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EXHIBIT 10.1
***PORTIONS OF THIS EXHIBIT MARKED BY BRACKETS ("[_____]") OR OTHERWISE
INDICATED HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.***
AGREEMENT FOR PURCHASE OF EQUIPMENT, REAGENTS AND SUPPLIES
THIS AGREEMENT, (the "Agreement"), is effective this first day of May , 2003
("Effective Date "), by and between Quest Diagnostics Incorporated, a Delaware
corporation, with an address at One Malcolm Avenue, Teterboro, NJ 07608 ("Quest
Diagnostics") and Cytyc Corporation, a Delaware corporation with offices at 85
Swanson Road, Boxborough, MA 01719 ("Seller" or "Cytyc").
WHEREAS, Quest Diagnostics intends to purchase or lease certain equipment and
purchase reagents and supplies (collectively, and including all components
thereof, "Products") from Seller;
WHEREAS, Cytyc is the manufacturer and distributor of a cervical sample
preparation system known as the ThinPrep(R)Pap Test (the "Test") for liquid
based thin-layer cervical sample preparation which includes certain instruments
and disposables consisting of one vial and one collection device ("Physician
Kit") and one filter and one slide ("Lab Kit")(collectively "Full Kits"); and
WHEREAS, the parties desire to set forth the terms and conditions pursuant to
which such purchase transactions shall be made.
NOW THEREFORE, in consideration of the mutual covenants contained herein, and
intending to be legally bound hereby, Quest Diagnostics and Seller hereby agree
as follows:
1.0 DIAGNOSTIC EQUIPMENT
1.1 Purchase and Lease
Quest Diagnostics intends to purchase or lease, and Seller intends to sell
or lease to Quest Diagnostics, the equipment ("Equipment") listed in
Exhibit 1.1, attached hereto and incorporated by reference.
1.2 Software and License.
The Equipment includes proprietary software and documentation owned by
Seller ("Seller Software"), which is hereby licensed to Quest Diagnostics
under a non-exclusive, non-transferable license solely for Quest
Diagnostics' own use in connection with the use of Equipment, Reagents or
Supplies supplied by Seller. Quest Diagnostics may not copy or modify in
whole or in part the Seller Software owned by Seller nor make it available
in any form to any third party. If Quest Diagnostics is a unit or agency of
the U.S. Government or a contractor which will or may supply any Seller
Software to a unit or agency of the U.S. Government, Quest Diagnostics
agrees that any software included with or in the Equipment represents
"Commercial Computer Software," that the government's use of such software
is subject to "Restricted Rights" and that before such software is
transferred, it shall be marked with the required restricted rights
legend(s) as provided in the Department of Defense Federal Acquisition
Regulations 52.227-7013 or corresponding government regulations. The term
of the license(s) extends from the date of this Agreement and shall
continue in perpetuity unless Quest Diagnostics breaches and fails to cure
within thirty (30) days of notice thereof any material term of this
Agreement, at which time Seller may revoke the license(s).
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1.3 Installation
Seller's qualified technicians shall install and test the Equipment
purchased or leased by Quest Diagnostics, in accordance with its then
current reasonable practice, at no additional cost to Quest Diagnostics.
2.0 REAGENTS and SUPPLIES
2.1 Generally
Quest Diagnostics intends to purchase, and Seller intends to sell to Quest
Diagnostics, the reagents ("Reagents") and other supplies ("Supplies")
listed in Exhibit 2.1, attached hereto and incorporated by reference.
2.2 Reporting
Quest Diagnostics shall deliver to Cytyc within twenty (20) business days
following the end of each month during the term, an aggregate report
detailing the number of Tests performed by Quest Diagnostics during the
prior month. Seller shall have the right, at its expense and subject to the
provisions below and confidentiality undertakings reasonably satisfactory
to Quest Diagnostics, to cause a major independent auditing firm, not doing
business with either Quest Diagnostics or Seller, to audit and examine
Quest Diagnostics' billing records for the sole purpose of verifying the
accuracy of reports provided by Quest Diagnostics pursuant to this Section
2.2. Such audits shall be conducted no more than twice during each 12 month
period of this Agreement and only during regular business hours and with
reasonable prior written notice from Seller to Quest Diagnostics.
2.3 End of Agreement Quarterly Purchasing
During the last quarter prior to the termination of the Agreement, Quest
Diagnostics may purchase no more than 110% of the quantity of the Test, Lab
Kit and Physician Kit purchased during the three months preceding the last
quarter.
3.0 PRICING
Quest Diagnostics agrees to pay for and Seller agrees to sell or lease all
Equipment, Reagents and Supplies at the purchase and rental prices as
listed in Exhibits 1.1 and 2.1. Such prices shall remain firm during the
term of this Agreement, subject to any credits to which Quest Diagnostics
may be entitled pursuant to Exhibit 2.1.
4.0 ORDERS
When Quest Diagnostics desires to place an order for Equipment, Reagents
and Supplies, it shall issue a purchase order via fax or electronic data
interchange (when made available by Seller at its sole option and
discretion, although Seller agrees to actively explore the development of
an electronic data interchange that will work with Quest Diagnostics'
ordering system during the term). All orders shall specify the items and
quantities ordered, reference a Quest Diagnostics purchase order number and
shall designate a place for delivery, which terms, together with the terms
and conditions of this Agreement, shall constitute the entire agreement
between the parties with respect to the sale or lease of Equipment,
Reagents and Supplies. Any additional or different terms contained in any
purchase order, acknowledgment, confirmation, invoice or other document
shall be null and void.
5.0 DELIVERY
Seller shall use commercially reasonable efforts to ship Equipment to Quest
Diagnostics' facilities as promptly as practicable after its receipt of
purchase order. Seller agrees to ship Reagents and
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Supplies by the end of the business day following Seller's receipt of a
purchase order, unless otherwise stated on the purchase order. All
deliveries shall be made consistent with the purchase order and shall be
accompanied by a packing slip identifying (i) the items shipped with
corresponding manufacturer's product number(s), (ii) the quantities
shipped, and (iii) the Quest Diagnostics' purchase order number.
6.0 SHIPMENTS
Seller will provide at its expense "no charge" shipping for one purchase
order designated by Quest Diagnostics as a "no shipping charge" order per
Quest Diagnostics' facility per calendar month during the term of the
Agreement. Additional orders shipped per month per Quest Diagnostics'
facility will be charged the usual and customary shipping charges at
competitive commercial rates that are actually incurred. Notwithstanding
the foregoing provision, the Teterboro lab will be permitted two
"no-charge" purchase order shipments per month.
Seller shall ship the Equipment, Reagents and Supplies in a manner
consistent with general industry practice for comparable goods so as to
minimize deterioration or damage in transit. Shipment will be scheduled
upon acceptance of Quest Diagnostics' purchase order. Title to all Products
(except leased Equipment) will pass to Quest Diagnostics free and clear of
all liens, claims and encumbrances on delivery to carrier at Seller's
shipping point regardless of any provisions for payments of freight or
insurance, or selection of carrier by Seller, or of the form of shipping
documents. Seller is solely liable for the safe arrival of any shipments.
7.0 INSPECTION
Quest Diagnostics shall have the right to inspect Equipment, Reagents and
Supplies upon delivery. Within 15 days of the delivery date, Quest
Diagnostics shall notify Cytyc of any duplicate shipments, over shipments
or damaged or defective Products and said duplicate or over shipments or
damaged or defective Products will be returned at no cost to Quest
Diagnostics. Quest Diagnostics shall submit a return goods authorization
form to Cytyc and follow the then existing reasonable return procedures of
Cytyc.
8.0 OWN USE
Equipment, Reagents and Supplies covered hereunder will be purchased by
Quest Diagnostics, for Quest Diagnostics' "own use." Quest Diagnostics
agrees not to resell Equipment, Reagents or Supplies.
