EX-10.1 Distribution and Development AgreementDevelopment Agreement |
|
|
You are currently viewing: This Development Agreement involves
CLARIENT, INC | ChromaVision Medical Systems, Inc. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
Exhibit 10.1
Distribution
and
Development
Agreement
DakoCytomation Denmark A/S (Ref. no. 2967)
Clarient, Inc.
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been field separately with the Securities and Exchange Commission pursuant to an application for confidential treatment under Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
1
Table of contents
2
LIST OF EXHIBITS
3
This Distribution and Development Agreement is entered into
W I T N E S S E T H:
WHEREAS Clarient is a company in the business of, among other things, developing, producing and selling of products within the field of image analysis and virtual microscopy; and
WHEREAS DakoCytomation is a diagnostic company with world-wide activities within the field of development, production and sale of reagents and instruments within the field of pathology and has a world-wide marketing and sales organization; and
WHEREAS DakoCytomation desires to obtain an exclusive right to purchase the Products from Clarient and to be appointed as Clarient’s exclusive distributor world wide; and
WHEREAS Clarient is willing to sell the Products exclusively in certain areas to DakoCytomation and make such an appointment, subject to the terms and conditions set forth in this Agreement; and
WHEREAS the Parties have agreed to enter into a collaboration with the purpose of further developing Clarient’s present products and to develop new products subject to the terms and conditions set forth in this Agreement.
NOW THEREFORE in consideration of the mutual covenants and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, have entered into this Agreement on the following terms and conditions:
Article 1 Definitions
1.1 “ACIS III” shall mean: The further development of the Product as described in Exhibits 14 and 15 .
1.2 “Adverse Event” shall mean:
4
1.2.1 Any malfunction, failure or deterioration in the characteristics and/or performance of a device/material, as well as any inadequacy in the labeling or the instructions for use which, directly or indirectly, might lead to or might have led to the death of a patient or user or of other persons or to a serious deterioration in their state of health;
1.2.2 Any technical or medical reason in relation to the characteristics or performance of a device/material for the reasons referred to in Subclause 1.2.1 leading to systematic recall of devices/materials of the same type by Clarient.
1.3 “Affiliate” shall mean any entity that directly or indirectly controls, is controlled by or is under common control with a Party to this Agreement, where “control” means direct or indirect possession of at least fifty percent (50%) of the outstanding voting securities of a corporation or at least fifty percent (50%) interest of the income of such corporation or a comparable ownership in any other type of entity, provided, however, that if the law of the jurisdiction in which such entity operates does not allow fifty percent (50%) or greater ownership by a Party to this Agreement, such ownership interest shall be at least forty percent (40%).
1.4 “Agreement” shall mean this entire Agreement and all of its Exhibits attached hereto.
1.5 “Business Day(s)” shall mean any day other than a Saturday, Sunday or public holiday in Denmark and/or the United States.
1.6 “Calendar Day(s)” shall mean any day and not limited to Business Days.
1.7 “Calendar Quarter(s)” shall mean the three (3) month periods ending on 31 March, 30 June, 30 September or 31 December.
1.8 “Calendar Year” shall mean the period 1 January to 31 December of a given year.
1.9 “Contract Year” shall mean the period 1 July to 30 June of a given year, except that the first Contract Year shall be the period from the Effective Date to 30 June 2006.
1.10 “Certificate of Conformance” shall mean documented evidence prepared by Clarient that a given Product meets the Product Specifications and Acceptance Criteria stated in Exhibits 1 and 2 .
1.11 “Defect” or “Defective” shall mean that the Product does not substantially conform to the capital Product Specifications and Acceptance Criteria, stated in Exhibits 1 and 2 .
1.12 “Date of Invoice” shall mean the date the invoice is issued by Clarient..
1.13 “Designated Representative” shall mean a third party agreed upon by the Parties to review or inspect essential and confidential information and/or documentation in order to support regulatory requirements.
1.14 “Effective Date” shall mean the last date of execution of this Agreement.
1.15 “Exclusive Field of Use” shall have the meaning set forth in Article 3.1.
5
1.16 “Field of Use” shall have the meaning set forth in Article 3.
1.17 “Field Service Engineering” shall have the meaning set forth in Exhibit 11 .
1.18 “FDA” shall mean the United States Food and Drug Administration and any successor agency thereto.
1.19 “Instruments” shall mean the Clarient ChromaVision ACIS II instrument for use within the field of image analysis and virtual microscopy, as defined in the Product Specifications in Exhibit 1 to this Agreement and the ACIS III instrument described in Exhibits 14 and 15 , which Product Specifications may from time to time be amended by Clarient with DakoCytomation’s prior reasonable written consent.
1.20 “Intellectual Property” shall mean patents, trademarks, service marks, trade secrets, copyrights, know-how and related rights and knowledge.
1.21 “IVD Directive” shall mean Council Directive 98/79/EC of the European Parliament and of the Council of 27 October 1998 on in vitro diagnostic medical devices, as it may be amended from time to time.
1.22 “New Price” shall mean the Price the Parties have agreed upon to be used during the New Pricing Period.
1.23 “New Pricing Period” shall mean the Contract Year following the Pricing Period.
1.24 “Nonexclusive Field of Use” shall have the meaning set forth in Article 3.2.
1.25 “Order Confirmation” shall mean Clarient’s written confirmation of DakoCytomation’s Purchase Orders for the Products.
1.26 “Phase 1 of the Agreement” shall mean the period of time from 1 September 2005 until 30 June 2006 during which period the Products will be launched in the United States of America and Canada with DakoCytomation branding.
1.27 “Phase 2 of the Agreement” shall mean the period of time from 1 July 2006 or such other date as the Parties offer for sale on a world-wide basis the ACIS III Product, with DakoCytomation branding.
1.28 “Price(s)” shall mean the Prices specified in Exhibit 4 and Exhibit 11 and all subsequent changes hereto according to Article 6.
1.29 “Pricing Period” shall mean the period for which the Price has been agreed and fixed.
1.30 “Products” shall mean the reference to the Instruments and/or the Software delivered by Clarient to DakoCytomation under this Agreement.
1.31 “Product Specifications” means the Clarient internal manufacturing specifications, including technical and performance specifications and Acceptance Criteria relating to the characterization of the Products, a copy of which is attached hereto and incorporated herein by reference as Exhibits 1 and 2 .
6
1.32 “Purchase Order” shall mean any request for delivery of the Product.
1.33 “QSR” shall mean the Quality system regulation set forth at 21 C.F.R §820, as may be amended, which includes current Good Manufacturing Practices (“GMP”).
1.34 “Serious Incident” means an incident involving a Product which is reportable to a Competent Authority as defined in Article 5 of Annex III of the IVD Directive and the European Commission Medical Device Vigilance Guidelines or such other guidelines as may be issued from time to time or FDA reporting requirements.
1.35 “Significant Change” shall mean a change in the manufacturing, manufacturing procedures and/or in the production process that alters the Product Specification or registration under the In-Vitro Diagnostic Directive, QSR or any other relevant regulation.
1.36 “Software” shall mean the Clarient ChromaVision Systems Automated Cellular Imaging System Software and all other included and additional Software related to the Instruments as specified in Exhibit 2 to this Agreement which Product Specifications may from time to time be amended by Clarient with DakoCytomation’s prior written reasonable consent that is delivered by Clarient to DakoCytomation under this Agreement either alone or together with the Instruments as well as any updates, upgrades and new generations of such software for the Instruments.
1.37 “Spare Parts” shall have the meaning ascribed to it is Article 24.1.
1.38 “Technical Services” shall have the meaning set forth in Exhibit 11 to this Agreement.
1.39 “USD” shall mean the official currency of the United States, US Dollars ($).
Article 2 Products
2.1 Clarient has developed the Instruments, and manufactures and markets the Instruments in accordance with the Product Specifications and Acceptance Criteria set forth in Exhibit 1 .
