Novoste Corporation Exhibit 10.25
THIS AGREEMENT made in duplicate this 14th day of October, 1999,
BETWEEN: AEA TECHNOLOGY-QSA, GMBH
having a place of business at
Gieselweg 1
X-00000, Xxxxxxxxxxxx
GERMANY
("QSA")
AND: NOVOSTE CORPORATION
having a place of business at
0000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000 XXX
("Novoste")
WHEREAS:
I. Novoste is the owner of certain patents, data, information and technology
related to the treatment of coronary artery restenosis;
II. QSA has expertise in the production and processing of radioactive
material, including the necessary patents, know-how, techniques, methods,
processes and trade secrets for the development and manufacture of sealed
sources and dosimetry;
III. Novoste desires that QSA manufactures Sr90 sources to meet Novoste's
commercial supply requirements; and
IV. Novoste desires that QSA develops the required sources, construct a
facility at its site in Braunschweig, Germany, and then to manufacture
Novoste's requirements for Sr90 sources, in accordance with the terms,
conditions and specifications set out herein.
NOW THEREFORE in consideration of the mutual covenants and agreements herein
contained, and subject to the terms and conditions hereinafter set out, the
Parties hereto agree as follows:
1
ARTICLE 1 - DEFINITIONS
For the purposes of this Agreement:
1.1 "Affiliated Company" shall mean either
(a) a company which is at least majority owned or majority controlled by a
Party hereto or which holds at least a majority interest or majority
control in such Party;
or
(b) a parent company to one of the Parties hereto
1.2 "Batch" shall mean a production batch of Source Trains manufactured by QSA
under this Agreement.
1.3 "Background Technology" shall mean all QSA or its Affiliated Company(s)
proprietary technology, including patents, know-how, techniques, methods,
processes and trade secrets which is required for the purposes of
performing the obligations of QSA under this Agreement and which is owned
by QSA or its Affiliated Company(s), or which QSA is authorized to use, or
which is licensed to QSA from third parties and which is in existence in
the form of a written, description, prototype or can otherwise be
demonstrated to be the property of QSA or its Affiliated Company(s), prior
to the Effective Date.
1.4 "Clinical Trials" shall mean animal and human trials for clinical
development of the Medical Device.
1.5 "Commercial Phase" shall mean the period commencing at the date of the
first commercial sale of Sources from QSA to Novoste which have been
manufactured in the Facility, for Novoste after receipt of marketing
authorization from the appropriate Regulatory Authorities.
1.6 "Development Phase" shall mean the period commencing from the Effective
Date until completion to Novoste's reasonable satisfaction of the
activities described in Schedule A and any other schedules referred to in
Schedule A.
1.7 "Effective Date" shall mean the date first written above.
1.8 "Equipment(s)" shall mean the moveable assets to be purchased or
manufactured by QSA for and on behalf of Novoste. Said equipment will be
detailed in project invoices from QSA to Novoste and will be clearly
tagged and identified as Novoste property.
1.9 "European Authority" shall mean Novoste's Notified Body.
1.10 "Facility" shall mean the production line facility to be constructed by
QSA in its currently existing factory in Braunschweig, Germany, as
described in Schedule B and which will be constructed and installed for
the production of Sources. The post billet part of the Facility shall be
for the sole use of satisfying the requirements of this Agreement.
2
1.11 "Facility Program" or "Facility Phase" shall mean the program for the
construction of the Facility as described in Article 5.
1.12 "Hot Cell(s)" shall mean the assets to be purchased or manufactured by QSA
for and on behalf of Novoste and installed in the Facility for the term of
this Agreement (unless QSA exercises the option under Article 6.1 (ii)),
as more specifically defined in Schedule "B".
1.13 "Initial Term" shall have the meaning set forth in Article 3.1 hereof
1.14 "Initial Term Notice" shall mean the written notice by either Party which
shall be given at least eighteen (18) months prior to the end of the
Initial Term and by which the notifying Party informs the other Party that
it does not wish to extend the term of the Agreement beyond the Initial
Term.
1.15 "Isotope" or "Sr-90" shall mean Strontium 90 radio-chemical.
1.16 "Jointly Owned Arising I P" shall mean any and all improvements or changes
to the Background Technology funded by either Party under this Agreement.
All such improvements shall be jointly owned by the two Parties hereto and
used by them only in conformity with this Agreement.
1.17 "Major Repair(s)" shall mean a repair to a given asset entailing
expenditures in excess of the lesser of:
(i) twenty-five per cent (25%) of the subject asset's purchase price as
determined at the time of purchase by the invoice price less any
discounts received, or
(ii) twenty-five thousand euros ((euro)25,000).
1.18 "Medical Device" shall mean Novoste's Beta-Cath System(TM) as described in
Schedule C.
1.19 "Minimum Batch Size" shall mean the minimum number of Source Trains to be
assembled in one batch and the number of which is to be mutually agreed in
writing prior to the commencement of the Commercial Phase.
1.20 "Notice of Termination" shall mean the written notice given by either
Party to the other Party to terminate the Agreement after the Initial Term
has ended. Notice of Termination must be given at least eighteen (18)
months prior to the date of effective termination.
1.21 "Novoste Notified Body" shall mean TUV Product Services.
1.22 "Novoste Technology" shall mean all Novoste proprietary technology,
including patents, know-how, techniques, methods, processes and trade
secrets which is required for the purposes of performing the obligations
of Novoste under this Agreement and which is owned by Novoste, or which
Novoste is authorized to use, or which is licensed to Novoste from third
parties and which is in existence in
3
the form of a written, description, prototype or can otherwise be
demonstrated to be the property of Novoste, prior to the Effective Date.
1.23 "Process" shall mean the process of formulation, dispensing,
encapsulation, de- encapsulation, re-encapsulation, inspection and testing
of Sources to meet Novoste's Specification.
1.24 "QSA Repairs" shall mean repairs or maintenance to the Equipment and Hot
Cells that are necessary through QSA's abuse, improper operation,
inadequate maintenance, negligence or willful misconduct.
1.25 "Scheduled Batch Completion Date" The date for which QSA has received
final confirmation from Novoste that a Batch is required. Such
confirmation from Novoste will be given at intervals no less than 14
(fourteen) days prior to when dispatch is required by Novoste
1.26 "Specification(s)" shall mean those specifications for the Source and
Source Trains set out in Schedule D.
1.27 "Source(s)" shall mean encapsulated Sr-90 material produced using the
Process which meet the Specifications.
1.28 "Source Train(s)" shall mean a set of Sources (presently 2.5mm in length)
in varying train lengths (presently 30mm, 40mm, 50mm and 60mm) meeting the
Specifications suitable for use in the Medical Device.
1.29 "Transfer Date" shall have the meaning set forth in Article 6.1 sub-clause
(v) hereof.
1.30 "United States Authority" shall mean the United States Food and Drug
Administration.
1.31 "Validation" shall mean the program mutually agreed to by the Parties by
which documented evidence provides assurance that the Process will
consistently produce Sources that meet Specifications and quality
attributes, to the reasonable satisfaction of both Parties and the
appropriate Regulatory Authorities.
ARTICLE 2 - PURPOSE
2.1 Scope and Object
The scope and object of the Agreement is to complete the development of
Sources in accordance with the development responsibilities and
obligations attributed to each of the Parties as set out in this
Agreement. In addition, this Agreement shall provide for the construction
of a Facility at QSA's manufacturing site in Braunschweig, Germany, for
the manufacture of Sources and the supply of Source Trains for Clinical
Trials and commercial sales.
4
ARTICLE 3 - TERM
3.1 Initial Term
The initial term of this Agreement shall commence upon the Effective Date
and, unless terminated earlier pursuant to this Agreement, shall continue
until the fifth anniversary of the commencement of the Commercial Phase
("Initial Term").
3.2 Extension
The term of this Agreement shall be automatically extended after
expiration of the Initial Term unless either Party has given Initial Term
Notice to the other Party. At least two years prior to the end of the
Initial Term, the Parties agree to meet in order to discuss, in good
faith, their intentions with respect to whether or not to continue the
term of this Agreement beyond the Initial Term.
ARTICLE 4 - DEVELOPMENT PHASE
4.1 Development Activities
During the Development Phase, QSA and Novoste shall respectively carry out
their obligations described and attributed in Schedule "A", it being
understood that some activities may be reasonably delayed to the extent
that such activity is premised on the work or provision of data,
information or technology by the other Party which such other Party does
not provide on a timely basis. Each Party shall use their best efforts in
order to carry out their respective obligations and responsibilities set
out in Schedule "A" to the timescales specified.
