Sales Agency and Services Agreement - Siemens Medical Solutions USA Inc., CTI Molecular Imaging Inc. and CTI PET Systems Inc.
SALES AGENCY AND SERVICES AGREEMENT
BY AND BETWEEN
SIEMENS MEDICAL SOLUTIONS USA, INC.,
CTI MOLECULAR IMAGING, INC.,
AND
CTI PET SYSTEMS, INC.
May 1, 2004
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 APPOINTMENT ...................................................2
1.1 Appointment ...................................................2
1.2 Authority .....................................................2
1.3 CPS Products ..................................................2
1.4 Sales Force ...................................................2
ARTICLE 2 GENERAL OBLIGATIONS OF CTI, SIEMENS AND CPS ...................3
2.1 Marketing .....................................................3
2.2 Documentation and Reports .....................................3
2.3 License to Product Technology .................................4
2.4 Obligations of Siemens ........................................4
2.5 Obligations of CPS ............................................5
2.6 Product Financing .............................................6
2.7 Initial Transfer Price Reductions .............................6
2.8 Additional Transfer Price Reductions ..........................6
2.9 Scope .........................................................7
2.10 Periodic Transfer Price Review ................................7
ARTICLE 3 ORDERS FOR CPS PRODUCTS .......................................7
3.1 Purchase Orders ...............................................7
3.2 Submission of Purchase Orders to Siemens ......................7
3.3 Acceptance of Purchase Orders .................................7
3.4 Sales Revenue .................................................8
3.5 Installation and Training .....................................8
3.6 Backlog .......................................................8
3.7 Sales Funnel ..................................................8
ARTICLE 4 EXPENSES ......................................................8
4.1 Expenses ......................................................8
4.2 Evaluation of CRPs ............................................9
4.3 Inspection ...................................................10
ARTICLE 5 TRADEMARKS ...................................................10
5.1 Siemens Brand ................................................10
5.2 CTI Products .................................................11
5.3 CPS ..........................................................11
ARTICLE 6 TAXES, IMPORT, EXPORT ........................................11
6.1 Sales and Related Taxes ......................................11
6.2 Employment Taxes .............................................11
ARTICLE 7 SERVICE AND WARRANTY .........................................12
7.1 Service Contracts ............................................12
7.2 Service Contract Transfers ...................................13
7.3 Service Contract Disputes ....................................13
7.4 First Year Warranty ..........................................13
7.5 Existing Service Contracts; Installed Base ...................13
ARTICLE 8 INTERNATIONAL EXPANSION ......................................14
8.1 Assignment of Service Contracts ..............................14
- i -
<PAGE>
8.2 Limitation ...................................................14
8.3 Restrictive Covenant .........................................15
8.4 Termination of Restrictions ..................................15
ARTICLE 9 SALE OF CTI PRODUCTS .........................................15
9.1 Siemens as Representative ....................................15
9.2 Exclusivity ..................................................15
9.3 Procedures ...................................................16
9.4 Packaging of CTI Products with Siemens Products ..............16
9.5 Commission ...................................................16
9.6 Mirada License ...............................................16
9.7 Further Cooperation ..........................................16
ARTICLE 10 TERMINATION ..................................................16
10.1 Term .........................................................16
10.2 Termination for Cause ........................................17
10.3 Termination Upon a Force Majeure Event .......................17
10.4 Termination by Mutual Agreement ..............................18
10.5 Termination Upon Exercise of Option ..........................18
10.6 Obligations Upon Termination .................................18
10.7 Distribution of CPS Products .................................18
ARTICLE 11 LIMITS ON DAMAGES AND INSURANCE ..............................18
11.1 Limitation of Damages ........................................18
11.2 Insurance ....................................................19
ARTICLE 12 DISPUTE RESOLUTION ...........................................19
12.1 Arbitration ..................................................19
12.2 Release of Siemens by CTI ....................................19
12.3 Release of CTI by Siemens ....................................19
12.3 Release of by CPS ............................................20
12.5 Denial of Admissions .........................................20
12.6 Sale of Workstations .........................................20
ARTICLE 13 ADDITIONAL COVENANTS .........................................20
13.1 Further Assurances ...........................................20
13.2 Assignment of Contracts ......................................20
ARTICLE 14 MISCELLANEOUS ................................................21
14.1 Relationship .................................................21
14.2 Force Majeure Provision ......................................21
14.3 Assignment ...................................................22
14.4 Notices ......................................................22
14.5 Entire Agreement .............................................23
14.6 Amendment ....................................................23
14.7 Publicity ....................................................23
14.8 Severability .................................................23
14.9 Counterparts .................................................24
14.10 Waiver .......................................................24
14.11 Authorization and Execution ..................................24
14.12 Confidentiality ..............................................24
- ii -
<PAGE>
14.13 Survival .....................................................25
14.14 Governing Law ................................................25
- iii -
<PAGE>
SALES AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is entered into and effective as of
the 1st day of May, 2004 (the "EFFECTIVE DATE") by and between SIEMENS MEDICAL
SOLUTIONS USA, INC., a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter "SIEMENS"), CTI MOLECULAR IMAGING, INC., a
corporation duly organized and existing under the laws of the State of Delaware
(hereinafter "CTI"), and CTI PET SYSTEMS, INC., a corporation organized and
existing under the laws of the State of Tennessee (hereinafter "CPS").
PREAMBLE
WHEREAS, CTI Group, Inc., CPS, Dr. Terry D. Douglass, Dr. Ronald Nutt,
Michael C. Crabtree and J. Kelly Milam and Siemens entered into a stock
purchase, reorganization and joint venture agreement (the "JOINT VENTURE
AGREEMENT") dated as of December 9, 1987;
WHEREAS, Siemens entered into an Amended Distribution Agreement with
CPS effective March 1, 2002 pursuant to which Siemens has the right to
distribute certain of the products manufactured by CPS (the "DISTRIBUTION
AGREEMENT");
WHEREAS, CTI entered into a Distribution Agreement with CPS effective
March 1, 2002 pursuant to which CTI has the right to distribute certain of the
products manufactured by CPS (the "CTI DISTRIBUTION AGREEMENT" and together with
the Distribution Agreement, the "DISTRIBUTION AGREEMENTS");
WHEREAS, CPS is engaged in the development, manufacture, assembly,
selling and licensing of hardware, software, systems and equipment, and parts
and components thereof, used in the positron emission tomography ("PET")
business for human imaging;
WHEREAS, CTI possesses the necessary expertise and marketing
organization to promote sales of, and to solicit and obtain purchase orders for,
such products and to provide other related services to Siemens in connection
therewith;
WHEREAS, Siemens is willing to appoint CTI, and CTI is willing to
accept its appointment, as the non-exclusive sales representative of Siemens for
the sale of those products manufactured by CPS in the United States upon the
terms and conditions set out in this Agreement; and
WHEREAS, the service and maintenance contracts with customers for CPS
Products sold under this Agreement shall be assigned between CTI and Siemens in
accordance with the principles set out in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
hereinafter set forth, the parties agree as follows:
<PAGE>
ARTICLE 1
APPOINTMENT
1.1 Appointment. During the term of this Agreement and upon the terms
and conditions set forth herein, Siemens appoints CTI as its non-exclusive sales
representative to solicit purchase orders ("PURCHASE ORDERS") to be entered into
by Siemens with customers for the sale of CPS Products (as defined in Section
1.3) throughout the United States (the "TERRITORY"), and CTI accepts such
appointment and agrees to conduct such activities in accordance with the terms
and provisions of this Agreement.
1.2 Authority.
(a) CTI's authority hereunder shall be to solicit Purchase Orders
within the Territory; provided, that all such Purchase Orders shall be subject
to acceptance by Siemens as provided in Section 3.3 hereof.
(b) Except as set forth in Section 3.1 and Section 7.1 hereof, CTI
and its employees, agents or contractors shall have no authority, and each shall
not represent that it has the authority to make, execute or enter into any
agreement or to incur any indebtedness on behalf of Siemens.
(c) Except as set forth herein, CTI and its employees, agentsor
contractors shall make no payment, rebate, offer of rebate, or other
remuneration, directly or indirectly, to any customer or third party, including,
without limitation, any buyers, brokers, or employees or agents thereof from any
compensation or other consideration paid to or provided to CTI by or on behalf
of Siemens.
1.3 CPS Products. Subject to the terms of this Agreement, CTI shall
have the right to sell throughout the Territory the products manufactured by or
offered for sale by CPS from time to time (the "CPS PRODUCTS"), including but
not limited to any software embedded therein or otherwise described therewith,
and spare and replacement parts and accessories for those CPS Products. The
parties agree that at all times CTI shall have the right to sell, on behalf of
Siemens, all products that Siemens is permitted to distribute on behalf of CPS
pursuant to the terms of the Distribution Agreement. Subject to Section 5.1 of
this Agreement, all CPS Products shall be marketed under the Siemens brand.
1.4 Sales Force. As soon as reasonably practicable after the
Effective Date, Siemens and CTI jointly shall appoint a Sales Management
Committee (the "SALES MANAGEMENT COMMITTEE") which shall be composed of six
members, with three representatives each from Siemens and CTI. The presence of
two Siemens representatives and two CTI representatives shall constitute a
quorum for meetings of the Sales Management Committee. Through the Sales
Management Committee, the parties shall determine the appropriate composition,
reporting structure and the assignment of regions into which their respective
sales forces shall be combined.
