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EXHIBIT 10.20
OEM SUPPLY AGREEMENT
This agreement, made and entered into June, 1999
between
TECAN AG
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(hereinafter referred to as "TECAN")
and
AUTOCYTE INC.
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(hereinafter referred to as "AUTOCYTE")
Whereas, TECAN has developed a RSP (Robotic Sample Processor) which is
manufactured and sold to AUTOCYTE as "AUTOCYTE PREP"(TM) PREPARATION SYSTEM,
hereinafter called "Product".
Whereas, AUTOCYTE will sell the Product worldwide under its name and its
Trademark with its sales force and through its distributors, but will sell
Product solely in combination with reagents.
Now, therefore, in consideration of the mutual covenants hereinafter expressed,
the parties agree as follows:
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1. DEFINITIONS
1.1 "Contract Year" shall mean a period of twelve (12) successive calendar
months during the term of this agreement or any extension thereof, the
first Contract Year to commence as of January 1st, 1999.
1.2 "Product" means the "AUTOCYTE PREP"(TM) PREPARATION SYSTEM, as
described in Exhibit A and the Project Book V. 2.1
1.3 "Application" means the use of the Product, in particular the QUAD-Arm
(or direct derivatives), for the preparation of cytology or histology
samples for diagnostic purposes.
2. MINIMAL QUANTATIES TO MAINTAIN EXCLUSIVITY
2.1 TECAN agrees not to offer directly on the basis of an Original
Equipment Manufacturing (OEM-) or Private Label (PL) Agreement to any
third party any device similar to the Product and intended for the
Application, provided that AUTOCYTE buys from TECAN at least the
following numbers of units of the Product:
YEAR UNITS
1999 tbd
2000 tbd
2001 tbd
2002 tbd
The applicable number of units shall be determined within 30 days of
FDA approval, however no later then by end of 1999.
The minimal quantities of units set forth above shall not be
cumulative; i.e. a surplus purchase in one Contract Year will not be
rolled over or applied to a subsequent Contract Year. If the minimal
quantities are not met, TECAN is free to offer the Product to any third
party also on the basis of an OEM or Private Label agreement.
AUTOCYTE understands that TECAN might sell individual units of the
Product to end-users that may be used for purpose similar to the
Application, provided the units do not have the AUTOCYTE labeling.
TECAN acknowledges that it has no authority to and will not sell slide
racks or any other AUTOCYTE specific components to any other party.
2.2 In case of the termination of this Agreement TECAN retains the right to
sell to AUTOCYTE all AUTOCYTE specific parts in stock at cost plus 10%
handling fee, but at a maximum of CHF 250'000.--.
2.3 TECAN will supply AUTOCYTE with the most current release of the system
software ("Integrator Software").
If TECAN discontinues the support of the system software, TECAN shall
hand-over to AUTOCYTE the system software development tools and the
source code. AUTOCYTE shall not have any further rights against TECAN
with respect to the system software.
Any changes in the system software will be treated like product changes
(see chapter 5: Product changes).
2.4 AUTOCYTE assumes all responsibility for the application software
development, documentation (including operating manual), installation
and after sales support.
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3. PURCHASE OF PRODUCT, QUANTITIES AND PRICING
3.1 Subject to the terms and conditions of this Agreement, AUTOCYTE shall
purchase, and TECAN shall sell to AUTOCYTE the Product. AUTOCYTE shall
purchase the Product hereunder in accordance with the price schedule in
Exhibit B. A Product is considered to be purchased during the Contract
Year in which the Product is shipped from TECAN. Upgraded or repaired
units shipped ex TECAN of Product do not count as purchased during the
Contract Year under this Agreement.
3.2 For the Contract Year starting on January 1, 1999 and ending on
December 31, 1999, AUTOCYTE is deemed to be in the ***-*** units price
bracket, at CHF ******.--. If AUTOCYTE is overachieving the target of
*** units, AUTOCYTE is reimbursed according to the following scheme
(example):
Over-achievement: e.g. Purchase of *** units per year: TECAN
shall credit AUTOCYTE *** x (CHF
*****.-- - *****.--) = CHF ******.--
If, to the contrary, AUTOCYTE will purchase less than *** units in the
Contract Year starting on January 1, 1999 and ending on December 31,
1999, AUTOCYTE will be invoiced the difference according to the
following scheme (example):
Under-achievement: e.g. Purchase of ** units per year: TECAN
shall invoice AUTOCYTE ** x (CHF
*****.-- - *****.--) = CHF ******.--
3.3 For each Contract Year AUTOCYTE and TECAN agree on the quantity of
units to be purchased by AUTOCYTE. The new minimum quantity has to be
negotiated 60 days before the expiration date of Contract Year. If
AUTOCYTE and TECAN fail to agree on the quantity for the new Contract
Year, the number of units sold during the preceding Contract Year shall
determine the applicable price bracket.
