), and include the signature of
Celera’s quality representative and date of approval. Celera
will send such Certificates to AMI along with delivery of the
Celera Products. AMI is entitled to rely on such Certificates for
all purposes of this Agreement. Nothing in this Agreement requires
AMI to perform any incoming testing, analytical or otherwise, on
any Celera Products received from Celera.
|
|
4.4
|
Shelf
Life . Each Specific
Celera Product ordered by AMI pursuant to Section 3.3(d) will
be delivered by Celera with at least six (6) months of
remaining shelf life on the date of delivery to AMI’s
designated carrier, and in no event, with less than three
(3) months from the dating indicated by real time stability
testing (or other means) of such Celera Product.
|
|
4.5
|
Labeling
. The Specific Celera Products will
be labeled with the applicable Celera Trademark and, if required by
regulatory authorities or licensors, will include the phrase
“Manufactured for Abbott Molecular Inc. by Celera
Corporation” and/or “Distributed by Abbott
Molecular Inc.,” and any other language as required by
specific licensors. Celera will package, label and assemble
Specific Celera Products into Kits or ASRs in final form for use by
the end user and in accordance with the Specifications. Upon mutual
agreement of the Parties, Specific Celera Products may be labeled
with the AMI trademark and, at AMI’s discretion, may include
the phrase “Manufactured by Celera Corporation”
and/or “Distributed by Abbott Molecular Inc .”
In such instance, AMI will, at its expense, provide to Celera all
packaging and labeling artwork in camera ready format for the
Specific Celera Products, and a grant for the limited use of any
necessary
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Distribution
Agreement
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37
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[*]
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Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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AMI trademarks. A one-time set-up
cost for printing plates will be paid by AMI. Such cost will be
agreed upon in advance and in writing by AMI and Celera. Celera
will, at its expense, procure the required labeling, including the
package inserts. If AMI believes that required materials in
countries not regulated by the IVD Directive must be translated
into local language(s), the Parties promptly will discuss whether
Celera will bear the cost of such translation(s). If Celera does
not agree to bear such cost, AMI may pay for such translation(s),
including the cost of Celera’s required review and approval;
provided , if Celera desires to use any such translation
after expiration or termination of this Agreement, Celera will
reimburse AMI for AMI’s amortized cost of each such
translation, which amortized cost will be calculated from the first
Commercialization date of the Specific Celera Product in such
language through the date that is seven (7) calendar years
thereafter.
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4.6
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Changes to
Products .
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(a)
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Celera will
notify AMI in writing at least ninety (90) days prior to any
proposed changes in its manufacturing process with regard to
Specific Celera Products or any Components of Specific Celera
Products and other raw materials, including, but not limited to,
(i) any changes that affect written quality plans for
production or written quality procedures respecting same, as well
as any changes outside the validated level or procedure;
(ii) any changes in Celera’s manufacturing procedures;
or (iii) any changes in raw materials or other parts vendors.
Upon AMI’s receipt of such notice, the Parties will confer
and agree upon a reasonable time frame within which AMI may
evaluate and communicate to Celera its comments on such change.
Celera will use commercially reasonable efforts to incorporate
AMI’s comments into any such change of the design or the
manufacturing process for Specific Celera Products. Celera will not
make any changes in its manufacturing process if AMI has raised an
objection to such proposed change within the ninety (90) day
period. Notwithstanding the foregoing, Celera may, without
notifying AMI, change the design or alter the manufacturing
processes of the Specific Celera Products provided that
(x) the Specific Celera Products continue to conform to the
Specifications, and (y) a change or alteration that impacts
the Specific Celera Products is made to all Celera Products cleared
under the equivalent 510(k) notification.
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(b)
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Notwithstanding the foregoing,
Celera will not make any changes to the fit, form or function of
the Specific Celera Products or the manufacturing site without
first obtaining the approval of such change from AMI, which
approval will not be unreasonably withheld or delayed. AMI will,
within thirty (30) days after receipt of the Celera notice or
within a timeframe agreed upon by the Parties, inform Celera
whether AMI accepts such change, or if it objects to such change
the reasons for such objection. If AMI accepts the proposed change
(i) Celera may supply to AMI the changed Celera Products
commencing ninety (90) days after Celera’s
first
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Distribution
Agreement
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38
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[*]
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Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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notice to AMI, and (ii) the
changed Celera Products, as proposed by Celera in the notice of
proposed change, will thereupon become the Celera Products under
this Agreement. If AMI objects to the changes proposed by Celera,
Celera may, at its option, either make any changes, corrections or
modifications suggested by AMI or continue to supply the existing
Specific Celera Products to AMI. If Celera agrees to make any
changes, corrections or modifications suggested by AMI, then Celera
may begin to supply the mutually agreed upon changed Celera
Products at any time ninety (90) days after Celera’s
first notice to AMI.