2.2 Clarient has developed the Software, and manufactures and markets the Software in accordance with the Product Specifications and Acceptance Criteria set forth in Exhibit 2 .
2.3 Clarient has marketed the Products in packages/combinations such that such Products are ready to use upon Clarient’s installation at end-user sites.
2.4 Exhibits 1 and 2 shall be amended and updated from time to time upon mutual written agreement between the Parties as soon as changes in the Product Specifications and Acceptance Criteria for the Instruments and the Software occur, e.g. after the completion of the development project.
7
Article 3 Field of Use
3.1 Exclusive Field of Use. The Parties agree that the Exclusive Field of Use under this Agreement shall be research and clinical applications in human in vitro diagnostics.
3.2 Nonexclusive Field of Use. The Parties agree that the Nonexclusive Field of Use under this Agreement shall be comprised of Biotech and Pharmaceutical companies and their academic research partners using the Products for drug discovery and development purposes in the United States.
3.3 DakoCytomation shall have an exclusive option to extend the Exclusive Field of Use to cover veterinary health care. The Parties will use commercially reasonable efforts to negotiate in good faith the terms for such an extension. DakoCytomation may exercise such option at any time during the Term, provided, however, that the Parties shall have six (6) months following DakoCytomation’s exercise of such option to negotiate the terms of such extension. If after such six (6) month period, the Parties have failed to reach agreement on the terms of the extension, the option shall expire and Clarient shall be free to offer the Products to one or more third parties for use in the field of veterinary health care.
Article 4 The Territory
4.1 The Territory shall be the whole world.
4.2 Notwithstanding article 4.1, with regards to any proposed sale of any Product to be installed in a country outside the United States, Canada, European Union and Japan, the Parties agree to discuss risks and determine the conditions, potential limitations and protections to be considered in connection with such installations.
Article 5 Appointment as Exclusive / Nonexclusive Distributor / Minimum Ordering Requirements
5.1 Clarient hereby appoints DakoCytomation and DakoCytomation hereby agrees to act as the exclusive distributor for the Products. Clarient hereby agrees to refrain from distributing the Products within the Exclusive Field of Use in the Territory.
5.2 Clarient hereby appoints DakoCytomation and DakoCytomation hereby agrees to act as the nonexclusive distributor for the Products within the Nonexclusive Field of Use in the Territory.
5.3 DakoCytomation agrees to use commercially reasonable efforts and good faith in marketing the Products to maximize the sales of the Products.
5.4 From the Effective Date Clarient will refer to DakoCytomation current and prospective customers outside the United States and Canada within the Exclusive Field of Use. In the event the Parties do not agree on which Party is responsible for a customer, then the Parties shall refer such dispute to the Head of US Sales for Clarient and the Vice President for Sales in the US for DakoCytomation.
5.5 Clarient will make available to DakoCytomation its sales force specialists in the Products to support DakoCytomation’s sales team for the ongoing sales efforts of DakoCytomation for a period of twenty-four (24) months or such other period as the Steering Committee determines.
8
5.6 Notwithstanding article 5.1, Clarient may fulfill its obligations to those customers listed as Active Leads on the list of Clarient’s current and prospective customers in the Exclusive Field of Use, which shall be provided by Clarient to DakoCytomation within fifteen (15) Days of the Effective Date, provided that such Active Leads do not have binding offers from Clarient that expires more than ninety (90) days after the Effective Date and that such Active Leads place binding orders before the expiration of Clarient’s binding offers. After the expiration of such offers to Clarient’s Active Leads, Clarient will refer to DakoCytomation its Active Leads within the Exclusive Field of Use.
5.7 During the Term of this Agreement, DakoCytomation may appoint third parties, including its Affiliates and independent distributors, to sell Products in accordance with the terms and conditions of this Agreement (collectively “Subdistributors”); provided that DakoCytomation shall (i) take such action as shall be reasonably necessary to advise each Subdistributor of DakoCytomation’s obligations under this Agreement; (ii) be liable for any breach by any such Subdistributor of this Agreement (as if such Subdistributors were parties to this Agreement) and for any violation of applicable laws or regulations by such Subdistributors; (iii) indemnify and hold Clarient harmless from and against any claims, causes of action, costs, penalties, losses or liabilities incurred by Clarient as a result of any breach, violation, use, infringement or misappropriation by or through such Subdistributors; and (iv) not allow any competitor of Clarient (as reasonably determined by Clarient) to be a Subdistributor.
5.8 Except as set forth in Article 5.6, neither Clarient nor any Affiliate controlled by Clarient shall supply the Products or competing products to the Products to end users or others for use within the Exclusive Field of Use or for resale for such use unless otherwise expressly stated in this Agreement or with the prior written consent of DakoCytomation.
5.9 During the Term, DakoCytomation shall purchase the Products exclusively from Clarient, and will not purchase, market, distribute, license or otherwise supply any competing products manufactured by any third party to end users or others.
5.10 Except as otherwise provided herein, DakoCytomation shall order (i) a minimum of 15 Instruments with included Software (including the 10 Instruments mentioned in Article 8.1) from Clarient in the first Contract Year of the Agreement; and (ii) a minimum of 40 Instruments with included Software in every Contract Year thereafter (the “Minimum Order Requirement”).
5.11 In the event DakoCytomation fails to fulfill the Minimum Order Requirement set forth in Article 5.10 in a Contract Year, DakoCytomation shall be entitled to cure such shortfall by issuing Purchase Orders within thirty (30) Calendar Days of the end of such Contract Year. In the event that DakoCytomation fails to cure such shortfall within such thirty (30) day cure period, Clarient may at its option, upon thirty (30) days written notice suspend or terminate the exclusive distribution relationship set forth in Article 5.1, in which case DakoCytomation shall become a non-exclusive distributor of the Products. Clarient shall provide such notice to DakoCytomation within thirty (30) days after the end of DakoCytomation’s thirty (30) day cure period.
9
5.12 Article 5.11 shall not apply during the first Contract Year.
5.13 Within the Nonexclusive Field of Use, Clarient shall not directly or indirectly, through any subdistributor or otherwise appoint any Companies that DakoCytomation regards as competitors as subdistributors of the Products. Clarient shall notify DakoCytomation of the proposed appointment of any subdistributor and DakoCytomation shall promptly and reasonably determine whether such proposed subdistributor is a competitor.
5.14 To the extent Clarient has elected to suspend or terminate DakoCytomation’s exclusive distributorship according to Article 5.11, Article 5.13 shall apply only for Ventana Medical Systems Inc. and any of its Affiliates.
Article 6 Prices
6.1 The Prices to be paid by DakoCytomation for the Products are specified in the price list attached hereto and incorporated herein by reference as Exhibit 4 and shall be exclusive of VAT and transportation.
6.2 All Prices shall be stated in USD.
6.3 All Prices shall be renegotiated annually upon the written request of either Party no later than three (3) months prior to the beginning of every Contract Year and shall be valid for Pricing Periods of one Contract Year, provided that the first Pricing Period shall begin on the Effective Date and continue through 30 June 2006; thereafter a New Pricing Period shall take effect covering the following Contract Year.
6.4 During the last Calendar Quarter of each Contract Year of the Term after 2005, the Parties agree to enter into good faith discussions with the objective to agree upon a New Price on or before 1 June of such Contract Year. During such negotiations the Parties shall give due consideration to the cost variations in raw materials and labor costs, quantities of the Products expected to be delivered during the previous and subsequent Pricing Periods and the necessity of marketing the Products at competitive prices.
6.5 If the Parties cannot reach an agreement on a New Price in accordance with clause 6.4, the prices prevailing shall remain in force for the New Pricing Period, provided that the Parties shall continue their efforts to agree on a New Price. If agreement is not reached within the New Pricing Period, this Agreement shall automatically terminate by the end of such New Pricing Period and Clarient shall have no obligation to supply Products ordered prior to such termination for delivery after such termination.
