INTERNATIONAL DISTRIBUTOR AGREEMENT
between
NeoPath, Inc.
and
Nikon Corporation
Dated as of December 19, 1996
CONTENTS
Article 1. Authority of Nikon 1
1.1 Appointment 1
1.2 Customer Pricing 1
1.3 Exclusivity 1
1.4 Independent Contractor 2
Article 2. Purchase and Sale of Products 2
2.1 Initial Purchase and Sale of QC Systems 2
2.2 Purchase and Sale of Additional Products 3
2.3 Upgrade of QC Systems 3
2.4 Title 3
Article 3. Leasing of Products 4
3.1 Orders of Leased Products 4
3.2 Cancellation of Orders 4
3.3 User Agreements 4
3.4 Risk of Loss 6
3.5 Title 6
Article 4. Delivery of Products 6
4.1 General 6
4.2 Delays in Delivery 7
4.3 Transportation Costs 8
4.4 Transfers 8
Page i
Article 5. Services of Nikon 8
5.1 Description 8
5.2 Reports 11
5.3 Qualified Personnel 12
Article 6. Services and Support by NeoPath 12
6.1 Dedication of Support Team 12
6.2 Technical Training 12
6.3 Sales Training 13
6.4 Direct Customer Software Support 13
6.5 Product Improvements, Etc. 13
6.6 Marketing and Service Materials 14
Article 7. Pricing and Payment 14
7.1 Products Purchased by Nikon 14
7.2 Products Leased by Nikon 14
7.3 Services and Support by NeoPath 15
7.4 Payment 15
7.5 Late Payment 15
7.6 Taxes 15
7.7 Modifications for Increased Supplier
Costs 16
7.8 Additional Price Modifications 16
Article 8. Product Warranty, Liability and
Indemnity 17
8.1 Limited Warranty and Remedy 17
8.2 Product Liability Indemnification 18
Page ii
8.3 Infringement Indemnification 19
8.4 Disclaimer and Release 21
Article 9. Protection of Proprietary Rights 21
9.1 Reservation 21
9.2 Software 21
9.3 Securing Rights in the Territories 22
9.4 Product Markings 22
9.5 Trademarks, Etc. 22
9.6 Third Party Infringement 22
9.7 Third-Party Claims Against the Products 23
9.8 Nikon Improvements 23
9.9 Protection of Confidential Information 24
Article 10.Additional Responsibilities of Nikon 24
10.1 Territorial Restriction 24
10.2 Taxes, Withholding, Etc. in Japan or Any
Other Territory 25
10.3 Noncompete 25
10.4 Authorized Use of NeoPath Systems and
NeoPath Technology 25
10.5 Indemnification 25
10.6 No Unauthorized Representations or
Warranties 26
10.7 Compliance with Laws 26
10.8 No Government Representation 27
10.9 No Conflict of Interest 27
Page iii
Article 11.Limitations of Liability 27
11.1 Force Majeure 27
11.2 Limitation of Consequential Damages 27
11.3 Additional Limitations of NeoPath's
Liability 28
Article 12.Term and Termination 28
12.1 Term 28
12.2 Termination After Five Years 28
12.3 Termination for Failure to Meet [*] of
Quota for Japan 29
12.4 Partial Termination for Failure to Meet
[*] of Quota for any Other Territory 29
12.5 Termination for Material Breach or
Default 29
12.6 Termination for Act of Insolvency 30
12.7 Effect of Termination 30
Article 13.Resolution of Disputes 31
13.1 General 31
13.2 Unassisted Settlement 31
13.3 Arbitration 32
Article 14.Miscellaneous 33
14.1 Notices 33
14.2 Assignment 33
14.3 Nonwaiver 34
14.4 Severability 34
14.5 Applicable Law 34
[*] Confidential treatment requested
Page iv
14.6 Entire Agreement 35
Page v
NEOPATH, INC.
INTERNATIONAL DISTRIBUTOR AGREEMENT
This Agreement, dated as of December 19, 1996, is made
and entered into by and between: NeoPath, Inc., a corporation
duly organized and existing under the laws of the State of
Washington, U.S.A. ("NeoPath"); and Nikon Corporation, a
corporation duly organized and existing under the laws of
Japan ("Nikon"). The definitions of certain terms used in
this Agreement are set forth in the attached Schedule No. 1
which is incorporated herein by this reference.
Article 1. Authority of Nikon
1.1 Appointment
NeoPath hereby appoints Nikon, and Nikon hereby accepts
NeoPath's appointment, as an authorized distributor of
Products in the Territories during the Term, all subject to
and in accordance with the provisions of this Agreement.
1.2 Customer Pricing
The prices, payment terms and similar provisions
applicable to amounts payable by the Customer to Nikon for any
Products or related services made available to the Customer
through Nikon will be established by Nikon in its sole
discretion and are not subject to any review, approval or
other action by NeoPath. Any prices, payment terms or similar
provisions recommended by NeoPath are provided solely for
Nikon's information.
1.3 Exclusivity
So long as the number of NeoPath Systems distributed in
any Territory by Nikon under this Agreement equals or exceeds
the Quotas for such Territory, then NeoPath will not appoint
any Third Party to, and will not by itself, promote, market or
distribute NeoPath Systems in such Territory during the Term
other than in connection with this Agreement. The foregoing
will not be interpreted or construed to prohibit or restrict
NeoPath's activities, acting in coordination with Nikon, to
facilitate Nikon's efforts to promote, market and distribute
Products under this Agreement (including, without limitation,
providing technical support, conducting market surveys and
contacting Customers or potential Customers in the
Territories). If the number of NeoPath Systems distributed in
any Territory by Nikon under this Agreement in any
Page 1
Year after 1996 does not equal or exceed the applicable Quota for such
Year, then NeoPath may terminate Nikon's exclusivity as to
such Territory (without terminating the Term) by giving Nikon
written notice of such termination specifying the affected
Territory within ninety (90) days after the end of the Year in
which distributions did not equal or exceed the applicable
Quota. Unless otherwise agreed upon by the Parties in
writing, any such termination will be effective immediately
upon Nikon's receipt of NeoPath's notice of the termination.
1.4 Independent Contractor
Nikon is an independent contractor, not an agent,
franchisee, or representative of NeoPath. Except as otherwise
specifically provided for in this Agreement or any applicable
Schedule, Nikon will perform all of the Services and its other
obligations under this Agreement at its own expense. Nikon is
not authorized to, and will not attempt to, create or assume
any obligation or liability, express or implied, in the name
or otherwise on behalf of NeoPath. Without limiting the
generality of the foregoing, Nikon will not enter into any
contract, agreement or other commitment, make any warranty or
guarantee, or incur any obligation or liability in the name or
otherwise on behalf of NeoPath.
Article 2. Purchase and Sale of Products
2.1 Initial Purchase and Sale of QC Systems
Upon execution of this Agreement, Nikon will purchase
from NeoPath, and NeoPath will sell to Nikon, [*] QC
Systems for a purchase price of [*]
each. Nikon acknowledges receipt of two (2) of
the [*] QC Systems being purchased under this paragraph.
NeoPath acknowledges receipt of the purchase price for one of
the QC Systems already delivered to Nikon (i.e., as an advance
under a letter agreement between the Parties, dated June 11,
1996). Nikon will pay NeoPath for the other QC System already
delivered to Nikon within forty-five (45) days after execution
of this Agreement. NeoPath will deliver the [*]
additional QC Systems to be purchased under this paragraph
within [*] days after the date this Agreement is
signed by both Parties. Nikon will pay NeoPath the purchase
price for each of the [*] additional QC Systems to be
purchased under this paragraph on or before the later of
[*] or forty-five (45) days after delivery of the
applicable QC System and receipt of NeoPath's invoice for
purchase price of the same.
[*] Confidential treatment requested
Page 2
2.2 Purchase and Sale of Additional Products
Nikon will complete, sign and submit to NeoPath a written
order for any additional Products that Nikon desires to
purchase from NeoPath under this Agreement. NeoPath will sell
and deliver to Nikon, and Nikon will purchase, accept delivery
of and pay for in accordance with paragraph 7.1, any
additional Products shipped or otherwise delivered by NeoPath
pursuant to orders submitted to and accepted by NeoPath
pursuant to this paragraph. Unless otherwise agreed by
NeoPath, Nikon will submit any order under this paragraph at
least one hundred twenty (120) days prior to the date upon
which Nikon desires delivery of the Product which Nikon
desires to purchase pursuant to the order. Each of Nikon's
orders will be in a form acceptable to NeoPath and will
specify the quantity of each type of Product ordered, the
applicable purchase prices, and shipping instructions (e.g.,
requested carrier, shipping date, shipping destination and
insurance). Each of Nikon's orders under this paragraph will
be subject to acceptance by NeoPath. Promptly after receipt
of any order from Nikon, NeoPath will notify Nikon of its
acceptance or rejection thereof and, if rejected, the reasons
for the rejection.
2.3 Upgrade of QC Systems
Upon Nikon's request and in no event later than the
second anniversary of the date of this Agreement, NeoPath will
upgrade each of the [*] QC Systems purchased by Nikon
pursuant to paragraphs 2.1 to Screener Systems for [*]
each. Unless otherwise
agreed by the Parties, Nikon will pay for each upgrade within
forty-five (45) days after completion of the upgrade and
receipt of NeoPath's invoice for the same. Unless and until
upgraded in accordance with this paragraph, Nikon will not use
or permit the use of any QC System as a Screener System.
2.4 Title
Title to Products purchased by Nikon under this Article 2
will pass to Nikon upon the later of:
(a) NeoPath's delivery of the applicable Product;
or
(b) NeoPath's receipt of full payment of the
purchase price for the applicable Product.
[*] Confidential treatment requested
Page 3
Article 3. Leasing of Products
3.1 Orders of Leased Products
Nikon will complete, sign and submit to NeoPath a written
order for any Products that Nikon desires to lease from
NeoPath under this Agreement. NeoPath will lease and deliver
to Nikon, and Nikon will lease, accept delivery of and pay for
in accordance with paragraph 7.2, any Product shipped or
otherwise delivered by NeoPath pursuant to orders submitted to
and accepted by NeoPath pursuant to this paragraph. Unless
otherwise agreed by NeoPath, Nikon will submit any order under
this paragraph at least one hundred twenty (120) days prior to
the date upon which Nikon desires delivery of the Product
which Nikon desires to lease pursuant to the order. Each of
Nikon's orders will be in a form acceptable to NeoPath and
will specify the Product ordered, the applicable lease
payments, the applicable Lease Term, the location at which the
Product is to be installed and operated throughout the Lease
Term, the name, address and telephone number of the Customer
to which the Product is to be subleased or rented by Nikon,
and shipping instructions (e.g., requested carrier, shipping
date, shipping destination and insurance). Each of Nikon's
orders under this paragraph will be subject to acceptance by
NeoPath. Promptly after receipt of any order from Nikon,
NeoPath will notify Nikon of its acceptance or rejection
thereof and, if rejected, the reasons for the rejection.
3.2 Cancellation of Orders
If the Customer cancels its order to Nikon for any
Product ordered by Nikon under this Article 3, then Nikon may
cancel its order to NeoPath for such Product, provided that
Nikon gives NeoPath written notice of such cancellation at
least sixty (60) days prior to the delivery date specified in
the applicable order from Nikon to NeoPath.