3.4 The prices of the Product as stated in Exhibit B are valid for a
Contract Year.
Prices for the following Contract Year change pursuant to the increase
in production costs for TECAN. TECAN shall consult with AUTOCYTE on
suggested new prices 60 days before the expiration date of each
contract year. If the parties fail to reach an agreement on the new
prices, TECAN shall have the right to unilaterally change the prices to
reflect the increase in production costs, if any. A price increase
shall not exceed increase of the official Swiss consumer price index.
3.5 For standard TECAN RSP 5000 Spare Parts TECAN will grant AUTOCYTE a
discount of **% on International List Prices (ILP) (as revised by TECAN
at its sole discretion from time to time). No discount is applicable
for OEM specific Spare Parts (see Exhibit C).
3.6 On single orders for Spare Parts exceeding a total of CHF ******.--
TECAN will grant to AUTOCYTE an additional discount of **%, on the ILP
of both standard TECAN and OEM specific Spare Parts.
4. ORDERS AND DELIVERY, PAYMENT AND SHIPMENT
4.1 In the first month of each quarter, AUTOCYTE will forecast orders of
the Product for the following 12-month period (the Production
Forecast). The Production Forecast is to be used for planning purposes
only, and summarizes the next 12 months forecast activity.
Products shall be ordered by means of a binding, non-cancelable
purchase order.
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Each purchase order shall contain a description of the Products
purchased, quantity purchased, routing instructions, destination,
delivery date and confirmation price. TECAN agrees to accept
telegraphic or telefaxed purchase orders.
The minimal order quantity of Product per purchase order is ** units.
The ** units can be shipped in lots of ** units, whereas the second lot
will be shipped 2 - 4 weeks after the first.
4.2 The payment shall be in CHF. Payment shall be net in Swiss Francs (CHF)
within 60 days from the date of invoice. Delays in payment will result
in the usual and applicable interest rates.
4.3 The exchange rate for deliveries is set to CHF 1.42 / USD for 1999.
Exchange rate fluctuations between the CHF and USD will be checked
twice annually on July 1 and December 31 of each Contract Year and the
exchange-risk is split 50:50 by AUTOCYTE and TECAN. TECAN shall
invoice/issue credit note to AUTOCYTE of 50 % of the exchange rage
fluctuation influence on the ordered and paid instruments
semi-annually. For the calculation basis the average exchange rate of
the previous 6 months as published by a leading Swiss bank is used.
4.4 Product prices are quoted ex works. Shipping costs are quoted as DDU
(Delivered duty unpaid).
4.5 Delivery times:
6 - 8 weeks after receipt of AUTOCYTE's purchasing order and
availability of forecast figures. 10 - 12 weeks after receipt of
AUTOCYTE's purchasing order, when no forecast figures are available.
4.6 Shipment of Product to AUTOCYTE, North Carolina is done via the same
carrier selected by TECAN for any delivery to AUTOCYTE as quoted in
EXHIBIT B.
4.7 Freight charges of any other delivery to AUTOCYTE or any drop shipment
will be paid by AUTOCYTE. Title and risk of loss or damage of any items
delivered hereunder shall pass to AUTOCYTE upon delivery to the common
carrier pursuant to the INCOTERM rules (1990).
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5. PRODUCT CHANGES
5.1 TECAN may, from time to time, modify or update the Product, spare parts
or accessory material. All changes, having an effect on the
functionality of the Product shall be announced in writing to the
Purchasing Manager at AUTOCYTE. In these cases, AUTOCYTE shall have the
right to reject the changes within 30 days, in writing, with the
exception of changes that are required by law. All changes should be
announced in advance.
TECAN will provide a listing of all new changes incorporated to the
Product on a semi-annual basis as per July 1 and December 31 of each
calendar year.
5.2 Only changes accepted in writing by the Purchasing Manager or any other
competent manager of AUTOCYTE shall be added as an amendment to the
specification in Exhibit A.
5.3 Enhancements in the Product, spare parts and accessory materials
requested by AUTOCYTE are subject to TECAN's discretion and price
policy.
5.4 Any major changes in the application software or the documentation
governing control of the Product shall be forwarded to the responsible
product manager/sales engineer at TECAN to guarantee the compliance
of the Product with the specifications in Exhibit A and the Project
Book V. 2.1. This Project Book V. 2.1. will be frozen. All future
changes shall be implemented according to applicable procedures (e.g.
