Sample Business Contracts

Manufacturing Agreement - Novoste BV and AorTech Europe Ltd.

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D1  1.3.94:D2  4.3.94:D3  6.5.94
D4  9.5.94:D5  10.8.94:D6  29.8.94
D7: 30.8.94

                     MANUFACTURING AGREEMENT


                              NOVOSTE B.V.
                              Dillenburgstraat 11a
                              5652 AM Eindhoven
                              The Netherlands
                              (hereinafter referred to as "Novoste B.V.")


                              AORTECH EUROPE LIMITED
                              Incorporated under the Companies Acts and having
                              their registered office at Phoenix Crescent
                              Strathclyde Business Park Bellshill Lanarkshire
                              ML4 3NJ Scotland (Hereinafter referred to as

            WHEREAS,          Novoste Corporation has developed the Product (as
                              hereinafter defined) and has licensed the related
                              intellectual property and technology to its
                              wholly owned subsidiary Novoste B.V., and Novoste
                              B.V. wishes AorTech to manufacture the Product;

            WHEREAS,   AorTech has agreed to manufacture the Product and
                       purchase the components therefore,



         1.1      For the purpose of this agreement, the Product shall mean all
                  finished devices produced by AorTech at the request of Novoste

         1.2      During the term of and upon the conditions set forth in this
                  Agreement, Novoste B.V. appoints AorTech as a European
                  manufacturer. AorTech accepts such appointment and agrees to
                  source and procure all required materials for and, assemble,
                  package, sterilize, label, arrange for the handling, testing,
                  storage and shipment of the Product, all in accordance with
                  the terms and specifications hereof. AorTech shall perform its
<PAGE>   2

                  hereunder in a competent and professional manner and in
                  compliance with applicable law of relevent jurisdictions.

         1.3      AorTech shall at its own cost, provide to Novoste B.V.:

                  a.       All labor required to carry out each task described
                           in 1.2;

                  b.       facilities for performing each task described in 1.2;

                  c.       facilities for storing the Product, its components
                           and supplies at the premises of AorTech.;

                  d.       qualified personnel for testing of the Product, its
                           sub-assemblies, components and supplies;

                  e.       qualified personnel to perform preventive and routine
                           maintenance and calibration of equipment, fixtures
                           and machines used to manufacture the Product;

                  f.       facilities and personnel to maintain and store all
                           quality records pertaining to the Product, where they
                           shall be available for immediate review and shall be
                           maintained as the property of Novoste B.V.;

                  g.       qualified personnel to assist Novoste B.V. in
                           transporting materials and finished Product through
                           customs and into all countries of the European Union;

                  h.       qualified personnel to source and procure all
                           materials required to build the Product as specified
                           in this Agreement;

         1.3      All Products shall be manufactured in accordance with Novoste
                  B.V.'s specifications and procedures, ISO 9001 procedures and


         2.1      All Products shall be packaged in the manner and with such
                  wrappers cartons boxes or other containers bearing such
                  labeling, trade names and trademarks as Novoste B.V. may from
                  time to time designate and supply to AorTech, provided that
                  Novoste B.V. shall give AorTech 30 days written notice of any
                  change thereto.


         3.1      AorTech shall manufacture Product for Novoste B.V. hereunder
                  only upon receipt of purchase orders from Novoste B.V. setting
                  forth the order number, the quantity and type of Product
                  ordered and special shipping instructions, if any.
<PAGE>   3

         3.2      Novoste B.V. Materials Management shall periodically issue to
                  Aortech an updated twelve (12) month Production forecast.

