Exhibit
      10.13

     

    DISTRIBUTION
      AGREEMENT

    


    BETWEEN

    


    NEOPROBE
      CORPORATION

    


    AND

    


    ETHICON
      ENDO-SURGERY, INC.
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    DISTRIBUTION
      AGREEMENT

    


    This
      is
      an Agreement dated and effective as of the last date of signature below
      (“Effective Date”), by and between Ethicon Endo-Surgery, Inc. a corporation
      organized under the laws of the State of Ohio, having a business address at
      4545
      Creek Road, Cincinnati, Ohio 45242 (“Ethicon”); and Neoprobe Corporation, a
      corporation organized under the laws of the State of Delaware, having a business
      address at 425 Metro Place North, Suite 300, Dublin, Ohio 43017 (“Neoprobe”,
      together with Ethicon, the “Parties”, and each a “Party”).

    


    ARTICLE
      1 - BACKGROUND

    


    1.1 Ethicon
      manufactures and markets surgical instruments and accessories for minimally
      invasive surgery, including trocars, staplers, ligation devices, hand-held
      instruments, retractors, manipulation devices, electrosurgery and diagnostic
      surgical products.

    


    1.2 Neoprobe
      manufactures and markets radiation detection devices, including but not limited
      to, devices for use in intraoperative lymphatic mapping (“ILM”) and gamma
      radiation guided surgery.

    


    1.3 Ethicon
      has developed and continues to develop certain technology, know how,
      intellectual property, devices and instruments for use in ILM and gamma
      radiation guided surgery.

    


    1.4 The
      devices manufactured and marketed by Neoprobe complement Ethicon’s surgical
      instruments and accessories for minimally invasive surgery, ILM and gamma
      radiation guided surgery and the Parties desire that Ethicon distribute the
      Products (as defined below) on a worldwide exclusive basis pursuant to the
      terms
      of this Agreement.

    


    1.5 The
      Parties entered into a standstill and rights agreement (the “Standstill and
      Rights Agreement”) on August 10, 1999, pursuant to which Ethicon paid Neoprobe
      four hundred thousand dollars ($400,000.00) in consideration of Neoprobe
      obligations in the Standstill and Rights Agreement.

    


    1.6 In
      connection with a good faith purchase order placed by Ethicon on August 13,
      1999
      for Products (the “PO”), Neoprobe placed purchase orders with the appropriate
      vendors to fill the PO in accordance with the terms thereof.

    


    Therefore,
      in consideration of the mutual promises, covenants and agreements hereinafter
      set forth, the Parties agree as follows:

     

    ARTICLE
      2 - DEFINITIONS

    


    The
      following terms, when used with initial capital letters, shall have the
      following meanings:

    


    2.1 “Affiliate”
      is any entity that directly or indirectly controls, is controlled by, or is
      under common control with a specified Party, and for such purpose “control”
shall mean the possession, direct or indirect, of the power to direct or cause
      the direction of the management and policies of the entity, whether through
      the
      ownership of voting securities, by contract or otherwise.

     

    
      
        
        

      

      
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    2.2 A
“Change
      of Control” shall be deemed to have occurred if (A) any “person” (as such term
      is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
      as
      amended (the “Exchange Act”) is or becomes the “beneficial owner” (as defined in
      Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
      Neoprobe representing 30% or more of the combined voting power of Neoprobe’s
      then outstanding securities; or (B) the stockholders of Neoprobe approve a
      merger or consolidation of Neoprobe with any other corporation, other than
      a
      merger or consolidation which would result in the voting securities of Neoprobe
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) at least 80% of the combined voting power of the voting
      securities of Neoprobe or such surviving entity outstanding immediately after
      such merger or consolidation, or the stockholders of Neoprobe approve a plan
      of
      complete liquidation of Neoprobe or an agreement for the sale or disposition
      by
      Neoprobe of all or substantially all of Neoprobe’s assets.

    


    2.3 “Commercial
      Year” shall mean a one (1) year period commencing on January 1 and any
      anniversary thereof during the term of this Agreement.

    


    2.4 “Control
      Unit” shall mean a gamma radiation detection device including a
      microcomputer-based unit which measures the presence of gamma-emitting isotopes,
      including, but not limited, to the model 2000 Control Unit.

    


    2.5 “First
      Commercial Year” is the one (1) year period commencing on January 1, 2000. The
      four (4) years following the First Commercial Year shall be referred to as
      the
“Second”, “Third”, “Fourth” and “Fifth” Commercial Years,
      respectively.

    


    2.6 “Gross
      Profit” is the difference between Neoprobe’s cost as indicated in Schedule 5.2
      and the Transfer Price indicated in Schedule 5.2.

    


    2.7 “Improved
      Product” or “Improved Products” shall mean an enhancement or modification to an
      existing Product.

    


    2.8 “Insolvency
      Event” shall mean the occurrence of any of the following events:

    


    (a) Neoprobe
      shall admit in writing its inability, or be generally unable, to pay its debts
      as such debts become due; or

    


    (b) Neoprobe
      shall (1) apply for or consent to the appointment of, or the taking of
      possession by, a receiver, custodian, trustee or liquidator of itself or of
      all
      or a substantial part of its property, (2) make a general assignment for the
      benefit of its creditors, (3) commence a voluntary case under the United States
      Bankruptcy Code, as now or hereafter in effect (the “Bankruptcy Code”), (4) file
      a petition seeking to take advantage of any other law relating to bankruptcy,
      insolvency, reorganization, winding-up, or composition or readjustment of debts,
      (5) fail to controvert in a timely and appropriate manner, or acquiesce in
      writing to, any petition filed against it in any involuntary case under the
      Bankruptcy Code, or (6) take any corporate action for the purpose of effecting
      any of the foregoing; or

     

    
      
        
        

      

      
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    (c) A
      proceeding or case shall be commenced by or against Neoprobe in any court of
      competent jurisdiction, seeking (1) its liquidation, reorganization, dissolution
      or winding-up, or the composition or readjustment of its debts, (2) the
      appointment of a trustee, receiver, custodian, liquidator or the like of
      Neoprobe or of all or any substantial part of its assets, or (3) similar relief
      in respect of Neoprobe under any law relating to bankruptcy, insolvency,
      reorganization, winding-up, or composition or adjustment of debts, or an order,
      judgment or decree approving or ordering any of the foregoing shall be entered
      and continue unstayed and in effect for a period of ninety (90) days; or an
      order for relief against Neoprobe shall be entered in a case under the
      Bankruptcy Code.

    


    2.9 “Know-How”
      shall mean all know-how relating to the design, development, manufacture, sale
      or use of any Product or Improved Product, including, without limitation,
      processes, techniques, methods, products, apparatuses, materials and
      compositions which are reasonably related thereto.

    


    2.10 “New
      Product” shall mean an instrument or device developed by or for Neoprobe prior
      to and/or during the term of this Agreement and any extensions thereof other
      than a Product or Improved Product.

    


    2.11 “Patent
      Applications” are the U.S. Patent applications listed in Schedule 2.11 hereto;
      all foreign counterparts of such applications; and all continuations,
      continuations-in-part, and divisionals of such applications.

    


    2.12 “Patents”
      are the U.S. Patents listed in Schedule 2.11 hereto and any patents subsequently
      issuing from the Patent Applications as well as renewals, reissues,
      reexaminations, extensions, and patents of addition and patents of importation.
      Furthermore, Patents shall also include each patent, U.S. or foreign, which
      Neoprobe owns or is empowered to grant a license to Ethicon prior to or during
      the term of this Agreement or any extension thereof, the practice of which
      is
      reasonably necessary for Ethicon to sell the Product.

    


    2.13 “Probe”
      shall mean a hand-held gamma radiation-sensing device that connects to a Control
      Unit.

    


    2.14 “Probe
      Isolation Module” or “PIM” shall mean a device that provides a type BF applied
      part interface between a 14mm Probe and a Control Unit.

    


    2.15 “Product”
      or “Products” shall mean instruments and devices used for radiation detection,
      including but not limited to, Neoprobe portable radioisotope detector systems,
      probes and related accessories set forth on Schedule 2.15 attached hereto as
      may
      be amended from time to time by mutual agreement of the Parties or a New Product
      added to Schedule 2.15 pursuant to Section 5.7 or Section 6.2.

     

    
      
        
        

      

      
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    2.16 “Raw
      Materials” shall mean the materials, components, and packaging required to
      manufacture and package any Product in accordance with the
      Specifications.

    


    2.17 “Regulatory
      Compliance” shall mean compliance with (i) all applicable statutes, laws, and
      regulations, including good manufacturing practices (“GMP”) and (ii) Ethicon
      Endo-Surgery, Inc. Quality Assurance Requirements, which are attached and
      incorporated into this Agreement as Exhibit 2.17.

    


    2.18 “Specifications”
      shall mean the requirements with which the Product must conform as specified
      by
      21 CFR §820.181 and include device specifications, production process
      specifications, quality assurance procedures and specifications, packaging
      and
      labeling specifications, and installation, maintenance and servicing procedures
      and methods that are contained in the Device Master Record for the
      Product.

    


    2.19 “Trademarks”
      shall mean the (i) U.S. and foreign marks set forth in Schedule 2.19 hereto;
      (ii) any unregistered trademarks used in connection with Products; and (iii)
      all
      copyrights or distinctive features of the packaging, including but not limited
      to trade dress, used in connection with the Products.

    


    2.20 “Year
      2000 Compliance” shall mean: (a) the Products perform in a consistent manner and
      functions without interruptions regardless of the date in time on which the
      Product is delivered, used and/or further distributed, whether before, on or
      after January 1, 2000 and whether or not the dates are affected by leap
      years;

    


    (b) the
      Product, if computerized, accept, calculate, compare, sort, extract, sequence
      and otherwise process date inputs and date values, and return and display date
      values and perform, in a consistent manner regardless of the dates used, whether
      before, on or after January 1, 2000;

    


    (c) the
      Product, if computerized, accept and respond to two-digit year-date input in
      a
      manner that resolves any ambiguities as to the century in a defined,
      predetermined and appropriate manner; and

    


    (d) the
      Product, if computerized, store and display date information in ways that are
      unambiguous as to the determination of the century.

    


    ARTICLE
      3 - APPOINTMENT

    


    3.1 Distribution
      Rights.
      Subject
      to the terms and conditions of this Agreement, and specifically to the terms
      and
      conditions of Sections 3.2 and 3.3 below, Neoprobe hereby appoints Ethicon,
      and
      Ethicon hereby accepts the appointment as Neoprobe’s exclusive distributor on a
      worldwide basis during the term of this Agreement and any extension thereof
      at
      the agreed upon Transfer Prices (as defined below).

     

    
      
        
        

      

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

    


    3.2 Third
      Party Rights.
      The
      granting to Ethicon by Neoprobe of the rights in Section 3.1 shall be on a
      country-by-country basis subject to Neoprobe’s termination of distribution and
      similar rights granted to third parties by Neoprobe or its Affiliates (“Third
      Party Agreements”). Neoprobe represents and warrants that Schedule 3.2
      accurately sets forth all countries where any such Third Party Agreement is
      in
      effect. Neoprobe represents and warrants that it has contractual rights which
      enable it to rightfully terminate such Third Party Agreements in accordance
      with
      the time lines set forth in Schedule 3.2 and covenants to take such actions
      and
      rightfully terminate all such Third Party Agreements as soon as practicable
      in a
      manner that would not prejudice the non-competition provisions imposed on such
      third parties therein and to deliver exclusive distribution rights pursuant
      to
      Section 3.1 to Ethicon on or before the dates set forth Schedule 3.2. Neoprobe
      agrees to indemnify and hold harmless Ethicon and its Affiliates and their
      respective officers, directors, employees and agents from and against any
      liability, loss, costs (including reasonable attorneys’ fees), expenses or
      damages that are attributable to claims of third parties against Ethicon arising
      out of Neoprobe’s efforts to terminate the rights of such third parties as
      contemplated by this Section 3.2. This obligation shall survive termination
      of
      this Agreement. Neoprobe agrees that upon the termination of each of the Third
      Party Agreements, the right to distribute the Products in the territories
      covered by such Third Party Agreement shall immediately be added to this
      Agreement and shall be subject to the terms and conditions set forth herein,
      at
      no additional license or other fee to Ethicon.

    


    3.3 Supply
      to Third Parties.
      Neoprobe grants Ethicon the exclusive right to supply Products to all other
      distributors of Products or at Ethicon’s request on a case by case basis, assign
      to Ethicon the underlying Third Party Agreement with such distributor if such
      distributor consents to such assignment. As used in this Section 3.3 the term
      “supply” shall mean, filling purchase orders (either to Neoprobe or directly to
      Ethicon), and shipping, invoicing, and collecting for such orders according
      to
      the applicable terms of the Third Party Agreements. Neoprobe agrees to forward
      any purchase orders for Products it receives to Ethicon promptly (but in any
      event within five (5) business days of receipt of the purchase order). Ethicon
      shall pay Neoprobe for Products shipped to such distributors in accordance
      with
      Section 5.2 herein. Ethicon’s sales of Products to such distributors (except to
      Century Medical, Inc. in Japan) shall be included in the calculation of any
      average selling price and minimum purchase requirements (“MPRs”) of a Product
      covered by this Agreement.

    


    ARTICLE
      4 - TERM

    


    The
      initial term of this Agreement (the “Initial Term”) shall commence on the
      Effective Date and shall continue until December 31, 2004 (the “Initial Term
      Date”), unless earlier terminated as expressly provided under the terms of this
      Agreement; provided,
      however,
      that
      Ethicon shall have the option (the “Option”) of extending the term of this
      Agreement for two (2) subsequent two (2) year periods [*] (in Ethicon’s sole
      reasonable judgment) than the immediately preceding Commercial Year. Neoprobe
      shall deliver to Ethicon written notice (the “Renewal Notice”) setting forth the
      Initial Term Date not less than one (1) year nor more than one (1) year and
      thirty (30) days prior to such date or the date of the expiration of any such
      period of extension, as the case may be. In the event that Ethicon exercises
      the
      Option, it shall deliver to Neoprobe written notice thereof within ninety (90)
      days following its receipt of the Renewal Notice.

     

    
      
        
        

      

      
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    ARTICLE
      5 - RESPONSIBILITIES OF THE PARTIES

    


    5.1 Supply
      of the Product.
      During
      the term of this Agreement, Neoprobe shall manufacture and sell the Products
      and
      Improved Products exclusively to Ethicon in accordance with the Specifications,
      and shall not sell, supply or distribute any Products or Improved Products
      to
      any third party. Neoprobe shall supply Ethicon (and its Affiliates) with all
      of
      those quantities of Products as ordered by Ethicon (and its Affiliates) pursuant
      to this Agreement.

    


    5.2 Transfer
      Pricing.
      The
      transfer price (the “Transfer Price”) for each type of Product shipped by
      Neoprobe during the term of this Agreement shall be set forth on Schedule 5.2
      hereto. The Transfer Prices set forth therein include all costs of packaging
      in
      accordance with the Specifications and all cost of delivery F.O.B. Neoprobe’s
      manufacturing facility. Ethicon shall pay the Transfer Prices set forth in
      Schedule 5.2 for delivery of the Products within thirty (30) days from the
      date
      of invoice. The date of invoice shall not be earlier than the date of shipment.
      Ethicon agrees to purchase the demonstration units referenced in Notes 2 and
      3
      of Article 11 “Demonstration Units” of Schedule 5.2 hereto within thirty (30)
      days after the units have been returned to Neoprobe and refurbished to the
      reasonable satisfaction of Ethicon.

    


    5.3 Cost
      Reduction Programs.
      Neoprobe hereby agrees that it shall use its best reasonable efforts to minimize
      the costs of manufacturing the Products to the extent it may do so without
      compromising the quality and/or regulatory status of the Products or compliance
      with the terms of this Agreement. Each Party will reasonably cooperate with
      the
      other Party in the pursuit of cost reduction programs in the manufacture of
      the
      Products. Each Party shall inform the other party of cost reduction initiatives
      related to the manufacture of Products within fourteen (14) days after cost
      reduction initiatives have begun. The resulting savings will initially be
      allocated to the Party that has incurred documented costs until such costs
      have
      been recovered. Thereafter, fifty percent (50%) of the savings shall be
      allocated to the Party which has initiated and funded the cost reduction
      program.

    


    5.4 Demonstration
      Unit Pricing.
      During
      the term of this Agreement or any extension thereof, the Transfer Price for
      Products and fully functional demonstration units shall be as listed in Schedule
      5.2.

    


    5.5 Risk
      of Loss.
      Neoprobe shall ship Products, at Ethicon’s cost, to any location chosen by
      Ethicon utilizing carriers chosen by Ethicon. The risk of loss with respect
      to
      the Products shall remain with Neoprobe until the Product is loaded aboard
      the
      common carrier at Neoprobe’s manufacturing facility for a Product, or other
      location mutually agreed upon by both Parties. Neoprobe will pack the Product
      in
      a manner suitable for shipment to enable the Product to withstand the effects
      of
      reasonable shipping conditions, including handling during loading and
      unloading.

     

    
      
        
        

      

      
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    5.6 Labeling
      and Sales Literature.
      As of
      the Effective Date, Neoprobe has on hand, the labeling, inserts, sales
      literature or customer instructions for Products in the quantities and at the
      respective costs listed on Schedule 5.6. Existing inventories of all labeling,
      inserts, sales literature, or customer instructions for all Neoprobe Products
      shall be provided to Ethicon at Ethicon’s request at Neoprobe’s cost. Additional
      inventories will be provided to Ethicon at Ethicon’s cost. Master art work for
      all labeling, inserts, sales literature or customers instructions shall be
      made
      available to Ethicon should additional quantities be produced by Ethicon or
      should changes be desired by Ethicon. Neoprobe will provide to Ethicon
      documented evidence of Neoprobe’s internal copy clearance review and approval;
      and Ethicon shall have the right to review and accept master art work for all
      labeling, inserts, sales literature or customer instructions prior to production
      of such.

