Manufacturing and Supply Agreement - Novoste Corp. and BEBIG Isotopen- und Medizintechnik GmbH d/b/a BEBIG Isotopentechnik und Umweltdiagnostik GmbH
MANUFACTURING AND SUPPLY AGREEMENT
between
Novoste Corporation
3890 Steve Reynolds Boulevard
Norcross, GA 30093
represented by its Vice President of Manufacturing Don Webber
- hereinafter referred to as NOVOSTE -
and
BEBIG Isotopen- und Medizintechnik GmbH
d/b/a so far as BEBIG Isotopentechnik und Umweltdiagnostik GmbH
Robert-Rossle-Str. 10
D-13125 Berlin
represented by its General Managers Dr. Andre Heb and Dr. Gunnar Mann
- hereinafter referred to as BEBIG -
Preamble
1. NOVOSTE produces medical devices and has developed a catheter based device
for the delivery of radiation seeds to the site of restenotic lesions in
coronary arteries for the inhibition and prevention of restenosis
(hereinafter referred to as "Restenosis Device").
2. BEBIG manufactures radioactive sealed Strontium-90 Seed sources (BEBIG
Product Code SrO.SO3) in units called seed-trains usable in the Restenosis
Device (hereinafter referred to as "Product" or "Seed-Trains").
3. The parties hereto concluded an Agreement under the term RESTENOSIS THERAPY
PROJECT DEVELOPMENT AND SUPPLY AGREEMENT dated November 14, 1994, amended by
the FRAME AGREEMENT CONTAINING PURCHASE ORDER PROVISION AND INVESTMENT GRANT
(hereinafter referred to as the "Framework Agreement"), dated November 15,
1996, dealing et. al. with the supply of the Product to NOVOSTE.
4. Additionally BEBIG granted an option to purchase all of BEBIG's tangible and
intangible assets required for the production of the Product under an
agreement called the OPTION TO PURCHASE ASSETS AGREEMENT dated August 22,
1995 (hereinafter referred to as the "Purchase Option Agreement").
5. Both the Framework Agreement and the Purchase Option Agreement were amended
by the AMENDMENT TO FRAMEWORK AGREEMENT AND SECURITY AGREEMENT (hereinafter
referred to as "Amendment 1") dated July 23, 1998, dealing inter alia with
the transfer of certain assets required for the manufacturing of the Product
as security collateral to NOVOSTE.
6. Finally the parties hereto concluded a 2. AMENDMENT TO THE FRAMEWORK
AGREEMENT AND SECURITY AGREEMENT dated February 11, 2000.
7. Both parties intend to continue their cooperation on the basis of the
considerations described hereinafter.
8. THEREFORE, in the light of the above, both parties agree to the following
MANUFACTURING AND SUPPLY AGREEMENT (hereinafter referred to as the
"Agreement"):
(S)1 Previous Agreements
1. Validity of Previous Agreements: The parties mutually agree that this
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Agreement supersedes all agreements mentioned above (collectively referred
to as "Previous Agreements"). These Previous Agreements shall no longer be
valid after the Effective Date of this Agreement and all rights and claims,
whether existing or contingent, whether known or unknown, shall finally and
fully be released and settled. All payments that have been made by
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NOVOSTE to BEBIG under this Previous Agreements shall be and remain the
sole property of BEBIG and NOVOSTE shall not be entitled to reclaim these
payments.
2. Waiver of the Option: NOVOSTE waives in particular its option to acquire
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the assets as specified in section 1 of the Purchase Option Agreement. In
this regard the option fee of one hundred thousand dollars (US$100,000) as
specified in section 2 of the Purchase Option Agreement that has been paid
by NOVOSTE to BEBIG shall be and remain the sole property of BEBIG and
NOVOSTE shall not be entitled to reclaim this payment.
3. Retransfer of Security Collateral: Additionally with the execution of this
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Agreement NOVOSTE retransfers the title in the Security Collateral A and B
as defined in par. 2 of section B of Amendment 1 to BEBIG. The parties
mutually agree that the investment contribution of an aggregate sum of DM
2,500,000 paid by NOVOSTE in respect to the Framework Agreement and the
Amendment 1 shall be and remain the sole property of BEBIG and NOVOSTE
shall not be entitled to reclaim this payment. In respect to the retransfer
of the title in the Security Collateral NOVOSTE promises to hold BEBIG
harmless from any debts, liabilities or obligations incurred in connection
with the transfer of the Security Collateral.