9.0 PARTIES BOUND
For purposes of this Agreement, Quest Diagnostics shall include all direct
and indirect subsidiaries and affiliates of Quest Diagnostics engaged in
the laboratory services business in which Quest Diagnostics owns more than
50% of the equity interest, including Unilab (as defined below) ("Majority
Owned Subsidiaries"), and all Majority Owned Subsidiaries shall be entitled
to the benefits of this Agreement, and all Tests utilized by Majority Owned
Subsidiaries shall be counted in determining whether Quest Diagnostics is
entitled to a Quarterly Usage Discount pursuant to Exhibit 2.1 attached
hereto. In addition, all direct and indirect subsidiaries and affiliates of
Quest Diagnostics engaged in the laboratory services business in which
Quest Diagnostics, as of the Effective Date, owns more than 29%, and up to
50% of the equity interest ("Minority Owned Subsidiaries") shall be
entitled to the pricing and related terms set forth in Section 3 of this
Agreement, and all Tests utilized by Minority Owned Subsidiaries shall be
counted in determining whether Quest Diagnostics is entitled to a Quarterly
Usage Discount pursuant to Exhibit 2.1 attached hereto. Any other
subsidiary or affiliate of Quest Diagnostics shall have the option to
become a party to this Agreement upon the giving of a written notice to
Seller and written acceptance by Seller (such other subsidiaries and
affiliates, together with
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Majority Owned Subsidiaries and Minority Owned Subsidiaries being
collectively referred to as "Participating Subsidiaries"). Upon acceptance
by Seller, the affiliate or subsidiary agrees to abide by all terms and
conditions of this Agreement. By signing this Agreement, each party
acknowledges the termination of the Agreement between Seller and Unilab
Corporation ("Unilab") dated March 29, 2000 (the "Unilab Agreement"),
except for the Cooperation and Confidentiality provision contained in the
Unilab Agreement that survives termination for a period of two years from
termination. Quest Diagnostics may purchase Equipment, Reagents and
Supplies pursuant to the terms hereof on behalf of laboratories for which
it provides management services upon prior written notice and mutual
written agreement by both Seller and Quest Diagnostics ("Managed
Laboratories").
10.0 PAYMENT TERMS
10.1 Equipment, Reagents and Supplies
Seller shall invoice Quest Diagnostics for the Equipment, Reagents and
Supplies in accordance with the prices set forth in Exhibits 1.1 and 2.1.
Invoices shall be mailed by Seller to the address set forth for Quest
Diagnostics on the purchase order and shall reference the Quest
Diagnostics' purchase order number (or submitted via EDI when applicable).
Quest Diagnostics will not accept third party invoices. Invoices for
multiple items shall separately identify the charges for those items.
Seller understands that its failure to follow these requirements may result
in delayed payments by Quest Diagnostics. Quest Diagnostics agrees to pay
all invoices within thirty (30) days of the invoice date, except for all or
any portion thereof disputed in good faith.
Quest Diagnostics shall not be obligated to pay that portion of the invoice
for Equipment, Reagents and/or Supplies that relates to quantities greater
than those ordered.
10.2 Taxes
Unless Quest Diagnostics provides Seller with satisfactory proof of
exemption from taxation, Quest Diagnostics shall pay and be responsible for
all applicable taxes, whether federal, state, local or otherwise, which may
be imposed upon the use, possession, ownership, sale or other transfer of
the Equipment, Reagents and Supplies exclusive of Seller's income and
related taxes, which shall be paid by Seller. Quest Diagnostics' shall
reimburse Seller for any such taxes paid by Seller on Quest Diagnostics'
purchases hereunder.
11.0 NOTICE OF DEFECTS; WARNINGS; RECALLS; WARRANTIES, INDEMNIFICATION AND
LIMITATION OF LIABILITY
The parties acknowledge and agree that references to Products and Equipment
in Sections 11 and 12 of this Agreement shall, in addition to Equipment
purchased or leased under this Agreement, also be deemed to include the
Unilab Equipment referenced in Exhibit 1.1A and Quest Diagnostics' existing
Equipment referenced in Exhibit 12.3.
11.1 Notification: Equipment, Reagents and Supplies' Defects, Warnings or
Recalls
In the event any Equipment, Reagents and Supplies do not perform in
accordance with the Seller's limited warranty package insert and operating
manuals, Quest Diagnostics shall give notice to Seller of the
nonconformance.
Seller will be responsible for promptly notifying Quest Diagnostics of any
known Product performance problem, or concern regarding Quest Diagnostics'
purchases, including Product defects, warnings or recalls. Such notice
shall be communicated in writing in accordance with Section 26 from
Seller's Quest Diagnostics service representative or other Seller
representative.
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Seller shall provide notice to the applicable Quest Diagnostics' sourcing
manager or other designated Quest contact within two (2) days after Seller
first becomes aware of any warning or recall or determines that a Product
contains a material defect, which shall be deemed to include any defects
that may materially impact any Test result or diagnosis, or any defects
requiring notice to customers. In connection with any failure to comply
with the foregoing notice requirement, Quest Diagnostics, in addition to
other contractual remedies the parties are otherwise entitled to, [_____].
Seller agrees to cooperate with Quest Diagnostics in discussing corrective
action plans of Seller and preventative measures to be implemented for the
future.
11.2 Limited Warranties
The Products are warranted against defects in workmanship and materials for
twelve (12) months with respect to Equipment and for twelve (12) months
with respect to other Products from date of shipment ("Warranty Period").
In addition, Seller warrants that during the Warranty Period, Products
shall conform with generally accepted industry standards and perform in
accordance with all applicable federal and state laws, regulations and
guidelines (including applicable U.S. Food and Drug Administration
regulations and guidelines), with published specifications and with any
additional documentation provided by Seller such as package inserts. Seller
further warrants that it has good title to all Equipment and that all
Equipment purchased by Quest Diagnostics will be transferred free and clear
of all liens, claims and encumbrances. PreservCyt(R) Solution, CytoLyt(R)
Solution and/or TransCyt(R) Filters shall be shipped a minimum of six (6)
months prior to their expiration date and shall be replaced at the request
of Quest Diagnostics if such expiration date expires prior to the end of
the Warranty Period. Cytyc assumes no liability for Products used after the
expiration date or Quest Diagnostics' failure to request replacement of
expired Products within the Warranty Period provided such expiration dates
are properly reflected on the Product label. Cytyc shall repair or replace
at its sole expense any defective Product as promptly as is practicable. If
Seller elects to repair Equipment, and such repair cannot be completed
within five (5) business days, Seller shall provide Quest Diagnostics with
loaner Equipment in good working order until such repair can be completed.
In fulfilling its obligation to provide loaner Equipment for ThinPrep(R)
3000 Equipment, Seller may provide one ThinPrep 2000 processor and up to a
maximum of two (2) ThinPrep 2000 Processors if necessary to meet Quest
Diagnostics' volume requirements in lieu of providing a ThinPrep 3000
Processor. If the defective Equipment is leased Equipment, and the
Equipment is not repaired or loaner Equipment provided within five (5)
business days after the defect arose [_____]. Replacement parts, which may
be reconditioned, are warranted from the date of installation for the
remainder of the original Warranty Period, which shall be extended for the
period commencing from the time the defect arose and continuing during any
period that Quest Diagnostics is without repaired or replaced Equipment or
loaner Equipment in good working order. Seller shall be responsible for the
expense of returning nonconforming Products, and providing conforming
Products in exchange. [_____] The foregoing warranties shall not apply to
defects to the extent resulting from Quest Diagnostics' misuse, negligence
or accident, including, without limitation: operation outside of the
environmental specifications for the Product; multiple use of a filter, use
of unauthorized supplies; failure of Quest Diagnostics or any third party
to perform routine maintenance for which Quest Diagnostics is responsible
in accordance with operating manuals; installation of software not supplied
by Cytyc; improper use or connection to incompatible equipment;
modifications to the Product not authorized by Cytyc; and external causes
such as, but not limited to, power failure. The foregoing warranties shall
survive any inspection by Quest Diagnostics. THE FOREGOING PROVISIONS SET
FORTH CYTYC'S SOLE AND EXCLUSIVE REPRESENTATIONS, WARRANTIES AND
OBLIGATIONS WITH RESPECT TO THE PRODUCT (S), AND CYTYC MAKES NO OTHER
WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED. CYTYC SPECIFICALLY
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DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WHETHER ARISING FROM A STATUTE OR OTHERWISE IN LAW,
EQUITY OR FROM A COURSE OF DEALING OR USAGE OF TRADE. CYTYC'S LIABILITY
ARISING OUT OF THE MANUFACTURE, SALE OR SUPPLY OF THE PRODUCT(S) OR
SERVICES OR THEIR USE OR DISPOSITION, WHETHER BASED UPON WARRANTY,
CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE ACTUAL PURCHASE PRICE
PAID BY QUEST DIAGNOSTICS FOR THE PRODUCT(S) OR SERVICES EXCEPT FOR CASES
IN WHICH REWORK IS REQUIRED OR AS PROVIDED IN CLAUSES 11.3 AND 11.4 BELOW.
SUCH LIMITED WARRANTY IS GIVEN SOLELY TO QUEST DIAGNOSTICS AND IS NOT GIVEN
TO, NOR MAY IT BE RELIED UPON BY, ANY THIRD PARTY INCLUDING, WITHOUT
LIMITATION, CUSTOMERS OF QUEST DIAGNOSTICS. THIS WARRANTY IS VOID UPON
TRANSFER OF PRODUCT BY QUEST DIAGNOSTICS TO ANY ENTITY.