The Parties acknowledge and agree that Schedule "A" may only be amended
during the course of the Development Phase to accommodate unforeseen
events and results beyond the reasonable control of the Parties. All such
changes to Schedule "A" shall be made by written agreement of the Parties.
The Project Managers (as specified at Article 22.1) will meet at least
quarterly, at locations to be agreed, including videoconferencing, for the
purpose of reviewing the status of the project and to assess progress
against the milestones and activities set forth in Schedule "A". QSA shall
also provide written reports to Novoste, on a monthly basis, setting out
the progress against milestones set forth in Schedule "A".
If Novoste has reasonable grounds to be dissatisfied with respect to any
failure by QSA to meet its obligations described in Schedule A, Novoste,
following written notice to QSA, may suspend payments otherwise due QSA
and may suspend performance of its other obligations hereunder until
reasonable satisfactory progress is achieved by QSA, or Novoste may
terminate this Agreement by giving thirty (30) days written notice to QSA.
Following such notice or notice under Article 4.2 hereto, QSA shall
endeavor to bring all activities to a timely end, however QSA shall have
the right to claim from Novoste reimbursement of all reasonable costs
necessarily and properly incurred by them in relation to the
5
orderly cessation of the work, including any commitments, liabilities or
expenditure which are reasonably and properly incurred and would otherwise
represent an unavoidable loss by QSA by reason of the termination of this
Agreement. For the avoidance of doubt Novoste will not indemnify QSA
against loss of future profit.
4.2 Development Phase Termination
At each quarterly review meeting of the Project Managers an assessment
shall be made of the progress of the Development Stage and the ability of
both Parties to fulfill the terms of this Agreement. Should both Parties
agree in writing during the Development Phase that it is no longer
possible to fulfill the terms of this Agreement, then this Agreement shall
be terminated.
ARTICLE 5 - FACILITY PROGRAM
5.1 Construction of Facility
Subject to successful completion of the relevant parts of the Development
Phase to the satisfaction of Novoste, QSA shall construct the Facility at
its site in Braunschweig, Germany to carry out the manufacture of Sources.
QSA will use its commercially reasonable best efforts to complete the
Facility Program in accordance with the Xxxxx Chart set forth in Schedule
B. Schedule B may only be modified as agreed in writing by the Parties. If
Novoste has reasonable grounds to be dissatisfied with the performance of
QSA in constructing the Facility in accordance with the Facility Program
or in accordance with Schedule B, Novoste may, following written
notification to QSA, suspend payments otherwise due QSA and Novoste may
suspend performance of its other obligations hereunder until satisfactory
performance is achieved or Novoste may terminate this Agreement by giving
thirty (30) days written notice to QSA. Following such notice, QSA shall
endeavor to bring all activities to a timely end, however QSA shall have
the right to claim from Novoste reimbursement of all reasonable costs
necessarily and properly incurred by them in relation to the orderly
cessation of the work, including any commitments, liabilities or
expenditure which are reasonably and properly incurred and would otherwise
represent an unavoidable loss by QSA by reason of the termination of this
Agreement. For the avoidance of doubt Novoste will not indemnify QSA
against loss of future profit.
5.2 Facility Program Capital Cost
The actual capital cost of the Facility Program will be calculated on a
time and materials basis as set out in Article 9.1. The facility shall be
completed by QSA by February 16, 2001. The budgeted capital cost for
performance of the Facility Program by QSA is estimated at the Effective
Date to be three million, seven hundred and sixty-four thousand euros
((euro)3,764,000). Any cost in excess of the estimated budgeted capital
cost shall be subject to the prior written authorization of Novoste.
6
ARTICLE 6 - ASSET OWNERSHIP
6.1 Equipment
(i) Under this Agreement QSA will purchase or manufacture, on behalf of
Novoste, the Hot Cell(s) and Equipment, which will be installed in
the Facility as described in Schedule B. Upon completion of the
purchase or manufacture of the Hot Cell(s) and Equipment, a warranty
xxxx of sale in a form reasonably acceptable to Novoste, shall be
executed and delivered to Novoste transferring full title to such
Hot Cell(s) and Equipment dedicated to Novoste requirements free and
clear of all liens, claims, or encumbrances. Subject to Novoste's
obligations to transfer ownership of the Hot Cell to QSA under
circumstances as set forth in this Agreement, Novoste shall at all
times hold all right, title and interest in the Hot Cell and
Equipment; provided, however, that during the term of this
Agreement, usage thereof shall belong exclusively to QSA for the
purposes of producing Sources for Novoste at the Braunschweig,
Germany site. Since the Equipment will be in QSA's possession, QSA
represents and warrants that the Hot Cell(s) and Equipment shall not
be encumbered, and shall, during the term of this Agreement, remain
free and clear of any and all encumbrances including, but not
limited to, mortgages, charges and liens and that no effective
financing statement, pledge or other instrument similar in effect
covering all or any part of the Hot Cell(s) or Equipment has been
agreed or will be agreed by QSA or Parties claiming by, through or
under QSA.
(ii) In partial consideration of the services to be performed hereunder
by QSA and in consideration of the payment of one dollar ($1.00) the
sufficiency of which is hereby acknowledged, on the earlier of the
natural expiration or termination of this Agreement by Novoste (for
whatever reason other than the default by QSA), should QSA wish to
retain the use of the Hot Cell(s), Novoste agrees without further
notice or demand to transfer all of its right, title and interest in
and to the Hot Cell and Equipment to QSA. After transfer of title,
QSA will following such transfer be responsible for any
decontamination or decommissioning costs of the Facility.
(iii) At the conclusion of this Agreement (for what ever reason) the Hot
Cell and other dedicated Equipment at Braunschweig, will need to be
decontaminated . This shall be the responsibility of Novoste unless
QSA is able and chooses to exercise its option to acquire title to
the Hot Cells and Equipment. At the time of the completion of the
Facility, February 16, 2001, Novoste shall establish an Escrow
Account for the estimated cost to Decontaminate and Decommission the
Facility (currently estimated at (euro)127,748). This Escrow Account
shall be funded either by cash in a German bank account or by an
irrevocable letter of credit, and be held by Novoste's attorney.
Should QSA decline to exercise its option, or fail to be allowed to
exercise the option due to its default of this Agreement, to own the
Hot Cell and the Equipment, then upon the natural expiration or
termination of this Agreement by Novoste the funds established by
Novoste in the "Decontamination and Decommissioning" Escrow Account
7
or through the letter of credit will be made available to QSA and
shall be used exclusively for the decontamination and
decommissioning of the Hot Cell(s) and any other Equipment prior to
their removal by Novoste from the Braunschweig site. Should QSA
exercise the option to own the Hot Cell(s) and the Equipment, then
the funds held in the Escrow Account will revert to Novoste or the
letter of credit canceled. At each calendar year end during this
Agreement, Novoste will increase or decrease the balance of the
Escrow Account or the letter of credit to reflect the reasonable
costs of Decontamination and Decommissioning as estimated by QSA. If
the balance of the Escrow Account exceeds the funds necessary for
Decontamination and Decommissioning, the excess shall be returned to
Novoste immediately upon completion of Decontamination and
Decommissioning.
(iv) Except as may be provided in accordance with Article 16.1 sub-clause
(vii), in no event may QSA use or permit any third Party to use the
Hot Cell(s) or Equipment for the manufacture of any Source or Source
Trains, any products which use technology of Novoste, or any
products which could compete with the sale of Sources or the Medical
Device (including the Source or Source Train) by Novoste. If title
to the Equipment and Hot Cell(s) is obtained by QSA, QSA may not
sell, transfer, lease, or permit the use of the Hot Cell(s) or the
Equipment by third parties without first notifying Novoste and
providing Novoste the opportunity to match the terms of any such
sale, transfer, lease, or permit. Should Novoste decline to exercise
such an option to purchase or acquire use of the Equipment and Hot
Cell(s) then QSA shall be relieved of all obligations under this
Article.
