Sample Business Contracts

Marketing and Distribution Agreement - Applera Corp., the Applied Biosystems Group of Applera and the Celera Genomics Group of Applera

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                             DISTRIBUTION AGREEMENT

                          EFFECTIVE AS OF APRIL 1, 2002




                  MARKETING AND DISTRIBUTION AGREEMENT (this "Agreement"), dated
as of February 27, 2003, and effective as of the 1st day of April, 2002
("Effective Date"), by and among Applera Corporation ("Applera"), the Applied
Biosystems Group of Applera ("AB"), and the Celera Genomics Group of Applera

                  WHEREAS, Celera has developed a business based on the
generation and sale of human genomic and other biological and medical
information (the "Online/Information Business," which term does not include
Celera's proteomics efforts or facilities); and

                  WHEREAS, the Online/Information Business is evolving rapidly
and somewhat unpredictably, particularly due to the role being played by the
public sequencing effort; and

                  WHEREAS, Celera management believes that additional value
could be obtained from the Online/Information Business if Celera's information
were provided as an integral part of a discovery or knowledge platform broader
than Celera's current platform and if such information were distributed by an
established sales and marketing organization with broader and deeper market
penetration than Celera currently has; and

                  WHEREAS, management representatives from both Celera and AB
have met extensively to discuss strategic alternatives for the
Online/Information Business, including alternatives for downstream, value-added
products; and

                  WHEREAS, AB is a leading supplier of assays, reagents, and
systems to the genomics and biotechnology markets, having perhaps the premier
marketing/distribution organization for such markets in the world; and

                  WHEREAS, AB desires to expand its current assays, reagents,
and systems business by incorporating the data and information developed
through, and by utilizing the technology developed for, the Online/Information
Business, where both AB and Celera believe that value-added commercial
opportunities will be greatly enhanced by Celera's information; and

                  WHEREAS, Celera intends to focus its future efforts in the
therapeutics business, and desires to retain its continuing access to genomic
and other biological and medical information of the Online/Information Business
without having to incur the investments required to enhance its world-class
marketing/distribution organization or transform the Online/Information Business
to meet the unpredictable and potentially shifting market demands; and

                  WHEREAS, management representatives from Celera and AB have
agreed that each of their Group's interests will be served best by collaborating
with respect to both marketing/distribution of Celera's information as well as
future investments relating to the Online/Information Business; and


                  WHEREAS, the Board of Directors of Applera (the "Applera
Board") has determined that it is appropriate and in the best interest of
Applera and its stockholders to establish a marketing and distribution
relationship between AB and Celera whereby AB would market and distribute, as
part of a new information business, the data and information developed through
the Online/Information Business;

                  WHEREAS, based on the Applera Board approval referred to
above, AB and Celera agreed upon the principal terms and conditions of the
aforementioned marketing and distribution relationship, and have been operating
under such agreement, effective as of April 1, 2002; and

                  WHEREAS, the parties hereto desire to formalize the
aforementioned marketing and distribution agreement in a written agreement.

                  NOW, THEREFORE, the parties hereto agree to the Terms and
Conditions described in Annex A attached hereto, which shall be deemed effective
as of the Effective Date.

                  IN WITNESS WHEREOF, the parties agree to the foregoing as of
the date written above.

                               APPLERA CORPORATION

                               By: /s/ Tony L. White
                                   Name:  Tony L. White
                                   Title: Chairman, President and
                                   Chief Executive Officer

                               APPLIED BIOSYSTEMS GROUP OF
                               APPLERA CORPORATION

                               By: /s/ Michael W. Hunkapiller
                                     Name:  Michael W. Hunkapiller
                                     Title: President

                               CELERA GENOMICS GROUP OF
                               APPLERA CORPORATION

                               By: /s/ Kathy Ordonez
                                     Name:  Kathy Ordonez
                                     Title: President



                                                                        ANNEX A

                             TERMS AND CONDITIONS OF

1.   Principles.

     1.1  AB's Knowledge Business. AB is developing a new business (the
          "Knowledge Business") comprising genomic and biological content,
          assays, reagents for use in combination with oligonucleotide arrays,
          services, experimental protocols, algorithms, and software
          (collectively, "Knowledge Products"). As part of the Knowledge
          Business, AB intends to develop and implement a portal for the
          integration, delivery, and presentation of biological information and
          products to enable scientific discovery by life sciences customers
          (the "Portal"). The Portal will incorporate Celera's existing Celera
          Discovery System ("CDS") infrastructure.

