Frame Agreement regarding Purchases
and Investment Grant
between
Novoste Corporation
▇▇▇▇/▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ 30093/3027
represented by the president and CEO ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇
hereinafter
- customer -
and
der Bebig Isotopentechnik und ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇▇(▇▇▇▇)▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
represented by the managing director ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
hereinafter
- supplier -
Preamble
1. The customer produces medical appliances and has developed a catheter for
the inhibition and prevention of proliferative responses of a vessel or
duct to interventional therapy ("Restenosisgerat").
2. The supplier produces radioactive strontium 90-sources (Bebig product code
Sr.O. SO3), which are applicable to the "Restenosisgerat". These isotopes
are subject of the following supply contract. They are being delivered in
units as "seed-train".
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3. On November 28, 1994 the parties concluded a frame agreement, part of which
among other things was the delivery of seed-trains, which are subject of
this contract of sale. This frame agreement remains valid except where
otherwise provided in the present contract. On August 22, 1995 the parties
concluded an option contract. This contract also remains valid.
I.
Contract concerning Grants
ss. 1
Payment Liability
1. The customer pays a monthly investment grant amounting to 100.000,- DM,
i.e. a total of 1.5 DM million, on the next 15 months following the signing
of this contract.
2. The customer remits this investment grant until the third day of each month
to the account no. 0000424648 with the Commerzbank, Bankleitzahl 120 400
00.
ss. 2
Use of Grants
1. The grant will be used for the building of a production site in Berlin for
the product to be supplied, namely radioactive strontium-90 seed-trains. To
this end the supplier will rent a part of building which will exclusively
be used for the production of the said product; he will then effect the
necessary renovation works and supply this part of a building with the
production machinery required. The machinery should guarantee a capacity of
at least * seed-trains per year by December 31, 1997.
2. The supplier agrees not to pledge, hypothecate, encumber or sell the assets
purchased with the grant in any way. The part of the building rented and
all the equipment
* Denotes confidential portions of this agreement that have been omitted and
filed separately with the Securities and Exchange Commission.
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purchased with the grant specified in ss. 1 shall be used exclusively for
the production of materials as stated in this contract for the sole benefit
of the customer. No other companies products are to be manufactured with
the equipment purchased through the grant, neither are products for other
companies to be manufactured in the same part of the building. The supplier
will make sure that all approvals necessary to use the part of the building
for the production of radioactive materials will be assigned.
3. The rental contract must state explicitly that the production site will be
used as a radioactivity laboratory (C-laboratory). The rental contract for
the part of the building must also hold a provision stating that the lease
maybe assigned to third parties.
ss. 3
Time Schedule for the Investments
1. According to ss. 2 the investments are effected in adherence with the
following time schedule:
Leasing a suitable building until February 1, 1997
Renovation of the building
including installation of a laser until May 1, 1997
Obtaining the necessary authorizations until October 1, 1997
Start of production December 31, 1997
2. The supplier will produce * seed-trains in 1997 as specified in ss. 10.
These seed-trains may be produced in another production site until the new
facilities are operative. Starting in 1998 the new production site must
have an annual capacity of at least * pieces.
3. The supplier has to inform the customer immediately if he cannot adhere to
the above time schedule. In case of delays of more than one month the
customer is entitled to stop the investment grants until the next step of
investment is realised.
* Denotes confidential portions of this agreement that have been omitted and
filed separately with the Securities and Exchange Commission.
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ss. 4
Repayment Obligation
If the machinery is not put into operation by December 31, 1997 the customer is
entitled to claim for repayment of the total amount of investment grants paid so
far, plus 5 % interest. This repayment obligation must take into account that
the value of the equipment purchased through the grant is reduced each year by
20% starting in 1998 to reflect the passage of time.
ss. 5
Information and Controlling Rights
1. The supplier is obliged to account quarterly for the use of the funds
received and for the progress of the investments. For this purpose he has
to give written proof to the customer of the funds used, their purpose, the
recipient of the funds as well as their date of payment.
2. The customer may appoint an independent certified public accountant to
verify the above costs by auditing the account books and other documents of
the supplier.
3. The supplier has to draw up a register indicating the number and the type
of the production machinery; this register has to represent the actual
state by the end of the last month in question.
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ss. 6
Insurance
The supplier is obliged to conclude all appropriate, customary and necessary
insurances for the continuance of the production site including a business
interruption insurance (use and occupancy insurance). The insurance sum must be
corresponding to the sale value of the respective production volume, at least *
US-$. Beneficiary of insurance must be the customer. The respective insurance
policy must be delivered to the customer within one month after the first
payment according to I ss. 1.1. If the insurance contract can not provide such a
condition the supplier assigns all claims and benefits from the insurance to the
customer irrevocably by this contract. The customer hereby declares the
acceptance of this assignment.
ss. 7
Crediting against Purchasing Price
The parties of this contract concluded an option contract as of August 22, 1995;
which grants a seven years option for the customer to buy all of the supplier's
tangible and intangible assets including customers' lists, instructions, patents
and licences, which are used or can be used for the production of isotopes. The
purchasing price amounts to 5 million US-$. If the customer makes use of this
option, the investment grant agreed upon within this contract amounting to 1.5
million DM will be credited against the purchasing price. This option is also
granted for any existing or future subsidiary of the customer.