-2-
<PAGE>
ARTICLE 2
GENERAL OBLIGATIONS OF CTI, SIEMENS AND CPS
2.1 CTI Sales Activities. At all times during the term of this
Agreement CTI, as Siemens's non-exclusive sales representative, shall:
(a) diligently promote sales of the CPS Products in the Territory;
(b) maintain in the Territory an adequately trained sales force
knowledgeable of the CPS Products as is reasonably necessary to perform its
obligations hereunder, and manage its sales force personnel as "product sales
engineers" (as that term is understood by Siemens on the Effective Date) in
support of Siemens's account executives;
(c) participate, as is appropriate and in compliance with
applicable legal requirements, in appropriate sales, promotion, marketing or
merchandising programs in the Territory prepared or undertaken by or on behalf
of Siemens;
(d) participate in, and consult with Siemens and its designated
agents, regarding trade shows and exhibitions in the Territory where such
participation will promote the CPS Products;
(e) as applicable, refer prospective customers to the designated
Siemens representative to obtain financing for the purchase of CPS Products,
subject to the provisions of Section 2.6 below.
2.2 Documentation and Reports. CTI shall prepare or cause to be
prepared, keep, maintain and provide Siemens with the following documentation
and reports in a form and format reasonably acceptable to Siemens:
(a) periodic (though no less often than quarterly) reports of sales
activities of CTI within the Territory identifying, among other things, actual
purchasers of the CPS Products and active prospective purchasers, actual or
pending orders, contact and other relevant lead information for each customer
and active prospect, and any other information or data as mutually agreed upon
from time to time by Siemens and CTI;
(b) non-confidential business records customarily maintained by CTI
with respect to CTI's solicitation of Purchase Orders;
(c) information, in such reasonable detail as requested by Siemens,
regarding market conditions and product performance;
-3-
<PAGE>
(d) a forecast for the number and type of units that will be sold
the following fiscal year, by no later than May 15 of each year; and
(e) such other matters as reasonably requested by Siemens.
2.3 License to Product Technology. Subject to the terms and conditions
of this Agreement, CPS grants to CTI a non-exclusive license in the Territory to
use the Product Technology (as defined below) to the extent reasonably necessary
for CTI to promote and solicit Purchase Orders for the Products and to service
and support the Products in order to allow CTI to fulfill its obligations under
this Agreement. This license is royalty-free and non-transferable except as
permitted by Section 14.3. "PRODUCT TECHNOLOGY" shall mean all computer software
code (in object code format and including all associated tool sets) and other
technology and know-how comprised within the Products as well as any service
manuals and user documentation that is generally provided by CPS to its
customers and similarly situated distributors. All rights in and to the Product
Technology not expressly granted in this license shall be retained by CPS.
2.4 Obligations of Siemens. At all times during the term of this
Agreement, Siemens shall support marketing of the CPS Products by:
(a) Providing product managers to support the combined CTI-Siemens
sales force (created pursuant to Section 1.4 of this Agreement) with regard to
technical matters within their expertise;
(b) Providing product demonstrators to demonstrate CPS Products,
including both software and hardware aspects of them;
(c) Developing sales tools and sales aids, including, among other
things, case studies, cost analyses, and competitive analyses;
(d) Promoting the unique capabilities of CPS Products using LSO
HI-REZ technologies and other pertinent technologies that may be developed (and,
if necessary, approved by the FDA) for use in CPS Products during the term of
this Agreement;
(e) Promoting the use of CPS Products in relevant medical
disciplines including, but not necessarily limited to, oncology, cardiology, and
neurology (the "KEY DISCIPLINES"), and further development of each Key
Discipline as a market for CPS Products and other CTI and Siemens products and
services;
(f) Placing advertisements in applicable journals and publications,
emphasizing those journals and publications pertaining to the Key Disciplines;
(g) Attending and participating in appropriate trade shows
pertaining to the PET industry or any of the Key Disciplines;
-4-
<PAGE>
(h) Ensuring equal representation of CTI and Siemens personnel and
shared presentation space at all trade shows attended, unless otherwise agreed
by the parties;
(i) Together with CPS, developing medical advisory boards for each
of the three Key Disciplines;
(j) Together with CPS, developing luminary and reference-site
accounts for PET and PET/CT;
(k) Participating in research projects with luminaries, including
commitments to make research contributions to luminaries from time to time in
connection with such research projects, subject to applicable legal requirements
and Siemens internal policies governing the funding of research grants; and
(l) Supporting and promoting to Siemens customers and Siemens
corporate accounts, in accordance with Article 9 of this Agreement, the products
and services manufactured, distributed, and/or provided by CTI and its
subsidiaries (including P.E.T.Net Pharmaceuticals, Inc., a Tennessee corporation
("PETNET")), including radiopharmaceuticals (as defined in Section 9.1 below),
cyclotrons, sources, and REVEAL(TM) Marketing and Network Solutions worldwide.
2.5 Obligations of CPS. During the term of this Agreement, CPS shall
use commercially reasonable efforts to support Siemens marketing of the CPS
Products by:
(a) Providing product managers to support Siemens' product managers
or, in lieu of providing product managers, providing adequate access for Siemens
product managers to CPS' engineering and
research personnel;
(b) Providing product demonstrators to demonstrate CPS Products,
including both software and hardware aspects of them, to Siemens product
managers and training personnel;
(c) Providing sufficient technical information, operational details
and technical analyses for Siemens to develop competitive arguments, sales tools
and promotional materials for sales of CPS Products;
(d) Continuing to develop competitive products or features to
further advance the technology or address competitive pressures created by the
technology or features developed by competitors;
-5-
<PAGE>
(e) Maintaining adequate product planning processes, soliciting
comments or feedback on development needs from Siemens and, if determined
appropriate by CPS after consultation with Siemens, responding to or
implementing such comments or feedback;
(f) Maintaining good quality standards and order completeness,
including review of quality records with Siemens periodically;
(g) Providing adequate training, tools and methods to facilitate
deployment and installation of and applications training for the CPS Products by
Siemens personnel;
(h) Providing support for research projects with luminary and
reference site accounts designated by CPS, including financial support in an
amount and to the extent deemed necessary or appropriate to further the
interests of CPS; and
(i) Evaluating requests from Siemens from time to time to provide
support to facilitate development of e.soft(TM) applications and integration and
connectivity of scanner data with other e.soft(TM) and e.soft@LEONARDO(TM)
workstations or other Siemens products or applications; provided, that any such
support will be provided by CPS to Siemens only upon their mutual agreement (and
in each party's respective exercise of its sole discretion) and subject to
availability of resources and other matters relating to the feasibility of
providing such support.
2.6 Product Financing. Siemens shall have the right of first refusal to
provide financing arrangements to purchasers of the CPS Products from CTI
pursuant to this Agreement; provided, that the financing terms and product
offering shall be no less favorable to the CTI sales team than Siemens provides
to its own sales team. If Siemens is unwilling or unable to provide financing on
a timely basis for a prospective purchaser, CTI will be permitted to refer such
customer to alternative financing sources.
2.7 Initial Transfer Price Reductions. For all orders for CPS Products
received by CPS after the Effective Date, the parties agree that (i) the
component prices for which CTI supplies LSO and Siemens supplies CTs to CPS
shall be reduced by the amounts set forth on Schedule 2.7 attached hereto, and
(ii) such component price reductions shall be passed to Siemens in their
entirety by reducing the Transfer Prices (as that term is defined in the
Distribution Agreement) by the sum of such amounts, as also set forth on
Schedule 2.7. The parties agree that Exhibit D to the Distribution Agreement
shall be substituted with a revised Exhibit D in substantially the form of
Schedule 2.7.1 reflecting the initial transfer price reductions.
2.8 Additional Transfer Price Reductions. Following the initial
transfer price reductions contemplated in Section 2.7 above, CPS agrees to
further reduce the transfer prices for the Siemens/CPS PET/CT products in its
product line in the amount of $* per system as reflected on Schedule 2.8
attached hereto (the "ADDITIONAL TRANSFER PRICE REDUCTIONS"), subject to the
receipt by CPS of an additional transfer price reduction of $* per unit from the
Siemens CT division (i.e. $* from CPS and $* from Siemens CT). The Additional
Transfer Price Reductions will become effective with the order of the * unit
from Siemens to CPS after October 1, 2003 which shall include CPS Products
ordered from CPS to fill Purchase Orders generated by CTI after May 1, 2004
pursuant to this Agreement.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has
been filed separately with the Securities and Exchange Commission.
-6-
<PAGE>
2.9 Scope. The initial transfer price reductions and the Additional
Transfer Price Reductions contemplated in Sections 2.7 and 2.8 above shall apply
to Siemens global sales of CPS Products.
2.10 Periodic Transfer Price Review. Upon Siemens's written request
given not more frequently than *, CPS and Siemens shall review CPS's Transfer
Prices (as that term is defined in the Distribution Agreement). Following such
review, Siemens shall have the right to provide its recommendations as to
appropriate adjustments to such Transfer Prices. All determinations regarding
the setting or the changing of Transfer Prices shall be made by CPS as provided
in the Joint Venture Agreement, and no provision of this Section 2.10 shall
restrict CPS's discretion in making such determinations.