6.6 Should neither Party request a price adjustment as described in 6.3, the prices then prevailing shall remain unchanged in the subsequent Pricing Period.
6.7 Notwithstanding article 6.3, Clarient may increase the Price Semi-Annually serving notice of two (2) months, provided that such increase does not exceed four percent (4%) and is justified by a significant change in price in raw materials and/or other documented production costs. In the event that Clarient increases the Price of Products, DakoCytomation reserves the right to conduct a market analysis for a period of ninety (90) days to determine quantities of Products for purchase orders and forecasts.
10
6.8 If Clarient increases the Price pursuant to Article 6.7 by more than four percent (4%) during any twelve (12) month period during the term of the Agreement, DakoCytomation shall not thereafter be required to comply with any obligations set forth in Article 5.10 and the binding portion of any forecast under Article 7.1 for the remainder of such Contract Year or such other period determined in good faith by the Steering Committee.
6.9 In the event of significant reductions in the price in raw materials and/or other documented production costs the Parties agree to enter into good faith negotiations in order to reduce the Price accordingly.
6.10 The Parties agree that DakoCytomation determines its own retail prices
6.11 DakoCytomation shall bear all cost and risks of collecting payments from its customers relating to the Products.
Article 7 Forecast
7.1 Once per Calendar Quarter DakoCytomation shall provide Clarient with a twelve (12) month rolling forecast for quantities of Instruments and Software required by DakoCytomation during the following twelve (12) calendar months. The first three months of such forecast will constitute a binding order of Instruments. The last nine (9) months of the forecast will not be binding on either Party and will be used only for planning purposes. DakoCytomation’s binding forecasts will cover each Calendar Quarter of the Calendar Year. DakoCytomation will provide forecasts to Clarient not later than five (5) Business Days after the beginning of the Calendar Month prior to each Calendar Quarter, i.e. December, March, June and September.
7.2 Absent agreement of the Parties, the quantities ordered by DakoCytomation pursuant to Article 8 may not be less than the forecasted quantities in the binding purchase order portion of the forecast, but DakoCytomation may order pursuant to Article 8, quantities greater than forecast and Article 8.7 will apply to any order in excess of the forecast.
7.3 DakoCytomation’s first forecast for the first twelve (12) months following the Effective Date is described in Exhibit 4 .
Article 8 Ordering and Supply Procedure
8.1 An initial Purchase Order from DakoCytomation to Clarient for ten (10) Instruments with included Software shall be issued upon the Parties’ signature of this Agreement. Clarient undertakes to make delivery of such ten (10) Instruments and Software within sixty (60) Calendar Days after the Effective Date.
8.2 During the term of this Agreement Purchase Orders issued are to be sent to:
Clarient, Inc. 33171 Paseo Cerveza San Juan Capistrano CA 92675 California United States of America
11
8.3 Purchase Orders shall be issued by DakoCytomation’s purchasing department as defined by DakoCytomation and shall be consistent with the quantities and lead time stated hereunder and shall specify:
a. The Instrument and Software number of each unit ordered. b. Quantities of each product number ordered. c. Price of each unit ordered. d. Delivery date for each unit ordered. e. Shipping address for each unit ordered.
8.4 All Purchase Orders shall refer to this Agreement. In all other respects, the obligations and rights of the Parties will be governed by the terms and conditions of this Agreement and not the terms and conditions of any Purchase Order.
8.5 All Purchase orders shall be made by DakoCytomation in lots of at least five (5) Instruments with included Software at a time.
8.6 For Instruments with included Software in the binding portion of the forecast as set forth in Article 7.1, Clarient undertakes to meet such orders within sixty (60) Calendar Days from its receipt of the Purchase Order.
8.7 In the event DakoCytomation orders additional quantities of Products in excess of the quantities stated in the binding portion of its Article 7 forecast, Clarient will produce and deliver to DakoCytomation such additional quantities that (i) exceed DakoCytomation’s binding forecast by up to fifty percent (50%) within ninety (90) days of its receipt of the Purchase Order for such additional quantities, and (ii) within one hundred twenty (120) days of its receipt of the Purchase Order for additional quantities that exceed DakoCytomation’s binding forecast by more than fifty percent (50%). Notwithstanding the foregoing, Clarient’s delay in supplying Products under this Article shall be excused, if Clarient has supplied twenty-five (25) or more Instruments with in the Calendar Month in question or seventy-five (75) Instruments within the three (3) month period prior to such delay.
8.8 Clarient shall confirm in writing all Purchase Orders within three (3) Business Days of its receipt of such Purchase Order. Clarient may reject a Purchase Order within two Business Days of its receipt of such Purchase Order, but otherwise a Purchase Order shall be deemed accepted by Clarient. DakoCytomation shall give Clarient reasonably prompt written notice of any failure to supply Products within the time periods permitted by Articles 8.6 and 8.7.
8.9 Clarient’s confirmation of DakoCytomation’s Purchase Orders shall be faxed to the ordering DakoCytomation purchasing department and shall, as a minimum, include the following information:
• Serial number (if available at the date of acknowledgement) • Date of delivery from Clarient’s warehouse • DakoCytomation’s Purchase Order number and any applicable reference • Lead time from date of order. • Shipping address • Unit cost • Unit quantity
12
8.10 Unless otherwise notified by Clarient upon receipt of DakoCytomation’s Purchase Order, orders shall be delivered ready for transportation to the address specified in DakoCytomation’s Purchase Order.
8.11 Clarient shall decide, at its own discretion, which shipping agent to use and shall book shipment accordingly. However, during Phase 1 of the Agreement, Clarient will use the transportation procedure and invoice DakoCytomation the transport costs defined in Exhibit 6 .
8.12 Clarient shall perform out-going quality control to confirm that Products delivered to DakoCytomation comply with the Product Specifications and Acceptance Criteria defined in Exhibits 1 and 2 .
8.13 DakoCytomation shall not be obliged to perform incoming quality control, but will rely on the quality control performed by Clarient. Clarient shall perform quality control testing in accordance with the standards present in the market to confirm that Products meet the Product Specifications and Acceptance Criteria. Clarient shall maintain complete records to the extent required by applicable laws and regulation, such as the IVD Directive.
8.14 A Certificate of Conformance prepared by Clarient is to follow each shipment of Products delivered to DakoCytomation under this Agreement.
8.15 Clarient hereby grants, and DakoCytomation hereby accepts, a worldwide, fully paid up, perpetual (subject to Article 8.23), non-transferable license to manufacture or have manufactured, use, develop and market all Products covered by this Agreement (including all necessary licenses and sub-licenses to any and all patents and patent applications, know-how and other rights to develop and modify the Products held by Clarient which relate to the Products) (i) exclusively as to the Exclusive Field of Use, and (ii) nonexclusively as to the Nonexclusive Field of Use; provided that DakoCytomation shall not be entitled to exercise any rights under the foregoing license: (a) until DakoCytomation’s delivery of written notice to Clarient of the occurrence of a Supply Failure, which notice must be given before Clarient has cured such Supply Failure and within sixty (60) Calendar Days of such occurrence; (b) until DakoCytomation’s delivery of written notice to Clarient of the occurrence of a Supply Failure which has otherwise been excused for more than six (6) consecutive months by application of Article 38, which notice must be given before Clarient has cured such Supply Failure and within sixty (60) Calendar Days of such occurrence; or (c) (if not previously exercised) after the Term. For the purposes of this Agreement a “Supply Failure” shall mean Clarient’s failure to supply Products ordered by DakoCytomation in accordance with Article 7 within sixty (60) Calendar Days after the expiry of the time limits set forth in Articles 8.6 and 8.7 for reasons other than (I) the cause or breach of DakoCytomation or a Subdistributor, (II) a bona fide dispute over the validity of a Purchase Order, (III) Clarient’s rejection of a defective Purchase Order, or (IV) as set forth in Article 38.