3.3 User Agreements
Unless otherwise agreed by the Parties, each User
Agreement will conform, in form and content, substantially to
the form of User Agreement attached to this Agreement or such
other form of User Agreement as may be agreed upon by the
Parties after the date of this Agreement. Unless otherwise
agreed by NeoPath, each User Agreement will require the
Customer to:
(a) use the Product only for the purposes specified
in and otherwise in strict accordance with the applicable
specifications, instructions, manuals and other
documentation which are provided by, or which conform to
the documentation provided by, NeoPath;
Page 4
(b) keep the Product in the Customer's sole
possession and control throughout the Lease Term at the
location specified in Nikon's order, provided that the
Customer may move the Product to another location in the
Territory upon the prior written consent of Nikon and
notice to NeoPath;
(c) provide Nikon and NeoPath access to the Product
during the Customer's normal business hours for
installation, inspection, testing, maintenance, repair or
removal (i.e., at the end of the applicable Lease Term)
of the Product and other reasonable purposes;
(d) not make any alterations or modifications to
any Product without the prior written consent of Nikon
and NeoPath;
(e) not disassemble, decompile or reverse engineer
any Product, any part or component of any Product or any
software included in any Product;
(f) obtain maintenance and repairs for the Product
as recommended in the applicable specifications,
instructions, manuals and other documentation provided
by, or conforming to the documentation provided by,
NeoPath;
(g) not authorize anyone other than the Customer's
personnel and other personnel authorized or approved by
Nikon or NeoPath to install, operate, maintain, repair or
service the Product;
(h) acknowledge NeoPath's ownership of the Product
and related proprietary rights, as between Customer and
NeoPath;
(i) acknowledge that NeoPath has not made any
representation or warranty to the Customer and that the
Customer will look solely to Nikon with respect to any
representation or warranty made with respect to the
Product;
(j) not remove, obscure or alter any label, decal,
plate, plaque, tag or other notice of NeoPath's ownership
of the Product and related proprietary rights;
(k) keep the Product free and clear of all security
interests, mortgages, deed of trust, liens, encumbrances
and other claims arising by or through Customer;
(l) protect the Product from casualty, damage,
theft and loss throughout the Lease Term; and
Page 5
(m) surrender and deliver the Product to Nikon or
NeoPath at the end of the Lease Term in good operating
condition and state of repair, subject to ordinary wear
and tear.
3.4 Risk of Loss
At the end of the applicable Lease Term, Nikon will
surrender and deliver any Product leased under this Article 3
as directed by NeoPath and in good operating condition and
state of repair, subject to ordinary wear and tear. Nikon
assumes and will bear all risk of casualty, damage, theft or
loss with respect to any such Product from delivery by NeoPath
under this Agreement until such Product is returned to NeoPath
or its designee after the end of the Lease Term. Nikon will
immediately notify NeoPath of any such casualty, damage, theft
or loss and bear the cost to repair or replace any such
Product. Nikon will secure and maintain, or cause the
Customer to secure and maintain, "all risk" or equivalent
insurance, in an amount not less than full replacement value,
covering any casualty, damage, theft or loss of any such
Product. All such insurance will name NeoPath as an
additional insured. Nikon will deliver to NeoPath such
certificates of insurance and other evidence of such insurance
(such as copies of the applicable insurance policies) as
NeoPath may reasonably request.
3.5 Title
NeoPath reserves ownership of any Product leased to Nikon
under this Article 3 and related proprietary rights. Nikon
will not remove, obscure or alter any label, decal, plate,
plaque, tag or other notice of NeoPath's ownership of the
Product or related proprietary rights. Nikon will keep the
Product free and clear of all security interests, mortgages,
deeds of trust, liens, encumbrances, and other claims arising
by or through Nikon. Nikon will take such additional action
(including, but not limited to, the execution, acknowledgment,
delivery, filing or recording of separate documents) as
NeoPath may reasonably request to effect, perfect or evidence
NeoPath's ownership of any Product leased to Nikon under this
Article 3, the lease of such Product under this Article 3 or
NeoPath's assignment or other transfer of its interests in
such Product or lease (e.g., for financing purposes), in each
case at NeoPath's expense.
Article 4. Delivery of Products
4.1 General
NeoPath will deliver Products in accordance with orders
submitted by Nikon and accepted by NeoPath pursuant to
Article 2 or 3 of this Agreement. All orders
Page 6
submitted by Nikon under this Agreement are subject to acceptance by
NeoPath in writing within thirty (30) days after receipt of
the applicable order. NeoPath may accept any order in whole
or in part. Except as otherwise provided in paragraphs 4.2.3
and 4.2.4, the Parties may not modify, rescind or cancel any
accepted order, in whole or in part, without mutual written
consent.
4.2 Delays in Delivery
4.2.1 NeoPath will promptly notify Nikon of any
delay in delivery, the anticipated duration of the delay and
any required change in the delivery date.
4.2.2 If NeoPath does not deliver a Product
subject to a Government Order on or prior to the delivery date
specified in the applicable order submitted by Nikon and
accepted by NeoPath under this Agreement, as such date may be
adjusted pursuant to paragraph 11.1, then NeoPath will
reimburse Nikon, promptly upon Nikon's request, for any
penalty for late delivery actually paid by Nikon to the
Customer as a requirement of the Government Order, provided
that the nature of the order as a Government Order and the
requirement and amount of the penalty for late delivery is
disclosed in the order submitted by Nikon to NeoPath for the
applicable Product.
4.2.3. If (i) NeoPath does not deliver a Product
prior to the expiration of thirty (30) days after the delivery
date specified in the applicable order submitted by Nikon and
accepted by NeoPath under this Agreement, as such date may be
adjusted pursuant to paragraph 11.1, and (ii) the Customer
cancels its order to Nikon for such Product as a result of
NeoPath's delay in delivery, then Nikon may (in addition to
any remedies under paragraph 4.2.2) cancel the order as to
such Product by giving NeoPath written notice of such
cancellation, provided that:
(a) the Customer's right to cancel its order to
Nikon on account of any such delay is disclosed in the
order submitted by Nikon to NeoPath for the applicable
Product; and
(b) Nikon gives NeoPath written notice of such
cancellation prior to Nikon's receipt of a copy of the
applicable airway ▇▇▇▇, ▇▇▇▇ of lading or other evidence
of shipment of the applicable Product.
4.2.4 If NeoPath does not deliver a Product prior to
the expiration of sixty (60) days after the delivery date specified
in the applicable order submitted by Nikon and accepted by NeoPath
under this Agreement, as such date may be adjusted pursuant to
paragraph 11.1, then Nikon may (in
addition to any remedies under paragraph 4.2.2 or 4.2.3)
cancel the order as to such Product, in its discretion, by
Page 7
giving NeoPath written notice of such cancellation prior to
Nikon's receipt of a copy of the applicable airway ▇▇▇▇, ▇▇▇▇
of lading or other evidence of shipment of the applicable
Product.
4.3 Transportation Costs
Unless otherwise agreed by the Parties (e.g., in the
applicable order), NeoPath will deliver all Products under
this Agreement FOB carrier at Seattle-Tacoma International
Airport (SeaTac) or the Port of Seattle, whichever is
specified in the applicable order. Nikon will be responsible
for all transportation costs from the FOB point (including,
but not limited to, shipping charges, premiums for freight
insurance, inspection fees, customs, duties, import or export
fees, assessments, and all other costs incurred in
transporting the Products to the shipping destination). Nikon
will promptly reimburse NeoPath for any such costs paid by
NeoPath. Nikon will be responsible for any claims against the
carrier arising from or relating to shipment after delivery by
NeoPath the FOB point.
4.4 Transfers
Nikon will not, and will not permit any Customer to, ship
or otherwise transfer any Product to a location outside the
country to which the Product is shipped by NeoPath. If Nikon
or any Customer transfers any Product to a location other than
the location to which it is shipped by NeoPath, Nikon will
give NeoPath a minimum of five days advance written notice
thereof (including the date of the transfer, the address and
telephone number of the new location and the name, address and
telephone number of the individual under whose direction the
Product is used at such location).
Article 5. Services of Nikon
5.1 Description
The Parties will consult and cooperate in connection with
the development and implementation of periodic plans for the
promotion, marketing, distribution, maintenance, repair and
servicing of NeoPath Systems in the Territories during the
Term. Each Party will use its best efforts to carry out and
fulfill its responsibilities under such plans. Without
limitation of the foregoing, Nikon will perform the following
Services for the promotion, marketing and distribution of
Products for use in the Territories:
5.1.1 Nikon will secure and maintain any and all
registrations, permits, licenses, approvals, certificates and
other governmental actions required to import, promote,
market, distribute and use Products in any Territory under
applicable law.
Page 8
Unless otherwise directed by NeoPath, Nikon
will provide to NeoPath copies of all registrations, permits,
licenses, approvals, certificates, correspondence and other
documentation related to any such action. Further, unless
otherwise agreed by NeoPath or required by applicable law,
Nikon will use its best efforts to provide NeoPath with a copy
of any application or other documents to be filed by Nikon
with any governmental authority with respect to any Product at
least ten (10) days prior to filing by Nikon (e.g., so as to
give NeoPath a reasonable opportunity to review and comment
upon such documentation prior to filing). Unless otherwise
required by applicable law, Nikon may apply for, obtain and
hold any such registration, permit, license, approval,
certificate or other governmental action in Nikon's own name
during the Term. If and to the extent permitted by applicable
law, NeoPath may, at its option, apply for, obtain and hold,
in its own name, a parallel, back-up, contingent or duplicate
of any registration, permit, license, approval, certificate or
other governmental action obtained or held in Nikon's name.
Unless otherwise agreed by Nikon or required by applicable
law, NeoPath will use its best efforts to provide Nikon with a
copy of any application or other documents to be filed with
any governmental authority in the Territory with respect to
any Product at least ten (10) days prior to filing of NeoPath
(e.g., so as to give Nikon a reasonable opportunity to review
and comment upon such documentation prior to filing). Without
limitation of the foregoing, Nikon will have the primary
responsibility for completing any field tests and clinical
trials required for any registration, permit, license,
certification or other governmental action to be applied for,
obtained or held by Nikon or NeoPath in connection with the
importation, promotion, marketing, distribution or use of any
Product in any Territory.
5.1.2 During the testing or performance evaluation
of any Product or any addition, improvement or modification to
any Product, Nikon will use its best efforts to collect and
transmit to NeoPath in a timely manner such information and
data from any laboratories or others located in any Territory
that may be involved in such test and evaluation as NeoPath
may reasonably request.
5.1.3 Nikon will use its best efforts to actively
promote and market Products throughout the Territories.
Without limiting the generality of the foregoing:
(a) Nikon will conduct regular promotional,
advertising and other marketing efforts in each Territory
for the Products;
(b) Nikon will participate in and promote Products
at local and regional trade shows, conventions and other
like events in each Territory; and
Page 9
(c) Nikon will respond promptly to leads or
referrals furnished by NeoPath.