ARTICLE 3
ORDERS FOR CPS PRODUCTS
3.1 Purchase Orders. CTI shall solicit Purchase Orders solely on the
basis of the terms and conditions of sale (the "TERMS OF SALE") by utilizing the
established standard sales processes of Siemens. In order to determine the price
to customers, CTI's sales agents shall use the list prices as published in the
Siebel quote system utilizing the same prizing authorities and escalation
processes as the Siemens personnel. Siemens shall implement its pricing policies
fairly between the Siemens and CTI sales organization so that neither party is
disadvantaged in pursuing opportunities in the marketplace. Where appropriate,
CTI shall inform each prospective customer that consummation of the sale is
subject to Siemens' acceptance of the Purchase Order.
3.2 Submission of Purchase Orders to Siemens. Within one (1) business
days after CTI has obtained a signed Purchase Order from a prospective customer,
CTI shall submit the Purchase Order to Siemens for review and approval. CTI
shall include any additional information regarding the prospective customer or
the order that Siemens reasonably may request.
3.3 Acceptance of Purchase Orders. All Purchase Orders submitted by CTI
are subject to acceptance in writing by Siemens in accordance with its corporate
policy. Siemens shall determine whether or not it will accept a Purchase Order
within two (2) business days of receiving the Purchase Order and any additional
information from CTI. Siemens promptly thereafter shall deliver notice of its
decision in writing to CTI. Siemens shall be obligated to accept all Purchase
Orders submitted by CTI that have been approved through the Siemens standard
order acceptance process, which applies for all business conducted by Siemens in
the Territory. If the Purchase Order requires financing, then the Purchase Order
will be conditionally accepted based on financing approval.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has
been filed separately with the Securities and Exchange Commission.
-7-
<PAGE>
3.4 Sales Revenue. Sales revenue under this Agreement shall accrue to
Siemens in full, in accordance with generally accepted accounting principles.
3.5 Installation and Training. Siemens shall be responsible for
installation and initial applications training through formal customer
acceptance of the sold CPS Products. CTI agrees to provide installation support
and initial applications training during the first six (6) months of the term of
this Agreement, at a price to be mutually agreed by CTI and Siemens. Pricing
shall be comparable to current pricing presently offered by CTI and/or Siemens.
Wherever possible during the first six (6) months of the term of this Agreement,
the party awarded the Service Contract for a CPS Product under the provisions of
Article 7 will perform installation and training; and, if such party is CTI,
then Siemens will pay to CTI $* per CPS Product, equal to the first-year
warranty labor credit extended to Siemens under the provisions of the
Distribution Agreement.
3.6 Backlog. The completion of firm Purchase Orders which have been
executed by the customer prior to the Effective Date but for which delivery has
not yet taken place (the "BACKLOG ORDERS") shall be carried out by Siemens or
CTI, whichever originally entered into the Purchase Order.
3.7 Sales Funnel. On or before June 1, 2004, representatives of CTI and
Siemens shall review all unexpired quotes that are in the course of being
negotiated by CTI that were outstanding as of the Effective Date (the "FUNNEL
ORDERS"). CTI shall enter into all Funnel Orders, from time to time after the
Effective Date, in the ordinary course of business. Based on its review of the
Funnel Orders with CTI, Siemens shall select such of the Funnel Orders as meet
Siemens' standards for acceptance, whereupon CTI and Siemens shall work together
to effect a transition of the relationship from CTI to Siemens in a manner that
meets the individual needs of the customer. CTI shall carry out all Funnel
Orders (a) not selected by Siemens in accordance with the foregoing, or (b)
selected by Siemens, but as to which a transition approach acceptable to the
customer is not achieved.
ARTICLE 4
EXPENSES
4.1 Expenses.
(a) Not later than one hundred fifty (150) days prior to the end of
each CTI fiscal year, CTI shall prepare and present to Siemens a proposed annual
operating and capital budget (the "BUDGET") for the expenses to be reimbursed by
Siemens pursuant to Section 4.1(b) hereof ("REIMBURSABLE EXPENSES") during the
following CTI fiscal year. Siemens shall have thirty (30) days in which to
review the Budget and communicate any material objections or requested changes
to the Budget in writing to CTI in reasonable detail. CTI and Siemens shall work
together to promptly respond to any objections and requested changes submitted
by Siemens. Siemens and CTI shall mutually agree upon a Budget by no later than
June 20 of each year; provided, that if Siemens and CTI are unable to approve a
Budget by the beginning of CTI's fiscal year, then until an agreement is reached
the Budget for the prior year shall be deemed to be adopted as the Budget for
the current year, with each line item, as applicable, in the Budget increased by
the percentage increase in the Consumer Price Index - All Urban Consumers
(CPI-U) U.S. City Average All Items 1982-84=100 from August of the prior year to
August of the current year.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has
been filed separately with the Securities and Exchange Commission.
-8-
<PAGE>
(b) Siemens shall reimburse CTI for all direct expenses incurred by
CTI with respect to the Account Managers employed by CTI who assist in the
sales, marketing and account management for the CPS Products and related
administrative support personnel (the "ACCOUNT MANAGERS"), including without
limitation (i) payroll, wages, salaries and benefits; and (ii) travel, lodging
and related expenses; except employment taxes, which will be paid as provided in
Section 6.2.
(c) On the tenth (10th) day following the end of each month during
the term of this Agreement, CTI shall submit to Siemens an invoice identifying
the amount of Reimbursable Expenses incurred in the previous month. Within
thirty (30) business days following the date of such invoice, Siemens shall pay
to CTI in cash via wire transfer to an account designated by CTI the amount set
forth on such invoice.
(d) The expenses to be incurred by Siemens pursuant to this Section
4.1 shall not exceed $* for the period from the Effective Date to September 30,
2004.
(e) Contemporaneously with the execution of this Agreement, CTI has
provided to Siemens, and Siemens has approved, a budget for the fiscal year from
October 1, 2004 to September 30, 2005 reflecting annual expenses of not more
than $*.
4.2 Evaluation of CRPs.
(a) The Parties agree that the average customer realized prices for
the CPS Product configuration set forth on Schedule 4.2 hereof (the "CRPS") will
be reviewed no later than October 31, 2004 for the five months ending September
30, 2004 (the "REVIEW PERIOD") in order to determine whether, over the Review
Period, the CRPs on sales of CPS Products in the United States exceed the
following target CRPs for substantially similar product configurations:
2-slice PET/CT . . $*
6-slice PET/CT . . $*
16-slice PET/CT . . $*
The Parties agree that the analysis of sales during the Review Period will
include only those transactions that were entered into after the transfer price
reductions became effective, regardless of shipment date. In the event the
average CRPs exceed the target CRPs set forth above for CPS Products installed
in the United States, Siemens and CTI shall each receive 50% of such excess with
such payment, if any, to be made within thirty (30) days of the turnover and
acceptance by customer. A similar review will be conducted each fiscal quarter
during the term of this Agreement commencing October 1, 2004. The parties agree
that the target CRPs will be reduced dollar-for-dollar with any transfer price
reductions implemented after the initial transfer price reduction referred to in
Sections 2.7 and 2.8 hereof.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has
been filed separately with the Securities and Exchange Commission.
-9-
<PAGE>
(b) Transfer Price Relief to Luminaries. Siemens and CPS
acknowledge that certain sales to key accounts and other key market
opportunities ("luminaries") may from time to time necessitate a further
reduction in CRPs for commercial reasons. The parties agree that CPS shall be
free to reduce its transfer prices within the limited scope of making sales to
such luminaries, such decision to be based upon reasonable business factors.
Accordingly, the parties agree that CRPs arising from such transactions shall be
excluded from the calculation contemplated in Section 4.2(a) above. The CRPs for
all sales of PET and PET/CT products in multi-modality deals where the CPS
volume is less than *% of the total order volume also will be excluded from the
calculation contemplated in Section 4.2(a) above. The Parties shall designate
one representative from each of their finance organizations to evaluate and
agree on those transactions that should be excluded from the foregoing
calculation. In the event the finance teams fail to agree, the disputed
transactions shall be escalated to the President of each Party for a decision,
prior to submission to arbitration in accordance with Section 12.1 of this
Agreement. In order to facilitate proactive decision making, once per fiscal
quarter the combined Siemens and CTI sales forces will develop a list of the
luminary accounts to be targeted, as a 12-month rolling forecast.
4.3 Inspection. CTI shall have the right, exercisable twice per fiscal
year upon five (5) business days notice to Siemens, to inspect at Siemens'
headquarters for a period of no longer than three (3) business days the customer
account information, financial records, service contracts, books, reports, and
other documents prepared, maintained or retained by Siemens that support the
calculation of CRPs contemplated in Section 4.2 hereof and the additional
payments, if any, to be made, as well as the allocation of service contracts
contemplated in Section 7.1 below. If Siemens reasonably determines that the
dates initially chosen by CTI to perform the inspection would unreasonably
interfere with Siemens's business, then Siemens and CTI shall select new dates
for the inspection by mutual agreement. CTI agrees that it shall hold in
confidence and treat as confidential all confidential information received from
Siemens pursuant to this Section 4.3 and shall only use and disclose such
information on a need-to-know basis in connection with the business relations
between CTI and Siemens, for financial and planning purposes, to resolve
disputes between the parties regarding the allocation of Service Contracts or
the amount owed to CTI pursuant to Section 4.2 of this Agreement.