8.16 A list of patents and patent applications related to the Products, specifying the owners, is attached to this Agreement as Exhibit 7 .
8.17 If DakoCytomation exercises the license granted pursuant to Article 8.15, and the exercise of such license is permitted by the occurrence of a Force Majeure event as set forth in Article 38, DakoCytomation shall pay to Clarient a license fee of (i) USD five thousand (5,000) for each Instrument delivered to DakoCytomation’s customers in the first twelve (12) months after the grant of such license, (ii) USD seven thousand five hundred (7,500) for each Instrument delivered to DakoCytomation’s customers in the next twelve (12) months after the grant of such license and (iii) USD ten thousand (10,000) for each Instrument delivered to DakoCytomation’s customers in the period thereafter, plus in each case make payment of the applicable Image Analysis Fee.
13
8.18 If DakoCytomation exercises the license granted pursuant to Article 8.15, and the exercise of such license is pursuant to an event other than the occurrence of a Force Majeure event as set forth in Article 38, DakoCytomation shall pay to Clarient a license fee of USD five thousand (5,000) for each Instrument delivered to DakoCytomation’s customers after the exercise of such license.
8.19 DakoCytomation shall keep complete and accurate accounts of all Products used and marketed. DakoCytomation shall not engage any competitor of Clarient to manufacture the products.
8.20 For so long as DakoCytomation manufactures or has manufactured any Instruments pursuant to the exercise of the license granted under Article 8.15, DakoCytomation shall provide Clarient with a sales report within sixty (60) Calendar Days after the end of each Calendar Year for each Instrument sold by DakoCytomation.
8.21 For a period of two (2) years after receiving any of the aforementioned reports from DakoCytomation, Clarient shall have the right to nominate an independent certified public accountant acceptable to DakoCytomation who shall have access to DakoCytomation’s records during business hours for the purpose of verifying the payments made to Clarient under this Agreement in the above-mentioned period. If Clarient wishes to audit DakoCytomation, such audit must be agreed with DakoCytomation. Such information shall be subject to Article 31.
8.22 Clarient shall fully co-operate with and assist DakoCytomation and/or third parties designated by DakoCytomation in such manufacture of the Products under a license to DakoCytomation under Article 8.15, e.g. by making available its personnel, books, records and other technical data needed for the process.
8.23 Clarient shall give DakoCytomation reasonable prior notice of any proposed cure of a Supply Failure. In the event that Clarient believes it has cured the cause of the Supply Failure after DakoCytomation has elected to exercise its rights under the license granted in Article 8.15, then the Parties agree to negotiate in good faith Clarient’s resumption of manufacturing of the Products for DakoCytomation. Further, in the event Clarient demonstrates that it can supply Products as required by Articles 8.6 and 8.7 after a Supply Failure caused by an event of Force Majeure, DakoCytomation shall not be entitled to exercise its rights under the license granted pursuant to Article 8.15 for such Supply Failure after the earlier to occur of (i) thirty-six (36) Calendar Months after such demonstration or (ii) Clarient’s payment to DakoCytomation of the reasonable costs DakoCytomation incurred to begin manufacture of the Products.
8.24 The license granted under Article 8.15, shall not affect Clarient’s right to use, have the right to manufacture or have manufactured, use or market the Products within the Nonexclusive Field of Use.
14
Article 9 Terms of Delivery
9.1 Delivery terms shall be FOB (Free On Board) Clarient’s designated warehouse site (INCOTERMS 2000).
Article 10 Packaging
10.1 Clarient shall ensure that all Products are appropriately boxed, crated and/or packaged in a professional manner sufficient to ensure their integrity during transportation.
10.2 The cost of packaging is included in the Prices set forth in Article 6 of this Agreement.
Article 11 Labelling
11.1 Clarient shall label and mark the Products in accordance with the Product Specifications and in compliance with all applicable current regulatory requirements.
11.2 The “Shipment Documentation” shall include the following information (identification of the Product on delivery):
a) Manufacturer b) Serial number c) Customer d) Safety notes and warnings e) Special instructions regarding handling and storage f) Quantity per trading unit and description g) Weight h) Notes for customs.
11.3 The cost of labeling is included in the Prices set forth in Article 6 of this Agreement.
Article 12 Terms of Payment
12.1 Clarient shall invoice DakoCytomation with each shipment of Products.
12.2 All invoices shall include the Price, VAT, local taxes and costs for transportation of the Products and include the information listed in Article 11.2.
12.3 All payments are due thirty (30) Calendar Days from the Date of Invoice. DakoCytomation will make all payments by bank transfer to Clarient’s bank:
12.4 Initial banking and transfer costs relative to payment of invoices shall be payable by DakoCytomation and receiving costs shall be payable by Clarient.
15
12.5 Interest shall accrue after 30 Calendar Days from the Date of Invoice at the prevailing twelve (12) month London InterBank Offered Rate plus five percent (5%).
Article 13 Currency
13.1 Clarient shall invoice DakoCytomation in USD, and DakoCytomation shall make all payments in USD.
Article 14 Trademarks and Trade Names
14.1 DakoCytomation may sell and market the Products in the Territory and within the Exclusive Field of Use and Nonexclusive Field of Use under its own label, trade name/trademarks and in its own packaging under no specific limitation; subject to Article 14.4 below. DakoCytomation may furthermore, at its own discretion, bundle the Products and market and sell the bundled Products in the Territory.
14.2 Subject to Article 14.4 below, the Products will be manufactured by Clarient and will carry the DakoCytomation trademarks “DAKOCYTOMATION” and Drop logo as set forth in Exhibit 8 .
14.3 DakoCytomation hereby grants Clarient a nonexclusive, worldwide, fully paid-up free license to use the DakoCytomation trademarks and trade names set forth in Exhibit 8 , in the manufacture, packaging and labeling of the Products in accordance with the terms of this Agreement. This Agreement does not imply the grant of a license from DakoCytomation to Clarient to use any DakoCytomation trademarks or trade names for any other purpose.
14.4 Further, the Products will be sold by DakoCytomation under a combination of DakoCytomation’s trademarks listed in Exhibit 8 and Clarient’s trademarks listed in Exhibit 9 , during Phase 1 of the Agreement e.g. as “DakoCytomation Clarient ChromaVision ACIS II”. The Parties shall mutually agree on the use of trademarks/trade names for the Products
14.5 Clarient hereby grants DakoCytomation a nonexclusive, world-wide, fully paid up license to use Clarient’s trademarks in Exhibit 9 for marketing, sale and support of the Products in accordance with the terms of this Agreement. This Agreement does not imply the grant of a license from Clarient to DakoCytomation to use any Clarient trademarks or trade names for any other purpose. For the avoidance of doubt, the license granted by DakoCytomation to Clarient only applies to Products sold by Clarient to DakoCytomation under this Agreement.
14.6 A label and/or plate, not exceeding a size of 20 x 100mm, stating that “Manufactured by Clarient, Inc., California, United States of America for DakoCytomation Denmark A/S”, is to be affixed to the back of the Products.
14.7 The Parties shall mutually agree on the use of trademarks/trade names for the ACIS III Products marketed under Phase 2 of the Agreement.
16
Article 15 Regulatory Matters
15.1 DakoCytomation shall obtain the relevant marketing licenses and fulfill any regulatory registration requirements for the Products to be marketed and sold by DakoCytomation in the European Union (“EU”) and all countries other than the United States (collectively, “ROW”).
15.2 For the ROW, DakoCytomation shall determine, in consultation with Clarient, for which countries DakoCytomation shall seek marketing licenses and product registration.
