Sample Business Contracts


License Agreement - Emory University and Novoste Corp.


                             EXCLUSIVE AGREEMENT
                                    between
                               EMORY UNIVERSITY
                                      and
                              NOVOSTE CORPORATION
<PAGE>

                               TABLE OF CONTENTS

ARTICLE 1.  DEFINITIONS......................................  2

ARTICLE 2.  ASSIGNMENT AND GRANT OF LICENSE..................  8

ARTICLE 3.  ROYALTIES AND OTHER PAYMENTS..................... 11

ARTICLE 4.  REPORTS AND ACCOUNTING........................... 14

ARTICLE 5.  PAYMENTS......................................... 17

ARTICLE 6.  DEVELOPMENT AND MARKETING PROGRAM................ 19

ARTICLE 7.  PATENT PROSECUTION............................... 22

ARTICLE 8.  INFRINGEMENT AND THIRD PARTY RIGHTS.............. 25

ARTICLE 9.  WARRANTIES AND INDEMNIFICATION................... 28

ARTICLE 10. CONFIDENTIALITY.................................. 33

ARTICLE 11. TERM AND TERMINATION............................. 36

ARTICLE 12. ASSIGNMENT....................................... 42

ARTICLE 13. MISCELLANEOUS.................................... 43

ARTICLE 14. NOTICES.......................................... 51

EXHIBIT A.................................................... 54

EXHIBIT B.................................................... 58

<PAGE>

THIS LICENSE AGREEMENT is made and entered into as of this      day of
January, 1996 by and between EMORY UNIVERSITY, a nonprofit Georgia corporation
with offices located at 1380 South Oxford Road, N.E., Atlanta, Georgia 30322,
(hereinafter referred to as "EMORY") and NOVOSTE CORPORATION, a Florida
corporation with its principal place of business located at 4350 International
Boulevard, Suite C, Norcross, Georgia 30093 (hereinafter referred to as
"NOVOSTE").

                                  WITNESSETH

    WHEREAS, EMORY asserts that it is the rightful owner of all right, title,
and interest in inventions developed by employees of EMORY and is responsible
for the protection and promotion of commercial development of such inventions;
and

    WHEREAS, Ron Waksman, M.D. ("Waksman") and Ian R. Crocker, M.D. ("Crocker")
have, during their course of employment with EMORY, collaborated with NOVOSTE
employees to jointly invent certain novel devices and methods useful for the
treatment of restenosis; and

    WHEREAS, Waksman and Crocker have executed an assignment of certain
inventions and the patent rights therein to NOVOSTE and there is, accordingly, a
dispute regarding title to such invention and patent rights; and
<PAGE>

    WHEREAS, NOVOSTE represents that it has the necessary expertise and
resources to fully develop and commercialize such methods and devices; and

    WHEREAS, EMORY wishes to have such methods and devices developed and
commercialized and made available in commerce for use by the public; and

    WHEREAS, the parties desire to develop and commercialize such devices and
methods to their mutual benefit and to resolve all disputes as to title to such
inventions and the patent rights therein.

    NOW, THEREFORE, for and in consideration of the mutual covenants and the
premises herein contained, the parties, intending to be legally bound, hereby
agree as follows.

                            ARTICLE 1.  DEFINITIONS
                            -----------------------

    The following terms as used herein shall have the following meaning:

  1.1  "Affiliate" shall mean any corporation or non-corporate business entity
which controls, is controlled by, or is under common control with a party to
this Agreement.  A corporation or non-corporate business entity shall be
regarded as in control of another corporation if it owns directly, or indirectly
controls, at

                                     - 2 -
<PAGE>

least forty (40%) percent of the voting stock of the other corporation, or (i)
in the absence of the ownership of at least forty (40%) percent of the voting
stock of a corporation or (ii) in the case of a non-corporate business entity,
or non-profit corporation, if it possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such corporation
or non-corporate business entity, as applicable.

1.2  "Agreement" shall mean this Agreement, including all Exhibits attached to
this Agreement.

1.3  "Assigned Patent" shall mean United States patent application serial number
08/330,327 and any reissues, renewals, extensions., divisionals, continuations,
which issue thereon, including reexamined and reissued patents, and any foreign
counterparts of such patent applications and issued patents.

1.4  "Dollars" shall mean United States dollars.

1.5  "FDA" shall mean the United States Food and Drug
Administration or successor entity.

1.6  "FDA Approval Application" shall mean, a PMA application or any other
application required to be filed with the FDA in order to obtain approval for
the sale of a Licensed Product in the United States.

                                     - 3 -
<PAGE>

    1.7  "Indemnitees" shall mean EMORY, its trustees, employees, students, and
their heirs, executors, administrators, successors and legal representatives.

    1.8  "Licensed Patents" shall mean the prepared and unfiled patent
application attached as a part of Exhibit B hereto and any other patent
application, now or hereafter filed, which claims Licensed Technology (filed by
NOVOSTE in accordance with Section 7.2 hereof) together with any reissues,
renewals, extensions, divisionals, continuations, continuations-in-part, and
patents which issue thereon including reexamined and reissued patents, and any
foreign counterparts of such patent applications and issued patents.

    1.9  "Licensed Product(s)" shall mean any catheter, transfer device or other
device, or other accessories sold with the catheter and/or the transfer device,
the manufacture, use, offer to sell or sale of which is covered by a Licensed
Patent, or uses or incorporates Licensed Technology.

    1.10 "Licensed Technology" shall mean know how, devices, instruments,
technical data, trade secrets, designs, plans, specifications, methods,
processes, systems, all improvements, discoveries, developments, modifications,
formulae, concepts, techniques, ideas, manufacturing procedures, marketing
strategies

                                     - 4 -
<PAGE>

and expertise, and any other information and documentation, whether or not
patented, which is conceived, learned, invented, or developed before or after
the date of this Agreement by Waksman, Crocker, and any other investigator
carrying out medical research sponsored by NOVOSTE during their course of
employment by EMORY or other employees of EMORY working under their direction to
the extent that: (i) such Licensed Technology is useful for the manufacture, use
or sale of any Licensed Product covered by the Assigned Patent or any Licensed
Patent and; (ii) EMORY possesses the right to license the use of such Licensed
Technology to NOVOSTE for commercial purposes without incurring financial or
other obligations to any non-employee third party or breaching any obligation of
confidentiality identiality with any such third party. "Licensed Technology
shall not include the subject matter claimed in the Assigned Patent.

1.11 "Territory" means the world.

1.12 "Net Selling Price" of Royalty-bearing Products shall mean the gross
invoice price actually paid by a purchaser of a Royalty-bearing Product to
NOVOSTE, an Affiliate of NOVOSTE, a sublicensee of NOVOSTE, or any other party
authorized by NOVOSTE to sell or lease Royalty-bearing Products (net of rebates,
refunds, replacements or credits allowed to purchasers for return of

                                     - 5 -
<PAGE>

Royalty-bearing Products or as reimbursement for damaged Royalty-bearing
Products, discounts, sales, use or value-added taxes, duties, shipping and
transportation charges, insurance and allowances, commissions paid to non-
employee outside salesmen or distributors, import and custom duties, and any
separately itemized cost or expense for handling or disposing of radiation
contaminated catheters, transfer devices or other accessories sold with the
catheter and/or transfer device which shall not exceed NOVOSTE's costs for such
handling and disposal) and, if applicable, the value of all properties and
services received in consideration of a Sale of Royalty-bearing Products, by
NOVOSTE or Affiliates or sublicensees or authorized agents to Sell, from
unrelated purchasers in accordance with NOVOSTE's or sublicensee's or authorized
agents to Sell's normal practice and for which NOVOSTE, sublicensees or
authorized agents to Sell give credit to such purchasers for the value of such
properties and services.  Where a Sale is deemed consummated by a gift, lease,
use or other disposition of products for other than a selling price stated in
cash, the term "Net Selling Price" shall mean the average gross selling price
billed by NOVOSTE in consideration of the Sale of comparable Royalty-bearing
Products during the three (3) month period immediately preceding such Sale, as
calculated above. if

                                     - 6 -
<PAGE>

there are no such comparable Royalty-bearing products, "Net Sales Price" shall
be negotiated in good faith between the parties based on a commercially
reasonable fair market-value of the Royalty-bearing Product.

    Notwithstanding anything set forth in this Paragraph 1.12, "Net Sales
Price" shall not in any event include any consideration paid to NOVOSTE, its
Affiliates, sublicensees or authorized agents for the sale, lease, use, service,
acquisition, handling, or disposal of radioactive isotopes or other radiation
sources.

    1.13  "Registration" shall mean, in relation to any Licensed Product, such
approvals or marketing clearances by United States and other federal
authorities, such as the FDA and the Nuclear Regulatory Commission (NRC), and
state authorities as may be legally required before such Licensed Product may be
commercialized or Sold in the United States.

    1.14  "Royalty-bearing Product" shall mean any catheter, transfer device or
other device, (excluding the isotope) or accessories sold with the catheter or
transfer device, the manufacture, use or sale of which is covered by the
Assigned Patent or a Licensed Patent, or which uses or incorporates Licensed
Technology. In no event shall "Royalty-bearing Product" include any service or
other act relating to the acquisition, handling,

                                     - 7 -
<PAGE>

disposal or service of radioactive isotopes or other radiation sources.

    1.15  "Sale" or "Sold" shall mean the sale, transfer, exchange for inventory
or services of comparable value, or other disposition of Royalty-bearing
Products whether by gift, lease or otherwise by NOVOSTE, an Affiliate of NOVOSTE
or NOVOSTE's sublicensees or any third party authorized by NOVOSTE to make such
sale, transfer, exchange or disposition including, but not limited to, the use
of Royalty-bearing Products by NOVOSTE, or any other person or entity authorized
to use Royalty-bearing Products by NOVOSTE.  Sales of Royalty-bearing Products
shall be deemed consummated upon the first to occur of: (a) receipt of payment
from the purchaser; (b) if deemed Sold by use, when first put to such use; or
(c) if otherwise transferred, exchanged for inventory or services of comparable
value, or disposed of, by gift, lease or otherwise, when such transfer, exchange
for inventory or services of comparable value (not for returns of defective
Royalty-bearing Products) gift, lease or other disposition occurs.

                  ARTICLE 2. ASSIGNMENT AND GRANT OF LICENSE
                  ------------------------------------------

  2.1  Assignment.  Emory shall, contemporaneous with the execution of this
       ----------
Agreement, execute and deliver to NOVOSTE the Quitclaim Assignment of the
Assigned Patent attached as Exhibit A.

                                     - 8 -
<PAGE>

    2.2  License. EMORY hereby grants NOVOSTE and its Affiliates an exclusive
         -------
right and license to make, have made, use, offer to sell, sell Licensed Products
and to perform any other acts that without this license would be an act of
infringement, inducing infringement or contributory infringement and to grant
sublicenses to others to, make, use, offer to sell and sell Licensed Products
and to perform such acts in the Licensed Territory during the term of this
Agreement.  EMORY further grants NOVOSTE and its Affiliates an exclusive right
and license to practice Licensed Technology and to grant sublicenses to others
to practice Licensed Technology, to make, have made, use, and sell Royalty-
bearing Products in the Territory during the term of this Agreement.

    2.3  Retained License and Rights. EMORY retains on behalf of itself and its
         ---------------------------
employees, a royalty-free, non-exclusive right and license to use Licensed
Technology and subject matter claimed in any Licensed Patents for Emory's
research and educational purposes only.  To the extent necessary for EMORY's
research and educational purposes only, NOVOSTE grants to EMORY a royalty-free,
non-exclusive license (without the right to grant sublicenses) to use the
subject matter covered by the Assigned Patent. EMORY reserves the right to grant
third parties rights to practice Licensed Technology for any purpose other than
to make, use, offer to sell,

                                     - 9 -
<PAGE>

and sell products that come within the claims of the Licensed Patents.  NOVOSTE
may supply Royalty-bearing Products at cost, to EMORY for Emory's research and
educational purposes, provided that such Royalty-bearing Products are not used
in studies sponsored by competitors of NOVOSTE and that EMORY shall not,
pursuant to this Section, supply any competitor of NOVOSTE with any samples of
any Royalty-bearing Products provided by NOVOSTE.  However, EMORY shall be
authorized to accept research funding from NOVOSTE's competitors.

    2.4  Sublicenses.  NOVOSTE shall have the right to grant sublicenses
         -----------
consistent with this Agreement, provided that NOVOSTE shall remain responsible
to EMORY for the operations of its sublicensees relevant to this Agreement, as
if such operations were carried out by NOVOSTE.  NOVOSTE shall provide EMORY
with copies of any sublicenses within ninety (90) days of their execution date.
Such sublicense agreements shall be treated as NOVOSTE confidential information
in accordance with Article 10 of this Agreement.

    2.5  No Implied License.  The license and right granted in this Agreement
         -------------------
shall not be construed to confer any rights upon NOVOSTE by implication,
estoppel, or otherwise as to any technology not specifically identified in this
Agreement, the Assigned Patent, Licensed Patents or Licensed Technology.

                                    - 10 -
<PAGE>

                    ARTICLE 3. ROYALTIES AND OTHER PAYMENTS
                    ---------------------------------------

    3.1  Earned Royalties.  NOVOSTE shall pay EMORY a royalty equal to XXXXX
         ----------------
percent of the Net Selling Price of Royalty-bearing Products Sold in the
Territory, except as provided for in Sections 3.2 and 3.3 of this Agreement.

3.2  Reduced Royalties.
     -----------------

(a)  No Issued Patents. If no Assigned Patent or Licensed Patent issues in the
     -----------------  
United States with claims covering a Royalty-bearing Product within three (3)
years of the filing date of U.S. Patent Application No. 08/330,327, NOVOSTE
shall, commencing with the first calendar quarter after such third year, pay
EMORY a reduced royalty rate of XXXXX percent of the Net Selling Price of
Royalty-bearing Products in the Territory. NOVOSTE's obligation to pay royalties
pursuant to this Section shall terminate ten (10) years after the first royalty
bearing commercial Sale of a Royalty-bearing Product, unless after such third
year a Licensed Patent or Assigned Patent issues in the United States with
claims covering a Royalty-bearing Product, at which time the applicable royalty
rate shall revert to XXXXX percent and shall remain in effect until the last to
expire of all Licensed Patents and Assigned Patent with claims covering a
Royalty-bearing Product in the United States.

                                    - 11 -
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential information.
<PAGE>

   (b) Adverse Claims Regarding the Assigned Patent.
       ---------------------------------------------
   If any claim or action is filed against NOVOSTE by EMORY, Waksman, Crocker,
or other EMORY employee or former employee, relating to the ownership, title,
license or other claim of rights to the Assigned Patent, NOVOSTE shall,
commencing with the first calendar quarter after any such claim or action is
filed, pay EMORY a reduced royalty of XXXXX percent of the Net Selling Price
of Royalty-Bearing products in the Territory, and the Minimum Annual Royalties
set forth below shall be reduced by fifty (50%) percent.   If such claim or
action is successfully defeated by NOVOSTE, the applicable royalty rate shall
revert to XXXXX percent and the Minimum Annual Royalties shall revert to those
amounts set forth below.  NOVOSTE shall provide EMORY with a full and complete
accounting of all withheld royalties and NOVOSTE's costs and expenses associated
with such litigation, in reports provided to EMORY pursuant to Article 4 of this
Agreement.  If the amount of withheld royalties exceeds the costs and expenses
incurred by NOVOSTE in defeating such claim or action, such amount shall be paid
to EMORY at the end of the first quarter following the termination of the claim
or action.  If NOVOSTE fails to prevail in such action, NOVOSTE shall be
entitled to pay the reduced royalties

                                    - 12 -

--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential information.
<PAGE>

prescribed under this Section to the extent required to satisfy any NOVOSTE
obligations to the prevailing party.