(v) It is understood that Novoste may finance the purchase and
construction of the Hot Cell(s) and Equipment through debt and
provide a preferred security interest (Sicherungseigentum) in the
Hot Cell(s) and Equipment to a financing institution or other
lender. Until such time as Novoste has made the transfer as set out
in Article 6.1sub-clause(ii) or has otherwise transferred ownership
of the Hot Cell(s) or Equipment as set out elsewhere in this
Agreement (the "Transfer Date"), QSA shall have, and is hereby
granted a secondary security interest (nachrangiges
Anwartschaftsrecht auf Sicherungseigentum) in and to the Hot Cell(s)
behind any security interest provided to any financing institution
or other lender. The secondary security interest in the Hot Cell(s)
and the provision for eventual Decontamination and Decommissioning
set forth above shall be perfected by possession of the Hot Cell(s)
by QSA and shall be effective as of the date of commencement of
installation of such Hot Cell(s) and shall serve as collateral for
the carrying out of the obligations of Novoste set out in this
Agreement. Until the Transfer Date, QSA at all times during the Term
of this Agreement shall be entitled to the use and possession of the
Hot Cell(s) and Equipment in accordance with this Agreement, and the
Hot Cell(s) and Equipment, shall be maintained and preserved by QSA
at its expense in accordance with the provisions set out in this
Agreement. Novoste shall execute all documents reasonably required
to provide a secondary security interest in and to the Hot Cell(s)
to QSA.
8
(vi) The labor rates and material handling markups on assets constructed
by QSA or its affiliates for this Phase are set forth at Article 9.1
hereto.
ARTICLE 7 - GENERAL MANUFACTURE AND SUPPLY OBLIGATIONS
7.1 Source Supply
QSA agrees to use the Process to produce Sources that meet the
Specifications in conformity with all applicable laws, rules and
regulations of Germany, the European Union and the United States and to
ship Source Trains as directed by Novoste. Subject to the provisions of
Article 27, during the Initial Term of this Agreement and any renewal or
extension thereof, QSA shall manufacture as provided in the preceding
sentence and provide Novoste with Source Trains which shall be ordered by
Novoste under this Agreement for the purposes of clinical trials and
commercial sale of the Medical Device.
7.2 Batch Size and Minimum Purchase Commitment
Novoste agrees that it shall order Source Trains at the price set forth in
Article 9.3 in batch sizes no smaller than the Minimum Batch Size. Novoste
further agrees that it shall purchase from QSA a minimum of XXXXX Source
Trains during each twelve months period after commencement of the
Commercial Phase for the remaining period of this Agreement. Should
Novoste not order the minimum number of Source Trains in any twelve month
period from the commencement of the Commercial Phase, then it shall pay
QSA a penalty of XXXXX of the price for the difference between the number
of actual Source Trains ordered and the minimum purchase requirement for
that period.
7.3 Testing and Documentation
QSA shall certify in writing, to Novoste, and shall provide backup
evidence as requested, that each Batch of Source Trains was produced and
tested in compliance with:
(i) the Specifications; and
(ii) all applicable laws, rules and regulations of Germany, the European
Union and the United States, and in accordance with procedures
agreed between Novoste and QSA.
The tests and analyses provided in the Specifications as well as the
nature and form of written certification may be amended from time to time
only by mutual
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
9
written consent of the Parties.
7.4 Repairs and Maintenance
After the Facility is installed, QSA shall maintain such Facility, Hot
Cell(s) and Equipment in satisfactory operating condition as required to
enable QSA to manufacture Sources to Specification in accordance with the
Process and all other applicable laws, regulations, rules or orders. In
the event of any conflict between the applicable laws, regulations, rules
or orders, QSA will notify Novoste of such conflict and the Parties shall
act in good faith to resolve such conflict or to determine which laws,
regulations, rules or orders should take precedence. Routine repairs,
preventive maintenance and service contracts for the Facility and
Equipment shall be arranged by QSA.
ARTICLE 8 - GENERAL OBLIGATIONS
8.1 Isotope Supply
QSA shall obtain Sr90 in sufficient quantities to meet its obligations
hereunder. QSA shall at all times own the Sr90 until incorporated into
Sources and title for the Sources passed to Novoste.
QSA shall contract for the supply of the amount of Isotope necessary for
QSA's production of Sources pursuant to this Agreement. Should QSA have
difficulty in procuring Strontium 90 at competitive prices, Novoste shall
be free to secure such supplies for QSA as are necessary for the
production of the Sources and Source Trains pursuant to this Agreement.
Where Novoste supplies the Strontium 90, the cost to Novoste of the
Sources shall be adjusted accordingly.
8.2 Unavailability or Scarcity of Isotope
It is understood that QSA's obligation to supply Isotope is conditional,
depending upon its ability to obtain a sufficient supply of the Isotope.
QSA will use its best efforts to locate and obtain a sufficient supply of
Isotope to manufacture Sources required by Novoste. QSA will notify
Novoste upon QSA's first knowledge of a shortage or likelihood of any
shortage of Isotope if such shortage will impact the manufacture of the
Sources. Except as set out below, QSA shall not be liable for any delays
in the supply of Isotope if due to causes described in Article 27 hereof.
8.3 Production Planning for Clinical Trail and Commercial Supply
During the first five (5) business days of each month commencing with the
Commercial Phase of this Agreement, QSA and Novoste will establish a
schedule of Batch runs for the next eight (8) weeks. Novoste shall provide
QSA with confirmation of Batch orders no later than fourteen (14) days
prior to a Scheduled Batch Completion Date. QSA shall be under an
obligation to deliver to Novoste the confirmed Batch order within the
agreed time schedule for such delivery. This approach to production
planning may be modified as mutually agreed to by the
10
Parties based upon Novoste's and QSA's experience in clinical and
commercial supply.
ARTICLE 9 - PAYMENTS
9.1 Development and Facility Program
As with the previous Agreements signed by the two Parties hereto, in
performing the Development Phase, QSA will invoice Novoste quarterly in
arrears, providing an adequate description of the work billed. In the
Facility Program, QSA will provide labor at the hourly billing rates
detailed at Schedule B, and will provide materials and equipment at QSA's
cost plus an additional ten per cent (10%) administration fee. All charges
not included in Schedule A or B hereto shall be subject to the prior
written approval of Novoste. Charges shall be due only for services,
material and equipment authorized by the terms of Schedule A or Schedule
B. Monthly invoices that include detailed cost statements shall be
submitted to Novoste for work performed during the prior month.
If QSA is required to purchase items of Equipment or items necessary for
the production of Equipment that cost more than (euro)15,000, Novoste
shall pay such amounts one week in advance of QSA making such payments to
third parties.
9.2 Payment for Repairs and Maintenance
QSA shall be responsible for the payment of all repair and maintenance
costs. Novoste will repay all reasonable expenses for any Major Repairs to
or replacement of the Equipment except for QSA Repairs. All costing for
all repairs shall be on the same basis as the Facility Phase.
The maximum amount QSA will be required to pay in any calendar year for
routine repairs, preventive maintenance and service contracts for the
Facility and Equipment shall be fifty thousand euros ((euro)50,000), plus
all amounts required for QSA Repairs. Any reasonable amounts for routine
repairs, preventive maintenance and service contracts for the Facility and
Equipment other than QSA Repairs in excess of fifty thousand euros
((euro)50,000) in any calendar year will be borne by Novoste. Preventive
maintenance and service contracts for the Equipment in excess of
twenty-five thousand euros ((euro)25,000) which are approved in advance by
Novoste will be borne by Novoste. All amounts set forth in this Article
shall be based on QSA's out-of-pocket costs and QSA's standard internal
labour rates. QSA shall co-ordinate with and advise Novoste regarding the
advisability of any Major Repair or replacement. The only repairs, if any,
to the Facility or Equipment which shall be borne by Novoste are those set
forth in this Article. All other repairs shall be borne by QSA.
9.3 Purchase Price for Source Trains
Prior to the commencement of the Commercial Phase, the Parties shall agree
the price that shall be paid by Novoste for each Source Train that QSA
produces to Specification. Such price shall not exceed XXXXX per Source,
exclusive of all
11
packaging and taxes, but inclusive of the cost of disposal of the Sources
at the end of the useful life of the Source Train.
9.4 Price Escalation
XXXXX. It is therefore Novoste's expectation that there will be no price
increase from QSA during the first two years of this Agreement after
commencement of the Commercial Phase. QSA will be free, and is encouraged,
to improve its gross margins by improvements in processes, scrap
reduction, inventory management, etc. The prices for the subsequent years
will be determined in advance by applying the average annual change in the
German cost of living index over the preceding two years in year three and
in the previous year for all subsequent years. Should this price increase
calculated by using the German cost of living index exceed five percent,
then the increase shall be calculated based upon QSA's relevant average
annual actual rise in costs.
It is understood that the costs of operating the Facility can be suddenly
increased as a result of direct or indirect Regulatory changes - such as
via the costs of conditioning and disposal of radioactive arisings. Should
such significant changes arise at any time after the Effective Date then
QSA shall immediately inform Novoste and the Parties shall agree a price
increase based upon QSA's actual rise in costs.
9.5 Payment Terms
Except as otherwise provided herein, all invoices shall be paid within 30
days. Where there is any dispute with regard to any item on any cost
statement and or invoice, payment for that item shall be withheld until
such time as any dispute is settled. Payment shall not be withheld from
any item that is not under dispute.
