Exhibit 10.1
SUPPLY AND DISTRIBUTION AGREEMENT
     THIS AGREEMENT, entered into the 15th day of November, 2007, by and between
Neoprobe Corporation, a Delaware corporation having a place of business at 425
Metro Place North, Suite 300, Dublin, Ohio 43017 (“Supplier”), and Cardinal
Health 414, LLC, a Delaware limited liability company, having a place of
business at 7000 Cardinal Place, Dublin, Ohio 43017 (“Cardinal Health”).
     WHEREAS, Supplier intends to manufacture and sell various
radiopharmaceutical products, including a product identified as Lymphoseek®, as
hereinafter described in greater detail (the “Product”); and
     WHEREAS, Cardinal Health desires to purchase from Supplier on an exclusive
basis, and Supplier desires to manufacture and sell to Cardinal Health on an
exclusive basis within the Territory, the Product on the terms and conditions
hereinafter set forth;
     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the parties mutually agree as follows:
1. DEFINITION OF TERMS

  1.1   “Affiliate(s)” means any corporation, firm, partnership or other entity
that controls, is controlled by or is under common control with a party. For
purposes of this definition, “control” shall mean the ownership of at least
fifty percent (50%) of the voting share capital of such entity or any other
comparable equity or ownership interest.     1.2   “Applicable Laws” means all
laws, ordinances, rules and regulations applicable to the Product or any aspect
thereof and to the obligations of Cardinal Health or Supplier, as the context
requires, under this Agreement, including, without limitation, (a) all
applicable federal, state and local laws and regulations, (b) the U.S. Food,
Drug and Cosmetic Act (21 U.S.C. §201, et seq.), and (c) the current Good
Manufacturing Practices promulgated by the FDA, each as amended from time to
time.     1.3   “Contract Year” means four calendar quarters beginning with the
first calendar quarter following the Effective Date, and each twelve (12) month
period beginning with the corresponding month in subsequent calendar years.
Contract Year 1 shall also include the also include those days prior to the
first calendar quarter following the Effective Date.     1.4   “Effective Date”
means the date of approval by the FDA of a New Drug Application for the Product.
    1.5   “FDA” means the U.S. Food and Drug Administration.

 

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* Portions have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.

  1.6   “Procedure” means a single diagnostic procedure (specifically, a single
surgical or preoperative imaging application of Sentinel Lymph Node Biopsy) for
which the Product is dispensed by Cardinal Health for administration to a single
patient.     1.7   “Product” shall mean Lymphoseek, as more specifically
described in Schedule 1.7, which is incorporated into this Agreement.     1.8  
“Provisional Transfer Cost” means (a) through the end of the first Contract
Year, [*] per Vial delivered to Cardinal Health, and (b) beginning with the
second Contract Year and continuing thereafter during the Term, the dollar
amount per Vial that is equal to the greater of (i) [*] percent ([*]%) of the
average retail sales price of the Product per Procedure by Cardinal Health
during the prior Contract Year, or (ii) [*] Dollars ([*]) per Vial delivered to
Cardinal Health.     1.9   “Revenue” means the sales revenue received by
Cardinal Health, net of any rebates, returns, credits and allowances, resulting
directly from the sale of the Product.     1.10   “Revenue Share Amount” means
the dollar amount due to Supplier that is equal to Revenue multiplied by the
applicable percentage set forth on Schedule 1.10, but only to the extent such
amount exceeds the Provisional Transfer Cost paid to Supplier by Cardinal
Health.     1.11   “Specifications” shall mean the manufacturing, labeling and
packaging specifications defined in an FDA New Drug Application for the Product.
    1.12   “Term” means the duration of this Agreement as set forth in Section 2
below.     1.13   “Territory” means the fifty states of the United States of
America.     1.14   “Vial” shall mean one vial of the Product, as further
identified in Schedule 1.7.

2. TERM OF AGREEMENT

  2.1   Unless earlier terminated pursuant to the terms herein, this Agreement
shall commence upon the date set forth in the first paragraph hereof and shall
continue in effect for a period of sixty (60) months from the Effective Date.

  2.2   The Term of this Agreement will automatically renew for an additional
Contract Year (and shall continue to renew annually thereafter), unless either
party gives notice of non-renewal to the other party at least six (6) months
before the expiration of the then-current Term.