   (c) Under no circumstances shall (i) reduced running royalties payable to
EMORY under this Agreement fall below XXXXX percent; (ii) nor shall minimum
annual royalties fall below fifty (50%) percent of those prescribed in Section
3.4.

3.3  Royalty-Free Products Notwithstanding anything to the contrary in this
     ---------------------
Agreement, no royalty shall be due or payable for Royalty-bearing Products that
are made, used, or Sold for use in (i) clinical trials, (ii) training or
demonstration procedures, (iii) research or development relating to improving
Royalty-bearing Products, or (iv) Licensed Products sold at cost to EMORY.

3.4  Additional Consideration.
     ------------------------

(a) NOVOSTE shall pay EMORY XXXXX percent of any signing fees, minimum
royalties, milestone or up-front payments received by NOVOSTE from any
sublicensee (excluding advanced earned royalty payments). NOVOSTE shall not be
required to pay EMORY any portion of any fees received from sublicensees to be
used by NOVOSTE solely for the purpose of conducting clinical trials, research
and development or for tooling. Such XXXXX percent payment shall be in addition
to running royalties payable to EMORY based on Sales

                                    - 13 -
--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential information.
<PAGE>

by NOVOSTE sublicensees in accordance with Sections 1.12, 1.15, 3.1 and 3.2 of
this Agreement.

(b)  Commencing upon one year after the first commercial (for purposes other
than clinical trial, research or development, or training or demonstration) Sale
of any Royalty-bearing Product in any major country (U.S., U.K., France,
Germany, Japan or Canada), NOVOSTE shall.11 pay EMORY minimum annual royalties
in accordance with the following schedule:

Year                                       Amount
----                                       ------
Year 2 After First Commercial Sale         $ XXXXX

Year 3 After First Commercial Sale         $ XXXXX

Year 4 After First Commercial Sale         $ XXXXX

Years 5-10 After First Commercial Sale     $ XXXXX

     (c) NOVOSTE shall, within thirty (30) days after execution of this
Agreement, issue shares of NOVOSTE Common Stock as indicated below:

     (a)  Forty-four Hundred (4,400) shares to XXXXX. **

     (b)  Eighteen Hundred (1,800) shares to Ian Crocker, M.D.

     (c)  Thirty Eight Hundred (3,800) shares to Emory University

                      ARTICLE 4. REPORTS AND ACCOUNTING
                      ---------------------------------

4.1 Royalty Reports and Records. Commencing with the first calendar quarter
    ---------------------------
during which NOVOSTE makes its first commercial

                                    - 14 -

** EMORY or any party designated by EMORY.

--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this page of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "XXXXX". The portions
omitted have been filed separately with the Securities and Exchange Commission
pursuant to such request for confidential information.
<PAGE>

sale of a Royalty-bearing Product, NOVOSTE shall furnish, or cause to be
furnished to EMORY, on a quarterly basis, and within sixty (60) days of the end
of each quarter a written report or reports governing each of NOVOSTE, NOVOSTE's
Affiliates and sublicensees fiscal quarters showing:

  (i) the Sales of all Royalty-bearing Products in the Territory during the
reporting period (including the number of units shipped, sold and the value of
any payments due or received) together with calculations of Net Selling Prices
and royalties payable to EMORY in Dollars in accordance with Sections 1.12,
1.14, 3.1, 3.2 and 3.4 of this Agreement; and

 (ii) the exchange rates, used, if any, in determining the
amount of Dollars; and

 (iii) any other consideration payable to EMORY in accordance with Article 3,
including but not limited to, fees received by NOVOSTE from sublicensees.

  To the extent that the "Net Selling Price" is calculated by making deductions
in accordance with Section 1.12 of this Agreement, the written royalty report
shall separately itemize such deductions and the basis therefore, including but
not limited to, deductions for actual costs or expenses incurred for handling or
disposing of radiation contaminated catheters, transfer devices and

                                    - 15 -
<PAGE>

accessories of such devices (excluding isotopes) and shall further indicate
NOVOSTE's costs on either a per catheter or transfer device basis, or a periodic
basis, or both.

    4.2  Right to Audit.  EMORY shall have the right, upon prior notice to
         --------------
NOVOSTE, not more than once in each NOVOSTE fiscal year, through an independent
public accountant selected by EMORY and acceptable to NOVOSTE, which acceptance
shall not be unreasonably refused, to have access during normal business hours
of NOVOSTE, as may be reasonably necessary, related to the Sale of Licensed
Products to verify the accuracy of the royalty reports furnished by NOVOSTE
pursuant to Section 4.1 of this Agreement. NOVOSTE shall include in any
sublicenses granted pursuant to this Agreement, a provision requiring the
sublicensee to keep and maintain a record of Sales made pursuant to such
sublicense and to grant similar access to such records by EMORY's independent
public accountant. If such independent public accountant's reports show any
underpayment of royalties, within sixty (60) days after NOVOSTE's receipt of
such report, and NOVOSTE accepts the accuracy of such report, NOVOSTE shall
remit or shall cause its sublicensees to remit to EMORY:

                   (i)  the amount of such underpayment; and

                                    - 16 -
<PAGE>

      (ii) if such underpayment exceeds five (5%) percent of the total
royalties owned for the fiscal year then being reviewed, the reasonably
necessary fees and expenses of such independent public accountant performing the
audit. Otherwise, EMORY's accountant's fees and expenses shall be borne by
EMORY.  Any overpayment of royalties shall be fully creditable against future
royalties payable in any subsequent royalty periods.  If NOVOSTE does not accept
the accuracy of the independent public accountant's report, then NOVOSTE may
invoke its options to mediate and arbitrate in accordance with Section 13.11 of
this Agreement.

    4.3  Confidentiality of Records.  All information subject to review under
         --------------------------
this Article 4 or any sublicense shall be confidential. Except where provided by
law, EMORY and its accountant shall retain all such information in confidence.

                              ARTICLE 5. PAYMENTS
                              -------------------

    5.1  Payment Due Dates.  Royalties and amounts payable to EMORY from any
         -----------------
other consideration paid to NOVOSTE during the period covered by each royalty
report provided for under Article 4 of this Agreement, shall be due and payable
on the date such royalty report is due.  Minimum annual royalties shall be due
on or before February 28th of the calendar year following the year for which the
minimum annual royalties are due.  Payments of royalties

                                    - 17 -
<PAGE>

in whole or in part may be made in advance of such due date.  Any payment in
excess of One Hundred Thousand ($100,000.00) Dollars shall be made by wire or
transferred to the account of EMORY designated by EMORY from time to time;
provided, however, that in the event that EMORY fails to designate such account,
NOVOSTE may remit payment to EMORY to the address applicable for the receipt of
notices hereunder; providing, further, that any notice by EMORY of such
account or change in such account, shall not be effective until fifteen (15)
days after receipt thereof by NOVOSTE.

  5.2  Currency Restrictions.  Except as hereinafter provided in this Section
       ---------------------
5.2, all royalties shall be paid in Dollars.  If, at any time, legal
restrictions prevent the prompt remittance of part of or all royalties with
respect to any country of the Territory where Royalty-bearing Products are sold,
NOVOSTE or its sublicensee shall have the right and option to make such payments
by depositing the amount thereof in local currency to EMORY's account in a bank
or depository in such country.

  5.3  Interest.  Royalties and other payments required to be paid by NOVOSTE
       --------
pursuant to this Agreement shall, if overdue, bear interest of ten (10%)
percent until paid.  The payment of such interest shall not foreclose EMORY from
exercising any other rights it may have because any payment is overdue.

                                    - 18 -
<PAGE>

                 ARTICLE 6. DEVELOPMENT AND MARKETING PROGRAM
                 --------------------------------------------

    6.1 Diligence obligations.  NOVOSTE shall directly, or in collaboration with
        ---------------------
Affiliates and sublicensees, use commercially reasonable efforts:

         (i) to conduct a product development program relating to the commercial
use of Royalty-bearing Products for the prophylaxis or treatment of restenosis,
and
         (ii) if, in NOVOSTE's opinion, the results of the development program
so justify, to seek Registration in the United States. For purposes of this
Agreement "commercially reasonable efforts" shall mean NOVOSTE shall use
commercially reasonable efforts, including seeking to establish alliances, with
other device companies where deemed appropriate and beneficial to NOVOSTE,
consistent with those used by medical device companies of similar size and with
comparable resources in the United States in research and development projects
for technology deemed to have commercial value comparable to the Royalty-bearing
Products and Licensed Technology. The development program shall include such
product development work as NOVOSTE may, in its sole discretion, consider
necessary for such Registrations or approvals.

    6.2  Fulfillment, Conversion.  NOVOSTE's commercially reasonable efforts
         -----------------------
obligations set forth in Section 6.1 shall be

                                    - 19 -
<PAGE>

deemed to have been fulfilled if (a) NOVOSTE uses commercially reasonable
efforts in filing an application with appropriate regulatory agencies to market
one or more Royalty-bearing Products in any major market country (France, U.K.,
Canada, U.S. or Japan) within forty-eight (48) months of the effective date of
this Agreement; and

      (b) NOVOSTE uses commercially reasonable efforts to diligently pursue
reasonable regulatory requirements necessary for achieving approval or
Registration in any such major market countries.

  If NOVOSTE fails to meet either deadline set forth in subsection 6.2 above,
EMORY may, upon at least sixty (60) days, prior written notice, grant third
parties identical or lesser rights in the Licensed Patents as granted to NOVOSTE
hereunder (in which case the license granted under Article 2 shall become
non-exclusive and EMORY shall be authorized to provide potential and actual
licensees with information pertaining to the Licensed Patents and Licensed
Technology in the same manner as if this Agreement were terminated in accordance
with Section 11.5(c)), and such termination has the effect described in
Paragraph 2 of Section 11.7, unless within such sixty (60) day period, NOVOSTE
meets such deadline.  NOVOSTE shall further use commercially reasonable

                                    - 20 -
<PAGE>

efforts to bring Licensed Products to market in major markets outside the United
States such as France, the United Kingdom, Canada, and Japan.  NOVOSTE shall
have the right to pursue mediation or arbitration pursuant to Article 13.11 if
NOVOSTE disputes EMORY's right to exercise any remedy under this paragraph.

    6.3  Progress Reports.  During the term of this Agreement, NOVOSTE shall
         ----------------
provide semi-annual reports to EMORY, summarizing in reasonable detail,
NOVOSTE's activities related to the development of Royalty-bearing Products, and
securing Registrations or approvals.  At a minimum, such reports shall include a
summary of correspondence or other communications between NOVOSTE or NOVOSTE's
affiliates and sublicensees and foreign or domestic agencies pertaining to any
regulatory application for a Royalty-bearing Product.  Where such correspondence
or communication indicates a request for additional data from any government
agency, NOVOSTE or NOVOSTE's Affiliates and sublicensee shall inform EMORY at
the time progress reports are due of NOVOSTE or NOVOSTE's Affiliates or
sublicensees schedules with respect to responding to such requirements.

    6.4  NOVOSTE Not Restricted.  Nothing in this Agreement is intended to
         ----------------------
inhibit or prohibit NOVOSTE from exploring, making,

                                    - 21 -
<PAGE>

using or selling other technologies useful for treating restenosis, even if
deemed competitive to Royalty-bearing Products.

                         ARTICLE 7. PATENT PROSECUTION
                         -----------------------------

    7.1  NOVOSTE shall have full and complete responsibility for all patent
prosecution activities with respect to the Assigned Patent and shall be
primarily responsible for all patent prosecution activities pertaining to the
Licensed Patents.  NOVOSTE shall, either directly, or through its outside
counsel, provide EMORY with copies of all filings and patent office
correspondence pertaining to such patent prosecution activities, in a timely
manner, so as to give EMORY an opportunity to comment thereon.   EMORY shall
have authority to maintain or add claims supported by any Licensed Patents
provided it does so in a timely manner after notice to NOVOSTE.  NOVOSTE shall
diligently pursue prosecution, issuance and maintenance of the Assigned Patent
and Licensed Patents in the United States, the United Kingdom, Germany, France,
Japan and Canada.  NOVOSTE may use the PCT or European Patent Convention as
NOVOSTE sees fit for the above identified countries.   NOVOSTE may further
exercise its discretion to pursue prosecution, issuance and maintenance of the
Assigned Patent and Licensed Patents in other foreign countries.  Any patent
counsel retained to prosecute or maintain any Licensed Patents shall be put on
written

                                     - 22 -
<PAGE>

notice that such counsel represents NOVOSTE and EMORY for the purpose of such
patent prosecution and maintenance activities.

    If NOVOSTE fails to diligently pursue prosecution in the United States,
United Kingdom, France, Germany or Japan of any Licensed Patent application or
maintain any issued Licensed Patent under this Agreement, such application or
issued patent shall no longer be subject to this Agreement and EMORY shall be
free, at its discretion, to assume the prosecution and maintenance of such
patent applications or issued patents and grant rights to third parties
pertaining to such Licensed Patent applications or issued Licensed Patents.

    7.2 To enable NOVOSTE to prepare and file Licensed Patent applications,
EMORY shall promptly disclose to NOVOSTE in written form ("invention
disclosure") any Licensed Technology that may conceivably be patentable made
during the course of any research or clinical trials sponsored by NOVOSTE
pertaining to NOVOSTE'S Beta System to treat restenosis.

    7.3  Upon receipt of EMORY'S invention disclosure, NOVOSTE shall have an
initial six-month period to evaluate the disclosure to determine if it wishes to
file a patent application on the subject matter of such disclosure.  If NOVOSTE
is unable to complete its evaluation within the first six month period, it may

                                     - 23 -
<PAGE>

request permission from EMORY for a second six-month evaluation period to
continue such evaluation, which permission shall not be unreasonably withheld by
EMORY.  In no event shall NOVOSTE'S evaluation period exceed a total of twelve
months.

    7.4.  (a) Licensed Patents for any inventions made or conceived jointly by
NOVOSTE and EMORY personnel shall be owned jointly by NOVOSTE and EMORY (not
including any inventions claimed in the Assigned Patent).  The parties agree to
cooperate in the preparation and prosecution of any patent applications for such
joint inventions.  NOVOSTE shall have the same responsibility for filing patent
applications directed to joint inventions as for inventions made solely by EMORY
employees.