    


    5.7 Transfer
      Price and Forecasts for New Products.
      Before
      a New Product the research and development of which is not funded by Ethicon
      (“Unfunded New Product”) may be added to Schedule 2.15 and become a Product
      subject to the terms of this Agreement, the Parties must agree to a Provisional
      Transfer Price (as defined in Schedule 5.2) and to a forecast of Ethicon’s
      expected purchases of such Unfunded New Product including a schedule of desired
      delivery dates for the following six (6) months, the first three (3) months
      of
      this forecast shall constitute a binding purchase order. Neoprobe shall be
      under
      no obligation to deliver and Ethicon shall be under no obligation to accept
      any
      Unfunded New Products until a Provisional Transfer Price and forecast is
      established for such New Product. If the Parties cannot agree upon a Provisional
      Transfer Price and forecast within ninety (90) days, Neoprobe shall be free
      to
      market and distribute the Unfunded New Product (a “Proposed Transaction”)
      subject to a right of first refusal of Ethicon. Pursuant to Ethicon’s right of
      first refusal, Neoprobe shall not consummate or agree to consummate a Proposed
      Transaction with any party without first giving prompt notice thereof to Ethicon
      in writing (the “Notice”) specifying the pricing, terms, conditions and other
      material provisions of such Proposed Transaction. In the event that Ethicon
      elects to consummate a transaction upon the same pricing, terms, conditions
      and
      other material provisions as specified in the Notice, Ethicon shall have thirty
      (30) days to so notify Neoprobe and Neoprobe shall use all reasonable commercial
      efforts to facilitate the consummation of such a proposed transaction with
      Ethicon or its Affiliate within ninety (90) days following the receipt of such
      notification. In the event that Ethicon fails to elect to exercise this right
      of
      first refusal within the above mentioned thirty (30) day period, Neoprobe may
      enter into an agreement with the party identified in the Notice with respect
      to
      the Proposed Transaction on terms that are not less favorable to Neoprobe than
      the terms specified by Neoprobe in the Notice; provided,
      however,
      that in
      the event that (a) Neoprobe and the third party identified in the Notice are
      unable to consummate such an agreement within sixty (60) days or (b) the
      pricing, terms, conditions and other material provisions of the Proposed
      Transaction are modified to be materially less favorable to Neoprobe than were
      specified in the Notice, then Neoprobe shall be required pursuant to this
      Section 5.7 to give anew the requisite notice to Ethicon and comply with the
      right of first refusal set forth herein for an additional thirty (30) business
      day period following the receipt of such new notice.

     

    
      
        
        

      

      
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    5.8 Minimum
      Purchase Requirements.

    


    (a) During
      each of the first three (3) Commercial Years, Ethicon shall purchase from
      Neoprobe the following minimum numbers of the neo2000 System and/or Products
      or
      New Products consisting of a Control Unit and Probe (Neoprobe shall provide
      accessories to support the aforementioned neo2000 Systems; however, no minimums
      will be established for these accessories):

    

      
        	
                Commercial
                  Year

              	 	
                Minimum
                  Purchase Requirement

              
	 	 	 
	
                First

              	 	
                400
                  neo2000 Systems, Products and/or New Products consisting of a Control
                  Unit
                  and Probe

              
	
                 

              	 	 
	
                Second

              	 	
                500
                  neo2000 Systems, Products and/or New Products consisting of a Control
                  Unit
                  and Probe

              
	
                 

              	 	 
	
                Third

              	 	
                600
                  neo2000 Systems, Products and/or New Products consisting of a Control
                  Unit
                  and Probe

              


      

       

    

    As
      used
      in this Section 5.8, a “neo2000
      System” consists of a model 2000 Control Unit and a reusable Probe. Subject to
      the provisions of Sections 3.2 and 3.3, to the extent that there is any delay
      in
      Ethicon’s ability to exclusively distribute the neo2000 Systems worldwide on an
      exclusive basis in any market due to a breach of Neoprobe of any of its
      representations, warranties, covenants or obligations under this Agreement,
      the
      MPR for the Commercial Years set forth above shall be reduced with respect
      thereto on a pro rata basis based upon the number of days of the delay and
      the
      number of days in the applicable Commercial Year. Purchase orders for neo2000
      Systems placed by Ethicon prior to the First Commercial Year shall count towards
      the MPR for the First Commercial Year. The MPRs set forth in this Section 5.8(a)
      shall be completely satisfied at such time as the purchases of neo2000 Systems
      by Ethicon exceed fifteen hundred (1,500) units in the aggregate at any time
      prior to or during the first three (3) Commercial Years during the term of
      this
      Agreement. Demonstration units purchased pursuant to Section 5.2 shall not
      count
      towards the MPRs.

    


    (b) The
      MPR
      for a Product set forth in Section 5.8(a) is a “take or pay” obligation. In the
      event Ethicon does not meet its MPR for a Commercial Year as required by Section
      5.8(a), Neoprobe shall notify Ethicon of the deficiency and Ethicon shall have
      forty-five (45) days to either place a purchase order for the neo2000 Systems
      and/or Products consisting of a Control Unit and Probe to make up the difference
      between actual purchases and the MPR or pay Neoprobe an amount equal to the
      Gross Profit on the amount of purchases necessary to satisfy such
      MPR.

    


    5.9 Ethicon
      Obligation to Commercially Exploit.
      Neoprobe shall consider the MPRs of Section 5.8 above as complete satisfaction
      of any duty, whether express or implied, which could be imposed upon Ethicon
      to
      commercially exploit its rights under this Agreement and is accepted by Neoprobe
      in lieu of any best efforts obligation on the part of Ethicon.

    


    5.10 Reduction
      of Minimum Purchase Requirements.
      The
      MPRs set forth under Section 5.8(a) above shall for any applicable Commercial
      Year be reduced in the following circumstances:

     

    
      
        
        

      

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

    


    (a) If
      Neoprobe fails for any reason other than a Major Forces event under Section
      17.6
      below to deliver the Products to Ethicon in accordance with the terms of this
      Agreement, or replace Products which are defective under Section 11.1 below,
      then the MPRs shall be reduced by an
      amount
      equal to one and one-half (1 1⁄2) times the number of Products not delivered or
      replaced.

    


    (b) If
      any
      Products is voluntarily or involuntarily recalled from the market or withdrawn
      from sale because of a lack of governmental approvals or for reason of safety,
      efficacy or quality, or if a Major Forces event under Section 17.6 occurs,
      then
      the MPRs for the Products shall be waived until a period of six (6) months
      shall
      have elapsed after either market re-entry or the Major Forces event is removed,
      whichever is applicable, and shall then be proportionately reduced.

    


    (c) If
      this
      Agreement is terminated pursuant to Articles 12 or 14 below during any
      applicable Commercial Year, then the MPRs for all Products shall be
      proportionately reduced for such Commercial Year, and Ethicon shall be relieved
      of MPRs for all Products thereafter.

    


    5.11 Forecasts.
      Within
      thirty (30) days of the Effective Date, Ethicon shall provide Neoprobe with
      a
      forecast of its expected purchases of the Products, including a schedule of
      desired delivery dates, for the following six (6) months, and the first four
      (4)
      months of this forecast shall constitute a binding purchase order. Thereafter,
      Ethicon shall (a) update the forecasts monthly so that its expected purchases
      and schedule of desired delivery dates are continually forecast for a six (6)
      month time period, the first four (4) months of such rolling forecasts
      constituting a binding purchase order and (b) provide a report of actual monthly
      Product sales.

    


    5.12 Adjustment
      of Forecasts.
      Ethicon
      may adjust the total number of Products to be delivered pursuant to Section
      5.11
      above upon sixty (60) days written notice, provided however, that any such
      adjustment shall not serve to reduce Ethicon’s obligation to purchase the total
      number of Product indicated in the binding purchase order. In any given month,
      if Ethicon wants Neoprobe to deliver more than [*] of the total number of the
      Products indicated in the binding purchase order, then Neoprobe shall not be
      obligated to supply the excess above [*], but Neoprobe shall nevertheless use
      its best reasonable efforts to deliver to Ethicon any such excess above one
      hundred twenty percent (120%) on a priority basis.

    


    5.13 Delivery.
      Neoprobe shall deliver the Products to Ethicon in accordance with the schedule
      of delivery dates specified in the binding purchase orders set forth in Section
      5.11 above.

     

    
      
        
        

      

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

    


    5.14 Provision
      of Information.
      No
      later than seven (7) days after the execution of the Agreement and provided
      that
      Neoprobe has such information in its possession or has a legal or contractual
      right to access to such information, Neoprobe agrees to provide Ethicon with
      documentation setting forth a complete list of all current Neoprobe customers
      and potential customer leads (including, but not limited to, outstanding leads
      and quotations from terminated distributors). Included in this documentation
      will be customer names, location, Products purchased, date of Product purchase,
      Product service history, and specific contact information in the case of
      customer leads.

    


    5.15 Product
      Changes.
      Neoprobe shall not change the form, fit, function, components or materials
      of
      any of the Products (or any change or modification to the Specifications),
      the
      process by which the Products are manufactured or the Raw Materials, without
      the
      prior written consent of Ethicon, such consent not to be unreasonably withheld.
      Neoprobe shall provide Ethicon notice of all other changes at least fourteen
      (14) days prior to making any such changes. If the Parties agree on any such
      change, improvement or modification, they shall modify the Specifications to
      reflect the same. Ethicon shall have the right to review and amend any
      qualification protocol(s) initiated by Neoprobe prior to the execution of such
      protocol(s), and shall have the right to review and agree upon the subsequent
      results of the protocol prior to releasing change into production. In the event
      of any change, Ethicon and Neoprobe may jointly establish an appropriate
      qualification protocol, and Ethicon and Neoprobe shall determine an appropriate
      inventory level for the pre-change Product in order to cover on-going
      requirements during the qualification process.

    


    5.16 Purchase
      of Neoprobe 1500 Units.
      Ethicon
      agrees to purchase existing inventories of Neoprobe 1500 Control Units each
      accompanied by a 14mm reusable Probe, noise adjustment fixture, battery charger,
      cord set, carrying case, operation manual, detector probe cable and Probe
      collimator (“Neoprobe 1500 Systems”) up to a maximum unit quantity of fifty (50)
      Neoprobe 1500 Systems respectively, provided
      that,
      Ethicon
      has received all prior agreed upon inventory stocking and sales Demonstration
      Units orders for the neo2000 System. The agreed upon cost to Ethicon for a
      Neoprobe 1500 System cost is $5,881.00 or less. In the event the Neoprobe 1500
      Systems are sold to Ethicon customers, Ethicon agrees to rebate to Neoprobe
      the
      appropriate gross margin on the sale of these Units in accordance with the
      agreed upon Transfer Prices outlined for neo2000 Systems as referenced in
      Schedule 5.2, provided
      that,
      any
      Neoprobe 1500 Systems sold will be credited against the MPRs for that Calendar
      Year accordingly.

    


    5.17 Sales
      of Product.
      All [*]
      distributed under this Agreement, shall be within the sole discretion of
      [*].

    


    5.18 Neoprobe
      Sales and Marketing [*].
      Neoprobe shall [*] for Neoprobe’s sales and marketing organization (the “Sales
      and Marketing Organization”) which include, but is not limited to, Neoprobe
      employees and programs, consulting agreements, etc. as referenced heretofore
      in
      Schedule 5.18 for a [*] from the Effective Date. [*] at its sole discretion,
      may
      continue the [*] directly or indirectly of these Sales and Marketing
      Organization activities.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    


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

    


    5.19 Training
      Assistance.
      Neoprobe shall provide Ethicon with all information in its possession reasonably
      necessary or appropriate to enable Ethicon to market the Products, and Neoprobe
      agrees further to consult with and advise Ethicon in such matters, including
      without limitation, the preparation of promotional, advertising and sales
      materials and presentations.

    Provided
      that it has the personnel on staff and subject to the availability of the Sales
      and Marketing Organization, Neoprobe shall provide reasonable sales training
      to
      Ethicon and its Affiliates at reasonable locations selected by Ethicon (travel
      expenses to be paid by Ethicon) and consented to by Neoprobe, such consent
      not
      to be unreasonably withheld. Thereafter Neoprobe will provide similar sales
      training from time to time in connection with any Products that become available
      at times and locations reasonably selected by Ethicon and consented to by
      Neoprobe, such consent not to be unreasonably withheld.

    


    5.20 [*]
      Program.
      The
      Parties agree to develop and negotiate the terms for an [*] and to implement
      such [*] within [*] after the Parties complete their marketing and customer
      assessments. The revenues for such program will be shared according to the
      gross
      revenues, less the selling [*], as agreed to for Transfer Pricing of Products
      in
      Schedule 5.2.

    


    5.21 [*]
      Expenses.
      Ethicon
      will fund the costs related to the [*] pursuant to Section 11.1 and the [*]
      Program only with respect to Products sold by [*] to its customers but not
      to
      the third party distributors listed on Schedule 3.2 up to a limit of [*] of
      Products of the immediately preceding Commercial Year sold by [*] but not to
      the
      [*]. Net sales shall mean the revenue received by [*] from the sale of the
      Products to an independent third party less the following amounts: (i)
      discounts, including cash discounts, or rebates actually allowed or granted;
      (ii) credits or allowances actually granted upon claims or returns, regardless
      of the party requesting the return; (iii) freight charges paid for customer
      delivery; and (iv) taxes or other governmental charges levied on or measured
      by
      the invoiced amount whether absorbed by the billing or billed
      party.

    


    5.22 Disposition
      of Defective Product.
      Without
      prejudice to any other remedy which Ethicon may have, Neoprobe shall replace
      at
      its own cost and expense, including reimbursement of freight and disposition
      costs incurred by Ethicon, Products that fail to comply with the Specifications
      or other warranties made in Article 11. Ethicon shall notify Neoprobe of the
      existence and nature of any non-compliance or defect which comes to its
      attention and Neoprobe shall have a reasonable opportunity, [*], to inspect
      such
      defective Product and provide Ethicon with detailed written instructions to
      return or dispose of such defective Product. Ethicon shall [*]. If Neoprobe
      fails to so inspect and instruct Ethicon as to the disposition of such defective
      Product, Ethicon may dispose of such defective Product as it sees fit and
      Neoprobe shall promptly (i) reimburse Ethicon for all direct, out-of-pocket
      costs incurred by Ethicon in respect of such disposition, and (ii) replace
      such
      defective Product at its own cost and expense.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    


    5.23 Independent
      Testing.
      If,
      after Neoprobe’s inspections of any Product, the parties disagree as to whether
      such Product conforms to the Specifications and other warranties made in Article
      11 or whether the Product has such a defect, either party may deliver the item
      to an independent third-party laboratory, mutually and reasonably acceptable
      to
      both parties, for analytical testing to confirm such item’s conformance to the
      Specifications and other warranties made in Article 11 or the presence or
      absence of defects. All costs associated with such third-party testing shall
      be
      at Ethicon’s expense unless the tested item is deemed by such third-party to be
      defective or not in compliance with the Specifications and other warranties
      made
      in Article 11, in which case all such costs, including reimbursement of freight
      and disposition costs, shall be promptly paid by Neoprobe. No inspection or
      testing of or payment for Product by Ethicon or any third-party agent of Ethicon
      shall constitute acceptance by Ethicon thereof, nor shall any such inspection
      or
      testing be in lieu or substitution of any obligation of Neoprobe for testing,
      inspection and quality control as provided in the Specifications and other
      warranties made in Article 11 or under applicable local, state, or federal
      laws,
      rules, regulations, standards, codes or statutes.

    


    5.24 Transfer
      Price Reporting.

    


    (a) Ethicon
      shall, within ninety (90) days from the end of December 31 of each calendar
      year
      during the term of this Agreement, deliver to Neoprobe a report of the actual
      Transfer Price for the Initial Period (as defined in Schedule 5.2) or the
      preceding Commercial Year, including a schedule calculating the actual Transfer
      Price. Ethicon shall keep for a period of at least three (3) years after the
      date of entry, accurate books and records reasonably necessary to verify the
      accuracy of the information used to establish the actual Transfer Price as
      described in Schedule 5.2.

    


    (b) Neoprobe
      shall have the right after thirty (30) days advance written notice to Ethicon,
      to appoint an independent certified accountant at its own expense, acceptable
      and approved by Ethicon (which approval shall not be unreasonably withheld)
      who
      shall have access to Ethicon’s records during reasonable business hours for the
      sole purpose of verifying the accuracy of the calculation of the Transfer Prices
      for the Products for a period not more than the previous four (4) calendar
      quarters, but this right may not be exercised more than once in any calendar
      year. Ethicon shall be entitled to withhold approval of an accountant which
      Neoprobe nominates unless the accountant duly executes a confidentiality
      agreement with Ethicon which shall obligate such accountant to keep the
      information it receives from Ethicon in confidence.

    


    (c) Unless
      otherwise agreed to by the Parties, if as a result of the audit performed
      pursuant to Section 5.24(b), the independent certified accountant determines
      that Ethicon has under-reported any information (e.g., the information used
      to
      calculate Net Selling Price) used to calculate the Transfer Price for a Product
      and as a result Neoprobe has received less than it should have under the
      Agreement, Ethicon 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 5.24(b),
      the independent certified accountant determines that Ethicon has over-reported
      any information (e.g., the information used to calculate Net Selling Price)
      used
      to calculate the Transfer Price for a Product and as a result Neoprobe has
      received more than it should have under the Agreement, Neoprobe shall, no later
      than forty-five (45) business days after receiving notice of such overpayment,
      remit to Ethicon the amount of the overpayment less the reasonable fees of
      the
      independent 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    


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

    


    certified
      accountant, but in no case shall Ethicon be required to remit any amount to
      Neoprobe if the fees of the independent certified accountant exceed the amount
      of the Ethicon overpayment.

    


    (d) If
      as a
      result of an audit performed pursuant to Section 5.24(b), it is determined
      by
      the independent certified accountant that Ethicon has underpaid any payment
      due
      to Neoprobe by more than [*], in addition to remitting the amount of the
      underpayment as described in Section 5.24(c), Ethicon shall pay Neoprobe
      interest on such amount at the rate per annum of “prime” (interest changing as
      and when the “prime” changes); such interest being payable on demand. As used
      herein, the term “prime” refers to the prime rate of interest per annum
      announced, from time to time, by major money center banks in the United States
      and as published daily in The
      Wall Street Journal;
      provided, however, that if The
      Wall Street Journal
      should
      ever cease, for any reason, to publish such rate on a daily basis, then the
      prime rate shall be at the rate of interest designated and in effect from time
      to time, by Citibank, N.A., in New York, New York as its prime
      rate.

    


    (e) In
      the
      event the audit conducted pursuant to Section 5.24(b) reveals an inaccuracy
      in
      the information reported to Neoprobe which results in an underpayment by Ethicon
      and if Ethicon disagrees with the results of such audit and further in the
      event
      the parties can not resolve such disagreement, the Parties shall mutually choose
      an independent accountant acceptable to both to conduct a second audit. The
      Parties agree to be bound by the results of the second independent audit. The
      cost of an audit conducted pursuant to this Section 5.24(e) shall be borne
      by
      Neoprobe if the independent accountant finds no underpayment and by Ethicon
      if
      an underpayment is found.

    


    5.25 14mm
      Probe Accessory Marketing Implementation Program.
      Neoprobe agrees to implement the 14mm Probe accessory program attached hereto
      as
      Schedule 5.25 in accordance with the deadlines set forth therein.

    


    5.26 PIM. (a)
      Neoprobe shall, at its sole expense, develop and release an external Probe
      Isolation Module (“EPIM”) and associated labeling and end-user communications
      subject to the provisions of Sections 5.15 and 8.12. Neoprobe agrees to use
      its
      best efforts to obtain all necessary market clearances from appropriate
      regulatory authorities as soon as practicable and to replace and in-service
      all
      14mm reusable adaptor cables (model #2007) currently in distribution with the
      EPIM in countries where there are Third Party Agreements in effect within sixty
      (60) days thereof. Neoprobe agrees to use its best efforts to obtain all
      necessary market clearances from appropriate regulatory authorities as soon
      as
      practicable and to provide Ethicon with sufficient quantities of the EPIM to
      replace all 14mm reusable adaptor cables (model #2007) currently in distribution
      in the U.S. by January 15, 2000 and outside the U.S. by February 14,
      2000.