3. EXCLUSIVE SALE AND PURCHASE OF THE PRODUCTS

  3.1   Following the Effective Date, Supplier agrees to manufacture and sell
the Product exclusively to Cardinal Health in the Territory, and Cardinal Health
agrees to purchase the Product exclusively from Supplier in the Territory in
accordance with

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* Portions have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.

      the provisions of this Agreement. Cardinal Health shall be entitled to
compound and distribute unit doses (i.e., prescriptions for a single Procedure)
to customers located within the Territory for use within the Territory, and to
distribute the Product in bulk form to end-users or subdistributors located
within the Territory for use within the Territory, including, but not limited
to, hospitals, clinics and mobile imaging services; provided however that (i) no
such subdistributor may appoint any other subdistributor, (ii) Cardinal Health
assumes full responsibility for compliance with all applicable restrictions and
obligations by each subdistributor, and (iii) all payments and reports due on
account of subdistributor activity will be made by and through Cardinal Health
together with Cardinal Health’s other payments and reports.     3.2   For
purposes of calculating the Revenue Share Amounts below, sales of Product in
bulk form (i.e., not compounded) shall be presumed to be on the basis of [*] per
Vial. The volume, price and ratio per vial of sales in bulk form will be
reviewed periodically by the Steering Committee and may be adjusted as deemed
appropriate by the Steering Committee.

4. REVENUE SHARE AMOUNT

  4.1   Within thirty (30) days following the end of each month during the Term,
Cardinal Health shall provide to Supplier data on the sales of the Product
sufficiently detailed to allow Supplier to calculate the number of Procedures
performed and the applicable Revenue Share Amount.     4.2   Within forty-five
(45) days following the end of each calendar quarter of the Term, Cardinal
Health will pay to Supplier the Revenue Share Amount by annualizing the number
of Procedures sold during the applicable quarter (the “Quarterly Revenue Share
Amount”) and will provide to Supplier a report setting forth in reasonable
detail the basis for the calculation of the Quarterly Revenue Share Amount.    
4.3   For each Contract Year, Cardinal Health shall calculate the annual Revenue
Share Amount due to Supplier (the “Annual Revenue Share Amount”). If the Annual
Revenue Share Amount is less than the sum of the Quarterly Revenue Share Amounts
paid during the applicable Contract Year, Supplier shall refund the excess to
Cardinal Health within forty-five (45) days of notice of such excess. If the
Annual Revenue Share Amount is greater than the sum of the Quarterly Revenue
Share Amounts for the applicable Contract Year, Cardinal Health shall remit the
balance due to Supplier within forty-five (45) days following the last day of
the applicable Contract Year.     4.4   In the event the Provisional Transfer
Cost of Vials used related to Procedures sold during a given quarter exceeds the
amount calculated pursuant to Schedule 1.10, Cardinal Health shall be entitled
to a credit against the Revenue Share Amount due to Supplier in the next
applicable period or periods in the amount of such excess. However, for purposes
of calculating the Revenue Share Amount for the applicable

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* Portions have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.

      period, in no case can the number of Vials used for any given calendar
quarter included in the calculation exceed the number of Procedures sold in the
calculation.

5. PROVISIONAL TRANSFER COST; SHIPMENT TERMS; MILESTONE PAYMENTS

  5.1   The price to be paid for Vials of the Products purchased by Cardinal
Health under this Agreement shall be the Provisional Transfer Cost.     5.2  
All prices are F.O.B. Cardinal Health’s national radiopharmaceutical
distribution center.     5.3   Prices do not include any sales, use, excise or
other similar taxes or duties. Cardinal Health shall pay all such taxes and
duties and any personal property taxes or other similar charges assessed on the
Product after delivery to the carrier.     5.4   Unless otherwise agreed by the
parties in writing, Cardinal Health shall make payment separately for each
purchase order filled by Supplier. Cardinal Health shall pay all invoice amounts
within thirty (30) days of the date of Cardinal Health’s shipment of the Product
from Cardinal Health’s national distribution center to another point of
destination (i.e., Cardinal Health nuclear pharmacy or independent pharmacy).  
  5.5   Title to and risk of loss or damage to the Product shall pass to
Cardinal Health on placement of Product in the hands of a carrier for shipment
from Cardinal Health’s national distribution center to another point of
destination.     5.6   In addition to the Revenue Share Amount and Provisional
Transfer Cost, Cardinal Health shall pay to Supplier the following payments (the
“Milestone Payments”):

     (a) Upon Cardinal’s sale of [*] cumulative Procedures, [*];
     (b) Upon Cardinal’s sale of [*] cumulative Procedures, [*];
     (c) Upon Cardinal’s sale of [*] cumulative Procedures, [*]; and
     (d) Upon Cardinal’s sale of [*] cumulative Procedures, [*].