All payments, costs and prices included in this Agreement shall be
exclusive of all taxes.
9.6 Currency
Unless otherwise specified, all sums set out in this Agreement shall be in
Euros.
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
12
9.7 Audit
QSA shall keep accurate books and accounts of record in connection with
the manufacture by it of the Sources in sufficient detail to permit
accurate determination of all figures necessary for verification of all
compensation required to be paid pursuant to Article 9. QSA shall maintain
such records for a period of three (3) years after the end of the year in
which they were generated. These records may be audited by Novoste in
accordance with this Agreement, and shall be available for review by
Novoste at any time upon reasonable notice.
Except as provided below, Novoste, at its sole expense and through its
accounting personnel or, if Novoste elects, through an independent
certified public accountant reasonably acceptable to QSA, shall have the
right to examine the books and records of QSA relating to the activities
of QSA hereunder and compensation due QSA hereunder for the sole purpose
of verifying such statements. Such audit shall be conducted upon six (6)
weeks' prior written notice to QSA during ordinary business hours, and
shall not be more frequent than once during each calendar year except for
those records pertaining to the supply of Strontium 90. In the case of
Strontium 90 records, these can be inspected with 5 days notice at
intervals no shorter than three (3) months. Novoste agrees to keep in
strict confidence all information learned in the course of such audits,
except when it is necessary to reveal such information in order to enforce
its rights under this Agreement. Novoste's right to have such records
examined shall survive termination or expiration of this Agreement for a
period of one (1) year. As each Phase of this Agreement shall be priced
and invoiced in a different manner, any financial audits undertaken by
Novoste, shall be done in a way that is appropriate for the type of
pricing and invoicing that was undertaken. In all events, QSA shall
promptly remit to Novoste the amount of any overpayment, plus interest at
the rate of 10% per annum from the date such payment was received by QSA
until repaid to Novoste. In addition, if the audit reveals an overcharge
of more than ten percent (10%) of the amount due, QSA shall reimburse
Novoste for the cost of the related audit and any costs incident thereto,
including attorney's fees and all costs of collection. Should such audits
reveal that QSA have undercharged Novoste, then Novoste shall promptly
remit to QSA such sums as have not been recovered.
ARTICLE 10 - ORDERS AND SHIPMENTS
10.1 Orders and Shipments
During the term of this Agreement, Novoste will forward orders to QSA by
facsimile (or other suitable means). Such orders shall include the
identity of the recipient and delivery destination. Delivery of Source
Trains to Novoste or as otherwise directed by Novoste shall be ex-Works
transport vehicle at QSA's facility in Braunschweig, Germany. Risk for the
goods shall pass to Novoste at point of delivery to the transport vehicle.
Title to the goods shall pass to Novoste upon QSA receiving payment from
Novoste.
13
During the term of this Agreement QSA shall subject to Article 27.1, meet
Novoste's orders and delivery requirements.
Prior to the first shipment of Source Trains to any third Party site, QSA
shall obtain from such third Party its license evidencing proper legal
authority for the receipt and possession of the Source Trains by such
third Party. If QSA is unable to obtain such license from the third Party,
Novoste, upon QSA's request, shall obtain and provide such evidence of
legal authority for the receipt and possession of the Source Trains by
such third Party. Novoste shall obtain all approvals, licenses and permits
required to import the Source Trains into any territory where Novoste
directs shipments to be sent.
QSA shall make shipping arrangement with carriers designated in writing by
Novoste from the ex-Works point to the delivery site. All transportation
and packaging costs incurred to deliver Source Trains ordered by Novoste
shall be borne by Novoste.
10.2 Batch Not Meeting Specifications
If either Party or its designee discovers that a Batch of Source Trains
does not meet the Specifications, then the discovering Party shall
promptly communicate in writing with the other Party to determine a
mutually agreed course of action. With respect to any such Batch of Source
Trains which do not meet Specifications, QSA will promptly:
(i) replace such Batch of Source Trains at no additional cost (with QSA
also paying all costs to deliver such replacement Batch to the
Novoste designated site);
(ii) reimburse Novoste for its actual costs incurred to return the Source
Trains to QSA and for any purchase price paid by Novoste for such
Source Trains; and
(iii) indemnify Novoste for any other costs it incurs by reason of such
Batch of Source Trains or single Source Trains not meeting
Specifications. Such costs shall exclude any loss of profits or any
other form of consequential loss.
10.3 Inventory Requirements
Within one month of the commencement of the Commercial Phase of this
Agreement, QSA shall maintain a minimum Source inventory of XXXXX Sources.
This minimum inventory stock level shall be reviewed by QSA and Novoste at
semi-
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
14
annual intervals to ensure compatibility with recent purchasing volumes.
Upon Termination of this Agreement for any reason whatsoever, Novoste
shall purchase the minimum inventory stock at QSA.
ARTICLE 11 - LICENSE
11.1 Royalty Free Licenses
Novoste hereby provides to QSA a non-exclusive, non-transferable, royalty
free license during the term of this Agreement to use Novoste Technology,
for the sole purpose of assisting QSA in carrying out its obligations set
out in this Agreement or when mutually agreed to develop and manufacture
products supporting the use of Novoste's products. QSA hereby provides to
Novoste a non-exclusive, non-transferable, royalty free license during the
term of this Agreement to the Background Technology, for the sole purpose
of assisting Novoste in carrying out its obligations set out in this
Agreement or when mutually agreed to develop and manufacture products
supporting the use of Novoste's products.
ARTICLE 12 - NOVOSTE REPRESENTATIONS AND WARRANTIES
12.1 Novoste Warranties
Novoste represents, warrants and covenants that:
(i) it has full right, power and authority to enter into this Agreement;
(ii) it is the owner or licensee, in Germany, the United Kingdom and the
United States, of the patents, data, information and technology
supplied to QSA by Novoste to assist QSA in carrying out its
obligations hereunder;
(iii) exercise of the patent(s) and technology provided by Novoste do not,
to Novoste's best information and belief, infringe any patents,
copyright or other industrial or intellectual property rights of
third parties;
(iv) it has the right to provide any license and right to permit QSA to
use the patents and technology related to the Sources provided to
the extent required to assist QSA in carrying out its obligations
under this Agreement;
(v) it has not received any notice of adverse claim or infringement of
any patent or misappropriation of trade secrets in connection with
the use and exploitation of the patents, data, information and
technology provided hereunder and related to the Sources; and
(vi) this Agreement has been duly authorized by all necessary corporate
action and constitutes a valid and binding agreement of Novoste,
enforceable in accordance with its terms.
15
The foregoing warranties shall be in lieu of and shall exclude all other
warranties (as conditions) expressed or implied, statutory or otherwise,
including any implied warranties (as conditions) of merchantability or
fitness for a particular purpose.
ARTICLE 13 - NOVOSTE'S INTELLECTUAL PROPERTY INDEMNITY
13.1 Indemnification of QSA
Novoste hereby agrees to indemnify, defend and hold QSA, its Affiliates
and all of the officers, directors, employees, and agents of QSA and its
Affiliates harmless from any and all damages directly suffered by them
arising out of or related to (a) the breach or falsity of any
representation of Novoste contained herein or (b) the negligent or willful
misconduct of Novoste or its officers, directors, employees or agents, or
(c) any breach by Novoste of its obligations hereunder.
Novoste shall indemnify and hold QSA harmless from and against any
liabilities, claims, damages and expenses (including reasonable attorney's
fees) which QSA may be compelled to pay in any judgment, claim or action
arising from infringement, of third Party copyright, patents, technology
or other intellectual property rights, resulting from QSA's use of any
data, information, technology or patents, as provided by Novoste
hereunder. QSA shall give written notice of any such legal action promptly
after QSA's first knowledge thereof. Novoste shall have sole and exclusive
control of the defense of any legal action, including the choice and
direction of any legal counsel. QSA may not settle nor compromise any
legal action without the prior written consent of Novoste. This indemnity
shall survive termination of the Agreement.
This Article shall not apply to any liability resulting from the use of
the aforementioned intellectual property for unauthorized purposes.
In the event that any portion of the Novoste Technology is, in Novoste's
reasonable opinion, likely to or does become the subject of a claim for a
patent, copyright or other industrial or intellectual property rights
infringement, Novoste reserve the right and may at its option:
(i) procure the right to continue using the technology; or
(ii) modify the technology to become non-infringing.