    


    (b) Neoprobe
      agrees to use its best efforts to provide EPIM’s to Ethicon for all sales and
      training demonstration units in Ethicon’s possession at cost to Ethicon by
      January 15, 2000.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    


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

    


    (c) Neoprobe
      shall use its best efforts to provide EPIM’s for all finished goods and
      work-in-progress neo2000 Systems at Neoprobe warehousing facilities by January
      15, 2000.

    


    (d) Neoprobe,
      at its sole expense, shall use its best efforts to develop and release an
      internal Probe Isolation Module (“IPIM”), by March 15, 2000 compatible with all
      Probe Products.

    


    (e) Neoprobe
      agrees to review all designs and modifications to the control unit, Probes
      and
      accessories during design and manufacturing phases of the EPIM and IPIM with
      Ethicon in accordance to Section 5.15.

    


    5.27 Should
      Ethicon develop and sell an instrument or device (a “Competing Ethicon Product”)
      which is a direct clinical replacement of a Product, Ethicon shall agree to
      provide Neoprobe financial consideration of [*] of Net Sales of the Competing
      Ethicon Product during the term of this Agreement.

    


    ARTICLE
      6 - PRODUCT IMPROVEMENTS

    AND
      RESEARCH AND DEVELOPMENT

    


    6.1 Research
      & Development Payments.
      Ethicon
      agrees to fund at the end of each calendar quarter during the first three (3)
      years of the Agreement, a total of one hundred twenty-five thousand dollars
      ($125,000.00) per calendar quarter for the four (4) technical research and
      development personnel in the job positions listed on Schedule 6.1 hereto,
      provided that, (a) Neoprobe retains the identified research and development
      personnel or persons in Ethicon’s reasonable judgment adequately skilled and
      trained personnel to fill the job positions listed on Schedule 6.1 (“R&D
      Personnel”) to the entire calendar quarter; (b) the R&D Personnel are
      utilized at Ethicon’s sole discretion for continued Product support and (c) the
      R&D Personnel are available to support to Ethicon identified and funded
      R&D programs. The one hundred twenty-five thousand dollars ($125,000.00) per
      calendar quarter as stated above shall be prorated in the event that less than
      four (4) individuals are available. The four hundred thousand dollars
      ($400,000.00) paid in consideration for the Standstill and Rights Agreement
      shall be credited against the research and development payments with any excess
      promptly returned to Ethicon within ten (10) days if no further research and
      development payments are to be made pursuant to this Section 6.1. A copy of
      the
      retention programs for the R&D Personnel shall be provided to Ethicon prior
      to the Effective Date.

    


    6.2 Improved
      Product and Ethicon [*] New Products.
      With
      respect to Improved Products and New Products the research and development
      [*],
      once the Parties agree to a Provisional Transfer Price and to a forecast of
      [*]
      of the Improved Product or [*] including a schedule of desired delivery dates
      for the following six (6) months, the first three (3) months of this forecast
      shall constitute a binding purchase order for such Improved Product [*], such
      Improved Product [*] shall be added to the Agreement and shall become a Product
      within the meaning of Section 2.15.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

    


    6.3 Existing
      [*] R&D Programs.
      Within,
      [*] days after the Effective Date, [*] agrees to review existing [*] research
      and development programs as described in Schedule 6.3 (the “R&D Programs.”)
      and in its sole discretion, agree to fund any or none of the R&D Programs in
      addition to the research and development payments made pursuant to Section
      6.1.
      [*] shall have sixty (60) days to make its determination and to inform [*]
      of
      the result. The Parties agree to negotiate in good faith within [*] days from
      the Effective Date an agreement setting forth: (i) development work plan(s)
      for
      the R&D Programs (ii) the transfer pricing for such any products resulting
      from the funded R&D Programs and (iii) ownership of intellectual property
      developed under such programs. In no event shall the [*] products developed
      under such R&D [*] set forth in Schedule 5.2.

    


    6.4 Ethicon
      Identified Research Programs.
      Ethicon
      may request that Neoprobe conduct certain R&D activities on behalf of
      Ethicon (“Ethicon Identified R&D”). In the event that Ethicon requests that
      Neoprobe conduct such Ethicon Identified R&D, Ethicon and Neoprobe shall, in
      good faith, negotiate an agreement setting forth: a) responsibility for costs
      associated with such Ethicon Identified R&D; b) ownership of designs,
      prototypes, or intellectual property; and (c) royalties, if any, payable to
      Neoprobe on instruments developed under such Ethicon Identified R&D and sold
      by Ethicon.

    


    6.5 Reports.
      Upon
      Ethicon’s written request, but no more than once per month, Neoprobe shall
      promptly provide Ethicon written research and development progress reports
      and
      activity reports relating to Products and Improved Products that are identified
      in the Specifications or Schedule 6.3.

    


    ARTICLE
      7 - REPRESENTATIONS AND WARRANTIES

    


    7.1 Execution
      and Performance of Agreement.
      Neoprobe and Ethicon each represents and warrants to the other that it has
      full
      right, power and authority to enter into and perform its respective obligations
      under this Agreement. Neoprobe and Ethicon each further represents and warrants
      to the other that the performance of its obligations under this Agreement will
      not result in a violation or breach of, and will not conflict with or constitute
      a default under any agreement, contract, commitment or obligation to which
      such
      Party or any of its Affiliates is a party or by which it is bound or infringe
      upon the rights of any third party and that it has not granted and will not
      grant during the term of this Agreement or any renewal thereof, any conflicting
      rights, license, consent or privilege with respect to the rights granted
      herein.

    


    7.2 Intellectual
      Property.
      Neoprobe represents and warrants to Ethicon that (a) Neoprobe owns all of the
      rights, title and interest in and to the Patents, Neoprobe Trademarks, Know-How
      and all other intellectual property that appear on or are otherwise used in
      connection with the Products; (b) no academic institution, member of an academic
      institution, corporation or other entity, or any local, state or federal
      government holds any property rights through it in any Product; (c) Neoprobe
      is
      able to consummate this Agreement in the capacity of a free agent; (d) the
      manufacture, use and sale of the Products in accordance with the terms of this
      Agreement does not present any issue of infringement of Neoprobe’s or any third
      party’s rights under any issued patent or license; (e) it has no outstanding
      encumbrances or agreements, whether written, oral or implied, which would be
      inconsistent with the licenses granted herein; (f) the use of the Neoprobe
      Trademarks by Ethicon hereunder does not and will not infringe the rights of
      any
      third party; and (g) Neoprobe is presently aware of no infringement or dispute
      by any third party of any Neoprobe Patent or any Neoprobe
      Trademark.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    


    7.3 Year
      2000 Compliance.
      Neoprobe hereby represents and warrants to Ethicon that:

    


    (a) it
      is
      able to demonstrate Year 2000 Compliance in full production versions of the
      Products and all of its services related to its performance hereunder, with
      accompanying documentation;

    


    (b) Neoprobe’s
      information systems and other business systems for estimates, performance
      schedules, orders, confirmations, manufacture and delivery, invoicing, crediting
      of payments and other business operations are able to accept and properly
      process input for dates before, on or after January 1, 2000; and

    


    (c) Neoprobe
      is now planning and taking action to implement and will continue to implement,
      in a commercially reasonable manner, any and all measures to continue to perform
      its obligations under this Agreement with respect to Year 2000 Compliance
      strictly according to its terms and otherwise to meet the needs of its
      relationship with Ethicon;

    


    (d) Neoprobe
      will promptly provide to Ethicon, in response to Ethicon’s periodic requests for
      updates, information concerning its Year 2000 Compliance program to the extent
      it affects performance of this Agreement and might impair its performance
      hereunder.

    


    7.4 Neoprobe
      expressly represents and warrants that a) it owns all of the right, title and
      interest in and to the Products listed on Schedule 2.15 as of the Effective
      Date; b) it is empowered to supply the Products to Ethicon; c) it has no
      outstanding encumbrances or agreements, contracts, understandings or
      arrangements of any kind pursuant to which any entity may purchase from
      Neoprobe, or has the right to sell or market, the Product or any component
      of
      such Product except for the Third Party Agreements; e) it is empowered to grant
      Ethicon licenses of the scope set forth in Articles 12, 13 and 14 below and
      f)
      it has the financial capacity to supply the Product to Ethicon in view of the
      terms and conditions set forth in this Agreement.

    


    ARTICLE
      8 - REGULATORY COMPLIANCE AND QUALITY ASSURANCE

    


    8.1 Inspections.
      Ethicon
      shall have the right, upon reasonable notice to Neoprobe and during regular
      business hours, to inspect and audit manufacturing processes and procedures,
      quality assurance/control processes and procedures, inventory, work-in-process,
      Quality System Regulations (“QSRs”) records in the countries where any Product
      is marketed, Raw Materials and the facilities being used by Neoprobe (or any
      third party) for production and storage of Products to assure compliance by
      Neoprobe (and its suppliers) with (a) all applicable statutes, laws and
      regulatory requirements and standards, including, without limitation, QSRs
      enforced by the United States Food and Drug Administration (the “FDA”), (b)
      Ethicon Endo-Surgery, Inc. Quality Assurance Requirements, (c) the terms and
      provisions of this Agreement. To the extent it has the right to do so, Neoprobe
      agrees to give Ethicon access during normal working hours to such records as
      are
      reasonably necessary to enable Ethicon to conduct its audit, including quality
      control records, test records, Device History Record and Device Master Records.
      Ethicon’s right of access to Neoprobe (or its agent’s) Confidential Information
      shall be restricted to those matters necessary to verify the compliance of
      Neoprobe (or its agents) with (a) all applicable statutes, laws and regulatory
      requirements and standards, including, without limitation, QSRs enforced by
      the
      FDA, (b) Ethicon Endo-Surgery, Inc. Quality Assurance Requirements, (c) the
      terms and provisions of this Agreement. Ethicon personnel exercising this right
      of inspection shall comply with applicable rules and regulations in place at
      the
      manufacturing facility when such personnel or representatives are made aware
      of
      such rules and regulations.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    


    8.2 Results
      of Ethicon’s Audit.
      Ethicon
      shall promptly (no more than ten (10) business days after conclusion of any
      audit conducted pursuant to Section 8.1) share the results of the audit with
      Neoprobe. If Ethicon believes that a deficiency exists, it shall inform Neoprobe
      and Neoprobe shall within ten (10) business days remedy or cause the remedy
      of
      any deficiencies that were noted in such audit, or if any such deficiency can
      not reasonably be remedied within ten (10) business days, present to Ethicon
      a
      written plan to remedy such deficiencies as soon as possible. Failure by
      Neoprobe to remedy or cause the remedy of a deficiency in the agreed upon time
      period shall be deemed a material breach of this Agreement; provided however,
      that if in Neoprobe’s reasonable judgement it disagrees with Ethicon’s
      conclusion that a deficiency exists and if the Parties continue to disagree
      after reasonable discussion, Neoprobe shall have the right to have an
      independent regulatory expert conduct the same audit as Ethicon. If the
      independent expert agrees with Neoprobe that no deficiency exists, Ethicon
      shall
      bear the cost of such audit. If the independent expert agrees with Ethicon’s
      assessment, Neoprobe shall bear the cost of the independent expert and shall
      correct all deficiencies as provided in this Section 8.2. Neoprobe acknowledges
      that the provisions of this Article Eight granting Ethicon certain audit rights
      shall in no way relieve Neoprobe of any of its obligations under this Agreement,
      nor shall such provisions require Ethicon to conduct any such
      audits.

    


    8.3 510(k)
      Clearance.
      Neoprobe represents and warrants that it has obtained 510(k) to the extent
      it is
      required to do so clearance from the FDA to manufacture and sell the Products;
      and that the submissions which Neoprobe made to the FDA were made in good faith
      and contained accurate and complete data and information regarding the Product
      as required by applicable laws, rules and regulations. Neoprobe shall maintain
      for the term of this Agreement or any extension thereof all 510(k) clearances
      for the Products. Furthermore, Neoprobe shall file, and maintain at its own
      cost
      for the Products listed on Schedule 2.15 as of the Effective Date, all
      appropriate registrations with the FDA and similar regulatory authorities in
      the
      United States and in foreign countries which have the authority to approve
      the
      sale of the Product for use in humans. Neoprobe shall review all Product changes
      agreed to pursuant to Section 5.15 for regulatory impact in the United States
      and other countries where any Product is marketed, and shall provide Ethicon
      with copies of all regulatory impact review documentation.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    


    8.4 Regulatory
      Compliance.
      Neoprobe represents and warrants that all Products sold or delivered to Ethicon
      during the term of this Agreement or any extension thereof shall be manufactured
      and delivered in accordance with Regulatory Compliance, and that continually
      during the term of this Agreement or any extension thereof no Products delivered
      by Neoprobe to Ethicon will be adulterated or misbranded at the time of delivery
      within the meaning of the Federal Food, Drug and Cosmetic Act. Neoprobe shall
      notify Ethicon in accordance with Section 8.8 below after receiving notice
      of
      any claim or action by the FDA relating to non-compliance with this Article
      or
      any notice with respect to any violation of any applicable laws, rules or
      regulations. In addition, Neoprobe shall notify Ethicon of any adverse reaction,
      malfunction, injury or other similar claims with respect to the Products of
      which it becomes aware in accordance with Section 8.8 below.

    


    8.5 Regulatory
      Inspections.
      Neoprobe shall notify Ethicon of any FDA inspection, or any inspection from
      any
      other regulatory body, of the facilities for the manufacture of the Products,
      or
      any request for information from the FDA or other regulatory body related to
      the
      manufacture of the Products, as soon as practically possible after Neoprobe
      becomes aware of such inspection or such request.

    


    8.6 Recalls.
      Upon
      mutual consent of the Parties, which consent may not be unreasonably withheld,
      or in the case of a recall required by an agency with competent jurisdiction,
      Neoprobe shall be required to institute and fund any recall, field corrective
      action, or the like in circumstances relating to a breach by Neoprobe of the
      warranty set forth in Article 11 below or other breach of its representations,
      warranties, guarantees, covenants or other obligations hereunder. In such
      circumstances, the actual retrieval of the Products and costs associated with
      that retrieval shall be undertaken and absorbed by Neoprobe. The Parties shall
      maintain adequate records concerning traceability of the Products, and shall
      cooperate with each other in the event that any procedures described in this
      paragraph are undertaken. In the event of any such recall, Neoprobe shall accept
      recalled Products and deliver to Ethicon replacement Products at Neoprobe’s sole
      cost and expense.

    


    8.7 Cooperation.
      Because
      regulatory requirements vary throughout the world, the Parties agree to
      cooperate with one another to obtain regulatory approvals.

    


    8.8 Adverse
      Experiences and Product Complaints.
      Each
      Party shall notify the other within three (3) business days of any serious
      and
      life-threatening adverse experiences related to the Product of which it becomes
      aware. Each Party shall notify the other within ten (10) business days of any
      other adverse experiences related to a Product of which it becomes aware.
      Neoprobe shall be responsible for all reporting to the FDA and all other
      regulatory bodies where any Product is marketed. Neoprobe shall provide Ethicon
      with a copy of the quarterly adverse experience reports for the Products, or
      any
      other reportable events, which Neoprobe is required by the Act to submit to
      the
      FDA or any other regulatory requirements in countries where any Product is
      marketed, within three (3) business days of its submission. Each Party shall
      notify the other of any serious complaints relating to the Products which it
      receives within thirty (30) days of becoming aware of such
      complaint.

    


    8.9 Corrective
      Action.
      In the
      event any governmental agency having jurisdiction shall request or order, or
      if
      Ethicon shall determine to undertake, any corrective action with respect to
      any
      Product, including any recall, corrective action or market action, and the
      cause
      or basis of such recall or action is attributable to a breach by Neoprobe of
      any
      of its warranties, guarantees, representations, obligations or covenants
      contained herein, then Neoprobe shall be liable, and shall reimburse Ethicon
      for
      the reasonable costs of such action including the cost of any Product which
      is
      so recalled whether or not any such specific unit of Product shall be
      established to be in breach of any warranty by Neoprobe hereunder.

     

    
      
        
        

      

      
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    8.10 Provision
      of Information.
      Upon
      Ethicon’s request, Neoprobe shall provide Ethicon with access to the following
      information at no cost to Ethicon:

    


    (a) necessary
      data, descriptions, processes, photographs and statements of claims for safety,
      efficacy or performance;

    


    (b) technical
      data to allow Ethicon to prepare up-to-date customer instruction for the
      Products;

    


    (c) the
      Device Master Records for the Products and the Device History Records for the
      Products, as defined in 21 Code of Federal Regulations §800, for the Products
      and components thereof; and 

    


    (d) copies
      of
      all U.S. and foreign regulatory submissions, including the 510(k) submission,
      for the Products.

    


    8.11 Provision
      of Support.
      Neoprobe shall provide Ethicon with the following support at no cost to Ethicon:
      

    a)
      claim
      support for any claims, indications, or other representations included in any
      labeling, inserts, sales literature or customer instruction prepared by Neoprobe
      relating to the Products (it is understood and agreed that in the event Ethicon
      reasonably disagrees with any such claims, indications, or other
      representations, Neoprobe shall modify the same in the manner agreeable to
      both
      Parties; and 

     

    b)
      prompt
      review and approval, as appropriate, of all training materials and sales and
      promotional literature developed by Ethicon relating to the Products (it being
      understood and agreed that no such review shall relieve Neoprobe of
      responsibility for the accuracy of such materials). 

     

    c)
      Neoprobe agrees to promptly obtain and maintain CE marking for all Products,
      provided
      however,
      it is
      the obligation of Ethicon, at its expense, to obtain other regulatory approvals
      necessary for distributors to market the Products in a specific country.
      Neoprobe agrees to support Ethicon in obtaining such regulatory approvals,
      including but not limited to, by providing any necessary documentation within
      Neoprobe’s control.

    


    8.12 Labeling
      and Sales Literature.
      Neoprobe shall be responsible for the appearance, text and regulatory compliance
      of all Neoprobe originated package labeling used in connection with the
      Products. Any labeling, inserts, sales literature, or customer instruction
      prepared by Ethicon relating to the Product is subject to written approval
      by
      Neoprobe, which approval shall not be unreasonably withheld (it being understood
      and agreed that no such review shall relieve Neoprobe of responsibility for
      the
      accuracy of such materials).

     

    
      
        
        

      

      
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    ARTICLE
      9 - INDEMNIFICATION

    


    9.1 Indemnification
      by Neoprobe.
      Neoprobe shall indemnify and hold harmless Ethicon and its Affiliates and their
      respective officers, directors and employees from and against any and all
      damages, liabilities, claims, costs, charges, judgments and expenses (including
      interest, penalties and reasonable attorneys’ fees) (collectively “Damages”)
      incurred by such party that (i) arise as the result of Neoprobe’s breach of this
      Agreement or of any obligation, covenant, warranty or representation made to
      Ethicon under this Agreement; or, (ii) which result from any claim made against
      Ethicon in connection with Neoprobe’s sale of defective Product; or (iii) which
      result from the negligent acts or willful malfeasance on the part of Neoprobe
      or
      Neoprobe’s employees or agents in connection with Neoprobe’s registration or
      other activities or actions in connection with the Product; (iv) which result
      from Ethicon’s use of promotional materials, provided by Neoprobe, so long as
      Ethicon’s use is in accordance with the Agreement; or (v) which result from any
      claim of patent or trademark infringement made against Ethicon by a third party
      which arises as a consequence of Ethicon’s promotion of the
      Product.

