1
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
Exhibit 10.4.37
TERMINATION AGREEMENT
This Termination Agreement ("Termination Agreement") made this 30th day
of September 1999, by and between Neoprobe Corporation, ("Neoprobe") and Kol
Bio-Medical Instruments, Inc., ("Kol").
RECITALS:
WHEREAS, Kol and Neoprobe entered into a Sales and Marketing Agreement
dated January 26, 1999 (the "Sales and Marketing Agreement"); and
WHEREAS, The parties desire to mutually terminate the Sales and
Marketing Agreement in accordance with the terms and conditions of this
Termination Agreement;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the recitals set forth above, which are hereby incorporated by reference
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Termination. Effective on September 30, 1999 (the "Effective
Date of Termination"), the Sales and Marketing Agreement shall
be terminated by the mutual agreement of the parties hereto
and except as specifically set forth in this Termination
Agreement, which the parties intend to be a substituted
contract for the Sales and Marketing Agreement, the parties
shall have no further obligation or remedies arising under the
Sales and Marketing Agreement.
2. Actions of the Parties. The parties agree to do the following:
2.1 Between the date of this Termination Agreement and
the Effective Date of Termination, Kol shall continue
to comply with the provisions of Article V of the
Sales and Marketing Agreement, except that Section
5.01 shall be inapplicable commencing with the date
of this Termination Agreement.
2.2 Neoprobe shall pay to Kol all outstanding commissions
for Products shipped prior to the Effective Date of
Termination. July and August commissions
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
2
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
previously due but unpaid in the amount of $93,187.92
shall be paid to Kol on the Effective Date of
Termination. Commissions (net of reimbursements to
Neoprobe for Clinical Specialists' sales commissions
and expenses, as previously agreed) due for the
period up to and including the Effective Date of
Termination shall be paid to Kol on or before October
15, 1999.
2.3 Neoprobe shall repurchase from Kol and Kol shall
resell to Neoprobe all of Neoprobe's Products,
demonstration cases and accessories in Kol's
inventory and in the inventory of Kol's Sub-Agents
("Products in Inventory"), as more particularly set
forth on Schedule 2.3 attached hereto and
incorporated by reference herein.
2.4 Unless otherwise agreed to by the parties, within
twenty business (20) days after the Effective Date of
Termination, (i) Kol shall ship to Neoprobe's
designated facility, Plexus, all Products in
Inventory previously shipped by Neoprobe to Kol but
not yet paid for by Kol. Payment for all such
Products in Inventory shall be made in accordance
with the provisions of Section 2.5. Kol shall ship
all Products in Inventory using a carrier chosen by
Neoprobe for delivery to Neoprobe's designated
facility. All freight costs for such shipments shall
be paid by Neoprobe. Neoprobe agrees ***. Neoprobe
shall pay Kol for Products in Inventory as follows:
the sum of $1,000,000 (i) less the outstanding A/R of
***; (ii) less Product in Inventory not passing the
inspection conducted pursuant to Section 2.5@ the
invoiced cost; (iii) less Product not returned @
invoiced cost.
2.5 All Products in Inventory repurchased by Neoprobe
pursuant to Section 2.3 shall be in reasonable
condition and have not been subjected to excessive
wear and tear ("Conforming Condition"). The parties
shall cooperate with each other to arrange the
inspection of the Products in Inventory, within ten
(10) days, at the facilities of Plexus by a Kol
representative and a Neoprobe representative
reasonably acceptable to Kol. Upon completion of the
inspection by Neoprobe, Neoprobe shall pay Kol for
all Products in Inventory determined by Neoprobe to
be in Conforming Condition, within fifteen (15) days
after the inspection.
2.6 Any dispute with regard to whether the Products in
Inventory are in Conforming Condition shall be
resolved by binding arbitration conducted by
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
3
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
a single arbitrator from the American Arbitration
Association (the "AAA"). The place of arbitration
shall be Fairfax, Virginia.
2.7 Neoprobe shall ***.
2.8 Kol agrees that it will use reasonable efforts to
transition records (from Kol and its Sub-Agents)
regarding sales of Products during the term of the
Sales and Marketing Agreement by turning over to
Neoprobe sales records, key contacts and project
lists. Neoprobe shall have the right to use all such
records in its business.
3. Termination Payment. Neoprobe shall pay to Kol a termination
payment in the amount of $700,000 as follows: (i) $350,000
payable on or before October 29, 1999; and (ii) $350,000
payable on or before November 29, 1999. All payments made
pursuant to this Section 2.5 shall be made by wire transfer.
