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DISTRIBUTION AGREEMENT

Distribution Agreement

DISTRIBUTION AGREEMENT | Document Parties: Abbott Laboratories | Abbott Molecular Inc | Applera Corporation | Celera Corporation You are currently viewing:
This Distribution Agreement involves

Abbott Laboratories | Abbott Molecular Inc | Applera Corporation | Celera Corporation

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Title: DISTRIBUTION AGREEMENT
Governing Law: Delaware     Date: 3/25/2009
Industry: Business Services     Sector: Services

DISTRIBUTION AGREEMENT, Parties: abbott laboratories , abbott molecular inc , applera corporation , celera corporation
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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:

 

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.

 

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.

 

1.3

Alliance ” means the cooperative arrangement created by the Alliance Agreement.

 

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.

 

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).

 

1.6

Analyte ” means an individual nucleic acid sequence which is the target of quantitative or qualitative measurement.

 

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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.


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.

 

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.

 

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.

 

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.

 

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: [*].

 

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 [*].

 

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.

 

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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[*]

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.


1.15

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.

 

1.16

Certificate of Compliance ” means a written statement made by Celera that enables Celera to make a Declaration of Conformity (as hereinafter defined).

 

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.

 

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.

 

1.19

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).

 

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.

 

1.21

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:

 

 

(a)

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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[*]

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)

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

 

 

(c)

is or becomes part of the public domain through no breach of this Agreement; or

 

 

(d)

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.

 

1.22

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.

 

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.

 

1.24

Device History Record ” has the meaning set forth in 21 C.F.R. 820.3(i).

 

1.25

Device Master Record ” has the meaning set forth in 21 C.F.R. 820.3(j).

 

1.26

Distribution Term ” means the term of this Agreement as defined in Section 13.1 unless otherwise terminated pursuant to the terms of this Agreement.

 

1.27

Distributor ” means each Third Party with whom AMI or its Affiliates have a contract for distribution of Products.

 

1.28

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.

 

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.

 

1.30

FDA ” means the United States Food and Drug Administration or any successor agency thereof.

 

1.31

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.


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.

 

1.33

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.

 

1.34

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.

 

1.35

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.

 

1.36

IVD Directive ” means the In Vitro Diagnostic Directive 98-79-EC and any amendments thereto governing in vitro diagnostic devices in the European Union.

 

1.37

Kit ” means the finished, packaged and labeled assembly of a Product configured in accordance with such Product’s Specifications.

 

1.38

m2000 Instruments ” means both m2000rt Instruments and m2000sp Instruments.

 

1.39

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.

 

1.40

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.


1.41

m2000 Platform Technology ” means the real time PCR and sample preparation technology used on the m2000 Instruments.

 

1.42

m2000 Product Software ” means any Software that provides a specific interface between a Molecular Diagnostic Product, an m2000 Instrument and associated m2000 Software.

 

1.43

m2000 Software ” means the Software that implements the m2000 Platform Technology, including any upgrades or updates thereto.

 

1.44

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.

 

1.45

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.

 

1.46

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.

 

1.47

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.

 

1.48

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.

 

1.49

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.

 

1.50

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.

 

1.51

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.

 

1.52

OUS Sales ” means:

 

 

(a)

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:

 

 

(i)

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.


 

(ii)

actual freight, postage, transportation and insurance costs incurred in delivering Specific Celera Products to the extent billed to such Third Party;

 

 

(iii)

reasonable and customary cash, quantity and trade discounts actually given to such Third Party;

 

 

(iv)

sales, use, value-added and other direct taxes to the extent billed to such Third Party; and

 

 

(v)

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.

 

 

(b)

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.

 

 

(c)

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:

 

 

(i)

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.


 

(ii)

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.

 

1.53

Party ” means AMI or Celera, and “ Parties ” means AMI and Celera.

 

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).

 

1.55

Platform Technology ” means the mode of operation of an Instrument.