15.3 For the ROW, all product registrations shall be made in DakoCytomation’s name and DakoCytomation shall either serve as or retain a third party, as appropriate in each such country, to be the Authorized Representative (as defined in the IVD Directive).
15.4 For the ROW, DakoCytomation shall pay all registration fees and DakoCytomation’s own costs in connection with obtaining marketing licenses and fulfilling registration requirements in each country.
15.5 In the event of any termination or expiration of this Agreement, DakoCytomation shall use commercially reasonable efforts to secure the transfer of all applicable registrations and licenses issued to DakoCytomation or its agents under this Article 15 to Clarient. In the event of termination of this Agreement due to DakoCytomation’s breach, DakoCytomation shall pay any reasonable costs and fees associated with the transfer of such registrations and licenses to Clarient.
15.6 Clarient shall make whatever information Clarient is holding of relevance to DakoCytomation’s obtaining of relevant marketing licenses and/or fulfillment of regulatory registration requirements available to DakoCytomation or its Designated Representative upon demand in a timely manner at Clarient’s cost.
15.7 During Phase 1 of the Agreement, Clarient shall maintain FDA approvals and/or clearances necessary to market and sell the Products as an in-vitro diagnostic device in the United States. All such registrations shall be in Clarient’s name and shall be at Clarient’s cost. At the completion of Phase 1 of the Agreement, the Parties will mutually agree in writing whether the applicable registrations and licenses issued to Clarient or its agents under this article shall be transferred to DakoCytomation and the conditions for such transfer. For Phase 2 of this Agreement, the Parties shall mutually agree on the Party to be responsible for the registration of the Products for in vitro diagnostic use with FDA in the United States. The agreed upon terms for the ACIS III Products shall be set forth in a written Amendment to this Agreement, signed by duly authorized representatives of the Parties.
15.8 For purposes of regulatory compliance, Clarient shall allow representatives of DakoCytomation or its Designated Party to audit its facilities, quality systems and records related to the manufacture of Products once per Contract Year, (or more frequently as required by applicable law or regulation) upon 30 days prior written notification to Clarient. Upon DakoCytomation’s written request, in the event of a time sensitive audit DakoCytomation will provide Clarient seventy-two (72) hour written notification.
17
15.9 In the ROW, DakoCytomation shall prepare, maintain and distribute Material Safety Data Sheets for the Products. In the United States, Clarient shall prepare, maintain and provide such Material Safety Data Sheets to DakoCytomation for any Clarient Product that requires this documentation. Clarient shall provide DakoCytomation or its Designated Representative with information necessary for the preparation of such Material Safety Data Sheets.
15.10 DakoCytomation shall be responsible for all market surveillance activities, including reporting substantial changes to Product Specifications and quality systems, reporting Serious Incidents, handling complaints and customer notifications, and conducting product recalls or removals issued by authorities or mutually agreed upon by the Parties. If Clarient becomes aware of potential Serious Incidents, customer complaints or other information relevant to market surveillance activities, or the Product it shall provide this information to DakoCytomation promptly. If DakoCytomation becomes aware of potential Serious Incidents customer complaints or other information relevant to market surveillance activities, or the Product it shall provide this information to Clarient promptly.
15.11 Notwithstanding the provision in article 15.10, during Phase 1 of the Agreement, Clarient shall be responsible for all market surveillance activities in the United States and Canada, including, the reporting requirements of FDA. If DakoCytomation becomes aware of information relevant to market surveillance activities, including without limitation, Adverse Events or customer complaints, it shall immediately notify Clarient. If Clarient receives a customer complaint regarding the Products or the Products are subject to a product recall in the United States, Clarient shall investigate such customer complaint or product recall. DakoCytomation shall assist Clarient as necessary in implementing any corrective action required, including without limitation, providing Clarient with a copy of its or its Affiliate or subdistributor’s customer list for Products. DakoCytomation shall further assist Clarient in the notification, if any, to such customers related to such customer complaints and/or product recalls.
15.12 The Parties shall use commercially reasonable efforts to provide each other with the information required to obtain and maintain CE marking in accordance with the IVD Directive or other requirements enforced by a notified body or governmental authority. The other party shall use commercially reasonable efforts to provide such information to the other Party’s custody within ten Business Days upon the other Party’s written request.
Article 16 Warranty
16.1 Clarient hereby warrants for a period of fifteen (15) months from delivery to DakoCytomation or for a period of twelve (12) months from the delivery to the end user that the Products delivered are in conformity with the Product Specifications and Acceptance Criteria in Exhibits 1 and 2 and are free of Defects in workmanship and materials.
16.2 Clarient hereby warrants that the Products will be manufactured in accordance with the applicable regulations and statutory requirements in force in the United States, Canada, EU and Japan. In other countries, the provision in Article 4.2 shall apply.
18
16.3 Clarient hereby warrants that it is in possession of all necessary rights, including but not limited to Intellectual Property Rights, covering the grant and supply of the Products in the United States, Canada, EU and Japan and warrants that it has the right and authority to supply the Products to DakoCytomation for the use intended under this Agreement. For Products delivered for other countries, the provision in Article 4.2 shall apply.
16.4 Clarient shall maintain at all times during the Term of this Agreement product liability insurance with a policy limit of not less than USD ten million (10,000,000) covering the Products. If DakoCytomation manufactures pursuant to exercise of the license granted under Article 8.15, DakoCytomation undertakes to maintain the same level of insurance.
16.5 Beyond the warranties expressly stated herein, CLARIENT EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, GUARANTEES, OBLIGATIONS, LIABILITIES AND RIGHTS AND REMEDIES, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO THE MANUFACTURE AND USE OF THE PRODUCTS, INCLUDING BUT NOT LIMITED TO (a) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND (b) ANY OBLIGATION, RIGHT OR LIABILITY, CLAIM OR REMEDY FOR (i) LOSS OF USE, REVENUE OR PROFIT OR ANY OTHER DAMAGES; AND (ii) INDIRECT, SPECIAL CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER, HOWEVER CAUSED, AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN CONTRACT, WARRANTY, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), STRICT LIABILITY, STATUTORY OR OTHERWISE, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF CLARIENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
16.6 DakoCytomation shall not provide any end user with any rights or licenses in conflict with, or expansion of, the rights granted herein. In selling the Products to end users, DakoCytomation shall use written agreements with use restrictions and other terms giving due consideration and respect to each Party’s standard end-user terms and experience with end-users, as well as the variations in risk and legal customs in different countries. Without limiting the generality of the foregoing, each DakoCytomation End-User agreement relating to the Products shall (i) prohibit use of the Products for or via remote access to external customers of the End-User, such that the End-User may only use the Product for global cases ( i.e. , where the End-User’s staff physicians are performing prognosis, diagnosis or similar professional services) (the “Remote Access Use Restriction”) and (ii) shall permit Clarient (at its sole expense) to directly and independently enforce its rights related to the Remote Access Use Restriction as an intended beneficiary (unless prohibited by applicable law). A Party discovering (or reasonably suspecting) an End-User violation of the Remote Access Use Restriction shall, within fifteen (15) days after such discovery (or reasonable suspicion), notify the other Party, identifying the End-User and the time, place and manner of the violation(s). Except to the extent Clarient reasonably believes that such a delay would cause irreparable harm to its business, DakoCytomation shall have thirty (30) days after receipt of the foregoing notice to encourage and allow such End-User to cure any violation (in a manner reasonably satisfactory to Clarient) before Clarient may seek to independently enforce its rights relating to the Remote Access Use Restriction. DakoCytomation agrees to cooperate with Clarient’s reasonable requests relating to the enforcement of Remote Access Use Restriction.
