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Exhibit 10.22
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT is made and entered into as of the 22nd day
of August, 2000, by and between Motorola, Inc. ("Motorola") and GMP|Genetics,
Inc. ("GMP|Genetics").
RECITALS
Whereas Motorola owns certain Biological Microarray technologies and
will be producing Biological Microarrays for sale to customers for use in
genetic analyses;
Whereas GMP|Genetics has the exclusive license to certain technologies
that permit it to separate genes from diploid to haploid state for genetic
analyses; and
Whereas the parties desire to enter into a strategic distribution
relationship pursuant to which Motorola shall invest in GMP|Genetics and
GMP|Genetics shall make available to Motorola these genetic analysis
technologies to process samples to be used by customers of Motorola who have
purchased its Biological Microarrays, all upon the terms and conditions set
forth herein.
Now therefore, based upon the above premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
AGREEMENTS
1. Definitions:
"BioChips" shall mean Biological Microarrays manufactured by or for Motorola.
"Biological Microarrays" shall mean an instrument that utilizes biomolecules to
produce genetic analysis using microarray technology. It shall include such
devices that incorporate microfluidics, electrical detection and
electrically-enhanced hybridization, microbead technology and built-in sample
preparation and amplification. It shall not include micro-titer plates,
macro-volume solution-based assays and other genetic analysis techniques that do
not employ microarray technology.
"Commercial Field" shall mean any use of Biological Microarrays and GMP
Conversion Technology(TM), or the genetic analyses derived from their use, to
generate revenues from such activities other than within the Research Field.
"GMP Conversion Technology(TM)" shall mean those certain technologies licensed
to or developed by GMP|Genetics that permit it to separate genes from diploid to
haploid state for genetic analysis.
"Research Field" shall mean the use of the GMP Conversion Technology(TM) in
connection with: (i) a customer's or potential customer's internal research and
development program and not for resale in any manner, or (ii) use by a
university or other accredited research, training or not-for-profit institution,
whether or not such institution receives compensation for such activities. The
description or labeling of either BioChips or GMP Conversion Technology(TM) "for
research use only" as part of an effort to comply with government regulatory
requirements shall not be considered determinative in deciding whether their use
meets this definition.
2. Motorola hereby agrees to purchase 66,667 shares of GMP|Genetics $0.001
par value common stock at a purchase price of $15.00 per share for a total
purchase price of $1,000,005, all as more fully described in the Stock Purchase
Agreement of even date between Motorola and GMP|Genetics, a copy of which is
attached hereto as Exhibit A (the "Stock Purchase Agreement").
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3. Motorola hereby pays to GMP|Genetics an additional $2,000,000 for the
grant of the strategic distribution rights described in Paragraph 4 below.
4. Distribution Rights:
a. General. GMP|Genetics agrees that for a period of twenty-seven (27)
months ending on December 31, 2002 (the "Exclusivity Period"), Motorola shall be
entitled to offer, and GMP|Genetics shall provide, processing of specimens using
the GMP Conversion Technology(TM) for Motorola customers who indicate that the
processed specimens will be used with BioChips. During such time period
GMP|Genetics agrees not to knowingly process specimens for subsequent use with
any other Biological Microarrays in the Commercial Field. The parties
acknowledge that GMPGenetics has certain obligations to Myriad Genetic
Laboratories, Inc. ("Myriad"), pursuant to the Strategic Agreement entered into
on July 15, 2000 between GMPGenetics and Myriad, which obligations shall be
excluded from the exclusivity granted to Motorola under the preceding sentence.
In the event that Myriad desires to use GMP Conversion Technology in connection
with Biological Microarrays, GMPGenetics shall use commercially reasonable
efforts to encourage Myriad to use BioChips in connection with its Biological
Microarrays.
b. GMP|Genetics Obligations.
(i) Specimen Processing. For Motorola BioChip customers,
GMP|Genetics shall, during the Exclusivity Period, process specimens in
accordance with its standard procedures and standard terms and conditions.
GMP|Genetics shall charge such customers the lower of: (A) the then current list
price for processing requested for commercial purposes (i.e. outside the
Research Field), or (B) the price charged for similar specimen processing for
commercial purposes. The initial price list is attached hereto as Exhibit C and
may be updated periodically by GMP|Genetics. For each specimen submitted to
GMP|Genetics that is identified for the Commercial Field using BioChips,
GMP|Genetics shall use all reasonable efforts to immediately initiate the
processing for such specimens, which in no event shall be any different from the
processing received by other GMP|Genetics customers.