ISO9000, engineering change procedures).
6. QUALITY CONTROL
Every Product and spare part(s) shall be subject to a quality control
inspection by TECAN, which conforms to AUTOCYTE manufacturing QC
specifications, and non-conforming products shall not be shipped by
TECAN. With each instrument supplied the full quality control report
shall be shipped.
7. INSTALLATION AND TRAINING
7.1 AUTOCYTE will install the Product and train customers of AUTOCYTE with
regard to the Product.
7.2 TECAN will provide upon request training for AUTOCYTE and/or its
distributors against payment of CHF 2'000.-- per trainee and week. The
minimal number of participants per training is 3 nos. The training will
cover the following subjects:
- Installation
- Service
- Preventive Maintenance
- Trouble Shooting
for the Product. This training will not cover the application software
nor any aspects of the application. Solely AUTOCYTE can offer such
training. The duration of the training is one week; location of this
training is at TECAN's Headquarters in Switzerland, travel and
accommodation cost to be borne by the trainees.
8. WARRANTY AND SERVICE
8.1 Any Product and spare parts and all documents or other items relating
hereto supplied by TECAN under this Agreement shall be manufactured
(or, as applicable, prepared) in accordance with the specifications and
manufacturing practices generally accepted in its business domain.
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8.2. TECAN is an ISO 9001 certified Company.
8.3 TECAN warrants each Product for a period of fifteen (15) months from
the date of shipment or twelve (12) months from the date of
installation at a customer site, whichever period expires first. TECAN
shall warrant that each Product is free from defects in workmanship and
materials and is manufactured in conformity with the specifications
under this Agreement.
Disposable parts of the Product, i.e. valves, tips, fittings, tubing's
and syringes, and all parts in contact with liquids are excluded from
any warranty.
If a Product or part of a Product covered by the aforementioned
warranty is found defective, TECAN shall, at its option, repair or
replace the defective Product or part of Product. AUTOCYTE shall not
have any further remedies. In particular, TECAN shall not be liable for
any consequential damages. Not withstanding the forgoing, TECAN's
liability shall in any event be limited to the amount of the purchase
price of the respective Product.
8.4 TECAN represents and warrants that Product, spare parts and accessory
materials shall be delivered free of any rights of any third party.
TECAN has good title to and has full power to sell Product, spare parts
and accessory materials to AUTOCYTE hereunder.
8.5 For a period of seven (7) years from the date of delivery of the last
Product unit shipped hereunder, TECAN agrees to maintain the ability to
deliver spare parts.
8.6 AUTOCYTE shall provide for sufficient insurance coverage against third
party claims and liabilities (including, but not limited, to product
liability and consequential damages).
8.7 Transportation costs for goods under warranty to and from TECAN will be
taken by TECAN. Transportation costs for repair goods to and from TECAN
will be taken by AUTOCYTE.
9. INDEMNIFICATION
9.1 TECAN shall defend, indemnify and hold harmless AUTOCYTE from and
against all loss, liability and expense, including legal fees and
disbursements, court costs, and settlement payments actually incurred
by AUTOCYTE as a results of, arising out of or related to TECAN's
breach of their respective representations, warranties and covenants
set forth in this Agreement. Notwithstanding the foregoing, TECAN's
obligation under this clause 9.1 shall in any event be limited to the
amount of the purchase price of the respective Product as long as the
product functions properly according to AUTOCYTES intended use of such
product.
9.2 AUTOCYTE shall defend, indemnify and hold harmless TECAN from and
against all loss, liability and expense, including legal fees and
disbursements, court costs, and settlement payments actually incurred
by TECAN as a result of, arising out of or related to AUTOCYTE's breach
of its representations, warranties and covenants set forth in this
Agreement. AUTOCYTE'S obligation under this clause 9.2 shall in any
event be limited to the amount of the purchase price of the respective
Product.
9.3 In no event shall either party be liable to the other party hereunder
for any consequential, indirect or special damages.
9.4 TECAN does not assume any liability for damages resulting from improper
handling or installation or from disregard of operating requirements.
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10. TERM OF AGREEMENT AND TERMINATION
This Agreement shall commence on January 1, 1999, and shall be
effective until December 31, 1999. This Agreement shall automatically
be renewed for additional one-year terms subject to either party's
right to terminate this Agreement by giving the other party at least
hundred-twenty (120) days written notice subject to article 13.1 prior
to the expiration date of the current term and thereafter to the
anniversary date.
11. SETTLEMENTS OF DISPUTES
Both parties agree to do their best to settle any dispute arising from
this Agreement amicably. The right to pursue the proceeding set forth
in article 15.2 remains reserved.
