Manufacturing And Supply Agreement

Exhibit 10.4.45


MANUFACTURING AND SUPPLY AGREEMENT


THIS AGREEMENT entered into this 30th day of March, 2000, between Neoprobe Corporation, 425 Metro Place North, Suite 300, Dublin, Ohio 43017 (hereinafter referred to as ("Neoprobe") and Plexus Corp, 55 Jewelers Park Drive, P.O. Box 156, Neenah, Wisconsin 54957-0156 (hereinafter referred to as ("Plexus").


WHEREAS, Neoprobe is a biomedical company which, using its proprietary technology and knowhow, has developed a handheld gamma radiation detection device used for detection of gamma radiation in radioisotope guided surgery and intraoperative lymphatic mapping; and


WHEREAS, Plexus is in the business of designing, developing, and manufacturing electromechanical instruments, medical instruments and electronic products; and


WHEREAS, Neoprobe desires to have Plexus manufacture and supply the device to Neoprobe.


NOW, THEREFORE, in consideration of the mutual covenants exchanged herein the parties agree as follows:


ARTICLE I. DEFINITIONS


1.01 Certificate of Release (or Certificate of Compliance). As used herein the term "Certificate of Release" is used to mean the document supplied by Plexus to Neoprobe with each lot or batch of Product stating that all Product, manufactured by Plexus and comprising that lot, meet or exceed the "Specifications" for the Product.


1.02 Components. The term "Components" shall mean the individual parts which are assembled to make a Product, as well as packaging and labeling for Product.


1.03 Control Unit. The term "Control Unit" shall mean the neo2000, intraoperative gamma radiation detection device including a microcomputer-based unit which measures the presence of gamma-emitting isotopes, which unit translates the gamma pulses received from a Probe (defined in Section 1.12 herein) into understandable displays and sounds.


1.04 Device Master Record. The term "Device Master Record ("DMR") as used herein shall mean the compilation of records containing the procedures and specifications for a finished device as described by 21 CFR Section 820.3(j) and Section 820.18 1.


1.05 Effective Date. The "Effective Date" of this Agreement shall be the date written herein above.


1.06 FDA and Act. The term "FDA" and the term "Act" as used herein shall mean the United States Food and Drug Administration or any successor agency having the administrative authority to regulate the approval for testing or marketing of human pharmaceutical or biological products and medical devices in the United States; and the term "Act" as used herein, refers to the Federal Food, Drug & Cosmetic Act (21 U.S.C. Section 301, et seq.).


1.07 QSR. As used herein the term "QSR" means the current good manufacturing practice requirements set forth in 21 CFR , Parts 808, 812, and 820 that govern the methods used in, and the facilities, and controls used for, the design, manufacture, packaging, labeling, installation, and servicing of all finished devices intended for human use to ensure that the finished device will be safe and effective and comply with the Act.


1.08 Long Lead Time Component(s). as used herein shall mean all of those individual parts and materials whose current lead times extend beyond forty (40) business days. The Long Lead Time Components may,


Text which has been omitted and filed separately under Rule 24b-2, pursuant to which Neoprobe Corporation has requested confidential treatment of this information , has been replaced by "***" in this Exhibit.


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Omitted portions of this Exhibit are subject to a Request for Confidential Treatment under Rule 24b-2.


from time to time, be reviewed by Plexus and Neoprobe, at the request of either party due to possible changes in market conditions of supply and demand affecting the procurement by Plexus of the Components and/or Long Lead Time Components for the assemblies hereunder. Any changes resulting from such review shall be with the mutual written agreement of Plexus and Neoprobe.


1.09 Monthly Rolling Quantity Forecast of Delivery Requirements. As used herein shall mean the written documents provided to Plexus by Neoprobe each month indicating the delivery requirements projected for the next twelve (12) months.