The parties agree that in the event Kol enters into an
agreement with Neoprobe's world-wide distribution partner for
continued sales and marketing activities relating to
Neoprobe's products, which Kol may or may not enter into at
its sole and absolute discretion, Kol agrees to ***. Neoprobe
shall remain liable for the full amount due under the
termination payment owed by Neoprobe to Kol pursuant to this
Section 3.
4. Non-competition After Termination. Provided that Kol is
receiving the fee as specified by Section 2.4, Kol agrees that
it will not distribute, market promote or sell a product
competitive with the Products covered by the Sales and
Marketing Agreement for a period of six (6) months following
the Effective date of Termination.
5. Incorporation of Provisions of the Sales and Marketing
Agreement. The obligations of confidentiality as provided in
Article X and indemnification as provided in Article IX of the
Sales and Marketing Agreement are hereby incorporated by
reference into this Termination Agreement in their entirety
and shall expressly survive the termination of the Sales and
Marketing Agreement and continue in full force and effect.
6. Returned Product. Neoprobe shall notify Kol on or before
October 31, 1999 of any Product sold by Kol prior to the
Effective Date of Termination that is returned by a customer
to Neoprobe for credit between the Effective Date of
Termination and October 31, 1999. Kol shall return toNeoprobe
any commission on the sale of such
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
4
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
returned Product paid by Neoprobe to Kol prior to the
Effective Date of Termination on or before November 15, 1999.
7. Mutual Releases.
7.1 Except for the obligations of the parties pursuant to
the terms of this Termination Agreement, and as
otherwise set forth herein, Neoprobe hereby releases
and forever discharges Kol, its officers, directors,
employees, agents, heirs, assigns and successors (the
"Kol Releasees") from and on account of all claims,
liabilities, obligations, debts, demands, actions,
causes of action, covenants, contracts,
controversies, agreements, promises, doings, acts,
omissions, trespasses, damages and other demands and
claims of every kind and nature, both in law and in
equity, that Neoprobe or any of its officers,
directors, employees, agents, successors of assigns
ever had, now has or may have in the future against
the Kol Releasees, arising out of the occurrence of
any act, transaction, matter or event, from the
beginning of the world to the date of this
Termination Agreement, whether fixed or contingent,
known or unknown, specifically including, but not
limited to, all claims arising out of or relating to
the Sales and Marketing Agreement, but excluding
claims for breach or non-performance of this
Termination Agreement.
7.2 Except for the obligations of the parties pursuant to
the terms of this Termination Agreement, and as
otherwise set forth herein, Kol hereby releases and
forever discharges Neoprobe, its officers, directors,
employees, agents, heirs, assigns and successors (the
"Neoprobe Releasees") from and on account of all
claims, liabilities, obligations, debts, demands,
actions, causes of action, covenants, contracts,
controversies, agreements, promises, doings, acts,
omissions, trespasses, damages and other demands and
claims of every kind and nature, both in law and in
equity, that Kol or any of its officers, directors,
employees, agents, successors of assigns ever had,
now has or may have in the future against the
Neoprobe Releasees, arising out of the occurrence of
any act, transaction, matter or event, from the
beginning of the world to the date of this
Termination Agreement, whether fixed or contingent,
known or unknown, specifically including, but not
limited to, all claims arising out of or relating to
the Sales and Marketing Agreement, but excluding
claims for breach or non-performance of this
Termination Agreement.
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
5
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
8. Entire Agreement. This Termination Agreement contains the
entire agreement of the parties and there are no other
understandings or agreements other than this Termination
Agreement; all prior agreements, representations, promises or
statements, whether oral or in writing, are of no effect
except as may be provided in this Termination Agreement may
not be changed orally, but only by an agreement in writing
signed by all parties. This Termination Agreement shall
supersede and abrogate in its entirety the Sales and Marketing
Agreement. The parties agree to look only to the provisions of
this Termination Agreement for a determination of their rights
and obligations in relation to each other.
9. Waiver of Breach. A non-breaching party's waiver of a breach
by the breaching party of any provision of this Termination
Agreement shall not operate as or be construed as a waiver of
any subsequent breach by the breaching party.
10. Public Announcements. The parties agree that they shall not
disparage each other nor make any statements regarding their
relationship and the termination thereof that reflects
adversely on the performance of the other.