11.3 Indemnification and Limitation of Liability
Sections 11.2,11.3 and 11.4 of this Agreement are intended to set out the
sole basis for Cytyc's liability relating to Products and their use. Cytyc
agrees to indemnify Quest Diagnostics for certain losses under certain
conditions, as outlined in Sections 11.3(a) through (c), and 11.4 below.
Except for wrongful termination of this Agreement by Cytyc (which, when
used in this paragraph, shall be deemed to mean any termination of this
Agreement by Cytyc before the expiration of the term of this Agreement or
any renewal thereof that is not expressly permitted by this Agreement), if
Sections 11.3(a) - (c) and 11.4 are inapplicable, then Cytyc's liability
for damages, indemnification or otherwise for any loss, irrespective of how
or by whom incurred, shall be limited to the Limited Warranty in Section
11.2 above. Except for wrongful termination of this Agreement by Cytyc and
for indemnification obligations under this Section 11.3 and Section 11.4,
in no event shall either party be liable to the other for attorney's fees
(except as otherwise provided in Sections 11.3(e)(iii) or 11.4 below) or
any incidental, indirect, special, punitive or consequential damages,
including lost profits or loss of use. The obligations to indemnify set
forth in Sections 11.3 and 11.4 constitute the parties' entire obligations
to indemnify one another.
(a) The ThinPrep(R) System is intended as a replacement for the
conventional Pap smear used to screen for cervical cancer or its precursor
lesions. Determination of slide adequacy and patient diagnosis is at the
sole discretion of the cytotechnologists and pathologists trained by Cytyc
to evaluate ThinPrep(R) prepared slides. Cytyc shall indemnify, defend and
hold harmless Quest Diagnostics and its subsidiaries and affiliates and
their officers, directors, employees, representatives, successors and
assigns from and against any and all damages, liabilities, penalties, costs
or other losses (collectively "Claims") in connection with any third party
claim, suit, action, demand or proceeding to the extent the Claim arises
from (i) a Product sold to Quest Diagnostics hereunder that was defective
in design or contained a manufacturing defect and that such defect caused
harm to a third party; (ii) a breach of any of representation, warranty or
covenant of Cytyc contained in this Agreement; or (iii) Cytyc's negligence
or willful misconduct. Notwithstanding the foregoing, Cytyc shall have no
obligation to indemnify pursuant to the foregoing provisions to the extent
any Claim arises out of an act or omission of Quest Diagnostics for which
Quest Diagnostics is required to indemnify Cytyc pursuant to Section
11.3(d) below.
(b) Other than as provided in Section 11.4 below, Section 11.3(a) above
sets forth Cytyc's sole obligation to indemnify or pay damages or other
monies and shall only apply if (i) the conditions set out therein strictly
apply, (ii) the Product has not been resold or leased by Quest Diagnostics,
and (iii) the Product has not been altered by Quest Diagnostics or any
third party in any material way and has been used substantially in
accordance with the then current Product specifications and labeling.
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(c) For purposes of Section 11.3(a), the terms "defective in design" and
"manufacturing defect" shall be determined in accordance with the
provisions of the American Law Institute's Restatement Third, Torts:
Products Liability (1998).
(d) Quest Diagnostics shall indemnify, defend and hold harmless Cytyc and
its subsidiaries and affiliates and their officers, directors, employees,
representatives, successors and assigns from and against any and all Claims
in connection with any third party claim, suit, action, demand or
proceeding to the extent the Claim arises from (i) a breach of any of
representation, warranty or covenant of Quest Diagnostics contained in this
Agreement; (ii) or Quest Diagnostics' negligence or willful misconduct.
Notwithstanding the foregoing, Quest Diagnostics shall have no obligation
to indemnify pursuant to the foregoing provisions to the extent any Claim
arises out of an act or omission of Cytyc for which Cytyc is required to
indemnify Quest Diagnostics pursuant to Section 11.3(a) above.
(e) With respect to Claims subject to indemnification pursuant to Sections
11.3(a) and (d) above, the following procedures shall apply:
Promptly and no later than thirty (30) days after receipt by any entity
entitled to indemnification under Sections 11.3 (a) or (d) above of notice
of the commencement or threatened commencement of any civil, criminal,
administrative, or investigative action or proceeding involving a Claim in
respect of which the indemnitee will seek indemnification pursuant to any
such Section, the indemnitee shall notify the indemnitor of such Claim in
writing. No failure to so notify an indemnitor shall relieve it of its
obligations under this Agreement except to the extent that it can
demonstrate damages attributable to such failure. Within fifteen (15) days
following receipt of written notice from the indemnitee relating to any
Claim, the indemnitor shall notify the indemnitee in writing if the
indemnitor elects to assume control of the defense and settlement of that
Claim (a "Notice of Election"). If the indemnitor delivers a Notice of
Election relating to any Claim within the required notice period, the
indemnitor shall be entitled to have sole control over the defense and
settlement of such Claim and the indemnitee shall provide reasonable non-
monetary cooperation in defense of such Claim; provided that (A) the
indemnitee shall be entitled to participate in the defense of such Claim
and to employ counsel at its own expense to assist in the handling of such
Claim, and (B) the indemnitor shall obtain the prior written approval, not
to be unreasonably withheld, of the indemnitee before entering into any
settlement of such Claim or ceasing to defend against such Claim. After the
indemnitor has delivered a Notice of Election relating to any Claim in
accordance with the preceding paragraph, the indemnitor shall not be liable
to the indemnitee for any legal expenses incurred by the indemnitee in
connection with the defense of that Claim. In addition, the indemnitor
shall not be required to indemnify the indemnitee for any amount paid or
payable by the indemnitee in the settlement of any Claim for which the
indemnitor has delivered a timely Notice of Election if such amount was
agreed to without the written consent of the indemnitor. If the indemnitor
does not deliver a Notice of Election relating to any Claim within the
required notice period, the indemnitee shall have the right to defend the
Claim in such manner as it may deem appropriate, at the cost and expense of
the indemnitor. The indemnitor shall promptly after final adjudication or
settlement of such Claim, reimburse the indemnitee for all such costs and
expenses.
11.4 Intellectual Property Indemnity
(a) If Quest Diagnostics or any of its subsidiaries or affiliates or their
officers, directors or employees or representatives, successors or assigns
is sued alleging that a Product or Quest Diagnostics' use thereof or sale
of results of use infringes a United States patent, trade secret,
trademark, copyright or other intellectual property right of a third party,
Cytyc agrees to defend the suit, pay all litigation costs, indemnify Quest
Diagnostics for any damages awarded or any sums
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due in connection with any settlement approved by Cytyc, provided Quest
Diagnostics: gives Cytyc (i) written notice as soon as possible but in no
event more than 30 days of Quest Diagnostics' receipt of notice of any
suit; (ii) continuous reasonable non-monetary cooperation in the defense,
and (iii) complete and sole control over the defense and settlement of any
such suit. Quest Diagnostics may participate in the defense and settlement
of any such suit, subject to Cytyc's ultimate right of control. Quest
Diagnostics shall be solely responsible for attorneys' fees and costs it
incurs independently of Cytyc's representation, unless Cytyc shall fail to
defend the suit as required by this Section 11.4(a), in which event Quest
Diagnostics shall have the right to defend the suit in such manner as it
may deem appropriate, at the cost and expense of Cytyc. Cytyc shall
promptly reimburse Quest Diagnostics for all such costs and expenses.
(b) If Quest Diagnostics is enjoined by a final, unappealable court order,
or by a settlement approved by Cytyc, from using the Product as sold by
Cytyc, Cytyc, at its option and in its sole discretion, may (i) procure for
Quest Diagnostics the right to continue using the Product, (ii) replace or
modify the Product to avoid infringement, or (iii) repossess the Product in
exchange for a refund of the depreciated value of the Product. The remedy
selected by Cytyc shall be Quest Diagnostics' exclusive remedy for any
damage, cost, or expense resulting from any court order or settlement
enjoining Quest Diagnostics' use of the Product but the foregoing shall not
in any way limit Cytyc's indemnification obligations hereunder.
(c) Notwithstanding any other provision hereof, Cytyc shall have no
obligation to defend, and shall not be liable for any costs or damages
awarded, in any suit for infringement concerning (i) any Product made by
Cytyc according to specifications supplied by Quest Diagnostics, (ii) any
infringement alleged, based on use by Quest Diagnostics of the Product as
sold by Cytyc in combination with another item not sold by Cytyc, to the
extent the alleged infringement arises from the combination or from the
practice of a method made possible by the combination, (iii) any
infringement alleged, to the extent based on any Product as modified by or
used contrary to Product specifications by any party other than Cytyc
without Cytyc's permission, or (iv) any damage, cost, fee, or expense
incurred in connection with, or any injunction, sanction, or other order
resulting from any suit that Cytyc is not given the reasonable opportunity
to defend.