ARTICLE 5
TRADEMARKS
5.1 Siemens Brand. The CPS Products sold by CTI pursuant to the terms
of this Agreement shall be marketed and sold under Siemens trademarks, service
marks, logos, trade names, labels and/or other materials; provided, however,
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has
been filed separately with the Securities and Exchange Commission.
-10-
<PAGE>
that those CPS Products sold by CTI in fulfillment of Backlog Orders pursuant to
Section 3.6 of this Agreement or in fulfillment of Funnel Orders not entered
into and completed by Siemens pursuant to Section 3.7 of this Agreement shall be
sold under CTI trademarks, service marks, logos, trade names, labels and/or
other materials. Nothing herein contained shall give or be deemed to give CTI or
its employees, agents or contractors any right, title or interest in any
trademark, service mark, copyright or other intellectual property right held or
used by Siemens. CTI shall not knowingly take any action, or knowingly fail to
take any action where such action or failure would, directly or indirectly, have
an adverse effect upon the trademarks, service marks, copyrights or other
intellectual property rights of Siemens.
5.2 CTI Products. All CTI Products shall be marketed and sold under CTI
trademarks, service marks, logos, trade names, labels and/or other materials.
Nothing herein contained shall give or be deemed to give Siemens or its
employees, agents or contractors any right, title or interest in any trademark,
service mark, copyright or other intellectual property right held or used by
CTI. Siemens shall not knowingly take any action, or knowingly fail to take any
action where such action or failure would, directly or indirectly, have an
adverse effect upon the trademarks, service marks, copyrights or other
intellectual property rights of CTI.
5.3 CPS. The parties hereto agree that nothing contained in this
Agreement is intended (i) to limit or restrict CPS' right to label or use its
trademarks, service marks, logos and trade names in any manner necessary to
maximize the growth of its business, or (ii) to amend or modify any term or
provision of the Joint Venture Agreement or the rights of the parties
thereunder. With respect to the CPS Products shipped with the Siemens logo or
under the Siemens brand, CPS agrees that it will not also place a CPS logo on
the equipment, other than the CPS manufacturer label on the lower right rear
corner, without the prior approval of Siemens. For purposes of this Agreement,
the parties agree that CPS shall not be considered an "affiliate" of either CTI
or Siemens, but shall be deemed an independent business enterprise subject to
the oversight and control of its Board of Directors and the terms of the Joint
Venture Agreement.
ARTICLE 6
TAXES, IMPORT, EXPORT
6.1 Sales and Related Taxes. In the event any governmental entity
imposes any tax on the sale of CPS Products, Siemens shall either pay the amount
of such tax directly, or cause the customers to pay the amount of such taxes
directly, to such governmental entity. CTI shall have no obligation to pay any
taxes on the sale of the CPS Products and Siemens agrees to indemnify and
reimburse CTI for any such taxes imposed on CTI by any governmental entity,
except that Siemens shall not be obligated to pay sales or related taxes on
sales of any CPS Products for which Siemens does not get sales credit under the
terms of this Agreement.
6.2 Employment Taxes. The parties acknowledge and agree that the
Account Managers will be employed by CTI and will under no circumstances be
considered employees of Siemens. CTI shall be responsible for all withholding,
payroll and similar taxes related to its employment of the Account Managers, and
-11-
<PAGE>
none of the Account Managers shall be entitled to any benefits afforded to the
employees of Siemens. CTI agrees that: (i) Siemens will not withhold on behalf
of the Account Managers any sums for income tax, unemployment insurance, social
security, or any other withholding pursuant to any law or requirement of any
governmental body; and (ii) all of such taxes, payments and withholdings, if
any, are the sole responsibility of CTI. CTI agrees to indemnify and reimburse
Siemens for any income tax, unemployment withholding or other employment taxes
with respect to the Account Managers that are imposed on Siemens by any
governmental entity.
ARTICLE 7
SERVICE AND WARRANTY
7.1 Service Contracts.
(a) For purposes of this Article 7, the term "SERVICE CONTRACT"
means a service contract covering a CPS Product for which formal customer
acceptance is received (i) at the time of sale of the CPS Product, regardless of
whether the CPS Product is sold as a new unit or as a used unit, or (ii) at any
time after such sale until the date which is eleven (11) months after formal
customer acceptance of installation of the CPS Product.
(b) As soon as reasonably practicable after the Effective Date, the
parties shall form a committee (the "SERVICE MANAGEMENT COMMITTEE") which shall
be composed of six representatives as follows: three representatives each from
Siemens and CTI with two representatives from each party from the service
organization and one from the finance group. The presence of two Siemens
representatives and two CTI representatives shall constitute a quorum for
meetings of the Service Management Committee. The Service Management Committee
shall meet on a monthly basis, and may meet by telephone conference. At each
meeting, Siemens shall submit to the Service Management Committee a list of all
Service Contracts received by Siemens since the previous meeting. The list of
Service Contracts shall include a summary of all information the Service
Management Committee deems necessary for the selection of such contracts by the
Parties. The selection of such contracts by CTI and Siemens shall take into
consideration certain parameters, including, but not limited to, predominant
geographic coverage in the customer's region, pre-existing business
relationships, and contract value. At the initial meeting of the Service
Management Committee, Siemens shall have the right to select the first Service
Contract it desires to maintain, then CTI shall have the right to select one
Service Contract, and thereafter the parties shall alternate selections until
all Service Contracts have been divided between them as closely as possible to
the revenue split contemplated in Section 7.2 below. The selection sequence will
continue to alternate at subsequent Service Management Committee meetings, such
that the party that did not have the last selection at the prior meeting shall
have the right to select first at the next meeting. Within thirty (30) days of
the end of each fiscal quarter, the chief financial officer of Siemens or the
chief financial officer of its Nuclear Medicine Group shall certify that all
Service Contracts required to be submitted to the Service Management Committee
under this Agreement have been submitted as required hereunder and that the
summaries of such service contracts as provided by Siemens are true and correct
in all material respects.
-12-
<PAGE>
7.2 Service Contract Transfers. As a result of the selections made by
the representatives of the Service Management Committee under Section 7.1
hereof, Siemens and CTI shall each enter into or otherwise effect the transfer
or assignment of such initial Service Contracts to ensure that the aggregate
revenues to be derived respectively by Siemens and CTI thereunder shall be
substantially equal. Siemens shall ensure that the agreements executed by the
customer authorize the transfer or assignment of such Service Contracts to CTI
as contemplated in Section 7.1 above.
7.3 Service Contract Disputes. In the event the Service Management
Committee is unable to resolve any dispute or controversy, the matter shall be
promptly submitted to the President of each organization for resolution prior to
submission of the dispute to arbitration in accordance with Section 12.1 of this
Agreement. The parties agree to work in good faith to resolve any such dispute
expeditiously in a manner consistent with the spirit of this Article 7.
7.4 First Year Warranty. First year warranty service shall be provided
by the party that receives the Service Contract, with such party also receiving
the first-year parts credit from CPS. If CTI provides first-year warranty labor,
Siemens shall pay CTI the applicable lump-sum labor reimbursement amount set by
Schedule 7.4 attached hereto. For all CPS Products, whether sold as new units or
used units, not covered by a Service Contract at the time of formal customer
acceptance of installation, the responsibility for providing first-year warranty
labor on such CPS Products shall be allocated equally between CTI and Siemens by
the Service Management Committee at the last monthly meeting before formal
customer acceptance of installation. Any Service Contract later executed with
respect to any such CPS Product shall be allocated in accordance with Section
7.1 above.
7.5 Existing Service Contracts; Installed Base.
(a) Except as provided in Article 8 of this Agreement, all
contracts in force on the Effective Date between either CTI or Siemens and any
third party for extended warranty service on any CPS Product shall be retained
after the Effective Date by the party which originally entered into them.
(b) Notwithstanding the other provisions of this Article 7, but
subject to the provisions of Article 8, Siemens and CTI shall have the right
independently to pursue any and all service contracts for CPS Products that, if
entered into, would not meet the definition of "Service Contract" set forth in
Section 7.1(a) above; and CTI nor Siemens shall be obligated to submit any such
service contract to the Service Management Committee.
-13-
<PAGE>
ARTICLE 8
INTERNATIONAL EXPANSION
8.1 Assignment of Service Contracts.
(a) CTI shall assign to Siemens all scanner service contracts for
the service of any CPS Products to which CTI or any of its affiliates is a party
in any international market other than Korea or Japan. A list of the applicable
service contracts to be assigned is attached hereto as Schedule 8.1. In
connection with such assignment, Siemens agrees to assume all remaining first
year warranty labor obligations applicable to such CPS Products, as well as
installation and first-year warranty labor obligations as to those CPS Products
covered by Backlog Orders to be installed at any international location after
the Effective Date. CTI agrees to credit Siemens for the unused prorated portion
of the first-year parts warranty for those CPS Products contemplated in the
immediately preceding sentence, up to the amount set by CPS. The parties agree
that in no event shall such credit exceed the aggregate unused prorated portion
of the first-year parts warranty applicable to such assigned service contracts.
