Exhibit 10.35
Portions of this Exhibit were
omitted and filed separately with the Secretary of the Commission
pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934. Such omissions are designated as ***.
Execution Copy
TERMINATION AND TRANSITION
AGREEMENT
This Termination and Transition
Agreement (this “ Agreement ”) is made and
entered into as of this 31st day of October, 2008 (“
Effective Date ”), by and between Abbott Laboratories,
an Illinois corporation with principal offices at 100 Abbott Park
Road, Abbott Park, Illinois 60064-3500 (“Abbott), and OraSure
Technologies, Inc., a Delaware corporation with principal offices
at 220 East First Street, Bethlehem, Pennsylvania 18015
(“OraSure”).
BACKGROUND
OraSure and Abbott
have previously entered into that certain Supply and Distribution
Agreement, dated as of February 11, 2005, as amended by
Amendment No. 1, dated as of July 21, 2005 (as amended,
the “Distribution Agreement”), pursuant to which
OraSure agreed to supply, and Abbott agreed to distribute, the
OraQuick ADVANCE ® Rapid HIV-1/2 Antibody Test. The
parties desire to terminate the Distribution Agreement and provide
for the transition of Abbott’s Current Customers and New
Customers (such terms are defined below) to OraSure, pursuant to
the terms and conditions set forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of
the foregoing, and other mutual promises and covenants contained in
this Agreement, OraSure and Abbott, intending to be legally bound,
hereby agree as follows:
1. Definitions . Capitalized
terms not otherwise defined in this Agreement shall have the
meanings set forth in the Distribution Agreement. For purposes of
this Agreement, the following terms will have the respective
meanings set forth below:
1.1 “ Assigned Contract
” shall have the meaning set forth in
Section 3.8.
1.2 “
Combined Contract ” shall mean any written contract
pursuant to which Abbott or its Affiliates supplies OraQuick
® Products to a customer in
addition to one or more other products. A Combined Contract shall
not include any contract which is limited solely to the provision
of OraQuick ® Products by Abbott to any
customer.
1.3 “
Current Customer ” shall mean any customer that at the
time in question is then purchasing OraQuick
® Product from Abbott or its
Affiliates pursuant to Abbott’s rights under the Distribution
Agreement.
1.4 “ National Account
” shall mean the following customers of Abbott:
***.
1.5 “ New
Customer ” shall mean any customer (other than a Current
Customer) who begins to purchase or resumes purchasing
OraQuick ® Product from Abbott or its
Affiliates after the Effective Date.
1.6 “
OraQuick ® Contract ” shall
mean any written contract pursuant to which Abbott or its
Affiliates supplies OraQuick ® Product to any of its customers;
provided that the term OraQuick ® Contract shall not include any
Combined Contract.
1.7 “
OraQuick ® Product ” shall
mean the OraQuick ADVANCE ® Rapid HIV-1/2 Antibody Test and
related positive and negative OraQuick ADVANCE
® controls.
1.8 “
Pending Orders ” shall mean customer orders for
OraQuick ® Product received by Abbott or
its Affiliates pursuant to any OraQuick ® Contract and which have not been
shipped as of the Termination Date.
1.9 “ Termination Date
” shall mean December 31, 2008.
1.10 “ Transition
Committee ” shall have the meaning set forth in
Section 3.1.
1.11 “ Transition
Period ” shall mean the period beginning on the Effective
Date and ending on the Termination Date.
1.12 “ Post-Termination
Period ” shall mean the period beginning January 1,
2009 and ending March 31, 2009.
2. Termination and Release
.
2.1 Termination . Subject to
the terms and conditions set forth in this Agreement, and except as
otherwise provided in this Agreement, the Distribution Agreement
shall terminate on the Termination Date. OraSure and Abbott
acknowledge and agree that the termination of the Distribution
Agreement is by mutual agreement and not for cause.
2.2 Conflicts . In the event
of a conflict or inconsistency between the terms of this Agreement
and the terms of the Distribution Agreement, the terms of this
Agreement shall control and, to the extent necessary, shall
constitute an amendment to the Distribution Agreement.
3. Transition Period . During
the Transition Period, OraSure and Abbott agree to perform the
respective obligations set forth in this Section 3.
3.1 Transition Committee
. In order to effect the objectives of this Agreement, the
parties agree to establish a transition committee which shall
operate as provided below (“Transition
Committee”).
(a) Composition
. The Transition Committee shall consist of representatives
(as needed) from each party as each party shall appoint from time
to time. Either party may replace its representative(s) for
any reason and at any time upon notice to the other
party.
(b) Meetings . The
Transition Committee shall meet, at a minimum, at least
2
bi-monthly and otherwise as mutually
agreed by the parties, either in person, by telephone, or by video
conference call. Additional participants may be invited by any
representative to attend meetings where appropriate.