         3.3      AorTech and Novoste B.V. agree to use the following scheduling
                  and material ordering parameters for the purpose of ordering
                  component inventory and planning Production and engineering
- ----------------------------------------------------------------------------------------------------------------
<S>                                                       <C>
3 months                                                  Firm Purchase Orders from Novoste B.V. for Finished
                                                          Product; schedule unchangeable
- ----------------------------------------------------------------------------------------------------------------
4 months (60 days minimum on hand inventory to be         Firm commitments from Novoste B.V. for AorTech to
maintained by AorTech; an additional 60 days inventory    purchase all material required to produce Products
secured in the form of firm purchase orders from          per rolling Production schedule
AorTech per the rolling Production schedule)
- ----------------------------------------------------------------------------------------------------------------
5 to 12 months                                            Novoste B.V. may move up to 30% of scheduled
                                                          deliveries out 60 days or in 60 days depending on
                                                          material availability and actual market demand
- ----------------------------------------------------------------------------------------------------------------

         3.4      AorTech shall source and procure all materials required for
                  the manufacture of the Product. AorTech shall use only
                  approved suppliers listed on AorTech's approved supplier list
                  when purchasing such material.

         3.5      AorTech shall immediately alert Novoste B.V. in writing of
                  potential or confirmed delays in obtaining material, of the
                  required amounts, when such a delay may affect Product
                  delivery dates.

         3.6      AorTech shall immediately alert Novoste B.V. in writing of
                  potential or confirmed material obsolescence or material
                  substitution issues.

         3.7      AorTech shall maintain a minimum of sixty (60) days inventory
                  of all required materials for the manufacture of the Product
                  to support the rolling Production forecast over that same time
                  period. In addition, firm purchase orders from AorTech shall
                  be outstanding for an additional sixty (60) days supply of
                  such required materials.

         3.8      AorTech shall provide Novoste B.V. on a monthly basis, an
                  inventory summary review of all material. At minimum the
                  report will detail the following information: part number and
                  description per Novoste B.V. specifications, quantity on hand,
                  quantity on order and due dates, cost, supplier name and
                  address, supplier approval status, total inventory valuation,
                  obsolete inventory and valuation, and any potential or pending
                  issue with the supplier that could potentially delay delivery
                  schedules. This report shall be made available by the 5th
                  business day of each month.
<PAGE>   4

         3.9      Upon written request from AorTech, Novoste B.V. will provide
                  an inventory deposit which will be applied against the
                  material cost incurred by AorTech to purchase all materials
                  required to support two (2) months of the Product forecast.
                  AorTech will typically order all material at a rate which will
                  compensate for shrinkage / yield losses. This rate may from
                  time to time be adjusted by Novoste B.V. provided such change
                  is delivered to AorTech in writing.

         3.10     During the performance of this manufacturing Agreement,
                  AorTech will in accordance with Clause 3.4 purchase materials
                  to support Novoste B.V. requirements. Novoste B.V. shall
                  reimburse Aortech on request for the cost of all such
                  materials. Certain materials which AorTech will acquire will
                  be subject to minimum-buy requirements and quantity price
                  breaks which may result in excess material accumulation which
                  will be the responsibility of Novoste B.V. provided Novoste
                  B.V. has approved such purchases. Additionally, design changes
                  may cause materials to become obsolete. Obsolete materials due
                  to a design change will be returned to suppliers when
                  possible. Non-returnable inventory will be charged and
                  delivered to Novoste B.V..

                  a.   During the performance of this manufacturing Agreement,
                       AorTech will provide Novoste B.V. with periodic updates
                       of the status and amounts of excess or obsolete material
                       held by Aortech.

                  b.   AorTech will use its best effort to minimize the impact
                       of excess material and/or obsolete materials. AorTech
                       will return materials to suppliers for credit, less
                       restocking fees, when appropriate. However, final costs
                       associated with the accumulation of excess and obsolete
                       materials are chargeable and payable by Novoste B.V..
                       Any excess or obsolete inventories will be charged to
                       Novoste B.V. by AorTech at cost, without profit.
                       Disposition of excess or obsolete materials will be
                       coordinated with Novoste B.V. to minimize the impact of
                       cost to Novoste B.V. where possible. Novoste B.V.'s
                       targeted maximum budget is for obsolete material is

         3.11     Novoste B.V. shall reimburse Aortech on request for all costs
                  incurred by Aortech on behalf of Novoste B.V. in carrying out
                  its duties under this Agreement


         4.1      All facilities used by AorTech for the manufacture of the
                  Product shall be open to inspection by Novoste B.V. or any
                  governmental, local or other regulatory agency or authority,
                  providing that AorTech receives reasonable written notice.
<PAGE>   5

         4.2      AorTech shall immediately notify Novoste B.V. upon receipt of
                  communication scheduling an inspection, excluding an
                  inspection requested by Novoste B.V., stated above in Section


         5.1      AorTech and Novoste B.V. shall, each at their own expense,
                  meet periodically to review performance and business
                  transacted, and to identify and resolve those issues which
                  have arisen since the last business review meeting. These
                  meetings shall be held at minimum of four (4) times per year.