(b) In consideration for the assignment of service contracts
pursuant to this Section 8.1, Siemens shall pay CTI $2,200,000, in immediately
available funds, to the account designated by CTI. CTI reserves the right to
direct that some or all of these funds be paid directly to CTI's wholly owned
European subsidiaries.
(c) CTI shall be responsible for all severance and other costs
associated with the cessation of its international sales and service business
with respect to the sale and service of the CPS Products. Siemens shall have the
right to interview, solicit and hire those CTI employees currently engaged in
CTI's international sales and service operations for the CPS Products.
8.2 Limitation. In consideration of the assignment set forth in Section
8.1 above, CTI hereby agrees that, during the term of this Agreement, it shall
not enter or re-enter the United States market or any international market with
respect to the sale or service of CPS Products, either directly or indirectly,
alone or in cooperation with any third party other than CPS, except as may be
otherwise agreed in writing by the parties hereto or as follows:
(a) In Korea, CTI shall continue its focus on sales based on the
fee/scan business model and the service of such equipment.
(b) From and after the Effective Date, the parties acknowledge and
agree that CTI shall retain the existing Distribution Agreement for CTI PET
Products dated January 22, 2003 (the "CMI AGREEMENT") between CTI and Kabushiki
Kaisha CMI ("CMI") in Japan, which has an initial term of three (3) years;
provided, that (i) upon the termination or expiration of the CMI Agreement, CTI
shall not replace CMI with another distributor in Japan or extend the CMI
Agreement with respect to the sale or service of CPS Products, and (ii) during
the term of the CMI Agreement, CTI will not enter into any new agreements
regarding the distribution of CPS Products in Japan.
-14-
<PAGE>
8.3 Restrictive Covenant. In consideration of the payment of the
consideration provided for in Section 8.1(b) of this Agreement, during the term
of this Agreement neither CTI nor any entity in which CTI owns 50% or more of
the voting securities, other than CPS (collectively, the "CTI RESTRICTED
PARTIES"), shall engage in the business of selling, servicing, maintaining, or
repairing PET or PET/CT scanners in the United States market or any
international market other than Korea and Japan.
8.4 Termination of Restrictions. The limitations and restrictive
covenants set forth in Sections 8.2 and 8.3 above shall terminate and become of
no further force and effect immediately upon CTI's receipt of any notice of
non-renewal of this Agreement given by Siemens pursuant to Section 10.1 below in
order to allow CTI to prepare to re-enter the markets at or after the effective
date of termination.
ARTICLE 9
SALE OF CTI PRODUCTS
9.1 Siemens as Representative. CTI hereby appoints Siemens, and Siemens
hereby accepts appointment, as CTI's non-exclusive representative to offer for
sale to Siemens' customers products manufactured and/or distributed by CTI and
its subsidiaries (collectively, the "CTI PRODUCTS"), including but not limited
to:
(a) positron-emitting molecular probes used in PET procedures,
whether for diagnosis of disease or for research purposes
("RADIOPHARMACEUTICALS"), distributed by PETNET;
(b) cyclotrons;
(c) REVEAL(TM) Marketing and Network Solutions; aND
(d) sources;
provided, with respect to Section 9.1(d) above, that regulatory requirements for
CPS sources are met and that offers are made by Siemens in a good faith basis.
9.2 Exclusivity.
(a) Subject to the expiration or termination of any existing
agreements to which Siemens is a party regarding the provision to Siemens
customers of cyclotrons or radiopharmaceuticals, Siemens hereby agrees that
during the term of this Agreement it shall offer exclusively CTI cyclotrons,
PETNET radiopharmaceuticals, and CPS sources for sale to Siemens customers
interested in purchasing cyclotrons, radiopharmaceuticals, or sources. It is a
condition to Siemens' obligations under this Section 9.2 that the cyclotrons,
radiopharmaceuticals, or sources be competitively priced, and that (with respect
to radiopharmaceuticals), PETNET be able to timely deliver the
radiopharmaceuticals to the customer site. Siemens agrees to review and pursue
the early termination of any such conflicting agreement or relationship if
Siemens can do so without cost to itself and such termination will not adversely
affect Siemens's existing business operations.
-15-
<PAGE>
(b) Siemens and CTI agree that the provisions of this Article 9 do
not impose any restriction on (i) CTI's right to distribute the CTI Products
itself or through others, (ii) Siemens's rights to distribute its products
itself or through others, or (iii) CPS's right to distribute any CPS Products
itself or through others.
9.3 Procedures. CTI and Siemens shall cooperate to develop procedures
for the sale of CTI Products pursuant to this Article 9; provided, that all
sales of CTI Products shall be made in accordance with CTI's standard terms and
conditions of sale and pursuant to orders accepted by CTI.
9.4 Packaging of CTI Products with Siemens Products. CTI Products
offered by Siemens under this Article 9 may be included as an option to the
customer as part of a package with the CPS Products and Siemens' own products.
In no event shall Siemens be obligated to package CTI Products with any other
Siemens products, nor shall any customer be forced to purchase any such package.
Any such packaged offering shall comply with all Federal, state and local laws.
9.5 Commission. The commission that the Siemens sales representatives
will receive for the sale of the CTI Products shall be consistent with the
commission paid by CTI to its PET tomography sales representatives for the same
products.
9.6 Mirada License. As additional consideration for CTI's execution of
this Agreement, Siemens shall execute and enter into that certain Fusion7D(R)
Software License Agreement dated as of the Effective Date (the "MIRADA LICENSE")
between Siemens and Mirada Solutions Limited, a wholly owned subsidiary of CTI
incorporated under the laws of England and Wales.
9.7 Further Cooperation. The parties will work together to identify
other potential areas in which they may collaborate in furtherance of their
respective businesses. Siemens also acknowledges its desire to enter into a
separate agreement with Concorde Microsystems, Inc. ("CONCORDE") for the
distribution of its microPET(TM) product line, on terms to be mutually agreed
upon between Siemens and Concorde.
ARTICLE 10
TERMINATION
10.1 Term. The initial term of this Agreement shall be two (2) years
from the Effective Date and shall automatically be extended for additional one
(1) year periods unless either party provides not less than 180 days prior
written notice of its election not to renew for such additional term or this
Agreement is earlier terminated pursuant to Sections 10.2, 10.3, 10.4, or 10.5
hereof.
-16-
<PAGE>
10.2 Termination for Cause. At any time during this Agreement, this
Agreement may be terminated for cause:
(a) By any party, upon thirty (30) days' written notice to the
other parties, upon the occurrence of any one or more of the following events:
(i) a material breach by any other party of this Agreement if
such other party shall have failed to cure such breach within ninety (90) days'
of receipt of written notice thereof from the terminating party describing with
specificity the factual basis constituting the material breach;
(ii) an adjudication of bankruptcy of any party under any
bankruptcy or insolvency law; or
(iii) the commission by any party of a receiver for business
or property, or the making of any general assignment for the benefit of
creditors.
(b) By CTI, in the event that total unit sales of CPS Products
represent less than *% of total unit sales of new PET and PET/CT scanners in the
United States for two consecutive fiscal quarters as reported by the National
Electronics Manufacturers Association (in either dollar volume or number of
orders), if such reduction is not directly attributable to a decline in the
quality of the CPS Products, non-competitive pricing or transfer pricing issues
not attributable to the Transfer Prices paid for CTs to Siemens by CPS, adverse
action by the U.S. Food and Drug Administration (the "FDA") related to CPS or
the CPS Products, work stoppage or labor unrest at CPS that results in missed
shipments, or similar events adversely affecting CPS's business operations in a
manner that erodes total market share.
(c) By CTI, if Siemens terminates the Mirada License for any
reason.
(d) By CTI, if Siemens is in breach or default of any of its
payment obligations set forth in this Agreement and such breach or default
continues for thirty (30) days or more after receipt of written notice thereof,
upon written notice to Siemens, with such termination to be effective on the
date of receipt by Siemens of such termination notice.
10.3 Termination Upon a Force Majeure Event. If a Force Majeure Event
(as defined in Section 14.2) continues for a period of six (6) months or longer,
then the entirety of this Agreement may be terminated by any party whose own
performance is not delayed or prevented by the Force Majeure Event (the
"UNAFFECTED PARTY") immediately thereafter by providing notice to the other
parties.
* Omitted information is the subject of a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934 and has
been filed separately with the Securities and Exchange Commission.
-17-
<PAGE>
10.4 Termination by Mutual Agreement . This Agreement may be terminated
at any time during the term hereof the mutual written agreement of the parties
hereto.
10.5 Termination Upon Exercise of Option. Either party shall have the
right to terminate this Agreement at such time as Siemens attains an 80% or
greater interest in CPS pursuant to the closing of the additional purchase and
sale rights set forth in Section 14 of the Joint Venture Agreement (the
"OPTION").
10.6 Obligations Upon Termination.
(a) Except as provided, CTI agrees that upon the termination
of this Agreement for any reason whatsoever CTI shall:
(i) cease all marketing and promotion of CPS Products and the
solicitation of Purchase Orders on behalf of Siemens; and
(ii) on or before the effective date of termination, assist
Siemens in preventing any disruption of service or supply to customers of CPS
Products located within the Territory, by providing Siemens with a complete and
accurate list and description of all unfulfilled Purchase Orders from customers
for the CPS Products submitted to CTI on or before the effective date of the
termination.