11.5 Insurance
Each party shall maintain insurance against such risks (including product
liability or professional liability, as the case may be) and upon such
terms (including coverages, deductible limits, and self-insured retentions)
as is customary for the activities to be conducted by it under this
Agreement and as appropriate to cover its indemnification obligations under
this Agreement, provided that the minimum coverage shall be [_____] per
occurrence and [_____] in the annual aggregate. Such insurance will be
primary to any other valid and collectible insurance coverage which the
indemnified party, or any of its parents, subsidiaries, affiliates,
principals, agents, or assigns, may have or obtain. Each party will furnish
the other party evidence of such insurance upon request.
11.6 Persistent Performance Issues
In the event of two (2) consecutive Equipment, Reagents and/or Supplies
material defects/lot rejections or four (4) Equipment, Reagents and/or
Supplies material defects/lot rejections in any twelve (12) month period,
Quest Diagnostics shall have the right to terminate this Agreement.
11.7 Miscellaneous Equipment, Reagents and Supplies Performance Issues
Seller shall use commercially reasonable efforts to provide at least ninety
(90) days' advance written notice to Quest Diagnostics of all other issues
such as product discontinuations, quality control changes, device changes
and material software upgrades. Quest Diagnostics
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acknowledges that information disclosed pursuant this Section shall be
deemed subject to the provisions of the Confidentiality Agreement (as
defined in Section 18 of this Agreement), and will be used by Quest
Diagnostics only in furtherance of the purposes of this Agreement).
12.0 TECHNICAL SERVICES; TRAINING; DEVELOPMENT
12.1 Technical Telephone Support
Seller shall maintain a sufficiently trained and qualified technical
service force during the term of this Agreement to provide, at no cost to
Quest Diagnostics, readily available technical support related to the
Equipment, Reagents and Supplies. Technical support shall include phone
access to a technical representative of Seller with the following minimum
telephone support service levels:
Coverage: 8:30 AM - 5:30PM ( EST ), Monday through Friday, excluding Seller
designated holidays.
Response Time: immediate, but in no event later than (one) 1 hour from time
of initial call.
12.2 Field Service/Technical Support
Technical support will include help from instrument hardware experts able
to guide Quest Diagnostics' representatives through part removal and
replacement procedures.
If any of the Equipment placed with or purchased by Quest Diagnostics fails
to perform as specified in the operator's manual and the problem cannot be
resolved by telephone, then Seller shall dispatch qualified technical
representative on-site at the designated facility of Quest Diagnostics at
the expense of Cytyc. A plan for problem resolution shall be provided
within one (1) business day of the initial call, unless otherwise agreed to
by Quest Diagnostics.
12.3 Equipment Service
Equipment Service will be provided by Cytyc Corporation Trained Field
Service Engineers as described here and detailed in the Service Agreement
attached hereto as Exhibit 12.3 ("Service Agreement"). Cytyc will service
all Equipment subject to the Service Agreement [_____]. All new Equipment
comes with a twelve-month warranty and shall be maintained by Cytyc in
accordance with the Warranty during the applicable Warranty Period and
thereafter pursuant to the terms of the Service Agreement at Cytyc's
expense.
Quest Diagnostics agrees to perform all required routine operator
maintenance as listed in the applicable operator's manual. Seller and Quest
Diagnostics will work together to ensure that all sites perform required
maintenance.
Only Seller or Seller-appointed personnel shall service, alter or replace
the Equipment and/or any accessories during the Warranty Period that are
necessary to keep the Equipment in good working order.
12.4 Equipment Records
Within fifteen (15) days after the expiration of each six (6) month period
during the term of this Agreement, Seller shall provide Quest Diagnostics
with a report that shall identify all Equipment service calls during the
preceding six (6) months, so that Quest Diagnostics' best practice team can
monitor whether mean time between failures (MTBF) for all Equipment is
within expected time frames. Such reports shall identify each item of
Equipment serviced and the nature of the repair or failure. If any
Equipment is found to have a MTBF lower than that which is commercially
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reasonable and acceptable to the Parties by mutual agreement, Seller's
field service personnel will be dispatched to service the Equipment
immediately. All service will be fully documented by Seller and MTBF will
be monitored each month for six (6) months to ensure that the Equipment
returns to the expected MTBF.
12.5 Customer Service
Seller shall maintain a client service department to respond to general
inquiries related to ordering including order placement status with the
following minimum service levels:
Coverage: 8:30 AM to 5:30 PM (EST), Monday to Friday, except Seller-
designated holidays.
Response Time: immediate, but in no event later than 1 hour from time of
initial call.
12.6 Training
Cytyc to provide, at its expense, training at its headquarters for one
cytopathologist and one cytotechnologist from each Quest Diagnostics'
facility that purchases or leases Cytyc Equipment. Additional training of
Quest Diagnostics' laboratory personnel will be conducted at no additional
charge to Quest Diagnostics by Cytyc CASs at Quest Diagnostics' facilities
so long as there are a minimum of four (4) cytotechnologists or
cytopathologists scheduled for training, otherwise Cytyc will charge Quest
Diagnostics at its standard rates.
12.7 Development
Seller and Quest Diagnostics agree to consider specific programs to improve
the performance of Seller's Equipment, Reagents and Supplies. The parties
agree to negotiate in good faith an agreement for compensation to Quest
Diagnostics regarding any mutually agreeable collaboration efforts which
result in enhancement to the Equipment, Reagents and Supplies or for work
performed during any evaluations and validations of new Equipment, Reagents
and Supplies. Quest Diagnostics will not endeavor to begin any development
programs for which it expects compensation under this Section without the
express written agreement of Seller. Except as expressly provided in this
Agreement, nothing herein shall be construed as granting Quest Diagnostics
a license to any intellectual property or proprietary information of Seller
except to the limited extent necessary and for the sole purpose of using
Products purchased under this Agreement and as specifically provided for
elsewhere in this Agreement.
13.0 TERM AND TERMINATION
13.1 The term of this Agreement shall begin on the Effective Date and terminate
twenty-four (24) months after the Effective Date, unless sooner terminated
hereunder.
13.2 Either party may terminate this Agreement if the other party seeks
protection under the bankruptcy laws (other than as a creditor) or any
assignment is made for the benefit of creditors or a trustee is appointed
for all or any portion of such party's assets.
13.3 In the event either party is in breach of any material term, covenant or
condition of this Agreement, the non-breaching party may terminate the
Agreement upon thirty (30) days' advance written notice of the breach,
unless during the thirty (30) day notice period the party in breach cures
the breach, in which event, the Agreement shall remain in full force and
effect.
13.4 In addition to other rights of termination set forth in this Agreement,
commencing on the first day of the thirteenth full calendar month during
the term of this Agreement, either party may terminate this Agreement for
any reason at any time on ninety (90) days' advance written notice.
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13.5 The rights and remedies provided hereunder shall be cumulative and be in
addition to all rights and remedies available to the parties in law and
equity.
13.6 This Section is in addition to the termination rights available under
Sections 11.6, 14.4, 14.7 and 23.
14.0 PATIENT CONFIDENTIALITY; PRIVACY; SECURITY REQUIREMENTS
14.1 Definitions
"HIPAA" means the Health Insurance Portability and Accountability Act of
1996. "Privacy Regulations" means all of the regulations in effect from
time to time issued pursuant to HIPAA and applicable to the privacy of
Individually Identifiable Health Information. "Security Regulations" means
all of the regulations in effect from time to time issued pursuant to HIPAA
and applicable to the security of patients' Individually Identifiable
Health Information. All other terms used, but not otherwise defined in this
Agreement, shall have the same meaning as those terms defined in the Code
of Federal Regulations applicable to HIPAA or any successor statute.
14.2 Services Subject to Privacy and Security Laws
Seller acknowledges that due to the regulated nature of Quest Diagnostics'
business and operations any services to be provided by Seller that are
related to the provision of Equipment, Reagents and Supplies under this
Agreement may be impacted by current and future laws, rules and regulations
(collectively, "Applicable Laws") regarding collecting, accessing, using,
disclosing, electronically transmitting, securing, and storing individually
identifiable health information of patients ("Confidential Information").
Applicable Laws may include, but shall not be limited to HIPAA, the Privacy
Regulations, the Security Regulations, other related HIPAA regulations,
State laws and regulations, and European Union laws and regulations
regarding data privacy (as applicable).