ARTICLE 14 - QSA'S REPRESENTATIONS AND WARRANTIES
14.1 QSA's Representations and Warranties
QSA represents, warrants and covenants that:
(i) It has full right and authority to enter into this Agreement;
16
(ii) It is the owner or has legal rights of use of its data, information
and technology contributed with respect to the Process;
(iii) The data, information and technology contributed by QSA does not, to
QSA's best information and belief, infringe any patents, copyright
or other industrial or intellectual property rights of third
parties;
(iv) It has not received any notice of adverse claim of infringement of
any patent or misappropriation of trade secret or any other
intellectual property rights in connection with the use and
exploitation of the data, information and technology used with
respect to the Process;
(v) There is no action or proceeding pending or insofar as QSA knows or
ought to know, threatened against QSA before any court,
administrative agency or other tribunal which might have a material
adverse effect on QSA's business; and
(vi) This Agreement has been duly authorized by all necessary corporate
and government action and constitutes a valid and binding agreement
of QSA, enforceable in accordance with its terms.
14.2 Source Train Product Warranty
Source Trains will be warranted by QSA as being free from any defect in
material and workmanship for a period of twelve (12) months from date of
delivery to Novoste or delivery to a third Party as directed by Novoste.
QSA will not be responsible for any other defects or damage under such
warranty including but not limited to that caused by the neglect, misuse,
abuse or alteration by Novoste or a third Party.
QSA's obligation under such warranty shall be limited solely to an
obligation to repair or replace all defective Source Trains and to pay or
reimburse associated costs or expenses reasonably incurred as a result of
such replacement, including shipping costs but not consequential losses
suffered due to delay related thereto, and to return replaced defective
sources to QSA. QSA shall be responsible for properly disposing of, or
recycle if permitted, replaced defective Source Trains all in accordance
with applicable laws and regulations.
The foregoing warranties shall be in lieu of and shall exclude all other
warranties (as conditions) expressed or implied, statutory or otherwise,
including any implied warranties (as conditions) of merchantability or
fitness for particular purpose.
At the end of each trains' useful life, Novoste will return the Source
Trains to QSA within one year after the end of the useful life for
decommissioning and storage. Such disposal and storage costs are included
in the initial purchase price of the Source Trains.
17
ARTICLE 15 - QSA'S INTELLECTUAL PROPERTY INDEMNITY
15.1 Indemnification of Novoste
QSA hereby agrees to indemnify, defend and hold Novoste, its Affiliates
and all of the officers, directors, employees and agents of Novoste and
its Affiliates harmless from any and all damages arising out of or related
to (a) the breach or falsity of any representation of QSA contained
herein, (b) the negligent or willful misconduct of QSA or its officers,
directors, employees or agents, or (c) any breach by QSA of its
obligations hereunder, including without limitation its obligation to
comply with standard operating procedures.
QSA agrees to defend, indemnify and hold Novoste, its officers, directors
and employees harmless from and against any liabilities, claims, damages
and expenses (including reasonable attorneys' fees) which Novoste and such
indemnified Parties may be compelled to pay in any judgment, claim or
action arising from infringement of third Party copyright, patents,
technology or other intellectual property rights resulting from QSA's use
under this Agreement of Background Technology. Novoste shall give written
notice of any legal action promptly after Novoste's first knowledge
thereof. QSA shall have sole and exclusive control of the defense of any
legal action, including the choice and direction of any legal counsel.
Novoste may not settle nor compromise any such legal action without the
written consent of QSA. This indemnity shall survive termination of this
Agreement.
In the event that any portion of the Background Technology developed is,
QSA's reasonable opinion, likely to or does become the subject of a claim
for a patent, copyright or other industrial or intellectual property
rights infringement, QSA reserves the right and may at its option:
(i) procure the right to continue using the technology; or
(iii) modify the technology to become non-infringing.
15.2 Arising Intellectual Property Indemnity
In the event that any portion of the technology developed under this
Agreement is, in either Parties reasonable opinion, likely to or does
become the subject of a claim for a patent, copyright or other industrial
or intellectual property rights infringement, either Party reserves the
right and may at its option:
(i) procure the right to continue using the technology; or
(ii) modify the technology to become non-infringing.
18
ARTICLE 16 - LICENSES, PATENTS AND TECHNOLOGY
16.1 Ownership of Work Performed
(i) Since all development work has been funded by Novoste, and QSA has
brought significant Background Technology, QSA and Novoste agree and
acknowledge, that any and all arising ideas, improvements,
inventions and works of authorship conceived, written, created or
first reduced to practice in the performance of this Agreement,
shall be jointly owned and be the equal property of both Novoste and
QSA. QSA on behalf of its stockholders, directors, employees,
officers, Affiliates and representatives hereby assigns to Novoste
an equal right, title and interest in and to any and all such
arising ideas, improvements, inventions and works of authorship.
Jointly Owned Arising IP includes technology related to the XXXXX
containing 90SrF2 created for the manufacture of Sources.
(ii) Notwithstanding the foregoing sub-clause (i), but subject to
sub-clause (iii) hereof, Jointly Owned Arising IP shall not include
any of the Background Technology or Novoste Technology. Further it
shall not include any modifications or improvements to Background
Technology that are conceived, written, created or first reduced to
practice by QSA during the term of this Agreement but unrelated to
the performance of this Agreement by QSA.
(iii) All data, information, or technology supplied to QSA by Novoste to
assist QSA in carrying out its obligations hereunder, shall remain
the property of Novoste and shall be returned by QSA to Novoste upon
expiration or termination of this Agreement.
(iv) QSA agrees that it will manufacture Source Trains exclusively for
Novoste. This Article will remain in effect and survive the
termination of this Agreement for an additional three years, unless
otherwise agreed in writing by Novoste,
(v) Subject to sub-clause (viii) hereto, QSA and Novoste agree that the
Jointly Owned Arising IP shall not be sold, licensed, assigned or
otherwise provided to any third party without the prior written
agreement of the other Party, provided that Novoste shall not
unreasonably withhold agreement for QSA to license a third party if
required for the purpose of exploiting any non-medical application
of the Jointly Owned Arising IP. Further, in the event that there
are medical applications for the Jointly Owned Arising IP which are
outside the scope of this Agreement the Parties shall consult and
seek to reach agreement by which such medical
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
19
applications can be jointly exploited, if possible by extending the
scope of this Agreement thereto.
(vi) Following agreement by the two Parties as to the countries in which
any patents will be filed, QSA and Novoste agree to jointly and
equally fund the filing, prosecution and maintenance of patent
applications and any other registration actions and any litigation
relating to Jointly Owned Arising IP. In the event of legal
proceedings relating to Jointly Owned Arising IP become necessary
to defend the Jointly Owned Arising IP, both Parties shall be in
agreement to take part in such proceedings, and neither Party shall
unreasonably refuse to participate in such proceedings.
(vii) QSA and Novoste agree that all potential incremental improvements
to the Jointly Owned Arising IP will be discussed in advance.
Should either Party not be interested in pursing additional medical
or industrial applications, and thus not fund such new development
areas, then the technology related to these new application areas
will be owned exclusively by the Party funding such development.
Under these circumstances the licensing of any Intellectual
Property owned by the other Party necessary for the use of such
developments shall be agreed at a reasonable market rate. Should
QSA require the use of the Equipment or Hot Cells to undertake such
development outside the medical area, then they agree to advance a
payment to Novoste of a reasonable fee for the use of the facility.
It is understood that Novoste's seed train production will always
have priority.
(viii) In the event this Agreement expires or is terminated by Novoste
under Article 21.1 or by QSA for any reason except under Article
21.1, QSA grants to Novoste a non-exclusive, non-transferable,
royalty free license to use and develop Background Technology
related to the manufacture of Source Trains. In the event Novoste
terminates this Agreement for any other reason, QSA agrees to grant
Novoste a license to the Background Technology at reasonable,
commercial terms to be agreed by the two Parties. Neither Party
shall transfer in any way rights to the Jointly Owned Arising IP to
a third party without first notifying the other Party and providing
them with the opportunity to match the terms of any such transfer.
Should the other Party decline to exercise such an option to
purchase or acquire use of the notifying Party's Jointly Owned
Arising IP then the notifying Party shall be relieved of all
obligations under this sub-clause.
16.2 Patent Applications
QSA shall prepare all papers, including patent applications, invention
assignments and copyright assignments, to perfect the rights, title and
other interests in the Jointly Owned Arising IP, and QSA, wherever
permitted under the law, shall file and execute such papers jointly in its
own name and in the name of Novoste. Reasonable costs related to such
preparation and filing shall be shared equally.
20
This Article 16 shall survive the termination of this Agreement for any
reason including expiration of the term.