  5.7   Cardinal Health shall pay the applicable Milestone Payment within
forty-five (45) days of the end of the quarter in which Cardinal Health achieves
the applicable milestone Procedures amount as set forth in Section 5.5.

6. ORDERING PROCEDURES; NO MINIMUM PURCHASE REQUIREMENT; MINIMUM SALES
REQUIREMENT

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* Portions have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.

  6.1   Cardinal Health shall submit its orders for the Product through
Supplier’s Customer Service representative. Cardinal Health may also submit
orders by facsimile to (614) 793-7522. Each order submitted by facsimile or in
other written form must specify (a) the number of Vials of the Product to be
purchased and (b) the desired delivery dates. Except for the information
specified in the preceding clauses (a) and (b), the terms of the Cardinal
Health’s purchase orders or any other documents submitted by Cardinal Health
shall be of no force and effect, and the terms of such purchase and sale shall
be governed solely by this Agreement.     6.2   Cardinal Health will provide
Supplier with real-time electronic access to inventory quantity and shipment
information regarding Product distributed from its national radiopharmaceutical
distribution center referenced in 5.2.     6.3   Supplier will use reasonable
commercial efforts to manufacture and supply the Product in the amounts and at
the times specified by Cardinal Health.     6.4   Cardinal Health has no
obligation to purchase from Supplier any minimum dollar volume of the Product,
however, commencing with the second Contract Year and, for each Contract Year
thereafter, Cardinal Health shall be required to sell not less than the greater
of (i) [*] percent ([*]%) of the number of Procedures sold during the prior
Contract Year or (ii) [*] Procedures (the “Minimum Sales Requirement”). In the
event Cardinal Health does not meet the Minimum Sales Requirement for any
Contract Year, within thirty (30) days following the expiration of such Contract
Year, Cardinal must either (a) pay to Supplier the additional Revenue Share
Amount (based on the average sales price and Procedure/Vial ratio that existed
for the first three quarters of the Contract Year) that Supplier would have
earned if Cardinal Health had met the Minimum Sales Requirement or (b) terminate
Supplier’s exclusivity obligation under this Agreement.

7. STEERING COMMITTEE; RETAIL PRICE

  7.1   Cardinal Health and Supplier agree to establish a Steering Committee
comprised of an equal number of representatives from each party. The Steering
Committee will meet periodically, but no less frequently than semi-annually. The
Steering Committee shall be responsible for reviewing performance and economics
of the distribution of the Product including, without limitation, consideration
of reimbursement rate, actual product labeling, average selling price, number of
Procedures per Vial, market penetration and Supplier production forecasts.    
7.2   The Steering Committee will discuss and suggest the retail sales price for
the Product; provided however, that Cardinal Health has sole discretion to
establish the retail sales price and that the Provisional Transfer Price per
vial may not be decreased below $[*] per Vial

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8. AUDIT RIGHTS

  8.1   Each party (each such party, an “Obligated Party”) agrees to permit the
other party (each such party, an “Auditing Party”) to appoint an independent
certified accountant, acceptable and approved by the Obligated Party, to examine
during reasonable business hours, upon ten (10) business days prior written
notice and not more frequently than once each rolling twelve (12) calendar
months, the books and records of the Obligated Party only to the extent
necessary to verify compliance with this Agreement. The Auditing Party shall
make such examination at its sole cost and expense; provided however, that in
the event such audit reveals a material breach of the Obligated Party’s
obligations under this Agreement, such Obligated Party shall bear the reasonable
costs and expenses of the audit.     8.2   Unless otherwise agreed to by the
Parties, if as a result of the audit performed pursuant to Section 8.1, the
independent certified accountant determines that Cardinal Health has
under-reported any information necessary to calculate Revenue Share Amount for
the Product and as a result Supplier has received less than it should have under
the Agreement, Cardinal Health shall, no later than forty-five (45) business
days after receiving notice of such underpayment, remit to Neoprobe the amount
of the underpayment. If as a result of the audit performed pursuant to
Section 8.1, the independent certified accountant determines that Cardinal
Health has over-reported any information used to calculate the Revenue Share
Amount for the Product and as a result Supplier has received more than it should
have under the Agreement, Cardinal Health shall be entitled to a credit against
the Revenue Share Amount due to Supplier in the next applicable period in the
amount of such excess.     8.3   The Auditing Party shall treat the information
provided by the Obligated Party as confidential information except that the
Auditing Party may disclose such information to its auditors, accountants and
attorneys to the extent reasonably necessary to conduct such audit.