     1.2  Products. This Agreement covers AB's development, marketing, and
          distribution of the following products to be included within the
          Knowledge Business ("Covered Products"):

          (a)  CDS and the datasets of Celera's Online/Information Business, in
               all formats, and including all analysis tools, software, and
               related information provided to former or current customers of
               the Online/Information Business, including any future versions or
               updates to such that are required by Committed Contracts, as that
               term is defined in Section 3.1 below ("Existing Information

          (b)  Probes, primer sets, or oligonucleotide arrays, each that are
               designed with reference to information included within the
               Online/Information Business, and new Portal subscription business
               marketed by AB as part of the Knowledge Business ("Related
               Products") (for the avoidance of doubt, Portal subscriptions
               which do not constitute Committed Contracts under Section 3.1 or
               3.2, and which are not renewals or modifications of Committed
               Contracts under Section 3.3, shall constitute new Portal
               subscription business); and

          (c)  Other Knowledge Products developed at AB's expense after the
               Effective Date ("Future Products").

               (1)  AB and Celera shall collaborate with respect to the
                    development of Future Products; and

                                   Annex A-1


               (2)  AB and Celera shall agree on the budget for new research and
                    development initiatives, and unless otherwise agreed, the
                    costs shall be borne by AB.

     1.3  AB's Access to Celera IP. Subject to Section 6 below, AB shall have
          unrestricted and exclusive access to and use of the intellectual
          property associated with Existing Information Products for the
          development and marketing of Knowledge Products, provided that such
          access shall be on an "as is" basis with no recourse to Celera.

     1.4  Ownership of Existing Online/Information Business Assets. Celera shall
          retain ownership of the assets, including intellectual property,
          relating to Existing Information Products.

     1.5  Ownership of Improvements. Improvements to Existing Information
          Products shall be owned by the party funding such improvements,
          provided that at the end of the Term of this Agreement Celera shall
          have the right to purchase any such improvements owned by AB at fair
          value as determined by the Applera Board. Celera shall have 6 months
          following the end of the Term to exercise such right.

     1.6  Competition. Consistent with Applera's tracking stock principles,
          neither AB nor Celera shall engage in each other's principal business
          except to the extent provided herein.

2.   Conduct and Relationship of the Parties.

     2.1  Cooperation between AB and Celera. The parties believe that the
          successful implementation of this Agreement will require close
          cooperation between AB and Celera. In particular, the parties expect
          that the relationship established by this Agreement will benefit from
          the application of both AB's and Celera's respective resources and
          expertise relating to Knowledge Products. However, the parties also
          acknowledge that Celera nonetheless must continue to have sufficient
          resources dedicated to the performance of its obligations under this
          Agreement, including particularly its obligations in respect of
          Committed Contracts (as defined below). Therefore, AB and Celera shall
          cooperate and use reasonable commercial efforts to ensure that their
          resources and expertise are applied in a manner that effectively
          achieves the purposes of this Agreement without interfering with the
          respective businesses of AB and Celera and their other obligations
          under this Agreement (the "Cooperation Guidelines").

                                   Annex A-2


     2.2  Online/Information Business Personnel. The parties believe that the
          Knowledge Business will benefit from the unique expertise that certain
          Celera personnel have developed from their involvement with the
          Online/Information Business. Accordingly, the parties anticipate that
          the cooperation referred to in Section 2.1 will involve, among other
          things, the dedication of some or all of the time of various
          Online/Information Business personnel to the Knowledge Business. The
          cost of such personnel shall be paid by AB as contemplated by Section
          4.2. In performing services for the Knowledge Business, the
          Online/Information Business personnel may report to, and be subject to
          the supervision of, Knowledge Business personnel. However, such
          Online/Information Business Personnel and services shall at all times
          remain subject to the Cooperation Guidelines.