    


    9.2 Neoprobe
      Insurance.
      Neoprobe shall obtain and maintain in full force and effect valid and
      collectible product liability insurance in respect of the Products for death,
      illness, bodily injury and property damage in an amount not less than $10
      million per occurrence. Such policy shall name Ethicon as an insured or an
      additional insured thereunder and Neoprobe shall grant like coverage to Ethicon
      under a standard broad form vendor’s endorsement thereto. Neoprobe shall within
      ten (10) days of the Effective Date provide Ethicon with evidence of this
      coverage, provided that the existence of such coverage shall in no way limit
      Neoprobe’s liability or obligations hereunder. Such insurance policy shall
      provide that in the event such insurance coverage should be materially adversely
      changed or terminated for any reason, the insurer thereunder will give Neoprobe
      and Ethicon ten (10) days prior notice of such change or
      termination.

    


    9.3 Indemnification
      by Ethicon.
      Ethicon
      shall indemnify and hold harmless Neoprobe and its Affiliates and their
      respective officers, directors and employees from and against any and all
      Damages incurred by such party which: (i) arise out of Ethicon’s breach of this
      Agreement or of any obligation, covenant, warranty or representation made to
      Neoprobe under this Agreement; or, (ii) result from the negligent acts or
      willful malfeasance on the part of Ethicon or its employees or agents, in
      promoting the Product in a manner inconsistent with the Product’s
      labeling.

    


    9.4 Claims.
      (a) A
      Party (hereinafter referred to as the “Indemnifying Party”) indemnifying another
      party or parties (hereinafter referred to as the “Indemnified Party”), pursuant
      to this Agreement, shall indemnify and hold the Indemnified Party harmless
      against any and all actions, suits, proceedings, demands, claims, assessments,
      costs, judgments, legal and other expenses incidental to any of the foregoing
      (hereinafter referred to as a “Claim”). In the event a Claim is made upon the
      Indemnified Party, the Indemnified Party shall promptly
      give notice of such Claim to the Indemnifying Party, and shall promptly deliver
      to such Indemnifying Party all information and written material available to
      the
      Indemnified Party relating to such Claim. If such Claim is first made upon
      the
      Indemnifying Party, the Indemnifying Party shall promptly give notice of such
      Claim to the Indemnified Party.

     

    
      
        
        

      

      
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    (b) The
      Indemnified Party will, if notified of the Indemnifying Party’s election to do
      so within fifteen (15) days of the date of notice of a Claim, permit the
      Indemnifying Party to defend in the name of the Indemnified Party any Claim
      in
      any appropriate administrative or judicial proceedings and take whatever actions
      may be reasonably requested of the Indemnified Party to permit the Indemnifying
      Party to make such defense and obtain an adjudication of such Claim on the
      merits, including the signing of pleadings and other documents, if necessary;
      provided that the Indemnifying Party shall defend the Claim with counsel
      reasonably satisfactory to the Indemnified Party and provide the Indemnified
      Party with evidence reasonably satisfactory to the Indemnified Party that the
      Indemnifying Party can satisfy the Claim if it is upheld. In addition to the
      liability for the ultimate settlement or judgment, if any, arising out of such
      Claim under this Agreement, the Indemnifying Party shall be solely responsible
      for all the expenses incurred in connection with such defense or proceedings,
      regardless of their outcome. However, the Indemnifying Party shall not be
      responsible for any expenses, including attorneys fees and costs, incurred
      by
      the Indemnified Party to monitor the defense of the Claim by the Indemnifying
      Party.

     

    (c) In
      the
      event the Indemnifying Party does not accept the defense of such Claim under
      the
      terms hereof, the Indemnified Party shall be entitled to conduct such defense
      and settle or compromise such Claim, and the Indemnifying Party’s
      indemnification obligation under this Agreement shall be absolute, regardless
      of
      the outcome of such Claim. The Indemnified Party, at its option, may elect
      not
      to permit the Indemnifying Party to control the defense against a Claim. If
      the
      Indemnified Party so elects, then the Indemnifying Party shall not be obligated
      to indemnify the Indemnified Party against any settlements, judgments or other
      costs or obligations arising thereunder which the Indemnified Party may make
      or
      incur relating to such Claim.

    


    ARTICLE
      10 - COVENANTS

    


    10.1 During
      the term of this Agreement and any extension thereof, Neoprobe shall not enter
      into any agreements, contracts, understandings or arrangements with any person
      other than Ethicon relating to the distribution or licensing of the Product
      or
      Improved Products during the term of this Agreement or any extension
      thereof.

    


    10.2 Within
      thirty (30) days from the Effective Date, Neoprobe shall place with an escrow
      agent mutually agreed upon by Neoprobe and Ethicon and as described in Schedule
      10.2 hereto, a description of Neoprobe’s process for the manufacture of the
      Products and Improved Products in sufficiently clear and detailed terms that
      it
      can be readily followed and carried out by a trained scientist or engineer
      to
      make the Products and Improved Products in the manner Neoprobe considers most
      efficient (“Escrowed Process”). Furthermore, should Neoprobe alter, modify or
      change its process for manufacturing the Products and Improved Products,
      Neoprobe shall amend the description in escrow to include such alteration,
      modification or change. Pursuant to the exercise of its rights and licenses
      under its Secondary License as set forth in Section 13.1 below, Ethicon shall
      have the right, at any time, and without Neoprobes’s consent, to access the
      Escrowed Process and the escrow agent is hereby directed to release such
      material to Ethicon and its Affiliates upon receiving a written request from
      Ethicon. Ethicon agrees not to exercise its rights to access the Escrowed
      Process except in connection with the exercise of its rights under its Secondary
      License and any such exercise shall be a material breach of the terms of this
      Agreement.

     

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

     

    
      
        
        

      

      
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    ARTICLE
      11 - WARRANTY

    


    11.1 Warranty.
      Neoprobe warrants during the warranty period set forth under Section 11.2 below
      that all Products delivered to Ethicon under this Agreement shall be
      manufactured in accordance and conformity with the Specifications and in
      compliance with this Agreement, and that the Product so delivered shall be
      of
      merchantable quality, free from defects in design, construction, materials and
      workmanship. Neoprobe warrants that it shall comply with all present and future
      statutes, laws, ordinances and regulations relating to the manufacture, assembly
      and supply of the Product, including, without limitation, those enforced by
      the
      FDA (including compliance with QSRs) and International Standards Organization
      Rules 9,000 et seq. Ethicon shall be entitled during the warranty period to
      return to Neoprobe for exchange or full credit at Ethicon’s original cost,
      including incurred freight and insurance costs, any Products returned by a
      customer of Ethicon for defects in design, construction, materials or
      workmanship. Any inspection by Ethicon shall not relieve Neoprobe of its
      obligation to manufacture Products which meet the Specifications and comply
      with
      good manufacturing practices.

    


    11.2 Warranty
      Period.
      The
      initial warranty period shall [*], whichever is later.

    


    11.3 Warranty
      Pass-through.
      Neoprobe agrees that Ethicon may pass the warranty given to Ethicon under this
      Section 11.1 above along to Ethicon’s customers.

    


    11.4 [*].
      As
      part of Neoprobe’s warranty obligation described in Sections 11.1 and 11.2,
      Neoprobe agrees [*] to [*]. Neoprobe shall provide Ethicon with a procedure
      for
      handling customer returns for servicing and repairing Products covered under
      the
      warranty obligations described in Sections 11.1 and 11.2 within thirty (30)
      days
      of the Effective Date.

    


    11.5 Replacement
      Parts.
      With
      respect to Products outside of the warranty periods set forth in Section 11.2
      above, Neoprobe shall provide repairs and replacement parts, as appropriate,
      for
      devices manufactured by Neoprobe at reasonable rates and prices mutually agreed
      upon in writing by both Parties.

    


    ARTICLE
      12 - FAILURE TO SUPPLY, CHANGE

    OF
      CONTROL OR INSOLVENCY EVENT

    


    12.1 If
      Neoprobe fails to supply [*] of the Products meeting the Specifications on
      a
      desired delivery date specified on a binding purchase order under either of
      the
      following conditions:

    


    (a) for
      any
      reason other than those set forth under Section 17.6 below, and this failure
      lasts longer than [*] from such desired delivery date; or

     

    
      
        
        

      

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

    


    (b) for
      any
      reason set forth under Section 17.6 below, and this failure lasts longer than
      [*] from such desired delivery date;

    


    then
      Ethicon shall thereafter have the right to [*] terminate this Agreement upon
      written notice to Neoprobe and to manufacture or have manufactured the Product.
      Additionally, if a Change of Control occurs followed by a failure to supply
      lasting longer than [*] from the desired delivery date set forth in a binding
      purchase order, or an Insolvency Event occurs, then [*] upon written notice
      to
      Neoprobe, Ethicon shall have the right to [*] terminate this Agreement upon
      written notice to Neoprobe. 

    


    12.2 In
      the
      event that a Change of Control occurs and such controlling or surviving entity
      is a competitor of Ethicon, then Ethicon shall have the right to immediately
      terminate this Agreement upon written notice to Neoprobe.

    


    ARTICLE
      13 - PATENTS, TRADEMARKS AND CONFIDENTIAL INFORMATION

    


    13.1 License.
      Ethicon
      and its Affiliates shall have a fully paid-up worldwide, exclusive license
      under
      the Patents to use, sell, offer for sale, import or otherwise dispose of,
      Products for the term of this Agreement or any extension thereof. Ethicon shall
      also have a secondary license (the “Secondary License”) which includes a
      worldwide, exclusive, paid-up license under all Patents and Know-How necessary
      to make, have made, import, use or sell the Products, Improved Products and
      Ethicon Funded New Products; a license under Neoprobe’s regulatory clearances,
      including Neoprobe’s 510(k), to market the Products, Improved Products and
      Ethicon Funded New Products and an exclusive, irrevocable, sub-licensable,
      right
      to continue to use the Neoprobe Trademarks pursuant to the restrictions set
      forth in Section 13.2. Ethicon’s Secondary License shall run for the term of
      this Agreement and any extension thereof, assuming Ethicon had exercised all
      rights to extensions thereof. In the event Ethicon exercises its rights under
      its Secondary License, to make, have made or import the Products, Improved
      Products and/or Ethicon Funded New Products Neoprobe shall make available to
      Ethicon all of the information then in Neoprobe’s possession or at its free
      disposal relating to the manufacture of the Products, Improved Products and/or
      Ethicon Funded New Products. Ethicon hereby agrees not to exercise its rights
      to
      make, have made, import, use or sell the Products, Improved Products and Ethicon
      Funded New Products under its Secondary License, except in the event of a
      failure to supply meeting the requirements of Section 12.1 above or a
      termination of this Agreement by Ethicon pursuant to Section 14.1, and any
      such
      exercise shall be a material breach of the terms of this Agreement.

    


    13.2 Trademarks.
      Ethicon
      shall have the right to promote and sell the Product under any trademark
      selected by Ethicon which trademark and all rights and goodwill associated
      thereto shall be and shall remain the property of Ethicon. Nothing herein shall
      be deemed to give one Party, either during the term of this Agreement or
      thereafter, any right to trademarks or copyrights of the other Party or to
      their
      use except that Ethicon shall have the right to use Neoprobe’s Trademarks in
      association with the marketing and sale of the Products during the term of
      this
      Agreement, any extension thereof or as provided by Section 13.1 if it chooses
      to
      do so, but Ethicon shall acquire no ownership rights to the
      Trademarks.

     

    
      
        
        

      

      
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    13.3 Confidential
      Information.
      All
      written information designated as confidential and exchanged between Neoprobe
      and Ethicon while this Agreement is in effect shall be treated as confidential
      information. Neither Party shall for three (3) years after the date of
      expiration or termination of this Agreement, use (other than in the performance
      of its obligations hereunder) or disclose such information to any third party
      without the prior written approval of the other Party, unless such information
      has become public knowledge through no fault of the Party receiving such
      information, or comes to such Party from a third party under no obligation
      of
      confidentiality with respect to such information, or was in the possession
      of
      such Party prior to the date of disclosure, or is developed by or on behalf
      of
      such Party without reliance on confidential information received hereunder,
      or
      is requested to be disclosed in compliance with applicable laws or regulations
      in connection with the sale of the Product, or is otherwise required to be
      disclosed in compliance with an order by a court or other regulatory body having
      competent jurisdiction, or is product-related information which is reasonably
      required to be disclosed in connection with marketing the Products. The
      obligations imposed by this section shall not limit any
      rights provided to Ethicon pursuant to Section 12.1 above to manufacture or
      have
      manufactured the Product following Neoprobe’s failure to supply pursuant to this
      Agreement; provided that the disclosure of confidential information to a third
      party (except as may be reasonably required in preliminary discussions with
      such
      third party) for the purpose of enabling such Party to manufacture the Products
      shall be conditioned upon such third party signing a confidentiality agreement
      prohibiting the disclosure of such information to any other party and limiting
      the use of such information to the manufacturing of the Products.

    


    ARTICLE
      14 - TERMINATION

    


    14.1 This
      Agreement may be terminated by either Party in the event the other materially
      fails to perform or otherwise materially breaches any of its obligations under
      this Agreement (other than pursuant to Article 12) by giving written notice
      of
      its intent to terminate and stating the grounds for termination. The Party
      receiving the notice shall have thirty (30) days from the date of receipt of
      the
      notice to cure the failure or breach. In the event it is cured, the notice
      shall
      be of no effect. In the event it is not cured, this Agreement then shall,
      without more, terminate at the end of such thirty (30) day period. If the
      failure to perform or other breach is due to circumstances covered under Section
      17.6 below, then this subsection shall not apply until such circumstances have
      ceased.

    


    14.2 For
      purposes of Section 14.1 a breach by Neoprobe of its obligations, covenants,
      representations or warranties under Section 3.2 and 3.3 shall be deemed to
      be a
      material failure to perform and a material breach of its obligations under
      this
      Agreement. If Ethicon exercises its rights to terminate this Agreement under
      Section 14.1, Neoprobe grants Ethicon an exclusive paid-up worldwide license
      under the Patents to make, have made, use, sell, offer for sale, import or
      otherwise dispose of, the Products, rights under Neoprobe’s regulatory
      clearances, including 510(k), to market the Products, and rights to all Know-How
      necessary to make, have made, use, sell, offer for sale, import or otherwise
      dispose of, the Products, such license and rights shall run for the term of
      this
      Agreement and any extension thereof, assuming Ethicon had exercised all rights
      to extensions thereof. Ethicon further shall have the exclusive right to
      continue to use the Neoprobe Trademarks pursuant to the restrictions set forth
      in Section 13.2. In the event Ethicon exercises its right to terminate this
      Agreement under Section 14.1, Neoprobe shall make available to Ethicon all
      of
      the information then in Neoprobe’s possession or at its free disposal relating
      to the manufacture of the Products.

    
       

    

    
      
        
        

      

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

         

      

    

    14.3 Ethicon
      may terminate this Agreement upon ninety (90) days written notice if Ethicon
      discovers a patent of a third party which arguably covers in whole or in part
      any aspect of the Product and the infringement is not cured within such ninety
      (90) day period in a manner which is satisfactory in Ethicon’s sole
      discretion.

    


    14.4 Following
      the effective date of termination of this Agreement, Ethicon shall have the
      right and option to either (i) continue to sell Products in the Territory on
      an
      exclusive worldwide basis for a period of [*], or (ii) on written notice to
      Neoprobe, sell to Neoprobe and have Neoprobe buy, within thirty (30) days after
      request, all of the Products in the Ethicon’s stock which were received by
      Ethicon [*] of less prior to the effective date of the effective date of
      termination which are in good condition. Such Products shall be repurchased
      at
      the most recent landed cost for such Products in effect hereunder prior to
      termination of this Agreement, and will be shipped to the designation selected
      by the Neoprobe, freight collect. Outdated, used or damaged Products shall
      either be made available to Neoprobe for destruction by Neoprobe at their then
      current location, or shipped to Neoprobe, freight collect, as determined by
      Neoprobe.

    


    14.5 Termination
      of this Agreement for any reason shall not affect rights and obligations of
      the
      Parties accrued through the effective date of termination, including without
      limitation indemnification provisions relating to the Product manufactured
      or
      distributed during the term of this Agreement or any extension
      thereof.

    


    ARTICLE
      15 - RESOLUTION OF DISPUTES

    


    15.1 Any
      dispute, claim or controversy arising from or related in any way to this
      agreement or the interpretation, application, breach, termination or validity
      thereof, including any claim of inducement of this agreement by fraud or
      otherwise, will be submitted for resolution to arbitration pursuant to the
      commercial arbitration rules then pertaining of the CPR Institute for Dispute
      Resolution, or successor (“CPR”), except where those rules conflict with these
      provisions, in which case these provisions control. The arbitration will be
      held
      in Cincinnati, Ohio.

    


    15.2 The
      panel
      shall consist of three (3) arbitrators chosen from the CPR Panels of
      Distinguished Neutrals (or, by agreement from another provider of arbitrators)
      each of whom is a lawyer with at least fifteen (15) years experience with a
      law
      firm or corporate law department of over twenty-five (25) lawyers or was a
      judge
      of a court of general jurisdiction. In the event the aggregate damages sought
      by
      the claimant are stated to be less than $5 million, and the aggregate damages
      sought by the counterclaimant are stated to be less than $5 million, and neither
      side seeks equitable relief, then a single arbitrator shall be chosen, having
      the same qualifications and experience specified above. Each arbitrator shall
      be
      neutral, independent, disinterested, impartial and shall abide by The Code
      of
      Ethics for Arbitrators in Commercial Disputes approved by the AAA. There shall
      be no ex parte
      communications with an arbitrator either before or during the arbitration,
      relating to the dispute or the issues involved in the dispute or the
      arbitrator’s views on any such issues.