(ii) Payments to Motorola. GMP|Genetics shall pay Motorola fifteen
percent (15%) of the price it receives from BioChip customers that identify
themselves as using GMP Conversion Technology(TM) in connection with subsequent
use of Bio Chips analysis during the Exclusivity Period within the Commercial
Field. Such payments shall be made quarterly, within thirty (30) days following
the end of each calendar quarter. GMP|Genetics shall maintain reasonable records
to allow Motorola to verify the accuracy of such payments.
(iii) Other Agreements of GMP|Genetics.
(A) In the event GMP|Genetics, during the Exclusivity
Period, requires Biological Microarrays for its own internal use, or in
conjunction with a service business it provides its customers. GMP|Genetics
agrees to use BioChips, so long as: (1) BioChips are reasonably capable of
meeting the requirements of GMP|Genetics, (2) Motorola's prices are comparable
to those offered by other suppliers of similar products, and (3) Motorola
provides the BioChips and related systems to GMP|Genetics at prices as least as
favorable as Motorola offers other customers requiring similar quantities of
BioChips. Motorola shall, without charge, provide GMPGenetics access to BioChips
systems at Motorola's facilities, from time to time, for the purpose of
evaluating the effectiveness of GMP Conversion Technology with BioChips. Pricing
for any BioChips in connection therewith and pricing for acquiring the use of
BioChip systems at GMPGenetics' facilities shall be at prices as least as
favorable as Motorola offers any other similar customers.
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(B) In the event Motorola requires GMP Conversion
Technology(TM) during the Exclusivity Period, either for its own internal use or
for a service business, GMP|Genetics agrees to process specimens for Motorola at
the same price as that offered to Motorola's BioChip Customers.
(C) In the event GMP|Genetics elects to license its GMP
Conversion Technology(TM) to a third party, GMP|Genetics shall ensure that such
license shall contain the same restrictions on use of GMP Conversion
Technology(TM) with Biological Microarrays in the Commercial Field as are set
forth in this Agreement.
d. License Option. If, after the Exclusivity Period, GMP|Genetics elects
to discontinue the operation of its laboratory services providing GMP Conversion
Technology(TM) or otherwise elects to operate its business in a manner that
makes GMP Conversion Technology(TM) unavailable to Motorola's BioChip customers,
Motorola shall have the option to obtain a non-exclusive license (without the
right to sublicense) to GMP Conversion Technology(TM) on commercially reasonable
terms for use solely with BioChips. In the alternative, if GMP|Genetics elects
to exclusively license GMP Conversion Technology(TM) to a third party, such
third party shall either agree to the provisions of the first sentence of this
Paragraph 4d or Motorola shall have the right to obtain such a sublicense from
GMP|Genetics prior to the license being granted to the third party. This
Paragraph 4d shall survive any termination of this Agreement.
5. The parties agree that the exclusivity provisions of Paragraph 4 above
shall, at the option of GMP|Genetics, be applicable only so long as the number
of genetic specimens presented to GMP|Genetics for GMP Conversion Technology(TM)
processing and subsequent use with Biochips in any given period described on
Exhibit B, attached hereto and incorporated herein by reference, meet or exceed
the number of tests described in Exhibit B for the applicable period. If
GMP|Genetics elects to terminate such exclusivity as a result of the failure to
meet such minimal specimen processing in any given period, it shall notify
Motorola of such decision, in writing, and return to Motorola that fraction of
the $2,000,000 equal to the number of months remaining until January, 2003,
divided by 27. In addition, the parties agree that GMP|Genetics shall be under
no obligation to Motorola with respect to the use of GMP Conversion
Technology(TM) (i) in conjunction with other genetic analysis techniques besides
those described in Paragraph 4a above, or (ii) in the Research Field in
conjunction with any technology, including Biological Microarrays.
6. The parties shall develop and implement a joint marketing plan for
BioChip customers and potential customers to utilize the GMP Conversion
Technology(TM) process. Such a plan would include the publication of the
availability of the GMP Conversion Technology(TM) process for BioChips and the
relationship of the parties. Motorola shall include the GMP Conversion
Technology(TM) xxxx in its BioChip sales and promotional materials, in a form to
be mutually agreed upon by the parties.