5.1.4 Nikon will assist NeoPath in the translation
of any promotional literature, marketing materials, manuals
and other Product documentation into the language(s) used in
any Territory. Unless otherwise agreed by the Parties,
NeoPath will own the copyright and any other intellectual
property rights in any such translation. Nikon will make
available to potential Customers promotional literature, data,
information and other items furnished or approved by NeoPath
to assist Nikon's promotion, marketing and sale of Products.
In addition, Nikon will develop its own promotional and
marketing materials for the Products based upon data and
information obtained through Nikon's promotional and marketing
activities in the Territories. Nikon will furnish copies of
such promotional and marketing materials, together with the
data and information upon which they are based, upon NeoPath's
request and will not distribute any such materials, data or
information to any Customer, potential Customer or other Third
Party unless and until approved by NeoPath, which approval
will not be unreasonably withheld or delayed. NeoPath will
approve or otherwise respond to any promotional or marketing
materials submitted by Nikon for approval under this paragraph
within seven (7) days after receipt by NeoPath. Nikon will
not use or distribute any other promotional or marketing
materials for the Products without the prior written approval
of NeoPath.
5.1.5 Nikon will maintain a staff of competent
sales personnel. Nikon will ensure that such personnel are
thoroughly familiar with the specifications, functions and
features of the Products. Nikon will require such staff to
study the Product materials furnished by NeoPath to Nikon and
to participate in Product training programs offered by Nikon,
NeoPath or others.
5.1.6 Nikon will keep and maintain complete and
accurate records of each sale or other distribution of any
Product sold or distributed by Nikon (e.g., showing the date
of sale, name and address of the Customer and the Product
serial number). Nikon will provide NeoPath with such
summaries, reports and copies of such records as NeoPath may
reasonably request.
5.1.7 Nikon will cooperate and coordinate with
NeoPath and Customers with regard to the training of Customers
and potential Customers in the use and operation of Products
in any Territory. Without limitation of the foregoing, Nikon
will provide appropriate training for all Customers in any
Territory.
5.1.8 Nikon will cooperate and coordinate with
NeoPath and Customers in connection with the maintenance,
repair and servicing of Products in the Territory.
Page 10
Without limitation of the foregoing, Nikon will provide for the
effective and efficient maintenance, repair and servicing of
Products (both in and out of warranty) in the Territories
throughout the Term and the fulfillment and satisfaction of
all warranties made by Nikon to Customers with respect to any
Product distributed by Nikon under this Agreement.
5.1.9 Nikon will investigate and report to NeoPath
all complaints received by Nikon with regard to any Product
(including, but not limited to, warranty claims). Nikon will
give immediate attention to and will use its best efforts to
promptly, courteously and equitably respond to, adjust and
settle all complaints received by Nikon from any Customer,
potential Customer or anyone else arising out of or in
connection with Nikon's distribution of any Product or the
performance of any Services. Nikon will promptly notify
NeoPath of all such complaints and any action taken (or to be
taken) in connection therewith. In handling any complaints,
Nikon will use its best efforts to maintain and promote good
public relations for NeoPath.
5.1.10 Nikon will use its best efforts to promptly
notify NeoPath of any inquiry (e.g., other than a purchase
order or potential purchase order) received by Nikon from the
public, any governmental authority, any trade association or
any news media, publication or reporter concerning any Product
or NeoPath and of Nikon's response to any such inquiry.
5.1.11 Nikon will cooperate and assist NeoPath in
executing any recall of any Product in any Territory and will
initiate and keep all records requested by NeoPath with
respect to any recall.
5.1.12 Nikon will conduct its business and
activities in such a manner so as to promote a good image and
public relations for the Products and NeoPath. Without
limiting the generality of the foregoing, Nikon will not:
(a) engage in any unfair or deceptive trade
practice involving any Product; or
(b) make any false, misleading or disparaging
representations or statements with regard to any Product
or NeoPath.
5.2 Reports
Promptly after the commencement of each Quarter, Nikon
will provide NeoPath with a report which summarizes the
Services performed by Nikon under section 5.1 during the
previous Quarter, the Services performed or planned by Nikon
under section 4.1 for the current and subsequent Quarters and
a forecast of orders
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under Articles 2 and 3 for Products to be
delivered in each of the next twelve (12) months. Such
forecast of orders for the Products for the current and
subsequent Quarters will be deemed to be confirmed firm orders
by Nikon. The forecast for the third and fourth Quarters as
specified in the report will be deemed to be estimated numbers
and will not be deemed to be firm orders. The reports will be
in such form and detail as specified by NeoPath. Nikon will
promptly furnish NeoPath such additional information regarding
the Services and the distribution of Products under this
Agreement as NeoPath may reasonably request.
5.3 Qualified Personnel
Nikon will ensure that all persons performing Services
are properly qualified and experienced to perform the same.
Article 6. Services and Support by NeoPath
6.1 Dedication of Support Team
Within ninety (90) days after the execution of this
Agreement, NeoPath will dedicate a team of employees at its
facilities in King County, Washington, U.S.A., to provide
technical, engineering and clinical support to Nikon for the
Territory. Throughout the Term, NeoPath's dedicated support
team will provide to Nikon consultation, technical assistance
and other support for Products distributed by Nikon under this
Agreement. Without limitation of the foregoing, NeoPath will:
(a) maintain a telephone number for Nikon to call
for support services;
(b) provide remote support services between 8:00
a.m. and 5:00 p.m. Pacific Time U.S.A., Monday through
Friday, excluding holidays, with pager back-up during
other hours; and
(c) provide emergency support services on an "as
needed" basis in any Territory, provided that Nikon pays
or reimburses any expenses incurred to provide such
services (including, without limitation, travel, lodging
and meal expenses).
6.2 Technical Training
During the Term, NeoPath will make available to Nikon
such training with respect to the maintenance, repair and
support of Products as it makes generally available to its
international distributors. Such training will be made
available at
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NeoPath's facilities in Redmond, Washington,
U.S.A. or another location designated by NeoPath. Nikon will
bear any expense incurred for its employees or other
representatives to participate in such training (including,
but not limited to, travel, lodging and meal expenses).
6.3 Sales Training
During the Term, NeoPath will make available to Nikon
such training with regard to the use, promotion, sales and
marketing of Products as it generally makes available to its
international distributors. Such training will be made
available at NeoPath's facilities in Redmond, Washington,
U.S.A., or another location designated by NeoPath. Nikon will
bear any expense incurred for its employees or other
representatives to participate in such training (including,
without limitation, travel, lodging and meal expenses).
6.4 Direct Customer Software Support
Upon Nikon's request, NeoPath will provide remote
Software support directly to Customers in the Territory;
provided that the Customer provides a telecommunication line
for remote access by NeoPath. Such support will include:
(a) diagnosis, troubleshooting and consultation
regarding any failure of the Software to operate
substantially in accordance with NeoPath's published
specifications;
(b) correction of bugs, errors and defects in the
Software;
(c) making updates and upgrades available to the
Customers; and
(d) such other support as may be specified in any
applicable Schedule.
NeoPath will promptly notify Nikon of any remote access by
NeoPath showing the date of such access, the name and address
of the Customer, and NeoPath's action taken in connection
therewith. Nikon will require each Customer to provide a
telecommunication line for remote access by Nikon and NeoPath
for the provision of Software support and monitoring of the
applicable NeoPath System.
6.5 Product Improvements, Etc.
NeoPath will promptly disclose to Nikon any improvements,
enhancements or other changes to any Products offered by
NeoPath during the Term to its other customers and
distributors. NeoPath will provide such technical and other
Page 13
information relating to any such improvement, enhancement or
change as Nikon may reasonably request for its review and
evaluation of the improvement, enhancement or change. Upon
Nikon's request, NeoPath will negotiate in good faith for the
addition of such improvement, enhancement or change to the
Products subject to this Agreement (including any modification
to the pricing schedules applicable to such Products). This
paragraph will not be interpreted or construed to require
NeoPath to disclose or make available to Nikon any
improvement, enhancement, change or information, if and to the
extent the same would violate any duty or obligation owing by
NeoPath to any Third Party (e.g., with respect to any custom
improvement, enhancement or change made by NeoPath for a
specific customer or distributor). Further, this paragraph
will not be interpreted or construed to require NeoPath to
disclose or make available to Nikon any improvement,
enhancement or change which does not apply to the use of
NeoPath Systems for the review, analysis or categorization of
cervical Pap smear slides.
6.6 Marketing and Service Materials
NeoPath will, at Nikon's request from time to time, make
available to Nikon, [*], reasonable quantities of
such promotional literature for the marketing of Products
(including pamphlets, leaflets, catalogues, brochures, and the
like) as NeoPath may from time to time make available to its
other distributors in the United States or other territories
or use in its own direct marketing of the Products from time
to time. NeoPath shall also provide Nikon, [*],
with such service manuals, parts lists and other service-
related information as NeoPath may from time to time provide
to its other distributors in the United States or other
territories or use in its own direct maintenance of the
Products from time to time.
Article 7. Pricing and Payment
7.1 Products Purchased by Nikon
Unless otherwise agreed upon by the Parties (e.g., in the
applicable order), the purchase price payable by Nikon to
NeoPath for any Product purchased by Nikon pursuant to
Article 2 will be determined in accordance with the attached
Schedule No. 2, as the same may be modified pursuant to
paragraph 6.5 or 7.7.
7.2 Products Leased by Nikon
Unless otherwise agreed upon by the Parties (e.g., in the
applicable order), the lease payments and other compensation
payable by Nikon to NeoPath for any Product leased by Nikon
pursuant to Article 3 will be determined in accordance with the
[*] Confidential treatment requested
Page 14
attached Schedule No. 3, as the same may be modified
pursuant to paragraph 6.5 or 7.7.
7.3 Services and Support by NeoPath
Unless otherwise agreed upon by the Parties, the fees,
charges and other compensation payable by Nikon to NeoPath for
any services or support provided by NeoPath pursuant to
Article 6 will be determined in accordance with the attached
Schedule No. 4, as the same may be modified pursuant to
paragraph 6.5 or 7.7.
7.4 Payment
NeoPath will issue invoices for all amounts payable under
this Agreement upon or subsequent to shipment of the Products
subject to the applicable invoice. Nikon will pay each of
NeoPath's invoice within forty-five (45) days after receipt of
the invoice and a copy of any applicable airway ▇▇▇▇, ▇▇▇▇ of
lading or other evidence of shipment. NeoPath may accept any
check or payment in any amount less than the full amount
invoiced without prejudice to NeoPath's right to recover the
balance of any amount properly due and payable or to pursue
any other right or remedy. No endorsement or statement on any
check or payment or in any letter accompanying any check or
payment or elsewhere will be construed as an accord or
satisfaction. Unless otherwise specified, all prices, fees,
charges and other amounts specified in this Agreement or any
Schedule are denominated in United States dollars. Nikon will
pay all prices, fees, charges and other amounts payable to
NeoPath under this Agreement in currency of the United States,
at NeoPath's principal place of business in King County,
Washington, U.S.A., or such other location as may be
designated by NeoPath, without withholding, deduction, offset
or setoff.