4. Offset License Fee Payments: Two prepaid offset license fee payments for
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the year 2000 for a total of 354.670 USD have been made by NOVOSTE to
BEBIG. These prepayments are not subject to refund or return to NOVOSTE by
BEBIG.
(S)2 Manufacturing and Supply of the Product
1. Manufacture and Sale of Product: During the Term, BEBIG shall manufacture
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and sell the Product to NOVOSTE, in accordance with the terms and
conditions of this Agreement as specified below and in quantities specified
in NOVOSTE's purchase orders. The obligation to supply NOVOSTE is limited
to a production capacity of ***** Seed-Trains per year with a maximum of
***** individual Seed sources unless otherwise agreed in writing. In 2001
the production capacity is limited to ***** Seed sources per week. BEBIG
will exert a maximum and best effort to meet NOVOSTE's actual purchase
requirements above the foregoing commitments.
2. Forecast: NOVOSTE shall provide to BEBIG a rolling forecast for Seed-Train
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delivery requirements for 12-month periods, the first such forecast to be
delivered to BEBIG within 30 days of the date of execution of this
Agreement and subsequent rolling and updated forecasts to be delivered to
BEBIG each 90 days thereafter during the term of this Agreement and any
extensions thereof.
3. Purchase Orders: NOVOSTE shall submit firm purchase orders to BEBIG from
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time to time, but not later than three (3) months before the established
Date of Delivery of Seed-Trains. NOVOSTE may exceed the forecast
requirements set forth in the 12-month rolling forecasts, in which case
BEBIG will do its best effort to fulfil NOVOSTE's orders.
4. Quality Assurance: BEBIG warrants and represents that the Product supplied
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by BEBIG under this Agreement will be manufactured in accordance with all
applicable ISO 9000 and EN46000 regulations. BEBIG shall notify NOVOSTE of
any proposed or planned changes in the manufacturing processes or
components of the Product, and shall not implement such changes until such
time as NOVOSTE approves the proposed or planned changes, in writing. In
addition, BEBIG agrees to have implemented a quality control system and
procedures as shall be appropriate to assure compliance with the
requirements of International Standards. NOVOSTE has the right to supervise
the agreed upon quality and shall be entitled to inspect the facility in
which any part of the Product is been manufactured upon one (1) week's
prior notice.
5. Terms of Use of the Trains: NOVOSTE agrees not to have a Seed-Train in
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clinical use after a period of 18 months from the Date of Manufacturing of
any such Seed-Train, as evidenced by the manufacturer's certificate. BEBIG
will deliver the Seed-Trains to NOVOSTE within 30 days after the Date of
Manufacturing. The time for Use of the Seed-Trains in the clinic shall not
exceed a period of 12 months.
6. Use of existing manufacturing line: BEBIG agrees not to sell directly or
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indirectly radioactive sources produced on the manufacturing line on which
the Product for NOVOSTE is manufactured.
7. Insurance. BEGBIG is obliged to maintain a reasonale damage insurance for
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the Product manufacturing line insuring against damages covering the risks
of fire, water damage, storm
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and hail and theft with breaking and entering. BEBIG also maintains all
necessary insurance coverage under the German Atomic Law for the
manufacturing facility.
(S)3 Remuneration and Payment Terms
1. Price: NOVOSTE agrees to pay the prices (collectively referred to as the
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"Price or Prices") according to the following price schedule:
in 30 mm in 40 mm in 60 mm
packaging packaging packaging
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In the event of an increase in material costs, BEBIG may add to the Prices
increases in material cost, after such cost increases exceed 5 % during any
one year period of the Agreement . BEBIG shall provide NOVOSTE with
evidence for such price increase.
Prices are ex works BEBIG's manufacturing facility Berlin (INCOTERMS),
including packaging and ensuring product is cleared for export but
excluding taxes if any. NOVOSTE agrees to pay for reasonable shipping costs
for such deliveries.