 

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.

 

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.

 

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.

 

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.


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).

 

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.

 

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.

 

1.63

Royalty Agreement ” means the agreement dated on even date herewith between Abbott and Celera relating to termination of the Alliance Agreement.

 

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.

 

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.

 

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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[*]

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.

 

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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.


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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[*]

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

 

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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.


“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.

 

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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.


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

 

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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.


 

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.

 

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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.


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

 

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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.


 

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.

 

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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)

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.

 

2.14

Celera Development .

 

 

(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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19

 

 

[*]

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.


 

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.

 

 

(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.

 

 

(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.

 

 

(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.

 

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:

 

 

(a)

For Calendar Year 2009, either

 

 

(i)

if AMI or its Affiliates Commercialize a Cannibalizing Product in 2009, a Sales Minimum of [*] U.S. Dollars (US$[*]); or

 

Distribution 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.


 

(ii)

if AMI or its Affiliates do not Commercialize a Cannibalizing Product in 2009 there will be no Sales Minimum.

 

 

(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

 

 

(ii)

if AMI or its Affiliates do not Commercialize a Cannibalizing Product in 2010, there will be no Sales Minimum.

 

 

(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.

 

 

(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.

 

 

(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.

 

2.16

Failure to Meet Sales Minimums.

 

 

(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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[*]

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.

 

 

(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:

 

 

(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

 

 

(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.

 

 

(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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[*]

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)

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.

 

 

(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.

 

 

(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.

 

 

(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.

 

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:

 

 

(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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[*]

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;

 

 

(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;

 

 

(e)

the occurrence of a Force Majeure Event affecting AMI’s ability to distribute Celera Products;

 

 

(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;

 

 

(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;

 

 

(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;

 

 

(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

 

 

(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

 

3.1

Purchase and Sale .

 

 

(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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[*]

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.

 

 

(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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[*]

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.

 

Distribution 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.


 

(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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[*]

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.


 

(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:

 

 

(i)

For the fourth through sixth months of the then-current twelve (12)-month forecast, [*] percent ([*]%) per month less than the forecasted amount; and

 

 

(ii)

For the seventh through twelfth months of the then-current twelve (12)-month forecast, [*] percent ([*]%) per month less than the forecasted amount.

 

 

(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.

 

 

(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.

 

3.4

Delivery and Invoicing .

 

 

(a)

Celera will ship Specific Celera Products which are ordered by AMI, FCA (Incoterms 2000) Celera’s facility in Alameda, California or another facility

 

Distribution 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.


 

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.

 

 

(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.              ]

 

 

(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.

 

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

 

Distribution 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.


 

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.

 

3.6

Interruption of Supply .

 

 

(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.

 

Distribution 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.


 

(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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[*]

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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[*]

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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[*]

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.

 

3.12

Transition Period .

 

 

(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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[*]

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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[*]

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.

 

4.3

Testing .

 

 

(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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[*]

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.


 

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.

 

4.6

Changes to Products .

 

 

(a)

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.

 

 

(b)

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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38

 

 

[*]

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.


 

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.

 

 

(c)

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.

 

4.7

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.

 

4.8

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

 

Distribution Agreement

 

39

 

 

[*]

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.


 

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.

 

4.9

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.

 

4.10

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.

 

4.11

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.

 

4.12

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.

 

4.13

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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[*]

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.


4.14

Vendor Qualification . During the Distribution Term, Celera will use its commercially reasonable efforts to maintain its classification as an AMI qualified vendor.

 

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.

Article 5. Customer Support, Complaints and Returns

 

5.1

Customer Support and Complaints .

 

 

(a)

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.

 

 

(b)

AMI technical/customer support will be available Monday through Friday during normal business hours in the Territory.

 

 

(c)

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.

 

5.2

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.

Article 6. Regulatory Matters

 

6.1

Assistance .

 

 

(a)

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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[*]

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 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.

 

 

(c)

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.

 

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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