7.5 Late Payment
Any amount not paid by Nikon when due under this
Agreement will be subject to a finance charge equal to 1.5%
per month or the highest rate allowable by applicable usury
law, whichever is less, determined and compounded daily from
the date due until the date paid. Further, Nikon will
reimburse any costs or expenses (including, but not limited
to, reasonable attorneys' fees) paid by NeoPath to collect any
amount which is not paid when due.
7.6 Taxes
The prices, fees, charges and other amounts specified in
this Agreement or any Schedule do not include any sales, use
or similar taxes. [*] all
taxes or other amounts payable to governmental authorities in
[*] Confidential treatment requested
Page 15
connection with the applicable transactions [*]
with an exemption certificate [*].
7.7 Modifications for Increased Supplier Costs
In the event of any increase in NeoPath's costs to
acquire any components, parts or materials from any Third
Party for incorporation into any Product, then NeoPath may
modify the price or other compensation for any Product,
services or support set forth in any of the Schedules referred
to in paragraph 7.1, 7.2 or 7.3 to reflect such increase as of
the commencement of any Year by giving Nikon written notice of
the modification; provided, however, that:
(a) no modification under this paragraph will be
effective prior to the later of January 1, 1998 or the
expiration of ninety (90) days after NeoPath gives Nikon
written notice of the modification; and
(b) no modification under this paragraph will apply
to any Products, services or other items subject to an
order submitted by Nikon and accepted by NeoPath prior to
the effective date of the modification.
7.8 Additional Price Modifications
In addition to the modifications described in
paragraph 7.7, NeoPath may modify the price, or other
compensation for any Product, services or support set forth in
any of the Schedules referred to in paragraph 7.1, 7.2 or 7.3
as of the commencement of any Year by giving Nikon written
notice of the modification at least ninety (90) days prior to
the commencement of such Year; provided, however, that:
(a) no modification under this paragraph prior to
the fifth (5th) anniversary of the date of this Agreement
will increase the price of any Product, service or other
item by a percentage more than [*] the percentage
increase in the CPI; and
(b) no modification under this paragraph will apply
to any Products, services or other items subject to an
order submitted by Nikon and accepted by NeoPath prior to
the effective date of this modification.
[*] Confidential treatment requested
Page 16
Article 8. Product Warranty, Liability and Indemnity
8.1 Limited Warranty and Remedy
8.1.1 Subject to the limitations set forth in
paragraph 8.1.2, NeoPath warrants that, during the Warranty
Period, each Product will:
(a) be free from material defects in materials and
workmanship;
(b) comply in all material respects with applicable
specifications, instructions, manuals and other
documentation provided by NeoPath; and
(c) operate in all material respects in accordance
with applicable specifications, instructions, manuals and
other documentation provided by NeoPath.
8.1.2 The warranty set forth in paragraph 8.1.1
will not apply to any Product that:
(a) has not been operated, maintained and repaired
in accordance with applicable specifications,
instructions, manuals and other documentation provided by
NeoPath;
(b) has been maintained or repaired by unauthorized
personnel; or
(c) has been modified, altered, misused, abused,
damaged or subjected to operation for which it was not
intended.
Further, the warranty does not apply to expendable items such
as lamps or external tubing.
8.1.3 NeoPath will use commercially reasonable
efforts to correct any failure of any Product to comply with
the warranty set forth in paragraph 8.1.1 (e.g., by
modification or repair of the noncomplying Product); provided
that Nikon gives NeoPath written notice of the noncompliance
prior to the end of the applicable Warranty Period. If Nikon
gives NeoPath notice of any such noncompliance in accordance
with the foregoing and NeoPath fails, notwithstanding its
reasonable efforts, to fully correct the noncompliance within
a reasonable period of time after receipt of such notice, then
Nikon may return the Product and elect to either (i) receive a
full refund of any amount paid by Nikon for the Product or
(ii) require NeoPath to promptly deliver a replacement
Product, in either case without cost to Nikon.
Page 17
8.2 Product Liability Indemnification
8.2.1 NeoPath will defend and indemnify Nikon from
and against any claim of any Third Party (including, without
limitation, any Customer) arising out of bodily injury
(including death) or property damage to the extent caused by
any defect in the design or manufacture of any Product
(including, without limitation, any such claim resulting from
an incorrect diagnosis - e.g., an incorrect false negative
diagnosis - generated by a NeoPath System when utilized in
accordance with the applicable specifications, instructions,
manuals and other documentation provided by NeoPath), provided
that Nikon: gives NeoPath written notice of the claim with
sufficient promptness to avoid any adverse effect on NeoPath's
ability to defend the claim; allows NeoPath to assume control
of the defense and settlement of the claim; reasonably assists
and cooperates with NeoPath in connection with the defense and
settlement of the claim at NeoPath's expense; and does not
settle the claim without NeoPath's prior written consent.
This paragraph will not apply to any claim arising out of:
(a) the negligence of Nikon or any Third Party
(including, without limitation, any Customer);
(b) any failure to operate or otherwise use the
applicable Product in accordance with the applicable
specifications, instructions, manuals and other
documentation provided by NeoPath; or
(c) any representation or warranty made by Nikon or
any employee, agent or other representative (e.g., any
sales representative, service representative, dealer or
distributor) of Nikon with respect to any Product, which
representation or warranty is not within the scope of
NeoPath's warranties set forth in paragraph 8.1.1 or
otherwise specifically set forth in any applicable
documentation, promotional literature and other materials
published by NeoPath or incorporated from such materials.
NeoPath will maintain appropriate insurance covering its
obligations under this paragraph, so long as such insurance is
available on commercially reasonable terms.
8.2.2 Notwithstanding paragraph 8.2.1, the Parties
acknowledge that it is customary in Japan to respond promptly
to claims arising out of bodily injury and that a reasonable
settlement is generally desirable in order to avoid lengthy
litigation and adverse publicity. Accordingly, in the event
of any claim against NeoPath and/or Nikon arising out of any
bodily injury in Japan resulting from any defect or failure in
any NeoPath System, then Nikon may, after notice to NeoPath
and unless otherwise directed by NeoPath, make initial
contacts with the claimant and/or the claimant's
Page 18
representatives and offer and make a reasonable settlement of
the claim, provided that, unless otherwise approved by NeoPath
in writing:
(a) the settlement does not admit any defect
(operational, design or otherwise) or failure in the
NeoPath System;
(b) the cost to NeoPath of the settlement does not
exceed the lesser of [*]
or [*] of the total cost of the
settlement;
(c) the aggregate costs to NeoPath of all such
settlements during any period of four (4) consecutive
Quarters do not exceed [*]; and
(d) such settlements will be subject to such
additional procedures, terms and conditions as NeoPath
may specify in order to comply with its applicable
insurance policies.
8.3 Infringement Indemnification
8.3.1 NeoPath will defend and indemnify Nikon
against any claim of any Third Party (including, without
limitation, any Customer) arising out of any infringement by
the Product of any patent, copyright, trademark, trade secret
or other intellectual property right arising under the laws of
the United States, Japan or any other country in which NeoPath
has been granted a patent on the Product, provided that Nikon:
gives NeoPath written notice of the claim with sufficient
promptness to avoid any adverse effect on NeoPath's ability to
defend the claim; allows NeoPath to assume control of the
defense and settlement of the claim; reasonably assists and
cooperates with NeoPath in connection with the defense and
settlement of the claim at NeoPath's expense; complies with
any court order or settlement made in connection with the
claim (e.g., as to future use of any infringing Product); and
does not settle the claim without NeoPath's prior written
consent.
8.3.2 If it is finally determined that any
Product infringes any such patent, copyright, trademark, trade
secret or other intellectual property right of any Third Party
or if an injunction is issued that prohibits the ongoing use
of a Product, in whole or in part, then NeoPath will use
commercially reasonable efforts to either:
(a) obtain a license or other right for the
Customer to continue to use the infringing Product;
[*] Confidential treatment requested
Page 19
(b) modify the infringing Product so that it no
longer infringes, without a reduction in functionality;
or
(c) replace the infringing Product with a non-
infringing Product, without a reduction in functionality.
For purposes of the foregoing, the existence of any reduction
in functionality will be determined by the Parties based upon
the functionality of the Product as set forth in the
applicable specifications, instructions, manuals and other
documentation provided by NeoPath.
8.3.3 If NeoPath is unable to accomplish the
action described in paragraph 8.3.2(a), (b) or (c) above
within a reasonable period of time under the circumstances, as
agreed upon by the Parties, but in no event exceeding three
(3) months, then, Nikon may elect to return the Product to
NeoPath in which case NeoPath will pay or reimburse Nikon for
the transportation costs reasonably incurred by Nikon to
return the Product to NeoPath, and:
(a) in the case of a Product purchased by Nikon
under Article 2, refund to Nikon the unamortized portion
of the purchase price (determined as described below)
paid by Nikon for the applicable Product; or
(b) in the case of a Product leased by Nikon under
Article 3, terminate the applicable lease and refund or
release Nikon and the Customer from any lease payments
for any portion of the applicable Lease Term after the
date of such termination.
For purposes of determining the unamortized portion of the
purchase price of any Product under (a) above, the purchase
price will be amortized on a levelized, daily basis over a
period of five (5) years commencing with the date upon which
the Product is delivered by NeoPath to Nikon or the Customer
under this Agreement.
8.3.4 Paragraphs 8.3.1, 8.3.2 and 8.3.3 will not
apply to any claim relating to:
(a) any use of Products in combination with any
equipment, software or other items not furnished by
NeoPath, where use of the Products alone would have
avoided the claim; or
(b) any use not in accordance with the applicable
specifications, instructions, manuals and other
documentation provided by NeoPath, where
Page 20
use of the Products in accordance with such specifications,
instructions, manuals and other documentation would have
avoided the claim.
8.4 Disclaimer and Release
THE WARRANTIES, OBLIGATIONS, AND LIABILITIES OF NEOPATH
TO NIKON AND THE REMEDIES OF NIKON SET FORTH IN THIS AGREEMENT
ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND NIKON HEREBY
WAIVES, RELEASES, AND DISCLAIMS, ALL OTHER WARRANTIES,
OBLIGATIONS, AND LIABILITIES OF NEOPATH TO NIKON AND ALL OTHER
RIGHTS, CLAIMS, AND REMEDIES OF NIKON AGAINST NEOPATH, EXPRESS
OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO THE
PRODUCTS AND ANY OTHER GOODS OR SERVICES DELIVERED UNDER THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO: (A) ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE; (B) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE; (C) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY IN TORT,
WHETHER OR NOT ARISING FROM THE NEGLIGENCE (ACTIVE, PASSIVE,
OR IMPUTED), PRODUCT LIABILITY, OR STRICT LIABILITY OF
NEOPATH; AND (D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR
REMEDY FOR INFRINGEMENT.
Article 9. Protection of Proprietary Rights
9.1 Reservation
Nikon acknowledges that the Products and NeoPath
Technology involve valuable patent, copyright, trademark,
trade secret and other proprietary rights of NeoPath. NeoPath
reserves all such rights. No title to or ownership of any
proprietary rights related to any Product is transferred to
Nikon or any Customer pursuant to this Agreement or any
transaction contemplated by this Agreement. Nikon will not
infringe, violate or challenge all such rights.