* Denotes confidential portions of this agreement that have been omitted and
filed separately with the Securities and Exchange Commission.
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II.
Frame Supply Contract
ss. 8
Quantity to be supplied
1. The customer has a supposed demand of isotopes of approx. * seed-trains in
1997 and approx. * seed-trains in each of the following years.
2. The supplier hereby takes over the obligation to cover the annual need up
to the amount mentioned above, upon receipt of order from the customer;
delivery can be effected in parts. The customer, however, is not obliged to
accept the delivery unless formally ordered.
ss. 9
Price
The price of the first * seed-trains per year is * per seed-train ex works. This
price is binding until December 31, 2000. Prices can be negotiated for any
seed-train ordered beyond the quantity of * per year after December 31, 1997.
The customer is also entitled to negotiate new prices if this agreement inhibits
a marketing of the product with a price able to meet the competition. From
January 1 1998 on prices of units exceeding the amount of * per year are subject
to negotiation.
After December 31, 2000 the parties agree upon a new price. Prices will only
increase if the supplier gives proof of circumstances that justify such an
increase.
* Denotes confidential portions of this agreement that have been omitted and
filed separately with the Securities and Exchange Commission.
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ss. 10
Terms of Delivery
1. Delivery is effected upon ordering the partial quantity in question; the
delivery period should be six months following receipt of order. The
supplier is obliged to observe the quality standard as attached to the
customers orders.
2. The parties have agreed on the following delivery schedule for 1997:
4 seed-trains per week starting on January 1997 until a quantity of * is
received.
3. Should the supplier fall behind his delivery schedule by more than 15 %,
the customer shall have the right to withhold the monthly investment grant
specified in I. ss. 1 until such a time that the supplier is back on
schedule.
4. Should it be established that the supplier will not be able to resume the
delivery of the products, which is presumed to be the case if delivery has
been discontinued for a period longer than 6 months, the customer is
entitled to a claim for repayment of the total amount of investment grants
paid so far according to I. ss. 4. This clause is not valid if the
discontinuation of delivery is due to an omission of orders.
5. All prices are ex works Berlin. With shipment, all property rights and all
risks of ownership are passed to the customer. The containers necessary for
shipment of the isotopes will be provided by the customer at his own cost.
ss. 11
Payment
Payment has to be effected within two weeks after the customer has received an
invoice from supplier and should be made to an account of the supplier with a
bank in Germany.
* Denotes confidential portions of this agreement that have been omitted and
filed separately with the Securities and Exchange Commission.
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ss. 12
Cancellation
1. The frame supply contract is firm until November 30, 2000. After that date
it can be cancelled regularly requiring a six months notice by the end of
each calendar year.
2. Notwithstanding this, the parties are entitled to give notice to quit for
cause.
3. If the supplier gives notice to quit for cause for a reason outside the
customer's range of responsibility, or if the customer gives notice to quit
for cause for a reason within the suppliers range of possibility, the
supplier is obliged to repay the investment grant according to I. ss. 4.
4. The frame supply contract terminates if the customer makes use of its
option right according to I. ss. 7. Partial deliveries ordered until the
day the customer exercises its option right, still have be delivered and
paid in accordance with this contract.
ss. 13
Exclusivity
By frame contract dated November 28, 1994 the parties have agreed that Novoste
is not to purchase, lease or otherwise acquire directly or indirectly a
radioactive source of like isotope for use in the treatment of restenosis from
any other supplier or party.
This obligation of the customer is replaced by the following:
The customer agrees not to buy more than 30 % of the annual requirement
according to ss. 8 of this contract from a third party. The customer is obliged
to inform the supplier immediately after such an order is placed. The supplier
remains not entitled to deliver to any other party.
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III.
General Conditions
ss. 14
Governing Law and Place of Jurisdiction
German law has to be applied to this contract. All disputes arising in
connection with the present contract shall be finally settled under the rules of
conciliation and arbitration of the International Chamber of Commerce by one or
more arbitrators appointed in accordance with the said Rules.
ss. 15
General Business Conditions
Neither the customer's selling conditions nor the supplier's delivery conditions
can be applied to this frame contract and to the single orders effected
accordingly.
ss. 16
Modifications
All modifications and additions to this contract shall be in writing. This also
applies to this condition.
ss. 17
Invalid Conditions
If single conditions of this contract become invalid, this does not affect the
remaining conditions. The invalid condition then has to be replaced by a
condition which best matches its economic and legal purpose.
Norcross, the .............. Berlin, the .............
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Novoste Corporation Bebig Isotopentechnik und
Umweltdiagnostik GmbH