11. Binding Effect. This Termination Agreement shall inure to the
benefit of and shall be binding on the Kol and Neoprobe and
their respective successors and assigns.
12. Attorneys fees. In the event that Neoprobe fails to pay any
amount due to Kol pursuant to this Termination Agreement, Kol
shall be entitled to recover all of its reasonable attorneys'
fees and costs, including but not limited to expert witness
fees or expenses, incurred in the prosecuting any such action
against Neoprobe.
13. Choice of Forum. Any claim or cause of action arising out of
or connected with this Termination Agreement shall be brought
exclusively in either the U.S. District Court for the Eastern
District of Virginia (subject to the statutory basis for
jurisdiction) or the Circuit Court of Fairfax County,
Virginia, and the parties hereto consent to submit to the
personal jurisdiction of such courts, and waive all objections
to such jurisdiction and venue. If either party is not a
resident of the Commonwealth of Virginia at the time of such
action, then such Party irrevocably appoints the Secretary of
the Commonwealth of Virginia as agent for the purpose of
accepting service of process in Virginia.
14. Severability. The invalidity or unenforceability of any
provision of this Termination Agreement shall not affect the
validity or enforceability of any other provision of this
Termination Agreement, unless doing so would materially alter
the respective
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
6
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
benefits and burdens of the parties, in which case this
Termination Agreement shall be either reformed by mutual
agreement of the parties or invalidated.
15. Modification. This Termination Agreement may not be changed
orally, but only by an agreement in writing signed by all
parties.
16. Captions. Captions provided in this Termination Agreement are
used solely for convenience and are not to be used in
construing or interpreting this Termination Agreement.
17. Counterparts. This Termination Agreement may be executed in
multiple counterparts, which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
18. Construction. Both parties have had the advice and assistance
of their counsel in the negotiation and execution of this
Termination Agreement. The language in all parts of this
Termination Agreement shall in all cases be construed as a
whole, according to its fair meaning, and not strictly for or
against either party. The parties expressly agree that the
principle of contract interpretation that ambiguities are
construed against the drafting party shall not apply.
19. Notice. Except as otherwise stated in this Termination
Agreement, any notice, request, instruction, approval or other
communication given hereunder by any party hereto shall be in
writing and hand-delivered against receipted copy; mailed by
registered or certified mail, postage prepaid, return receipt
requested; telecopied (with hard copy sent via U.S. mail
within one (1) business day after the facsimile notice is
transmitted) or delivered by Fed Ex or other similar overnight
courier, to the following addresses:
If to Kol at: 00000 Xxxxxxx Xxxx
X.X Xxx 000000
Xxxxxxxxx, Xxxxxxxx 00000
If to Neoprobe at: 000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxx 00000-0000
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
7
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
or to such other address as either party may hereafter
designate to the other by notice similarly given. If mailed as
aforesaid, notice shall be deemed given three (3) business
days after being deposited in the United States mail; if
telecopied, notice shall be deemed given when telecopied on a
business day and such telecopy is received before 5:00 p.m.
Eastern Time by the addressee thereof; otherwise, such notice
by telecopy shall be deemed given on the next succeeding
business day; and
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
8
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
if sent by overnight courier, notice shall be deemed given on
the next business day after being deposited with the overnight
courier service.
IN WITNESS WHEREOF, the parties have affixed their hands and seals to
this Termination Agreement effective on the day and year first set forth above.
Neoprobe Corporation
by: /s/ Xxxxx X. Xxxx (SEAL)
-----------------------------------
Xxxxx Xxxx, President, CEO
Kol Bio-Medical Instruments, Inc.,
by: /s/ Xxxxx X. Xxxxxxxxxx (SEAL)
-----------------------------------
Xxxxx X. Xxxxxxxxxx, Chairman
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
9
Confidential portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
SCHEDULE 2.3
PRODUCTS IN INVENTORY
PURCHASE INVOICE INVOICE ITEM
CUSTOMER ORDER NUMBER DATE QTY ITEM DESCRIPTION
-------- ----- ------ ---- --- ---- -----------
*** *** *** *** *** *** ***
CONTROL UNIT PROBE UNIT INVOICE AMOUNT A/R
SERIAL NO. SERIAL NO. PRICE AMOUNT PAID BALANCE 2000 14MM 12U 12C 19U
---------- ---------- ----- ------ ---- ------- ---- ---- --- --- ---
*** *** *** *** *** *** *** *** *** *** ***
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