         6.1      The initial price to be paid by Novoste B.V. to AorTech shall
                  be calculated at the rate of $18 (United States currency) per
                  hour (each such hour being referred to herein as a Direct
                  Labor Assembly Hour) in respect of each hour or part of an
                  hour which an AorTech employee shall devote to performing any
                  of the following activities: manufacture of Novoste B.V.
                  Product; inspection and testing of Novoste B.V. Product or
                  materials used to build Novoste B.V. Product; packaging of
                  Novoste B.V. Product; handling of material, sub assemblies and
                  / or Novoste B.V. Product, shipping of Novoste B.V. Product,
                  and receiving of materials used to build Novoste B.V. Product.
                  AorTech will invoice Novoste B.V. monthly, at the end of each
                  month, for payment of the cost associated with performing
                  these activities in support of this Agreement. Novoste B.V.
                  will pay such invoices within thirty days of their being
                  issued by AorTech. Overtime shall be defined as the number of
                  hours worked beyond the normal work week. Overtime shall be
                  invoiced at the base rate of $18 per hour plus 50%, (over time
                  premium) (or $9) or $27 per hour.

         6.2      AorTech shall, in good faith, maintain written records (time
                  sheets) for each individual assigned to work on Novoste B.V.
                  Product, whereby the number of hours worked, date work was
                  performed, and name of individual performing the work shall be
                  recorded. These records, as they apply to Novoste B.V.
                  Product, shall be made available to Novoste B.V. for review
                  upon request.

         6.3      The price specified in clause 6.1 shall be increased annually
                  with effect from the anniversary of the last date of execution
                  hereof (a) in proportion to the increase (if any) in the
                  Retail Prices Index published in the United Kingdom by the
                  Department of Employment (or by any Government Department upon
                  which its duties in connection with such Index shall have
                  devolved) for the immediately preceding month of over that for
                  the same month in
<PAGE>   6

                  the preceding year, or (b) by 5% per annum, whichever shall be
                  the higher.

         6.4      Novoste B.V. shall in addition to the price specified in
                  clause 6.1 pay to AorTech an overhead fee of $48 (United
                  States currency) (together with all Value Added Tax payable
                  thereon) in respect of each hour or part of an hour devoted by
                  an AorTech employee to providing management services, (each
                  hour being referred to herein as an Indirect Labor Hour) as

                  a.   handling, disposition and resolution of routine
                       non-conforming materials and Product;

                  b.   engineering support in the areas of quality assurance and
                       manufacturing as required to support ongoing Production
                       including troubleshooting of routine process and Product
                       issues as they arise in day to day Production;

                  c.   source and procurement of all materials required to build
                       Novoste B.V. Product per the specifications stated in
                       this Agreement;

                  d.   management support provided by AorTech's operation
                       Manager, Quality Assurance Manager and Warehouse

         6.5      Novoste B.V. shall pay AorTech $5,000 (United States currency)
                  per month for use of a class 100,000 cleanroom dedicated
                  exclusively to manufacture the Product. In addition, the
                  following services shall be included:

                  a.   the storage of materials within AorTech's warehouses
                       area; this shall include up to 500 square feet of
                       storage space. Novoste B.V. shall pay for any
                       additional storage space exceeding this 500 square feet
                       at a rate to be specified by AorTech and agreed upon
                       by Novoste B.V.;

                  b.   passing materials for sterilization and coordinating all
                       sterilization scheduling at a Novoste B.V. approved
                       sterilization facility;

                  c.   providing quarantine and quality assurance assistance for
                       finished Products;

                  d.   receiving orders, allocating and packaging Products and
                       preparing shipping documents;

                  e.   arranging collection with a freight forwarder;

                  f.   controlling and tracing the foregoing services;
<PAGE>   7

                  g.   monthly reporting to Novoste B.V. of all raw material
                       inventory, finished goods inventory and receipt and
                       dispatch of said material;

                  h.   the provision of warehouse and Production control
                       personnel and inspection and quality assurance