14.3 Confidentiality and Privacy of Confidential Information
In the performance of any services that are related to the provision of
Equipment, Reagents and Supplies under this Agreement, Seller and its
employees, representatives, or agents may inadvertently obtain or gain
access to Confidential Information on paper, tape, diskette, CD or other
tangible media, in instruments or computers, electronically displayed, or
verbally disclosed. Both Seller and Quest Diagnostics acknowledge that
Confidential Information is not required for the performance of this
Agreement. Seller agrees that it shall not use, disclose, or reproduce, in
any manner, any Confidential Information (including, without limitation,
laboratory results and patient demographic information) that it obtains or
to which it gains access as a result of this Agreement. Seller agrees to
advise all of its employees, representatives or subcontractors acting on
its behalf of the requirements of this Agreement and to cause each of them
to become bound to the terms and conditions of this Agreement regarding the
confidentiality and privacy of Confidential Information. Seller agrees that
it shall immediately report to Quest Diagnostics any incidents in which it
or its employees, representatives, or subcontractors gain access to,
reproduce, use, or disclose Confidential Information.
14.4 Safeguards
Seller shall adopt, implement and maintain throughout the term of this
Agreement appropriate and adequate security policies, procedures, and
practices, physical and technological safeguards, and security mechanisms
to protect the Confidential Information against unauthorized use,
disclosure, alteration, or destruction ("Safeguards") and Seller shall
require its sub-contractors or agents to adopt Safeguards that are equally
appropriate and adequate. Quest Diagnostics is relying on the
appropriateness and adequacy of the Safeguards and failure of such
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Safeguards will constitute a material breach of this Agreement. Quest
Diagnostics may terminate this Agreement at any time, without penalty, if
Seller fails to cure any breach of this provision within thirty (30) days
of notice thereof from Quest Diagnostics.
14.5 Benefit
This Agreement is not intended to create a third-party beneficiary
liability and/or to obligate the parties in any way or to create any rights
to the benefit of any person or entity that is not a party to this
Agreement, including but not limited to the individuals whose Confidential
Information will be used and disclosed hereunder.
14.6 Mitigation
In addition to any rights of indemnification contained in this Agreement,
Seller will mitigate any harm caused by its breach of this Agreement and/or
reimburse Quest Diagnostics for the cost of mitigation based upon, arising
out of or attributable to the acts or omissions of Seller, its employees,
representatives, officers, directors, agents, or subcontractors for uses or
disclosures of Confidential Information in violation of this Agreement.
14.7 Amendment
Seller and Quest Diagnostics agree to amend this Agreement in such manner
as Quest Diagnostics deems necessary to comply with any amendment of 1)
HIPAA or other applicable privacy law, 2) the Privacy Regulations, the
Security Regulations, or other applicable privacy regulations, or 3) any
applicable court decision, or binding governmental policy or opinion with
respect to HIPPA, Privacy Regulations or Security Regulations. If the
parties are unable to agree on an amendment within 30 days of written
notice from Quest Diagnostics to Seller of the requirement to amend the
Agreement, Quest Diagnostics may, at its option, terminate this Agreement.
14.8 Interpretation
Any ambiguity in this Agreement shall be resolved in favor of a meaning
that permits the parties to comply with all Applicable Laws.
15.0 ASSIGNMENT
Neither party may assign, or in any way transfer its interest in this
Agreement without the prior written consent of the other party.
Notwithstanding the foregoing, either party may assign this Agreement to a
parent, majority-owned subsidiary, majority owned affiliate or successor
company (including, but not limited to, by way of merger or other
acquisition of the assigning party), provided the assigning party (if such
party survives) remains secondarily liable to the other party under any
such assignment, without obtaining consent of the other party.
16.0 COMPLIANCE WITH LAWS
Each of the parties represents and warrants to the other party that it will
comply with all applicable laws, rules or regulations ("Applicable Laws"),
including, but not limited to, the federal Physician Self-Referral Law, 42
U.S.C. 1395nn, and the regulations promulgated thereunder, similar state
physician self-referral laws and regulation, the federal Medicare/Medicaid
Anti-kickback Law and regulations promulgated thereunder and similar state
Anti-kickback laws and regulations, and HIPAA and the HIPAA Privacy
Regulations, the standard transactions regulations and HIPAA Security
Regulations (as of the effective dates of those regulations and European
Union laws or regulations regarding data privacy) as applicable, and as to
Seller, the federal Food Drug and Cosmetic Act and regulations promulgated
thereunder. Each party will maintain in full force and effect all necessary
licenses, permits, and other authorizations required by law to carry out
its
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respective duties and obligations under this Agreement. Failure by either
party to comply with any Applicable Law shall be considered a material
breach of this Agreement.
17.0 EQUAL EMPLOYMENT OPPORTUNITY/AFFIRMATIVE ACTION To the extent Seller's
Products or services will be used by Quest Diagnostics in the performance
of a federal government contract, Seller hereby certifies that all Products
which are produced, manufactured or, if a service, provided in the United
States are produced, manufactured or provided in compliance with all
applicable requirements, orders and regulations of the United States
Federal Government pertaining to nondiscrimination, equal employment
opportunity and affirmative action, including, without limitation, the
following, as the same may be amended from time to time: (A) Executive
Order 11246, as amended by Executive Order 11375, including 41 CFR Part
60.1 et seq. and 48 CFR 52.222-26, Equal Opportunity; (B) the
Rehabilitation Act of 1973 (29 USC 793), as amended, including 41 CFR Part
60-741 et seq. and 48 CFR 52.222-36, Affirmative Action for Workers With
Disabilities; (C) the Vietnam Era Veterans Readjustment Assistance Act of
1974 (38 USC 4212), including 41 CFR Part 60-250 et seq. and 48 CFR
52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the
Vietnam Era, and Other Eligible Veterans; (D) the certification
requirements for nonsegregated facilities as ordered by the Secretary of
Labor (32 F.R. 7439) and as required by 41 CFR Part 60-1 et seq.; (E)
Executive Order 11141 (proscribing age discrimination); (F) the Service
Contract Act of 1965, as amended (41 USC 351 et seq.) including 48 CFR
52.222-41; (G) 48 CFR 52.237-7, Indemnification and Medical Liability
Insurance; and (H) all regulations, rules, orders and applicable contract
clauses promulgated under (A) through (G) above and/or required by federal,
state or local law, rule or regulation to be included in this Agreement.
Seller agrees that until four years after payment under this Agreement
Seller will afford the Secretary of Health and Human Services, Comptroller
General of the United States or any of their duly authorized
representatives, access to, and the right to examine, any pertinent books,
documents, papers and records of the successful bidder or offer or
involving transactions relating to this Agreement.
18.0 CONFIDENTIALITY
In the performance of this Agreement, each party will obtain knowledge
about the other party and its operations. Seller and Quest Diagnostics
acknowledge that they have entered into a Confidentiality Agreement dated
November 21, 1996 (the "Confidentiality Agreement"), which Confidentiality
Agreement, in the absence of the modification thereto set forth below,
would have remained in effect with respect to its subject matter for two
years after the termination of the Agreement between the parties dated
January 1, 2000 (the "January 2000 Agreement") pursuant to Section 13.1 of
the January 2000 Agreement, which terminated December 31, 2002. The parties
agree to extend the protections and restrictions on use and disclosure of
confidential information contained in the Confidentiality Agreement to all
disclosures made under this Agreement, and by executing this Agreement,
hereby modify the Confidentiality Agreement so that it shall remain
effective until three (3) years after the expiration or sooner termination
of this Agreement. The parties further hereby modify the Confidentiality
Agreement so that any Confidential Information of a party (as defined in
the Confidentiality Agreement) disclosed to the other party or to which the
other party is provided access may only be used by the other party in
furtherance of the purposes of this Agreement and subject to the
restrictions contained in the Confidentiality Agreement. The parties
acknowledge the terms, conditions and other contents of this Agreement,
including all attachments incorporated into this Agreement, are
confidential and subject to the Confidentiality Agreement and shall not be
disclosed by either party except (i) to those individuals at or
representatives or agents of the respective parties with a need to know
such information who shall be subject to confidentiality obligations
similar to those in this Agreement; (ii) as required by applicable law or
regulation or Court Order or subpoena; (iii) based
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upon mutual agreement of the parties, signed by authorized representatives
of the parties, which agreement shall clearly delineate the terms of any
such disclosures.
19.0 PRESS RELEASE
Subject to the confidentiality provisions above, the parties agree that
either party may issue a press release announcing the execution of this
Agreement and related matters in form and substance satisfactory to and
approved by both parties in writing, such approval not to be unreasonably
withheld by either party.
20.0 INDEPENDENT CONTRACTORS
It is understood that Quest Diagnostics and Seller are independent
contractors engaged in the operation of their own respective businesses.
Neither party is, or is to be considered as, the agent or employee of the
other party for any purposes whatsoever. Neither party has authority to
enter into contracts or assume any obligations for or on behalf of the
other party or to make any warranties or representations for or on behalf
of the other party.