9.2 Software
Without limitation of paragraph 9.1, NeoPath reserves
ownership of all patent, copyright, trade secret and other
proprietary rights in any Software that is included in or
distributed with any Product. NeoPath will provide to Nikon a
license for the Customer's use of the Software with each
Product requiring such Software, whether acquired by Nikon
pursuant to Article 2 or 3, in accordance with the instructions,
Page 21
manuals and other documentation provided by
NeoPath. Nikon will not use, or grant any authorization for
any Customer or other Third Party to use, any Software for any
other purpose. Without limitation of the foregoing, Nikon
will not, and will not grant any authorization for any
Customer or other Third Party to, do any of the following:
(a) copy, modify, make any derivative work based
upon, publish or distribute any Software; or
(b) reverse engineer, decompile or attempt to
discover or recreate any source code to any Software.
9.3 Securing Rights in the Territories
During the Term, Nikon will reasonably assist and
cooperate with NeoPath in securing and maintaining any and all
patent, copyright, trademark, trade secret and other
proprietary rights in any Territory relating to any Product or
NeoPath Technology. Any such rights will be secured and
maintained solely in the name of NeoPath at NeoPath's expense,
and NeoPath will reimburse Nikon for any such expense that may
be paid by Nikon. Nikon will provide to NeoPath copies of all
registrations, certificates, correspondence and other
documentation related to any such rights.
9.4 Product Markings
Nikon will not alter, remove, deface or obscure any notice
of patent, copyright, trademark, trade secret, or other
proprietary right on any Product and will not add to any Product
any other trademark or notice of any other proprietary right
without NeoPath's prior written consent.
9.5 Trademarks, Etc.
This Agreement does not grant Nikon any license or other
right to use any trademark, service ▇▇▇▇, trade name or trade
dress of NeoPath. Without limiting the generality of the
foregoing, Nikon will not use the name "NeoPath" or "AutoPap"
or any confusingly similar name in any publicity, advertising,
telephone listing, sign, business card, letterhead or in any
other published manner whatsoever without the prior written
approval of NeoPath.
9.6 Third Party Infringement
Nikon will promptly notify NeoPath of any infringement,
misappropriation or violation of any patent, copyright,
trademark, trade secret or other proprietary right of
Page 22
NeoPath that comes to Nikon's attention. In the event of any such
infringement, misappropriation or violation relating to the
activities of Nikon or any of its employees, agents,
representatives, distributors, dealers, sales representatives
or Customers, Nikon will take all steps reasonably necessary
to terminate such infringement, misappropriation or violation.
NeoPath will have exclusive control over the prosecution and
settlement of any legal proceeding to enforce or recover
damages on account of any infringement, misappropriation or
violation of any of NeoPath's proprietary rights, and Nikon
will:
(a) provide such assistance related to such
proceeding as NeoPath may reasonably request; and
(b) assist NeoPath in enforcing any settlement or
order made in connection with such proceeding,
in each case at NeoPath's expense.
9.7 Third-Party Claims Against the Products
If during the Term either Party becomes aware of any
claim by any Third Party that any Product infringes,
misappropriates or violates any patent, copyright, trade
secret or other proprietary right of any Third Party or any
claim of unfair competition in any Territory or in the United
States involving any Product, then such Party will notify, and
continue to keep informed, the other of the same.
9.8 Nikon Improvements
Nikon will promptly and fully disclose any Nikon
Improvement to NeoPath. If and to the extent that NeoPath
does not own (by contract or pursuant to applicable law) all
right, title and interest in any Nikon Improvement and unless
otherwise agreed upon by the Parties in writing (e.g., in a
separate written agreement between the Parties relating to the
development of the applicable Nikon Improvement), Nikon hereby
grants to NeoPath a nonexclusive, unrestricted, worldwide,
royalty-free right and license (including the right to
sublicense with respect to Nikon Improvements described in
clause (a) of the definition but not with respect to Nikon
Improvements described in clause (b) of the definition) to
make, have made, use, sell, distribute, reproduce, copy,
modify, make derivatives based upon and otherwise commercially
exploit the same in medical products and applications
(including, without limitation, Products). However, if
NeoPath implements any Nikon Improvement in any medical
product or application other than a Product under this
Agreement, then NeoPath will give Nikon a right-of-first
refusal to acquire the rights to distribute such product or
application in any Territory during the Term.
Page 23
9.9 Protection of Confidential Information
The Recipient will protect Confidential Information of
the Discloser against any unauthorized use or disclosure to
the same extent that the Recipient protects its own
Confidential Information of a similar nature against
unauthorized use or disclosure; provided that the Confidential
Information of the Discloser is conspicuously marked or
otherwise identified as confidential or proprietary upon
receipt by the Recipient or the Recipient otherwise knows or
has reason to know that the same is Confidential Information
of the Discloser. Each Party reserves ownership of its own
Confidential Information. The Recipient will use any
Confidential Information of the Discloser solely for the
purposes for which it is provided by the Discloser. This
paragraph will not be interpreted or construed to prohibit:
(a) any use or disclosure which is necessary or
appropriate in connection with the Recipient's
performance of its obligations or exercise of its rights
under this Agreement or any other agreement between the
Parties;
(b) any use or disclosure required by applicable
law (e.g., pursuant to applicable securities laws or
legal process), provided that the Recipient uses
reasonable efforts to give the Discloser reasonable
advance notice thereof (e.g., so as to afford the
Discloser an opportunity to intervene and seek an order
or other appropriate relief for the protection of its
Confidential Information from any unauthorized use or
disclosure); or
(c) any use or disclosure made with the consent of
the Discloser.
Without limitation of the foregoing, unless otherwise agreed
by the Parties, Nikon will not use any Confidential
Information of NeoPath to develop, correct, modify, enhance,
improve, maintain, repair or support any product other than a
Product, whether or not such other product competes with the
Product.
Article 10. Additional Responsibilities of Nikon
10.1 Territorial Restriction
Nikon will not promote, market or distribute Products
outside the Territory. Nikon will not ship, deliver or export
any Product to a location outside the Territory without the
prior written consent of NeoPath.
Page 24
10.2 Taxes, Withholding, Etc. in Japan or Any Other
Territory
The prices, fees and other compensation specified in any
Price List, Schedule or other provision of this Agreement are
net of any taxes, withholding or other amounts required to be
paid to any governmental authority in any Territory with
respect to any of the transactions or payments contemplated by
this Agreement. Nikon will pay any such taxes, withholding or
other amounts required to be paid to any governmental
authority in any Territory (i.e., in addition to any prices,
fees, compensation or other amounts payable to NeoPath under
this Agreement). Nikon will not, however, be responsible for
any taxes based upon NeoPath's net income, whether inside or
outside any Territory.
10.3 Noncompete
During the Term and for a period of one year thereafter,
Nikon will not, directly or indirectly, promote, market, sell
or distribute any Competing Product in any Territory. This
paragraph 10.3 will not be interpreted to prohibit Nikon from
engaging in research and development activities in any field.
10.4 Authorized Use of NeoPath Systems and NeoPath
Technology
Nikon will not use, or grant any authorization to use,
any NeoPath System or NeoPath Technology under this Agreement
for any purpose other than the review, analysis or
categorization of cervical Pap smear slides originating in the
Territory. Without limitation of the foregoing, Nikon will
not use, or grant any authorization to use, any NeoPath System
to process any slide originating or created outside the
Territory or any slide other than a cervical Pap smear slide.
Nikon will not attempt to reverse engineer any Product.
10.5 Indemnification
Except as otherwise provided for in Article 8, Nikon will
defend and indemnify NeoPath against any claim of any Third
Party (including, without limitation, any Customer) arising
out of:
(a) any representation or warranty made by Nikon or
any employee, agent or other representative (e.g., any
sales representative, service representative, dealer or
distributor) of Nikon with respect to any Product, which
representation or warranty is not within the scope of
NeoPath's warranties set forth in paragraph 8.1.1 or
otherwise specifically set forth in any applicable
documentation, promotional literature and other materials
published by NeoPath or incorporated from such materials;
Page 25
(b) any breach of or default by Nikon under any
agreement between Nikon and any Customer (including,
without limitation, any User Agreement);
(c) any use or application of any Product for any
purpose that is authorized by Nikon and not specifically
set forth in the documentation, promotional literature
and other materials published or approved in writing by
NeoPath; or
(d) any modification or alteration of any Product
made or authorized by Nikon, which modification or
alteration is not specifically approved or otherwise
authorized by NeoPath in writing,
provided that NeoPath: gives Nikon written notice of the
claim with sufficient promptness to avoid any adverse effect
on Nikon's ability to defend the claim; reasonably assists and
cooperates with Nikon in connection with the defense and
settlement of the claim at Nikon's expense; and does not
settle the claim without Nikon's prior written consent.
10.6 No Unauthorized Representations or Warranties
Nikon will not make or authorize any written or oral
representation or warranty in respect of any of the Products
except as may be contained in documentation, promotional
literature or other materials published or approved in writing by
NeoPath. Nikon will not recommend, perform or demonstrate any
use or application of any Product that is not specified in the
applicable instructions, manuals or other documentation or
otherwise specifically approved in writing by NeoPath.
10.7 Compliance with Laws
In performing this Agreement Nikon will comply with all
applicable laws, regulations, rules, orders and other
requirements, now or hereafter in effect, of governmental
authorities having jurisdiction. Nikon represents and warrants
that it is thoroughly familiar with applicable laws, regulations,
rules, orders and other governmental requirements concerning the
importation, marketing, sale, use and distribution of Products in
the Territory. Nikon will not, directly or indirectly, export or
reexport from the Territory any Products, technical data
associated with the Products, or the immediate products
(including, but not limited to, processes, services, data and
reports) derived from the use of any Product, without first
obtaining the appropriate license from the United States Office
of Export Licensing or its successor.
Page 26
10.8 No Government Representation
Nikon represents and covenants that throughout the Term,
neither it nor any of its stockholders (excluding, in the
event that Nikon's stock is listed on a national securities
exchange, stockholders of less than one percent (1%) of any
class of Nikon's capital stock), consultants, partners,
directors, officers, employees, agents or Nikons are or will
be a consultant, employee, agent or other representative of
any governmental authority responsible for procurement of any
Products.
10.9 No Conflict of Interest
Nikon represents that it does not have, and agrees that
it will not enter into, any agreement, obligation, duty or
commitment with any Third Party that conflicts with any
provision of this Agreement or any of Nikon's obligations,
duties, or commitments under this Agreement.
Article 11. Limitations of Liability
11.1 Force Majeure
Neither Party will be liable for, or be considered to be
in breach of or default under this Agreement on account of,
any delay or failure to perform as required by this Agreement
as a result of any cause or condition beyond such Party's
reasonable control (including, but not limited to: fire,
explosion, earthquake, storm, flood, wind, drought and act of
God or the elements; court order; act, delay or failure to act
by civil, military or other governmental authority; strike,
lockout, labor dispute, riot, insurrection, sabotage and war;
unavailability of required parts, materials or other items;
and act, delay or failure to act by the other Party or any
Third Party); provided that such Party uses its best efforts
to promptly overcome or mitigate the delay or failure to
perform. Any Party whose performance is delayed or prevented
by any cause or condition within the purview of this paragraph
will promptly notify the other Party thereof, the anticipated
duration of the delay or prevention, and the steps being taken
to overcome or mitigate the delay or failure to perform. In
the event of any such delay, the applicable delivery dates,
schedules or other times for performance affected by the delay
will be equitably adjusted to accommodate the delay. This
paragraph will not apply to excuse any payment obligation of
either Party for more than forty-five (45) days.