(c) Decision-Making
. The parties shall cause their respective representatives on
the Transition Committee to use diligent efforts, acting in good
faith, to resolve all matters presented to them as expeditiously as
possible. If the Transition Committee members are unable to
resolve any such matter presented to them within a reasonable
period of time, the matter shall be presented to OraSure’s
President and Chief Executive Officer and Abbott’s Executive
Vice-President, Diagnostics or their designees for good faith
negotiation of resolution. To the extent any matter or dispute
which should arise is not resolved pursuant to the procedures in
this section, the procedures set forth in Section 10.13, shall
be followed.
(d) Duties and
Responsibilities . The Transition Committee will be
responsible for assisting in and overseeing all of the activities
as set forth in Sections 3 and 4 and for fulfilling their
respective responsibilities hereunder.
3.2 Business
Preservation . The parties agree to cooperate with and assist
each other, and use commercially reasonable efforts, to maintain
sales of OraQuick ® Products to all Current
Customers and New Customers. It is the intention of the parties to
maintain customer satisfaction, preserve customer good will and the
reputation of the OraQuick ® Products, OraSure and Abbott,
and to take all actions reasonably necessary to ensure the
continued supply of OraQuick ® Products to each Current
Customer and New Customer, both before and after the transfer of
such Customers by Abbott to OraSure; provided, however ,
that Abbott makes no representation, warranty or covenant
concerning: (a) the likelihood of obtaining New Customers
during the Transition Period or (b) the likelihood that
Current Customers or New Customers will purchase OraQuick
® Products from OraSure. If,
during the Transition Period, any customer in the Hospital Segment
is unable to negotiate a mutually acceptable price or other terms
with Abbott for OraQuick Products, the Transition Committee shall
discuss alternative solutions and strategies for the customer to
minimize any potential loss of sales. The timing and content of any
notice or communication to Abbott’s customers and sales
representatives (or to any other third parties) regarding the
termination of the Distribution Agreement and transition of
customers shall be subject to the prior approval of both
parties.
3.3 Customer
Information . As soon as practicable after the Effective Date,
Abbott shall use commercially reasonable efforts to provide OraSure
with the information listed on Exhibit A to this Agreement for all
Current Customers and those customers who have purchased
OraQuick ® Product from Abbott in the
twenty-four (24) months prior to the Effective Date, subject
to any confidentiality obligations Abbott may have to such Current
Customers and past customers. Abbott shall use commercially
reasonable efforts to provide such customer information in an
electronic file and in a format compatible with OraSure’s
validated SAP system. All such information shall have been provided
no later than October 31, 2008.
3.4 New Customers . To the
extent Abbott obtains any New Customers, Abbott shall, as soon as
practicable, supply OraSure with the information specified in
Section 3.3 for each such New Customer, subject to any
confidentiality obligations Abbott may have to such New
Customers.
3
3.5 Customer
Transition . As soon as practicable after the Effective Date,
OraSure and Abbott shall cooperate in good faith to develop a
mutually agreeable detailed plan for transitioning all Current
Customers and New Customers to OraSure, including communication of
this transition and termination of Abbott’s rights to
distribute the OraQuick ® Products under the Distribution
Agreement. Such transition activities shall include, but not be
limited to, the development by the parties of milestones and a list
of key customer accounts which receive in-person visits by sales
representatives of both parties prior to the Termination Date in
order to explain the parties’ transition plans. The parties
shall review each National Account and other top customers (as
determined by mutual agreement of the parties) and mutually agree
on whether the best method of contact and communication shall be an
in-person meeting by the parties, mail or other method. Abbott
personnel shall participate in a maximum of one hundred fifty
(150) in-person customer visits. The parties shall cooperate
in the timely development of mutually acceptable communications to
all customers. The parties will attempt in good faith to schedule
in-person visits with customers, and all customer notifications
regarding the transition under this Agreement, during the period
beginning eight (8) weeks prior to the Termination Date and
ending four (4) weeks thereafter; provided , that any
such meetings and notifications that do not occur within such time
period will take place as soon as practicable after the end of such
period, but Abbott will not be required to participate in such
activities beyond the expiration of the Post-Termination
Period.
3.6
Qualification . OraSure shall be responsible for developing
information about OraSure and the OraQuick ® Product as may be needed to
qualify OraSure as an approved or registered vendor for the
OraQuick ® Product with each Current
Customer and New Customer.
3.7 Combined
Contracts . As of the Termination Date, Abbott agrees that it
shall use commercially reasonable efforts to terminate the right of
each of its customers that is a party to a Combined Contract to
purchase any OraQuick ® Products thereunder;
provided , that “commercially reasonable
efforts” shall not require Abbott to pay money, lower prices
for other products or offer other economic incentives to its
customers as consideration for terminating their right to purchase
OraQuick ® Products.
3.8 Assignment of
OraQuick ® Contracts; Pending Orders
. To the extent not otherwise precluded by any contract, pricing
letter or other arrangement, Abbott agrees to transfer and assign,
and does hereby transfer and assign, as of the Termination Date,
all right, title and interest to each OraQuick
® Contract (each, an
“Assigned Contract”). The foregoing assignm