     2.3  Operating Procedures. The parties acknowledge and agree that it may be
          appropriate from time to time to establish specific operating
          procedures with respect to the allocation of resources contemplated by
          Section 2.1 and the activities of the Online/Information Business
          personnel contemplated by Section 2.2. Accordingly, the Inter-Group
          Policy Committee (as defined in Section 8), working with AB and
          Celera, shall periodically (and upon request of a party) evaluate the
          need for, and if applicable adopt (and amend as necessary), operating
          procedures for the relationship established by this Agreement
          consistent with its terms (including specifically the Cooperation

     2.4  Use of Celera Name. AB's use of the "Celera" name in the marketing and
          distribution by AB of Knowledge Products shall be subject to Celera's

3.   Committed Contracts.

     3.1  Committed Contracts. Celera shall continue to be responsible for the
          performance of its obligations under all contracts relating to
          Existing Information Products in effect as of the Effective Date (the
          "Committed Contracts"), and shall receive all revenues and other
          benefits under, and be responsible for all costs and expenses
          associated with, such Committed Contracts.

                                   Annex A-3


     3.2  Transition Period. Notwithstanding anything to the contrary contained
          in this Agreement, commencing as of the Effective Date and continuing
          for a period of three months thereafter (the "Transition Period"), all
          revenues and other benefits under, and all costs and expenses
          associated with, any contract for Existing Information Products
          entered into during the Transition Period shall be allocated to
          Celera, and Celera shall be responsible for the performance thereof.
          Any such contract entered into during the Transition Period shall be
          deemed a Committed Contract for purposes of this Agreement.
          Notwithstanding Section 1.3 above, during the Transition Period Celera
          shall be permitted to market Existing Information Products and
          associated services.

     3.3  Renewals of and Modifications to Committed Contracts. All revenues and
          other benefits under, and all costs and expenses associated with, any
          renewals of and/or modifications to Committed Contracts shall be
          allocated to Celera, and Celera shall be responsible for the
          performance thereof. All such renewals of and modifications to
          Committed Contracts shall be deemed Committed Contracts for purposes
          of this Agreement. For these purposes:

          (a)  Contractual arrangements with a Committed Contracts customer
               entered into after June 30, 2002, will be treated as a renewal of
               and/or modification to the original Committed Contract with that
               customer, rather than a new Knowledge Business contract, only if
               the nature of the subsequent contractual arrangement with the
               customer is substantially the same as the nature of the original
               Committed Contract.

          (b)  Without limitation, if (i) a renewal or modification of a
               Committed Contract is entered into as a result of AB's marketing
               efforts, and (ii) such renewal or modification involves the
               addition of new subscribers to CDS, then the nature of the
               subsequent contractual arrangement with the customer shall be
               deemed different from the nature of the original Committed
               Contract, and the renewed or modified contract shall not
               constitute a Committed Contract hereunder as of effectiveness of
               such renewal or modification.

                                   Annex A-4


          (c)  Any question regarding the application of this Section 3 shall be
               subject to interpretation and resolution in accordance with
               Section 8. The interpretation of the guidelines set forth above
               and their application to specific factual circumstances shall be
               guided by the general principle that Celera or AB, as the case
               may be, should receive attribution for business actually
               generated. In furtherance of this general principle, the
               Inter-Group Policy Committee (or the Applera Chief Executive
               Officer or Applera Board, as applicable) may determine that a
               particular contract may have both a Committed Contract component
               and new Knowledge Business contract component.