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(c)
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AMI will not
modify, alter or change any Celera Product without the written
consent of Celera. In addition, AMI will not repackage any Specific
Celera Product unless Celera has agreed to such repackaging in a
writing signed by Celera.
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4.7
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Discontinued
Celera Product . In the
event Net Sales of a Specific Celera Product is less than [*] U.S.
Dollars (US$[*]) per Calendar Year for two consecutive Calendar
Years, or the average Actual Purchase Price for a Celera Product
Group is less than Celera’s Fully Loaded Product Cost plus
the applicable percentage set forth in Section 3.2(c)(i), then
Celera may elect to discontinue manufacture and supply of such
Specific Celera Product. Celera will provide AMI with written
notice of such election and if AMI does not object within thirty
(30) days thereafter, Celera may discontinue the Specific
Celera Product. If AMI objects, the Parties will discuss
AMI’s plans for increasing sales of the Specific Celera
Product or the market need for the Specific Celera Product. If,
after such discussion, AMI continues to object to discontinuance of
the Specific Celera Product, Celera will continue to supply AMI
with such Specific Celera Product provided AMI continues to sell
such Product and to pay Celera for such Specific Celera Products in
accordance with this Agreement. If AMI does not object to
discontinuance of such Specific Celera Product, Celera will provide
AMI with one hundred eighty (180) days’ advance written
notice, and Celera will continue to manufacture and supply to AMI
such Specific Celera Product until expiration of the 180-day
period. If Celera elects to discontinue a Specific Celera Product
pursuant to this Section 4.7, AMI may return to Celera all
unsold inventory of such Specific Celera Product for reimbursement
of the Estimated Purchase Price of such inventory. Discontinuation
of a Specific Celera Product under this Section 4.7 will not
be considered an interruption of supply under Section 3.6, and
the Parties will reduce Sales Minimums accordingly. Upon such
discontinuance, Celera may sell the Specific Celera Product and
Celera will pay AMI a royalty for such sales by Celera and its
Affiliates in accordance with Section 4.1(k) of the Royalty
Agreement. Any replacement product developed or acquired by AMI as
a result of discontinuance under this Section 4.7 will not be
considered a Competing Product and no royalties or other payment
will be due to Celera for AMI’s sale thereof.
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4.8
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Rejected
Goods/Shortages . AMI
will notify Celera of any claim relating to any Specific Celera
Product that does not conform to the Specifications or
any
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Distribution
Agreement
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39
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[*]
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Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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shortage in quantity of any
shipment of Specific Celera Products within thirty (30) days
after receipt of such shipment. In the event of such claim or
shortage that is verified by Celera, AMI’s sole and exclusive
remedy will be replacement of the Specific Celera Product or make
up of the shortage within sixty (60) days after receiving such
notice, at no additional cost to AMI. If Celera reasonably believes
it requires more than sixty (60) days to deliver such
replacement Specific Celera Product, Celera will request
AMI’s prior written approval for a reasonable extension of
the replacement date, which will not be unreasonably withheld.
Celera will make arrangements with AMI for the return or
destruction of any Specific Celera Product that does not conform to
the applicable Specifications, such return shipping charges or
costs of destruction to be paid by Celera.
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4.9
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Product
Issues . Celera will
immediately notify AMI and follow-up with a written notification of
any lot failure, manufacturing problems or similar issues of which
Celera is actually aware, that may impact AMI’s ability to
distribute Celera Product to its customers.
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4.10
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Product
Safety . Celera, at its
expense at AMI’s direction and to AMI’s satisfaction,
will prepare Material Safety Data Sheets (“ MSDSs
”) and generate any other information and documentation
related to Celera Product safety, including but not limited to
physical, chemical, and biological characteristics of each of the
Celera Products that AMI reasonably requests as needed for
addressing safety issues related to each Celera Product. Celera
will provide MSDSs and other information described above in
English, and AMI will have the responsibility for translation of
such information into other languages.
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4.11
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Human
Material . If
human-sourced material is used to produce any Celera Product, the
CoA accompanying each shipment of such Celera Product must indicate
that the following analytes have been tested for and are not
detected in the Celera Products: anti-HCV, anti-HIV-1/HIV-2, HIV
antigen and HBsAg. For the purposes of this Agreement, genomic DNA
secured from tissue culture cell lines will not be deemed
human-sourced material.
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4.12
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Animal
Material . Celera will
provide AMI with information on any animal-sourced material that is
included in the Celera Products in order for AMI to meet any
regulatory requirements.
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4.13
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On-Going
Stability Testing .
Celera will perform stability testing for Celera Products using its
approved procedures to ensure that the Celera Products conform to
the Specifications. Testing will be performed at the frequency that
is required by Celera’s quality standards. If any Celera
Product fails to meet the stability acceptance criteria at any
given test point, Celera will follow its investigation procedures
for no-test, invalids or failures. If the stability failure is
confirmed prior to the expiration date of any Celera Product,
Celera will promptly inform AMI of such non-conformance and both
Parties will agree on the course of action to follow.