11.2 Limitation of Consequential Damages
NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES
Page 27
(INCLUDING, BUT NOT NECESSARILY LIMITED TO, LOSS OF PROFIT,
REVENUE OR USE) RESULTING FROM ANY PERFORMANCE,
NONPERFORMANCE, BREACH OR DEFAULT UNDER THIS AGREEMENT.
However, the limitations set forth in this paragraph will not
apply to limit:
(a) either Party's liability for damages with
respect to any breach of such Party's obligations under
paragraphs 9.2, 9.4, 9.5, 9.9, 10.4 (last sentence only)
or 10.8; or
(b) either Party's liability for consequential
damages (including, but not necessarily limited to, loss
of profit, revenue or use) with respect to any breach of
such Party's obligations under paragraphs 9.8, 10.1, 10.3
or 10.4 (other than the last sentence).
11.3 Additional Limitations of NeoPath's Liability
NEOPATH'S LIABILITY TO NIKON (WHETHER IN CONTRACT, TORT,
OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE,
STRICT LIABILITY, OR PRODUCT LIABILITY OF NEOPATH) WITH REGARD
TO ANY PRODUCT OR OTHER GOODS OR SERVICES FURNISHED UNDER THIS
AGREEMENT WILL NOT EXCEED THE AMOUNTS PAID OR PAYABLE BY NIKON
TO NEOPATH FOR THE SAME. However, the limitations set forth
in this paragraph will not apply to NeoPath's obligations
under sections 8.2 and 8.3.
Article 12. Term and Termination
12.1 Term
The Term will commence as of the date of this Agreement
and continue unless and until terminated pursuant to paragraph
12.2, 12.3, 12.5 or 12.6.
12.2 Termination After Five Years
Either Party may terminate the Term effective as of any
anniversary of the date of this Agreement by giving the other
Party written notice of termination, provided that:
(a) no termination under this paragraph will be
effective prior to the fifth (5th) anniversary of the
date of this Agreement; and
(b) such notice must be given at least ninety (90)
days prior to the anniversary date upon which the
termination is to become effective.
Page 28
12.3 Termination for Failure to Meet [*] of Quota for
Japan
If the number of NeoPath Systems distributed in Japan by
Nikon under this Agreement during any Year after 1996 does not
equal or exceed [*] of the Quota for Japan for
such Year, then NeoPath may terminate the Term by giving Nikon
written notice of such termination within ninety (90) days
after the end of the Year in which such distributions did not
equal or exceed [*] of the applicable Quota.
Any termination pursuant to this paragraph will be effective
upon the expiration of ninety (90) days after Nikon's receipt
of NeoPath's notice of such termination.
12.4 Partial Termination for Failure to Meet [*] of
Quota for any Other Territory
If the number of NeoPath Systems distributed in any
Territory other than Japan during any Year after 1996 by Nikon
under this Agreement does not equal or exceed [*]
of the Quota for such Territory and Year, then NeoPath
may delete such Territory from this Agreement by giving Nikon
written notice of the deletion within ninety (90) days after
the end of the Year in which such distributions did not equal
or exceed [*] of the applicable Quota. Unless
otherwise agreed by the Parties, any such deletion will be
effective ninety (90) days after Nikon's receipt of NeoPath's
notice of the deletion. NeoPath will not have any liability
(e.g., for any claim of damages, for any loss of revenue,
profit or compensation, or for any costs, expenses,
expenditures, investments or other commitments made in
reliance upon or otherwise in connection with this Agreement)
on account of the deletion of any Territory in accordance with
this paragraph.
12.5 Termination for Material Breach or Default
If either Party commits a material breach of or default
under this Agreement, then the other Party may give such Party
written notice of the breach or default (including, but not
necessarily limited to, a statement of the facts relating to
the breach or default, the provisions of this Agreement that
are in breach or default, and the action required to cure the
breach or default) and that the Term will terminate pursuant
to this paragraph if the breach or default is not cured within
thirty (30) days after receipt of notice (or such later date
as may be specified in such notice). If the other Party fails
to cure the specified breach or default within thirty (30)
days after receipt of such notice (or such later date as may
be specified in such notice), then the Term will terminate
without any further notice or action by the terminating Party.
[*] Confidential treatment requested
Page 29
12.6 Termination for Act of Insolvency
If an Act of Insolvency occurs with respect to any Party,
then the other Party may terminate the Term by giving the
other Party written notice of termination. Any termination
pursuant to this paragraph will be effective immediately upon
receipt by the Party with respect to which the Act of
Insolvency has occurred.
12.7 Effect of Termination
In the event of any termination of the Term, the
following will apply:
12.7.1 Unless otherwise agreed by the Parties, each
Party will fulfill its obligations under any and all orders
that have been submitted by Nikon and accepted by NeoPath in
accordance with Article 2 or 3 prior to the date of
termination; provided, however, that, in the event of any
termination by NeoPath pursuant to paragraph 12.5 or 12.6,
NeoPath may, at its option, cancel any outstanding orders by
giving Nikon written notice of such cancellation. Any such
cancellation will be without cost, penalty or liability to
NeoPath.
12.7.2 Articles 6 through 14, inclusive, and any
other provisions of this Agreement that may reasonably be
interpreted or construed to survive termination of the Term
will survive termination of the Term.
12.7.3 Neither Party will have any liability (e.g.,
for any claim of damages, for any loss of revenue, profit or
compensation or for any costs, expenses, expenditures,
investments or other commitment made in reliance upon or
otherwise in connection with this Agreement) to the other on
account of any termination of the Term in accordance with this
Article 12. Without limiting the generality of the foregoing,
neither Party will have any right, either express or implied
by applicable law or otherwise, to renewal of this Agreement
or to any damages or compensation for any termination of the
Term in accordance with this Article 12. Each of the Parties
have considered the possibility of such termination and the
possibility of loss and damage resulting therefrom in making
expenditures pursuant to the performance of this Agreement.
It is the express intent and agreement of the Parties that
neither will be liable to the other for damages or otherwise
by reason of the termination of the Term as provided for
herein.
12.7.4 Upon NeoPath's request, Nikon will use
reasonable efforts to transfer to NeoPath or surrender any
registration, permit, license, approval, certificate or other
governmental action obtained or held by Nikon in its own name
under this Agreement for such Territory to the extent that the
same can be so transferred or surrendered under applicable
law, such transfer or surrender to be effective upon the
Page 30
effective date of such termination or as soon thereafter as
possible. Further, Nikon will not oppose or otherwise
interfere with NeoPath's efforts to apply for, obtain or hold
any registration, permit, license, approval, certificate or
other governmental action relating to the distribution of
Products in any Territory as to which Nikon's exclusive rights
hereunder no longer apply.
Article 13. Resolution of Disputes
13.1 General
If any dispute arises between the Parties relating to
this Agreement, the Parties will follow the procedures set
forth in this Article 13. However, either Party may commence
litigation within thirty (30) days prior to the date after
which the commencement of such litigation could be barred by
any applicable statute of limitations or other law, rule,
regulation, or order of similar import or in order to request
injunctive or other equitable relief necessary to prevent
irreparable harm. In such event, the Parties will (except as
may be prohibited by judicial order) nevertheless continue to
follow the procedures set forth in this Article 13.
13.2 Unassisted Settlement
13.2.1 A Party seeking to initiate the procedures
under this Article 13 will give written notice thereof to the
other Party. Such notice will state that it is notice
initiating the procedures under this Article 13, describe
briefly the nature of the dispute, describe briefly the
notifying Party's claim or position in connection with the
dispute, and identify an individual with authority to settle
the dispute on behalf of the notifying Party.
13.2.2 Within ten (10) business days after receipt
of any notice under paragraph 13.2.1, the receiving Party will
give the other Party written notice which describes briefly
the receiving Party's claims and positions in connection with
the dispute and identifies an individual with the authority to
settle the dispute on behalf of the receiving Party.
13.2.3 The individuals identified in the Party's
respective notices under paragraphs 13.2.1 and 13.2.2 will
promptly make such investigation of the dispute as they deem
appropriate. Promptly and in no event later than thirty (30)
days after the date of the initiating Party's notice under
paragraph 13.2.1, such individuals will commence discussions
concerning resolution of the dispute. If the dispute has not
been resolved within thirty (30) days after commencement of
such discussions, then either Party may submit the dispute to
arbitration under section 13.3.
Page 31
13.3 Arbitration
13.3.1 If any dispute is not resolved after
compliance with the procedure set forth in subsection 13.2,
then either Party may submit the dispute to arbitration in
accordance with the rules of AAA.
13.3.2 The Parties will use their best efforts to
agree upon a mutually acceptable arbitrator within twenty (20)
days after submission of the dispute to arbitration. If the
Parties are unable to agree upon a mutually acceptable
arbitrator, then either Party may request AAA to supply a list
of at least five potential arbitrators satisfying the
requirements set forth in paragraph 13.3.3 and such other
requirements as the Parties may agree upon. Within ten (10)
days after receipt of the list, the Parties will independently
rank the proposed arbitrators and simultaneously exchange
rankings. Each Party may eliminate one of the listed
arbitrators. The arbitrator receiving the highest combined
ranking will be selected to serve.
13.3.3 The arbitrator will be impartial in fact and
appearance, not an advocate of any Party. The arbitrator will
not have (and neither Party will nominate a potential
arbitrator who it knows to have):
(a) any direct or indirect financial or personal
interest in the outcome of the arbitration; or
(b) any past, present or anticipated financial,
business, professional, family, social or other
relationship which is likely to affect impartiality or
which might reasonably create the appearance of
partiality or bias.
The arbitrator will be required to disclose to each of the
Parties any such interest or relationship, and the Parties may
agree to waive the requirements of the preceding sentence as
to any interest or relationship so disclosed.
13.3.4 In any arbitration, each Party will have:
(a) full access to the records of the other Party
that pertain directly to the subject matter of the
dispute;
(b) the power to call for the testimony of any
officer, employee, agent or representative of the other
Party having direct knowledge or information that
pertains to the subject matter of the dispute; and
(c) such other rights of discovery as may be
afforded by the Commercial Arbitration Rules of the AAA
or by the arbitrator.
Page 32
However, the Parties and the arbitrator will use their best
efforts to: avoid any unnecessary discovery; limit discovery
to the extent reasonably required to ensure a fair and
equitable decision; and otherwise conduct all discovery in an
effective, efficient, expeditious and economical manner.
13.3.5 Unless otherwise agreed by the Parties, any
arbitration hearing will be held at a mutually acceptable
location in the State of Hawaii, U.S.A.
13.3.6 The arbitration will be conducted in the
English language.
13.3.7 The arbitrator will render his or her
decision in writing not later than thirty (30) days after the
final statements and proof have been submitted and any hearing
on the matter is closed, and such decision will be final,
conclusive and binding upon the Parties.