12. CONFIDENTIAL INFORMATION
Each party understands that during the execution of this Agreement, it
may acquire or have access to information that is confidential and of
great value to the other ("confidential information").
Therefore, each party ("receiving party") agrees that during the term
of this Agreement and for a period of three (3) years after termination
of this agreement, it shall not use (except for the purposes set forth
in this Agreement) or disclose the confidential information of the
other party ("the disclosing party") without the disclosing party's
prior written consent and each party agrees that it will impose the
same obligations on its employees who have access to such confidential
information.
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13. MISCELLANEOUS PROVISIONS
13.1 All written notices and demands required or permitted to be given or
made pursuant to this Agreement shall be in English and shall
conclusively be presumed for all purposes of this agreement to be given
or made at the time the notice or demand is personally given or made,
or at the time it is sent by registered mail, or fax or courier
addressed as follows:
If to AUTOCYTE: If to TECAN:
AUTOCYTE Inc. TECAN AG
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Feldbachstrasse 80
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 8634 Hombrechtikon
USA SWITZERLAND
Or to such other address as to which either party may advise the other
in writing that notices should be sent.
13.2 This Agreement shall be binding upon and relate to the benefit of the
parties hereto, their successors and assignees. This Agreement shall be
assignable by either party only with the prior written consent of the
other, except that either party may assign this Agreement without the
consent of the other to a wholly owned subsidiary or to the purchaser
of all its stock or assets of its business to which this Agreement
relates.
13.3 Within reasonable limits TECAN will assist AutoCyte Inc. in approval
and certification matters. Such assistance would include but is not
limited to:
- Copies of drawings and QC procedures for the "AUTOCYTE
PREP"(TM) System
- Allowing audits announced latest two weeks in advanced on
TECAN premises once a year (2 days max.)
13.4 This Agreement supersedes earlier agreements between TECAN or it's
subsidiaries and AUTOCYTE or any of its predecessors regarding the
Product.
14. YEAR 2000 READINESS
TECAN is firmly committed to ensuring that RSP5000 as the base product
and Integrator as the base software are Millenium-compliant. This
certification is contingent on proper operation of the computer
hardware and operating system.
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15. GOVERNING LAW AND ARBITRATION CLAUSE
15.1 This Agreement shall be governed by, and construed in accordance with,
the laws of Switzerland, to the exclusion of the Swiss rules on
conflicts of laws and to the exclusion of the 1980 UN Convention on
Contracts for the International Sale of Goods.
15.2 Any disputes or controversies arising out of or in connection with this
Agreement, including disputes on its conclusion, binding effect,
amendment and termination, shall be resolved to the exclusion of the
ordinary courts by a sole arbitrator in accordance with the
International Arbitration Rules of the Zurich Chamber of Commerce.
Arbitration shall be conducted in the English language.
Hombrechtikon, June 26, 1999 Burlington, June 26, 1999
TECAN AG AUTOCYTE INC.
/s/ ▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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S&M Manager F&A Manager Chief Financial Officer
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EXHIBIT A
"AUTOCYTE PREP"(TM) PREPARATION SYSTEM Part. No. 505 107 includes:
DESCRIPTION: PART NUMBER:
1 Specimen tray 505250
1 RSP 5051 including: 505100
1 1000 ul DiTi C option 505215
1 Additional 465 Dilutor 445003
4 5 ml syringes 300206
1 QUAD Arm complete 505225
1 Vacuum set including:
1 Waste bottle 505255
1 Tubing Kit 505246
1 Tube evacuator 505248
1 Tubing kit 505251
1 Solenoid Valve Kit 520100
1 Operating manual 390350
1 Misc. hardware set including:
1 1 - 4 distribution block (Vacuum) 505254
1 Special tubing guide 505249
1 Waste bottle 505255
Following parts are in responsibility of AUTOCYTE and are therefore excluded
from "AUTOCYTE PREP"(TM)
PREPARATION SYSTEM Part. No. 505 107:
1 Waste station including: 505220
1 Tip rack ......
1 Waste / wash station 505222
1 Tip loading rack 505221
1Base Plate 0552542.P0
4 Slide racks 505235
The "AUTOCYTE PREP"(TM) system does not include the controlling PC, nor the
application software written in Integrator.
The "AUTOCYTE PREP"(TM) PREPARATION SYSTEM is white including the safety guard
and instead of the TECAN-Logo the AUTOCYTE-Label is placed.