9. DUTIES OF CARDINAL HEALTH

  9.1   In addition to all other obligations set forth in this Agreement,
Cardinal Health shall:

  (a)   use diligent efforts to market the Product, including creating
promotional, educational, marketing and sales materials and a marketing plan
acceptable to the Supplier; provided that Supplier may at its expense undertake
certain promotional and/or marketing activities; and     (b)   secure any
governmental or regulatory approvals, at its own expense, necessary for its
purchase, use or resale of the Product and provide proof of regulatory
notification or approval as requested by Supplier; and     (c)   comply at all
times with all Applicable Laws governing the performance of its obligations
hereunder.

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10. DUTIES OF SUPPLIER

  10.1   In addition to all other obligations set forth in this Agreement,
Supplier shall:

  (a)   manufacture, label and package the Product in accordance with the
Specifications;     (b)   notify Cardinal Health promptly in writing should
Supplier become aware of any defect or condition which may render the Product in
violation of any Applicable Laws; and     (c)   comply at all times with all
Applicable Laws governing the manufacture, labeling, packaging or sale of the
Product or the performance of Supplier’s obligations hereunder.

11. REPRESENTATIONS AND WARRANTIES

  11.1   Such party (a) is duly organized, validly existing and in good standing
under the laws of the state in which it is organized, (b) has the power and
authority and the legal right to own and operate its property and assets, and to
carry on its business as it is now being conducted, and (c) is in compliance
with all requirements of Applicable Laws, except to the extent that any
noncompliance would not materially adversely affect such party’s ability to
perform its obligations under the Agreement;     11.2   Such party (a) has the
power and authority and the legal right to enter into this Agreement and to
perform its obligations hereunder and (b) has taken all necessary action on its
part to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder.     11.3   This Agreement has been
duly executed and delivered on behalf of such party, and constitutes a legal,
valid, binding obligation, enforceable against such party in accordance with its
terms;     11.4   All necessary consents, approvals and authorizations of all
regulatory authorities and other persons required to be obtained by such party
in connection with the Agreement have been obtained; and     11.5   The
execution and delivery of this Agreement and the performance of such party’s
obligations hereunder (a) do not conflict with or violate any requirement of
Applicable Laws, and (b) do not materially conflict with, or constitute a
material default or require any consent under, any contractual obligation of
such party.

12. PRODUCT WARRANTIES
12.1 Supplier warrants that the Product shall:

  (a)   conform to the Specifications;

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  (b)   be free from defects in material and workmanship; and     (c)   not be
adulterated or misbranded within the meaning of the U.S. Food, Drug and Cosmetic
Act, as amended (21 U.S.C. §201, et seq.), and the regulations promulgated from
time to time thereunder.

THE WARRANTIES IN SECTION 9.1 ARE THE SOLE AND EXCLUSIVE WARRANTIES AS TO
SUPPLIER’S PRODUCTS, AND ARE EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, ORAL OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY ORAL OR IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR NONINFRINGEMENT AND SUPPLIER
DOES NOT MAKE ANY WARRANTY TO CARDINAL HEALTH’S CUSTOMERS OR AGENTS. EXCEPT TO
THE EXTENT THAT INDEMNIFICATION IS AVAILABLE UNDER SECTION 13.2 BELOW, CARDINAL
HEALTH’S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THE FOREGOING WARRANTIES
SHALL BE REPLACEMENT OF OR (AT SUPPLIER’S OPTION OR IF REPLACEMENT IS
IMPRACTICAL) REFUND FOR RETURNED NON-CONFORMING VIALS OF PRODUCT FOR WHICH FULL
DOCUMENTATION AND PROOF OF NON-CONFORMITY IS PROVIDED TO SUPPLIER WITHIN 60 DAYS
AFTER THE ORIGINAL NON-CONFORMING VIALS ARE SHIPPED BY SUPPLIER.
13. INDEMNIFICATION; LIMITATIONS OF LIABILITY