13.3.8 Costs of the arbitrator, AAA, court
reporter, hearing rooms and other common costs will be divided
equally between the Parties. Each Party will bear the expense
of preparing and presenting its own case in connection with
the arbitration (including, but not limited to, its own
attorneys' fees and costs of witnesses).
13.3.9 Each Party hereby irrevocably consents to
the jurisdiction of the state and federal courts in the State
of Hawaii, U.S.A., and to the service of process by U.S. mail
in connection with any legal action to compel, administer or
enforce any arbitration under this Section 13.3 or any
litigation permitted under paragraph 13.1.
Article 14. Miscellaneous
14.1 Notices
Any notice or other communication under this Agreement
given by either Party to the other Party will be in writing
and will be delivered in person or mailed, properly addressed
and stamped with the required postage, to the intended
recipient at its address specified below its signature at the
end of this Agreement and to the attention of the person that
executed this Agreement on behalf of such Party. Either Party
may from time to time change such address by giving the other
Party notice of such change in accordance with this paragraph.
14.2 Assignment
Neither Party will assign this Agreement without the
prior written consent of the other Party; provided however,
that either Party may assign this Agreement without such
consent to any successor as a result of any merger,
consolidation or other
page 33
corporate reorganization of such Party
or any sale of all or substantially all of the assets of such
Party, but only in the event that the successor assumes or is
otherwise fully bound by all of the obligations of the
assigning Party under this Agreement. No assignment, with or
without such consent, will relieve either Party from any of
its obligations under this Agreement. Subject to the
foregoing, this Agreement will be fully binding upon, inure to
the benefit of and be enforceable by the Parties and their
respective successors and assigns.
14.3 Nonwaiver
Any failure to insist upon or enforce strict performance
of any provision of this Agreement or to exercise any right or
remedy under this Agreement or applicable law will not be
construed as a waiver or relinquishment to any extent of the
right to assert or rely upon any such provision, right or
remedy in that or any other instance; rather the same will be
and remain in full force and effect.
14.4 Severability
This Agreement will be enforced to the fullest extent
permitted by applicable law. If for any reason any provision
of this Agreement is held to be invalid or unenforceable to
any extent, then:
(a) such provision will be interpreted, construed
or reformed to the extent reasonably required to render
the same valid, enforceable and consistent with the
original intent underlying such provision;
(b) such provision will be void to the extent it is
held to be invalid or unenforceable;
(c) such provision will remain in effect to the
extent that it is not invalid or unenforceable; and
(d) such invalidity or unenforceability will not
affect any other provision of this Agreement or any other
agreement between the Parties.
14.5 Applicable Law
This Agreement will be interpreted, construed and
enforced in all respects in accordance with the laws of the
State of New York, U.S.A., without reference to its rules
relating to choice of law. The provisions of the U.N.
Convention on Contracts for the International Sale of Goods
will not apply.
Page 34
14.6 Entire Agreement
This Agreement (including all Schedules) constitutes the
entire agreement, and supersedes any and all prior agreements
(including, without limitation, the letter of intent, dated
June 11, 1996, previously entered into by the Parties),
between NeoPath and Nikon with regard to the Products. No
amendment, modification or waiver of any of the provisions of
this Agreement will be valid unless set forth in a written
instrument signed by the Party to be bound thereby. Without
limitation of the foregoing, NeoPath will not be bound by, and
specifically objects to, any term, condition, or other
provision which is different from or in addition to the
provisions of this Agreement (whether or not it would
materially alter this Agreement) which is proffered by Nikon
in any order, receipt, acceptance, confirmation, or otherwise,
unless NeoPath specifically agrees to such provision in a
written instrument signed by NeoPath.
IN WITNESS WHEREOF, the Parties have executed this
Agreement on the date first above written.
Nikon: NeoPath:
Nikon Corporation NeoPath, Inc., a
Washington corporation
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------- ----------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Title:
Director Vice President, Sales
Address: Address:
Page 35
Schedule No. 1
(Dated Dec. 19, 1996)
This Schedule No. 1 dated as of Dec. 19, 1996, is made
and entered into pursuant to the International Distributor
Agreement dated as of Dec. 19, 1996 ("Agreement") between:
NeoPath, Inc., a corporation duly organized and existing under
the laws of the State of Washington, U.S.A. ("NeoPath"); and
Nikon Corporation, a corporation duly organized and existing
under the laws of Japan ("Nikon"). By this reference, this
Schedule is incorporated into and made a part of the
Agreement.
Definitions
Whenever used in the Agreement with initial letters
capitalized, the following terms will have the following
specified meanings:
"AAA" means the American Arbitration Association or any
other arbitration service approved by the Parties.
"Act of Insolvency" means the occurrence of any of the
following: (a) the filing by or against a Party of a petition
to have such a Party adjudged as bankrupt or a petition for
reorganization or arrangement of such Party under any Debtor
Relief Law (unless, in the case of a petition filed against
such Party, the same is dismissed within sixty (60) days after
it is filed); (b) the making of any general assignment or
general arrangement for the benefit of a Party's creditors
under any Debtor Relief Law; (c) the appointment of a trustee
or receiver to take possession of all or substantially all of
a Party's assets under any Debtor Relief Law (unless such
possession is returned to such Party within thirty (30) days
after such appointment); (d) the attachment, execution or
other judicial seizure of all or substantially all of a
Party's assets (unless the same is released within thirty (30)
days); or (e) a Party dissolves or liquidates, is dissolved or
liquidated, or adopts any plan of dissolution or liquidation,
where such a Party does not continue as a viable business in
altered form.
"Competing Product" means any product performing the
automatic analysis or categorization of specimens containing
pap smear or other medical material; provided, however, that
microscopes and other equipment used to enhance visual or
electronic images of medical specimens shall not be deemed to
be Competing Products. Additionally, microscopes and other
equipment for the analysis or
Page 1
categorization of non-medical
specimens [*] shall not be
deemed to be Competing Products. In addition, a product for
the analysis or categorization of medical specimens that would
otherwise be a "Competing Product" will be excluded from that
definition, and shall not be subject to Nikon's obligations
under paragraph 10.3, if Nikon: (a) offers to NeoPath the
opportunity to collaborate or otherwise participate with Nikon
in the development or marketing of the product and (b) NeoPath
fails to accept such offer notwithstanding the Parties' good
faith negotiations concerning appropriate collaborative terms
and conditions over a minimum of three months.
"Confidential Information" means any information that is
proprietary or confidential or that a Party is obligated to
keep confidential (e.g., pursuant to a contractual or other
obligation owing to a Third Party). Confidential Information
may be of a technical, business or other nature (including,
but not limited to, information which relates to a Party's
technology, research, development, products, customers,
employees, contractors, marketing plans, finances, contracts,
legal affairs, or business affairs). The terms and conditions
of this Agreement will be treated as Confidential Information
of each Party. However, Confidential Information does not
include any information that:
(a) was known to the Recipient prior to receiving
the same from the Discloser in connection with this
Agreement;
(b) is independently developed by the Recipient
without the use of or reliance upon any Confidential
Information of the Discloser;
(c) is acquired by the Recipient from another
source without restriction as to use or disclosure; or
(d) is or becomes part of the public domain through
no fault or action of the Recipient.
"CPI" means the Consumer Price Index for All Items, All
Urban Consumers (Base Year 1982-84 = 100) for the Seattle
Metropolitan Area published by the United States Department of
Labor, Bureau of Labor Statistics, or such other index as the
Parties may agree upon in writing. If the then-current CPI is
replaced with a corresponding or similar CPI (e.g., if there
is a change in the base year), then the CPIs taken into
account in making any determination under this Agreement will
be equitably adjusted to reflect the change. If the then-
current CPI is discontinued and not replaced with a
corresponding or similar CPI, then the Parties shall agree
upon a replacement CPI.
[*] Confidential treatment requested
Page 2
"Customer" means any Person that acquires any Product
through Nikon under the Agreement.
"Debtor Relief Law" means any bankruptcy, moratorium,
insolvency, reorganization, liquidation, conservatorship or
similar law, now or hereafter in effect, for the relief of
debtors and that affects the rights of creditors generally.
"Discloser" means a Party that discloses Confidential
Information to the other Party.
"Government Order" means an order for a Product placed by
a Customer that is owned in whole or in part by a governmental
authority (including any government-sponsored laboratory).
"Lease Term" means the term of any lease of any Product
from NeoPath to Nikon under Article 3.
"MHW Approval" means the approval of the Ministry of
Health and Welfare of Japan required for the use of Screener
Systems in Japan or the date upon which the Parties determine
that such approval is not required.
"NeoPath System" means NeoPath's system for the automated
interpretation of cervical Papanicolaou (Pap) smear slides, as
more particularly described in the attached Schedules, as the
same may be modified from time to time by agreement of the
Parties.
"NeoPath Technology" means NeoPath's inventions,
products, processes, methods, designs, know-how,
specifications and other technology related to any Product
(including, without limitation, any technology incorporated in
or utilized by any Product or any technology utilized by
NeoPath in the development, correction, modification,
enhancement, improvement, maintenance, repair or support of
any Product).
"Nikon Improvement" means any correction, modification,
enhancement or improvement that Nikon may discover or make
that is either:
(a) based upon or developed with the use of any
Confidential Information of NeoPath; or
(b) developed for, applied to or incorporated into
any Product by Nikon.
Page 3
"Party" means NeoPath, Nikon or a successor permitted
under paragraph 10.2 to all of the right, title and interest
of NeoPath or Nikon under the Agreement.
"Person" means any individual, corporation, trust,
association, governmental authority or other entity.
"Product" means the NeoPath System, any part or component
of the NeoPath System or any other products that Nikon is
authorized to distribute under the Agreement. The "Products"
as of the date of the Agreement are specified in the attached
Schedules. Subject to any limitation set forth in any
applicable Schedule, NeoPath may change the Products from time
to time to reflect any updates, enhancements, improvements or
other modifications of the same; provided that, unless
otherwise agreed by Nikon, (a) no change in the Products will
be effective as to Nikon until the expiration of ninety (90)
days after NeoPath gives Nikon written notice of the change
and (b) no NeoPath System will be added as a Product.
"QC System" means a NeoPath System that is used solely
for the limited purpose of rescreening cervical Pap smear
slides that have been manually analyzed and categorized (e.g.,
screened) as normal by a cytologist or other trained
laboratory professional.
"Quarter" means a calendar quarter (i.e., a period of
three consecutive months commencing with January, April, July
or October).
"Quota" means the quota for NeoPath Systems to be
distributed in any Territory during any Year by Nikon under
the Agreement as specified in the attached Schedule No. 5 or
otherwise agreed upon by the Parties.
"Recipient" means a Party that receives Confidential
Information from the other Party.
"Schedule" means any of the schedules or other documents
attached to, incorporated into or otherwise made a part of the
Agreement.
"Screener System" means a NeoPath System that may be used
to automatically analyze and categorize (e.g., screen)
cervical Pap smear slides prior to their review by a
cytologist or other trained laboratory professional.
"Services" means the services to be performed by Nikon
pursuant to the Agreement (including, but not necessarily
limited to, the services described in Article 5 of the
Agreement).
Page 4
"Software" means any computer program or other software
that is included in, or provided by NeoPath with, any Product.