         6.6      Novoste B.V. shall reimburse AorTech in respect of any capital
                  expenditure necessarily incurred by AorTech with the prior
                  Agreement of Novoste B.V., such Agreement not to be
                  unreasonably withheld for the purpose of assembling the
                  Product pursuant to this Agreement, including, without
                  prejudice to the foregoing generality, any expenditure
                  incurred in connection with the provision of new or additional
                  cleanroom facilities. This amount shall not exceed $10,000 US
                  dollars unless otherwise agreed by both parties in writing in

         6.7      Novoste B.V. shall also pay to AorTech a fee of $30 US
                  dollars, (together with all Value Added Tax payable thereon)
                  in respect of each hour or part of an hour devoted by
                  AorTech's senior technician. Overtime shall be defined as the
                  number of hours worked beyond the normal work week. Overtime
                  shall be invoiced at the base rate of $30 per hour plus 50%,
                  (over time premium) (or $15) or $45 per hour.

         6.8      Novoste B.V. shall pay AorTech a fifteen percent (15%) fee
                  based on the actual cost of materials purchased by AorTech,
                  where such materials are exclusiverly used to build Novoste
                  Product per this agreement (fee is equal to 15% of actual
                  material costs). This incremental material cost shall cover
                  any administrative, finance or other costs incurred by AorTech
                  to purchase materials required to build Novoste Product per
                  this agreement. This incremental material cost shall be
                  invoiced on a separate line item from that of actual material


         7.1      AorTech shall arrange delivery of the Product to such
                  destination as Novoste B.V. may designate in accordance with
                  Clause 7.4. All freight costs relating to delivery of Product
                  from AorTech's premises to their ultimate destination will be
                  at the expense of Novoste B.V. and will be reimbursed by
                  Novoste B.V. to AorTech within 30 days of a request for
                  payment in writing by AorTech to Novoste B.V.. Novoste B.V.
                  retains the right to approve the freight forwarder recommend
                  by AorTech.

         7.2      Novoste B.V. will provide AorTech with a purchase order which
                  shall state the Product part number, quantities and date
                  required. AorTech shall use its best efforts to supplying the
                  Product in accordance with Novoste B.V. required ship dates.
<PAGE>   8

         7.3      Novoste B.V. shall pay for all transportation costs and any
                  Value Added Tax as assigned in accordance with the terms in
                  Clause 7.1. All transit insurance costs in respect of onward
                  delivery of finished goods to Novoste B.V.'s customers, will
                  be the passed on to Novoste B.V. by AorTech.

         7.4      Novoste B.V. may require that shipments of Product under this
                  Agreement be shipped by AorTech directly to Novoste B.V.
                  customers. These shipment locations will be specified by
                  Novoste B.V..

         7.5      During the initial pre-Production stage (defined as the stage
                  where equipment installation, Product qualification, process
                  validation take place, and initial shelf stock units are
                  built), AorTech and Novoste B.V. shall work together to
                  develop a price per unit cost which includes the cost,
                  facility overhead, direct and indirect labor, and
                  sterilization costs. Upon developing a mutually agreed upon
                  price per unit, this manufacturing Agreement will be amended
                  to reflect such terms. Until such time pricing shall remain as
                  indicated in section 6 of this Agreement.

8.0      TERM

         8.1      Subject to prior termination as provided in Section 9.1 below,
                  the initial term of this Agreement shall be from the date of
                  execution of this agreement until March 31st, 2000.

         8.2      After the initial term of this Agreement, the duration of this
                  Agreement shall thereafter automatically renew for an
                  additional twelve month period except that either Novoste B.V.
                  or AorTech may terminate the Agreement by giving ninety (90)
                  days prior written notice of termination, such termination to
                  be effective at the end of the relevant twelve month period.
                  AorTech will complete the manufacture of any Products ordered
                  by Novoste B.V. up to the termination date.