2. Payment Guarantee: NOVOSTE guarantees the following minimum annual payments
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(collectively referred to as "Annual Guaranteed Payment"), for all
purchases of Products of NOVOSTE to BEBIG during the term of this
Agreement:
Year Annual Guaranteed payment
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2001
2002 *****
2003
2004
During the respective calendar year payments of the invoiced Price shall
be credited against the Annual Guaranteed Payment commitment until the
remaining balance equals zero. In case NOVOSTE may order less Seed-Trains
than prepaid by the Annual Guaranteed Payment commitment the remaining
balance of the respective Annual Guaranteed Payment shall be due and
payable, in full, by NOVOSTE to BEBIG, 30 days after the end of the one-
year contract period.
In the event that the three month purchase orders are less than the
prorated Guaranteed Payment, NOVOSTE and BEBIG shall in good faith
negotiate an appropriate prepayment or mutually acceptable alternative.
All Seed-train revenues resulting from deliveries in 2001 which are in
excess of the Annual Guaranteed Payment for 2001 can be credited against
the Guaranteed Payment of the year 2002.
In the event both parties have entered into a new development and
manufacturing agreement for a new source by the end of year 2002 the
Annual Guaranteed Payment commitments for the years 2003 and 2004 under
this Agreement shall be the payment commitments for the new agreement.
3. Surcharge: BEBIG will make a substantial investment in the Sr-90 seed
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production line upon the execution of this Agreement to ensure continuous
production for a period of four (4) years. NOVOSTE agrees to pay a
surcharge of ***** for the first ***** seeds (total: *****) delivered
after the execution of this Agreement to cover a part of BEBIG's
investment costs. This surcharge will not be credited against the Annual
Guaranteed Payments and will be charged separately.
4. Payment terms: Payment shall be due within 30 days after receiving an
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invoice from BEBIG. The payment shall be made free of charge to account
no. ***** at the Commerzbank Berlin, code no. *****.
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(S)4 Warranty
1. Warranties: BEBIG warrants and represents that the Product when delivered
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to NOVOSTE will meet all Product specifications and be free from defects
and unreasonable hazards in material and workmanship and conform to
applicable specifications and to contract requirements.
2. Warranty Period: During a period of twelve (12) month following the Date of
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Delivery (referred to as the "Warranty Period") BEBIG agrees to replace at
its own expenses any defective Product which has been returned to BEBIG by
NOVOSTE. This provision does not apply to any defective Product that will
be returned after expiration of the Warranty Period.
3. Occurrence of any Defective Product: NOVOSTE is obliged to immediately
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notify BEBIG in writing upon becoming aware of any potentially defective
source train. In such case the two companies agree to mutually determine
the cause of defect and work in good faith to identify the root cause.
4. Exclusions of Warranty: Any warranty is excluded with respect to defects
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caused in BEBIG's reasonable opinion by (i) accident, abuse, alteration,
misuse or neglect, (ii) failure to use Products under normal operating
conditions or environment, , (iii) (iv) failure to use or take any proper
precautions under the circumstances, (v) user modification of any Product.
(S)5 Terms of Disposal
1. Disposal Obligation: BEBIG will, on NOVOSTE's request, take back Seed-
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Trains for final disposal at a flat rate of ***** per seed. The flat rate
shall be valid for disposal of a total of ***** seeds, however, BEBIG
shall not be required, at the ***** rate, to dispose of more than 6000
seeds per year. For any additional seeds disposed by BEBIG, the flat rate
will be *****. However, NOVOSTE is not obliged to send Seed-Trains back to
BEBIG for disposal. BEBIG agrees not to reuse Seed-Trains returned for
disposal.
2. Duration: The disposal obligation by BEBIG as stated above, shall be in
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effect for a period of 18 months after termination of this Agreement.
(S)6 Force Majeure
1. Force Majeure: The performance of a Party, required by this Agreement,
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shall be extended by a reasonable period of time if such performance of the
respective Party is impeded by an unforeseeable event beyond such Party's
control, which shall include but not be limited to acts of God, industrial
actions, riots, wars, embargo or requisition (acts of government).
2. Notification: In case of Force Majeure, each Party shall promptly notify
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and furnish the other Party in writing with all relevant information
thereto and the Parties shall negotiate in good faith appropriate
solutions.