     3.4  EBITDA From Committed Contracts. AB shall reimburse Celera for any
          shortfall in Celera's projected total cumulative EBITDA of $62.5
          million from Committed Contracts for fiscal years 2003 through 2006
          (the "EBITDA Projection") caused by (i) any actions taken by AB in
          connection with the Knowledge Business or (ii) actual changes to
          Celera's current strategy for marketing and distribution of Existing
          Information Products requested by AB, subject to the following terms,
          conditions, and limitations:

               (a)  AB's reimbursement obligation under this Section 3.4 shall
                    be limited to $62.5 million in the aggregate;

               (b)  AB's reimbursement obligation under this Section 3.4 shall
                    be subject to the condition that Celera shall perform all of
                    its obligations under the Committed Contracts, except where
                    its failure to perform is due to (i) actions taken or
                    changes requested by AB as provided above, or (ii) the
                    breach or non-performance by the other party to such
                    Committed Contract as a result of any actions taken or
                    changes requested by AB as provided above;

               (c)  For purposes of making determinations under this Section
                    3.4, no less frequently than annually the parties shall
                    review and, as necessary, revise the 4 year forecast for
                    EBITDA from Committed Contracts (though no such revision to
                    the EBITDA forecast shall affect the EBITDA Projection on
                    which AB's obligations are based under this Section 3.4);

               (d)  Reimbursements by AB shall be made at the end of any quarter
                    if it is determined, and agreed to by AB and Celera, that AB
                    would have to recognize a reimbursement obligation on its
                    financial statements for that quarter; and

                                   Annex A-5


               (e)  Determinations and interpretations under this Section 3.4
                    shall be made pursuant to Section 8 and shall be consistent
                    with the financial model presented to the Applera Board that
                    corresponds to the EBITDA Projection.

4.   Financial Provisions Applicable to Related Products.

     4.1  Royalty to Celera for Covered Products.

               (a)  In exchange for marketing and distribution rights for
                    Covered Products as described in Section 1 above, AB shall
                    pay Celera a royalty quarterly through AB's 2012 fiscal year
                    based on revenues from Related Products. The royalty shall
                    be as heretofore approved by the Applera Board, subject to
                    such amendments as the Applera Board shall from time to time

               (b)  The royalty arrangement contemplated by Section 4.1(a) is
                    based on the mutual understanding that AB does not currently
                    intend to bundle Covered Products with other products and
                    services. If such bundling occurs, then the Inter-Group
                    Policy Committee shall approve an alternative financial
                    arrangement for such bundled Covered Products designed, to
                    the maximum extent possible, to give to Celera substantially
                    the same economic benefit from those Covered Products as was
                    originally intended by the parties, and to minimize any
                    adverse financial impact to Celera as a result of such
                    bundling of products.

     4.2  Reimbursement of Costs. AB shall reimburse Celera for all costs
          relating to the Knowledge Business (i.e., of the type or nature
          identified in the financial model referred to in Section 3.4(e)) in
          excess of the costs associated with Committed Contracts in a manner
          consistent with Applera's tracking stock principles.

5.   Shared Services. Celera and AB shall provide each other with access to
     information technology, informatics, and other shared resources in a manner
     consistent with Applera's tracking stock principles, as determined by the
     Inter-Group Policy Committee (as defined in, and subject to the provisions
     of, Section 8 below), to ensure the availability of these resources as
     needed for purposes of this Agreement.

6.   Effect on Other Operations/Arrangements.

     6.1  Celera.

          (a)  Celera shall continue to have unrestricted access to:

                                   Annex A-6


               (1)  data (i.e., subscription content as well as underlying data
                    related to Covered Products) and other intellectual property
                    associated with the Knowledge Business for internal
                    therapeutics uses (including for collaborations with third
                    parties), as well as for other uses where AB declines
                    interest, without royalty or other payment obligations; and

               (2)  therapeutic targets identified through AB funded research
                    and development consistent with Applera's tracking stock

          (b)  Celera shall remain obligated to comply with obligations pursuant
               to existing collaborations, subject to future modification and

     6.2  AB.

          Access to Celera proteomics data shall be at the discretion of Celera.