19
Article 17 Liability; Indemnification
17.1 EXCEPT AS OTHERWISE SET FORTH HEREIN, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (collectively “Damages”) ARISING IN CONNECTION WITH THIS AGREEMENT, THE SCOPE OR ANY DOCUMENTS OR EXHIBITS RELATED THERETO. IN NO EVENT SHALL CLARIENT’S LIABILITY UNDER THIS AGREEMENT EXCEED THE GREATEST OF (i) THE PAYMENTS RECEIVED BY CLARIENT UNDER THIS AGREEMENT IN THE TWELVE (12) MONTH PERIOD PRIOR TO THE EVENT OF LIABILITY IN QUESTION OR (ii) USD FOUR MILLION (4,000,000), OR (iii) USD TEN MILLION (10,000,000) IN THE CASE OF CLARIENT’S LIABILITY HEREUNDER FOR INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OR TO ANY LOSS ARISING OUT OF PRODUCT LIABILITY CLAIMS, INCLUDING PERSONAL INJURY.
17.2 IN NO EVENT SHALL EITHER PARTY BE RESPONSIBLE FOR ANY DAMAGES CAUSED BY THE OTHER PARTY’S (A) ILLEGAL CONDUCT, (B) WILLFUL MISCONDUCT OR (C) VIOLATION OF THIS AGREEMENT (INCLUDING WITHOUT LIMITATION PRESCRIBED USE OF THE PRODUCTS).
17.3 Clarient shall indemnify DakoCytomation, its Affiliates and their respective officers from any loss, cost, damage or expense (a “Loss”) from any lawsuit, action, claim, demand, assessment or proceeding (a “Claim”) arising or occurring as a result of (i) infringement of third party Intellectual Property Rights, (ii) product liability claims, including personal injury or property damage proximately caused by Clarient’s gross negligence or intentional misconduct (iii) other personal injury or property damage caused by Clarient’s gross negligence or intentional misconduct, or any material Defect in a Product, or (iv) any violation of applicable law, rule or regulation by Clarient, in each case except to the extent (a) such Product was altered after it left Clarient’s control or (b) of the negligence, gross negligence or intentional misconduct of a party other than Clarient. Notwithstanding anything herein to the contrary, Clarient shall have no obligation with respect to any Loss or Claim to the extent that such Loss or Claim results from (I) DakoCytomation’s combination, operation or use of the Products with products, data or other materials not provided by Clarient outside the scope of this Agreement; (II) modifications of the Products that were not made or authorized by Clarient.
17.4 DakoCytomation shall indemnify Clarient, its Affiliates and their respective officers, directors and employees from any Loss or Claim arising or occurring as a result of (i) personal injury or property damage proximately caused by DakoCytomation’s gross negligence or intentional misconduct, or any modification by DakoCytomation or its agents to a Product, (ii) any violation of applicable law, rule or regulation by DakoCytomation, in each case except to the extent of the negligence, gross negligence or intentional misconduct of a party other than DakoCytomation, or (iii) infringement of third party Intellectual Property Rights by DakoCytomation. IN NO EVENT SHALL DAKOCYTOMATION’S LIABILITY UNDER THIS AGREEMENT FOR MATTERS OTHER THAN PAYMENT OF THE AMOUNTS INDICATED ON EXHIBIT 4 EXCEED THE GREATEST OF (i) THE PAYMENTS RECEIVED BY CLARIENT UNDER THIS AGREEMENT IN THE TWELVE (12) MONTH PERIOD PRIOR TO THE EVENT OF LIABILITY IN QUESTION OR (ii) USD FOUR MILLION (4,000,000), OR (iii) USD TEN MILLION (10,000,000) IN THE CASE OF DAKOCYTOMATION’S LIABILITY HEREUNDER FOR INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OR TO ANY LOSS ARISING OUT OF PRODUCT LIABILITY CLAIMS, INCLUDING PERSONAL INJURY.
20
17.5 If a claim for damages is lodged by a third party against one of the Parties, the affected Party shall forthwith inform the other Party hereof. Each Party agrees to give prompt written notice to the other Party of the commencement of any action, suit or proceeding for which indemnification may be sought, and the indemnifying Party, through counsel reasonably satisfactory to the indemnified Party shall assume the defense thereof. It has been agreed, however, that the indemnified Party shall be entitled to participate in any such action, suit or proceeding with counsel of its own choice, but at its own expense. The indemnifying party shall not make any settlement offer or compromise without the indemnified party’s reasonable consent.
17.6 Each Party agrees to give promptly written notice to the other Party of the commencement of any action, suit or proceeding for which indemnification may be sought, and the indemnifying Party, through counsel reasonably satisfactory to the indemnified Party shall assume the defense thereof. It has been agreed, however, that the indemnified Party shall be entitled to participate in any such action, suit or proceeding with counsel of its own choice, but at its own expense.
Article 18 Complaints
18.1 DakoCytomation shall, no later than five (5) Business Days from discovery, give Clarient written notice of any Defect or other fault in or of a Product, and reject any Product that does not comply with the Product Specifications set forth in Exhibits 1 and 2 .
18.2 In case the Products do not substantially meet the Product Specifications set forth in Exhibits 1 and 2 or should otherwise be Defective, DakoCytomation is authorized to withhold payment due without interest accruing until such Defect is cured.
18.3 Clarient shall repair or replace (at Clarient’s option) any Products, which DakoCytomation identifies as Defective. In the event Clarient elects to replace a Defective product, DakoCytomation shall return such Defective Product clearly marked with DakoCytomation’s name and address. Such returned Defective Products shall be carefully packed and sent to Clarient accompanied by a copy of Clarient’s invoice. Clarient shall pay all costs concerning the return of such Defective product, thus Clarient shall be entitled to choose means of transportation and book transportation accordingly.
Article 19 Defects
19.1 If a Product is found to be Defective in accordance with the Product Specifications and Acceptance Criteria in Exhibits 1 or 2 to this Agreement, or is found to be Defective because of faulty workmanship or materials, and such reason is reported by DakoCytomation to Clarient in accordance with Article 18.1 during the Warranty Period stated in Article 16.1, the following provisions shall apply.
21
19.2 During the Term, Clarient will repair Defects free of charge. Clarient shall initiate such repairs as promptly as possible, but not more than one (1) week from Clarient’s receipt of DakoCytomation’s notification of the Defect. In the event that the Product cannot be repaired within six (6) weeks after Clarient receives notice of the Defect, Clarient will replace the Product free of charge.
19.3 Delivery terms for any replacement shipments are DDP (Delivery Duty Paid) on the shipping address provided by DakoCytomation in the relevant Purchase Order (INCOTERMS 2000). Clarient shall bear any freight, transportation and custom clearance fees related to such replacements.
19.4 Failure by Clarient to replace any Defective Product pursuant to Article 19.2 shall be deemed a material breach of the Agreement, which shall entitle DakoCytomation to have the Product manufactured at a third party’s production facility at Clarient’s choice for Clarient’s account according to the procedure set forth in Article 8.15 to 8.24 of this Agreement.
19.5 In case the delivered Product should not substantially meet the Product Specifications or Acceptance Criteria in Exhibits 1 and 2 or should otherwise be Defective after the period specified in Article 19.2, DakoCytomation may cancel the Purchase Order or the specific part of the Purchase Order concerning such Product.
Article 20 Installation
20.1 During Phase 1 of the Agreement, Clarient shall install the Products at end-user sites.
20.2 Clarient will invoice DakoCytomation for cost of travel, accommodations, travel allowances and installation time connected to installation services provided during Phase 1 of the Agreement according to the price list in Exhibit 10 to this Agreement.
20.3 The Payment Terms set forth in Article 12 of this Agreement shall apply to Installation Services.
20.4 During Phase 2 of the Agreement, DakoCytomation shall make installation of the Products at end user sites. DakoCytomation may elect to assume responsibility for installation of Products at end user sites at any time during the Term upon forty-five (45) days written notice to Clarient.
20.5 The Parties agree to discuss a continuation of Clarient’s handling of the Installation Services during a transition period after the commencement of Phase 2.