1.10 NCNR Component(s). As used herein shall mean those parts that are not cancelable once placed on order with Plexus suppliers, and are not returnable once delivered to Plexus. The NCNR Component(s) may, from time to time, be reviewed by Plexus and Neoprobe, at the request of either party due to possible changes in market conditions of supply and demand affecting the procurement by Plexus of the Components and/or NCNR Component(s) for the assemblies hereunder. Any changes resulting from such review shall be with the mutual written agreement of Plexus and Neoprobe.


1.11 Person. As used herein, the term "Person" shall mean any individual, corporation, partnership, business trust, business association, governmental entity, governmental authority or other legal entity.


1.12 Probe. As used herein, the term "Probe" shall mean a handheld gamma radiation sensing device which connects to the Control Unit.


1.13 Product. The term "Product" as used herein, shall mean the finished, packaged and labeled Control Unit and or Probe listed on Exhibit 1.13 and "released" in accordance with Section 7.12 herein.


1.14 Quarter. The term "Quarter" as used herein shall mean the consecutive three (3) month periods beginning January 1, April 1, July 1, and October 1 of each Year.


1.15 Specifications. As used herein, the term "Specifications" shall mean the requirements with which the Product must conform as provided by the device Specifications which are included in the Device Master Record for each Product.


1.16 Special Component(s) as used herein shall mean those parts that have special procurement conditions such as limited change parameters or other special liability conditions that are required by Plexus' suppliers. The Special Component(s) may, from time to time, be reviewed by Plexus and Neoprobe, at the request of either party due to possible changes in market conditions of supply and demand affecting the procurement by Plexus of the Components and/or Special Component(s) for the assemblies hereunder. Any changes resulting from such review shall be with the mutual written agreement of Plexus and Neoprobe.


1.17 Year. The term "Year" shall mean the consecutive twelve (12) month period beginning January 1 of a year and ending December 31 of such year.


ARTICLE II. SUPPLY OF PRODUCT


2.01 Manufacture. Neoprobe hereby appoints Plexus as Neoprobe's exclusive supplier for all of Neoprobe's requirements for the Products listed on Exhibit 1.13 and Plexus hereby accepts such appointment.


2.02 Price of Product. The unit price charged by Plexus to Neoprobe for each unit of Product may be amended from time to time after mutual discussion of the parties. Unless stated otherwise, prices quoted are F. O. B. Plexus's manufacturing facility. Unless specifically stated otherwise, all quoted prices are firm for thirty (30) days from the date of quotation. Quotations are based on drawings, specifications, and other written information available


Text which has been omitted and filed separately under Rule 24b-2, pursuant to which Neoprobe Corporation has requested confidential treatment of this information , has been replaced by "***" in this Exhibit.


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Omitted portions of this Exhibit are subject to a Request for Confidential Treatment under Rule 24b-2.


to Plexus at the time of quotation. Any additional data supplied at the time of purchase may necessitate price adjustments.


2.03 Payment of the Purchase Price. Plexus shall bill Neoprobe for all purchases of Product made under this Agreement by invoice sent to Neoprobe at Neoprobe's address shown on the first page of this Agreement. Neoprobe shall pay all invoices net thirty (30) days after: (i) receipt of such invoice, and (ii) receipt of a Certificate of Release for the Product.


2.04 Payment of Taxes. Any manufacturer's tax, retailer's occupation tax, use tax, sales tax, excise tax, or tax of any nature whatsoever imposed on or measured by the transaction between Plexus and Neoprobe shall be paid by Neoprobe in addition to the invoice price for Product. In the event Plexus is required to pay such tax, Neoprobe shall reimburse Plexus therefore, within ten (10) days of written demand by Plexus to Neoprobe for such reimbursement. If the transaction between Plexus and Neoprobe is exempt from all such taxes, Neoprobe shall provide Plexus with a tax exemption certification or other document acceptable to all taxing authorities at the time the order is submitted.