(S)7 Term and Termination
1. Term of the Agreement: The Agreement shall be valid for a period of four
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(4) years (referring to as the "Initial Term") beginning from the date of
Execution of this Agreement (referred to as "Effective Date"). The
Agreement will automatically be extended for a period of one (1) year
(referred to as "Extended Term") unless written cancellation is given by
either party six (6) month before the end of the Initial Term or any
Extended Term (collectively referred to as "Term"). During the Extended
Term the terms and conditions as of the last year of the Initial Term shall
apply.
2. Line Decontamination and Disposal: After termination of this Agreement and
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provided that both parties will not enter into an Agreement to continue the
production of the Product, then NOVOSTE agrees to pay BEBIG the costs to
decontaminate the strontium 90 line assets, up to a maximum of US$250,000.
3. At the time of termination of this agreement, BEBIG will grant to NOVOSTE a
fully paid, non-exclusive and non-transferable license to all its know-how
and intellectual property used in the design and manufacture of the Seed
trains. NOVOSTE will not assign these rights to any third party, however,
NOVOSTE may permit a third party manufacturer to utilize the said know-how
and intellectual property for the sole purpose of manufacturing product for
NOVOSTE.
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4. In case of material breach of this agreement caused by BEBIG, NOVOSTE will
give written notice to BEBIG within 30 days. If such breach is not cured by
reasonable measures by BEBIG within 90 days from the date of notice, then
NOVOSTE may permit a third party manufacturer to utilize the said know-how
and intellectual property for the sole purpose of manufacturing product for
NOVOSTE.
(S)8 Confidential Information
Each party promises to hold in confidence any confidential information
disclosed by the other party in the execution of this Agreement and the
Previous Agreements and not provide such information to third parties,
during this Agreement and for a period of two (2) years after its
termination. Neither party shall have the right to use the confidential
information given to the other party for any purposes other than those of
this Agreement. The confidential information and all copies or part or all
thereof, shall be and remain the exclusive property of the disclosing
party.
(S)9 Miscellaneous
1. Amendments: This Agreement may only be amended or modified at any time and
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in all respects by an instrument in writing executed by NOVOSTE and BEBIG.
2. Notices: Any notices or other communications required or permitted
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hereunder shall be sufficiently given if delivered personally or sent by
registered or certified mail, postage prepaid, addressed to:
To NOVOSTE: NOVOSTE Corporation
3890 Steve Reynolds Boulevard
Norcross, GA 30093
Attn: Don Webber
To BEBIG: BEBIG Isotopen- und Medizintechnik GmbH
Robert-Rossle-Str. 10
D-13125 Berlin
Attn: Dr. Andre Heb
or to such other address as shall be furnished in writing by a party to the
other and shall be deemed to have been given as of the date so personally
delivered or three (3) days after being deposited in the United States
mail, postage pre-paid, as the case may be.
3. Governing Law: It is the intention of the parties the laws of the Federal
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Republic of Germany, both substantive and remedial, should govern the
validity of this Agreement, the construction of its terms and the
interpretation of its rights and duties of the parties.
4. Execution of Counterparts: This Agreement may be executed in counterparts,
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each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
5. Succession: All the terms and provisions of this Agreement shall be binding
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upon and inure to the benefit of, and be enforceable by, BEBIG and NOVOSTE
and their successors and valid assigns.
6. Entire Understanding: This Agreement constitutes the entire agreement
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between the parties hereto, and there are no agreements, understandings,
restrictions, warranties or representations between the parties other than
those set forth herein.
7. Severability: Should any provision of this Agreement be or become invalid
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or void, the remaining provisions will continue to be in effect. Invalid or
void provisions are to be replaced by such provisions that will fulfil the
intent of the parties and the economic purpose of this Agreement in a
legally binding form.
8. Adverse Regulatory Events: Bebig agrees to inform Novoste immediately in
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writing upon receipt of any information regarding any adverse regulatory
event that holds any potential to interfere with production schedules or
specification changes
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NOVOSTE: BEBIG:
Date: 14 June 2001 Date: 20 June 2001
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/s/ Donald J. Webber /s/ Dr. Andre Heb
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Donald J. Webber Dr. Andre Heb
Vice President of Manufacturing General Manager
/s/ Dr. Gunnar Mann
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Dr. Gunnar Mann
General Manager
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