(b) Upon termination of this Agreement, Siemens shall reimburse CTI
for all expenses for which Siemens is obligated to reimburse CTI and which were
incurred on or before the effective date of termination.
10.7 Distribution of CPS Products.
(a) Upon the termination or non-renewal of this Agreement by
Siemens for any reason, CTI shall have the right to distribute CPS Products on
substantially the terms set forth in the CTI Distribution Agreement, as such
agreement may be amended from time to time by the parties.
(b) Upon the termination or non-renewal of this Agreement by CTI
for any reason other than a payment default by Siemens in accordance with to
Section 10.2(d) above, CTI shall not have the right to be a distributor of the
CPS Products; provided, however, that Siemens and CTI may enter into discussions
regarding an appropriate OEM relationship to further the commercial interests of
the parties.
ARTICLE 11
LIMITS ON DAMAGES AND INSURANCE
11.1 Limitation of Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR LOSS OF
ANTICIPATED PROFITS, OR FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE SALE OR USE OF THE CPS
PRODUCTS.
-18-
<PAGE>
11.2 Insurance. CTI and Siemens each agrees to maintain during the term
hereof liability insurance for personal injury and property damage, including
product liability and contractual coverage, as set forth herein. Coverage for
personal injury shall be not less than One Million Dollars ($1,000,000)
aggregate annual liability. Coverage for property damage shall be not less than
Two Million Dollars ($2,000,000) per occurrence. CTI and Siemens agree that all
liability insurance obtained by CTI and Siemens shall include CTI and Siemens as
named insureds reasonably acceptable to CTI and Siemens. CTI and Siemens further
agree, as a continuing obligation after the term hereof, to maintain such
insurance with no less than the coverage specified above in full force and
effect for the full life of the CPS Products sold hereunder. CTI and Siemens
shall supply each other with a Certificate of Insurance upon written request by
Siemens or CTI.
ARTICLE 12
DISPUTE RESOLUTION
12.1 Arbitration. Except for (i) claims resulting from an alleged
breach of a party's confidentiality obligations hereunder or infringement of a
party's technology or software, or (ii) situations in which a party may suffer
irreparable harm, any controversy or claim between the parties arising out of or
relating to this Agreement which cannot be settled by mutual agreement of the
parties in lieu of the institution of legal proceedings by either party shall be
submitted to binding arbitration on the terms set forth in the Joint Venture
Agreement.
12.2 Release of Siemens by CTI. For and in consideration of the
promises made by Siemens set forth herein, the adequacy and sufficiency of which
hereby is acknowledged, CTI hereby does release, acquit, remise and forever
discharge Siemens, all of its past and present servants, agents, employees,
shareholders, officers, directors, partners, associates, principals, attorneys,
successors, predecessors, insurers, and assigns, and any parent, subsidiary or
affiliated entities from any and all claims, causes of action, liabilities,
obligations, responsibilities, agreements, damages, actions, costs, and expenses
of any nature whatsoever, including attorneys' fees, arising out of or relating
to violations or alleged violations of Section 12.2 the Joint Venture Agreement
related to the sale of PET image display or image analysis workstations, spare
parts or sources, from the beginning of time to the Effective Date. No portion
of this Section 12.2 shall apply to matters arising pursuant to this Agreement
after the Effective Date.
12.3 Release of CTI by Siemens. For and in consideration of the
promises made by CTI set forth herein, the adequacy and sufficiency of which
hereby is acknowledged, Siemens hereby does release, acquit, remise and forever
discharge CTI, all of its past and present servants, agents, employees,
shareholders, officers, directors, partners, associates, principals, attorneys,
successors, predecessors, insurers, and assigns, and any parent, subsidiary or
affiliated entities from any and all claims, causes of action, liabilities,
obligations, responsibilities, agreements, damages, actions, costs, and expenses
-19-
<PAGE>
of any nature whatsoever, including attorneys' fees, arising out of or relating
to violations or alleged violations of Section 11.4 of the Joint Venture
Agreement related to the sale of PET image display or image analysis
workstations, spare parts or sources, from the beginning of time to the
Effective Date. No portion of this Section 12.3 shall apply to matters arising
pursuant to this Agreement after the Effective Date.
12.4 Release by CPS. For and in consideration of the promises made by
CTI and Siemens set forth herein, the adequacy and sufficiency of which hereby
is acknowledged, CPS hereby does release, acquit, remise and forever discharge
CTI and Siemens, all of their respective past and present servants, agents,
employees, shareholders, officers, directors, partners, associates, principals,
attorneys, successors, predecessors, insurers, and assigns, and any of their
respective parent, subsidiary or affiliated entities from any and all claims,
causes of action, liabilities, obligations, responsibilities, agreements,
damages, actions, costs, and expenses of any nature whatsoever, including
attorneys' fees, arising out of or relating to violations or alleged violations
of Sections 11.4 or 12.2 of the Joint Venture Agreement related to the sale of
PET image display or image analysis workstations, spare parts or sources, from
the beginning of time to the Effective Date. No portion of this Section 12.4
shall apply to matters arising pursuant to this Agreement after the Effective
Date.
12.5 Denial of Admissions. The parties hereby agree that the releases
set forth in Sections 12.2, 12.3, and 12.4 of this Agreement shall not be deemed
to be an admission by any party of any violation of any provision of the Joint
Venture Agreement.
12.6 Sale of Workstations. The Parties hereby agree to amend the Joint
Venture Agreement to provide that future sales of PET image display and image
analysis workstations (as opposed to those workstations that provide PET
reconstruction or image correction capability, which shall continue to be
excluded as part of the CPS Business) by either CTI or Siemens pursuant to the
terms of this Agreement shall not constitute a breach of the covenant not to
compete contained in the Joint Venture Agreement.
ARTICLE 13
ADDITIONAL COVENANTS
13.1 Further Assurances. CTI, CPS, and Siemens shall cooperate
reasonably with each other in connection with any steps required to be taken as
part of their respective obligations under this Agreement, and shall i) furnish
upon request to each other such further information; ii) execute and deliver to
each other such other agreements, certificates, documents, and instruments; and
iii) do such other acts and things, all as any other party to this Agreement
reasonably may request for the purpose of carrying out the intent of this
Agreement and the transactions contemplated hereby.
13.2 Assignment of Contracts. In the event that the transactions
contemplated by this Agreement require the sale, assignment, assumption,
transfer, conveyance, or delivery by any party hereto (the "ASSIGNOR") to
another party hereto (the "ASSIGNEE") of any contract to which the Assignor is a
-20-
<PAGE>
party, and if either (x) the provisions of such contract (the "RESTRICTED
CONTRACT") prohibit such assignment, or (y) the provisions of the Restricted
Contract require the consent of any other party to such sale, assignment,
assumption, transfer, conveyance, or delivery and such other party withholds,
unreasonably delays, or unreasonably conditions such consent, then:
(a) Notwithstanding any other provision hereof, neither this
Agreement nor any other document related to the consummation of the transactions
contemplated hereby shall constitute a sale, assignment, assumption, transfer,
conveyance, or delivery or an attempted sale, assignment, assumption, transfer,
conveyance ,or delivery of the Restricted Contract; and
(b) The Assignor and the Assignee shall cooperate with each other
in any reasonable and lawful arrangements designed to provide to the Assignee
the benefits of use of the Restricted Contract for the term thereof (or any
right or benefit arising thereunder, including the enforcement for the benefit
of the Assignee of any and all rights of the Assignor against a third party
thereunder); and
(c) The Assignor and the Assignee shall use their respective best
efforts, and shall cooperate with each other, to obtain the consent to the
assignment of the Restricted Contract as quickly as practicable.
Once consent for the sale, assignment, assumption, transfer, conveyance
and delivery of a Restricted Contract is obtained, the Assignor promptly shall
assign, transfer, convey, and deliver the Restricted Contract to the Assignee,
and the Assignee shall assume the obligations under the Restricted Contract
assigned to the Assignee from and after the date of assignment to the Assignee.
ARTICLE 14
MISCELLANEOUS
14.1 Relationship. Nothing in this Agreement shall be construed to
render any party the employer or employee of any other party, the agent or
principal of any other party, or a joint venturer or member of any other party.
No party shall have the right to bind any other party, to exercise control of
any other party, or to conduct any other party's business, except as expressly
set forth in this Agreement.
14.2 Force Majeure Provision. No party hereto shall be liable for any
delay arising from unanticipated catastrophic circumstances beyond its
reasonable control including, but not limited to, acts of God, war, riot or
civil commotion, fire, flood, terrorism, drought or act of government ("FORCE
MAJEURE EVENTS"); provided, that the party seeking to be excused shall make
every reasonable effort to minimize the delay resulting therefrom. Each party
shall keep the other parties fully informed of any such circumstances. During
the period that the performance by one of the parties of its obligations under
this Agreement is been suspended by reason of a Force Majeure Event, all parties
to this Agreement shall cooperate and use their commercially reasonable best
-21-
<PAGE>
efforts to continue the business contemplated by this Agreement; provided, that
any Unaffected Party may (but shall not be required to) suspend performance of
all or part of its obligations hereunder to the extent that such suspension is
commercially reasonable. The parties agree to resume their performance under
this Agreement as soon as possible upon the passing of the Force Majeure Event.