ARTICLE 17 - REGULATORY MATTERS
17.1 Novoste Responsibilities
It shall be the responsibility of Novoste or its designee to file, obtain
and maintain such licenses, registrations, listings, authorizations and
approvals as the European Authority or United States Authority or any
other applicable governmental entity may require to enable use of the
Source Train in association with the Medical Device. QSA shall provide to
Novoste as requested or, at QSA's discretion directly to the regulatory
authority (in order to protect the proprietary nature of the information),
all required information in its possession necessary to assist Novoste in
filing, obtaining and maintaining all licenses, registrations, listings,
authorizations and approvals of any governmental entities necessary for
the use of Source Trains in conjunction with the Medical Device and in
order to seek marketing authorization for the Medical Device.
17.2 QSA Responsibilities
QSA shall be responsible for obtaining and maintaining all necessary
facility licenses, registrations, authorizations and approvals, other than
those required to market the Medical Device or use it in clinical trials,
which are necessary to develop, manufacture, handle, store, label,
package, dispose of, transport and ship Source Trains and radioactive
materials in the U.S., Germany, and other jurisdictions specified by
Novoste.
17.3 Governmental Inspections, Compliance Review and Inquiries
Upon request of any governmental entity or any third Party entity
authorized by a governmental entity, such entity shall, for the purpose of
regulatory review, have access to observe and inspect the Facility and
procedures used for the manufacturing, testing, storage and shipping of
Sources, including Process development operations, and to audit such
Facilities for compliance with applicable regulatory standards, and to
perform such other activity as such entity may be authorized to undertake.
QSA shall give Novoste prompt notice of any upcoming inspections or audits
by a government entity of the Facility or procedures and shall provide
Novoste with a written summary of such inspection or audit following
completion thereof. QSA agrees to use commercially reasonable efforts to
promptly rectify or resolve any deficiencies noted by a government entity
whether communicated orally, in a report or correspondence or otherwise
issued to QSA.
17.4 Access to the Facility
Novoste shall have reasonable access to the Facility and procedures:
21
(i) at least once per calendar quarter and more frequently for good
cause, for the purpose of observing the Process development relating
to the Sources, and
(ii) no more frequently than semiannually (except for good cause) for the
purpose of auditing the Facility for compliance to applicable
regulatory requirements and standards relating to the Sources and
timely performance by QSA of its obligations hereunder.
After commencement of the Commercial Phase, Novoste shall, as mutually
agreed and no less frequently than semiannually (except for good cause),
be entitled to access to the Facility for the purpose of observing any
Process development or to audit the Facility for compliance with
specifications and other regulatory requirements. QSA shall provide access
to Novoste, on a continuing basis, to all QSA protocols, standard
operating procedures and manufacturing records, as is necessary or
relevant for the development, manufacture, handling, storage, labeling,
packaging, disposing, transportation and shipment of Source Trains, which
may be required in obtaining or maintaining licenses, registrations,
authorizations and regulatory authorization of the Medical Device. All
such information disclosed to Novoste or its employees or agents, shall be
deemed to be Novoste's Confidential Information as such term is defined in
this Agreement.
17.5 Approval for Manufacturing Changes
QSA agrees that no changes will be made to any materials, Specifications,
Equipment, Hot Cell(s) or methods of production or testing the Sources,
without Novoste's prior written approval. Subsequent to such approval by
Novoste, QSA may then make such approved changes in manufacturing
procedures, so long as in any event:
(i) such changes are permitted by applicable government regulations and
the terms of any licenses, registrations, authorizations or
approvals previously granted by the applicable governmental entity
with respect to the Medical Device, and
(ii) Novoste receives copies of all documentation relating to such
approved changes.
If the changes require the additional license, registration, authorization
or approval of any applicable governmental entity in Europe, United States
or elsewhere, such changes may not be implemented until QSA receives
written notice that the governmental entity or entities has or have
authorized or approved the change. Each Party shall cooperate fully with
the other in preparing data and information for a submission requesting
prior authorization or approval of a change in materials, specifications,
equipment or methods of production or testing. However, where changes are
required to be made at the request of a regulatory body, Novoste shall not
withhold their agreement to such changes.
22
17.6 New Regulatory Requirements
Each Party shall promptly notify the other of new regulatory requirements
of which it becomes aware which are relevant to the manufacture of Sources
under this Agreement and which are required by the European Authority,
United States Authority or other applicable governmental entities and the
Parties shall confer with each other with respect to the best means to
comply with such requirements. QSA shall be responsible for implementing
and complying with any new or revised regulatory requirements arising
after the Effective Date relating to QSA's performance of this Agreement.
ARTICLE 18 - GENERAL INDEMNITY
18.1 Hold Harmless
QSA and Novoste, as the case may be, shall indemnify and hold harmless the
other from and against any and all costs, claims, judgements or other
expenses, including reasonable attorney fees, arising as a result of
damages claimed by third parties, in tort, contract or other legal theory,
or arising as a result of its violation of any applicable law or
regulation, in each case occasioned by QSA's or Novoste's negligence or
willfulness or that of their respective employees or agents, in carrying
out their obligations hereunder.
18.2 Indemnification Procedures
A Party (the "Indemnitee") which intends to claim indemnification under
this Agreement shall promptly notify the other Party (the "Indemnitor") in
writing of any action, claim or other matter in respect of which the
Indemnitee, or any of their respective directors, officers, employees or
agents intend to claim such indemnification; provided, however, the
failure to provide such notice within a reasonable period of time shall
not relieve the Indemnitor of any of its obligations hereunder except to
the extent the Indemnitor is prejudiced by such failure. The Indemnitor
shall have sole and exclusive control of the defense of any legal action,
including the choice and direction of any legal counsel. The Indemnittee
may not settle nor compromise any legal action without the written consent
of the Indemnitor The Indemnitee, and its respective directors, officers,
employees and agents shall cooperate fully with the Indemnitor and its
legal representatives in the investigation and defense of any action,
claim or other matter covered by this indemnification. The Indemnitee
shall have the right, but not the obligation, to be represented by counsel
of its own selection and at its own expense.
18.3 Survival of Article
This Article 18 shall survive the termination of this Agreement for any
reason including expiration of the term.
23
ARTICLE 19 - DISCLOSURE OF TECHNOLOGY
19.1 Disclosure
Except as otherwise set out, it is agreed that disclosure of data,
information or technology by QSA or Novoste, to the other, during the term
of this Agreement shall not, except to the extent granted herein,
constitute any grant, option or license under any patent, technology or
other rights, held by QSA or Novoste.
ARTICLE 20 - CONFIDENTIALITY
20.1 Confidentiality and Exceptions
During the term of this Agreement and for a period of ten (10) years
thereafter, each Party hereto shall maintain in confidence all technology
including Background Technology, Novoste Technology, Jointly Owned Arising
IP and know-how, data, processes, methods, techniques, formulas, test data
and other information disclosed to such Party by the other Party whether
or not it is identified as "Confidential Information" by the disclosing
Party (collectively "Confidential Information"). This obligation of
confidentiality shall not apply to the extent that it can be established
by the Party in receipt of such Confidential Information, that the
information:
i) was already known to the receiving Party at the time of disclosure;
ii) was generally available to the public or otherwise part of the
public domain at the time of its disclosure;
iii) became generally available to the public or otherwise part of the
public domain after its disclosure to the receiving Party through no
act or omission of the receiving Party;
iv) was disclosed to the receiving Party by a third Party who had no
obligation to restrict disclosure of such information; or
v) was independently developed by the receiving Party without any use
of Confidential Information of the disclosing Party.
Notwithstanding the foregoing, QSA and Novoste may both disclose
Confidential Information to an Affiliate provided that the Affiliate is
bound by confidentiality to the same extent as QSA and Novoste hereunder.
The Party disclosing Confidential Information to such Affiliate shall be
liable for any unauthorized use or disclosure of the Confidential
Information by the Affiliate.
This Article shall survive termination or expiration of this Agreement in
accordance with its terms.
24
ARTICLE 21 - TERMINATION
21.1 Termination for Breach
This Agreement may be terminated by either Party in the event of a
material breach by the other Party of the terms and conditions hereof;
provided, however, the other Party shall first give to the breaching Party
written notice of the proposed termination of this Agreement (a "Breach
Notice"), specifying the grounds thereof. Upon receipt of such Breach
Notice, the breaching Party shall have ninety (90) days to respond by
curing such breach. If the breaching Party does not cure such breach
within such cure period, the other Party may terminate the Agreement
without prejudice to any other rights or remedies which may be available
to the non-breaching Party.