         9.1      Notwithstanding the term set forth in Section 8.1 above, this
                  Agreement may be terminated prior to the expiration of the
                  initial term (or any renewal term) as follows:

                  a.   AorTech shall have the option of terminating this
                       Agreement immediately if Novoste B.V. fails to pay any
                       amounts due and payable to AorTech in terms of this
                       Agreement which remain due and unpaid for thirty (30)
                       days after receiving written notices from AorTech that
                       such amounts were unpaid, due and owing to AorTech.
<PAGE>   9

                  b.   Should either party commit any material breach of this
                       Agreement and fail to remedy the same within thirty (30)
                       days after receipt of written notice to do so, the party
                       giving notice shall by entitled forthwith to terminate
                       this Agreement by a notice in writing, without prejudice
                       to any claim for any damages or other relief arising out
                       of such breach, and any waiver of any breach shall not be
                       taken to a waiver of any subsequent breach.

                  c.   In case of the bankruptcy, appointment of a trustee,
                       receiver of liquidator, assignment for the benefit of
                       creditors or insolvency of either party, or in the event
                       that either party liquidates its business, this
                       Agreement shall terminate immediately.

         9.2      Upon termination of this Agreement, all amounts due and owing
                  from Novoste B.V. to AorTech, notwithstanding prior terms of
                  sale or Agreement, become immediately due and payable. All
                  tooling, equipment, inventory and documents shall be forwarded
                  by AorTech to a destination specified by Novoste B.V.. All
                  costs associated with the transfer of equipment,
                  documentation, records or other Novoste B.V. assets shall be
                  expensed to Novoste B.V..

         9.3      With reference to Section 13 of this Agreement, if any of the
                  conditions listed in Section 13 of this Agreement should
                  occur, and the result of such condition represents a breach of
                  this Agreement, this Agreement will terminate.


         10.1     AorTech and Novoste B.V. shall each maintain as confidential,
                  and not to disclose to third parties or use for its own
                  benefit, any specifications, drawings, blueprints, flow
                  charts, reports, data, business information, trade secrets,
                  manufacturing processes, or other confidential information of
                  the other party which AorTech or Novoste B.V., as the case may
                  be, learns or acquires by virtue of this Agreement, except
                  that AorTech or Novoste B.V. may disclose confidential
                  information pursuant to the order or requirement of a court,
                  administrative agency, or other governmental body, and for
                  disclosures required to be made by Novoste B.V. or its parent,
                  Novoste Corporation, pursuant to United States Securities Law.
                  AorTech and Novoste B.V. must notify the other party in
                  writing of the need for such disclosure in advance of any such
                  disclosure being made and AorTech and Novoste B.V. further
                  agree to use reasonable efforts to protect the confidential
                  information against disclosure to unauthorized persons.

         10.2     AorTech may disclose confidential information to AorTech's
                  employees who have a need to know and legal duty to protect
<PAGE>   10

                  such confidential information. At Novoste B.V.'s written
                  request, AorTech agrees to destroy or otherwise dispose of all
                  confidential information, except as prohibited by regulatory
                  or safety agencies.

         10.3     Without Novoste B.V.'s written consent, AorTech shall not in
                  any manner disclose (except as required for financing),
                  advertise, nor publish the existence of this Agreement nor the
                  terms of transactions under this Agreement, which shall be
                  considered as part of the confidential information.

         10.4     The term confidential information shall not include
                  information which is in the public domain at the time of
                  disclosure or afterward, except where such information becomes
                  public due to a breach by the disclosing party of its
                  obligations hereunder, nor shall the term confidential
                  information in possession at the time of disclosure or which
                  may be disclosed by third party having the right to disclose
                  the same.