    7.4. (b) NOVOSTE shall promptly notify EMORY if, after receiving an
invention disclosure, it believes that the invention was made by NOVOSTE
employees, either alone or jointly with EMORY employees. If, after receiving
notice from NOVOSTE that an invention was jointly made, EMORY believes that the
invention claimed was invented solely by employees of EMORY, the parties each
agree to promptly investigate, in good faith, the making of such invention and
to share the results of such investigation with one another. If unable to agree
on inventorship after such investigation, the parties agree to submit the issue
of

                                     - 24 -
<PAGE>

inventorship for decision to an experienced patent attorney, who has represented
neither NOVOSTE nor EMORY, and who is agreeable to both parties.  Each party
will cooperate fully with such attorney, and the attorney's fee shall be borne
equally by both parties.  The decision of "inventorship" by the attorney shall
be binding, and the parties agree to cooperate in any necessary steps to change
inventorship, if required by the attorney's decision.

                ARTICLE 8. INFRINGEMENT AND THIRD PARTY RIGHTS
                ----------------------------------------------

    8.1  Infringement.  If either NOVOSTE or EMORY becomes aware of a product or
service, the manufacture, use or Sale of which appears to infringe the Assigned
Patent or any Licensed Patent, the party obtaining such knowledge shall promptly
advise the other party of all relevant facts and circumstances pertaining to the
potential infringement.  NOVOSTE shall have the right to enforce any Licensed
Patent.  NOVOSTE shall exercise full control over any such action with respect
to the infringement or protection of the Assigned Patent or any Licensed
Patents; provided that EMORY shall have the opportunity to be represented in
such action at EMORY's sole option and expense.  EMORY shall cooperate with
NOVOSTE in any such effort, at NOVOSTE's expense, including being joined as a
party to such action, if necessary.  Any damages or costs recovered in
connection with any action filed by NOVOSTE hereunder, which

                                     - 25 -
<PAGE>

exceed NOVOSTE's out-of-pocket costs and expenses of litigation, shall be deemed
to be Net Sales of Licensed Products in the fiscal year received by NOVOSTE, and
royalties shall be payable by NOVOSTE to EMORY thereon in accordance with the
terms of this Agreement.

    If NOVOSTE shall fail, within sixty (60) days after receiving notice from
EMORY of a potential infringement, or providing EMORY with notice of such
infringement, to either (a) terminate such infringement or (b) institute an
action to prevent continuation thereof and, thereafter to prosecute such action
diligently, or if NOVOSTE notifies EMORY that it does not plan to terminate the
infringement or institute such action, then EMORY shall have the right to do so
at its own expense.  NOVOSTE shall cooperate with EMORY in such effort, at
EMORY's expense, including being joined as a party to such action as necessary.
Any damages or costs recovered by EMORY in connection with any action shall be
retained by EMORY.

    8.2  Third Party-Rights.  If the manufacture, use or Sale of a Royalty-
         -------------------
bearing Product is objected to as infringing a patent issued as of the date of
this Agreement from the date of such objection until the objection is finally
resolved, NOVOSTE shall have the right to retain as a reserve 12.5% of any
royalties coming due to EMORY under Article 3 and to apply such reserve against:
its

                                     - 26 -
<PAGE>

legal expenses; any settlement costs or license fees; any court ordered
recovery; and any loss suffered by NOVOSTE, including any loss as a result of
any court-ordered injunction.  NOVOSTE shall exercise full control over the
settlement or resolution of any such objection and full control over any related
litigation, and shall have full and complete authority to settle and resolve
such objection on such terms as NOVOSTE, in its sole discretion, sees fit.
EMORY shall have the right to be represented in any proceeding regarding such
objection by counsel of its own choice and at its own expense.  Within thirty
(30) days of a final resolution of all such matters, NOVOSTE shall pay any
balance of said reserve to EMORY and provide EMORY an accounting of the amounts
held in reserve and amounts offset by NOVOSTE against the reserve.  If the final
resolution of the matter requires NOVOSTE to make royalty or other payments to
the other party, and such payments result in NOVOSTE's cumulative royalty
obligation on the Sale of Royalty-bearing Products exceeding five (5%) percent
of the Net Selling Price, NOVOSTE shall be authorized to retain up to 12.5% of
any future royalties, (excluding minimum annual royalties) due under this
Agreement to meet such obligations of NOVOSTE.

                                     - 27 -
<PAGE>

                   ARTICLE 9. WARRANTIES AND INDEMNIFICATION
                   ----------------------------------------

    9.1  Merchantability and Exclusion of Warranties. NOVOSTE possesses the
         -------------------------------------------
necessary expertise and skill in the technical areas pertaining to the Licensed
Patents and Licensed Technology to make and has made its own evaluation of the
capabilities, safety, utility and commercial application of the Licensed Patents
and Licensed Technology. ACCORDINGLY, EXCEPT AS SET FORTH IN SECTION 9.7, EMORY
DOES NOT MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE
LICENSED PATENTS OR LICENSED TECHNOLOGY AND EXPRESSLY DISCLAIMS ANY WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER IMPLIED
WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY, UTILITY, OR COMMERCIAL
APPLICATION OF THE LICENSED PATENTS OR LICENSED TECHNOLOGY.

    9.2  No Liability.  EMORY shall not be liable to NOVOSTE or NOVOSTE's
         ------------
Affiliates, customers or sublicensees for special incidental, indirect, or
consequential damages resulting from the manufacture, testing, design, labeling,
use or Sale of Royalty bearing Products.

    9.3   Indemnification.
          ---------------

    (a) NOVOSTE shall defend, indemnify, and hold harmless the Indemnitees, from
and against any and all claims, demands, loss, liability, expense, or damage
(including investigative costs, court

                                     - 28 -
<PAGE>

costs and attorneys, fees) Indemnitees may suffer, pay, or incur as a result of
claims, demands or actions against any of the Indemnitees arising or alleged to
arise by reason of, or in connection with, any and all personal injury
(including death) and property damage caused or contributed to in whole or in
part by NOVOSTE's or NOVOSTE's Affiliates', contractors', agents', or
sublicensees' manufacture, testing, design, use, Sale, or labeling of any
Royalty-bearing or Licensed Products except where such claim, demand, loss,
liability, expense or damage results solely from EMORY's negligence or
misconduct or misrepresentation implied or direct.  NOVOSTE's obligations under
this Article shall survive the expiration or termination of this Agreement for
any reason.

  (b) EMORY shall notify NOVOSTE promptly and in writing of any claim, suit or
proceeding relating to the Licensed Patents or the Licensed Technology of which
EMORY becomes aware, and for which EMORY intends to seek indemnification in
accordance with Section 9.3(a). EMORY shall furnish NOVOSTE with full
information concerning any such claim, suit or proceeding and shall render
NOVOSTE full cooperation to facilitate a settlement or defense of any such
claim.  EMORY shall have the opportunity to be represented by counsel at its
sole option and expense.

                                     - 29 -
<PAGE>

    9.4  Insurance.  Without limiting NOVOSTE's indemnity obligations under the
         ---------
preceding paragraph NOVOSTE shall, to the extent available at commercially
reasonable rates and prior to the Sale of any Royalty-bearing Product, cause to
be in force, an "occurrence based type" liability insurance policy which:

         (a) insures Indemnitees for all claims, damages, and actions mentioned
in Section 9.3 of this Agreement, including but not limited to, damages caused
by radioactive substances; and

         (b) includes a contractual endorsement providing coverage for all
liability which may be incurred by Indemnitees in connection with the Agreement;
and

         (c) requires the insurance carrier to provide EMORY with no less than
thirty (30) days' written notice of any change in the terms or coverage of the
policy or its cancellation; and

         (d) provides Indemnitees product liability coverage in an amount no
less than Two Million Dollars ($2,000,000.00) per occurrence for bodily injury
and One Million Dollars ($1,000,000.00) per occurrence for property damage,
subject to a reasonable aggregate amount.

    9.5 Occurrence Based Coverage Not Available. If NOVOSTE is unable to obtain
        ---------------------------------------
"occurrence based type" liability insurance at commercially reasonable rates,
NOVOSTE shall procure "claims made

                                     - 30 -
<PAGE>

type" liability coverage to be effective throughout the term of this Agreement
and "tail coverage", extending at least five (5) years after termination of this
Agreement.  NOVOSTE shall notify EMORY prior to its first commercial Sale of any
Licensed Product, of all insurance coverage and other assets available to
NOVOSTE to meet NOVOSTE's obligations under Sections 9.3 and 9.4 of this
Agreement.

    9.6  Notice of Claims.  NOVOSTE shall promptly notify EMORY of all claims
         ----------------
involving the Indemnitees and shall advise EMORY of the policy amounts that
might be needed to defend and pay any such claims.

    9.7  Warranties of EMORY.  EMORY represents and warrants that it is the
         -------------------
lawful assignee of all intellectual property rights, including patent rights,
possessed by Ian Crocker, M.D. and Ron Waksman, M.D. pertaining to the Licensed
Patents and Licensed Technology and has the right and authority to grant the
rights and licenses provided for in Article 2 of this Agreement.

    9.8  Indemnification by EMORY.  EMORY shall indemnify and hold NOVOSTE, its
         ------------------------
Affiliates, authorized agents and sublicensees, harmless from and against any
liability or damages or expenses resulting from any claim or action by EMORY,
Waksman, Crocker or other EMORY employee or former employee relating to
ownership,

                                     - 31 -
<PAGE>

title, license or other claim of rights to any Licensed Patent, or in or to any
inventions claimed therein.  NOVOSTE shall promptly inform EMORY in writing of
any action, claim or liability in respect of which NOVOSTE intends to claim such
indemnification.   NOVOSTE shall permit EMORY, at its discretion, to settle any
such action, claim or liability and agrees to the complete control of such
defense or settlement by EMORY; provided, however that such settlement does not
adversely affect NOVOSTE's rights hereunder or impose any obligations financial
or otherwise on NOVOSTE in addition to those set forth herein in order for
NOVOSTE to exercise the rights granted to it under this Agreement.  NOVOSTE
shall not be responsible for any legal fees or other costs incurred other than
as provided herein.  NOVOSTE, its employees and agents shall cooperate fully
with Emory and its legal representatives, at EMORY's expense, in the
investigation and defense of any action, claim or liability covered by this
indemnification.  The amount of such indemnification shall be limited to the
total consideration received by EMORY from NOVOSTE under this agreement,
including cash royalty payments and the value of any NOVOSTE stock issued to
EMORY hereunder.  The value of such stock shall be determined as follows: (i) if
shares or other units of NOVOSTE equity are publicly traded on a recognized
securities market, the publicly traded price shall

                                     - 32 -
<PAGE>

apply; or (ii) if such shares are not publicly traded, the value shall be equal
to the per share price obtained by NOVOSTE in its most recent round of preferred
equity financing, unless since such round, NOVOSTE's Board of Directors has
established a new per share price in good faith, in which case, such Board
determined price shall apply.  EMORY shall, under all circumstances, be entitled
to satisfy any obligations to NOVOSTE under this Section respecting such stock
by returning the stock to NOVOSTE.  If NOVOSTE incurs costs or damages for which
it is entitled to indemnification in an amount which exceeds the total
consideration received by EMORY at the time such costs or damages are incurred,
NOVOSTE may retain one hundred (100%) percent of future royalties payable to
EMORY hereunder, including any minimum royalties, and apply it as a credit
against such unpaid costs or damages until such amounts are recouped in full by
NOVOSTE.  NOVOSTE shall provide EMORY with a complete and full accounting of any
such royalty credits in reports provided to EMORY pursuant to Article 4 of this
Agreement.

                          ARTICLE 10. CONFIDENTIALITY
                          ---------------------------

    10.1  Treatment of Confidential Information.  Except as otherwise provided
          -------------------------------------
hereunder, during the term of this Agreement and for a period of five (5) years
thereafter;

                                     - 33 -
<PAGE>

           (i) NOVOSTE and its Affiliates, sublicensees and alliance partners
shall retain in confidence and use only for purposes of this Agreement any
information or data designated confidential and pertaining to the Licensed
Technology supplied by EMORY to NOVOSTE under this Agreement;

          (ii) EMORY shall retain in confidence and use only for purposes of
this Agreement any information and data designated confidential and supplied by
NOVOSTE or on behalf of NOVOSTE to EMORY under this Agreement.

    For purposes of this Agreement, all such information and data which a party
is obligated to retain in confidence shall be called "Information."

    10.2  Right to Disclose.  To the extent that it is reasonably necessary to
          -----------------
fulfill its obligations or exercise its rights under this Agreement or any
rights which survive termination or expiration hereof, each party may disclose
Information to its Affiliates, sublicensees, consultants, alliance partners,
outside contractors, and clinical investigators on condition that such entities
or person agree:

          (i) to keep the Information confidential for at least the same time
periods and to the same extent as each party is required to keep the Information
confidential;

                                     - 34 -
<PAGE>

         (ii) to use the Information only for such purposes as such parties are
authorized to use the Information.

    Each party or its Affiliates or sublicensees may disclose Information to the
government or other regulatory authorities or qualified independent consultants
to the extent that such disclosure (a) is reasonably necessary to obtain patents
or authorizations to conduct clinical trials and to market commercially Licensed
Products, provided that such party is otherwise entitled to engage in such
activities under this Agreement or (b) is otherwise legally required to make
such disclosure.

    10.3  Release from Restrictions.  The obligation not to disclose Information
          -------------------------
shall not apply to any part of such Information that:

         (i) is or becomes patented, published or otherwise part of the public
domain, other than by acts of the party obligated not to disclose such
Information; (for purposes of this Article 10 the "receiving party") or its
Affiliates or sublicensees in contravention of this Agreement;

        (ii) is disclosed to the receiving party or its Affiliates or
sublicensees by a third party provided that such Information was not obtained by
such third party directly or

                                     - 35 -
<PAGE>

indirectly from the other party under this Agreement pursuant to an obligation
of confidentiality; or

       (iii) prior to disclosure under this Agreement, was already in the
possession of the receiving party, its Affiliates or sublicensees, provided that
such Information was not obtained directly or indirectly from the other party
under this Agreement; or

       (iv)  results from research and development by the receiving party or
its Affiliates or sublicensees independent of disclosures from the other party
of this Agreement, provided that the persons developing such information have
not had exposure to the information received from the disclosing party; or

        (v) is required by law to be disclosed by the receiving party, provided
that the other party is notified and given reasonable opportunity to oppose such
requirement; or

       (vi) NOVOSTE and EMORY agree in writing may be disclosed.

                        ARTICLE 11. TERM AND TERMINATION
                        --------------------------------

    11.1  Term.  Unless sooner terminated as otherwise provided in this
          ----
Agreement, the term of this Agreement shall commence on the effective date
hereof and shall continue in full force and effect until the later of (a) the
expiration of the last Assigned Patent

                                     - 36 -
<PAGE>

or Licensed Patent to expire or (b) twenty (20) years after the date hereof.

    11.2  Termination.  EMORY shall have the right to terminate this Agreement,
          -----------
in accordance with the procedures set forth in Section 11.3, upon the occurrence
of any one or more of the following events;

         (a) failure of NOVOSTE to make any payment required pursuant to this
Agreement when due; or

         (b) failure of NOVOSTE to render reports to EMORY as required by this
Agreement; or

         (c) the insolvency of NOVOSTE; or

         (d) the institution of any proceeding by NOVOSTE under any bankruptcy,
insolvency, or moratorium law; or

         (e) any assignment by NOVOSTE of substantially all of its assets for
the benefit of creditors; or

         (f) placement of NOVOSTE's assets in the hands of a trustee or a
receiver unless the receivership or trust is dissolved within thirty (30) days
thereafter; or

         (g) a decision by NOVOSTE (except through the sale of NOVOSTE or the
business of NOVOSTE per Article 12) or NOVOSTE's assignee of rights under this
Agreement to quit the business of developing or selling Licensed Products; or

                                     - 37 -
<PAGE>

         (h) the breach of any other material term of this Agreement; or

         (i) the cessation of the business of developing and marketing catheters
by NOVOSTE, or an assignee of NOVOSTE's interests under this Agreement.