Article 21 After Sales Services
21.1 During Phase 1 of the Agreement Clarient will perform all After Sales Services described in Exhibit 11 .
22
21.2 During Phase 1 of the Agreement, DakoCytomation may elect to assume the responsibility for performing After Sales Services. If DakoCytomation chooses to do so, DakoCytomation will consider employing Clarient personnel who performed such functions.
21.3 Clarient will invoice DakoCytomation for cost of travel, accommodations, travel allowances and Clarient personnel time connected to After Sales Services provided during Phase 1 of the Agreement according to the price list in Exhibit 11 .
21.4 During Phase 2 of the Agreement, DakoCytomation will perform all After Sales Services worldwide.
21.5 Notwithstanding the above, Clarient will provide access to the After Sales Services during the entire term of this Agreement.
21.6 Clarient will invoice DakoCytomation for Support Services according to the Price List in Exhibit 11 .
21.7 The Payment Terms set forth in Article 12 of this Agreement shall apply to all After Sales Services mentioned in this article.
21.8 The Parties will mutually agree upon a continuation of Clarient’s handling of the After Sales Services during a transition period after the commencement of Phase 2.
Article 22 Training
22.1 During the Term of this Agreement Clarient shall train DakoCytomation employees on the use of the Products free of charge. Clarient will provide training for DakoCytomation’s customers at the DakoCytomation training center at the DakoCytomation site located in Carpinteria, California (United States) for a fee of five hundred dollars (USD 500) per training session (unlimited participants) as described in Exhibit 10 .
22.2 DakoCytomation shall request customer Training in writing with thirty (30) days written notice.
22.3 Clarient will provide training of DakoCytomation’s Service Engineers, including Service Engineers employed by DakoCytomation’s external Service Partners once per year during the entire Term for a fixed fee of one thousand five hundred dollars (USD $1,500) per training session (unlimited participants). Training will be provided at the DakoCytomation site determined by DakoCytomation.
22.4 DakoCytomation shall request Service Engineer Training in writing with forty-five (45) days written notice. Clarient shall provide training free of charge to both sales and marketing employees of DakoCytomation in The United States and Europe.
22.5 Clarient will provide a comprehensive “Service Manual” for the Products to DakoCytomation’s Service Engineers within sixty (60) Calendar Days prior to DakoCytomation’s assuming service responsibility.
23
22.6 Clarient will provide a one-time theoretical and hands-on training of a minimum of three days of DakoCytomation’s R&D and Marketing Staff and Country Product Managers free of charge that will take place in DakoCytomation’s location in Carpinteria, California, United States.
22.7 DakoCytomation is responsible for all additional expenses and providing facilities for training. DakoCytomation will reimburse the travel and related expenses of Clarient’s representatives (subject to DakoCytomation’s reasonable, prior approval) as well as all of its own representatives.
Article 23 Image Analysis Fee
23.1 The Parties have agreed that Clarient will receive payment of an Image Analysis Fee as set forth on Exhibit 4 for each use of an image analysis algorithm by DakoCytomation’s customers/end-users in the United States. The fee indicated on Exhibit 4 applies only to the current algorithms, and the Image Analysis Fee for any future assay algorithms shall be agreed upon by the Parties when such algorithms are released.
23.2 DakoCytomation shall only pay the Image Analysis Fee as long as DakoCytomation’s customers/end-users receive reimbursements from Centers for Medicare and Medical Services and/or third party payors ( e.g. patient medical insurance).
23.3 In the event the reimbursement rate for Image Analysis changes, the Parties will mutually determine an appropriate adjustment to the Image Analysis Fee based principally on the ratio of the new reimbursement rate (CMS Prevailing Rate) to the reimbursement rate on the Effective Date.
23.4 In the event of significant changes in the market situation the Parties agree to enter into good faith negotiations in order to amend this Agreement accordingly.
Article 24 Spare Parts
24.1 For each Product, Clarient shall maintain at its premises an appropriate stock level of Spare Parts, covering all components of the Products. Spare parts related to the Products shall hereinafter be referred to as the “Spare Parts”. A list of Clarient’s Spare Parts for the Instruments is included in Exhibit 4 to this Agreement.
24.2 Clarient shall have an unlimited obligation to supply the Spare Parts for the Products to DakoCytomation during the Term of this Agreement and five (5) years thereafter.
24.3 Clarient shall have an obligation to ship Spare Parts not later than two (2) Business Days after DakoCytomation has ordered them, to the destination specified by DakoCytomation.
24.4 The initial prices for the Spare Parts for Phase 1 are set forth in Exhibit 4 . Prices for Spare Parts for Phase 2 shall be negotiated in good faith at a later time. Clarient shall notify any changes in the Spare Part prices in writing sixty (60) days in advance. Spare Part orders made prior to such notification shall be made at previous prices.
24
24.5 Clarient in Phase 1 of the Agreement shall make shipment of Spare Parts to DakoCytomation customers/end-users.
24.6 During the Phase 2 of this Agreement, DakoCytomation shall make shipment of Spare Parts to the end-users.
24.7 Clarient’s delivery of Spare Parts shall be subject to the terms of this Agreement.
24.8 Clarient shall notify and receive DakoCytomation’s written approval prior to using remanufactured parts in place of Spare Parts on the Products.
24.9 DakoCytomation shall be responsible for all Spare part obligations if it exercises its license under Article 8.15. In such event, Clarient shall assist DakoCytomation with assuming the Spare Part obligations by providing supplier lists and other reasonable documentation and assistance.
Article 25 Software, Updates and Maintenance
25.1 As stated in Article 2.2 of this Agreement, Clarient has developed manufactures and markets the Software to be used with the Instruments. The Product Specifications and Acceptance Criteria for the Software is enclosed hereto as Exhibit 2 .
25.2 Clarient agrees to provide the Software to DakoCytomation and DakoCytomation’s customers subject to a perpetual, revocable, nonexclusive, world-wide, fully paid up, license to use, execute, display, perform and configure (within its designed parameters) the Software.
25.3 Clarient shall provide Software maintenance during the applicable warranty period for the Product, including development and creation of updates for the Software to cure software bugs and malfunctioning at no charge to DakoCytomation or its customers/end-users.
25.4 Clarient shall develop and provide upgraded versions of the Software, which may include additional or enhanced features, new functionalities and interfaces as well as new algorithms on an ongoing basis. The Parties will mutually agree upon the consideration, if any, that Clarient receives for such development work from DakoCytomation.
Article 26 Manuals, Brochures and Marketing Materials
26.1 Clarient shall provide for the Products:
i. an appropriate “User Instruction/Operation Manual”. Each delivery of an instrument shall include such Manual as an integrated part of the Product which meets legal requirements.
ii. an appropriate “Service Manual” allowing DakoCytomation’s service organization to professionally implement preventive and normal service interventions sixty (60) Calendar Days prior to DakoCytomation’s assuming service responsibility.
25
26.2 Clarient shall provide a new Service Manual for each new instrument phase.
26.3 DakoCytomation shall have the right to review and suggest changes to the manuals prior to final print.
26.4 The above Manuals shall be produced by Clarient at Clarient’s cost and shall be supplied at Clarient’s cost in the German, English and French languages. The Manuals shall be printed with DakoCytomation branding
26.5 DakoCytomation shall pay the cost of translation of the Manuals into other languages if such translation is requested by DakoCytomation.
26.6 Brochures and other marketing material are DakoCytomation’s responsibility, provided that DakoCytomation shall provide advance copies of all such materials for Clarient’s review.
Article 27 Manufacturing
27.1 Clarient warrants manufacturing the Products according to FDA QSR Good Manufacturing Practices Regulations and that records of such compliance are at any time available for auditing by DakoCytomation or third party authorities.
27.2 Clarient will notify DakoCytomation in writing prior to implementing any change in the Products or manufacture thereof for DakoCytomation’s prior written approval.