11.0     INSURANCE

         11.1     Novoste B.V. shall provide AorTech, on or before execution of
                  this Agreement with evidence acceptable to AorTech from a
                  reputable insurance company certifying that Novoste has one or
                  more policies issued by such insurance company in respect of
                  Product liability insurance in respect of the Product in an
                  amount equivalent to at least EIGHT MILLLION U.S. DOLLARS ($8

         11.2     AorTech shall provide to Novoste B.V., on or before execution
                  of this Agreement with evidence acceptable to Novoste B.V.
                  from a reputable insurance company certifying that AorTech has
                  one or more policies issued by such insurance company in
                  respect of Product liability, fire insurance, and theft
                  (catastrophic loss). In the event of a catastrophic loss, said
                  insurance must cover the cost of replacing all Novoste
                  equipment and fixtures at replacement value, Novoste purchased
                  supplies and components, Novoste B.V. finished Products.
                  Novoste equipment shall be covered by AorTech up to ONE
                  MILLION U.S. DOLLARS ($1 Million) Or other sum to be agreed
                  upon in writing.


         12.1     Novoste B.V. shall at all times indemnify and hold AorTech
                  (and its respective directors, officers, employees and agents)
                  harmless and upon request will defend the same against all
                  actions, proceedings, claims, demands, losses, suits, outlays,
                  damages, judgments, penalties or expenses of any kind or
                  nature (including reasonable legal fees, other costs and
                  amounts paid in settlement
<PAGE>   11

                  with Novoste B.V.'s consent) which may be suffered or incurred
                  by any of them arising out of any defect in any Product or any
                  part thereof ;

         12.2     AorTech shall at all times indemnify and hold Novoste B.V.
                  (and its respective directors, officers, employees and agents)
                  harmless and upon request will defend the same against all
                  actions, proceedings, claims, demands, losses, suits, outlays,
                  damages, judgments, penalties or expenses of any kind or
                  nature (including reasonable legal fees, other costs and
                  amounts paid in settlement with AorTech's consent) which may
                  be suffered by any of them arising out of any failure by
                  AorTech to exercise reasonable care in carrying out the tasks
                  specified in 1.2 of this Agreement.

         12.3     Each party shall give the other party prompt notice of any
                  claim or suit relating to the subject matter of the
                  indemnities granted in terms of this Clause 12. At the
                  discretion of Novoste B.V., Novoste B.V. will assume the
                  defense of any claim, demand or action against AorTech,
                  however if shall upon written request by AorTech allow AorTech
                  to participate in the defense thereof, such participation to
                  be at the expense of AorTech.

  13.0   DEFAULT

         13.1     No failure or omission by either of the parties hereto in the
                  performance of any obligation contained in this Agreement
                  shall be deemed a breach hereof to the extent the same shall
                  result from any cause beyond the control of such party,
                  including, but not restricted to, acts of God, acts of local
                  governments or any agency thereof, requests of any
                  governmental authority or any officer, department, agency or
                  instrumentality thereof, fire, storm, flood, earthquake,
                  explosion, accident, acts of the public enemy, war, rebellion,
                  insurrection, riot, sabotage, epidemic, quarantine,
                  restrictions, strike, lock-out, dispute with workmen, labor
                  shortages, transportation embargoes, or failures or delays in
                  the delivery of any transportation facility, Product or
                  material necessary to the performance hereof.


         14.1     The illegality or unenforceability of any provision this
                  Agreement shall not impair the legality or enforceability of
                  any other provision.

15.0     NOTICES

         15.1     Any notices required or permitted to be given pursuant to this
                  Agreement shall be sufficient if delivered either by personal
                  delivery or by registered post. Notices sent by post shall be
                  addressed as follows:
<PAGE>   12

                           If to Novoste B.V.:       Novoste B.V.
                                                     Dillenburgstraat 11a
                                                     5652 AM Eindhoven
                                                     The Netherlands

                                                     Attn:  David Gill

                                                     And one copy to Novoste
                                                     B.V. parent company,

                                                     Novoste Corporation
                                                     4350-C International Blvd.
                                                     Norcross, GA 30093

                                                     Attn: Donald Webber

                           If to AorTech:            AorTech Europe Limited
                                                     Strathclyde Business Park
                                                     Scotland  ML4 3NJ

                                                     Attn:  Richie Brown

                  Subject to change by written notice in accordance with this

         15.2     Notices delivered personally shall be deemed to be received as
                  of the date of actual receipt; notices sent by post shall be
                  deemed to be received on the fifth business day after the date
                  of posting.