21.0 SEVERABILITY
It is the intention of the parties that the provisions of this Agreement
will be enforceable to the fullest extent permissible under applicable
laws, and that the unenforceability of any provisions under such laws will
not render unenforceable, or impair, the remainder of this Agreement. If
any provisions hereof are deemed invalid or unenforceable, this Agreement
will be deemed amended to delete or to modify, as necessary, the offending
provisions and to alter the bounds thereof in order to render it valid and
enforceable.
22.0 FORCE MAJEURE
No delay in or failure of performance by either party under this Agreement
will be considered to be a breach hereof if and to the extent that an
occurrence or occurrences beyond the control of the party affected caused
such delay or failure of performance, including delay due to shortage of
materials, labor difficulties, floods, fires, actions taken or threatened
by any governmental agencies, terrorism, civil unrest, acts of God or other
contingencies or acts not within the sole control of the party. Cytyc
reserves the right (a) during the period of any shortage to allocate its
available supplies it may determine equitable without any liability to
Customer, and (b) to make substitutions and modifications in the
specification of any Product, provided such substitutions or modifications
do not materially affect the performance of Products. The foregoing will
not be considered to be a waiver of either party's obligations under this
Agreement, and as soon as such occurrence or occurrences cease, the party
affected thereby will promptly fulfill its obligations under this Agreement
which accrued during such occurrence or occurrences.
23.0 PARTICIPATION IN FEDERALLY FUNDED HEALTHCARE PROGRAMS
Each party to this Agreement represents that (i) it has not been convicted
of a criminal offense related to health care, or (ii) is not currently
listed by a federal agency as debarred, excluded or otherwise ineligible
for participation in federally funded health care programs. Either party
shall notify the other in writing within five (5) days of any change in
this representation or if circumstances change to render this
representation false during the term of this Agreement. Such change in
circumstances shall constitute cause by the other party to immediately
terminate this Agreement. For purposes of this paragraph, a party is
defined as the entities entering into this contract, and/or its principals,
directors and officers.
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24.0 DISPUTES
All disputes, controversies or claims arising out of or under this
Agreement or its performance shall be resolved as set forth in this
Section.
24.1 Arbitration
Except for clauses 11.3 and 11.4 above and alleged breaches of
confidentiality obligations or intellectual property rights, any
controversy or claim arising out of or related to any Product, this
Agreement, or the breach thereof in which the amount in controversy is less
than $3 million, exclusive of interest and attorney's fees, shall be
settled by binding arbitration, by a single arbitrator mutually agreeable
to the parties (if the amount in controversy is less than $1 million
exclusive of interest and attorney's fees), administered by the American
Arbitration Association ("AAA") in accordance with the AAA's Commercial
Arbitration Rules, including the Emergency Interim Relief Procedures, and
judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. In the event that a claim exceeds $1
million and is less than $3 million, exclusive of interest and attorneys
fees, the dispute shall be heard and determined by three arbitrators; Quest
Diagnostics and Cytyc each selecting one arbitrator, and the two mutually
selecting a third neutral arbitrator. Any arbitration under this clause
shall be held in New York, New York and the arbitrator shall have no
authority to award punitive, consequential, or other damages not measured
by the prevailing party's actual damages. Each party shall bear its own
costs and expenses and an equal share of the arbitrators' and
administrative fees of arbitration. The parties acknowledge that this
agreement evidences a transaction involving interstate commerce. The
Federal Arbitration Act shall govern the interpretation, enforcement, and
proceeding under this arbitration clause. If any of these provisions shall
be held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired.
24.2 Civil Litigation
Any dispute in which the amount in controversy is $3 million or more,
exclusive of interest and attorney's fees, may be resolved in any state or
federal court in which jurisdiction and venue are proper. The parties
hereby irrevocably waive, to the fullest extent permitted by law, all
rights to trial by jury in any action, proceeding or counterclaim (whether
in contract, statute, tort (including negligence) or otherwise) relating to
or arising from this Agreement. In any litigation, each party shall bear
its own fees and expenses, including attorneys' fees.
24.3 Governing Law
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York without regard to the conflict of laws
principles of such State.
25.0 ENTIRE AGREEMENT
This Agreement, the Confidentiality Agreement and the Service Agreement
constitute the entire Agreement and supercede all prior written or oral
agreements between Quest Diagnostics (including its Majority Owned
Subsidiaries) with respect to the subject matter hereof. No modification of
this Agreement will have any force or effect unless such modification is in
writing and signed by authorized representatives of both parties. This
Agreement is valid only when signed by authorized representatives of both
companies and both parties have signed within ten (10) days of each other.
26.0 NOTICES
Any notice required to be given hereunder will be deemed to have been
served properly, if sent by a nationally recognized overnight express
carrier or mailed by certified mail, postage prepaid,
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properly addressed and posted in a United States depository to the
respective parties hereto at the following addresses. Notices shall be
effective upon receipt.
To Quest Diagnostics: 1201 South Collegeville Road
Collegeville, PA 19426
Attention: Sourcing Manager, Commodity
With a copy to: 1201 South Collegeville Road
Collegeville, PA 19426
Attention: Deputy General Counsel
To Seller: 85 Swanson Road
Boxborough, MA 01719
Attention: VP Commercial Operation
With a copy to: 85 Swanson Road
Boxborough, MA 01719
Attention: National Account Director (Quest)
85 Swanson Road
Boxborough, MA 01719
Attention: General Counsel's Office
27.0 WAIVER; NON-EXCLUSIVE REMEDY
No waiver of any breach or failure by either party to enforce any of the
terms or conditions of this Agreement at any time will, in any manner,
limit or waive such party's right thereafter, to enforce and to compel
strict compliance with every term and condition hereof. No remedy made
available to any party by any of the provisions of this Agreement is
intended to be exclusive of any other remedy, and each and every remedy
will be cumulative and in addition to every other remedy available under
this Agreement, at law, in equity, or otherwise.
28.0 USE OF MARKS
During the Term of this Agreement, Seller grants Quest Diagnostics a fully
paid up right and license to use its Trademarks referenced in Exhibit 29.0
solely in connection with Quest Diagnostics' promotion, marketing and
distribution of the Products, provided that Quest Diagnostics' use of the
Trademarks is lawful and in accordance with the trademark usage guidelines
provided by Seller attached hereto as Exhibit 29.0 and incorporated by
reference herein. Said guidelines may be revised from time to time during
the term in the sole discretion of Seller with thirty (30) days written
notice to Quest Diagnostics. During the term of this Agreement, Quest
Diagnostics grants Cytyc the right to use the Quest Diagnostics' trademark
solely in promotional materials for the sole purpose of identifying that
Quest Diagnostics performs the Test. Except as permitted by the preceding
sentence, Seller shall not mention or otherwise use any name, insignia,
symbol, trademark, trade name or logotype of Quest Diagnostics (or any
abbreviation or adaptation thereof) in any publication, press release,
promotional material or other form of publicity other than as required by
law or regulation without the prior written approval of Quest Diagnostics.
In the event such approval is granted by Quest Diagnostics, such usage
together with usage of the Quest Diagnostics' trademark shall be lawful and
in accordance with trademark usage guidelines provided by Quest Diagnostics
and any goodwill or other benefit accruing from such usage shall accrue
solely to Quest Diagnostics. Said guidelines may be
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revised from time to time during the term in the sole discretion of Quest
Diagnostics with thirty (30) days written notice to Seller. Upon
termination of this Agreement, each party shall discontinue the use of the
other's trademarks that it has been authorized to use under this Agreement.
The restrictions imposed by this Section shall not prohibit either party
from making any disclosure identifying the other party that is required by
applicable law.
29.0 COUNTERPARTS
This Agreement may be executed in one or more counterparts, including by
facsimile, all of which shall be considered one and the same agreement. The
Agreement shall become effective when each party has signed and delivered
to the other party at least one such counterpart.
30.0 SURVIVAL
The provisions of Sections 10.2, 11, 14, 16, 17, 18, 19, 24, 26 and 28
shall survive termination of this Agreement.
IN WITNESS WHEREOF, the parties intending to be legally bound, do hereby
execute this Agreement and represent that the individuals executing this
Agreement have authority to bind the respective entities.
CYTYC CORPORATION QUEST DIAGNOSTICS INCORPORATED
BY: BY:
------------------------------------- -----------------------------------
PRINT NAME: PRINT NAME:
------------------------------------- -----------------------------------
TITLE: TITLE:
------------------------------------- -----------------------------------
DATE: DATE:
------------------------------------- -----------------------------------
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EXHIBIT 1.1
New Equipment Purchase
ThinPrep(TM) 2000 Processor
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ITEM DESCRIPTION PART NO. Price
- ---------------------------------------------------------------------------------------------
ThinPrep(TM) 2000 Processor TP 2000 Processor used to process 70031-001 [______]
gynecological and non-
gynecological slide samples.