     6.3  Celera Diagnostics.

          This Agreement shall not have any effect on the rights or obligations
          of Celera Diagnostics within Applera. Celera Diagnostics shall
          continue to have access to the intellectual property of Celera and AB
          for human in-vitro diagnostics as set forth in the Celera Diagnostics
          Joint Venture Agreement.

     6.4  Third Party Obligations. Notwithstanding anything to the contrary
          contained herein, the provisions of this Agreement are subject to any
          now existing or future obligations of Celera or AB to third parties
          regarding the intellectual property or other data or information of
          such third parties.

7.   Term of Agreement; Right of First Refusal.

     7.1  Term. This Agreement shall become effective as of the Effective Date
          and shall terminate as of the close of business on June 30, 2012 (the
          "Term"), provided, however, that (a) any amounts payable by AB to
          Celera as of the termination date shall continue to be payable in
          accordance with the terms of this Agreement and (b) Section 7.2 below
          shall survive such termination.

                                   Annex A-7


     7.2  Right of First Refusal. If, at any time during the 5 years following
          the termination or expiration of this Agreement, Celera desires to
          sell, liquidate, or otherwise dispose of all or a portion of the
          assets associated with the Online/Information Business, it shall first
          offer to sell such assets to AB. Thereafter, if AB desires to purchase
          such assets, Celera and AB shall negotiate in good faith such sale for
          a period of not less than 60 days. In the event that Celera and AB are
          unable to reach agreement on the sale of such assets within such time
          period, Celera may, within 60 days following the conclusion of
          negotiations with AB, sell all of such assets proposed to be sold to a
          third party on terms no less favorable to Celera in the aggregate than
          the terms last proposed by AB, if any.

8.   Interpretation of Agreement; Resolution of Disputes.

Subject to Section 10 below, it is the intent of the parties that all questions,
concerns, disputes, or other issues that may arise relating to this Agreement,
including interpretation of the Agreement, be subject to the same procedures and
processes currently used to resolve issues between AB and Celera within Applera.
These procedures and processes include the Applera Inter-Group Policy Committee
(the "Inter-Group Policy Committee," which term includes any processes or
procedures for resolution of issues between AB and Celera as may be applicable
from time to time, and any successor committees, processes, or procedures). The
Inter-Group Policy Committee shall also have such other specific
responsibilities in relation to this Agreement as are expressly set forth in the
other provisions of this Agreement. Any dispute, disagreement, deadlock, or
other issue or matter relating to this Agreement which cannot be so resolved or
addressed by the Inter-Group Policy Committee may be referred by the Applera
Chief Executive Officer to the Applera Board, and any resulting determination by
the Applera Board shall be binding on the parties. Without limitation of the
foregoing, the parties anticipate that the Inter-Group Policy Committee is the
most appropriate management committee to ensure compliance with the Cooperation
Guidelines, and they therefore expect such committee to have an active role in
evaluating such compliance and responding to any questions or concerns that may
be raised regarding same (and, if it deems appropriate, implementing procedures
as contemplated by Section 2.3 in response to those questions or concerns).

9.   Amendment and Waiver.

Subject to Section 10 below, the terms and conditions contained in this
Agreement may be amended, and the conduct of the parties may deviate from such
terms and conditions, with the approval of the Inter-Group Policy Committee;
provided, however, that any amendment to this Agreement, upon receiving the
necessary approval, shall be in a written instrument signed by (a) AB, (b)
Celera, and (c) the Applera Chief Executive Officer.

                                   Annex A-8


10.  Role of Applera Board.

Notwithstanding anything to the contrary contained herein, all matters relating
to this Agreement shall at all times remain within the purview of the Applera
Board, which shall have the authority to review such matters on its own
initiative. In addition, the Applera Chief Executive Officer may refer matters
relating to this Agreement to the Applera Board as he deems appropriate.

11.  Transaction Expenses.

All out-of-pocket costs and expenses incurred by Applera or its affiliates in
connection with the negotiation and implementation of the arrangements provided
for herein shall be borne equally by AB and Celera.

                                   Annex A-9