         16.1     The descriptive headings herein are inserted for convenience
                  of reference only and are not intended to be a part of or to
                  affect the meaning or interpretation of this Agreement.


         17.1     In the event of any question or dispute or difference arising
                  between the parties as to the true intent and meaning of this
                  Agreement or the fair interpretation or the implement thereof,
                  the same shall be referred to the Dean for the time being of
                  the Royal Faculty of Procurators in Glasgow, whom failing an
                  Arbiter to be appointed by him as sole Arbiter, and the award
                  of such Arbiter, partial, interim or final, shall be binding
                  on the parties, who agree to exclude the jurisdiction of the
                  court to give its opinion on any question of law arising in
                  any such arbitration under in terms of Section 3 (1) of the
                  Administration of Justice (Scotland) Act 1972.
<PAGE>   13


         18.1     This Agreement shall be governed by and construed in
                  accordance with the provisions of Scots Law.


         19.1     AorTech shall update its Quality Manual and inform the
                  regulatory body TUV of its desire to broaden the scope of
                  their ISO 9001 coverage to include contract-manufacturing
                  services within 45 days of entering into this contract.

         19.2     AorTech will within six (6) months of entering into this
                  contract, deliver to Novoste B.V., a copy of the AorTech's
                  amended ISO 9001 certificate as confirmation that 19.1 above
                  has been met.

         19.3     AorTech shall immediately inform Novoste B.V. of any
                  non-compliance or observation raised by the Company (AorTech)
                  or Notified Body (TUV Product Service) that may affect the
                  Product. This shall be done in writing within 3 business days
                  upon being issued the observation.

         19.4     If AorTech shall lose its ISO 9001 certificate due to
                  unsatisfactory resolution of observations of non-compliance
                  issued by AorTech's notified body, or, AorTech changes
                  notified bodies, or, AorTech is unable to broaden its Quality
                  Manual as per 19.1 of this Agreement, Novoste B.V. will have
                  the option to terminate this contract, on thirty days written

         19.5     AorTech shall maintain a cleanroom certification at class
                  10,000 status. Appropriate records verifying this
                  classification is maintained shall be made available to
                  Novoste B.V. upon request.

20.0     NO CHANGE

         20.1     AorTech agrees to make no changes to either the facility,
                  process layout, process flow, Product, processes
                  (manufacturing, testing, sterilization and inspection),
                  Products intended end use, design, component, tooling,
                  packaging, labeling, instructions for use, or any change which
                  can or may effect the form, fit, function, safety or efficacy
                  of the device, end user, patient or Production operator,
                  without the express written permission of Novoste B.V.. The
                  person(s) designated by Novoste B.V. for approving any change
                  shall be Donald J. Webber, Director of Manufacturing
                  Operations, or Daniel Currie, Director of Quality Assurance,
                  unless otherwise amended in writing.

<PAGE>   14


         21.1     The parties understand that, except as may be otherwise
                  expressly stated herein, neither the Terms or Conditions of
                  this Agreement, nor the acts of either party arising out of
                  this Agreement or related to Novoste B.V.s's purchase, use,
                  sale, or other distribution of Product may be considered in
                  any way as a grant of any license whatsoever under any of
                  Novoste B.V.'s or its parent, Novoste Corporation, present or
                  future patents, copyrights, trademarks, trade secrets, or
                  other proprietary rights, nor is any such license granted by
                  implication, estoppel, or otherwise.

22.0     OWNERSHIP

         22.1     Specifications - AorTech acknowledges that the specifications
                  and all related writings, drawing, artwork, computer assisted
                  designs and similar works are and shall be the exclusive
                  property of Novoste B.V., or its parent , Novoste Corporation
                  (jointly "Novoste"), and Novoste retains all right, title and
                  interest, including copyright, relating to such material. Upon
                  termination of this Agreement for any reason with the
                  exception of breach by Novoste B.V., AorTech agrees to return
                  to Novoste B.V. all copies of the specifications and related
                  materials within ten (10) business days of such termination.
                  This material shall be complete in every respect, as to permit
                  experienced manufacturer to manufacture, assemble, test,
                  package and sterilize the Product described in this Agreement.
                  In the event of Breach by Novoste B.V., AorTech will return
                  all documentation within ten (10) days of resolution of any
                  outstanding technical issues and payment of outstanding
                  engineering or Production invoices.