"Standard Terms and Conditions" means NeoPath's standard
terms and conditions in effect from time to time. The
Standard Terms and Conditions as of the date of the Agreement
are included in the attached Schedules.
"Supplemental Terms and Conditions" means NeoPath's
standard supplemental terms and conditions for user agreements
in effect from time to time. The Supplemental Terms and
Conditions as of the date of the Agreement are included in the
attached Schedules.
"Term" means the period of time specified in Article 12
of the Agreement.
"Territory" means Japan or any other geographical area in
which Nikon is authorized to distribute Products under the
Agreement. As of the date of the Agreement, the only
Territory is Japan. The Parties may from time to time add or
delete Territories pursuant to a written instrument signed by
both Parties. Territories may also be deleted pursuant to
paragraph 12.3 of the Agreement.
"Third Party" means any Person other than a Party.
"User Agreement" means a sublease or rental agreement
between Nikon and a Customer pursuant to which a NeoPath
System leased by Nikon from NeoPath is made available for a
Customer's use in the Territory pursuant to Article 3 of the
Agreement.
"Warranty Period" means, with respect to any Product, the
period of time from the delivery of such Product by NeoPath
under this Agreement until the expiration of three hundred
sixty-five (365) days after such delivery.
Page 5
"Year" means a calendar year.
Nikon: NeoPath:
Nikon Corporation NeoPath, Inc., a
Washington corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------- ----------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Title:
Director Vice President, Sales
Page 6
Schedule No. 2
Price Schedule for Purchased Products
This Schedule No. 2, dated as of Dec. 19, 1996, is made
and entered into pursuant to the International Distributor
Agreement, dated as of Dec. 19, 1996 ("Agreement") between:
NeoPath, Inc., a corporation duly organized and existing under
the laws of the State of Washington, U.S.A. ("NeoPath"); and
Nikon Corporation, a corporation duly organized and existing
under the laws of Japan ("Nikon"). By this reference, this
Schedule is incorporated into and made a part of the
Agreement. All terms defined in Schedule No. 1 to the
Agreement will have the same meanings when used in this
Schedule.
The purchase price of each Product purchased by Nikon
under Article 2 of the Agreement will be as follows, subject
to adjustment as provided for in the Agreement:
Product Price
AutoPap 300 QC System [*]
AutoPap System [*]
Spare parts, components, etc. See price list
attached
The NeoPath System will classify as "Review" or "Process
Review" certain slides that cannot be analyzed by the NeoPath
System (e.g., because of scant cellularity, light staining,
improper application of the slide cover or other matters
involving preparation or handling of slides). Changes in the
procedures for slide preparation and handling can result in
fewer slides being classified as "Review" or "Process Review"
slides. Accordingly, Nikon will use its best efforts to
educate Customers (and others who may prepare slides for
processing by NeoPath Systems in any Territory) and otherwise
implement NeoPath's recommendations regarding proper
procedures for slide preparation and handling. If the
percentage of slides to be classified by a NeoPath System
being purchased by Nikon under paragraph 2.2 of the Agreement
as "Review" or "Process Review" (e.g., as compared to the
total number of slides processed by such NeoPath System) is
expected to be less than the following percentage (e.g., based
upon the procedures for slide preparation and handling being
used by the Customer), then the purchase price for such
NeoPath System will be increased by the following amount:
[*] Confidential treatment requested
Page 1
If % of Review and Amount of Increase Amount of Increase
Process Review in the Purchase in Purchase Price
Slides Is Expected Price for AutoPap for AutoPap System
To Be Less Than 300 QC System
[*] [*] [*]
[*] [*] [*]
[*] [*] [*]
Nikon: NeoPath:
Nikon Corporation NeoPath, Inc., a
Washington corporation
By:/s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------ ----------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Title:
Director Vice President, Sales
[*] Confidential treatment requested
Page 2
Schedule No. 3
Price Schedule for Leased Products
This Schedule No. 3, dated as of Dec. 19, 1996, is made
and entered into pursuant to the International Distributor
Agreement, dated as of Dec. 19, 1996 ("Agreement") between:
NeoPath, Inc., a corporation duly organized and existing under
the laws of the State of Washington, U.S.A. ("NeoPath"); and
Nikon Corporation, a corporation duly organized and existing
under the laws of Japan ("Nikon"). By this reference, this
Schedule is incorporated into and made a part of the
Agreement. All terms defined in Schedule No. 1 to the
Agreement will have the same meanings when used in this
Schedule.
A. Annual Lease Payments
The annual lease payment for each NeoPath System leased
by Nikon under Article 3 of the Agreement will be as follows,
subject to adjustment as provided for below and elsewhere in
the Agreement:
Product Annual Lease Payment
AutoPap 300 QC System [*]
AutoPap System [*]
1. The annual lease payments specified above are for a Lease
Term of five years commencing upon completion of
installation of the applicable NeoPath System.
2. The annual lease payments specified above will be payable
in equal quarterly installments. A quarterly installment
will be due and payable in advance on the first day of
each quarter within the annual period for which the
payment is being made (a "Lease Quarter").
3. If the "Exchange Rate" (as defined below) increases or
decreases by more than [*] of the Exchange
Rate on the date of this Agreement, then, upon request of
either Party, the Parties will meet, in person or by
conference telephone, to discuss in good faith whether,
in light of such increase or decrease, the lease payments
should be increased or decreased for subsequent periods.
However, the lease payments previously agreed upon by the Parties
[*] Confidential treatment requested
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will remain in effect absent a written agreement
by the Parties to the contrary. For purposes of the
foregoing, "Exchange Rate" means the rate for the
exchange of United States dollars and Japanese yen as
published in the Wall Street Journal or another source
agreed upon by the Parties.
4. If (a) any Product leased by Nikon under Article 3 of the
Agreement is rendered inoperable for a period in excess
of one week due to NeoPath's fault (e.g., due to a defect
in the design of the Product or NeoPath's failure to
deliver necessary parts or components in a timely
fashion) and (b) the Customer is relieved of its
obligation to pay Nikon under the applicable User
Agreement for the period in question, then Nikon will be
relieved of its obligation to pay NeoPath that portion of
the annual lease payment for such Product under this
Agreement which is attributable to that portion of such
period which is in excess of two weeks. This paragraph
will not apply to any period (or portion thereof) in
which the Product is inoperable due to any failure of
Nikon or the Customer to perform their respective
obligations under this Agreement or the applicable User
Agreement (e.g., regarding the use or maintenance of the
applicable Product or the maintenance of a reasonable
inventory of spare parts and components).
5. If (a) a Customer terminates a User Agreement prior to
the end of the applicable Lease Term for any reason other
than Nikon's default or Nikon terminates a User Agreement
on account of the Customer's nonpayment or other breach
and (b) after exercising commercially reasonable efforts
to collect the remaining payments due Nikon under the
applicable User Agreement, Nikon is unable to collect all
of such payments, then, upon Nikon's request, the Parties
will meet, in person or by conference telephone, to
discuss in good faith whether, in light of the early
termination of the applicable User Agreement and Nikon's
inability to collect the remaining payments due Nikon,
the lease payments under this Agreement for the period in
question should be equitably adjusted.
B. Supplemental Lease Payments
The NeoPath System will classify as "Review" or "Process
Review" certain slides that cannot be analyzed by the NeoPath
System (e.g., because of scant cellularity, light staining,
improper application of the slide cover or other matters
involving preparation or handling of slides). Changes in the
procedures for slide preparation and handling can result in
fewer slides being classified as "Review" or "Process Review"
slides. Accordingly, Nikon will use its best efforts to
educate Customers (and others who may prepare slides for
processing by NeoPath Systems in
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any Territory) and otherwise
implement NeoPath's recommendations regarding proper
procedures for slide preparation and handling. If the
percentage of slides classified by a NeoPath System leased by
Nikon under Article 3 of the Agreement as "Review" or "Process
Review" (e.g., as compared to the total number of slides
processed by such NeoPath System) during any Lease Quarter is
less than the following percentage, then Nikon will pay to
NeoPath (e.g., in addition to the annual lease payment under A
above) a supplemental payment for the applicable Lease Quarter
equal to the following:
If % of Review Amount of
and Process Review Supplemental Payment
Slides Is Less for the Applicable
Than Lease Quarter
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[*] [*]
[*] [*]
[*] [*]
Any supplemental payment will be due and payable to NeoPath
within thirty (30) days after the end of the applicable Lease
Quarter.
Nikon: NeoPath:
Nikon Corporation NeoPath, Inc., a
Washington corporation
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Title: Title:
Director Vice President, Sales
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Schedule No. 4
Price Schedule for NeoPath Services and Support
This Schedule No. 4, dated as of Dec. 19, 1996, is made
and entered into pursuant to the International Distributor
Agreement, dated as of Dec. 19, 1996 ("Agreement") between:
NeoPath, Inc., a corporation duly organized and existing under
the laws of the State of Washington, U.S.A. ("NeoPath"); and
Nikon Corporation, a corporation duly organized and existing
under the laws of Japan ("Nikon"). By this reference, this
Schedule is incorporated into and made a part of the
Agreement. All terms defined in Schedule No. 1 to the
Agreement will have the same meanings when used in this
Schedule.
1. Annual Support Services
Product Annual Fee
AutoPap 300 QC System [*]
AutoPap System [*]
Note: The annual fee specified above applies only to
Products purchased under paragraph 2.2 of the
Agreement.
2. Spare parts, components, etc. See price list
attached
This Schedule does not apply to NeoPath Systems leased by
Nikon under Article 3 of the Agreement.
Nikon: NeoPath:
Nikon Corporation NeoPath, Inc., a
Washington corporation
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Title: Title:
Director Vice President, Sales
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Page 1
Schedule No. 5
Quotas
This Schedule No. 5, dated as of Dec. 19, 1996, is made
and entered into pursuant to the International Distributor
Agreement, dated as of Dec. 19, 1996 ("Agreement") between:
NeoPath, Inc., a corporation duly organized and existing under
the laws of the State of Washington, U.S.A. ("NeoPath"); and
Nikon Corporation, a corporation duly organized and existing
under the laws of Japan ("Nikon"). By this reference, this
Schedule is incorporated into and made a part of the
Agreement. All terms defined in Schedule No. 1 to the
Agreement will have the same meanings when used in this
Schedule.
1. Following are the preliminary Quotas for Japan for
calendar years 1996 through 2002:
Year Annual Quota
1996 [*]
1997 [*]
1998 [*]
1999 [*]
2000 [*]
After 2000 [*]
2. The Quotas set forth in paragraph 1 are expressed as
the number of NeoPath Systems delivered to Nikon under this
Agreement during the applicable Year, whether such NeoPath
Systems are purchased or leased by Nikon.
3. Upon request of either Party prior to September 1 of
any Year, the Parties will meet, in person or by conference
telephone, to discuss in good faith whether, in light of the
development of the market for Products in each Territory, the
Quota applicable to such Territory should be changed (upwards
or downwards) for subsequent years. However, Quotas
previously agreed upon by the Parties shall remain in effect
absent a written agreement by the Parties to the contrary.
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Nikon: NeoPath:
Nikon Corporation NeoPath, Inc., a
Washington corporation
By:/s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Title:
Director Vice President, Sales
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