  13.1   Cardinal Health shall indemnify and hold harmless Supplier, its
Affiliates, and their respective directors, officers, employees and agents
(“Supplier Indemnitees”) from and against any and Losses (as defined in section
13.4) arising out of or resulting from (a) any breach of its representations,
warranties or obligations set forth in this Agreement, (b) any negligence or
willful misconduct by Cardinal Health, or (c) any dispensing by Cardinal of the
Product, except to the extent that any of the foregoing arises out of or results
from any Supplier Indemnitee’s negligence, willful misconduct or breach of this
Agreement.     13.2   Supplier shall indemnify and hold harmless Cardinal
Health, its Affiliates, and their respective directors, officers, employees and
agents (“Cardinal Health Indemnitees”) from and against all Losses (as defined
in section 13.4) arising out of or resulting from (a) any breach of its
representations, warranties or obligations set forth in this Agreement, (b) any
manufacture, sale, promotion, distribution of the Product by Supplier, or any
person’s use of or exposure to the Product, (c) any actual or alleged
infringement or violation of any U.S. patent, trade secret, copyright, trademark
or other proprietary rights related to the Product, or (d) any negligence or
willful misconduct by Supplier, except to the extent that any of the foregoing
arises out of or results from any Cardinal Health Indemnitee’s negligence,
willful misconduct or breach of this Agreement.

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* Portions have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.

  13.3   All indemnification obligations in this Agreement are conditioned upon
the party seeking indemnification: (a) promptly notifying the indemnifying party
of any claim or liability of which the party seeking indemnification becomes
aware (including a copy of any related complaint, summons, notice or other
instrument); provided, however, that failure to provide such notice within a
reasonable period of time shall not relieve the indemnifying party of any of its
obligations hereunder except to the extent the indemnifying party is prejudiced
by such failure, (b) cooperating with the indemnifying party in the defense of
any such claim or liability (at the indemnifying party’s expense), and (c) not
compromising or settling any claim or liability without prior written consent of
the indemnifying party.     13.4   For purposes of this Section 13, “Losses”
shall mean all suits, claims, losses, demands, liabilities, damages, costs and
expenses (including reasonable attorneys’ fees) in connection with any suit,
demand or action by any third party.     13.5   IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL,
EXEMPLARY OR PUNITIVE DAMAGES OF ANY NATURE, INCLUDING LOST OR ANTICIPATED
PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF,
REGARDLESS OF WHETHER THE LIABILITY ARISES OUT OF BREACH OF CONTRACT, BREACH OF
WARRANTY, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER THEORY.
THE LIMITATIONS IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE ANY LIABILITY
FOR LOSSES PURSUANT TO SECTION 13.1 OR 13.2 HEREOF.

14. INSURANCE

  14.1   Supplier shall, at its own cost and expense, obtain and maintain in
full force and effect the following insurance during the Term: (a) Commercial
General Liability insurance with per-occurrence and general aggregate limits of
not less than $[*], and (b) Product and Completed Operations Liability Insurance
with per-occurrence and general aggregate limits of not less than $[*]. In the
event that any of the required policies of insurance are written on a claims
made basis, then such policies shall be maintained during the entire Term and
for a period of not less than three (3) years following the termination or
expiration of this Agreement. Cardinal Health and its Affiliates shall be named
as additional insureds under the Product and Completed Operations Liability
insurance policies as respects the Product. Supplier shall furnish certificates
of insurance upon request for all of the above noted policies and required
additional insured status. Each insurance policy that is required under this
Section shall be obtained from an insurance carrier with an A.M. Best rating of
at least A- VII.

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15. CONFIDENTIALITY

  15.1   Cardinal Health and Supplier agree that they will not disclose the
other party’s Confidential Information (as defined in Section 15.2) to any third
party without the prior written consent of the other party except as required by
law, regulation or court or administrative order; provided, however, that prior
to making any such legally required disclosure, the party making such disclosure
shall give the other party as much prior notice of the requirement for and
contents of such disclosure as is practicable under the circumstances.
Notwithstanding the foregoing, each party may disclose the other party’s
Confidential Information to any of its Affiliates provided that such Affiliates
agree to be bound by the terms of this Section.     15.2   As used in this
Agreement, the term “Confidential Information” includes all such information
furnished by Cardinal Health or Supplier, or any of their respective
representatives or Affiliates, to the other or its representatives or
Affiliates, whether furnished before, on or after the date of this Agreement and
furnished in any form, including but not limited to written, verbal, visual,
electronic or in any other media or manner. Confidential Information includes
all proprietary technologies, know-how, trade secrets, discoveries, inventions
and any other Intellectual Property (whether or not patented), analyses,
compilations, business or technical information and other materials prepared by
either party, or any of their respective representatives, containing or based in
whole or in part on any such information furnished by the other party or its
representatives. Confidential Information also includes the terms of this
Agreement.     15.3   Notwithstanding Section 15.2, Confidential Information
does not include information that (a) is or becomes generally available to the
public or within the industry to which such information relates other than as a
result of a breach of this Agreement, (b) is already known by the receiving
party at the time of disclosure as evidenced by the receiving party’s written
records, (c) becomes available to the receiving party on a non-confidential
basis from a source that is entitled to disclose it on a non-confidential basis,
or (d) was or is independently developed by or for the receiving party without
reference to the Confidential Information, as evidenced by the receiving party’s
written records.