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Distribution
Agreement
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40
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[*]
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Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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4.14
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Vendor
Qualification . During
the Distribution Term, Celera will use its commercially reasonable
efforts to maintain its classification as an AMI qualified
vendor.
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4.15
|
Quality
Assurance . Not later
than January 30, 2009, representatives of AMI’s and
Celera’s quality organizations will finalize and approve a
quality assurance agreement regarding the activities under this
Agreement.
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Article 5. Customer Support,
Complaints and Returns
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5.1
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Customer
Support and Complaints .
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(a)
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AMI will be
responsible for all primary level customer support for Specific
Celera Products sold or otherwise distributed by or for AMI, its
Affiliates or Distributors, including responding to technical
questions concerning the use, function and performance of the
Specific Celera Products from AMI’s Distributors and
customers through AMI’s toll free number. AMI will refer any
technical questions it is unable to answer to Celera for assistance
and secondary level support.
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(b)
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AMI
technical/customer support will be available Monday through Friday
during normal business hours in the Territory.
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(c)
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All customer
complaints will be handled in accordance with the procedure
specified in the quality assurance agreement created pursuant to
Section 4.15, provided, however, that the Parties will
use the procedure currently in use for Abbott’s distribution
of Celera products under the Alliance Agreement until a new
procedure is adopted pursuant to Section 4.15.
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5.2
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Returned
Product . In the event
any customer of AMI rejects or returns a Specific Celera Product to
AMI as a result of performance problems or other deficiencies that
are the result of noncompliance of any Celera Product with the
Specifications or the failure by Celera to satisfy any of its
responsibilities under this Agreement, the Parties will handle the
matter in accordance with Section 4.8.
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Article 6. Regulatory
Matters
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(a)
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Celera will be
responsible for, bear the cost of, and obtain any necessary
Regulatory Approval of Celera Products in the United States. Celera
will cooperate with AMI in obtaining Regulatory Approval of Celera
Products in countries or areas in the Territory other than the
United States that is necessary for Commercialization of such
Celera Products. Effective as of the Signature Date, Celera
provides AMI with a limited “power of attorney,” and
AMI will, on behalf of Celera, be responsible at Celera’s
cost for obtaining any necessary Regulatory Approval for Celera
Products in countries other than the United States in the Territory
that are approved by Celera. Celera will not unreasonably withhold
such approval.
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Distribution
Agreement
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41
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[*]
|
Certain
information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted
portions.
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(b)
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If Celera in
good faith declines to approve seeking Regulatory Approval in a
country or area requested by AMI, Celera will provide AMI and its
Affiliate with a limited “power of attorney” for
Regulatory Approval in such country or area only upon written
agreement by AMI or its Affiliate to bear the costs incurred in
obtaining such Regulatory Approval, the amortized cost of which
Celera promptly will reimburse to AMI or its Affiliate if Celera
desires to use any such Regulatory Approval after expiration or
termination of this Agreement. Such amortized cost of a Regulatory
Approval will be calculated from the first Commercialization date
of the Specific Celera Product in a country or area pursuant to
such Regulatory Approval through the date that is seven
(7) calendar years thereafter.
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(c)
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Celera will own
all Regulatory Approvals for Celera Products obtained pursuant to
Section 6.1(a), and Celera will own all Regulatory Approvals
for Celera Products obtained pursuant to Section 6.1(b) but
Celera may not use such Regulatory Approvals until after
(i) expiration of the Distribution Term and (ii) Celera
reimburses the amortized costs incurred by AMI and its Affiliates
in obtaining such Regulatory Approvals. Celera will provide to AMI
all documentation reasonably required for Celera Product Regulatory
Approval outside the United States and for AMI’s
international Celera Product master file data generation and
submission. Upon AMI’s reasonable request, Celera
representatives will meet with AMI representatives at mutually
agreed times and places regarding the completion of the
international Celera Product master file data generation and
submission. Such meetings will include, but not be limited to, the
preparation of filings and assignment of responsibilities. Celera
will also be responsible for supplying reagents that are required
for country validation activities in support of a submission
outside the United States. AMI will deliver to Celera the original
of all documents evidencing grant of any Regulatory Approval for a
Celera Product.
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6.2
|
Regulatory
Communications . To the
extent practical in view of deadlines, the Party responsible for a
Regulatory Approval pursuant to Section 6.1 will provide the
other Party (if requested in writing by the other Party) with an
opportunity, in advance of submission to a Regulatory Authority, to
review and comment on all filings or communications (including
written responses to any Regulatory Authority questions) regarding
each Celera Product. The responsible Party will provide to the
other Party copies of all material written communications with
applicable Regulatory Authorities (in advance of filing if
possible), copies of all material written communications received
from such Regulatory Authorities promptly after receipt, and any
adverse finding or communication, oral or written, by such
Regulatory Authority regarding each Celera Product.
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