2.05 Addition of Other Assemblies to the Agreement. Additional devices may be added to this Agreement by mutual consent of the parties. Any additional devices added to this Agreement shall require individual specifications and a determination of a "per unit" price as described in Section 2.02 hereinabove.


2.06 Failure to Supply All Requirements. In the event Plexus is unable to supply substantially all of Neoprobe's requirements for Product, for reasons solely within Plexus' control, Neoprobe may have the right to source Product from an alternative contract manufacturer, subject to Neoprobe providing Plexus with six (6) months prior written notice of its desire to source the Product from an alternative contract manufacturer and Neoprobe has provided Plexus a reasonable time period to cure any delays in supplying Neoprobe with the Product. Neoprobe's right to use a third party manufacturer for all or part of its requirements for Product shall remain in effect until six (6) months after Plexus notifies Neoprobe that it is once again able to supply substantially one hundred percent (100%) of Neoprobe's requirements for Product.


2.07 Competitive Pricing. In the event Neoprobe is able to source Product from a third party manufacturer at a price which is significantly better (***) than the price charged by Plexus pursuant to Section 2.02, the "exclusive supplier" status granted to Plexus pursuant to Section 2.01 shall become nonexclusive; provided however, that Plexus shall have the right to match the price offered by the third party in which case Plexus shall remain an exclusive supplier.


2.08 Plexus Becomes Non-Exclusive Supplier. If Plexus' status as "exclusive supplier" becomes "non- exclusive" in accordance with this Section 2.07, Neoprobe agrees to purchase all finished Product, raw materials, all Components in Plexus' inventory (including the full markup as defined in the Plexus Quotation), and other Components for which Plexus has liability or on order, but which are not in Plexus' inventory, as well as payment for any and all in-process manufacturing costs and expenses, including, ramp down costs, cancellation or restocking charges. To help minimize the impact of cancellation charges, Plexus will attempt to restock components at the supplier, resell the components, and/or utilize the components on non-Neoprobe assemblies.


ARTICLE III. FORECAST, ORDERS, MATERIALS AND SCHEDULING


3.01 Forecast. Within fifteen (15) days after the Effective Date, Neoprobe shall deliver to Plexus a forecast of the quantity of Product required for the initial twelve (12) month period from the Effective Date (the "Initial Forecast") and shall thereafter update such forecast on a monthly basis and provide it to Plexus on or before the fifteenth (15th) day of each month so that the parties have a twelve (12) month rolling forecast of the estimated requirements for Product. Neoprobe shall promptly notify Plexus, at any time, Neoprobe anticipates a material


Text which has been omitted and filed separately under Rule 24b-2, pursuant to which Neoprobe Corporation has requested confidential treatment of this information , has been replaced by "***" in this Exhibit.


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Omitted portions of this Exhibit are subject to a Request for Confidential Treatment under Rule 24b-2.


deviation from the forecast. Plexus shall promptly notify Neoprobe at any time Plexus anticipates a material deviation in its ability to meet the forecast.


3.02 Manufacturing Lead Time. For each Product to be manufactured, Plexus establishes a manufacturing lead time, which is the number of business days it will take, on average, to receive and kit all Components, assemble, test and ship the lot of finished Product. Unless otherwise noted, this manufacturing lead- time is twenty (20) business days. Plexus schedules all Components for a particular lot of Product to arrive one manufacturing lead-time prior to the Neoprobe due date. Plexus then uses this information, together with the Forecast and Purchase Order information as defined below, to place commitments to its suppliers for materials.


3.03 Purchase Orders. Neoprobe will issue Neoprobe Purchase Orders ("POs") at least sixty (60) business days prior to the required delivery dates for Product in accordance with, but not limited to, the Monthly Rolling Quantity Forecast of Delivery Requirements. Neoprobe POs for delivery with lead times of less than sixty (60) business days may be mutually agreed to by Plexus and Neoprobe.