16. USE OF TRADEMARKS

  16.1   Subject to the terms and conditions of this Agreement, Supplier hereby
grants to Cardinal Health the non-exclusive right to use Supplier’s trademarks,
trade names and logos (the “Supplier Marks”) as listed in Schedule 16.1 solely
in connection with its distribution, promotion and marketing of the Product
hereunder. Cardinal Health recognizes Supplier’s exclusive ownership of the
Supplier Marks and agrees to comply with any reasonable usage requirements
and/or quality control guidelines with respect to the Supplier Marks as Supplier
may reasonably prescribe in writing from time to time. All goodwill resulting
from the use of the Supplier Marks by Cardinal Health shall belong to and inure
solely to the benefit of Supplier. Cardinal

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      Health shall not undertake any act that would impair the Supplier Marks or
the goodwill associated therewith. In particular, Cardinal Health shall not use
the Supplier Marks except as authorized in this Agreement. Cardinal Health shall
promptly notify Supplier in writing of any actual or suspected infringement of
the Supplier Marks by a third party of which Cardinal Health becomes aware.

  16.2   Cardinal Health will produce all sales and marketing materials used in
connection with the sale and marketing of the Product. Cardinal Health will
provide marketing collateral to its sales personnel in the Territory. Supplier
must approve Product claims and labeling.

17. REGULATORY MATTERS

  17.1   Each party will notify the other promptly in writing, but in all cases
within five business days, of learning of any event that either materially
affects, or could reasonably be expected to materially affect, the marketing of
the Product, including without limitation any complaint regarding the Product,
report of adverse event with respect to the Product, and any inquiry or other
communication, whether oral or written, received from any person, including any
governmental or regulatory authority.

  17.2   In the event that either party obtains information that a Product may
not meet the approved specifications or labeling for such Product, or is
otherwise defective, misbranded or adulterated, such party shall notify the
other party immediately and both parties shall cooperate fully regarding the
investigation and disposition of such matter. Cardinal Health and Supplier shall
each maintain such traceability records as are sufficient and as may be
necessary to permit a recall, product withdrawal or field correction of the
Product. In the event any applicable governmental or regulatory authority should
issue a request, directive or order that a Product be recalled or withdrawn,
Cardinal Health agrees to cooperate fully with Supplier in the recall and take
all corrective action necessary to resolve the situation. The Supplier shall
bear the costs incurred in affecting a recall, except to the extent such recall
is directly attributable to the actions or omissions of Cardinal Health or a
breach of its obligations hereunder, in which case Cardinal Health shall be
responsible for all expenses reasonably incurred by Supplier in effecting the
recall.

18. TERMINATION

  18.1   Either party may terminate this Agreement as follows:

  (a)   if the other party commits a material breach of any of the provisions of
this Agreement and does not cure such breach within thirty (30) days after the
non-breaching party gives written notice thereof; or     (b)   immediately in
the event that proceedings in bankruptcy or insolvency are instituted by or
against the other party, or a receiver is appointed, or if any

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      substantial part of the assets of the other party is the object of
attachment, sequestration or other type of comparable proceeding, and such
proceeding is not vacated or terminated within thirty (30) days after its
commencement or institution.

  18.2   Following the expiration or termination of this Agreement, all further
rights and obligations of the parties shall cease, except that the parties shall
not be relieved of (a) their respective obligations to pay monies due or which
become due on or subsequent to the date of expiration or termination, and
(b) any other respective obligations under this Agreement which specifically
survive after the date of expiration or termination.

19. MISCELLANEOUS

  19.1   All notices and other communications hereunder shall be in writing and
shall be deemed given: (a) when delivered personally, (b) when delivered by
facsimile transmission (receipt confirmed), (c) when received or refused, if
mailed by registered or certified mail (return receipt requested), postage
prepaid; or (d) when delivered if sent by express courier service, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice; provided, that notices of a change of address
shall be effective only upon receipt thereof):

     
To Supplier:
  Neoprobe Corporation
 
  425 Metro Place North, Suite 300
 
  Dublin, Ohio 43017
 
  Attn: President
 
  Facsimile: (614) 793 - 7522
 
   
With a copy to:
  Porter, Wright, Morris & Arthur, LLP
 
  41 South High Street, Suite 2800
 
  Columbus, Ohio 43215
 
  Attn: William J. Kelly, Jr.
 