     

    
      
        
        

      

      
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    15.3 The
      Parties agree to cooperate (a) to obtain selection of the arbitrator(s) within
      forty-five (45) days of initiation of the arbitration, including jointly
      interviewing the final candidates,
      (b) to meet with the arbitrator(s) within forty-five (45) days of selection
      and
      (c) to agree at that meeting or before upon procedures for discovery and as
      to
      the conduct of the hearing which will result in the hearing being concluded
      within no more than nine (9) months after selection of the arbitrator(s) and
      in
      the award being rendered within sixty (60) days of the conclusion of the
      hearings, or of any post-hearing briefing, which briefing will be completed
      by
      both sides within thirty (30) days after the conclusion of the hearings. In
      the
      event no such agreement is reached, (a) the CPR will select arbitrator(s),
      allowing appropriate strikes for reasons of conflict or other cause and three
      (3) peremptory challenges for each side, and permitting the Parties, prior
      to
      exercising their final peremptory challenge, jointly to interview each of the
      top three (3) final candidates (for no more than one (1) hour each) if a single
      arbitrator is being selected or the top five (5) finalists if a panel of three
      (3) is being selected, (b) the arbitrator(s) shall set a date for the hearing
      in
      accord with the above schedule, commit to the rendering of the award within
      sixty (60) days of the conclusion of the evidence at the hearing, or of any
      post-hearing briefing (which briefing will be completed by both sides in no
      more
      than thirty (30) days after the conclusion of the hearings), and (c) the
      arbitrator(s) shall provide for discovery according to these time limits, giving
      recognition to the understanding of the Parties that they contemplate reasonable
      discovery, including document demands and depositions, but that such discovery
      be limited so that the time limits specified herein may be met without
      difficulty. In no event will the arbitrator(s), absent agreement of the parties,
      allow more than a total of ten (10) days for the hearing or permit either side
      to obtain more than a total of forty (40) hours of deposition testimony from
      all
      witnesses, including both fact and expert witnesses, or serve more than twenty
      (20) individual requests for documents, including subparts, or twenty (20)
      individual requests for admission or interrogatories, including subparts.
      Multiple hearing days will be scheduled consecutively to the greatest extent
      possible.

    


    15.4 The
      arbitrator(s) must render their award by application of the substantive law
      of
      the State of Ohio and are not free to apply “amiable compositeur” or their own
      or another’s view of “natural justice and equity.” The arbitrator(s) shall
      render an opinion setting forth findings of fact and conclusions of law with
      the
      reasons therefor stated. A transcript of the evidence adduced at the hearing
      shall be made and shall, upon request, be made available to either party. The
      arbitrator(s) shall have power to exclude evidence on grounds of hearsay,
      prejudice beyond its probative value, redundancy, or irrelevance and no award
      shall be overturned by reason of such ruling on evidence.

    


    15.5 To
      the
      extent possible, the arbitration hearings and award will be maintained in
      confidence.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    


    15.6 The
      United States District Court for the Southern District of Ohio, Western Division
      at Cincinnati, may enter judgment upon any award. In the event the panel’s award
      exceeds $5 million in monetary damages or includes or consists of equitable
      relief, or rejects a claim in excess of that amount or for that relief, then
      the
      court shall vacate, modify or correct any award (including remanding to the
      arbitrators for further proceedings) where the arbitrators’ findings of fact are
      clearly erroneous, and/or where the arbitrators’ conclusions of law are
      erroneous; in other words, the court will undertake the same review as if it
      were a federal appellate court reviewing a district court’s findings of fact and
      conclusions of law rendered after a bench trial. An award for less than $5
      million in damages and not including equitable relief or which neither rejects
      a
      claim in excess of that amount or for that relief, may be vacated, modified
      or
      corrected only pursuant to the Federal Arbitration Act. The Parties consent
      to
      the jurisdiction of the above-specified Court for the enforcement of these
      provisions, the review specified herein, and the entry of judgment on any award.
      In the event such Court lacks jurisdiction, then any court having jurisdiction
      of this matter may enter judgment upon any award and provide the same relief,
      and undertake the same review, as specified herein.

    


    15.7 In
      the
      event the expanded judicial review provided for under Section 15.6 above is
      not
      available from the court as a matter of law, the party unable to obtain such
      review may instead obtain review of the arbitrators’ award or decision by a
      single appellate arbitrator (the “Appeal Arbitrator”) selected from the CPR list
      of distinguished neutrals and pursuant to then current CPR selection procedures.
      No Appeal Arbitrator shall be selected unless he or she can commit to rendering
      a decision within forty-five (45) days following oral argument as provided
      in
      this Section. Any such review must be initiated with the CPR within thirty
      (30)
      days following the date the district court declines the expanded review
      specified in Section 15.6 above. In the event timely review is sought, the
      Appeal Arbitrator will make the same review of the arbitration panel’s ruling
      and its bases that the Court of Appeals of the federal circuit where the
      arbitration hearings are held would make of findings of fact and conclusions
      of
      law rendered by a district court after a bench trial and then modify, vacate
      or
      affirm the arbitration panel’s award or decision accordingly. The Appeal
      Arbitrator will consider only the arbitration panel’s findings of fact and
      conclusions of law, pertinent portions of the hearing transcript and evidentiary
      record as submitted by the parties, opening and reply briefs of the party
      pursuing the review, and the answering brief of the opposing party, plus a
      total
      of no more than four (4) hours of oral argument evenly divided between the
      parties. The party seeking review must submit its opening brief and any reply
      brief within seventy-five (75) and one hundred twenty (120) days, respectively,
      following the date the court declines the expanded review specified in Section
      15.6; whereas, the opposing Party must submit its responsive brief within one
      hundred ten (110) days of that date. Oral argument shall take place within
      five
      (5) months after the district court declines the expanded review specified
      in
      Section 15.6, and the Appeal Arbitrator shall render a decision within
      forty-five (45) days following oral argument.

    


    15.8 Each
      party has the right before or, if the arbitrator(s) cannot hear the matter
      within an acceptable period, during the arbitration to seek and obtain from
      the
      appropriate court provisional remedies such as attachment, preliminary
      injunction, replevin, etc. to avoid irreparable harm, maintain the status
      quo,
      or
      preserve the subject matter of the arbitration.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    


    15.9 EACH
      PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY
      JURY.

    


    15.10 EACH
      PARTY HERETO WAIVES ANY CLAIM TO PUNITIVE OR EXEMPLARY, CONSEQUENTIAL DAMAGES
      FROM THE OTHER.

    


    15.11 EACH
      PARTY HERETO WAIVES ANY CLAIM FOR ATTORNEYS’ FEES AND COSTS AND PREJUDGMENT
      INTEREST FROM THE OTHER.

    


    15.12 Any
      dispute, controversy or claim arising out of or related to this agreement,
      or
      the interpretation, application, breach, termination or validity thereof,
      including any claim of inducement by fraud or otherwise, which claim would,
      but
      for this provision, be submitted to arbitration shall, before submission to
      arbitration, first be mediated through non-binding mediation in accordance
      with
      the Model Procedures for the Mediation of Business Disputes promulgated by
      the
      CPR then in effect, except where those rules conflict with these provisions,
      in
      which case these provisions control. The mediation will be held in Cincinnati,
      Ohio and shall be attended by a senior executive with authority to resolve
      the
      dispute from each of the operating companies that are parties.

    


    15.13 The
      mediator shall be neutral, independent, disinterested and shall be selected
      from
      a professional mediation firm such as ADR Associates or JAMS/ENDISPUTE or
      CPR.

    


    15.14 The
      Parties shall promptly confer in an effort to select a mediator by mutual
      agreement. In the absence of such an agreement within fifteen (15) days of
      initiation of the mediation, the mediator shall be selected by CPR from a list
      generated by CPR with each Party having the right to exercise challenges for
      cause and two (2) peremptory challenges within seventy-two (72) hours of
      receiving the CPR list.

    


    15.15 The
      mediator shall confer with the Parties to design procedures to conclude the
      mediation within no more than forty-five (45) days after initiation. Under
      no
      circumstances shall the commencement of arbitration under Section 15.1 above
      be
      delayed more than forty-five (45) days by the mediation process specified
      herein.

    


    15.16 Each
      Party agrees not to use the period or pendancy of the mediation to disadvantage
      the other Party procedurally or otherwise. No statements made by either side
      during the mediation may be used by the other or referred to during any
      subsequent arbitration.

    


    15.17 Each
      Party has the right to pursue provisional relief from any court, such as
      attachment, preliminary injunction, replevin, etc., to avoid irreparable harm,
      maintain the status quo, or preserve the subject matter of the arbitration,
      even
      though mediation has not been commenced or completed.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

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

    


    ARTICLE
      16 - DISCLAIMER

    


    [*].
      Furthermore, all business decisions, including without limitation, sale, price
      and promotion of the Product marketed under this Agreement and the decision
      whether to sell the Product shall be within the sole discretion of [*]. Neoprobe
      realizes that Ethicon (and its Affiliates) already sells a complete line of
      diagnostic and surgical devices and [*] under this Agreement.

    


    ARTICLE
      17 - MISCELLANEOUS

    


    17.1 [*]

    


    17.2 Transfer
      and Assignment.
      Neither
      Party shall transfer or assign this Agreement, in whole or in part, without
      the
      prior written consent of the other Party (which shall not be unreasonably
      withheld); except that Ethicon may, without such consent, assign this Agreement
      to an Affiliate or with the sale of substantially all of the assets of the
      business to which the Products relate.

    


    17.3 Communications.
      All
      communications, purchase orders, invoices, payments and notices required or
      called for under this Agreement shall be in writing, shall be transmitted by
      facsimile or first class mail, postage prepaid, and shall be deemed delivered
      upon confirmed receipt if by facsimile or mailing to the address below or to
      such other address as either Party may give to the other in
      writing:

    


    If
      to
      Ethicon:

    


    Ethicon
      Endo-Surgery, Inc.

    4545
      Creek Road

    Cincinnati,
      Ohio 45242

    Attn:
      President

    Facsimile:
      (513) 483-8945

    


    If
      to
      Neoprobe:

    


    Neoprobe
      Corporation 

    425
      Metro
      Place North, Suite 300 

    Dublin,
      Ohio 43017 

    Attn:
      President 

    Facsimile:
      (614) 793-7522

    


    17.4 Relationship
      of Parties.
      The
      Parties hereto are entering into this Agreement as independent contractors,
      and
      nothing herein is intended or shall be construed to create between the Parties
      a
      relationship of principal and agent, partners, joint venturers or employer
      and
      employee. Neither Party shall hold itself out to others or seek to bind or
      commit the other Party in any manner inconsistent with the foregoing provisions
      of this Article 17.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    


    17.5 No
      Waiver.
      The
      failure of either Party to enforce at any time for any period the provisions
      of
      this Agreement shall not be construed to be a waiver of such provisions or
      of
      the right of such Party thereafter to enforce each such provision.

    


    17.6 Major
      Forces.
      Subject
      to Ethicon’s rights set forth in Article 12 above, neither Party shall be
      responsible for and the terms of this Agreement shall be inapplicable to any
      defaults or delays which are due to unforeseen causes beyond the Parties’
control including, but without limitation, acts of God or public enemy, acts
      or
      other order of a government, particularly full market approval by the United
      States Food and Drug Administration and any foreign government equivalent
      approval, fire, flood or other natural disasters, embargoes, accidents,
      explosions, strikes or other labor disturbances (regardless of the
      reasonableness of the demands of labor), shortage of fuel, power or raw
      materials, inability to obtain or delays of transportation facilities, incidents
      of war, or other unforeseen events causing the inability of a Party, acting
      in
      good faith with due diligence, to perform its obligations under this
      Agreement.

    


    17.7 Publicity.
      With
      respect to any other publicity, neither Party shall originate any such
      publicity, news release or public announcement, written or oral, whether to
      the
      public or press, stockholders or otherwise, relating to this Agreement or any
      of
      its terms, to any amendment or performances under the Agreement, save only
      such
      announcements as in the opinion of counsel for the Party making such
      announcement is required by law to be made. If a Party decides to make an
      additional announcement required by law under this Agreement, it will give
      the
      other Party thirty (30) days advance written notice, or any shorter notice
      period otherwise required by law, of the text of the announcement so that the
      other Party will have an opportunity to comment upon the
      announcement.

    


    17.8 Bankruptcy.
      All
      licenses granted under or pursuant to this Agreement, by Neoprobe to Ethicon
      are
      for all purposes of Section 365(n) of the Bankruptcy Code, licenses to
“intellectual property” as defined in the Bankruptcy Code. The Parties agree
      that Ethicon, as a licensee of such rights under this Agreement, shall retain
      and may fully exercise all of its rights and elections under the Bankruptcy
      Code. Neoprobe agrees during the term of this Agreement to create and maintain
      current copies or, if not amenable to copying, detailed descriptions or other
      appropriate embodiments, of all such licensed intellectual property. If a case
      is commenced by or against Neoprobe under the Bankruptcy Code, then, unless
      and
      until this Agreement is rejected as provided in the Bankruptcy Code, Neoprobe
      (in any capacity, including debtor-in-possession) and its successors and assigns
      (including, without limitation, a Bankruptcy Code trustee) shall either perform
      all of the obligations provided in this Agreement to be performed by Neoprobe
      or
      provide to Ethicon all such intellectual property (including all embodiments
      thereof) held by Neoprobe and such successors and assigns, as Ethicon may elect
      in a written request, immediately upon such request. If a Bankruptcy Code case
      is commenced by or against Neoprobe, this Agreement is rejected as provided
      in
      the Bankruptcy Code and Ethicon elects to retain its rights hereunder as
      provided in the Bankruptcy Code, then Neoprobe (in any capacity, including
      debtor-in-possession) and its successors and assigns (including, without
      limitation, a Bankruptcy Code trustee) shall provide to Ethicon all such
      intellectual property (including all embodiments thereof) held by Neoprobe
      and
      such successors and assigns immediately upon Ethicon’s written request therefor.
      All rights, powers and remedies of Ethicon provided under this Article are
      in
      addition to and not in substitution for any and all other rights, powers and
      remedies now or hereafter existing at law or in equity (including, without
      limitation, the Bankruptcy Code) in the event of any such commencement of a
      bankruptcy proceeding by or against Neoprobe. Ethicon, in addition to the
      rights, powers and remedies expressly provided herein, shall be entitled to
      exercise all other such rights and powers and resort to all other such remedies
      as may now or hereafter exist at law or in equity (including the Bankruptcy
      Code) in such event.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    


    17.9 Entire
      Agreement.
      The
      Parties have, in this Agreement, incorporated all representations, warranties,
      covenants, commitments and understandings on which they have relied in entering
      into this Agreement and, except as provided herein, the Parties make no
      covenants or other commitments to the other concerning their future actions.
      Accordingly, this Agreement

     

    (a) constitutes
      the entire agreement and understanding between the Parties, and there are no
      promises, representations, conditions, provisions or terms relating to it other
      than as set forth in this Agreement, and

     

    (b) supersedes
      all previous understandings, agreements and representations between the Parties,
      written or oral, relating to the subject matter of this Agreement. This
      Agreement may be altered or amended only upon mutual written
      consent.

    


    17.10 Survival
      of Certain Provisions.
      The
      provisions of this Agreement set forth in Sections 3.2, 5.22, 10.2, 13.3, 14.3,
      14.4, 17.7 and 17.14 and Articles 7, 8, 9, 11, 12 and 15 any remedies for the
      breach thereof, shall survive the termination of this Agreement under the terms
      hereof.

    


    17.11 Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

    


    17.12 Expenses.
      Each
      party shall pay all of its own fees and expenses (including all legal,
      accounting and other advisory fees) incurred in connection with the negotiation
      and execution of this Agreement and the arrangements contemplated
      hereby.

    


    17.13 Modifications
      and Amendments.
      This
      Agreement shall not be modified or otherwise amended except pursuant to an
      instrument in writing executed and delivered by each of the parties
      hereto.

    


    17.14 Construction.
      The
      parties have participated jointly in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the parties
      and no presumption or burden of proof shall arise favoring or disfavoring any
      party by virtue of the authorship of any of the provisions of this
      Agreement.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    


    17.15 Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Ohio, without giving effect to the choice of laws provisions
      thereof.

    


    17.16 Incorporation
      of Exhibits and Schedules.
      The
      Exhibits and Schedules identified in this Agreement are incorporated herein
      by
      reference and made a part hereof.

    


    The
      Parties agree to the terms of this Agreement, as indicated by the signatures
      of
      their respective corporate officers, duly authorized as of the last date of
      signature below.

     

    
      	NEOPROBE
              CORPORATION	 	 	ETHICON ENDO-SURGERY,
              INC.
	 	 	 	 
	 	 	 	 
	By:
 /s/ David
              Bupp	 	 	By: /s/
              Alastair
              Clemon
	
              
                

              

              Name: David
                Bupp

              Title: President,
                CEO

               

              Date: Sept.
                28, 1999

            	 	 	
              
                

              

              Name: Alastair
                Clemon

              Title: V.P.
                Business Development

               

               Date: Sept.
                28, 1999

            




    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

       

    APPENDIX
      A

    


    PATENT,
      COMPUTER SOFTWARE, AND MASK WORK LICENSE AGREEMENT


    


    This
      is
      an agreement (hereinafter referred to as “Agreement”) dated and effective as of
      September, 28, 1999 (“Effective Date”), by and between the following
      parties:

     

    a) Ethicon
      Endo-Surgery, Inc., a corporation organized under the laws of the State of
      Ohio,
      having its principal office at 4545 Creek Road, Cincinnati, Ohio 45242
      (“Ethicon”); and

     

    b) Neoprobe
      Corporation, a corporation having its principal office at 425 Metro Place North,
      Suite 300, Dublin, Ohio (“Licensor”).

    


    ARTICLE
      1 - BACKGROUND

    


    1.1 Licensor
      has represented to Ethicon that it owns issued U.S. and foreign patents,
      copyrighted computer software, mask works, and pending U.S. and foreign patent
      applications, `covering instruments for radiation detection.

    


    1.2 Ethicon
      desires to obtain a exclusive license from the Licensor under such patents
      and
      equivalent pending patent applications. Ethicon further desires to obtain an
      exclusive license from the Licensor for such copyrighted software and mask
      works.

    


    1.3 Licensor
      is willing to grant such a license to Ethicon upon the terms and conditions
      set
      forth below.

    


    1.4 Ethicon
      and Licensor have entered into a Distribution Agreement dated September 28,
      1999
      to which this Patent, Computer Software, and Mask Work License Agreement is
      attached as Appendix A (“Distribution Agreement”) whereby Licensor has granted
      Ethicon exclusive rights to distribute Licensor’s gamma radiation detection
      products.

    


    Therefore,
      in consideration of the mutual promises contained in this Agreement, the parties
      agree as follows:

    


    ARTICLE
      2 - DEFINITIONS

    


    The
      following terms, when used with initial capital letters, shall have the meanings
      set forth below, terms set forth herein in capital letters and not defined
      below
      shall have the meanings set forth in the Distribution Agreement.

    


    2.1 “Licensed
      Product” is any instrument, or other product developed by or for Ethicon, which,
      but for the licenses granted under this Agreement, would infringe at least
      one
      Valid Claim of the Licensed Patents in the country in which any Licensed Product
      is made, used or sold or which uses any Know How, Licensed Software or Licensed
      Mask Works.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    


    2.2 “Licensed
      Patents” are the U.S. Patent applications and U.S. Patents listed in Schedule
      2.11 of the Distribution Agreement as well as any counterpart patent
      applications and any patents subsequently issuing from such applications.
      Licensed Patents shall also include any other counterparts of the above
      worldwide, as well as all continuations, continuations-in-part, divisions,
      renewals, reissues, reexaminations, extensions, and patents of addition and
      patents of importation. Furthermore, Licensed Patents shall also include each
      patent which Licensor owns or is empowered to grant a license to Ethicon prior
      to or during the term of this Agreement, the practice of which is reasonably
      necessary for Ethicon to make, have made, use, sell, offer for sale, import
      or
      otherwise dispose of a Licensed Product.