    11.3  Exercise.  EMORY may exercise its right of termination by giving
          --------
NOVOSTE, its trustees, receivers or assigns, thirty (30) days' prior written
notice of EMORY's election to terminate.  Such notice shall be sixty (60) days
if the basis of exercising EMORY's right of termination is the failure of
NOVOSTE to provide a progress report as required under Section 6.3 of this
Agreement.   Such notice shall include the basis for such termination.  Upon the
expiration of such period, this Agreement shall automatically terminate unless
NOVOSTE has cured the breach.  Such notice and termination shall not prejudice
EMORY's right to receive royalties or other sums due hereunder and shall not
prejudice any cause of action or claim of EMORY accrued or to accrue on account
of any breach or default by NOVOSTE.

    11.4  Failure to Enforce.  The failure of EMORY or NOVOSTE, at
          ------------------
any time or for any period of time, to enforce any of the provisions of this
Agreement shall not be construed as a waiver of

                                     - 38 -
<PAGE>

such provisions or as a waiver of the right of EMORY or NOVOSTE thereafter to
enforce each and every such provision.

    11.5  Termination by NOVOSTE. NOVOSTE shall have the right to terminate this
          ----------------------
Agreement upon the occurrence of any of the following events:

         (a) The breach of a material term of this Agreement by EMORY; or

         (b) If the manufacture, use or Sale of Royalty-bearing Products is
determined by a court to infringe third party rights; or

         (c) if the Sale of Licensed Products requires approval by any
government agency, and after using commercially reasonable efforts to gain such
approval, including but not limited to: performing alternative tests or analyses
as requested by any agency; submitting relevant data to such agency; and after
pursuing available and commercially reasonable administrative procedures and
appeal processes permitted by such agency NOVOSTE is unable to obtain such
approval in such territory; or

         (d) NOVOSTE determines in its sole discretion that it is not
commercially practicable to proceed with such manufacture, use or Sale of
Royalty-bearing Products due to litigation costs or costs required for obtaining
licenses, or due to changes in the

                                     - 39 -
<PAGE>

market resulting from the emergence of competitive technologies and rights from
such third parties.

    11.6  Exercise.  NOVOSTE may exercise its right of termination pursuant to
          --------
Section 11(5) (a), by giving EMORY sixty (60) days prior written notice of
NOVOSTE's election to terminate.  The notice shall include the basis for such
termination.  Upon the expiration of such period, this Agreement shall
automatically terminate unless EMORY has cured the breach.  Such notice of
termination shall not prejudice any cause of action or claim of NOVOSTE accrued
or to accrue on account of any breach or default by EMORY.

    NOVOSTE may exercise its right of termination pursuant to section 11.5(b),
(c) or (d) , or if the license hereunder becomes nonexclusive pursuant to 6.2,
by giving EMORY thirty (30) days prior written notice of NOVOSTE's election to
terminate.  This agreement shall be terminated upon the expiration of such
thirty (30) days.

    11.7  Effect.  In the event this Agreement is terminated for any reason
          ------
whatsoever, other than by NOVOSTE under Paragraph 11.5(a) , NOVOSTE shall
return, or at EMORY Is direction destroy, all data, writings and other documents
and tangible materials such as cell lines, supplied to NOVOSTE by EMORY provided
that such items

                                     - 40 -
<PAGE>

consist of Licensed Technology or Licensed Patents.  NOVOSTE shall provide EMORY
with full and complete copies of all toxicity, efficacy, and other data
generated by NOVOSTE or NOVOSTE's sublicensees, contractors and agents in the
course of NOVOSTE's efforts to develop Licensed Products, to the extent NOVOSTE
controls such data and information.  NOVOSTE shall be authorized to retain one
(1) archival copy of confidential information received from EMORY under this
Agreement in its corporate offices to be used solely for the purpose of NOVOSTE
monitoring compliance with this Agreement.

    If the Agreement is terminated as a result of NOVOSTE's breach pursuant to
Section 11.2 or in accordance with 11.5 (b), (c) or (d), EMORY shall be
authorized to provide full and complete copies of all information provided to
EMORY by NOVOSTE pertinent to the Licensed Patents and Licensed Technology to
any third party with a bona fide interest in licensing any technology licensed
to NOVOSTE hereunder.  Such information shall be provided on a confidential
basis, provided, however, that if such third party signs a license agreement
with EMORY, such third party shall be free to use such information for all
purposes including to obtain government approvals to sell Licensed Products.
NOVOSTE shall cooperate with EMORY in granting any third parties data or patent
rights (such as

                                     - 41 -
<PAGE>

under the Assigned Patent) needed to proceed with commercializing, including the
IDE, or other approval applications filed by NOVOSTE, any Licensed Products upon
reasonable terms and conditions acceptable to NOVOSTE in its complete and
absolute discretion. If EMORY or its licensee are unable, after good faith
negotiations with NOVOSTE, to conclude terms allowing for the commercial
development or Sale of Licensed Products, EMORY or its licensee may refer the
matter to mediation and arbitration pursuant to Section 13.11 of this Agreement.

    11.8 NOVOSTE Rights Upon Termination. Upon termination of this Agreement
         --------------------------------
pursuant to Section 11.5(a), or upon the expiration of any obligations of
NOVOSTE to pay royalties pursuant to Article 3 of this Agreement, NOVOSTE shall
have a perpetual, royalty free, worldwide exclusive, license to make, have made,
use and sell Licensed Products covered by the Licensed Patents and practice
Licensed Technology.

                            ARTICLE 12. ASSIGNMENT
                            ----------------------

    Neither party shall assign this Agreement or any part thereof without the
prior written consent of the other party, which consent shall not be
unreasonably withheld.  Either party may, however, without consent, assign or
sell their rights under this Agreement in connection with the transfer or sale
of substantially their

                                     - 42 -
<PAGE>

entire business to which this Agreement pertains, or in the event of their
merger or consolidation with another company.  Any permitted assignee shall
assume all obligations of its assignor under this Agreement.  No assignment
shall relieve any party of responsibility for the performance of any accrued
obligation which such party has under this Agreement.  Any assignee of this
Agreement shall assume all accrued and prospective obligations including but not
limited to those set forth in Articles 6 and 7. Any such assignee shall further,
within sixty (60) days of becoming the assignee of rights hereunder, meet with
representatives of EMORY, to discuss such assignee's plans for the future
development of the Licensed Patents and Licensed Technology.  If such assignee
determines that it does not wish to continue the development or marketing
obligations required under this Agreement, then such assignee shall
immediately terminate this Agreement. Any such termination shall be treated in
accordance with the second paragraph of Section 11.7 as if the termination
resulted from a breach of this Agreement.

                           ARTICLE 13. MISCELLANEOUS
                           -------------------------

    13.1 Export Controls.  NOVOSTE acknowledges that EMORY is subject to
         ---------------
United States laws and regulations controlling the export of technical data,
biological materials, chemical

                                     - 43 -
<PAGE>

compositions and other commodities and that EMORY's obligations under this
Agreement are contingent upon compliance with applicable United States export
laws and regulations.  The transfer of technical data, biological materials,
chemical compositions and commodities may require a license from a cognizant
agency of the United States government or written assurances by NOVOSTE that
NOVOSTE shall not export data or commodities to certain foreign countries
without the prior approval of certain United States agencies.  EMORY neither
represents that an export license shall not be required nor that, if required,
such export license shall issue.

    13.2  Legal Compliance.  NOVOSTE shall comply with all laws and regulations
          ----------------
relating to its manufacture, use, Sale, labeling or distribution of Licensed
Products and shall not take any action which would cause EMORY or NOVOSTE to
violate any laws and regulations.

    13.3  Independent Contractor.  NOVOSTE's relationship to EMORY shall be that
          ----------------------
of a licensee or assignee only.  NOVOSTE shall not be the agent of EMORY and
shall have no authority to act for, or on behalf of, EMORY in any matter.
Persons retained by NOVOSTE as employees or agents shall not, by reason thereof,
be deemed to be employees or agents of EMORY.
                                                           

                                     - 44 -
<PAGE>

    13.4  Patent Marking.  NOVOSTE shall mark Licensed Products Sold in the
          --------------
United States with United States patent numbers.   Licensed Products
manufactured or Sold in other countries shall be marked in compliance with the
intellectual property laws in force in such foreign countries.

    13.5  Use of Names.  EMORY acknowledges that Spencer B. King, III, M.D., Ron
          ------------
Waksman, M.D. and Ian Crocker, M.D. are authorized to license the use of their
names to NOVOSTE for the purposes of promoting the Royalty-bearing Products.
Any such License Agreement shall be subject to EMORY's consulting and conflict
of interest policies.  NOVOSTE shall obtain the prior written approval of EMORY
prior to making use of EMORY's name for any commercial purpose.   NOVOSTE shall
be permitted to disclose EMORY's name and the names of the inventors of the
Licensed Products in any document used in connection with NOVOSTE's financing
activities to the extent that NOVOSTE is advised by counsel that such disclosure
is required by law.

    13.6  Place of Execution.  This Agreement and any subsequent modifications
          ------------------
or amendments hereto shall be deemed to have been executed in the State of
Georgia, U.S.A. This Agreement shall not become effective or binding upon EMORY
until signed on its behalf

                                     - 45 -
<PAGE>

by its Executive Vice President or Vice President and General Counsel
in the State of Georgia, U.S.A.

     13.7 Governing Law. This Agreement and all agreements, modifications,
          -------------
alterations, or supplements hereto, and the rights of the parties hereunder
shall be construed under and governed by the laws of the State of Georgia and
the United States of America. Only courts in the State of Georgia, U.S.A., shall
have jurisdiction to hear and decide any controversy or claim between the
parties arising under or relating to this Agreement.

     13.8  Entire Agreement.  This Agreement constitutes the entire agreement
           ----------------
between EMORY and NOVOSTE with respect to the subject matter hereof and shall
not be modified, amended or terminated, except as herein provided or except by
another agreement in writing executed by the parties hereto.

     13.9  Severability.  All rights and restrictions contained herein may be
           ------------
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid or
unenforceable. if any provision or portion of any provision of this Agreement,
not essential to the commercial purpose of this Agreement, shall be held to be
illegal, invalid or unenforceable by a court of

                                     - 46 -
<PAGE>

competent jurisdiction, it is the intention of the parties that the remaining
provisions or portions thereof shall constitute their agreement with respect to
the subject matter hereof, and all such remaining provisions or portions thereof
shall remain in full force and effect. To the extent legally permissible, any
illegal, invalid or unenforceable provision of this Agreement shall be replaced
by a valid provision which shall implement the commercial purpose of the
illegal, invalid or unenforceable provision. In the event that any provision
essential to the commercial purpose of this Agreement is held to be illegal,
invalid or unenforceable and cannot be replaced by a valid provision which will
implement the commercial purpose of this Agreement, this Agreement and the
rights granted herein shall terminate.

    13.10  Force Majeure. Any delays in, or failure of performance of any party
           -------------
to this Agreement, shall not constitute a default hereunder, or give rise to any
claim for damages, if and to the extent caused by occurrences beyond the control
of the party affected, including, but not limited to, acts of God, strikes or
other concerted acts of workmen, civil disturbances, fires, floods, explosions,
riots, war, rebellion, sabotage, acts of governmental authority or failure of
governmental authority to issue licenses or approvals which may be required.

                                     - 47 -
<PAGE>

    13.11  Mediation.  Except for the right of either party to apply to a court
           ---------
of competent jurisdiction for a temporary restraining order, a preliminary
injunction, or other equitable relief to preserve the status quo or prevent
irreparable harm, any and all claims, disputes or controversies arising under,
out of, or in connection with the Agreement, including any dispute relating to
patent validity or infringement, which the parties shall be unable to resolve
within sixty (60) days shall be mediated in good faith.   The party raising such
dispute shall promptly advise the other party of such claim, dispute or
controversy in a writing which describes in reasonable detail the nature of such
dispute.  By not later than five (5) business days after the recipient has
received such notice of dispute, each party shall have selected for itself a
representative who shall have the authority to bind such party, and shall
additionally have advised the other party in writing of the name and title of
such representative.  By not later than ten (10) business days after the date of
such notice of dispute, the party against whom the dispute shall be raised
shall select a mediation firm in the Atlanta area and such representatives shall
schedule a date with such firm for a mediation hearing.  The parties shall enter
into good faith mediation and shall share the costs equally.  If the
representatives of the parties have not been

                                     - 48 -
<PAGE>

able to resolve the dispute within fifteen (15) business days after such
mediation hearing, the parties shall have the right to pursue any other remedies
legally available to resolve such dispute.  If the dispute is not successfully
resolved through mediation, either party shall have the option to pursue binding
arbitration.  Any such arbitration shall be held in Atlanta, Georgia and shall
be performed in accordance with all relevant guidelines and rules of the
American Arbitration Association before a panel of three independent
arbitrators.

    13.12  Publications.  NOVOSTE acknowledges EMORY's obligation to disseminate
           ------------
new knowledge and research findings.   However, notwithstanding any other
provisions of this Agreement, EMORY acknowledges that NOVOSTE may have
proprietary interests and agrees to submit any manuscript which discloses data
or other information pertaining to any Licensed Technology, to NOVOSTE for
review sixty (60) days prior to submission for any oral presentation or written
publication.  NOVOSTE shall then have forty-five (45) days to respond to EMORY
with any requested revisions. NOVOSTE shall have the right to edit such proposed
disclosure to remove any NOVOSTE confidential or proprietary information and to
delay the publication of any manuscript which first discloses an invention for a
reasonable period of time, to

                                     - 49 -
<PAGE>

enable NOVOSTE to file, or have filed, a patent application to protect any
invention disclosed therein.

    13.13  Data Ownership. EMORY shall retain ownership of any medical records,
           --------------
patient specimens, x-rays, angiograms, EKG'S, ultrasonic images and recordings,
and other patient medical data generated during clinical studies sponsored by
NOVOSTE and conducted at EMORY.

    EMORY shall retain ownership of all scientific data, photos, selected
tissues, histology slides, microscope preparations, angiograms, ultrasonic
images and other primary information sources obtained as a result of conducting
in vitro and animal experimental procedures sponsored by NOVOSTE at EMORY under
approved protocols and using EMORY facilities.

    NOVOSTE shall retain ownership of all completed case medical record forms,
research notebooks, prototypes, devices, supplies, radiation sources, and
equipment provided by NOVOSTE.  EMORY shall be entitled to retain a confidential
copy of the case medical record forms, without duplication, subject to the
Confidentiality provisions for all clinical studies conducted at EMORY.

    EMORY shall, within the bounds of legal requirements, make such medical
records, patient specimens, x-rays, angiograms, EKG'S, ultrasonic images and
recordings, and other patient medical data

                                     - 50 -
<PAGE>

generated under this Agreement available for audit, review and copying by
NOVOSTE.