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EXHIBIT B
PRICE LIST OF PRODUCTS FOR 1999
- "AUTOCYTE PREP"(TM) SYSTEM, TECAN P/N 505 107
PRODUCT PRICE BRACKET PRICE PER UNIT IN CHF
less than or equal to *** UNITS/YEAR ******
*** - *** UNITS/YEAR ******
greater than *** UNITS/YEAR ******
Prices are valid for purchase quantity within a 12 months period
starting January 1, 1999 and lasting until December 31, 1999. According
to the forecast received from AutoCyte Inc., AutoCyte plans to purchase
*** instruments in 1999. Accordingly the price bracket set for 1999 is
for *** - *** COMPLETE INSTRUMENTS.
- "AUTOCYTE PREP"(TM) SYSTEM: UPGRADES TECAN P/N 505 210
PRICE PER UNIT IN CHF ******
- "AUTOCYTE PREP"(TM)SYSTEM: PREVENTIVE MAINTENANCE KIT TECAN P/N 505 260
PRICE PER UNIT IN CHF: ******
- SHIPPING COSTS
TRANSPORTED UNITS PER ORDER TRANSFER PRICE
PER UNIT IN CHF
ONE UNIT PER SHIPMENT ******
TWO UNITS PER SHIPMENT ******
THREE UNITS PER SHIPMENT ******
FOUR UNITS PER SHIPMENT ******
FIVE UNITS AND MORE PER SHIPMENT ******
Prices are valid within a 12 months period starting January 1, 1999 and lasting
until December 31, 1999.
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EXHIBIT B
ORDER NO. DESCRIPTION QTY. TRANSFER PRICE CHF
--------- ----------- ---- ------------------
SPARE PARTS:
505 250 Specimen Tray 1 *********
505 225 QUAD-Arm complete 1 *********
505 220 Waste Station (complete) 1 *********
505 221 Tip Loading Tool 1 *********
0552542.P0 Base Plate 1 *********
505 235 Slide Rack 4 *********
505 255 Waste Bottles for Vacuum System 1 *********
505 248 Tube Vac 1 *********
505 251 Tubing Kit complete 1 *********
505 227 1-4 Manifold on QUAD 1 *********
505 222 QUAD waste trough incl. elbow 1 *********
505 226 QUAD Tubing complete 1 *********
505 247 Vacuum Tubing Pump - Bottle 2 *********
505 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇-▇▇▇▇▇ 1 *********
505 249 Tubing Guide 1 *********
505 230 Tip Bundles 4 *********
0100 726 Ball Slide 1 *********
0100 740 BioHazard Disposal Bag (100 Pieces) 1 *********
0100 735 Labels (BioHazard, Contaminated, Waste) 1 *********
FOR FOLLOWING PARTS ILP - 30% IS APPLICABLE ILP CHF
(INTERNATIONAL LIST
PRICE)
------
552 483 DiTi spring loaded Z-Rack 1 *********
505 215 DiTi C 1000 ul RIAS complete 1 *********
320 002 Diluter 465/87 1 *********
445 003 Diluter 465/87 EMV CE 1 *********
520 350 CPU 87 1 *********
520 353 PONI/ALID left 1 *********
503 308 PONI/ALID left EMV CE 1 *********
530 360 FLEX-Cable left 1 *********
530 304 FLEX-Cable left EMV CE 1 *********
520 450 ARM left 1 *********
520 453 ARM left EMV CE 1 *********
520 355 Motherboard 1 *********
520 310 Motherboard EMV CE 1 *********
520 100 Option 3.1: Solenoid Valve Kit complete 1 *********
240 000 Aspirating Tubing 1.5x2.5x900 4 *********
118 566 Pipetting Tubing DiTi 1.5x2.5x1200 5 *********
520 520 Connect. Tubing Valve - IIII-Block 4 *********
520 885 Connect Tubing Valve - Diluter 2 *********
800 331 Tubing Distribution Block - IIII-Block 4 *********
390 350 Operating Manual RSP 5051 1 *********
ILP IS SUBJECT OF CHANGE WITHOUT NOTIFICATION.
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EXHIBIT C
ORDER NO. DESCRIPTION TRANSFER PRICE CHF
--------- ----------- ------------------
REPAIR PARTS:
R503308 Repair of PONI / ALID left CE version *********
R505215 Repair of ▇▇▇▇ ▇▇▇▇ Kit complete *********
R520350 Repair of CPU-87 Board *********
R520353 Repair of PONI/ALID 87 "LEFT" with cable *********
R520355 Repair of Motherboard 87 *********
R520450 Repair of arm LEFT *********
R520453 Repair of arm LEFT CE version *********
R520455 Repair of AutoCyte arm CE version *********
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