21.2 Remedies Upon Termination by QSA Pursuant to Articles 21.1 or 21.3
If QSA terminates this Agreement, under Articles, 21.1 or 21.3, QSA, in
addition to any claim for damages it may have, shall be entitled to:
(i) retain all amounts paid by Novoste to QSA prior to such termination;
(ii) except for the Hot Cell(s), return to Novoste all the Equipment
which is owned by Novoste and in QSA's possession and for which
Novoste has paid all amounts due to QSA pursuant to this Agreement,
unless Novoste requests that QSA decommission the Equipment by using
the funds in the Escrow Account;
(iii) terminate all activities under this Agreement expeditiously so as to
minimize costs incurred by Novoste therefor;
(iv) deliver all completed and undelivered Sources to Novoste, or destroy
such Sources, as Novoste may elect.
(v) immediately upon such termination, except as provided elsewhere in
this agreement, terminate all licenses granted by QSA to Novoste
under this Agreement which rights shall revert back to QSA; and
(vi) where applicable receive from Novoste written confirmation that the
foregoing steps have been taken and that it has ceased using all
patents data, information, technology, trade secrets and other
intellectual property owned by QSA pursuant to this Agreement.
Novoste shall further reimburse QSA for all reimbursable costs incurred
and sums owing but not invoiced prior to the effective date of any such
termination by QSA under this Agreement. In addition, Novoste will if QSA
so opts, either promptly transfer title of the Hot Cell(s) to QSA or allow
the execution of the Decontamination and Decommissioning work by using the
funds in the Escrow Account, whereupon Novoste shall have no further
obligations under Article 6.1.
25
21.3 Bankruptcy
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated by either Party in the event the other Party
files a petition in bankruptcy, is adjudicated a bankrupt, or files a
petition or otherwise seeks relief under or pursuant to any bankruptcy,
insolvency or reorganization statute or proceeding, or if a petition in
bankruptcy is filed against it which is not dismissed within sixty (60)
days or proceedings are taken to liquidate the assets of such Party which
are not stayed within sixty (60) days. Any assets jointly owned by the two
Parties including the Jointly Owned Arising IP shall become the property
of the Party not seeking such relief.
21.4 Remedies Upon Termination by Novoste Pursuant to Article 21.1 or Article
21.3
If Novoste terminates this Agreement under Article 21.1 or under Article
21.3, or under any other provision hereof, Novoste, in addition to any
claim for damages it may have, shall be entitled to:
(i) within thirty (30) days of such termination at QSA's expense if
termination is caused by a breach of QSA's or at Novoste's if
termination is for any other reason, receive the Equipment and all
related materials, in its then current condition (subject to
decontamination);
(ii) exercise the option whether the Hot Cell(s) shall be returned to
Novoste by QSA or whether they shall be decontaminated and
decommissioned by QSA by using the funds in the Escrow Account;
(iii) receive all completed Sources which have been ordered but not
delivered;
(iv) immediately upon such termination, terminate all licenses granted by
Novoste to QSA under this Agreement which rights shall revert back
to Novoste and QSA shall then destroy all Sources Novoste elects not
to acquire; and
(v) receive from QSA written confirmation that the foregoing steps have
been taken and that it has ceased using all patents data,
information, technology, trade secrets and other intellectual
property owned by Novoste pursuant to this Agreement.
21.5 Consequences of Termination or Expiration
Notwithstanding expiration or termination of this Agreement, the
obligations of the Parties under Articles 21 shall survive termination of
this Agreement.
ARTICLE 22 - NOTICES
22.1 Within thirty (30) days after execution of this Agreement, the Parties
shall each designate a Project Manager, who shall be responsible for
coordinating communication and monitoring performance under this
Agreement. All
26
references in this Agreement to changes to the Schedules shall be
automatically approved if agreed in writing by both Parties Project
Managers.
22.2 Any notice to be sent to a Party hereunder except with regard to changes
to the Schedules hereto shall be forwarded to:
QSA at: QSA Division of AEA Technology PLC
Building 329
Harwell, Didcot
Oxfordshire, OX11 ORA
United Kingdom
Attention: Mr. Xxxx Xxxxx
with copy to: Xx. Xxxxxxxxx Xxxxx
Novoste at: Novoste Corporation
0000 Xxxxx Xxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Any notice required or authorized to be given by a Party to the other in
accordance with the provisions of this Agreement shall, unless otherwise
specifically stipulated, be in writing and delivered personally, overnight
courier or electronic facsimile confirmed by registered mail.
ARTICLE 23 - DISCLAIMER OF CONSEQUENTIAL DAMAGES
23.1 Disclaimer
In no event shall either Party be liable to the other for indirect,
contingent, incidental, special or consequential damages, including, but
not limited to, any claim for damages based on lost profits, cost of
capital, loss of business opportunity or loss of time.
ARTICLE 24 - ASSIGNMENT
24.1 No Assignment
This Agreement shall endure to the benefit of and shall be binding upon
the heirs, executors, administrators, successors and permitted assigns of
the Parties. Neither QSA nor Novoste shall assign any portion of this
Agreement without the written approval of the other Party, which approval
shall not be unreasonably withheld.
27
However, either Party has the right to assign this agreement to an
Affiliate, but in such case shall remain liable to the other Party for the
performance of its Affiliate and shall indemnify the other Party and hold
it harmless from and against all costs, claims, judgements and other
expenses arising from the Affiliate's performance or failure of
performance.
QSA shall be entitled to subcontract to third parties any of its
obligations set out in this Agreement in order to carry out its
obligations hereunder; provided, however, that QSA may not subcontract any
obligation in this Agreement unless such subcontractor shall agree to be
bound by all of the relevant provisions hereof. QSA shall remain
responsible for the performance of its subcontractors and shall indemnify
Novoste and hold it harmless from and against any and all costs, claims,
judgments or other expenses arising from any subcontractor's performance
or failure of performance.
ARTICLE 25 - COMPLIANCE
25.1 Compliance with Laws
This Agreement shall be carried out in compliance with all relevant laws,
bylaws, rules, regulations and orders of government or manifestations
thereof of Germany, the European Union and the United States.
ARTICLE 26 - NON-WAIVER
26.1 Non-Waiver of Rights
Failure by either Party to enforce at any time any of the provisions of
this Agreement shall not be construed as a waiver of its rights hereunder.
Any waiver of a breach of any provision hereof shall not affect either
Party's rights in the event of any additional breach.
ARTICLE 27 - FORCE MAJEURE
27.1 Force Majeure
Neither Party shall be liable to the other for loss or damage by virtue of
the occurrence of an event of Force Majeure. In the event of Force
Majeure, the Party affected shall promptly notify the other and shall
exert commercially reasonable efforts to eliminate, cure or overcome such
event and to resume performance of its obligations. If QSA is the Party
affected by the Force Majeure event, QSA agrees that it will resume
production of Source Trains as soon as practicable thereafter. For such
time as QSA is affected by an event of Force Majeure, Novoste is relieved
from its purchase obligations under this Agreement which purchase
commitments shall be adjusted accordingly on a pro rated annual basis.
"Force Majeure" shall mean an occurrence which prevents, delays or
interferes with the performance by a Party of any of its obligations
hereunder, if
28
such event occurs by reason of any act of God, flood, fire, explosion,
casualty or accident, or war, revolution, civil commotion, acts of public
enemies, blockage or embargo, or any law, order or proclamation of any
government not existing on the Effective Date, failure of unaffiliated
suppliers to provide materials, equipment or machinery, interruption of or
delay in transportation, strike or labor disruption, or other cause,
whether similar or dissimilar to those above enumerated, beyond the
commercially reasonable control of such Party.
ARTICLE 28 INSURANCE
28.1 Novoste Insurance
During the Term of this Agreement and for a period of four years after the
expiration or other termination hereof, Novoste shall maintain in force
and effect product liability insurance issued by a reputable insurance
company with a rating reasonably satisfactory to QSA. Such insurance shall
(a) insure against Damages resulting from or caused by (or claimed to be
resulting from or caused by) the operation or use of any Medical Devices
marketed or distributed by Novoste, and (b) shall have coverage limits of
not less than U.S. $8,000,000 per occurrence and U.S. $8,000,000 in the
aggregate. Within 15 days after the execution of this Agreement, Novoste
will deliver to QSA copies of all policies effecting such insurance (in
English) with a certificate (in English) of Novoste's insurance broker
stating that all premiums then due have been paid.
28.2 QSA Insurance
QSA agrees, at QSA's expense, to maintain general liability, business
interruption (for at least $2 million) and property and casualty insurance
covering loss or damage to:
(i) the Facility;
(ii) any asset owned by Novoste in the possession of QSA under this
Agreement, including the Hot Cell(s) and Equipment; and
(iii) QSA's facility located at Braunschweig, Germany, as the case may be.