    


    2.3 “Licensed
      Software” shall mean any copyrightable computer software (both source code and
      object code) used in connection with the Licensed Products.

    


    2.4 “Licensed
      Mask Work” shall mean any “mask work,” as defined in Section 901 of the U.S.
      Copyright Act, used in connection with the Licensed Products.

    


    2.5 “Derivative
      Work” shall mean a work that is based upon one or more pre-existing works, such
      as a revision, modification, translation, abridgment, condensation, expansion,
      or any other form in which such pre-existing works may be recast, transformed,
      or adapted and that, if prepared without authorization of the owner of the
      copyright in such pre-existing work would constitute a copyright infringement.
      For purposes hereof, a “Derivative Work” shall also include any compilation that
      incorporates such a pre-existing work.

    


    2.6 “Valid
      Claim” is a bona fide, unexpired issued claim in the Licensed Patents which has
      not been held invalid or unenforceable by a decision of a court or other
      governmental agency of competent jurisdiction, unappealable or unappealed within
      the time allowed for appeal, and which has not been admitted to be invalid
      by
      the Licensor or his successors or assigns through reissue or
      disclaimer.

    


    2.7 “Net
      Sales” is the revenue which Ethicon or its Affiliates actually collect from the
      sale of the Licensed Product to an unaffiliated third party, less the following
      amounts: (i) discounts, including cash discounts, or rebates actually allowed
      or
      granted, (ii) credits or allowances actually granted upon claims or returns
      regardless of the party requesting the return, (iii) freight charges paid for
      delivery, and (iv) taxes or other governmental charges levied on or measured
      by
      the invoiced amount whether absorbed by the billing or the billed
      party.

    


    ARTICLE
      3 - TERM

    


    Unless
      otherwise terminated in accordance with the provisions of Article 10 herein,
      the
      term of this Agreement shall be from the Effective Date until the date upon
      which the last of the Licensed Patents expires.

    


    ARTICLE
      4 - LICENSE GRANT AND RELEASE

    


    4.1 In
      addition to the rights and licenses granted to Ethicon under the Distribution
      Agreement and subject to the terms and conditions of this Agreement, Licensor
      grants Ethicon the following licenses:

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    


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

    


    (a) a
      non-exclusive, worldwide, fully paid-up license under the Licensed Patents
      and
      Know How to make, have made, use, sell, offer for sale, import or otherwise
      dispose of, the Licensed Product;

     

    (b) a
      non-exclusive, worldwide, fully paid-up license under the Licensed Software
      to
      make, display, have made, make derivative works from, use, sell, offer for
      sale,
      import, or otherwise dispose of the Licensed Product; and

     

    (c) a
      non-exclusive, worldwide, fully paid-up license under the Licensed Mask Works
      to
      make, have made, use, sell, offer for sale, import or otherwise dispose of,
      and
      reproduce the Mask Work by optical, electronic or any other means in, the
      Licensed Product.

    


    4.2 In
      the
      event that the Distribution Agreement is terminated by Licensor in accordance
      with the provisions of Article 14.1 of the Distribution Agreement, Ethicon’s
      Licenses under Article 4.1 above shall remain in effect, however, Ethicon shall
      thereafter be required to pay Licensor a royalty of twenty percent (20%) on
      Net
      Sales of Licensed Products where, but for the licenses granted under this
      Agreement, such Licensed Product would infringe at least one Valid Claim of
      the
      Licensed Patents in the country in which any Licensed Product is made, used
      or
      sold. No multiple earned royalties shall be payable because the Licensed Product
      is covered by more than one of the Licensed Patents. If Ethicon takes a third
      party license to a patent which covers a Licensed Product, [*].

    


    4.3 Ethicon
      shall have the right to extend the licenses granted herein to any of its
      Affiliates, upon the terms and conditions of this Agreement, provided Ethicon
      agrees in writing to be responsible for the performance by such Affiliates
      of
      all of Ethicon’s obligations hereunder.

    


    4.4 Licensor
      forever releases and discharges Ethicon and its Affiliates, directors, officers,
      employees, suppliers and customers (the “Released Parties”) from and against all
      claims, liabilities, damages and other expenses whatsoever relating to the
      manufacture, use, sale, offer for sale or importation of the Licensed Product
      by
      or on behalf of the Released Parties prior to the Effective Date.

    


    4.5 Any
      Derivative Work created by or for Ethicon based upon the Licensed Software
      or
      Licensed Mask Work shall be the exclusive property of Ethicon, and with respect
      to the Licensed Software or Licensed Mask Work upon which this Derivative Work
      is based, Ethicon’s license granted under 4.1(b) or (c) shall be perpetual and
      fully paid-up.

    


    ARTICLE
      5 - PAYMENTS

    


    5.1 Non-refundable
      Upfront Payment.
      In full
      consideration for the execution of this Agreement, and for the exclusive license
      and release granted to Ethicon under Article 4 herein, Ethicon shall pay
      Licensor the non-refundable sum of four million dollars ($4,000,000.00) within
      three (3) business days of the Effective Date.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    


    5.2 Royalty
      Payments.
      Except
      as specifically set forth herein, Ethicon shall not have any royalty obligations
      during the term of this Agreement.

    


    5.3 Upfront
      Payment as Adequate Consideration.
      Except
      as specifically set forth in the Distribution Agreement, Licensor shall consider
      the upfront payment set forth in Article 5.1 above as complete satisfaction
      of
      any duty, whether express or implied, which could be imposed upon Ethicon to
      commercially exploit its rights during the term of this Agreement, and is
      accepted by Licensor in lieu of any best efforts or other obligation on the
      part
      of Ethicon.

    


    ARTICLE
      6 - RESERVED

    


    ARTICLE
      7 - ENFORCEMENT

    


    The
      parties acknowledge that it is of the utmost importance to Ethicon to ensure
      that infringement of the Licensed Patents is prevented. Accordingly, each party
      shall promptly notify the other party in writing of any infringement by third
      parties relating to the Licensed Patents. If within ninety (90) days of such
      notice Licensor has not entered into a royalty-bearing license agreement with
      such third party under the Licensed Patents or such third party continues its
      infringing activity, then Licensor shall thereafter promptly initiate and
      diligently pursue legal proceedings against such third party to protect the
      Licensed Patents, provided that Licensor shall not be obligated to initiate
      separate litigation against more than one infringer at any one time. Should
      Licensor fail to take prompt legal action or diligently pursue legal
      proceedings, then Ethicon shall be relieved of its obligation to make the earned
      royalty payments set forth in Article 4.2 above until such time as either
      Licensor enters into a royalty-bearing license agreement with such third party
      under the Licensed Patents or such third party discontinues its infringing
      activity.

    


    ARTICLE
      8 - PATENT PROSECUTION AND MAINTENANCE

    


    8.1 Licensor
      is solely responsible for the continued prosecution of any pending patent
      applications included in the Licensed Patents, as well as the prosecution of
      patent applications subsequently filed pursuant to Article 8.2 below. Licensor
      shall also be solely responsible for the issuance of such applications after
      allowance.

    


    8.2 Licensor
      shall pay all government fees in any given country required to maintain the
      Licensed Patents, including official taxes, annuities and maintenance fees.
      Any
      decision to pay any such taxes, annuities or maintenance fees shall be in the
      sole discretion of Licensor and Licensor may, at any time, after providing
      written notice to Licensee, drop prosecution or maintenance of any Licensed
      Patent.

    


    ARTICLE
      9 - WARRANTIES AND REPRESENTATIONS

    


    9.1 Licensor
      expressly warrants and represents that a) it owns all of the right, title and
      interest in and to the Licensed Patents, Licensed Software, and Licensed Mask
      Works; b) it is empowered to grant the licenses and release granted herein;
      c)
      it has no outstanding encumbrances or agreements, including any agreements
      with
      academic institutions, universities, or third party employers, whether written,
      oral or implied, which would be inconsistent with the licenses and release
      granted herein; d) the Licensed Patents are the only patents or pending patent
      applications related to any instrument for radiation detection which the
      Licensor currently owns or otherwise have the right to grant licenses therein,
      whether domestic or foreign; and e) it is unaware of any information which
      would
      raise a substantial question of the validity of any of the Licensed Patents,
      Licensed Software; or Licensed Mask Works.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    


    9.2 Licensor
      shall indemnify and hold Ethicon harmless from all liabilities, demands,
      damages, expenses and losses upon the breach of any of the warranties and
      representations set forth in Article 9.1 above. In the event of any breach
      of
      the warranties and representations set forth in Article 9.1 above, Licensee
      shall be entitled to recover all payments made to Licensor under article 5.1
      above.

    


    ARTICLE
      10 - TERMINATION

    


    10.1 Ethicon
      may terminate either this Agreement in full or a portion of its exclusive
      license in any given country at any time during the term of this Agreement
      upon
      four (4) months written notice to Licensor, and such termination shall become
      effective at the end of the four (4) month notice period.

    


    10.2 Either
      party may terminate this Agreement upon sixty (60) days written notice for
      any
      material breach or default of the other party. Such termination shall (subject
      to the provisions of Article 11 below) become effective at the end of the sixty
      (60) day period unless during such period the party in breach or default cures
      such breach or default.

    


    ARTICLE
      11 - RESOLUTION OF DISPUTES

    


    11.1 Any
      dispute, claim or controversy arising from or related in any way to this
      agreement or the interpretation, application, breach, termination or validity
      thereof, including any claim of inducement of this agreement by fraud or
      otherwise, shall be settled in accordance with the provisions of Article 15
      of
      the Distribution Agreement.

    


    11.2 From
      the
      date one party notifies the other it wishes to commence an arbitration
      proceeding until such time as the matter has been finally settled by
      arbitration, the running of the time period set forth in Article 10.1 above,
      as
      to which a party must cure a breach, shall be suspended as to the subject matter
      of the dispute.

    


    ARTICLE
      12 - MISCELLANEOUS

    


    12.1 Business
      Decisions.
      Subject
      to the provisions of the Distribution Agreement, all business decisions,
      including without limitation the design, manufacture, sale, price and promotion
      of the Licensed Product shall be within the sole discretion of
      Ethicon.

    


    12.2 Confidentiality
      and Publicity.
      Neither
      party shall disclose the financial terms of this Agreement to an unaffiliated
      third party, except for legal, financial, accounting or other similar advisors
      who agree to keep the financial terms of this Agreement confidential, without
      the prior written approval of the other party. Furthermore, neither party will
      originate any publicity, news release, or other public announcement, written
      or
      oral, whether to the public press, to stockholders, or otherwise, relating
      to
      this Agreement, to any amendment hereto or to performance hereunder or the
      existence of an arrangement between the parties without the prior written
      approval of the other party.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    


    12.3 Notices.
      All
      notices hereunder shall be in writing and shall be deemed to have been duly
      given if delivered personally, one day after delivery to a nationally recognized
      overnight delivery service, charges prepaid, three days after sent by registered
      or certified mail, postage prepaid, or when receipt is confirmed if by,
      facsimile or other telegraphic means:

    


    In
      the
      case of Licensor:

    


    Neoprobe
      Corporation

    425
      Metro
      Place North, Suite 300

    Dublin,
      Ohio 43017

    Attn:
      President

    Facsimile:
      (614) 793-7522

    


    In
      the
      case of Ethicon:

    


    Ethicon
      Endo-Surgery, Inc.

    4545
      Creek Road

    Cincinnati,
      Ohio 45242

    Attn:
      President

    Facsimile:
      (513) 483-8945

    


    With
      a
      copy to:

    


    Chief
      Patent Counsel

    Johnson
      & Johnson

    One
      Johnson & Johnson Plaza

    New
      Brunswick, New Jersey 08933

    


    Such
      addresses may be altered by written notice given in accordance with this Article
      12.3.

    


    12.4 Assignment.
      Ethicon
      may assign this Agreement or any rights and obligations contemplated herein
      to
      an Affiliate of Ethicon or to a company acquiring substantially all of the
      assets of Ethicon to which this Agreement relates, without the consent of
      Licensor, upon giving written notice thereof to Licensor. In all other
      instances, neither Ethicon nor Licensor shall assign this Agreement or any
      rights granted hereunder without the prior written consent of the other party.
      Subject to the foregoing, this Agreement shall bind and inure to the benefit
      of
      the respective parties hereto and their successors and assigns.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    


    12.5 Force
      Majeure.
      Any
      delays in or failures of performance by either party under this Agreement shall
      not be considered a breach of this Agreement if and to the extent caused by
      occurrences beyond the reasonable control of the party affected, including
      but
      not limited to: acts
      of
      God; acts, regulations or laws of any government; strikes or other concerted
      acts of workers; fires; floods; explosions; riots; wars; rebellions; and
      sabotage; and any time for performance hereunder shall be extended by the actual
      time of delay caused by such occurrence.

    


    12.6 Licensor
      Bankruptcy.
      Notwithstanding anything to the contrary in the Distribution Agreement, all
      rights and licenses granted under or pursuant to this Agreement by Licensor
      to
      Ethicon are, for all purposes of Section 365(n) of Title 11, U.S. Code (the
      “Bankruptcy Code”), licenses of rights to “intellectual property” as defined in
      the Bankruptcy Code. The parties agree that Ethicon, as a licensee of such
      rights under this Agreement, shall retain and may fully exercise all of its
      rights and elections under the Bankruptcy Code. Licensor agrees during the
      term
      of this Agreement to create and maintain current copies or, if not amenable
      to
      copying, detailed descriptions or other appropriate embodiments, of all such
      licensed intellectual property. If a case is commenced by or against Licensor
      under the Bankruptcy Code, then, unless and until this Agreement is rejected
      as
      provided in the Bankruptcy Code, Licensor (in any capacity, including
      debtor-in-possession) and its successors and assigns (including, without
      limitation, a Bankruptcy Code trustee) shall either perform all of the
      obligations provided in this Agreement to be performed by Licensor or provide
      to
      Ethicon all such intellectual property (including all embodiments thereof)
      held
      by Licensor and such successors and assigns, as Ethicon may elect in a written
      request, immediately upon such request. If a Bankruptcy Code case is commenced
      by or against Licensor, this Agreement is rejected as provided in the Bankruptcy
      Code and Ethicon elects to retain its rights hereunder as provided in the
      Bankruptcy Code, then Licensor (in any capacity, including debtor-in-possession)
      and its successors and assigns (including, without limitation, a Bankruptcy
      Code
      trustee) shall provide to Ethicon all such intellectual property (including
      all
      embodiments thereof) held by Licensor and such successors and assigns
      immediately upon Ethicon’s written request therefor. All rights, powers and
      remedies of Ethicon provided under this Article are in addition to and not
      in
      substitution for any and all other rights, powers and remedies now or hereafter
      existing at law or in equity (including, without limitation, the Bankruptcy
      Code) in the event of any such commencement of a bankruptcy proceeding by or
      against Licensor. Ethicon, in addition to the rights, powers and remedies
      expressly provided herein, shall be entitled to exercise all other such rights
      and powers and resort to all other such remedies as may now or hereafter exist
      at law or in equity (including the Bankruptcy Code) in such event.

    


    12.7 Relationship
      of Parties.
      The
      parties hereto are entering into this Agreement as independent contractors,
      and
      nothing herein is intended or shall be construed to create between the parties
      a
      relationship of principal and agent, partners, joint venturers or employer
      and
      employee. Neither party shall hold itself out to others or seek to bind or
      commit the other party in any manner inconsistent with the foregoing provisions
      of this Article.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    


    12.8 Integration.
      It is
      the mutual desire and intent of the parties to provide certainty as to their
      future rights and remedies against each other by defining the extent of their
      mutual undertakings as provided herein. The parties have in this Agreement
      incorporated all representations, warranties, covenants, commitments and
      understandings on which they have relied in entering into this Agreement and,
      except as provided for herein and in the Distribution Agreement, neither party
      has made any covenant or other commitment to the other concerning its future
      action. Except where specifically set forth herein, in the event of any conflict
      between the terms of this Agreement and the Distribution Agreement, the terms
      of
      the Distribution Agreement shall control. Accordingly, except as expressly
      set
      forth herein, this Agreement constitutes the entire agreement and understanding
      between the parties with respect to the matters contained herein, and there
      are
      no prior oral or written promises, representations, conditions, provisions
      or
      terms related thereto other than those set forth in this Agreement. The parties
      may from time to time during the term of this Agreement modify any of its
      provisions by mutual agreement in writing.

    


    12.9 Headings.
      The
      inclusion of headings in this Agreement is for convenience only and shall not
      affect the construction or interpretation hereof.

    


    This
      Agreement is signed on the dates set forth below by duly authorized
      representatives of Ethicon and the Licensor, respectively.

    
      	 	 	 	 
	Licensor	 	 	Ethicon Endo-Surgery,
              Inc.
	 	 	 	 
	 	 	 	 
	By: /s/ David
              Bupp	 	 	By: /s/
              Alastair
              Clemo
	
              
                

              

              Date: Sept.
                28, 1999

            	 	 	
              
                

              

              Date: Sept.
                28, 1999

            




    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

          

    Schedule
      2.11 Patents
      and Patent Applications

    


    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    


    
      	
              NEOPROBE
                PATENTS

            	 	 
	
              Patent
                Number

            	 	
              Serial
                Number

            	 	
              Filing
                Date

            	 	
              Patent
                Title

            
	
              US4782840

            	 	
              06/905880

            	 	
              10-Sep-86

            	 	
              Method
                for Locating Differentiating, and Removing Neoplasms (RIGS)
                

            
	
              US4801803

            	 	
              07/027197

            	 	
              17-Mar-87

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions (RIGS)

            
	
              US4889991

            	 	
              07/248816

            	 	
              23-Sep-88

            	 	
              Gamma
                Radiation Detector with Enhanced Signal Treatment

            
	
              US4893013

            	 	
              07/248920

            	 	
              23-Sep-88

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions

            
	
              US5070878

            	 	
              07/404403

            	 	
              08-Sep-89

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions

            
	
              US5151598

            	 	
              07/629271

            	 	
              18-Dec-90

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions

            
	
              US5383456

            	 	
              08/214814

            	 	
              17-Mar-94

            	 	
              Radiation-Based
                Laproscopic Method For Determining Treatment Modality

            
	
              US5429133

            	 	
              07/992617

            	 	
              18-Dec-92

            	 	
              Radiation
                Responsive Laparoscopic Instrument

            
	
              US5441050

            	 	
              07/992622

            	 	
              18-Dec-92

            	 	
              Radiation
                Responsive Surgical Instrument

            
	
              US5475219

            	 	
              08/329505

            	 	
              26-Oct-94

            	 	
              Validation
                of Photon Emission Based Signals Using an Energy Window Network in
                Conjunction With a Fundamental mode Discriminator
                Circuit

            
	
              US5495111

            	 	
              08/329319

            	 	
              26-Oct-94

            	 	
              Crystal
                Array based Localizer for tissue sampling

            
	
              US5682888

            	 	
              08/662600

            	 	
              13-Jan-96

            	 	
              Apparatus
                and System for Detecting and Locating Photon Emissions with Remote
                Switch
                Control

            
	
              US5732704

            	 	
              08/542955

            	 	
              13-Oct-95

            	 	
              Radiation
                Based Method Locating And Differentiating Sentinel Node

            
	
              US5857463

            	 	
              08/543032

            	 	
              13-Oct-95

            	 	
              Remotely
                controlled system for tracking and locating a source of photon
                emission

            
	
              US5916167

            	 	
              08/949125

            	 	
              10-Oct-97

            	 	
              Surgical
                probe apparatus and system

            
	
              US5928150

            	 	
              08/944078

            	 	
              04-Oct-97

            	 	
              System
                for locating and detecting a source of photon
                emissions.