  Facsimile: (614) 227-2100
 
   
To Cardinal Health:
  Cardinal Health 414, LLC
 
  7000 Cardinal Place
 
  Dublin, Ohio 43017
 
  Attn: President-NPS
 
  Facsimile: (614)-757-8311

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With a copy to:
  Cardinal Health, Inc.
 
  7000 Cardinal Place
 
  Dublin, Ohio 43017
 
  Attn: VP, General Counsel—N.P.S.
 
  Facsimile: (614) 757-3142

  19.2   This Agreement, the attachments and any amendments thereto constitute
the entire understanding between the parties and supersede any contracts,
agreements or understanding (oral or written) of the parties with respect to the
subject matter hereof. No term of this Agreement may be amended except upon
written agreement of both parties, unless otherwise provided in this Agreement.
    19.3   The captions in this Agreement are for convenience only and are not
to be interpreted or construed as a substantive part of this Agreement     19.4
  The parties agree to execute, acknowledge and deliver such further instruments
and to take all such other incidental acts as may be reasonably necessary or
appropriate to carry out the purpose and intent of this Agreement.     19.5  
Failure by either party to insist upon strict compliance with any term of this
Agreement in any one or more instances will not be deemed to be a waiver of its
rights to insist upon such strict compliance with respect to any subsequent
failure.     19.6   If any term of this Agreement is declared invalid or
unenforceable by a court or other body of competent jurisdiction, the remaining
terms of this Agreement will continue in full force and effect.     19.7   The
relationship of the parties is that of independent contractors, and neither
party will incur any debts or make any commitments for the other party except to
the extent expressly provided in this Agreement. Nothing in this Agreement is
intended to create or will be construed as creating between the parties the
relationship of joint ventures, co-partners, employer/employee or principal and
agent.     19.8   This Agreement will be binding upon and inure to the benefit
of the parties, their successors and permitted assigns. Neither party may assign
this Agreement, in whole or in part, without the prior written consent of the
other party, except that either party may, without the other party’s consent,
assign this Agreement to an Affiliate (in which case the assigning party shall
remain jointly and severally liable and responsible with any such Affiliate for
the performance of this Agreement) or to a successor to substantially all of the
business or assets of the assigning company.     19.9   This Agreement shall be
governed by and construed under the laws of the State of Ohio, excluding its
conflicts of law provisions.     19.10   In any action or proceeding between the
parties in connection with this Agreement, the court shall have the authority to
award and apportion costs, including reasonable

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      attorneys’ fees and other costs incurred by the parties, taking into
account the circumstances of the case, the conduct of the parties during the
proceeding, and the result.     19.11   Any action or proceeding arising out of
or relating to this Agreement may be brought in the state or federal courts
located in Franklin County, Ohio, and each of the parties irrevocably submits to
the exclusive jurisdiction of each such court in any such action or proceeding,
waives any objection it may now or hereafter have to venue or to convenience of
forum, agrees that all claims in respect of the action or proceeding shall be
heard and determined only in any such court and agrees not to bring any action
or proceeding arising out of or relating to this Agreement in any other court.
The parties agree that either or both of them may file a copy of this Section
19.11 with any court as written evidence of the knowing, voluntary and bargained
agreement between the parties irrevocably to waive any objections to venue or to
convenience of forum. Process in any action or proceeding referred to in the
first sentence of this Section may be served on any party in any manner set
forth in Section 19.1, provided that the foregoing shall not affect the right of
a party to serve process in any other manner permitted by law.     19.12   This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original but all of which together will constitute one and the same
instrument. Any photocopy, facsimile or electronic reproduction of the executed
Agreement shall constitute an original.     19.13   Neither party will make any
press release or other public disclosure regarding this Agreement or the
transactions contemplated hereby without the other party’s express prior written
consent, except as required under applicable law or by any governmental agency,
in which case the party required to make the press release or public disclosure
shall use commercially reasonable efforts to obtain the approval of the other
party as to the form, nature and extent of the press release or public
disclosure prior to issuing the press release or making the public disclosure.
Specifically, if either party determines that this Agreement must be disclosed
in a filing with the Securities and Exchange Commission, that party shall use
its best efforts to obtain confidential treatment of the pricing and revenue
share amounts set forth in this Agreement and will consult with the other party,
at least two business days prior to filing, regarding the information to be
disclosed.     19.14   The rights and obligations of the parties shall continue
under Section 13 (Indemnification: Limitations of Liability), 14 (Insurance), to
the extent expressly stated therein, 15 (Confidentiality), 17 (Regulatory
Matters), 18 (Termination), and 19 (Miscellaneous) notwithstanding expiration or
termination of this Agreement.     19.15   Except as to payments required under
this Agreement, neither party shall be liable in damages for, nor shall this
Agreement be terminable or cancelable by reason of, any delay or default in such
party’s performance hereunder if such default or delay is caused by events
beyond such party’s reasonable control including, but not limited