Such insurance policy shall designate Novoste as loss payee in the event
of any loss or damage involving any asset owned by Novoste and shall name
Novoste as an additional insured. QSA agrees that such insurance shall be
replacement value insurance for all property owned by Novoste. QSA shall,
upon request, provide to Novoste a certificate of insurance designating
Novoste as loss payee in event of any loss or damage covered by sub-clause
(ii) of this Article, provided that any proceeds so received as a result
of less than a total loss shall be used to repair such damaged or
destroyed assets, including, but not limited to, the Hot Cell(s) and the
Equipment. Any insurance proceeds held by QSA pursuant to this Article
shall be used to repair or replace such damaged Facility and QSA shall
give Novoste thirty (30) days advance notice of any termination or
cancellation of such
29
coverage. This Article shall survive termination of this Agreement with
respect to sub-clause (ii) of the first sentence of this Article.
In addition, during the Term of this Agreement and for a period of four
years after the expiration or other termination hereof, QSA shall maintain
in force and effect product liability insurance issued by a reputable
insurance company with a rating reasonably satisfactory to Novoste. Such
insurance shall (a) include coverage insuring against Damages resulting
from or caused by (or claimed to be resulting from or caused by) the
operation or use of any Source shipped or repaired by QSA (b) shall have
coverage limits of not less than U.S. $8,000,000 per occurrence and U.S.
$8,000,000 in the aggregate, and shall name Novoste as an additional
insured. Within 15 days after the execution of this Agreement, QSA will
deliver to Novoste copies of all policies effecting such insurance (in
English) with a certificate (in English) of QSA's insurance broker stating
that all premiums then due have been paid.
ARTICLE 29 SEVERABILITY
29.1 Invalid Provisions
If any provision or term of this Agreement is found unenforceable under
any of the laws or regulations applicable thereto, all other conditions
and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the Agreement or
transactions contemplated herein are not affected in any manner materially
adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties
hereto shall negotiate in good faith to modify this Agreement to effect
the original intent of the Parties as closely as possible in a mutually
acceptable manner, in order that the transaction contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
ARTICLE 30 GENERAL
30.1 Entire Agreement
This Agreement, including the Schedules hereto which are incorporated
herein, constitute the entire agreement of the Parties with respect to the
subject matter hereof and supersedes all proposals, oral or written, and
all negotiations, conversations, or discussions. This Agreement may not be
modified, amended, rescinded, canceled or waived, in whole or in part,
except by written amendment signed by both Parties hereto.
30.2 Publicity
The Parties agree that, except as may otherwise be required by applicable
laws, regulations, rules or orders, no information concerning this
Agreement and the transactions contemplated herein shall be made public by
either Party without the prior written consent of the other, which consent
shall not be unreasonably
30
withheld. In the event either Party decides to issue a press release
announcing the execution of this Agreement, it shall not do so without the
prior written approval of the other Party.
A copy of any proposed press release shall be provided to the other Party
at least three (3) business days prior to any proposed dissemination. The
Parties agree that they will use reasonable efforts to coordinate the
initial announcement or press release relating to the existence of this
Agreement.
30.3 Export Control
The Parties understand that materials and information resulting from the
performance of this Agreement may be subject to export control laws and
that each Party is responsible for its own compliance with such laws.
Novoste agrees that the cost of exporting Sources from Germany at its
request shall be the responsibility of Novoste.
30.4 Dispute Resolution
(i) In the event that, at any time during the term of this Agreement, a
disagreement, dispute, controversy or claim should arise relating to
scientific or technical issues in connection with QSA's performance
under this Agreement, the Parties will attempt in good faith to
resolve their differences for sixty (60) days. If, after sixty (60)
days, the Parties are unable to resolve such dispute, the Parties
shall refer the matter to a third Party consultant with expertise in
the scientific or technical area of dispute for sixty (60) days. In
the event such consultant is unable to work out a resolution of the
issue with the Parties, the Parties shall within 30 days submit the
matter to binding arbitration in Frankfurt, Germany to be undertaken
pursuant to the applicable rules of the London Court of
International Arbitration.
(ii) In the event that, at any time during the term of this Agreement, a
disagreement, dispute, controversy or claim should arise out of or
relating to the interpretation of or performance under this
Agreement, or the breach, or invalidity thereof other than a dispute
relating to scientific or technical issues in connection with QSA's
performance under this Agreement covered by Article 30.4 sub-clause
(i) above, the Parties will attempt in good faith to resolve their
differences by referring the matter to the Chief Executive Officers
of the Parties (or their designees) for sixty (60) days, following
which if the matter is not resolved it will be submitted to
alternative dispute resolution in Frankfurt, Germany to be
undertaken pursuant to the applicable rules of the London Court of
International Arbitration.
(iii) The dispute resolution tribunal shall be composed of three
arbitrators. The language of the arbitration shall be English. Under
the LCIA Rules which are deemed to be incorporated by reference into
this Agreement, the arbitrators shall resolve any dispute arising
out of or in connection with this Agreement, including any questions
regarding its existence, validity or termination.
31
30.5 Essence
Time is of the essence in this agreement.
ARTICLE 31 - APPLICABLE LAW
31.1 Applicable law
This Agreement shall be governed and construed in accordance with the laws
of Germany. The Convention on the International Sale of Goods of April 11,
1980 (CISG) and the German Law transforming the CISG into national law
shall not apply.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of
the date first above written.
AEA TECHNOLOGY QSA GMBH
By:________________________________
Xxxxxxx Xxxxxxxxx
Geschaftsfuhrer
NOVOSTE CORPORATION
By:_________________________________
Xxxxx X. Xxxx
Chief Operating Officer
32
Schedule A
Development Phase
XXXXX
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
33
Schedule B
Facility Description
As per the following Xxxxx chart and detailed Project Cost Estimate.
It is recognized by both Parties that the chart details may change if any of the
other schedules change as a result of mutual agreement, confirmed in writing,
between the parties.
XXXXX
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
34
Schedule C
PRODUCT DESCRIPTION
The BETA-CATH(TM) System was developed to reduce the incidence of coronary
artery restenosis following angioplasty through the delivery of a prescribed
dosage of beta radiation to the balloon injury site. It is an integrated system
comprised of three separate components: the Delivery Catheter, the Transfer
Device, and the Radiation Source Train. However, the System will most likely be
sold or leased as only two discrete units of sale: 1) the Delivery Catheter and
2) the Transfer Device containing the Radiation Source Train.
Delivery Catheter
The Delivery Catheter is an invasive device which provides access to the site of
balloon injury and the path through which the Radiation Source Train is
delivered to the angioplasty treatment site in the coronary artery. The current
catheter design is a triple lumen, 5Fr, single extrusion. The three lumens (the
Source Train lumen, the hydraulic return lumen and the guidewire lumen) allow
for the transfer of the guide-wire and Radiation Source Train, as well as
providing a closed hydraulic return loop. The catheter design consists of a
rapid-exchange design for the guide-wire lumen primarily for the European
market, known as the Beta-Rail(TM), and an over-the-wire design for the US
market, known as the Beta-Cath(TM).
Transfer Device
The ergonomically-designed Transfer Device houses the Radiation Source Train and
controls the hydraulics during the radiation treatment procedure. The handheld
Transfer Device holds the Radiation Source Train until the user depresses a
syringe attached to the Transfer Device; this action hydraulically delivers the
Radiation Source Train to the treatment zone within the Delivery Catheter. At
the end of the treatment, the switching mechanism in the Transfer Device allows
the hydraulic pressure to propel the Radiation Source Train back into the
Transfer Device. The Transfer Device has also been designed to protect
healthcare workers and patients from significant unintended radiation exposure.
Source Train
The Source Train consists of a series of independent cylindrical sources, with
an inactive gold marker at each end, providing the radiation dosage for the
treatment procedure. Each source is composed of radioactive materials (Sr90/Y90)
XXXXX. XXXXX. The Source Train will be contained within the Transfer Device when
it is sold commercially and will be offered in 30mm, 40 mm, 50 mm and 60mm
lengths.
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
35
Additional components that may be required to use the system are:
- sterile sheaths
- three-ring syringes
- fluid collection bags
- sterile saline
- stopwatch timer
- extension tubing
- stopcocks
- Luer extension connectors
- Response Kit
- Bailout Box
- Survey meter (generally exists in Radiation Oncology)
36
Schedule D
Source and Source Train Specifications
XXXXX
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
37
Schedule E
Pricing
XXXXX
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential treatment.
38