7. During the Exclusivity Period GMP|Genetics shall report to Motorola
quarterly on the number of specimens processed for customers indicating that the
results were to be used for BioChips in the Commercial Field.
8. All notices pertaining to this Agreement shall be in writing and sent
certified mail, return receipt requested, or by other commercial delivery means
to the parties at the following addresses or such other address as such party
shall have furnished in writing to the other party as set forth on the signature
page of the Agreement.
All payments to GMP|Genetics and any other related correspondence shall be in
writing and sent to:
FOR GMP|Genetics: Xxxxxxx Xxxxxxxx
Comptroller
GMPGenetics, Inc.
Xxx Xxxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
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9. Miscellaneous.
a. In the event that any one or more of the provisions of this Agreement
should be determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. Any provision or provisions determined to be
invalid, illegal or unenforceable shall be reformed to approximate as nearly as
possible the intent of the parties, and if unreformable, shall be divisible and
deleted.
b. The construction, performance, and execution of this Agreement shall be
governed by the laws of the State of Delaware without regard to that State's
conflict of law provisions. Except for the right of either party to apply to a
court of competent jurisdiction for a temporary restraining order, a preliminary
injunction, or other equitable relief to preserve the status quo or prevent
irreparable harm, any and all claims, disputes or controversies arising under,
out of, or in connection with the Agreement shall be addressed in the manner set
forth in Section 10.1 of the Technology Development Agreement dated July 27,
2000 between Motorola and GMP Companies, Inc., the parent company of
GMP|Genetics.
c. This Agreement and the documents referred to herein and in the
documents attached hereto constitute the entire understanding between the
parties with respect to the obligations of the parties with respect to the
subject matter hereof, and supersedes and replaces all prior agreements,
understandings, writings, and discussions between the parties relating to said
subject matter.
d. This Agreement may be amended and any of its terms or conditions may be
waived only by a written instrument executed by the authorized officials of the
parties or, in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect its right at a later time to enforce
the same. No waiver by either party of any condition or term in any one or more
instances shall be construed as a further or continuing waiver of such condition
or term or of any other condition or term.
e. This Agreement is binding upon and shall inure to the benefit of each
party, and its permitted successors and assignees. This Agreement shall not be
assignable by either party without the written consent of the other party, which
consent shall not be unreasonably withheld, except that either party shall have
the right to assign this Agreement to a third party without the consent of the
other party in the case of the sale or transfer of all, or substantially all, of
its assets relating to its GMP Conversion Technology(TM) or BioChip business, as
the case may be.
f. This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF the respective parties hereto have executed this
Agreement by their duly authorized officers on the date appearing below their
signatures.
MOTOROLA, INC. GMP|GENETICS, INC.
By: By:
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Xxxxxxx X. Xxxxxx Xxxx Xxxxxxx, M.D.
Senior Vice President and President
President Motorola Future Business GMP|Genetics, Inc.
Motorola, Inc. One East Broward Boulevard
0000 Xxxx Xxxxxxxxx Xxxx Xxxxx 0000
Xxxxxxxxxx, XX 00000 Xxxx Xxxxxxxxxx, XX 00000
Exhibit A - Stock Purchase Agreement
Exhibit B - Processing Minimums to Maintain Exclusivity
Exhibit C - Initial Pricing
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EXHIBIT A
STOCK PURCHASE AGREEMENT
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EXHIBIT B
PROCESSING MINIMUMS TO MAINTAIN EXCLUSIVITY
Period Number of Samples
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October 1, 2000 - June 30, 2001 190
July 1, 2001 - September 30, 2001 150
October 1, 2001 - December 31, 2001 300
January 1, 2002 - March 31, 2002 450
April 1, 2002 - June 30, 2002 600
July 1, 2002 - September 30, 2002 800
October 1, 2002 - December 31, 2002 1000
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EXHIBIT C
INITIAL PRICING FOR GMP CONVERSION TECHNOLOGY
Service Price
DNA $475
cDNA $75 additional
Cells $125 additional
Expression Analysis To be determined
Haplotyping To be determined
First 5 DNA samples are free.
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