         22.2     Novoste Equipment - AorTech shall assist in the initial
                  installation, qualification, validation of Novoste equipment,
                  tooling, and fixtures, and maintain and account Novoste
                  equipment at the AorTech facility or AorTech's
                  sub-contractor's facility. AorTech hereby acknowledges that
                  Novoste equipment is the sole and exclusive property of
                  Novoste. Novoste shall provide identification and ownership
                  tags (also called asset tags) for all Novoste. equipment, and
                  AorTech shall ensure that such tags are properly placed and
                  maintained on all Novoste equipment. AorTech hereby covenants
                  that, during the term of this Agreement

                  a.       AorTech and any sub-contractor of AorTech using
                           Novoste equipment shall utilize Novoste equipment
                           solely for manufacturing Novoste B.V. requirements of
                           the Product provided hereunder,

                  b.       AorTech shall not encumber any of Novoste equipment,
                           nor shall AorTech permit Novoste equipment to become

<PAGE>   15

                           encumbered as a result of any act or omission of
                           AorTech or a subcontractor of AorTech.

                  c.       AorTech agrees that it will not sub-contract the
                           manufacturing of Novoste B.V. Product without written
                           permission from Novoste B.V..

         22.3     Within ten (10) business days following termination (with the
                  exception of termination due to breach by Novoste B.V.) or
                  expiration of this Agreement, AorTech agrees to properly pack
                  and return to Novoste, or cause to be properly packed and
                  returned to Novoste, F.O.B. point of shipment, all Novoste
                  equipment, the same to be shipped to such facility as Novoste
                  B.V. directs at Novoste B.V.'s expense.

         22.4     AorTech acknowledges that any improvement made to any Novoste
                  equipment, tooling, fixture, process or system made by AorTech
                  where such service is paid by Novoste B.V., Novoste B.V. shall
                  own all rights and claims to such improvements.

23.0     WARRANTY

         23.1     Limited Warranty: AorTech warrants to Novoste B.V., for the
                  shelf life of the Product as defined by Novoste
                  specifications, which shall be a minimum of twenty four months
                  from the date of sterilization, and a maximum of thirty-six
                  months from the date of sterilization, that all Product shall
                  be free from defects in material and workmanship, and shall
                  conform to applicable specifications, drawings, samples and
                  descriptions referred to in this Agreement.

         23.2     AorTech shall rework or replace all defective Product
                  (typically within 15 days of receipt) unless otherwise
                  specified by Novoste B.V., at no cost to Novoste B.V.. All
                  rework of finished Product must be approved in writing before
                  starting any such rework by the Novoste B.V., Director of
                  Quality Assurance.

         23.3     AorTech warrants its right under this Agreement to convey the
                  Product and that the Product is and will continue to be, upon
                  delivery from AorTech, free of all liens and encumbrances.


         24.1     AorTech acknowledges that Novoste Corporation is in the
                  process of forming its European corporate striucture, which
                  ultimately may include subsidiaries in several countries in
                  addition to Novoste B.V. in the Netherlands. Novoste B.V.

<PAGE>   16

                  reserves the right to assign or transfer this contract to
                  another subsidiary of the Novoste corporate group.


         25.1     The contract signed by Novoste Corporation and AorTech Ltd. on
                  July 16th, 1998 is now agreed as terminated and that this
                  contract supercedes all other discussions or agreements in
                  relation to the subject matter of the contract.

         IN WITNESS WHEREOF, the authorized representatives of the parties have
         executed this Agreement under seal and date(s) set forth below:

         AorTech Europe Limited                     Novoste B.V.
         Contractor                                 Buyer

         /s/ Eddie McDaid                           /s/ David Gill
         ------------------------                   --------------------------
         Eddie McDaid                               David Gill
         Managing Director                          General Manager

         Date:                                      Date:  12/23/98