            
	
              D390480

            	 	
              29/060780

            	 	
              07-Oct-96

            	 	
              Detector
                Unit for Radiation Detecting Probe

            
	
              D390481

            	 	
              29/060782

            	 	
              10-Oct-96

            	 	
              Radiation
                Detecting Probe

            
	
              D390485

            	 	
              29/060781

            	 	
              07-Oct-96

            	 	
              Handle
                Unit for Radiation Detecting Probe

            
	
              D400249

            	 	
              29/077957

            	 	
              14-Oct-97

            	 	
              Console
                for Controlling a radiation probe

            
	
              D411118

            	 	
              29/067945

            	 	
              18-Mar-97

            	 	
              Console
                for controlling a radiation probe

            
	
              D411468

            	 	
              29/092799

            	 	
              27-Aug-98

            	 	
              Console
                for controlling a radiation probe - medium scope

            
	
              D412125

            	 	
              29/092808

            	 	
              27-Aug-98

            	 	
              Console
                for controlling a radiation probe-broad

            
	
              Filed

            	 	
              08/949107

            	 	
              10-Oct-97

            	 	
              Surgical
                probe apparatus and system

            
	
              Filed

            	 	
              08/067947

            	 	
              08-Mar-97

            	 	
              Detector
                unit for radiation detecting probe

            
	
              Filed

            	 	
              08/067946

            	 	
              18-Mar-97

            	 	
              Radiation
                detecting probe

            
	
              Filed

            	 	
              08/067944

            	 	
              18-Mar-97

            	 	
              Radiation
                detecting probe

            
	
              Filed

            	 	
              29/092780

            	 	
              27-Aug-98

            	 	
              Console
                for controlling a radiation probe - narrow scope

            
	
              Filed

            	 	
              09/167704

            	 	
              06-Oct-98

            	 	
              Radiation
                response surgical probe apparatus

            
	
              Filed

            	 	
              09/167643

            	 	
              06-Oct-98

            	 	
              Surgical
                probe apparatus and system

            
	
              Filed

            	 	
              09/167008

            	 	
              06-Oct-98

            	 	
              Radiation
                probe with compound semiconductor crystal performing in a
                trapping

            
	
              Filed

            	 	
              09/167420

            	 	
              06-Oct-98

            	 	
              Surgical
                probe apparatus

            
	
              Filed

            	 	
              09/178322

            	 	
              23-Oct-98

            	 	
              System
                and apparatus for detecting and locating sources of
                radiation

            
	
              Filed

            	 	
              09/177714

            	 	
              23-Oct-98

            	 	
              Scanning
                system and method for locating sources of radiation emission
                RIGS

            
	
              Filed

            	 	
              09/177725

            	 	
              23-Oct-98

            	 	
              Scanning
                a radiation source with a count rate output derived with a Dynamic
                window

            


    

    


    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    


    
      	
              NEOPROBE
                PATENTS 

            	 	 
	
              Patent
                Number

            	 	
              Serial
                Number

            	 	
              Filing
                Date

            	 	
              Patent
                Title

            
	
              US478280

            	 	
              61905880

            	 	
              10-Sep-86

            	 	
              Method
                for Locating Differentiating, and Removing Neoplasms
                (RIGS)

            
	
              US4801803

            	 	
              07/027197

            	 	
              17-Mar-87

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions (RIGS)

            
	
              US4889991

            	 	
              07/248816

            	 	
              23-Sep-88

            	 	
              Gamma
                Radiation Detector with Enhanced Signal Treatment

            
	
              US4893013

            	 	
              07/248920

            	 	
              23-Sep-88

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions

            
	
              US5070878

            	 	
              071404403

            	 	
              08-Sep-89

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions

            
	
              US5151598

            	 	
              07/629271

            	 	
              18-Dec-90

            	 	
              Detector
                and Localizer for Low Energy Radiation Emissions

            
	
              US5383456

            	 	
              08/214814

            	 	
              17-Mar-94

            	 	
              Radiation-Based
                Laproscopic Method For Determining Treatment Modality

            
	
              US5429133

            	 	
              07/992617

            	 	
              18-Dec-92

            	 	
              Radiation
                Responsive Laparoscopic Instrument

            
	
              US5441050

            	 	
              07/992622

            	 	
              18-Dec-92

            	 	
              Radiation
                Responsive Surgical Instrument

            
	
              US5475219

            	 	
              08/329505

            	 	
              26-Oct-94

            	 	
              Validation
                of Photon Emission Based Signals Using an Energy Window Network in
                Conjunction With a Fundamental mode Discriminator
                Circuit

            
	
              US5495111

            	 	
              08/329319

            	 	
              26-Oct-94

            	 	
              Crystal
                Array based Localizer for tissue sampling

            
	
              US5682888

            	 	
              08/662600

            	 	
              13-Jan-96

            	 	
              Apparatus
                and System for Detecting and Locating Photon Emissions with Remote
                Switch
                Control

            
	
              US5732704

            	 	
              08/542955

            	 	
              13-Oct-95

            	 	
              Radiation
                Based Method Locating And Differentiating Sentinel Node

            
	
              US5857463

            	 	
              08/543032

            	 	
              13-Oct-95

            	 	
              Remotely
                controlled system for tracking and locating a source of photon,
                emission

            
	
              US5916167

            	 	
              08/949125

            	 	
              10-Oct-97

            	 	
              Surgical
                probe apparatus and system

            
	
              US5928150

            	 	
              08/944078

            	 	
              04-Oct-97

            	 	
              System
                for locating and detecting a source of photon
                emissions.

            
	
              D390480

            	 	
              29/060780

            	 	
              07-Oct-96

            	 	
              Detector
                Unit for Radiation Detecting Probe

            
	
              D390481

            	 	
              29/060782

            	 	
              10-Oct-96

            	 	
              Radiation
                Detecting Probe

            
	
              D390485

            	 	
              29/060781

            	 	
              07-Oct-96

            	 	
              Handle
                Unit for Radiation Detecting Probe

            
	
              D400249

            	 	
              29/077957

            	 	
              14-Oct-97

            	 	
              Console
                for Controlling a radiation probe

            
	
              D411118

            	 	
              29/067945

            	 	
              18-Mar-97

            	 	
              Console
                for controlling a radiation probe

            
	
              D411468

            	 	
              29/092799

            	 	
              27-Aug-98

            	 	
              console
                for controlling a radiation probe - medium scope

            
	
              D412125

            	 	
              29/092808

            	 	
              27-Aug-98

            	 	
              Console
                for controlling a radiation probe-broad

            
	
              Filed

            	 	
              08/949107

            	 	
              10-Oct-97

            	 	
              Surgical
                probe apparatus and system

            
	
              Filed

            	 	
              08/067947

            	 	
              08-Mar-97

            	 	
              Detector
                unit for radiation detecting probe

            
	
              Filed

            	 	
              08/067946

            	 	
              18-Mar-97

            	 	
              Radiation
                detecting probe

            
	
              Filed

            	 	
              081067944

            	 	
              18-Mar-97

            	 	
              Radiation
                detecting probe

            
	
              Filed

            	 	
              29/092780

            	 	
              27-Aug-98

            	 	
              Console
                for controlling a radiation probe - narrow scope

            
	
              Filed

            	 	
              09/167704

            	 	
              06-Oct-98

            	 	
              Radiation
                response surgical probe apparatus

            
	
              Filed

            	 	
              09/167643

            	 	
              06-Oct-98

            	 	
              Surgical
                probe apparatus and system

            
	
              Filed

            	 	
              09/167008

            	 	
              06-Oct-98

            	 	
              Radiation
                probe with compound semiconductor crystal performing in a
                trapping

            
	
              Filed

            	 	
              09/167420

            	 	
              06-Oct-98

            	 	
              Surgical
                probe apparatus

            
	
              Filed

            	 	
              09/178322

            	 	
              23-Oct-98

            	 	
              System
                and apparatus for detecting and locating sources of
                radiation

            
	
              Filed

            	 	
              09/177714

            	 	
              23-Oct-98

            	 	
              Scanning
                system and method for locating sources of radiation emission
                RIGS

            
	
              Filed

            	 	
              09/177725

            	 	
              23-Oct-98

            	 	
              Scanning
                a radiation source with a count rate output derived with a dynamic
                window

            


    

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    


    Schedule
      2.15 Products

    


    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    


    Schedule
      2.15 Products

    
      
        


        
          	
                  NEOPROBE
                    MODEL #

                	 	
                  DESCRIPTION

                
	 
	
                  neo2000TM
                    Control Uni

                
	
                  2000

                	 	
                  neo2000
                    Control Unit

                
	
                  2009

                	 	
                  AC
                    Power Cord, N. America

                
	
                  2008

                	 	
                  Op
                    Manual - English (2000)

                
	
                  2020

                	 	
                  Instr
                    Video (2000)

                
	
                  2010

                	 	
                  Accy
                    Case

                
	 
	
                  14mm
                    Probe & Collimator

                
	
                  1017

                	 	
                  14mm
                    Probe

                
	
                  1013

                	 	
                  14mm
                    Collimator

                
	 
	
                  BlueTipTM
                    Probes & Collimators

                
	
                  2001

                	 	
                  12mm
                    Uncollimated Tip

                
	
                  2002

                	 	
                  12mm
                    Collimated Tip

                
	
                  2003

                	 	
                  19mm
                    Uncollimated Tip

                
	
                  2004

                	 	
                  12mm
                    BTP Collimator

                
	
                  2019

                	 	
                  19mm
                    BTP Collimator

                
	 
	
                  Probe
                    Cables

                
	
                  2021

                	 	
                  Probe
                    Cable (14mm/2000)

                
	
                  2012

                	 	
                  Disposable
                    Handle, 12-pack

                
	 
	
                  Int’l
                    Power Cords

                
	
                  1021

                	 	
                  N.
                    America (for 1500/1000)

                
	
                  1022

                	 	
                  Continental
                    Europe

                
	
                  1023

                	 	
                  UK

                
	
                  1024

                	 	
                  Italy

                
	
                  1025

                	 	
                  Denmark

                
	
                  1026

                	 	
                  Australia

                
	
                  1027

                	 	
                  Swiss

                
	
                  1028

                	 	
                  Israel

                
	
                  1029

                	 	
                  Japan

                
	
                  1032

                	 	
                  India

                
	
                  1033

                	 	
                  Argentina

                
	
                  1034

                	 	
                  China

                
	
                  1050

                	 	
                  Ground
                    Plug Adapter

                


        

         

        
          	
                  1500
                    Control Unit

                
	
                  1500

                	 	
                  1500
                    Control Unit

                
	
                  1508

                	 	
                  Op
                    Manual (1500)

                
	
                  1510

                	 	
                  Op
                    Manual Int’l (1500)

                
	
                  1502

                	 	
                  Instr
                    Video (1500)

                
	
                  1514

                	 	
                  Carry
                    Case

                
	 
	
                  19mm
                    Probe & Accessories

                
	
                  1002

                	 	
                  19mm
                    Probe

                
	
                  1015

                	 	
                  19mm
                    Collimator

                
	
                  1016

                	 	
                  19mm
                    Shield

                
	
                  1007

                	 	
                  Background
                    Shield

                
	
                  1009

                	 	
                  O-ring
                    10-Pack

                
	 
	
                  Probe
                    Cables

                
	
                  1003

                	 	
                  Reusable
                    Probe Cable

                
	
                  1503

                	 	
                  Probe
                    Tip Adapter Cable (1500)

                
	 
	 
	
                  1500
                    Battery Chargers

                
	
                  1504

                	 	
                  US
                    Battery Charger (1500)

                
	
                  1531

                	 	
                  Canadian
                    Batt Chrgr (1500)

                
	
                  1530

                	 	
                  EU
                    Battery Charger (1500)

                
	
                  1020

                	 	
                  Int’l
                    Battery Charger

                
	
                  1519

                	 	
                  Intl
                    Charger Adapter Cable

                
	 
	
                  Model
                    1000

                
	
                  1000

                	 	
                  1000
                    Console (w/ 1014 case)

                
	
                  1008

                	 	
                  1000
                    Op Manual

                
	
                  1014

                	 	
                  1000
                    Carry Case

                
	
                  1004

                	 	
                  1000
                    US Charger

                
	
                  1030

                	 	
                  1000
                    EU Charger

                
	
                  1019

                	 	
                  1000
                    Intl Adapter Cable

                


        

         

      

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      2.19 Trademarks

    


    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    


    Schedule
      2.19

    

      Neoprobe
        Trademarks & Trade Names(1)

      
        
           

        

      

    

    
      	 	 	
              U.S.
                Registration #

            	 	
              OUS
                Registration #

            
	
              Audible
                Tone Sequence

            	 	
              1959649

            	 	 	 
	
              Neoprobe

            	 	
              1938283

            	 	
              1510060 

            	Austria
	 	 	 	 	
              541191 

            	Benelux
	 	 	 	 	
              8155193 

            	1 U K
	 	 	 	 	
              1787313 

            	Spain
	 	 	 	 	
              1787314 

            	Spain
	 	 	 	 	
              259040 

            	Sweden
	 	 	 	 	
              2079214 

            	Germany
	 	 	 	 	
              90098 

            	Israel
	 	 	 	 	
              90099 

            	Israel
	 	 	 	 	
              784400 

            	Taiwan
	 	 	 	 	
              446971 

            	S. Korea
	 	 	 	 	
              800774 

            	Taiwan
	 	 	 	 	
              Appl
                #T093C002090 

            	Italy 11/93
	 	 	 	 	
              Appl
                #113414/93 

            	Japan 11/93
	 	 	 	 	
              (?)
                Appl #38908/93 

            	S. Korea 11/93
	 	 	 	 	
              (?)
                Appl #38909/93 

            	S. Korea 11/93
	 	 	 	 	
              (?)
                Appl #2861/97 

            	Singapore N/A
	
              Neoprobe
                and Design

            	 	
              446971
                (4/26/99)

            	 	 	 
	 	 	
              Appl
                #75/636945 (2/2/99)

            	 	 	 
	
              Blue
                Tip

            	 	
              Appl
                #75/734590 6/99

            	 	 	 
	
              NE02000

            	 	
              Appl
                #75/432104 6/98

            	 	 	 
	
              NEOLINK

            	 	
              Appl
                #75/784096 8/99

            	 	 	 
	
              NEOMAX

            	 	
              Appl
                #75/783829 8/99

            	 	 	 


    

     

    
      

    

    
      
        	1	
                Correspondence
                  from P. Coburn, dated 9/21/99

              


      

       

    

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    


    Schedule
      3.2 Third
      Party Agreements

    


    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3.2

    


    Date
      of Delivery of Exclusive Distribution Rights

    


    
      	
              PARTY

            	 	
              TERRITORY

            	 	
              DATE*

            
	
              Artimed

            	 	
              Poland
                

            	 	
              60
                days

            
	
              CEI

            	 	
              Brazil
                

            	 	
              60
                days

            
	
              Century
                Medical, Inc.

            	 	
              Japan
                

            	 	
              03/03/09**

            
	
              CM
                Nuclear

            	 	
              S.
                Africa 

            	 	
              60
                days

            
	
              Endoskopiki

            	 	
              Greece
                

            	 	
              60
                days

            
	
              Endounique

            	 	
              Austria
                

            	 	
              60
                days

            
	
              Epsilon

            	 	
              Turkey
                

            	 	
              60
                days

            
	
              Evergreen

            	 	
              China
                

            	 	
              60
                days

            
	
              Global
                Damon Pharma

            	 	
              Korea

              Thailand

              Singapore

              Taiwan

            	 	
              6
                months

            
	
              KOL
                Bio-Medical

            	 	
              USA
                

            	 	
              10/15/99

            
	
              Murray

            	 	
              Ireland
                

            	 	
              6.25
                months

            
	
              Sigma
                B.V.B.A.

            	 	
              Belgium
                

            	 	
              6.25
                months

            
	
              Sigma
                B.V.

            	 	
              The
                Netherlands 

            	 	
              6.25
                months

            


    

     

    
      	*	
              Stated
                as time running from the Effective Date of this
                Agreement

            


    

    


    
      	
              **

            	
              Initial
                Term is 5 Years with an automatic term renewal of 5 years provided
                Century
                is meeting its contractual
                obligations.

            


    

    


    Neoprobe
      agrees to use its reasonable best efforts to reduce the stated time if possible
      under a particular distribution agreement with a party listed
      above.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    


    Schedule
      5.2 Transfer
      Pricing for Products

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    


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

    


    SCHEDULE
      5.2

    


    TRANSFER
      PRICING

    


    
      	I.	
              Saleable
                Product

            


    

    


    
      	
              A.

            	
              The
                following schedule shall be used, in conjunction with paragraph I.B.,
                to
                determine the applicable per unit Transfer Price for all Products
                meeting
                the Specifications:

            


    

    

      
        	
                Commercial

              	
                 

              	
                Product

              	
                 

              	
                Provisional

              	
                 

              	
                Floor

              	
                 

              	
                Actual
                  Transfer

              
	
                Year

              	
                 

              	
                Description(2)

              	
                 

              	
                Transfer
                  Price (4)

              	
                 

              	
                Price(6)
                  

              	
                 

              	
                Price

              
	 	 	 	 	 	 	 	 	 
	
                Initial
                  Period(1)

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              
	 	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              	 	
              
	 	 	
                All
                  other Products

              	 	
                [*]

              	 	
                [*]

              	 	
              
	 	 	 	 	 	 	 	 	 
	 	 	
                [*]
                  Products

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              
	 	 	 	 	 	 	 	 	 
	
                Year
                  [*]

              	 	
                [*]

              	 	
                [*]
                  

              	 	
                [*]

              	 	
                [*]

              
	 	 	
                [*]

              	 	
              	 	
                [*]

              	 	
                [*]

              
	 	 	
                [*]

              	 	
              	 	
                [*]

              	 	
                [*]

              
	 	 	 	 	 	 	 	 	 
	
              	 	 	 	 	 	
                [*]

              	 	 
	 	 	 	 	 	 	 	 	 
	
                [*]
                  Products

              	 	
                [*]

              	 	
              	 	
              	 	
                [*]

              
	 	 	 	 	 	 	 	 	 
	
                Years
                  [*]

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	
                [*]

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]
                  

              	 	
                [*]

              
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              	 	
                [*]

              


      

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

    


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

    


    Notes

    


    
      	
              1.

            	
              For
                purposes of this Schedule 5.2 only, the Initial Period shall mean
                the
                period beginning on the Effective Date of the Agreement and ending
                on
                March 31, 2000.