(Includes one accessory kit and one
year service warranty.)
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ThinPrep(TM) 3000 Processor
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ITEM DESCRIPTION PART NO. Price
- ---------------------------------------------------------------------------------------------
ThinPrep(TM) 3000 Processor TP 3000 Processor used to process 70150-001 [______]
gynecological and non-
gynecological slide samples.
(Includes one accessory kit and one
year service warranty.)
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[________]
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Equipment Rental (Existing Unilab Equipment Attached as Exhibit 1.1A)
ThinPrep(TM) 2000 Processor
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ITEM DESCRIPTION PART NO. Price
- ---------------------------------------------------------------------------------------------
ThinPrep(TM) 2000 Processor TP 2000 Processor used to process 70031-001 [______]
gynecological and non-
gynecological slide samples.
(Includes one accessory kit, any
applicable one-year warrantyand
full service for term of
Agreement.)
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ThinPrep(TM) 3000 Processor
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ITEM DESCRIPTION PART NO. Price
- ---------------------------------------------------------------------------------------------
ThinPrep(TM) 3000 Processor TP 3000 Processor used to process 70150-001 [______]
gynecological and non-
gynecological slide samples.
(Includes one accessory kit, any
applicable one-year warranty,and
full service for term of
Agreement.)
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Unilab Equipment Rental:
Unilab Equipment shall be rented at the above rates for the term of the
Agreement. The above payments shall include full service during the term of the
Agreement pursuant to the terms of the Service Agreement. Upon expiration of the
term or sooner termination of this Agreement, Quest Diagnostics shall return the
Unilab Equipment at its expense.
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New Equipment Rent to Own Option
ThinPrep(TM) 2000 Processor
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ITEM DESCRIPTION PART NO. Price
- ---------------------------------------------------------------------------------------------
ThinPrep 2000(TM) Processor TP 2000 Processor used to process 70031-001 [______]
gynecological and non-
gynecological slide samples.
(Includes one accessory kit,
one-year warranty and one year full
service)
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ThinPrep 3000(TM) Processor
- ---------------------------------------------------------------------------------------------
ITEM DESCRIPTION PART NO. Price
- ---------------------------------------------------------------------------------------------
ThinPrep(TM) 3000 Processor TP 3000 Processor used to process 70150-001 [______]
gynecological and non-
gynecological slide samples.
(Includes one accessory kit,
one-year warranty,and one-year full
service)
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Rent to Own Option:
Rent to Own option is for 24 months from the date of shipment with one year
warranty and one year full service pursuant to the Service Agreement [_____]. At
the end of the twenty four months, if Quest Diagnostics has paid all monies owed
to Cytyc with respect to the rental payments during the term, and is not in
material breach of this Agreement, title to the Equipment shall pass from Cytyc
to Quest Diagnostics free and clear of all liens and encumbrances thereon.
Otherwise, Quest Diagnostics shall return the Instruments to Cytyc at the end of
the twenty-four month period at Quest Diagnostics' expense. This provision will
survive any early termination of this Agreement.
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EXHIBIT 1.1A
Unilab Equipment T-2
[_____]
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EXHIBIT 1.1A
Unilab Equipment T-3
[_____]
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EXHIBIT 2.1
Reagents and Supplies
Price per Test from effective date through December 31, 2003:
Full Kit Lab Kit Phys. Kit
[_____] [_____] [_____]
Price per Test from January 1 2004 through April 30, 2005 or the termination of
this Agreement:
Full Kit Lab Kit Phys. Kit
[_____] [_____] [_____]
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THINPREP PAP TEST SUPPLIES
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70096-001 ThinPrep(R) Pap Test Package [_____] per package from
Includes: 500 tests and 500 Broom-like collection devices 5/1/03 through 12/31/03
[_____] per package from
1/1/04 through 4/30/05 or
termination of this
Agreement
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70096-003 ThinPrep Pap Test Package [_____] per package from
Includes: 500 tests and 500 Cytobrush/Plastic 5/1/03 through 12/31/03
Spatula collection devices
[_____] per package from
1/1/04 through 4/30/05 or
termination of this
Agreement
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70136-001 Physician's Kit [_____] per package
Includes: 500 vials and 500 Broom-like collection devices
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70136-002 Physician's Kit [_____] per package
Includes: 500 vials and 500 Cytobrush/Plastic Spatula
collection devices
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70137-001 Laboratory Kit [_____] per package from
Includes: 500 filters and 500 slides 5/1/03 through 12/31/03
[_____] from 1/1/04 through
4/30/05 or termination of this
Agreement
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70101-001 Broom-like Collection Devices [_____]per package
Includes: 500 Broom-like collection devices
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70124-001 Cytobrush/Spatula Collection Devices [____] per package
Includes: 500 Cytobrush/Plastic Spatula collection devices
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
NON-GYN SUPPLIES
- ------------------------------------------------------------------------------------------------------
70205-001 Non-Gyn TransCyt Filters [_____] box
Box of 100 filters
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70214-001 ThinPrep Slides, box of 100 slides [_____] per box
[____] per case of [__] boxes
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0100007 Multi-Mix Racked Vortexor [_____] each
- ------------------------------------------------------------------------------------------------------
0234005 PreservCyt Solution, vials [_____] box
Box of 50 vials, pre-filled with 20 ml
- ------------------------------------------------------------------------------------------------------
0234004 PreservCyt Solution, 32 oz bottles [_____] box
Box of 4, 32 oz. Bottles
- ------------------------------------------------------------------------------------------------------
0236004 CytoLyt(R) Solution, 32 oz bottles [_____] box
Box of 4, 32 oz. Bottles
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0236080 CytoLyt Solution, centrifuge tubes [_____] box
Box of 80 centrifuge tubes, pre-filled with 30 ml
- ------------------------------------------------------------------------------------------------------
0236050 CytoLyt Solution, collection cups [_____] box
Box of 50 collection cups, pre-filled with 30 ml
- ------------------------------------------------------------------------------------------------------
THINPREP 2000 PROCESSOR ACCESSORIES
- ------------------------------------------------------------------------------------------------------
70102-001 ThinPrep2000 Processor Operator's Manual And Updates Provided free of charge on
purchase or lease of
Equipment--Additional
copies [_____]
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50705-001 Dispenser Pump, for use with 32 oz bottles [_____] each
- ------------------------------------------------------------------------------------------------------
70129-001 Fix Bath Vials [_____] each
- ------------------------------------------------------------------------------------------------------
70027-001 Filter Cap Assembly [_____] each
- ------------------------------------------------------------------------------------------------------
74024-001 O-Rings for Filter Cap, package of 10 [_____] package
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50248-001 Waste Filter [_____] each
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50326-001 Vacuum Grease [_____] each
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74023-001 Waste Tubing Replacement Kit, includes 2 pre-cut tubes [_____]per kit
- ------------------------------------------------------------------------------------------------------
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[LOGO] Quest Diagnostics(R)
EXHIBIT 12.3
Service Agreement
1. General. Customer and Cytyc Corporation ("Cytyc") are parties to an
Agreement for Purchase of Equipment, Reagents and Supplies effective as of
May 1, 2003 (the "Purchase Agreement"), under which Customer purchases or
leases from Cytyc and Cytyc sells or leases to Customer certain Equipment,
Reagents and Supplies identified in the Purchase Agreement (including
existing Unilab Equipment within the meaning of the Purchase Agreement). In
addition, Customer owns the Equipment identified on Exhibit A attached
hereto (that Equipment, together with all Equipment purchased or leased by
Customer under the Purchase Agreement, shall hereafter be referred to as
"Equipment"). Equipment purchased or leased under the Purchase Agreement as
well as certain of the existing Equipment owned or leased by Customer is
under a twelve month manufacturer's warranty under the Purchase Agreement.
The parties are entering into this Agreement to set forth the terms under
which Cytyc will service and maintain in good working order and condition
all Equipment the warranty for which has expired or will expire during the
term of this Agreement (the "Covered Equipment"). These terms and the terms
of the Purchase Agreement constitute the entire contract between the
parties regarding service for Covered Equipment and supersede all prior
written and oral agreements, understandings and representations. Each party
agrees that the terms and conditions for the sale or lease of Equipment
contained in any purchase order, confirmation, invoice or other unilateral
document issued by a party in connection herewith, which are in addition to
or inconsistent with this Agreement, will not be deemed to affect or modify
this Agreement.