14.3 Assignment. No party shall have the right to assign or otherwise
transfer its rights and obligations under this Agreement except with the prior
written consent of the other parties; provided, however, Siemens and CTI shall
each be entitled to assign any or all of its rights and obligations hereunder to
any of its controlled subsidiaries, provided that both Siemens and CTI, as
applicable, shall remain fully liable for the performance of all its obligations
hereunder; and further provided that a successor in interest by merger, by
operation of law, assignment, purchase or otherwise of the entire business of
either party shall acquire all rights and obligations of such party hereunder.
Any prohibited assignment shall be null and void.
14.4 Notices. All notices or other communication which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile or telecopier transmission (and a transmission confirmation is
received by the sender), or by a recognized international or overnight courier,
to the persons at the addresses set forth below (or at such other address as may
be provided hereunder), and shall be deemed to have been delivered as of the
date so delivered.
Siemens: Siemens Nuclear Medicine Group
3501 North Barrington Road
Hoffman Estates, Illinois 60195
Facsimile: (847) 304-7080
Attention: President, Siemens Nuclear Medicine
With copies to: Siemens Medical Solutions USA, Inc.
51 Valley Stream Parkway
Malvern, PA 19355
Facsimile:
Attention: President & CEO
and Associate General Counsel
Siemens Legal Department J-16
51 Valley Stream Parkway
Malvern, PA 19355
CTI: CTI Molecular Imaging, Inc.
810 Innovation Drive
Knoxville, TN 37932
Fax No.: 865/218-3016
Attention: President
-22-
<PAGE>
With a copy to: CTI Molecular Imaging, Inc.
810 Innovation Drive
Knoxville, TN 37932
Fax No.: 865/218-2760
Attention: General Counsel
CPS: CPS Innovations
810 Innovation Drive
Knoxville, TN 37932
Fax No.: 865/218-2878
Attention: President
With a copy to: Kilpatrick Stockton LLP
Suite 900
607 14th Street
Washington, DC 20005-2018
Fax No.: 202 585 0002
Attention: David A. Stockton
14.5 Entire Agreement. This Agreement, including the schedules attached
hereto and incorporated as an integral part of this agreement, constitutes the
entire Agreement of the parties with respect to the subject matter hereof, and
supersedes any and all previous Agreements by and between CPS, Siemens and CTI
with respect to the subject matter hereof, if any, as well as any and all
proposals, oral or written, and all negotiations, conversations or discussions
heretofore had between the parties related to this agreement.
14.6 Amendment. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
written amendment signed by the parties hereto.
14.7 Publicity. This Agreement is confidential and no party shall issue
press releases or engage in other types of publicity of any nature dealing with
the commercial and legal details of this Agreement without the other parties'
prior written approval, which approval shall not be unreasonably withheld.
However, approval of such disclosure shall be deemed to be given to the extent
such disclosure is required to comply with governmental rules, regulations or
other governmental requirements. In such event, the publishing party shall
promptly furnish a copy of such disclosure to the other parties. Notwithstanding
the foregoing, CPS, Siemens and CTI shall be permitted to file this Agreement
and to disclose the terms of this Agreement in their respective filings with the
U.S. Securities and Exchange Commission or any similar state agency.
14.8 Severability. In the event that any of the terms of this Agreement
are in conflict with any rule of law or statutory provision or are otherwise
unenforceable under the laws or regulations of any government or subdivision
thereof, such terms shall be deemed stricken from this Agreement, but such
invalidity or unenforceability shall not invalidate any of the other terms of
this Agreement and this Agreement shall continue in force, unless the invalidity
or unenforceability of any such provisions hereof does substantial violence to,
or where the invalid or unenforceable provisions comprise an integral part of,
or are otherwise inseparable from, the remainder of this Agreement.
-23-
<PAGE>
14.9 Counterparts. This Agreement shall be executed in three or more
counterparts, and each such counterpart shall be deemed an original hereof.
14.10 Waiver. No failure or delay by any party to take any action or
assert or exercise any right or remedy hereunder shall operate or be deemed to
be a waiver of such right or remedy in the event of the continuation or
repetition of the circumstances giving rise to such right; nor shall any single
or partial exercise of such right or remedy preclude any other or further
exercise thereof or of any other right or remedy. No provision of this Agreement
may be waived except in a writing signed by the party granting such waiver.
14.11 Authorization and Execution. By executing this Agreement each
party represents and warrants to the other parties (i) that the entry into and
execution and performance of this Agreement has been fully and duly authorized
by all required corporate action, and (ii) that the person signing this
Agreement on behalf of a party has been fully authorized by all required
corporate action to execute this Agreement on behalf of the party for which such
person is signing.
14.12 Confidentiality. Each party hereto agrees not to disclose to
others the technical and business information of the other parties hereto
("CONFIDENTIAL INFORMATION"), and agrees to use the other parties' Confidential
Information only for the implementation of this Agreement and to hold the other
parties' Confidential Information confidential using at a minimum the same care
it would exercise to protect its own Confidential Information but in no event
less than a reasonable degree of care. The receiving party further agrees to
disclose the Confidential Information of the disclosing party only to the
receiving party's employees and agents who have a need to know and only to those
employees and agents who have agreed in writing to confidentiality obligations
substantially similar to those in this Section 14.12. The receiving party shall
not permit any of its personnel to remove any proprietary or other legend or
restrictive notice contained or included in any Confidential Information
provided by the disclosing party, and the receiving party shall not permit any
of its personnel to reproduce or copy any such Confidential Information except
as expressly authorized under this Agreement. Provided, however, that such
confidentiality obligation shall not apply to any information which (a) is now
or hereafter becomes a part of the public domain, other than by act or omission
of the receiving party, (b) was independently developed by the receiving party
or its affiliates; (c) information that was in such party's possession prior to
disclosure by the other party, (d) is hereafter furnished to the receiving party
by a third party, as a matter of right and without restriction on use or
disclosure, who lawfully possesses such information and did not acquire it
directly or indirectly from the other party, (e) is disclosed in any U.S. or
foreign patent, or published patent application, whether owned by the other
party or any third party, or (f) is required to be disclosed to a government
agency or pursuant to a judicial proceeding, but only to the extent so required
and provided that the receiving party gives the disclosing party advance notice
of such disclosure and reasonably cooperates with the disclosing party (at the
disclosing party's expense) to contest such disclosure. The duration of this
confidentiality obligation shall be for the term of this Agreement and for two
-24-
<PAGE>
(2) years thereafter with respect to any Confidential Information that does not
constitute a "trade secret" under applicable law, and for Confidential
Information that does constitute a trade secret under applicable law, these
confidentiality obligations shall last in perpetuity. Nothing in this Section is
intended by the parties to abrogate any rights or obligations of the parties
under common law or statutory law with respect to the use and disclosure of
confidential information or trade secrets.
14.13 Survival. The provisions in Section 14.12 shall survive the
expiration or termination of this Agreement indefinitely.
14.14 Governing Law. This Agreement shall be governed by, construed
under, and interpreted in accordance with the laws of the State of Delaware,
U.S.A, applicable to contracts made and performed entirely within that state.
[SIGNATURE PAGE FOLLOWS]
-25-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date.
CTI MOLECULAR IMAGING, INC.
By: /s/ Ronald Nutt
-----------------------------------
Ronald Nutt, Ph.D.
President
SIEMENS MEDICAL SOLUTIONS USA, INC.
By: /s/ Thomas N. McCausland
-----------------------------------
Thomas N. McCausland
President
CTI PET SYSTEMS, INC.
By: /s/ R. Gregory Brophy
-----------------------------------
R. Gregory Brophy
President
-26-
<PAGE>
SCHEDULE 2.7
INITIAL TRANSFER PRICE REDUCTION SCHEDULE
LSO CRYSTALS CTS CPS TRANSFER PRICE RELIEF
--------------------------------------------------------------------------------------------
EMERGE
(8x8 block) * * *
--------------------------------------------------------------------------------------------
ACCEL
(8x8 block) * * *
--------------------------------------------------------------------------------------------
BIO 2
(8x8 block) * * *
--------------------------------------------------------------------------------------------
BIO 6
(HI-REZ block) * * *
--------------------------------------------------------------------------------------------
BIO 16
(8x8 block) * * *
--------------------------------------------------------------------------------------------
BIO 16
(HI-REZ block) * * *
--------------------------------------------------------------------------------------------
* Omitted information is the subject of a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of
1934 and has been filed separately with the Securities and Exchange
Commission.