27.3 Copies of the current and future “Bill of Goods” listing all components and manufacturing procedures for the Products will be officially transferred in escrow to the International Chamber of Commerce in Copenhagen, Denmark, or to another escrow agent, which can be approved by both Parties, such approval not to be unreasonably withheld.
Article 28 Inspection
28.1 Clarient will allow DakoCytomation to inspect Clarient’s facilities annually, upon reasonable prior notice, to determine Clarient’s compliance with regulatory and/or quality assurance standards.
28.2 DakoCytomation may, once per Calendar Quarter, have a DakoCytomation Quality Assurance/Quality Control responsible person inspect Clarient’s manufacturing site to confirm that the Products are manufactured according to the Good Manufacturing Practices Regulations set forth in Article 27 .
28.3 Any audit or inspection under this Article 28 or Article 15.8 shall be subject to the provisions of Article 31 and Clarient shall have the right to escort the inspection or audit team at its premises.
Article 29 Development project
29.1 In order to fulfill the evolving customer requirements/needs and to cope with the rapidly changing technology advances, Clarient and DakoCytomation have agreed to mutually develop the Products into next generation Products.
26
29.2 Clarient will perform the research and development work under this Agreement. Clarient may engage subcontractors to assist in such work but shall secure from each such subcontractor confidentiality undertakings in accordance with Article 31.
29.3 The Parties have agreed to enter into a Development Project with the goal to develop the ACIS III Instrument and Software based on the current Clarient ChromaVision ACIS II instrument and software. The Product and Technical Specifications for the ACIS III Instrument and Software are set forth in Exhibit 14 to this Agreement. The Research and Development Project is defined in the Project Plan in Exhibit 15 to this Agreement.
29.4 The Parties agree that the enclosed version of Exhibits 14 and 15 is only preliminary. The Parties agree to negotiate a final version of Exhibits 14 and 15 within thirty (30) days of the Effective Date and that the final version of Exhibits 14 and 15 will supersede the current version of Exhibits 14 and 15 as soon as it is approved by both Parties in writing. Furthermore, the Parties agree that the entire Agreement will cease (including cancellation of DakoCytomation’s initial Purchase Order described in Article 8.1) should the Parties not be able to agree on a final version of Exhibits 14 and 15 within thirty (30) days of the Effective Date. Any disputes regarding the finalization of Exhibits 14 and 15 shall be solved according to the Dispute Resolution Procedure set forth in article 29.9 below.
29.5 Notwithstanding the provisions herein, Clarient will initiate the research and development work within thirty (30) days of the Effective Date.
29.6 The Parties will mutually agree to any changes and amendments to Exhibits 14 and 15 , including but not limited to all design files, project milestones and phase gate documentation. DakoCytomation shall participate in all design review, risk management and other general project management.
29.7 Clarient and DakoCytomation will appoint an individual as Project Executive to represent and bind Clarient and DakoCytomation, respectively, in connection with all aspects of the Research and Development Project described in Exhibits 14 and 15 .
29.7.1 Before assigning an individual as Project Executive, Clarient and DakoCytomation will (i) introduce the individual to each other, (ii) provide the other with information reasonably requested regarding the work history and experience of the individual and (iii) discuss reasonable objections to such appointment.
29.7.2 Clarient and DakoCytomation will provide each other with at least thirty (30) Calendar Days notice before assigning a new Project Executive, unless the Project Executive (a) resigns from employment, (b) is dismissed by his employer, (c) fails to perform his obligations or (d) is unable to work.
29.8 Clarient and DakoCytomation will create a joint Steering Committee as described in Article 42 below.
29.9 If the Parties have a dispute regarding the Research and Development Project under this agreement, the following Dispute Resolution Procedure shall apply:
29.9.1 A dispute will initially be referred to the Project Executives.
27
29.9.2 If the Project Executives cannot resolve the dispute within five (5) Business Days after their referral, the dispute will be referred to the Steering Committee.
29.9.3 If the Steering Committee cannot resolve the dispute within ten (10) Business Days after the referral, the dispute will be referred in writing to the CEO of DakoCytomation and the CEO of Clarient (jointly referred to as “Lead Executives”) for their review and resolution.
29.9.4 The Parties agree that neither Party may initiate formal proceedings for the resolution of such disputes before (i) the Lead Executives’ joint written conclusion that an amicable resolution to a dispute is unlikely, or (ii) thirty (30) days after the referral of a dispute to the Lead Executives.
29.9.5 The Parties will exercise good faith efforts to resolve any dispute related to the Research and Development Project.
29.9.6 The Parties agree the all written or oral statements and offers of settlement made in the course of the Dispute Resolution Procedure, , will (a) be confidential, (b) not be offered as evidence, disclosed, or used for any other purpose than the Dispute Resolution Procedure, and (c) not constitute an admission or waiver of any rights.
29.9.7 Each Party will promptly return to the other upon request any such written statements or offers including all copies hereof.
29.9.8 Except where clearly prevented by the nature of the dispute, Clarient and DakoCytomation agree to continue performing their respective obligations under this Agreement while a dispute is being resolved.+
29.10 The Parties have agreed that the following procedure shall apply with respect to the fulfillment of the Development Project and the Project Plan:
29.10.1 Clarient will give DakoCytomation written notice of fulfillment of Acceptance Criteria’s and Milestones and present its results to DakoCytomation.
29.10.2 DakoCytomation will carry out an evaluation of the results presented by Clarient within ten (10) Business Days.
29.10.3 DakoCytomation presents the results of the evaluation phase to Clarient, i.e. whether the Acceptance Criteria and Milestone has been met.
29.10.4 If Clarient has not met a Milestone, the Parties agree to enter into discussions in good faith with the purpose of accomplishing the outstanding Milestone.
29.11 Clarient is responsible for meeting the development Milestones and Acceptance Criteria set forth in Exhibits 14 and 15 .
29.12 If Clarient fails to meet its objectives in each development Milestone and/or Acceptance Criteria, for reasons other than mutually agreed upon, the applicable Milestone payment shall be decreased by ten percent (10%).
28
29.13 If Clarient has delays in the total Development Project timeline in excess of ninety (90) Calendar Days, (i) the Minimum Order Requirement in Article 5.10 shall be suspended until the completion of the Research and Development Project, and (ii) the total payments for Research and Development work set forth in Exhibit 4 shall be reduced by twenty-five percent (25%) after giving effect to any reductions already made pursuant to Article 29.12.
29.14 If Clarient has delays in excess of ninety (90) Calendar Days in the total Research and Development Project timeline or Clarient fails to perform its Research and Development obligations set forth in this Agreement caused by Clarient’s fault or gross negligence, DakoCytomation shall have the right to take over the Research and Development Project in its entirety according to the procedure stated in Articles 8.15 and 8.24
29.15 Clarient will receive compensation for Research and Development work under this Agreement as described in Exhibit 4 to this Agreement.
Article 30 Intellectual Property
30.1 Intellectual Property owned by or otherwise in the possession of a Party on the Effective Date, as well as any derivative works, enhancements or modifications thereof (“Pre-existing Intellectual Property”), shall remain the absolute, unencumbered property of that Party.
30.2 The Parties agree to maintain and defend all Pre-existing Intellectual Property owned by or otherwise in the possession of a Party on the Effective Date related to the Products during the Term of this Agreement.
30.3 The Parties agree to notify each other promptly of material infringements or possible infringements of Pre-existing Intellectual Property related to the Products , as well as any facts that may materially affect the validity, scope and enforceability of such Pre-existing Intellectual Property of which either Party becomes aware.
30.4 The Parties hereby grant each other rights to initiate legal actions for infringement of Intellectual Property related to the Products, including Intellectual Property created under this Agreement. If a Party desires to initiate legal actions for infringement of the other Party’s Intellectual Property rela |
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