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      to, acts of God, regulation or law or other action or failure to act of
any government or agency thereof, war or insurrection, civil commotion,
destruction of production facilities or materials by earthquake, fire, flood or
storm, labor disturbances, epidemic, or failure of suppliers, public utilities
or common carriers; provided however, that the party seeking relief hereunder
shall immediately notify the other party of such cause(s) beyond such party’s
reasonable control. The party that may invoke this section shall use all
reasonable endeavors to reinstate its ongoing obligations to the other. If the
cause(s) shall continue unabated for one hundred eighty (180) days, then both
parties shall meet to discuss and negotiate in good faith what modifications to
this Agreement should result from this force majeure.     19.16   The terms and
conditions of this Agreement are intended solely for the benefit of each party
to this Agreement and their respective successors or permitted assigns, and it
is not the intention of the parties to confer third party beneficiary rights,
and this Agreement does not confer such rights, upon any other person or entity.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized representatives as of the date first written
above.

                  NEOPROBE CORPORATION
 
                By:   /s/ David C. Bupp          
 
      Name:   David C. Bupp
 
           
 
      Title:   President & CEO
 
           
 
                CARDINAL HEALTH 414, LLC
 
                By:   /s/ Gordon Troup          
 
      Name:   Gordon Troup
 
           
 
      Title:   President
 
           

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Schedule 1.7
Lymphoseek Description
1.0    Product Name
Lymphoseek®
2.0    Chemical Name and Structure
Technetium-99m-diethylenetriamine pentaacetic acid-mannosyl-dextran
(TcDTPA-mannosyl-dextran)
Chemical Structure:
[l28956al2895691.jpg]
3.0    Proposed Indications
Lymphoseek is indicated for use in preoperative and/or intraoperative
localization of sentinel lymph node(s) draining the primary site of a tumor in
patients with melanoma or breast cancers.
4.0    Dosage Form and Dosing Regimen
Patients will receive a single dose of 50 µg Lymphoseek radiolabeled with 0.5 or
1.0 mCi 99mTc. The amount of 99m Tc used will be related to the time between
injection of Lymphoseek and surgery. 0.5 mCi 99m TC should be used for patients
scheduled for surgery the same day as the injection of Lymphoseek. For those
patients that are scheduled for surgery the following day after injection with
Lymphoseek should have the radiotracer labeled with 1.0 mCi 99m Tc.

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* Portions have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
Schedule 1.10
Revenue Share Pricing Tier Table
Supplier’s Revenue Share will be based upon the number of Procedures sold by
Cardinal Health during the Contract Year and the average number of Procedures
that Cardinal Health is able to dispense per Vial during such Contract Year as
follows:

Pricing Tier Table
                                                  Number of Procedures    
Procedures per Vial
(Annualized)                                                                    
                              Less                                          
Greater     Than or     [*]     [*]     [*]     [*]     [*]     [*]     [*] Than
    Equal To                                                                    
                        [*]     [*]     [*]     [*]     [*]     [*]     [*]    
[*]     [*]                                                   [*]     [*]    
[*]     [*]     [*]     [*]     [*]     [*]     [*]                            
                      [*]     [*]     [*]     [*]     [*]     [*]     [*]    
[*]     [*]                                                   [*]     [*]    
[*]     [*]     [*]     [*]     [*]     [*]     [*]                            
                      [*]     [*]     [*]     [*]     [*]     [*]     [*]    
[*]     [*]                                                   [*]     [*]    
[*]     [*]     [*]     [*]     [*]     [*]     [*]

      
Example (Quarterly Revenue Share Calculation in Contract Year 1):

Number of Procedures Dispensed = [*]
Number of Vials Used = [*]
Procedures per Vial = [*]
Provisional Transfer Cost of Vials [*]
CH Revenue = [*]
Number of Procedures (annualized) = [*]
Revenue Share Percentage = [*]
Revenue Share Calculation = [*].

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Schedule 16.1
List of Supplier Registered Trademarks, Trademarks, Trade Names and Logos
Neoprobe®
Lymphoseek®
[l28956al2895690.jpg]

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