            


    

    


    
      	
              2.

            	
              Products
                described include all Products as defined in Section 2.15 of the
                Agreement.

            


    

    


    
      	
              3.

            	
              For
                purposes of this Schedule 5.2, a “System” shall be defined as one (1)
                neo2000 control unit, one (1) reusable 14mm probe and other accessories
                (including, but not limited to, cord set, operations manual, detector
                probe cable and adapter, Probe collimator) sold as a package meeting
                the
                Specifications.

            


    

    


    
      	
              4.

            	
              The
                Provisional Transfer Price (the “Provisional Price”) is the amount that
                shall be used solely for purchase orders and invoicing purposes.
                The
                Provisional Price shall be recalculated annually, by the end of the
                first
                calendar quarter of each Commercial Year, and will then be in effect
                for
                the subsequent twelve-month period as described in paragraph
                I.B.2.

            


    

    


    
      	
              5.

            	
              Net
                Selling Price (“NSP”) shall mean the revenue received by Ethicon or an
                Affiliate from the sale of the Product to an independent third party
                less
                the following amounts: (i) discounts, including cash discounts, or
                rebates
                actually allowed or granted; (ii) credits or allowances actually
                granted
                upon claims or returns, regardless of the party requesting the return;
                (iii) freight charges paid for customer delivery; and (iv) taxes
                or other
                governmental charges levied on or measured by the invoiced amount
                whether
                absorbed by the billing or billed party. Commissions paid by Ethicon
                to
                its sales representatives shall not be deducted from the amount that
                Ethicon charges to such third party in determining the
                NSP.

            


    

    


    
      	
              6.

            	
              Average
                Net Selling Price (“Average NSP”) shall mean the sum of the NSP for all
                units sold during the commercial year, including [*] as provided
                for in
                Section 3.2 and 3.3, divided by the total number of units sold during
                that
                same commercial year provided that the total number of units is [*]
                Commercial Year.

            


    

    


    
      	
              7.

            	
              “Floor
                Price” shall mean the minimum Transfer Price and the minimum Provisional
                Price for a unit as defined in the schedule above or based on the
                actual
                cost (“Cost”) to manufacture plus the indicated percentage markup. The
                Cost to manufacture are the direct material and labor costs for Products
                supplied to Neoprobe from its suppliers plus Neoprobe’s direct and
                indirect overhead charges, provided that any cost reductions or
                volume-related discounts or other associated cost savings are applied
                to
                the Cost in the Floor Price calculation. Neoprobe’s overhead charges
                mentioned above shall be calculated in like manner as the “Current Cost
                Estimate” shown in the table in paragraph
                II.

            


    

    


    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

       

    

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

    


    
      	B.	
              Provisional
                Price Calculation

            


    

    


    
      	 	
              1.

            	
              During
                the Initial Period, the Provisional Price for each unit shipped to
                Ethicon
                will be as established in the schedule in paragraph
                I.A.

            


    

    


    
      	 	
              2.

            	
              During
                the first calendar quarter of each Commercial Year, the average NSP
                will
                be recalculated based on the actual world-wide sales recognized during
                the
                prior Commercial Year, except that, [*], the average NSP will be
                recalculated based on the actual world-wide sales recognized during
                the
                period from the Effective Date to
                [*].

            


    

    


    
      	 	
              3.

            	
              Concurrently,
                the Provisional Price will also be recalculated based on the recalculated
                average NSP as described above. The recalculated Provisional Price
                shall
                be equal to the recalculated average NSP multiplied by the percentage
                indicated in the “Provisional Transfer Price” column of the schedule in
                paragraph I.A. above or the amount in the “Floor Price” column, whichever
                is greater. This revised Provisional Price will be in effect for
                the
                following twelve-month period, and will be communicated to Neoprobe
                no
                later than March 31 of each Commercial
                Year

            


    

    


    
      	C.	
              Reconciliation
                to Actual Transfer Price

            


    

    


    On
      [*]
      the Provisional Price will be reconciled to the actual Transfer Price based
      on
      actual, world-wide average NSP for the period from the Effective Date [*] After
      the Initial Reconciliation, the Provisional Price will be reconciled to the
      actual Transfer Price by the end of the first calendar quarter of each
      Commercial Year, i.e. March 31, based on actual, world-wide average NSP for
      the
      previous Commercial Year. Any overpayments or underpayments to Neoprobe shall
      be
      reflected on the first invoice to Ethicon after April 1 as a lump-sum
      adjustment.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

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

    


    II. Sample
      Demonstration Units

    


    Products
      purchased by Ethicon to be used as promotional product demonstration units,
      training units or sales representative samples will be priced according to
      the
      calculation under “Demonstration Unit Pricing” under the following
      schedule:

    


    
      	 	 	
              Demonstration

              Unit
                Pricing

            	 	
              Current
                Cost Estimate

            	 	
              Estimated
                Demonstration Unit Price1

            
	
              [*]

              [*]

              [*]

            	 	
               

              [*]

              [*]

            	 	
               

               

              [*]

            	 	
               

              [*]

              [*]

            
	 	 	 	 	 	 	 
	
              Control
                unit only:

              [*]
                

              [*]

              [*]

            	 	
               

              [*]

              [*]

              [*]

            	 	
               

              [*]

              [*]

              [*]

            	 	
               

              [*]

              [*]

              [*]

            
	 	 	 	 	 	 	 
	
              Probes:

              [*]

              [*]

              [*]

              [*]

              [*]

              [*]

              [*]

              [*]

            	 	
               

              [*]

              [*]

               

              [*]

              [*]

              [*]

              [*]

              [*]

            	 	
               

              [*]

              [*]

               

              [*]

              [*]

              [*]

               

              [*]

            	 	
               

              [*]

              [*]

               

              [*]

              [*]

              [*]

               

              [*]

            
	 	 	 	 	 	 	 
	
              All
                other Products

            	 	
              [*]

            	 	 	 	 


    

    


    Notes

     

    
      	 	
              1.

            	
              The
                “Estimated Demonstration” Unit Price” is based on the current estimated
                Cost of the Products provided to Ethicon by Neoprobe as shown in
                the
                “Current Cost Estimate” column in the above schedule and represents the
                maximum Demonstration Unit Price. It is agreed that any cost reductions,
                volume-related deductions or associated Cost savings shall reduce
                the Cost
                in the demonstration unit pricing
                calculation.

            


    

    


    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    


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

    


    
      	 	
              2.

            	
              The
                Demonstration Unit Price of [*] for the returned and refurbished
                demonstration units (“Returned Units”) [*] only. The maximum quantity of
                Returned Units is [*]. Any and all other demonstration system purchases
                shall be made at the [*] whichever is less. For tracking and compliance
                purposes, Neoprobe shall provide Ethicon with a list of serial numbers
                for
                those demonstration units [*] including serial numbers for all related
                components.

            


    

    


    
      	 	
              3.

            	
              The
                Demonstration Unit Price of [*] demonstration units from the [*]
                only. The
                maximum quantity of [*] Blue Tip [*]. Any and all other demonstration
                unit
                purchases shall be made at the [*]. For tracking and compliance purposes,
                Neoprobe shall provide Ethicon with a list of serial numbers for
                those
                demonstration units owned by the current U.S. distributor including
                serial
                numbers for all related components.

            


    

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    


    Schedule
      5.6 Sales
      and
      Marketing Literature

    


    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    


    SCHEDULE
      5.6

    


    LIST
      OF APPROVED MARKETING LITERATURE

    


    
      	
              DOCUMENT

            	 	
              REVIEW

              NUMBER

            	 	
              USE

            	 	
              QUANTITY

              AS
                OF

              9/15/99

            
	
              neo2000TM
                BIueTipTM Probe Sales Training Binder

            	 	
              99-581

            	 	
              Released
                for use by Sales Reps; internal use only; not for dissemination to
                users/
                public

            	 	
              1
                (Master)

            
	 	 	 	 	 	 	 
	
              neo2000TM
                Gamma Detection System Operation Manual

            	 	
              99-582

            	 	
              Released
                for use by product users

            	 	
              75

            
	 	 	 	 	 	 	 
	
              neo2000TM
                Gamma Detection System Operation Training Binder

            	 	
              99-583

            	 	
              Released
                for use by Sales Reps; internal use only; not for dissemination to
                users/
                public

            	 	
              1
                (Master)

            
	 	 	 	 	 	 	 
	
              Neoprobe
                14mm Reusable Probe Sales Aid

            	 	
              99-584

            	 	
              Released
                for use by Sales Reps to interface with potential
                customers

            	 	
              2,500

            
	 	 	 	 	 	 	 
	
              neo2000TM
                BlueTipTM Probe Sales Aid

            	 	
              99-585

            	 	
              Released
                for use by Sales Reps to interface with potential
                customers

            	 	
              6,000

            
	 	 	 	 	 	 	 
	
              neo2000TM
                Gamma Detection System Sales Aid

            	 	
              99-586

            	 	
              Released
                for use by Sales Reps to

              interface
                with potential customers

            	 	
              6,000

            


    

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    


    Schedule
      5.18 Sales and Marketing Organization

    


    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    


    Schedule
      5.18 Sales and Marketing Organization

    


    
      	
              EUROPE

            	 	 	 	 	 	 
	
              Employee

            	 	
              Location

            	 	
              Title

            	 	
              Hire
                Date

            
	
              Cookson,
                Doug

            	 	
              Oxfordshire,
                England

            	 	
              Marketing
                Director

            	 	
              11/3/97

            
	
              Janssen,
                Jan-Willem

            	 	
              Grave,
                Netherlands

            	 	
              Clinical
                Specialist

            	 	
              9/1/98

            
	
              Vinotti,
                Donatella

            	 	
              Nepi,
                Italy

            	 	
              Clinical
                Specialist

            	 	
              9/1/98

            
	
              Wright,
                Susan

            	 	
              Hampshire,
                England

            	 	
              Professional
                Educ. Mgr 

            	 	
              7/1/98

            
	 	 	 	 	 	 	 
	
              U.S.

            	 	 	 	 	 	 
	
              Bellett,
                Dennis

            	 	
              Issaguah,
                WA (Seattle)

            	 	
              Clinical
                Specialist

            	 	
              5/14/98

            
	
              Gates,
                Dan

            	 	
              McKinney,
                TX (Dallas)

            	 	
              Western
                Area Dir.

            	 	
              1/12/98

            
	
              Regester,
                Steve

            	 	
              Westerville,
                OH

            	 	
              Clinical
                Specialist 

            	 	
              1/12/98

            
	
              Russell,
                Mike

            	 	
              Raleigh,
                NC

            	 	
              Sales
                Director

            	 	
              8/1/96

            


    

    


    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    


    Schedule
      5.25 14 mm Probe Accessory Marketing Implementation Program

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    


    Schedule
      5.25 14mm Probe Accessory Marketing Implementation Program - Page 1

    


    Program Revised
      labeling and customer instructions for the Neoprobe Reusable Probes when used
      neo2000 Control Units

    


    Scope The
      Parties agree to the following key items of the Program:

     

    
      	 	
              ·

            	
              A
                Warning shall be developed and placed on the neo2000 Control Units
                as well
                as, added to Section 1.1-1, System Warnings, Cautions and Notes of
                the
                Operation Manual, as well as any promotional material and read as
                follows:
                “Warning! To minimize the risk of safety hazards (electric shock or
                burns)
                and to maintain proper operation, Neoprobe Corporation recommends
                that
                this equipment not be in contact with the patient or operator when
                any
                electrosurgical device is in use and
                energized.”

            


      	 	 	 


    

    
      	 	
              ·

            	
              Recommendation
                shall be added to Section 1.1-1 and Section 4.3-1, Sterilization
                Procedures of the Operation Manual and read as follows: “When reusable
                probes, Models 1002 and 1017 are used with the neo2000 Control Unit,
                it is
                recommended that the probes always be placed in commercially available
                sterile surgical drape barriers [as noted
                above].”

            


      	 	 	 


    

    
      	 	
              ·

            	
              Written
                communications shall be developed and provided to all Neoprobe customers
                on the Warning and Recommendation.

            


      	 	 	 


    

    
      	 	
              ·

            	
              Customer
                inservicing shall be conducted to reinforce the written communications
                and
                ensure proper procedures are followed during Product
                use.

            


    

    


    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    


    Responsibilities
      and Timing

    


    
      	
              Actions

            	 	
              Responsibility

            	 	
              Timing
                from

              Effective
                Date

            
	
              Finalize
                Regulatory strategy.

            	 	
              Neoprobe

            	 	
              7
                days

            
	
              Develop
                Warning and Recommendation labeling and revised Operation Manual
                pages
                (include artwork and copies)

            	 	
              Neoprobe

            	 	
              21
                days

            
	 	 	 	 	 
	
              Prepare
                written communications on Warning and Recommendations and send to
                all
                Neoprobe Customers (“Customers”); Prepare inservicing
                script

            	 	
              Neoprobe
                - Preparation of communications including script and mailing to
                Customers

               

              Ethicon
                - Affixing Labels and inserting new Operation Manual pages where
                Customer
                inservicing to existing neo2000 customers will be done b Ethicon
                (as noted
                below)

            	 	
              7-10
                days

            
	 	 	 	 	 
	
              Conduct
                Customer inservicing to existing neo2000 customers where Third Party
                Agreements are not in effect (refer to Schedule 3.2 of the
                Agreement)

            	 	
              Ethicon

            	 	
              45
                days from final printed labeling and operations manual
                updates

            


    

    


    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    


    Schedule
      5.25 14mm Probe -Accessory Marketing Implementation Program - Page
      2

    


    In
      - Service Script

    Neo2000
      Gamma Detection System

    


    The
      following information is required to be disseminated to the customer during
      inservice training.

     

    To
      ensure
      the intended operation, and safe and effective use of the neo2000 Gamma
      Detection System, when configured with the Model 1002 (19mm) or Model 1017
      (14mm) detector probes, follow these basic rules:

    


    1) To
      minimize the risk of safety hazards (electric shock or bums) and to maintain
      proper operation, Neoprobe Corporation recommends that this equipment not be
      in
      contact with the patient or operator when any electrosurgical device is in
      use
      and energized.

    


    a) For
      existing accounts:

    


    Add
      the ESU warning label to the front of the console as depicted
      here:

     

     

    
      	
              

            
	 	
              WARNING!
                To
                minimize the risk of safety hazards (electric shock or bums) and
                to
                maintain proper operation, Neoprobe Corporation recommends that this
                equipment not be in contact with the patient or operator when any
                electrosurgical device is in use and energized.

            	 


    

     

    2) When
      reusable probes, Models 1002 and 1017 are used with the neo2000 Control Unit,
      it
      is recommended that the probes always be placed in commercially available
      sterile surgical drape barriers. Refer the customer to page 4.3-3 for the
      surgical sheath product information (i.e., Microtek Probe Drape Catalog No.
      3787; 1-800-824-3027).

    


    3) Update
      the Operation Manual with new pages for Sections: l.1-1, 4.1-1, and 7.1-1 will
      be provided with this in-service document.

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

    


    Schedule
      6.1 R&D
      Personnel

    


    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    


    SCHEDULE
      6.1

    


    INSTRUMENT
      DEVELOPMENT POSITIONS

     

    
      	
              POSITION

            	 	
              CURRENT
                INCUMBENT

            
	 	 	 
	
              Director,
                Instrument Development

            	 	
              Carl
                Bosch

            
	
              Project
                Engineer

            	 	
              John
                Call

            
	
              Project
                Engineer

            	 	
              Open

            
	
              Software
                Engineer FT Consultant 

            	 	
              Olwen
                Wee

            
	
              Executive
                Assistant

            	 	
              Jean
                Jerew

            


    

    


    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    


    Schedule
      6.3 R&D
      Programs

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    


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

    


    Schedule
      6.3 R&D
      Programs

     

    SCHEDULE
      6.3

    


    EXISTING
      NEOPROBE R&D PROGRAMS

    


    
      	
              PRODUCT

            	 	
              DESCRIPTION

            	 	
              IMPACT

            	 	
              AVAILABILITY

            
	 	 	 	 	 	 	 
	
              [*]

            	 	
              ·
[*]

              ·
[*]

              ·
[*]

              ·
[*]

            	 	
              ·
[*]

            	 	
              ·
[*]

              ·
[*]

              ·
[*]

            
	 	 	 	 	 	 	 
	
              [*]

            	 	
              ·
[*]

            	 	
              ·
[*]

              ·
[*]

              ·
[*]

            	 	
              ·
[*]

              ·
[*]

            
	
              [*]

            	 	
              ·
[*]

              ·
[*]

              ·
[*]

            	 	
              ·
[*]

            	 	
              ·
[*]

              ·
[*]

            
	 	 	 	 	 	 	 
	
              [*]

            	 	
              ·
[*]

              ·
[*]

              ·
[*]

              ·
[*]

              · [*]

            	 	
              ·
[*]

            	 	
              ·
[*]

              ·
                [*]

            


    

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

     

    Schedule
      10.2 Escrowed Process Descriptions

     

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    


    SCHEDULE
      10.2

    


    MATERIAL
      FOR ESCROW

     

    1) Copy
      of
      the Product Technical Documentation

    


    2) Copy
      of
      the Method Sheets(Manufacturing Instructions)

    


    3) Copy
      of
      the Verification and Validation Procedures

     

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    


    Exhibit
      2.17 Ethicon Endo-Surgery, Inc. Quality Assurance requirements

    


    ETHICON
      QUALITY ASSURANCE REQUIREMENTS

    


    
      	
              1.

            	
              Neoprobe
                shall maintain a quality assurance system for the manufacture of
                the
                Products that is compliant with the requirements of FAR 820, Quality
                System Regulation, Current Good Manufacturing
                Practices.

            


    

    


    
      	
              2.

            	
              Neoprobe
                represents and warrants that each of the Products is marked and attested
                to comply with Council Directive 93/42/EEC and that each of the Products
                is compliant with EN60601-1 and any related requirements relating
                to such
                Product.

            


    

    


    
      	
              3.

            	
              Neoprobe
                shall provide Ethicon with the most recent copies of all applicable
                EC
                certificates # 02033 and all other certifications upon Ethicon’s written
                request.

            


    

    


    
      	
              4.

            	
              Neoprobe
                represents that each of the Products is marked (UL) and attested
                to comply
                with Underwriters Laboratory safety requirements. Neoprobe shall
                be
                responsible for assuring that each of the Products is compliant with
                UL
                2601-1; Medical Electrical Equipment, Part 1: General Requirements
                for
                Safety.

            


    

    


    
      	
              5.

            	
              Neoprobe
                shall be responsible for assuring all external suppliers maintain
                the
                appropriate quality, process and material controls to assure that
                the
                goods and services they provide are delivered on schedule and meet
                the
                requisite material and quality
                specifications.

            


    

    


    
      	
              6.

            	
              Pursuant
                to Section 8.2, Neoprobe shall agree to provide Ethicon with a written
                plan to remedy deficiencies lasting longer than ten (10) business
                days
                with updates on a monthly basis until such activities necessary to
                correct
                such deficiencies are completed.

            


    

     

    
      
        
        

      

      
        71