2. Service. Cytyc shall provide to Customer during the term hereof, preventive
maintenance in accordance with specifications and repair service on Covered
Equipment (the "Covered Service"). All Covered Service shall be provided by
properly trained Cytyc Field Service Engineers. Covered Service shall be
provided during normal service hours between 8:30 AM through 5:30 PM,
Monday through Friday, except Cytyc holidays. All labor and replacement
Equipment or part(s) for Covered Equipment that fails for any reason other
than those set forth below are included in the Covered Service. Unless
otherwise specified, one preventive maintenance visit per unit of Covered
Equipment per year is included in the Covered Service. Customer shall be
responsible for performing routine maintenance in accordance with the
applicable Operator's Manual to the extent the Operator's Manual specifies
that Customer perform such routine maintenance. Customer agrees to make
Covered Equipment available to Cytyc at mutually acceptable prearranged
times in order for Cytyc to perform the Covered Service. The Covered
Service does not include the following: (1) service or parts which are
needed as a result of Customer's negligence, misuse, theft, environmental
factors, unauthorized modifications or accessory items not meeting Cytyc's
specifications, or any other cause beyond Cytyc's control, including
floods, fires, acts of God or any other contingencies or acts not within
the sole control of Cytyc; (2) replacement of Covered Equipment supplies,
including but not limited to waste bottles, filter caps, o-rings, tubing
and other consumables and (3) reconditioning or refurbishment of Covered
Equipment covered by this Agreement.
3. Payment/Price. [_____] Any additional service not specifically covered
under this Agreement shall be at Cytyc's option and shall be paid for by
Customer at Cytyc's then current hourly rate for service and its then
current rate for parts. When applicable for additional services not covered
by this Agreement, Customer agrees to pay Cytyc the undisputed portion of
any fee for service or parts and any applicable taxes, within thirty (30)
days of receipt of the invoice. Prices for parts are FOB Boxborough, MA.
Customer is responsible for all shipping charges for parts not covered by
this Agreement. Cytyc reserves the right to charge interest on all
undisputed amounts not paid by the date due, at the lower of 12% per annum
or the maximum rate permitted by law. Payment of disputed amounts is not
binding as a resolution of disputed issues, absent written authorization
from Cytyc's General Counsel.
4. Delays in Performance. Cytyc shall not be liable for failure or delay in
providing service or in the shipment of parts by reason of shortage of
materials, labor difficulties, floods, fires, actions taken or threatened
by any governmental agencies, acts of God or other contingencies or acts
not within the sole control of Cytyc.
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5. Limited Warranty & Limitation of Liability. All service provided hereunder
shall be performed in a timely, professional and workmanlike manner, by
qualified personnel in accordance with general industry standards and
procedures for similar services, and in accordance with manufacturer
specifications and all federal, state and local laws, rules, regulations
and orders. Cytyc further warrants that Covered Equipment shall be
maintained by Cytyc in accordance with generally accepted industry
standards and Covered Equipment will perform in accordance with all
applicable federal and state laws, regulations and guidelines (including
applicable U.S. Food and Drug Administration regulations and guidelines),
with published specifications and with any additional documentation
provided by Cytyc including package inserts during the term of this
Agreement. Cytyc's sole obligation under this warranty is to repair or
replace (at its sole discretion) any Covered Equipment or part thereof that
is deemed to be defective. Cytyc shall repair or replace at its sole
expense any defective Covered Equipment as promptly as is practicable. If
Cytyc elects to repair Covered Equipment, and such repair cannot be
completed within five (5) business days, Cytyc shall provide Quest
Diagnostics with loaner Equipment in good working order until such repair
can be completed. In fulfilling its obligation to provide loaner Equipment
for ThinPrep(TM) 3000 Equipment, Cytyc may provide one (1) ThinPrep 2000
Processor up to a maximum of two (2) ThinPrep(TM) 2000 Processors in
accordance with Customer's volume requirements in lieu of providing a
ThinPrep(TM) 3000 Processor. If the defective Covered Equipment is leased
Equipment, and the Covered Equipment is not repaired or loaner Equipment
provided within five (5) business days after the defect arose, [_____].
Cytyc shall be responsible for the expense of returning nonconforming
Covered Equipment or parts, and providing conforming Covered Equipment or
parts in exchange. This warranty shall not apply to defects resulting from
misuse, negligence or accident, including, without limitation: operation
outside of the environmental specifications for the Product; use of
unauthorized supplies; performance of improper or inadequate maintenance
specified to be performed by Customer in the Operator Manual for the
Covered Equipment; installation of software not supplied by Cytyc; improper
use or connection to incompatible equipment; making of modifications to the
Product not authorized by Cytyc; and external causes such as, but not
limited to, power failure. THE FOREGOING PROVISIONS SET FORTH CYTYC'S SOLE
AND EXCLUSIVE REPRESENTATIONS, WARRANTIES AND OBLIGATIONS WITH RESPECT TO
THE SERVICE OF THE COVERED EQUIPMENT AND THE PARTS PROVIDED, AND CYTYC
MAKES NO OTHER WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED. CYTYC
SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, WHETHER ARISING FROM A STATUTE OR
OTHERWISE IN LAW, EQUITY OR FROM A COURSE OF DEALING OR USAGE OF TRADE.
CYTYC'S LIABILITY ARISING OUT OF THE SERVICE PERFORMED UNDER THIS AGREEMENT
AND THE REPLACEMENT PARTS FURNISHED HEREUNDER, WHETHER BASED UPON WARRANTY,
CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE ACTUAL PURCHASE PRICE
PAID BY QUEST DIAGNOSTICS FOR THE COVERED EQUIPMENT AND SERVICES EXCEPT AS
PROVIDED IN SECTIONS 11.3 OR 11.4 OF THE PURCHASE AGREEMENT. CYTYC
ACKNOWLEDGES THAT SERVICES PROVIDED HEREUNDER SHALL BE SUBJECT TO THE
INDEMNIFICATION PROVISIONS CONTAINED IN SECTIONS 11.3 AND 11.4 OF THE
PURCHASE AGREEMENT. EXCEPT FOR THOSE INDEMNIFICATION OBLIGATIONS, IN NO
EVENT SHALL EITHER PARTY BE LIABLE FOR LOST PROFITS, RELIANCE, INDIRECT,
INCIDENTAL, CONSEQUESTIAL OR SPECIAL DAMAGES AND THIS CLAUSE SHALL
CONSTITUTE A COMPLETE DEFENSE TO SUCH CLAIMS. SUCH LIMITED WARRANTY IS
GIVEN SOLELY TO THE ORIGINAL CUSTOMER AND IS NOT GIVEN TO, NOR MAY IT BE
RELIED UPON BY, ANY THIRD PARTY INCLUDING, WITHOUT LIMITATION, CUSTOMERS OF
CUSTOMER. THIS WARRANTY IS VOID UPON TRANSFER OF COVERED EQUIPMENT BY
CUSTOMER TO ANY ENTITY WHO HAS LESS THAN FIFTY (50) PERCENT OWNERSHIP IN
THE COVERED EQUIPMENT. SOME STATES DO NOT ALLOW THE EXCLUSION OF IMPLIED
WARRANTIES SO THE ABOVE EXCLUSIONS MAY NOT APPLY TO YOU. YOU MAY ALSO HAVE
OTHER RIGHTS, WHICH VARY, FROM STATE TO STATE.
6. Term and Termination. This Agreement shall have a term commencing May 1,
2003 and continuing for the term of the Purchase Agreement; provided,
however, that with respect to leased Covered Equipment, should the 24 month
period of the lease extend beyond the term of the Purchase Agreement, this
Agreement shall continue
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[LOGO] Quest Diagnostics(R)
for so long as such lease continues with respect to such Covered Equipment.
Either party shall have the right to terminate this Agreement in the event
that the other party shall default on or materially breach any provision
hereof that is not cured within thirty (30) days of notice thereof.
7. Notice. Any required notice shall be given in writing to each party as
provided in the Purchase Agreement.
8. Amendments. This Agreement may be modified only by written amendment
referring to this Agreement and signed by persons authorized to sign on
behalf of the parties. If any of these contractual provisions are held
invalid, illegal or unenforceable, the validity, legality and
unenforceability of the remaining provisions shall not in any way be
affected or impaired.
9. Assignability and Waiver. This Agreement may only be assigned in accordance
with the provisions of the Purchase Agreement. Either party's failure to
exercise any of its rights hereunder shall not constitute or be deemed a
waiver or forfeiture of such rights or any rights hereunder.
10. Choice of Law and Enforcement. If any of these provisions shall be held to
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to the
conflict of laws principles of such State. The parties agree that any
disputes hereunder shall be resolved in accordance with the provisions of
Section 24 of the Purchase Agreement.
Accepted and agreed to effective this 1st day of May, 2003:
Quest Diagnostics Incorporated Cytyc Corporation
By: By:
----------------------------------- ------------------------------------
Name: Name:
--------------------------------- ----------------------------------
Title: Title:
-------------------------------- --------------------------------
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[LOGO] Quest Diagnostics(R)
EXHIBIT A to Service Agreement
Quest T2000 Owned Equipment by Location
[_____]
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