    EMORY agrees to promptly provide NOVOSTE with copies of all data, codes,
photographs and other recorded scientific information obtained as a result of
conducting in vitro and animal experimental procedures at EMORY.

    NOVOSTE shall have free, clear, and unencumbered access to all data subject
to the provisions of this Agreement and may use such data in connection with any
of its research, development, marketing or promotional activities and may be
disclosed by NOVOSTE to other clinical centers, consultants, the Food and Drug
Administration and other Federal, State and/or local regulatory agencies.

                              ARTICLE 14. NOTICES
                              -------------------

    All notices, statements, and reports required to be given by one party to
the other shall be in writing and shall be deemed to have been given upon
delivery in person or upon the expiration of five (5) days after deposit in a
lawful mail depository in the country of residence of the party giving the
notice, registered or certified airmail postage prepaid, and addressed as
follows:

                                     - 51 -
<PAGE>

EMORY                                   NOVOSTE

Vincent La Terza                        President
Director of Licensing                   Novoste Corporation
and Patent Counsel                      4350 International Boulevard
2009 Ridgewood Drive                    Suite C
Atlanta, Georgia 30322                  Norcross, Georgia 30093

    Either party hereto may change the address to which notices to such party
are to be sent by giving notice to the other party at the address and in the
manner provided above.  Any notice may be given, in addition to the manner set
forth above, by telex, facsimile or cable, provided that the party giving such
notice obtains acknowledgment by telex, facsimile or cable that such notice has
been received by the party to be notified.  Notice made in this manner shall be
deemed to have been given when such acknowledgment has been transmitted.

                                     - 52 -
<PAGE>

    IN WITNESS WHEREOF, EMORY and NOVOSTE have caused this Agreement to be
signed by their duly authorized representatives, under seal,'as of the day and
year indicated below.


EMORY UNIVERSITY:                NOVOSTE CORPORATION


By:  /s/                                      By: /s/
   ----------------------------                  ----------------------------
Name: John Temple                             Name: Thomas D. Weldon
                                                   --------------------------
Title: Executive Vice President               Title: President & CEO
                                                    -------------------------
Date:     1/30/96                             Date:  1/30/96
     --------------------------                    --------------------------

                                     - 53 -
<PAGE>

                                   EXHIBIT A

                             QuitClaim Assignment

    For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Emory University, a nonprofit Georgia corporation, with
offices at 1380 South Oxford Road, N.E., Atlanta, Georgia 30322 ("EMORY") hereby
irrevocably and unconditionally quitclaims and assigns to Novoste Collporation,
a Florida Corporation, with offices at 4350-C International Boulevard, Norcross,
Georgia 30093-3037 ("NOVOSTE"), its successors, legal representatives and
assigns, any and all right, title and interest throughout the world that EMORY
may now or hereafter have in:

    (1) U.S. Patent Application entitled "Method and Apparatus For Treating a
Desired Area in the Vascular System of a Patient" filed on October 27, 1994, and
assigned Serial No. 08/330,327 and in any United States division or continuation
application or reexamination, reissue or extension of any U.S. Patent issuing
therefrom.

    EMORY agrees to assist NOVOSTE in such manner as may be reasonably required
to obtain the cooperation of EMORY employees in the execution, filing and
prosecution of the above-identified

                                     - 54 -
<PAGE>

patent applications, and any division, continuation, reexamination, reissue or
extension thereof, in the United States and to vest title to the above-
identified patent applications in the United States.

    EMORY further agrees upon the request of NOVOSTE, its successors, legal
representatives and assigns, in the event of said application or any
continuation or division thereof, or Letters Patent issued thereon, or any
reissue or application for the reissue thereof becoming involved in Interference
or any other contested matter, to cooperate to the best of its ability with
NOVOSTE, its successors, legal representatives and assigns in the matters of
preparing and executing the preliminary statement or other such document and
giving and producing evidence in support thereof.  EMORY further agrees to
perform, upon such request, any and all affirmative acts to obtain said Letters
Patent, and vest all rights therein hereby conveyed in NOVOSTE, its successors,
legal representatives and assigns whereby said Letters Patent will be held and
enjoyed by NOVOSTE, its successors, legal representatives and assigns to the end
of the term for which said Letters Patent may be granted as fully and entirely
as the same would have been held and enjoyed by EMORY if this assignment and
sale had not been made.

                                     - 55 -
<PAGE>

    NOVOSTE acknowledges that activities required to perfect NOVOSTE's patent
rights shall be undertaken at NOVOSTE's expense.   NOVOSTE further acknowledges
that EMORY has no authority to compel the cooperation of any individuals not
employed by EMORY.

    EMORY also assigns to NOVOSTE, its successors, legal representatives and
assigns the entire right, title and interest in foreign patent applications
corresponding to U.S. Patent Application No. 08/330,327 or any divisional or
continuation thereof and the right of priority for patent and utility model
applications in all countries arising under any applicable international
convention for the protection of industrial property and/or any internal
priority legislation of such countries, and EMORY agrees upon the request of
NOVOSTE, its successors, legal representatives and assigns to execute any and
all documents that shall be required to be executed in connection with any and
all applications for foreign Letters Patent thereof, including the prosecution
thereof, and to execute any and all documents necessary to invest title in said
foreign applications and patents in said Assignee, and to assist NOVOSTE in such
manner as may be reasonably required to obtain the cooperation of EMORY
employees in the execution, filing and prosecution of the above-identified
foreign patent applications.

                                     - 56 -
<PAGE>

EMORY UNIVERSITY
By:

/s/ John L. Fengler                 1/30/96
-----------------------             ------------------
Name:          
Title: Exec V. Pres.                Date


SUBSCRIBED and SWORN to before me this 30th day of
                                      -----
January, 1996.
-------    --


---------------------------
NOTARY PUBLIC




                                      -57-
<PAGE>

                                   EXHIBIT B

                              PATENT APPLICATION

                                     -58-

<PAGE>

                                                                 January 3, 1996
                                                Attorney Docket No. WELD-111-CIP

                                    TITLE:

           METHOD AND APPARATUS FOR RADIATION TREATMENT OF A DESIRED
                   AREA IN THE VASCULAR SYSTEM OF A PATIENT

                                  INVENTORS:

                               RON WAKSMAN, M.D.
                               THOMAS D. WELDON
                             RICHARD A. HILLSTEAD
                               JONATHAN J. ROSEN
                               CHARLES E. LARSEN
                             IAN R. CROCKER, M.D.
                               RAPHAEL F. MELOUL
                            GEORGE K. BONNOITT, JR.
                               DAVID S. HALPERN

                            FIELD OF THE INVENTION

     The present invention relates generally to the delivery of treating
elements by a catheter to a selected site within the vascular system of a
patient. More particuarly, the present invention relates to method and apparatus
for the delivery of a treating element, such as a radiation source, through a
catheter to a desired site, such as a coronary artery, for inhibiting wound
healing response, such as restenosis following balloon angioplasty.

                             RELATED APPLICATIONS

     This application is a continuation-in-part of application Ser. No.
08/330,327 filed October 27, 1994.

                          BACKGROUND OF THE INVENTION

     It is known that the human body's healing response to wounds typically
includes the formation of what is commonly called scar tissue. This response
also occurs within the vascular system of a person following injury to a blood
vessel. An injury that provokes the formation of scar tissue may occur in
various locations within the vascular system, such as in the carotid artery or
in coronary bypasses, or in various ways, such as trauma from surgical or
diagnostic procedures.

                                   EXHIBIT B
<PAGE>

                                       2

    One area of the vascular system of particular concern with respect to such
injuries is coronary arteries that are subjected to procedures for removing or
reducing blockages due to plaque within the arteries. Partial and even complete
blockage of coronary arteries by the formation of an atherosclerotic plaque is
a well known and frequent medical problem. Such blockages may be treated using
atherectomy devices, which mechanically remove the plaque; hot or cold lasers,
which vaporize the plaque; stents, which hold the artery open; and other devices
and procedures which have the objective of allowing increased blood flow through
the artery.  The most common such procedure is the percutaneous transluminal
coronary angioplasty (PTCA) procedures -- more commonly referred to as balloon
angioplasty.  In this procedure, a catheter having an inflatable balloon at its
distal end is introduced into the coronary artery, the uninflated balloon is
positioned at the stenotic site and the balloon is inflated.  Inflation of the
balloon disrupts and flattens the plaque against the arterial wall, and
stretches the arterial wall, resulting in enlargement of the intraluminal
passageway and increased blood flow.  After such expansion, the balloon is
deflated and the balloon catheter removed.

    PTCA is a widely used procedure and has an initial success rate of between
90 and 95 percent. However, long term success of PTCA (as well as the other
artery-opening procedures referred to above) is much more limited, due largely
to restenosis, or reclosing of the intraluminal passageway through the artery.
Restenosis, wherein the vessel passageway narrows to approximately 50% or less
of the enlarged size, is experienced in approximately 30 to 50 percent of the
patients within six months after PTCA. Restenosis may occur for various reasons,
but it is now believed that restenosis is, in significant part, a natural
healing response to the vessel injury caused by inflation of the angioplasty
balloon.

    Vessel injury may occur in several ways during PTCA, including: denudation
(stripping) of the endothelium (the layer of flat cells that line the blood
vessels); cracking, splitting and/or disruption of the atherosclerotic plaque
and intima


<PAGE>

                                       3

(innermost lining of the blood vessel); dehiscence (bursting) of the intima and
the plaque from the underlying media; stretching and tearing of the media and
adventitia (outside covering of the artery) which may result in aneurysmal
expansion; and injury to the vessel smooth muscle. Such injury to the vessel
typically initiates the body's own natural repair and healing process. During
this healing process, fibrin and platelets rapidly accumulate in the
endothelium, and vascular smooth muscle cells proliferate and migrate into the
intima. The formation of scar tissue by smooth muscle proliferation, also known
as intimal hyperplasia, is believed to be a major contributor to restenosis
following balloon angioplasty of the coronary artery.

    Prior attempts to inhibit restenosis of coronary arteries have included,
among other things, the use of various light is therapies, chemotherapeutic
agents, stents, atherectomy devices, hot and cold lasers, as well as exposure of
the stenotic site to radiation. These therapies have had varying degrees of
success, and certain disadvantages are associated with each of these therapies.
Although radiation therapy has shown promise, particularly in inhibiting intimal
hyperplasia, the devices available for delivery of radiation sources to a
stenotic site have been limited and have tended to suffer from drawbacks which
limit their usefulness. Typical of the devices using radiation to treat
restenosis are those shown or described in U.S. Patents 25 Nos. 5,059,166 to
Fischell; 5,213,561 to Weinstein; 5,302,168 to Hess, 5,199,939 to Dake;
5,084,002 to Liprie; and 3,324,847 to Zoumboulis.
<PAGE>

                                       4

                           SUMMARY OF THE INVENTION

    The present invention is directed to apparatus and methods for delivering
one or more treating elements, such as a radiation source, through a catheter to
a desired location in the vascular system of a human patient and to retrieving
the treating element(s) through the catheter, if so desired. The present
invention is particularly applicable, but not limited, to the treatment of
coronary arteries that have been or will be subjected to PTCA or other artery-
opening procedures, in order to inhibit intimal hyperplasia and reduce the risk
of restenosis. The present invention is also useful in other areas of the
vascular system, such as in the carotid artery or in coronary bypasses.

    More specifically, as set forth in the appended claims, the
present invention comprises an elongated flexible catheter tube having a
proximal end portion adapted to remain outside the patient's body, a distal end
portion adapted to be positioned at a selected location within the vascular
system of the patient and a lumen extending therebetween, with the diameter of
the catheter tube being sufficiently small for insertion into the patient's
vascular system.  The catheter tube is preferably but not necessarily adapted
for positioning the distal end of the tube at the desired site by advancement
over a guide wire.  A port is provided at the proximal end portion of the tube,
through which blood-compatible liquid may be introduced from a source of such
liquid into the lumen. One or more treating elements, which may be in the form
of a solid capsule, pellet or the like, such as a capsule or pellet containing
radioactive material, is positionable within the lumen and is movable between
the proximal and the distal end portions of the tube under the motive force
exerted by the liquid flowing through the lumen.

    In accordance with the present invention, a method is also provided for
treating a selected area in the vascular system of a patient wherein an
elongated flexible catheter tube having a distal end portion adapted to be
positioned at a selected location within the vascular system of the patient, a
proximal
<PAGE>

                                       5

end portion adapted to remain outside the patient's body, a lumen extending
therebetween, and a diameter sufficiently small for insertion into the patient's
vascular system is introduced into the vascular system of a patient. The
catheter is preferably but not necessarily introduced over a guide wire until
the distal end portion of the tube is within the selected area of the vascular
system. A port communicating with the first lumen is adapted for introduction of
blood-compatible liquid into the lumen. One or more treating elements, such as a
capsule or pellet containing radioactive material, is introduced into the lumen
at the proximal end portion of the tube and is moved from the tube's proximal
end portion through the lumen to the distal end portion within the selected area
by flowing the blood-compatible liquid through the lumen to generate a motive
force on the element so as to move it from the proximal end to the desired
location at the distal end portion. There, the treating element is allowed to
remain a sufficient time for treatment of the selected area, during which time
the remaining portion of the catheter is free of treating elements so as to not
unnecessarily expose other tissue to such treatment. After the treatment is
completed, the catheter tube is removed from the patient.

    In another embodiment, the present invention is embodied in an angioplasty
balloon catheter having proximal and distal end portions, with a lumen extending
therebetween. The lumen communicates with an inflatable balloon located on the
distal end portion. In accordance with the present invention, one or more
treating elements, such as a radiation source, is either carried fixedly at the
balloon or moved through a lumen from the proximal end portion to the distal end
portion, for delivery of radiation to the stenotic site as the angioplasty
procedure is actually carried out -- therefore allowing what may otherwise be
a two-step process to be carried out in a single step. From this summary, it
should be apparent that the method of the present invention may be carried out
before, during or after an angioplasty or other artery-opening procedure,
whichever is deemed most desirable by the treating physician.

<PAGE>

                                    6

                                DRAWINGS

     Figure 1 is a diagrammatic representation of a catheter-based treatment
delivery system embodying the present invention.

     Figure 2A is cross-sectional view of one embodiment of the proximal end
portion of the treatment delivery system of the present invention.

     Figure 2B is a cross-sectional view of another embodiment of the treatment
delivery system of the present invention.

     Figure 2C is a cross-sectional view of still another embodiment of the
treatment delivery system of the present invention.

     Figure 3 is a cross-sectional view of one embodiment of the treating
elements of the present invention.

     Figure 4 is a partial cross-sectional view of one embodiment of the
elongated catheter tube of the present invention, showing the treating elements
disposed in the distal end portion of the tube.

     Figure 5 is a partial cross-sectional view of a second embodiment of the
elongated catheter tube of the present invention, showing the treating elements
in the distal end portion of the tube.

     Figure 6A is a partial cross-sectional view of a third embodiment of the
elongated catheter tube of the present invention, showing the treating elements
in the distal end portion of the tube.

     Figure 6B is a partial cross-sectional view of the Figure 6A embodiment of
the elongated catheter tube of the present invention, disposed within an outer
guiding catheter which may be used to position the catheter tube of the present
invention within the body of a patient.