3.04 Monthly Rolling Quantity Forecast of Delivery Requirements. Neoprobe shall provide to Plexus a Monthly Rolling Quantity Forecast of Delivery Requirements in accordance with Section 3.01 above. This Monthly Rolling Quantity Forecast of Delivery Requirements for each assembly shall be used by Plexus to determine the Components and/or the Long Lead-Time Components, NCNR Components and/or Special Components that Plexus must obtain and/or procure and/or inventory, and unless otherwise agreed to, Plexus will negotiate pricing contracts with its supplier based upon the forecast. Plexus shall procure in advance of Neoprobe POs for assemblies, pursuant to the Monthly Rolling Quantity Forecast of Delivery Requirements for each Product, the Components and/or the Long Lead Time Components, NCNR Components and/or Special Components, as required for each Product.


3.05 Schedule Changes. Neoprobe may request a change to the delivery schedule at any time. Schedule changes can have an extraordinary effect on the amount of inventory at Plexus, the impact for which is not considered in the original cost of the Product. Frequent schedule changes may result in additional administrative charges. If Neoprobe determines that the total annual rolling quantity forecast of delivery requirements for any Product previously specified in the Monthly Rolling Quantity Forecast of Delivery Requirements will be delayed and/or reduced in quantity, then Plexus shall notify Neoprobe that Plexus has procured and is inventorying and/or has on order with its Components and/or Long Lead Time Components, NCNR Components and/or Special Components suppliers an excess quantity of Components and/or Long Lead Time Components, NCNR Components and/or Special Components that Plexus shall be unable to use for any other currently forecasted Product requirement specified in the Monthly Rolling Quantity Forecast of Delivery Requirements. Rescheduling of delivery requirements less than thirty (30) days prior to the delivery date may only be done with mutual agreement between Plexus and Neoprobe. Any schedule change may result in a "Schedule Change Condition" as described in Section 3.06 and Section 3.07 below with corresponding liability to Neoprobe.


3.06 Schedule Decreases. For schedule decreases issued within the manufacturing lead-time of the scheduled delivery date, Neoprobe will either:


a) Accept shipment of the completed assemblies within the
calendar month originally scheduled: or


b) Pay full price and accept title and risk of los for completed
assemblies and any work in process materials and labor. Plexus
will warehouse completed assemblies for a reasonable period of
time.


For schedule decreases issued outside the manufacturing lead-time of the scheduled delivery date, the Neoprobe will:


a) Pay for and accept title and risk of loss for the value of the
components (including the full component markup as defined in
the Plexus quotation) which Plexus is unable to return or
reschedule to meet the new schedule requirements; and


b) Pay Plexus for any additional cost from suppliers resulting
from the rescheduling.


Text which has been omitted and filed separately under Rule 24b-2, pursuant to which Neoprobe Corporation has requested confidential treatment of this information , has been replaced by "***" in this Exhibit.


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Omitted portions of this Exhibit are subject to a Request for Confidential Treatment under Rule 24b-2.


3.07 Schedule Increases. For schedule increases, Plexus will make its best effort to obtain the Components necessary to meet Neoprobe requirements. However, Plexus may be unsuccessful in obtaining all of the Components required to meet the Neoprobe's increased requirements. In that situation, Plexus reserves the right to Neoprobe payment of the value of all inventory in house as of the delivery date that is a result of the increased requirement.