<PAGE>
SCHEDULE 2.7.1
INITIAL TRANSFER PRICE REDUCTION SCHEDULE
(NEW EXHIBIT D TO THE JOINT VENTURE AGREEMENT)
See attached spreadsheet
<PAGE>
SCHEDULE 2.7.1
PRICING EFFECTIVE WITH ORDERS RECEIVED AFTER APRIL 30, 2004
DISTRIBUTOR'S TRANSFER PRICE PERCENTAGES FOR CPS PET SCANNER
UNDER A NON-EXCLUSIVE DISTRIBUTION AGREEMENT
U.S.A
--------------- -------------- -------------- -------------- --------------
* units * units * units * units * units
--------------- -------------- -------------- -------------- --------------
in US$ Transfer Transfer Transfer Transfer Transfer List
price price price price price
in % of list in % of list in % of list in % of list in % of list
--------------- -------------- -------------- -------------- --------------
EMERGE *% *% *% *% *% $*
ACCEL *% *% *% *% *% $*
LSO Duo *% *% *% *% *% $*
LSO PET/CT- 6 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 *% *% *% *% *% $*
HiRez Processing Option *% *% *% *% *% $*
Options *% *% *% *% *%
----------------------------------------------------------------------------------------------------
---------------------------------------------------------------
Transfer Price CPS CPS %GM
--------------------------------------------------------------
* * >*
HMS CTI SMS COST HMS CTI SMS
in US$
EMERGE $* $* $* $* *% *% *%
ACCEL $* $* $* $* *% *% *%
LSO Duo $* $* $* *% *%
LSO PET/CT- 6 HIREZ $* $* $* *% *%
LSO PET/CT- 16 HIREZ $* $* $* *% *%
LSO PET/CT- 16 $* $* $* *% *%
HiRez Processing Option $* $* $* *% *%
Options
-------------------------------------------------------------------------------------------
R.o.W.
--------------- -------------- -------------- -------------- --------------
* units * units * units * units >* units List
--------------- -------------- -------------- -------------- --------------
in US$ Transfer Transfer Transfer Transfer Transferprice List
price price price price n % of list
in % of list in % of list in % of list in % of list i
--------------- -------------- -------------- -------------- --------------
EMERGE *% *% *% *% *% $*
ACCEL *% *% *% *% *% $*
LSO PET/CT Duo *% *% *% *% *% $*
LSO PET/CT- 6 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 *% *% *% *% *% $*
HiRez Processing Option *% *% *% *% *% $*
Options *% *% *% *% *%
----------------------------------------------------------------------------------------------------
---------------------------------------------------------------
Transfer Price CPS CPS %GM
--------------------------------------------------------------
HMS CTI SMS Cost HMS CTI SMS
in US$
EMERGE $* $* $* $* *% *% *%
ACCEL $* $* $* $* *% *% *%
LSO PET/CT Duo $* $* $* *% *%
LSO PET/CT- 6 HIREZ $* $* $* *% *%
LSO PET/CT- 16 HIREZ $* $* $* *% *%
LSO PET/CT- 16 $* $* $* *% *%
HiRez Processing Option $* $* $* *% *%
Options
--------------------------- ---------------------------------------------------------------
* Omitted information is the subject of a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of
1934 and has been filed separately with the Securities and Exchange
Commission.
<PAGE>
SCHEDULE 2.8
ADDITIONAL TRANSFER PRICE REDUCTIONS
See attached spreadsheet
<PAGE>
SCHEDULE 2.8 (NEW EXHIBIT D TO THE JOINT VENTURE AGREEMENT)
PRICING EFFECTIVE WITH THE ORDER OF THE * UNIT FROM SIEMENS TO CPS SINCE OCTOBER
1, 2003
DISTRIBUTOR'S TRANSFER PRICE PERCENTAGES FOR CPS PET SCANNER UNDER A
NON-EXCLUSIVE DISTRIBUTION AGREEMENT
U.S.A
--------------- -------------- -------------- -------------- ---------------
* units * units * units * units >* units
--------------- -------------- -------------- -------------- ---------------
in US$ Transfer price Transfer Transfer Transfer Transfer price List
n % of list mprice price price n % of list
i in % of list in % of list in % of list i
--------------- -------------- -------------- -------------- ---------------
EMERGE *% *% *% *% *% $*
ACCEL *% *% *% *% *% $*
LSO Duo *% *% *% *% *% $*
LSO PET/CT- 6 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 *% *% *% *% *% $*
HiRez Processing
Option *% *% *% *% *% $*
Options *% *% *% *% *%
-------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
Transfer Price CPS CPS %GM
---------------------------------------------------------------------
* * >*
in US$ HMS CTI SMS Cost HMS CTI SMS
EMERGE $* $* $* $* *% *% *%
ACCEL $* $* $* $* *% *% *%
LSO Duo $* $* $* *% *%
LSO PET/CT- 6 HIREZ $* $* $* *% *%
LSO PET/CT- 16 HIREZ $* $* $* *% *%
LSO PET/CT- 16 $* $* $* *% *%
HiRez Processing
Option $* $* $* *% *%
Options
-----------------------------------------------------------------------------------------------
R.o.W.
--------------- -------------- -------------- -------------- ---------------
* units * units * units * units >* units List
--------------- -------------- -------------- -------------- ---------------
in US$ Transfer price Transfer Transfer Transfer Transfer price List
n % of list price price price n % of list
i in % of list in % of list in % of list i
--------------- -------------- -------------- -------------- ---------------
EMERGE *% *% *% *% *% $*
ACCEL *% *% *% *% *% $*
LSO PET/CT Duo *% *% *% *% *% $*
LSO PET/CT- 6 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 HIREZ *% *% *% *% *% $*
LSO PET/CT- 16 *% *% *% *% *% $*
HiRez Processing
Option *% *% *% *% *% $*
Options *% *% *% *% *%
-------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
Transfer Price CPS CPS %GM
---------------------------------------------------------------------
* * >*
in US$ HMS CTI SMS Cost HMS CTI SMS
EMERGE $* $* $* $* *% *% *%
ACCEL $* $* $* $* *% *% *%
LSO PET/CT Duo $* $* $* *% *%
LSO PET/CT- 6 HIREZ $* $* $* *% *%
LSO PET/CT- 16 HIREZ $* $* $* *% *%
LSO PET/CT- 16 $* $* $* *% *%
HiRez Processing
Option $* $* $* *% *%
Options
---------------------------------------------------------------------------------------------
* Omitted information is the subject of a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of
1934 and has been filed separately with the Securities and Exchange
Commission.
<PAGE>
SCHEDULE 4.2
CPS PRODUCT CONFIGURATION
TYPICAL CUSTOMER CONFIGURATION
LSO/DUO
Base Unit
Gantry Air/Water Chiller
Isolation Transformer
Long RTP Flat Pallet
Patient Positioning Acc Kit
Leonardo HEP, WS
Eizo Flat Screen Color 18" (1)
Eizo Flat Screen Color 18" (2)
5.25" Desktop MOD #L
Leonardo e.soft PET/CT58432
Bio Installation
Sources
e.soft PET Training - Cary,NC
Training Classes e.soft PET
PET Aps Training
bio CT UPS 110V
Codonics Imager Sm Format
TYPICAL CUSTOMER CONFIGURATION
LSO 6 SLICE
Base Unit
PET/CT Hi-Rez Processing Option
Gantry Air/Water Chiller
Isolation Transformer
Long RTP Flat Pallet
Patient Positioning Acc Kit
MOD Dicom Wizard
Leonardo HEP, WS
Eizo Flat Screen Color 18" (1)
Eizo Flat Screen Color 18" (2)
Leonardo e.soft PET/CT
Bio Installation
Sources
<PAGE>
Training Classes e.soft PET
PET Aps Training
bio CT UPS 110V
Codonics Imager Sm Format
TYPICAL CUSTOMER CONFIGURATION
LSO 16 SLICE
Base Unit
PET/CT Hi-Rez Processing Option
snygo Vessel View
syngo Volume Rendering
syngo Lung CARE CT
sygo Heartview OR Colonography
syngo Pulmo Evaluation
syngo Fly Through
Gantry Cool Water Chiller
Kraus Indoor Chiller
Isolation Transformer
Long RTP Flat Pallet
Patient Positioning Acc Kit
MOD Dicom Wizard
Bio S16 Pre-Install Kit
Leonardo HEP, WS
Eizo Flat Screen Color 18" (1)
Eizo Flat Screen Color 18" (2)
Leonardo e.soft PET/CT
Bio Installation
Sources
Training Classes e.soft PET
PET Aps Training
Proj Mgmt/Site Planning
Codonics Imager Sm Format
<PAGE>
SCHEDULE 7.4
LUMP-SUM LABOR REIMBURSEMENT AMOUNTS
$*
ECAT EMERGE
-----------------------------------------------------------
$*
ECAT ACCEL
-----------------------------------------------------------
$*
BIOGRAPH 2
-----------------------------------------------------------
$*
BIOGRAPH 6
-----------------------------------------------------------
$*
BIOGRAPH 16
* Omitted information is the subject of a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act of
1934 and has been filed separately with the Securities and Exchange
Commission.
<PAGE>
SCHEDULE 8.1
INTERNATIONAL SERVICE CONTRACTS TO BE ASSIGNED
1. Contrato de Mantenimiento [Service Agreement] dated January 3, 2003
between CTI and Centro PET Recoletas, S.L.U. (1 scanner)
2. Contrato de Mantenimiento [Service Agreement] dated January 4, 2003
between CTI and Diagnostico PET (1 scanner)
3. Service Agreement dated October 28, 2003 between CTIMI and University
of Aberdeen/University of Aberdeen & Grampian University Hospitals NHS
Trust (1 scanner)
4. Service Agreement dated December 17, 2003 between CTIMI and Guy's and
St. Thomas' Hospital NHS Trust (2 scanners)
5. PET Scanner Support Services Agreement dated January 16, 2004 between
CTI Molecular Imaging-Europe Limited, a company incorporated under the
laws of England and Wales and a wholly owned subsidiary of CTI, and
Hammersmith Imanet Limited, a company incorporated under the laws of
England and Wales (3 scanners)