     Figure 7A is a partial cross-sectional view of a fourth embodiment of the
elongated catheter tube of the present invention, showing the treating elements
disposed in the distal end portion of the tube.

     Figure 7B is a partial cross-sectional view of the elongated catheter tube
of Figure 7A taken along line 7-7B.
<PAGE>

                                       7

      Figure 8A is a partial cross-sectional view of a fifth embodiment of the
elongated catheter tube of the present invention, showing the treating elements
in the distal end portion of the tube.

      Figure 8B is a partial cross-sectional view of a modified
version of the embodiment of the elongated catheter tube of Figure 8A, showing
the treating elements in the distal end portion of the tube.

      Figure 9 is a partial cross-sectional view of a sixth embodiment of the
elongated catheter tube of the present invention showing toroidal or ring-shaped
treating elements in the distal end portion of the tube.

     Figure 10 is a partial cross-sectional view of an alternative embodiment of
the present invention having an inflatable balloon and treating elements
fixedly positioned on the distal end portion.

     Figure 11 is a partial cross-sectional view of an alternative embodiment of
the present invention having an inflatable balloon, with the treating elements
disposed therein.

     Figure 12 is a partial cross-sectional view of another alternative
embodiment of the present invention having an inflatable balloon, with the
treating elements movable along the catheter.

     Figure 13 is a partial cross-sectional view of a further alternative
embodiment of the present invention having an inflatable balloon, with the
treating elements movable along the catheter.

     Figure 14 is a partial cross-sectional view of another embodiment of the
treatment delivery system of the present invention.

     Figure 15A is a partial cross-sectional view of a further embodiment of the
treatment delivery system of the present invention.

     Figure 15B is an elevational view of part of the proximal end portion of
the treating system shown in Figure 15A.

     Figure 15C is a cross-sectional view taken along lines 15c=15c of Figure
15A.
<PAGE>

                                       8

      Figure 16 is a partial cross-sectional view of various parts of a further
embodiment of the treatment delivery system of the present invention.

     Figure 17 is a partial cross-sectional view of another alternative
embodiment of the present invention having an inflatable balloon, with the
treating elements movable along the catheter.

     Figure 18 is a partial cross-sectional view of still another alternative
embodiment of the present invention having an inflatable balloon, with the
treating elements movable along the catheter.

     Figure 19 is a partial cross-sectional view of still another alternative
embodiment of the present invention having an inflatable balloon, with treating
elements movable along the catheter.

-------------------

     Confidential treatment has been requested for portions of this page and for
all of pages 9 and 10 of this exhibit.  The copy filed herewith omits the
information subject to the confidentiality request.  Omissions are designated as
"XXXXX".  The portions omitted have been filed separately with the Securities
and Exchange Commission pursuant to said request for confidential information.

<PAGE>

                                       9



                                     XXXXX
<PAGE>

                                      10



                                     XXXXX
<PAGE>

                                      11

                             DETAILED DESCRIPTION


     Figure 1 depicts one embodiment of the present invention in general
diagrammatic form for ease of initial understanding. Shown in Figure 1 is an
elongated catheter 2 having a proximal end portion 4, a distal end portion 6,
and at least one lumen 8 extending therebetween. The catheter is sized for
insertion of the distal end portion through the vascular system of a patient to
a selected area to be treated, such as the site of a balloon angioplasty
procedure or other opening procedure, such as an atherectomy, in a coronary
artery. This may be carried out, for example, by inserting the catheter
percutaneously into a femoral artery and advancing the catheter over a typical
guide wire 10 upwardly through the descending aorta, over the aortic arch,
downwardly through the ascending aorta and into the particular coronary artery
that has been selected for treatment, such as a coronary artery that has been
subjected to PTCA or other artery-opening procedure. Guide wires and procedures
used in advancing such a catheter to the point of the angioplasty procedure are
well known and will not be discussed in detail.

      At the proximal end of the catheter, which is located outside the patient
in a percutaneous procedure such as described above, a transporting and/or
loading device 12 is provided for loading a treating element, such as a pellet
or capsule comprising or containing radioactive material, into the lumen 8 of
the catheter 2. Additional treating elements may also be loaded such that the
total length of the combined treating elements corresponds to at least the
length of the stenotic area of the vasculature to be treated. The total length
of the combined treating elements also could be longer than the stenotic area in
order to assure that the end edges of the stenotic area are also treated. This
loading procedure may also be performed manually, but a mechanical loader as
described in more detail later is preferred to provide better user protection
against radiation.

     After the treating element is loaded into the lumen 8, pressurized blood-
compatible liquid, such as sterile saline
<PAGE>

                                      12

solution or sterile water, is introduced via liquid source 14 through a port 16
in the proximal end of the lumen behind the treating element. Flow of liquid
through the lumen pushes the treating element along the lumen to the distal end
portion, which is located at the site to be treated. The liquid which provides
the motive force for moving the treating element may be allowed to exit from the
distal end of the catheter or may be returned in a parallel lumen provided in
the catheter or may be returned via suction through the same lumen in which the
treating element travels.

     After the treating element is located at the desired site, the
treating element is allowed to remain for a time sufficient to treat the tissue.
For radiation treatment of a stenotic site, the treating element preferably are
beta-emitting radiation sources, and the residence time period will be
relatively short, on the order of minutes as discussed in more detail below.

     After the treatment is complete, the catheter may be removed with the
treating element remaining at the distal end or, alternatively, liquid may be
forced through the lumen in a reverse direction to return the treating element
to the proximal end and into the loading device, if desired, before removal of
the catheter. The reverse flow of fluid may be achieved by forcing liquid under
positive pressure through the lumen in a reverse direction or by applying a
suction, such as by withdrawing the piston of a syringe attached at the proximal
end of the lumen, to the lumen.

     The transporting/loading device 12 need not be connected directly to the
proximal end of the catheter 2 if such direct connection would result in
possible kinking of the catheter or would restrict maneuverability. In that
case, an additional length of tubing (which may have the same number of lumens
as the catheter) could be provided between the transporting/loading device 12
and the proximal end portion 4 of the catheter. In such event, the additional
length of tubing (as well as the proximal end portion of the catheter located
outside the patient) may be shielded to protect the user and/or the patient from
unnecessary radiation exposure.
<PAGE>

                                      13

      Figure 2A shows one actual embodiment of the proximal end of the catheter
system depicted in Figure 1. Although not limited to use with radioactive
treating elements, the device shown in Figure 2A is particularly adapted for
that application.

     Specifically, Figure 2A depicts a three-lumen catheter system 18 with a
loading device 20 containing treating elements 22 and connected to the proximal
end of a three lumen catheter tube 24. The loading device comprises a rigid body
26 preferably of a suitable rigid polymer, having a proximal end 28, a distal
end 30 and a first, a second and a third bore, 32, 34 and 36 respectively,
extending therebetween. A fitting 38 located at the distal end of the body
connects the first, second and third bores, respectively, with one of the three
lumens 33, 35 and 37 of the catheter tube 24.

     At the proximal end of the housing member, ports, such as luer connector
ports, are provided for communication with bores 32, 34 and 36. A first port 40
is aligned with the first bore 32 of the body and is adapted for the entry or
exit of a liquid, such as sterile saline. A second port 42 is in communication
with the second bore 34 of the housing member and is likewise adapted to
permit the entry or exit of liquid into the body. The third port 44 opens into
the third bore of the body and is adapted to receive a guide wire 46 to aid in
positioning the distal end of the catheter tube within a patient. A valve (not
shown), such as a Touhy-Borst valve, may be attached to the third port to
prevent leakage of fluid around the guide wire during or after insertion of the
device into the patient.

          For loading and/or unloading of the treating elements 22, a retaining
device such as a magazine, carrier or carriage 48 is slidably positioned within
a slot 50 defined in the body 26 intermediate the proximal and distal ends. The
carriage is preferably constructed of the same material as the rigid body 26 and
has a first through bore 52 and a second through bore 54. The first and second
through bores of the carriage may be selectively aligned with the first bore 32
of the body, depending upon the lateral position of the carriage relative to the
body. A carriage with only a single through bore may also be used.
<PAGE>

                                      14

     By pre-loading the treating elements into the carriage, they may be
conveniently handled, shipped and stored separate from the rest of the loading
device. When the user is ready for the procedure, the carriage may be simply
inserted into the body, thereby minimizing handling of the treating elements by
and exposure to the user. The carriage is preferably made of a material and has
sufficient thickness to protect the user against unnecessary exposure to
radiation when the treating elements are radioactive. As shown in Figure 2A,
carriage 48 is fully inserted into the body 26, with the first bore 52 of the
carriage aligned with the first bore 32 of the body. In this position, second
bore 54 of the carriage contains the treating elements 22 and is positioned
within the body, thereby providing protection of the user from radiation emitted
by the treating elements. In this first position, fluid, such as sterile saline,
may be introduced through the first port to prime the body and catheter and
remove any air contained therein, if so desired.

     By sliding the carriage 48 outwardly from the body 26, the carriage is
moved into a second position wherein second bore 54 of the carriage is coaxially
aligned with first bore 32 of the body, and the treating elements 22 are ready
for introduction into the catheter 24.  In this second position, pressurized
liquid, such as sterile saline, may be introduced via pump 14
through first port 40 to supply the motive force against the treating
elements 22, ejecting them from second through bore of the carriage, distally
through the first bore 32 of the body, and into a lumen of the catheter.

     The specific design of the pump 14 may be chosen from various alternatives.
For example, the pump 14 may be a simple saline-filled piston syringe attached
via luer lock connector to port 40 of body 26. Manual depression of the syringe
plunger would provide sufficient force to eject the treating elements and move
them to the desired position in the catheter (and withdrawal of the plunger may
assist in returning the treating elements to the proximal end portion after the
treatment is complete).

Alternatively, the motive force may be provided by a column of
<PAGE>

                                      15

liquid from a suspended container of sterile saline or water, controlled by a
simple roller clamp or stopcock.

     Alternative configurations for the carriage (not shown) also may be used
without departing from the scope of the present invention. For example, the
carriage may be cylindrical and/or rotatably mountable within the body. Through
bores or chambers within the carriage may be selectively brought into alignment
with the bores of the body by rotating the carriage. The treating elements may
be pre-loaded in the cylinder to minimize user contact and to protect the user
from radiation when a radioactive treating element is employed. By providing the
treating elements 22 pre-loaded into a loading device 20 or pre-loaded into a
carriage 48 that may be inserted into a loading device, user contact with the
treating elements is minimized, and for radioactive treating elements, the user
may be shielded from radiation.

     Figure 2B shows a further alternative embodiment of a catheter system of
the present invention.  Catheter system 56 includes a combination loading device
and pump 58 and a multi-lumen catheter 60.  The combination pump and loading
device comprises a body portion 62 having a distal end portion 64 attached to
the elongated catheter tube and a proximal end portion 66 mounting connectors
for fluid communication with passageways defined in the body.

      The body portion 62 has a central bore or passageway 68 in which treating
elements 22 are located prior to the treatment and after the treatment is
completed. The central bore 68 communicates directly with one of the lumens of
multi-lumen catheter 60. Discharge of the treating elements from the bore 68 is
controlled by gate 70, which may be moved between positions blocking flow or
allowing flow through central bore. Alternatively, the gate may contain openings
of sufficiently small size to permit fluid to pass therethrough, while
preventing passage of the treating elements while the gate blocks the central
bore. This aids in priming the system with the treating elements in position
in bore 68, if so desired.
<PAGE>

                                      16

     For providing the pressurized flow of liquid to transport treating elements
to and from the distal end of catheter 60, a pair of piston-cylinder
arrangements are provided on opposite sides of the body portion 62. Piston-
cylinder arrangement 72 provides the liquid flow for dispatching the treating
elements to the distal end of the catheter and piston-cylinder arrangement 74
provides the reverse liquid flow for retrieving the treating elements therefrom.

      Interior passageway 76 in the body 62 communicates between liquid inlet
port 78, central bore 68 and the cylinder of dispatch piston-cylinder
arrangement 72, which provides the fluid flow for moving the treating elements
into and along a principal lumen of the catheter 60. One-way, spring loaded ball
valve 80 within passageway permits liquid to enter through the inlet port
but blocks liquid from exiting from the port.  Vent 79 allows displacement
air to exit from the passageway 76 when liquid is added, for priming purposes
and the like, and a pressure relief valve 81 may be provided to prevent
overpressurization of the catheter.

     Interior passageway 82 in the body 62 communicates between the cylinder of
the retrieval piston-cylinder arrangement 74 and a return lumen of the catheter
60.  At the distal end portion of the catheter, the return lumen communicates
with the principal lumen to provide a closed circulation path for the liquid
that dispatches and retrieves the treating elements.

     In addition, the body 62 has a third interior passageway 84 that
communicates between guide wire inlet 86 and a guide wire lumen of the catheter
60.  By itself, the catheter 30 may not have sufficient strength or torsional
rigidity for insertion along a lengthy serpentine vascular path -- in typical
angioplasty procedures, the distance between the percutaneous entry point and
the coronary artery may be approximately 3-4 feet (90-120 cm). To assist in
positioning the distal end of the catheter at the desired location, the catheter
may be advanced over a guide wire that is pre-inserted to the desired location
in a manner well known to those skilled in performing angioplasty and similar
procedures. The guide wire inlet preferably includes
<PAGE>

                                      17

a Touhy-Borst valve or similar known device to close the guide wire inlet around
the guide wire to restrict leakage of blood or other fluid from the guide wire
lumen.

    In use, the interior passageways, piston-cylinder arrangements, and catheter
principal and return lumen are filled with sterile water or saline through the
liquid inlet port 78 and one-way valve 80. In the initial position, the dispatch
and retrieval piston-cylinders are oppositely positioned, with the piston of the
dispatch piston-cylinder 72 in a withdrawn position, as shown in Figure 2B, and
the piston of the retrieval piston-cylinder 74 in an advanced position, also as
shown in Figure 2B. Before the treating elements can be moved to the desired
position, gate 70 controlling the central bore must be opened.

      By advancing the dispatch piston, the liquid in the dispatch
cylinder is forced through the interior flow path 76 and into the central bore
68 containing the treating elements 22.  The pressurized liquid flow ejects the
treating elements from the central bore and forces the treating elements along
the principal lumen of the catheter to the distal end portion located at the
site to be treated.  As liquid moves along the principal lumen in a distal
direction, it displaces an equal amount of liquid that returns along the return
lumen and enters the cylinder of the retrieval piston-cylinder arrangement 74,
pushing the retrieval piston outwardly.

     Retrieval of the treating elements may be accomplished by reversing the
steps described above.  The retrieval piston is advanced, forcing liquid in a
reverse or distal direction along the return lumen and returning the fluid to
the body along the principal lumen. The liquid flow moves the treating elements
in a proximal or return direction along the principal lumen, returning them to
the central bore of the body 62. The returning liquid enters the cylinder of the
dispatch piston-cylinder arrangement 72.

    With the catheter system as shown in Figure 2B, a completely closed system
is provided, and no liquid that contacts the treating elements is allowed to
enter the patient's body.
<PAGE>

                                      18

This may be particularly important when the treating agent is radioactive.  The
closed system arrangement also allows the treating elements, whether a single
element or a train of treating elements, to be shifted back and forth slightly
while in the distal portion of the catheter by alternately slightly depressing
the dispatch and retrieval pistons. This technique may be used to provide a more
uniform exposure of the selected vessel area, particularly where there is dead
space between or at the ends of the treating elements.