3.08 Engineering Change. The term "Engineering Change(s)" (hereinafter called "EC" or "EC's") shall mean those mechanical, software, or electrical design and/or specification and requirement changes which, if made to the Product to be delivered hereunder, would affect the schedule, performance, reliability, quality, availability, serviceability, appearance, dimensions, tolerance, safety or purchase price of such Product or which would require additional approval testing. Plexus may determine that Engineering Changes will affect its ability to maintain the delivery schedule of Product , due to the lead time of newly specified parts and/or the impact of substantial rework or modification. Under these circumstances, Plexus reserves the right to define a new schedule for delivery and treat this as a Schedule Change Condition, with the Neoprobe liability as defined under Section 3.06 or Section 3.07. Upon receipt of an EC, Plexus shall review Neoprobe's proposed EC and shall give to Neoprobe a written evaluation of the EC, stating Plexus' cost to implement the EC (including the cost to modify any tooling), the excess quantity of Components and/or Long Lead Time Components, NCNR Components and/or Special Components Plexus has inventoried and/or has on order with its Components and/or Long Lead Time Components, NCNR Components and/or Special Components suppliers that are unusable for any other assembly requirement and excess due to the EC, and associated costs and expenses such Components and/or Long Lead Time Components, NCNR Components and/or Special Components that Neoprobe shall be liable for and the cost savings, if any, resulting from the EC, and the expected effect on the schedule, availability and/or purchase price of such assemblies, or which may require additional approval tests by Neoprobe.


3.09 Cancellation. Neoprobe may cancel requirements defined in orders and/or forecasts at any time before the scheduled delivery date. Any Product requirements canceled within the manufacturing lead-time of the scheduled delivery date will be invoiced at the full agreed to price for the completed Product. For Product requirements canceled outside the manufacturing lead time of the scheduled delivery date, Neoprobe's liability to Plexus will be the value of the Components in Plexus' inventory (including the full markup as defined in the Plexus Quotation), and other Components for which Plexus has liability or on order, but which are not in Plexus' inventory, as well as payment for any and all in-process manufacturing costs and expenses, including, ramp down costs, cancellation or restocking charges. To help minimize the impact of cancellation charges, Plexus will attempt to restock components at the supplier, resell the components, and/or utilize the components on non-Neoprobe assemblies.


3.10 Changes to Specifications. Neoprobe shall have the right to change the Specifications for a Product to make reasonable and lawful modifications to Product Specifications; provided, however, that Plexus shall have a reasonable period of time to implement such Product Specification changes, and shall be entitled to full reimbursement by Neoprobe for any costs incurred by Plexus in implementing such changes, including cost of materials which can not be utilized as a result such change. Neoprobe shall absorb all reasonable adjustments to pricing for a Product which may be required as a result of the Specification change. Neoprobe is responsible for verification and/or validation of any changes to the Specifications.


3.11 Delivery of Product. Unless otherwise mutually agreed to by the parties, Plexus shall ship Product to a distribution facility designated by Neoprobe.


ARTICLE IV. COMPONENTS


4.01 Responsibility for Components. Unless otherwise agreed to by the parties, Plexus shall be responsible for ordering, purchasing and maintaining sufficient Components to support manufacture of Product in accordance with the forecast described in Section 3.01 herein.


Text which has been omitted and filed separately under Rule 24b-2, pursuant to which Neoprobe Corporation has requested confidential treatment of this information , has been replaced by "***" in this Exhibit.


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Omitted portions of this Exhibit are subject to a Request for Confidential Treatment under Rule 24b-2.


4.02 Neoprobe Supplied Parts. Neoprobe may provide certain components required to build Neoprobe's Product in which case, Neoprobe's inability to provide parts in a timely manner may effect Plexus's ability to meet its delivery schedule and may cause Plexus to incur extraordinary expenses to hold Plexus purchased material and/or labor in process. Under these circumstances, Plexus reserves the right to define a new schedule for delivery based upon component availability information from Neoprobe and treat this as a Schedule Change Condition, with Neoprobe liability as defined under Section 3.06 or Section 3.07 above.


4.03 Minimum Component Purchases. Plexus may have to place orders for quantities of Components in excess of that required to support Neoprobe requirements. This may be as a result of minimum order size requirements or standard package sizes from the supplier. Neoprobe agrees to have the cost of the excess Components amortized over a maximum of six (6) month's requirements, or will place a purchase order separately for the excess Components.


ARTICLE V. TOOLING


5.01 Ownership o ...