      A variation on the catheter system of Figure 2B is depicted in Figure 2C.
The catheter system 88 shown there similarly includes a combination pump and
loading device 90 and a multilumen catheter 92. The combination pump and loading
device 90 also has a body portion 94 with a distal end portion 96 attached to
the catheter 92, and a proximal end portion 98. In this embodiment, however,
liquid inlet port 100, guide wire inlet 102 and dispatch and retrieval bellows
104 and 106, respectively, are located on one side of the body 94. This
arrangement permits a large cylindrical chamber 108 to be provided, extending
inwardly from the proximal end of the body, for receiving a carrier or insert
110 which is pre-loaded with treating elements 22. Alternatively, the body 94
and insert 110 could be of one piece or integral construction.

     Insert 110 has a central bore 112 in which the treating elements are
located, a gate 114 controlling passage of the treating elements from the
central bore, and a laterally extending branch 116 of the central bore. When
inserted into the chamber 108 of the body 94, central bore 112 of the insert 110
is aligned with central passageway 118 of the body 94, which communicates
directly with a principal lumen of the catheter 92, and branch 116 communicates
with internal passageway 120 of the body, which connects to the liquid inlet
port 100 and the dispatch bellows 104.

    Alternatively, the insert 110 could have a plurality of bores and be
rotatably mounted in the body for selective alignment of the bores with inlet
port 100 and central passageway 118. In this arrangement, one bore could be
empty for fast
<PAGE>

                                      19

priming of the system and another bore could contain the treating elements.

      As with the embodiment in Figure 2B, an internal liquid flow passageway
122 is provided in the body 94, communicating between the retrieval bellows and
a return lumen of the catheter 92, and a guide wire passageway 124 is provided
between a guide wire lumen of the catheter and guide wire inlet 102. Also
similarly, a vent 126 is provided in communication with the passageway that
connects with the liquid inlet port l00.

     In operation, the catheter system of Figure 2C is essentially identical to
that discussed regarding Figure 2B. The embodiment of Figure 2C allows the
treating elements to be conveniently stored separately from the remainder of the
catheter system, for example in special radiation-proof containers.

     It should be clear that in each of the embodiments discussed above, the
body, carrier (insert or carriage) and catheter may be provided in various
combinations of assemblage, as a matter of choice. For example, the body and
carrier could be preassembled or even of one piece construction. Similarly, the
body could be preassembled with the catheter tube, with the carrier separate for
convenient storage and transportation of the treating elements. Alternatively
all three elements could be separate and assembled in the desired configuration
on site -- this would permit the physician to select the appropriate combination
depending on the desired procedure.

     For radiation exposure of the desired site, the treating elements 22
contain radioactive material, preferably betaemitting. In the preferred
embodiment shown in Figure 3, the treating elements are elongated hollow
cylinders 128 which are preferably constructed of stainless steel, silver,
titanium or other suitable material, and are ideally in the range of 2.5 to 5.5
mm in length. The cylindrical treating elements have rounded first and second
ends with a chamber 130 extending therebetween. The inner diameter of chamber
130 is preferably in the range of 0.4 to 0.6 mm. A first end plug 132 closes the
first end of the cylinder, while a second end plug 134 closes the second end.
The
<PAGE>

                                      20
end plugs are preferably less than about 1 mm in width and are affixed to
cylinder 128, for example, by welding.

     The outer diameter of the treating elements is preferably between
approximately 0.6 and 0.8 mm, being sized, of course, to slidably fit into the
respective receiving bores of the carriages, bodies and catheter lumen described
above. To permit maximum mobility through the loading devices and catheters
described above, the inner diameter of each of the bores or lumens the treating
elements pass through should preferably be less than twice the outer diameter
of the cylindrical treating elements and the outer surface of the treating
elements may be coated with Teflon material or similar low-friction material to
reduce friction between the treating element and the wall of the lumen in which
it moves. This allows the treating elements to move quickly through the
lumen, minimizes unnecessary exposure of other tissue to the treating elements
and in particular minimizes radiation exposure to other tissue. Additionally, to
increase the surface area of the treating elements subject to the motive force
provided by fluid being passed through the system, the treating elements may
also be provided with one or more annular ridges which extend outwardly about
the circumference of the treating elements.

       To treat a length of vascular tissue, a plurality of treating elements,
joined together to form a train of treating elements, as illustrated in the
attached figures, may be used. To keep the treating elements uniformly spaced
from each other, and, more importantly, to prevent the treating elements from
becoming too spaced apart while moving through the catheter, the individual
treating elements may be connected by several lengths of hard tempered spring
wire 136, as is shown in Figure 3.

      Each treating element 22, as constructed above, encapsulates a therapeutic
agent, such as a radiation emitting substance 138. Radiation emitting substance
138 is contained within interior chamber 130 of the treating element and may be
composed of any alpha, beta or gamma particle emitting substance. Preferably,
however, the radioactive source is a pure beta-particle emitter,
<PAGE>

                                      21

or beta and gamma emitter.  Examples of such substances include
Strontium/90/, Ruthenium/106/, Phosphorus/32/, Iridium/192/, and/or Iodine/125/.

     The amount and strength of the radioactive material contained in the
combined number of treating elements 22 should be sufficient to deliver a
desired dosage of from 100 to about 10,000 rads, preferably about 700 to 5,000
rads, in about 2-10 minutes. Radioactivity is generally measured in units of
"Curie" (Ci), and the radioactivity of the material for the present invention is
selected to provide the above dosage. For the preferred dosage, the radioactive
material may have a radioactivity of approximately 0.45 and 25,000 mCi per
centimeter of vessel to be treated, depending on the radiation source used. As
described briefly earlier, when a train of treating elements is used which have
dead space (non-radioactive) between adjacent elements, the train may be
oscillated by moving the catheter slightly back and forth or by briefly
repeatedly reversing the flow of liquid, resulting in a shifting back and forth
of the treating elements to provide a more uniform radiation exposure of the
selected area of the vessel.

     The selected radioactive material may be contained within glass, foil, or
ceramics, or, alternatively, within a powder or liquid medium, such as
microparticles in liquid suspension. When solid materials are used, the
preferred outer diameter of the material is approximately 0.5 mm, allowing it to
be inserted into the central chamber 130 of the treating element cylinder 128.
Such radioactive materials may be formed into pellets, spheres, and/or rods in
order to be placed into the chamber of the treating element.

     Various alternative treating elements may also be used to
contain the radioactive material without departing from the present
invention.  For example, the treating elements may be toroidal, spherical, or in
the form of elongated rings, and in such configurations, the radioactive
material may be actually impregnated in a metal and formed into the desired
shape. Alternatively, a radioactive powder may be fired to fuse the material so
that it may be formed into the desired shape, which may then be encapsulated in
metal, such as titanium, stainless
<PAGE>

                                      22

steel or silver, or in plastic, as by dipping in molten or uncured plastic. In
still another embodiment, the treating elements may be formed from a ceramic
material which has been dipped in a radioactive solution. In a still further
alternative, the treating elements 22 may be constructed in the form of two
piece hollow cylindrical capsules having a larger-diameter half with a central
cavity and a smaller-diameter half also having a central cavity, the smaller
half slidably received within the larger half and bonded or welded to form the
capsule structure.

      Turning now to a more detailed description of the catheters of the present
invention, as stated previously, catheters of the present invention may be pre-
attached to the loading device or, as discussed with regard to Figure 2, a
fitting such as 38 may be provided for attaching an elongated catheter tube to
the loading device. Although catheters of the present invention may vary in the
number of lumens or the specific construction of such lumens, those catheters
have in common, a proximal end attachable to a body member such as body 26, a
distal end opposite the body which is adapted to be positioned at a selected
site in the body, and an elongated tubular portion therebetween. For those
catheters that are not pre-attached to the loading device, the proximal end may
be provided with a keyed fitting to allow attachment of only certain catheters
to the fitting on the loading device. Such fittings may include those generally
known in the art which will not be discussed herein, but also may include
specially designed fittings which would be peculiar to this device. A specially
keyed fitting would prevent the inadvertent attachment of the fitting or body to
other catheters on the market which are not specifically designed to receive the
treating elements and/or to prevent the treating elements from being released
into the body.

     As used herein, the terms "elongated tube," "elongated catheter tube" and
similar phrases are intended to include a catheter possessing one or more lumens
produced from a single extrusion and catheters of multiple lumens wherein the
catheter is made up of several separate tubes bundled together.
<PAGE>

                                      23

     Figure 4 depicts the distal end portion of one catheter of the present
invention, generally at 140, with the treating elements located in the distal
end portion. In this embodiment, the catheter comprises a single tubular member
142 having a proximal end portion (not shown), a distal end portion and a lumen
144 extending therebetween. The tubular member is preferably extruded from Nylon
11 material, although other suitable plastic materials may be used. The outer
diameter of the tubular member is sized according to the intended application --
for example 5 French or smaller for use in treating the stenotic site of a
coronary artery. The inner diameter of the lumen is correspondingly sized to
receive the treating elements 22.

     To prevent treating elements 22 from exiting the distal end of the tubular
member, a retention projection may be provided in the lumen to block passage of
the treating elements, such as an end barrier 146. Barrier 146 is a separate
molded tip adhered or bonded to the distal end portion of tubular member 142.
Barrier 146 preferably has a smooth rounded external surface to minimize
possible abrasion to a vessel or other tissue and a central opening 148 to allow
liquid flow therethrough.

      To aid in placement of the catheter at the desired location, a marker band
150 is attached to the outer surface of tubular member 142 at the distal end
portion. To provide a continuous smooth outer surface, a slight undercut may be
provided in the surface of the catheter tube, in which the marker band resides.
Although shown on the exterior surface of the catheter, the marker band may also
be provided internally as well. Preferably the barrier 146 and marker band 150
are constructed from barium, a platinum-iridium compound, or like substance,
which is visible by fluoroscope during placement of the catheter.

      In use, still referring to Figure 4, the distal end portion of the tubular
portion is introduced into the body of a patient into a selected site, such as
the coronary artery 152 following balloon angioplasty. In such instances, a
guide wire will typically be pre-positioned in the patient, although a guiding
catheter could also be used. The distal end of the catheter is
<PAGE>

                                      24

then advanced over the guide wire, through lumen 144. The positioning of the
device is made more precise due to the ability to fluoroscopically observe the
barrier 146 and marker band 150 at the distal end portion of the catheter tube.

     After the distal end portion of the catheter is positioned such that the
previously stenosed area, generally at 154, of the coronary artery is located
between the barrier 146 and marker band 150, the guide wire can be removed, and
the proximal end of the catheter can be connected to a treating element loading
device and/or pump, as described earlier with reference to the Figure 2-2B
embodiments.

     So connected, the treating elements 22 are in direct communication with
lumen 144 of the catheter and a flow path is formed therebetween. Pressurized
liquid, such as from a fluid, syringe or other piston-cylinder arrangement,
plunger, or pump, elevated saline solution container, is then directed against
the treating elements, causing them to advance along the catheter lumen until
stopped by the end barrier 146.

     Referring to the Figure 2A embodiment of a loading device as an example, to
move the treating elements 22 from the body 26 to the selected site in the
patient, the carriage 48 is moved from the first position to the second
position. This releases the treating elements into the flow path where they are
carried rapidly by the motive force of the fluid therein into and through the
lumen of the catheter to the distal end portion, which is located at the
stenotic site. The rapid transportation of the treating elements reduces the
amount of radiation which is transmitted to tissues in the body through which
the elongated catheter tube extends. In this embodiment, the liquid transporting
the treating elements exits through the central opening 148 in the end barrier
146.

      As noted above, upon reaching the distal end portion of the elongated
tube, the treating elements are prohibited from being ejected into the patient
by the barrier 146. Once more, the barrier and marker band may be used to
fluoroscopically visualize the released radioactive elements, and account for
their location. The barrier and marker band may be specifically spaced
<PAGE>

                                      25

to cover the distance of the lumen occupied by the total length of the
radioactive treating elements, and the location of the elements may be confirmed
by viewing a solid image between the barrier and marker band on the fluoroscope.

     To maintain the treating elements within the distal end portion of the
elongated tube, a constant fluid pressure through the lumen and against the
treating elements may be required to counteract the effects of external blood
pressure and/or gravitational forces exerted upon the treating elements,
depending on the angle at which the distal end portion of the elongated tube is
placed and on the specific location in the patient.

     Preferably, in order to sufficiently irradiate the stenotic site of a
coronary artery that has been subjected to PTCA to inhibit intimal hyperplasia,
the treating elements should remain at the selected site for a sufficient time
to deliver a therapeutically effective amount of radiation, which is preferably
between about 100 and 10,000 rads, preferably about 700 to 5,000. The length of
time required to deliver this dosage of radiation depends primarily on the
strength of the radioactive source used in the treating elements and the number
of treating elements employed. The radioactivity needed will depend on the
strength of the source used and the emission, and may be in the range of 0.45 to
25,000 mCi depending on the source. After sufficient time, such as 2 to 10
minutes, has been allowed for treatment, the treating elements may be removed by
withdrawing the catheter from the patient or by applying suction (such as by a
syringe) to the proximal end of the lumen in which the treating element travels.

    Another embodiment of an elongated catheter tube 156 of the present
invention is shown in Figure 5. The proximal end of the catheter tube may be
pre-attached to a loading device/pump or employ a fitting for keyed attachment
to such a device, as described in detail earlier. Accordingly, only the distal
end portion of the catheter is depicted in Figure 5.

      As shown in Figure 5, the elongated tube 156 comprises co-axial inner and
outer tubes 158 and 160 respectively.  Inner tube
<PAGE>

                                      26

158 defines an inner bore or lumen 162, through which the treating elements 22
are advanced.  Inner and outer tubes are spaced apart to define to define a
return lumen 164 therebetween for return of the liquid used to advance the
treating elements.

     The distal end of the outer tube 160 tapers to a narrow, flexible and
atraumatic tip 166 bonded to the outer tube. A radiopaque barrier 168 located
slightly beyond the end of the inner tube 158 closes the outer tube 160 and
blocks further proximal movement of the treating elements 22. Similarly to
marker band 150 of the previous embodiment, a marker band 170 may be provided in
an undercut area on the surface of outer tube 160 at a location spaced
proximally from the barrier 168 to enhance placement of the distal end portion
and the treating elements at the desired location.

     When used to treat the site of a coronary artery where a balloon
angioplasty procedure has been carried out, this catheter 156 is positioned in
the previously stenosed site by a guide tube or similar device. Positioning of
the distal end portion of the catheter may be viewed fluoroscopically due to the
radiopaque barrier 168 and marker band 170.

     If not pre-attached to a loading device/pump, the proximal end of the
catheter is attached to such a device as described earlier. Without
unnecessarily repeating earlier description, the treating elements 22 are
advanced along the inner lumen 162 of the catheter under the force of liquid
flowing therethrough. With this embodiment, instead of exiting from the distal
end of the catheter, the liquid exits from the distal end of the inner lumen (or
through a side aperture 172 in the wall of the inner tube), and returns through
the return lumen 164 provided between the inner tube and the outer tube. The
return liquid may be allowed to exit through the loading device/pump or may be
collected therein, as described earlier, for alternative disposal.

    Unlike the first embodiment, this embodiment is a completely
closed system, in that the fluid is not released into the patient
and the treating elements 22 do not contact the blood.  While this eliminates
the effects of blood pressure in moving the
<PAGE>

                                      27

treating elements, a small but constant fluid flow may be required to maintain
the treating elements in the distal end portion of the elongated catheter tube
due to the gravitational effects in the event the treatment site is at a higher
elevation than the proximal end of the catheter. By oscillating the liquid flow
between the dispatch and retrieval pistons, the train of treating elements 22
may be shifted slightly back and forth to make the exposure along the desired
area more uniform.

     The radioactive treating elements remain in the distal end portion of the
elongated tube for a sufficient period of time to deliver a therapeutically
affective amount of radiation. As was previously discussed, this is preferably
about 100-10,000 rads, in the case of inhibiting the development of intimal
hyperplasia.

     After a sufficient amount of radiation is delivered, the treating elements
22 may be retrieved from the distal end portion of the elongated catheter tube
and returned to the loading device by introducing pressurized fluid into the
return lumen. This reverses the flow of liquid and creates an oppositely
directed motive force on the treating elements forcing them proximally through
the inner lumen 162 for return to the loading device. The elongated catheter
tube may then be removed from the patient and the procedure concluded.
Alternatively, the treating elements may be removed by withdrawing the catheter
from the patient.

     In a third alternative embodiment of the present invention
shown in Figures 6A and 6B, the catheter is constructed and operates
similarly to that described for the Figure 5 embodiment.   Elongated catheter
tube 174 comprises co-axial inner and outer tubes 176 and 178 respectively.
Inner tube 176 defines an inner bore or lumen 180, through which the treating
elements 22 are advanced. Inner and outer tubes are spaced apart to define a
return lumen 182 therebetween for return of the liquid used to advance the
treating elements.

      The distal end of the outer tube 178 is not tapered, but is
closed by radiopaque solid tip 184, which also serves as a barrier to the
treating elements as they move along the inner lumen 180. Also similarly, a
marker band 186 is provided on the surface of outer tube 178 at a location
spaced proximally from
<PAGE>

                                      28

the tip 174 to enhance placement of the distal end portion and the treating
elements at the desired location.

    The initial placement of the distal end portion of elongated catheter tube
174 is facilitated by the use of a third or guide tube 188, as is shown in FIG
6B. As shown therein, the separate third tube 188 has a proximal end portion
(not shown), a tapered distal end portion and a lumen 190 extending
therebetween.

     In use, the guide tube has sufficient strength or rigidity
for placement or is placed into the body of a patient over a pre-positioned
guide wire, so that the distal end portion of the third tubular member is
located at a specific selected site within the body at which treatment is
desired. Once the guide tube is positioned at the selected site, and the guide
wire at least partially pulled back, the elongated catheter tube 174 shown in
Figure 6A may be inserted into lumen 190 of the guide tube.

     As in the Figure 5 embodiment, the embodiment shown in Figures 6A and 6B
allows treating elements 22 to be hydraulically moved between the proximal and
distal end portions of the elongated tube, with the direction of the hydraulic
flow being determined by the pressure gradient existing between the delivery and
retrieval lumens. Thus, after maintaining the treating elements at the distal
end portion of the elongated catheter tube for a desired period of time, the
treating elements may be retrieved by reversing the flow of fluid through the
elongated tube. Following this the catheter and third or guide tube may be
removed from the patient and the procedure concluded.

     Another embodiment of the catheter of the present invention, particularly
intended for placement at a desired location by advancement over a guide wire,
is shown in Figures 7A and 7B. The elongated catheter tube 192 comprises a pair
of inner tubes 194 and 196 that extend in a parallel side-by-side arrangement
within an outer tube 198. Inner tube 194, which is of smaller diameter than tube
196, defines an inner lumen 200 for receiving a guide wire used for placement of
the catheter at the desired location within the patient. Inner tube 196, which
is of larger
<PAGE>

                                      29

diameter, provides inner lumen 202 along which the treating elements 22 travel.
Return lumen 204 is provided by the space between the inner surface of the
outer tube 198 and the outer surfaces of the inner tubes 194 and 196 for return
flow of liquid used to transport the treating elements.

     As seen in Figure 7A, the outer tube 198 has an open tapered distal end. An
interluminal wall 206 is provided within the outer tube at the beginning of the
taper and at the distal end of the inner tubes 194 and 196. The wall 206
includes an aperture in sealed communication with lumen 200 of inner tube 194,
through a guide wire may pass. The wall 206 is preferably slightly
spaced from the distal end of the other inner tube 196, through which the
treating elements pass, to allow liquid to exit from the end of tube 196 for
return through the return lumen 206. The wall also provides a barrier to prevent
the treating elements from exiting the end of tube 196.

     As in the earlier embodiments, the elongated catheter tube 192 has first
and second radiopaque marker bands, 208 and 210 on the outer tube to aid in
placing the distal end portion at the desired location in the patient. As noted
earlier, although generally depicted on the outer tube in many of the
embodiments, the markers may be provided inside the catheter at any convenient
location, such as on an inner tube or surface, without departing from the
present invention.

     In use for treating a stenotic site in a coronary artery with radiation,
the proximal end of the elongated catheter 192 tube may be pre-connected to a
loading device/pump or separately connected to such a device by a keyed fitting
or similar arrangement, as discussed earlier.  The distal end portion of the
elongated catheter tube is then positioned at the selected site within the
body of the patient by advancing the catheter over a pre-positioned guide wire.
In this embodiment, the guide wire may be allowed to remain in position.  This
has the significant advantage that it is unnecessary to insert the guide wire a
second time if a further catheter or device needs to be inserted after the
treatment is completed.
<PAGE>

                                      30

     The radiopaque marker bands 208 and 210 are visible on a fluoroscope and
aid in the placement of the device. When the distal end portion of the elongated
tube is positioned such that the selected site is located between marker bands
208 and 210, liquid may be pumped through the lumen 202 to move the treating
elements to the distal end portion of the elongated catheter tube, where they
are accounted for by the positioning of the marker bands. After sufficient
irradiation has occurred, the flow through the device is reversed by reversing
the flow of pressurized fluid through the return lumen causing return of the
treating elements to the loading device. The elongated catheter tube may then be
removed from the patient and the procedure completed.

     A further alternative embodiment of the catheter of the present invention,
preferably intended for placement over a guide wire, is shown in Figures 8A and
8B. The elongated catheter tube 212 comprises a pair of inner tubes 214 and 216
that extend in a parallel side-by-side arrangement within an outer tube 218. As
in the Figure 7 embodiment, inner tube 214, which is of smaller diameter than
tube 216, defines an inner lumen 220 for receiving a guide wire used for
placement of the catheter at the desired location within the patient. Inner tube
216, which is of larger diameter, provides inner lumen 222 along which the
treating elements 22 travel. A return lumen 224 is provided by the space between
the inner surface of the outer tube 218 and the outer surfaces of the inner
tubes 214 and 216 for return flow of liquid used to transport the treating
elements, in the very same manner as depicted in Figure 7B. In the Figure 8
embodiment, however, inner tube 214 (for the guide wire) extends fully along the
length of the outer tube 218, and is bonded to the outer tube at the distal-most
location, where the outer tube is tapered.

      In Figure 8A, an internal barrier 226 is provided at the end of the inner
tube 216, through which the treating elements are carried, to block the passage
of treating elements from the distal end of the tube 216. A center opening in
the barrier 226 allows liquid to pass from the lumen 222 of the inner tube 216
to the return lumen. Alternatively, the barrier may be solid as
<PAGE>

                                      31

depicted with barrier 228 in Figure 8B (which is otherwise the same as Figure
8A), and an aperture 230 may be provided in the wall of inner tube 216 to permit
liquid to flow between the treating element lumen 222 and the return lumen.
Although not depicted in Figures 8A or 8B, it should be understood that the
elongated catheter tube may also include a series of marker bands appropriately
placed along the length of the tube to aid in accurate placement in the patient.

     Another embodiment of the catheter of the present invention
is shown in Figure 9. As shown there, catheter 232 has three coaxial tubes,
inner tube 234, outer tube 236 and intermediate tube 238, which all extend the
full length of the catheter. Inner tube 234 has a lumen 240 for receiving a
guide wire for placement of the catheter at the desired location in the patient.
Inner tube 234 is spaced from intermediate tube 238 to define an annular
treating element passageway 242 therebetween. In this embodiment, the treating
elements are preferably ring shaped, as at 244, or donut shaped, as at 246, to
allow them to slide over the inner tube 234 and along the passageway 242. To
provide a return flow channel, the inner diameter of the outer tube 236 is
slightly larger than the intermediate tube 238 to provide a return flow path 248
therebetween.

     The end of the catheter is closed by a molded tip plug 250, preferably of
radiopaque material, bonded to the ends of the inner and outer tubes 234 and
236. Center passageway 252 through the tip plug allows for the passage of a
guide wire or the like for placement of the catheter at the desired location.
The distal end of the intermediate tube 238 stops short of the tip plug, thereby
allowing the treating element passageway 242 to communicate directly with the
return flow path 248. Radiopaque marker bands, although not shown, may also be
incorporated on the distal end portion of the elongated catheter tube to aid in
placing the elongated tube within the body at the selected site.

     After the distal end portion of the elongated tube is
positioned at the desired location in the patient, a liquid, such as saline,
is forced through the treating element passageway 242 and directed against the
ring-shaped treating elements, moving
<PAGE>

                                      32

the treating elements along the passageway over the inner tube 234 until they
abut the distal tip plug 250. The radioactive elements are retained at the
distal end portion of the elongated catheter tube for a sufficient time to
deliver the therapeutically effective amount of radiation to the selected site.
To retrieve the treating elements, the fluid flow is reversed through the flow
path by forcing liquid in a distal direction through the return lumen. Following
this the elongated tube can be removed over the guide wire and the procedure
completed.

     In a still further embodiment of the present invention, shown in Figure 10,
a catheter 254 is provided which includes both an inflatable balloon membrane
256 for carrying out a balloon angioplasty procedure and treating elements 22
fixed in the distal end of the catheter for simultaneous treatment. The catheter
of Figure 10 includes an elongated tubular portion 258, typically of extruded
construction, with a guide wire lumen 260 and an inflation lumen 262. A balloon
membrane is located at the distal end of the catheter tube and sealed to the
exterior surface to form an inflatable balloon. Port 264 communicates between
the inflation lumen and the inside of the balloon for inflating the balloon by
pressurized liquid. Only the distal end portion of the catheter is shown -- the
proximal end of the catheter being typical of angioplasty catheter construction
as is well known to those skilled in the field.

     To perform radiation treatment simultaneously with a balloon angioplasty
procedure, radioactive treating elements 22 are located within the balloon,
between coaxial walls 266 and 268 of the distal end portion of the catheter. The
treating elements are ring-shaped or donut-shaped, as described earlier, and
positioned over the inner wall 266. Stop rings 270, preferably of radiopaque
material, are positioned at each end of the string of treatment elements to
maintain the treatment elements at a fixed location within the balloon and aid
in locating the catheter at the desired location.

     The strength and other characteristics of the radioactive treating elements
are essentially as described earlier and will
<PAGE>

                                      33

not be repeated.  With this construction, the balloon angioplasty procedure and
the radiation treatment of the stenotic site may be carried out simultaneously
instead of sequentially, thereby further reducing the time, cost and risk
associated with such procedures.

     In use, catheter 254 is positioned into the stenosed area of the artery
over a pre-positioned guide wire.  Using the radioactive treating elements alone
or in conjunction with the radiopaque end rings, the distal end portion of the
catheter is positioned such that the balloon portion is located at the stenosed
site. Pressurized fluid introduced into the proximal end of the inflation lumen,
as with a syringe, enters through port 264, inflating the balloon. The expanding
balloon membrane 256 compresses the sclerotic plaque and increases the diameter
of the blood vessel. The balloon may be deflated and the distal tip retained in
this position for the desired period of time to deliver an effective amount of
radiation to the previously stenosed area. The device may then be removed from
the patient and the procedure completed.

     Figure 11 shows a variation of the radiation delivery system of Figure 10.
In the Figure 11 embodiment, the basic operation and construction of the
catheter are the same as described with respect to that shown in Figure 10,
except that in Figure 11, the radioactive treating elements are located on inner
tube 272 and directly below balloon membrane 274. Balloon membrane may be
inflated by the introduction of pressurized fluid through inflation lumen 276
defined between inner tube 272 and co-axial outer tube 278.

     Figure 12 shows the distal end portion of another balloon catheter 280
embodying the present invention. The catheter 280 employs three coaxial tubes,
inner tube 282, outer tube 284 and intermediate tube 286. Inner tube 282 defines
an inner lumen 288 through which a guide wire may extend for placement of the
catheter at the desired location. The space between the inner tube and the
intermediate tube 286 defines an annular lumen 290, through which ring-shaped or
donut-shaped treating elements may pass. The space between the intermediate tube
and the outer tube
<PAGE>

                                      33

not be repeated.  With this construction, the balloon angioplasty procedure and
the radiation treatment of the stenotic site may be carried out simultaneously
instead of sequentially, thereby further reducing the time, cost and risk
associated with such procedures.

     In use, catheter 254 is positioned into the stenosed area of the artery
over a pre-positioned guide wire.  Using the radioactive treating elements alone
or in conjunction with the radiopaque end rings, the distal end portion of the
catheter is positioned such that the balloon portion is located at the stenosed
site. Pressurized fluid introduced into the proximal end of the inflation lumen,
as with a syringe, enters through port 264, inflating the balloon. The expanding
balloon membrane 256 compresses the sclerotic plaque and increases the diameter
of the blood vessel. The balloon may be deflated and the distal tip retained in
this position for the desired period of time to deliver an effective amount of
radiation to the previously stenosed area. The device may then be removed from
the patient and the procedure completed.

    Figure 11 shows a variation of the radiation delivery system of Figure 10.
In the Figure 11 embodiment, the basic operation and construction of the
catheter are the same as described with respect to that shown in Figure 10,
except that in Figure 11, the radioactive treating elements are located on inner
tube 272 and directly below balloon membrane 274. Balloon membrane may be
inflated by the introduction of pressurized fluid through inflation lumen 276
defined between inner tube 272 and co-axial outer tube 278.

     Figure 12 shows the distal end portion of another balloon catheter 280
embodying the present invention. The catheter 280 employs three coaxial tubes,
inner tube 282, outer tube 284 and intermediate tube 286. Inner tube 282 defines
an inner lumen 288 through which a guide wire may extend for placement of the
catheter at the desired location. The space between the inner tube and the
intermediate tube 286 defines an annular lumen 290, through which ring-shaped or
donut-shaped treating elements may pass. The space between the intermediate tube
and the outer tube
<PAGE>

                                      34

284 forms a return lurnen 292 for return of liquid used to transport the
treating elements.

     The catheter 280 also includes a balloon membrane 294 bonded at one end to
the exterior surface of the outer tube 284 and bonded to the exterior surface of
the inner tube 282 (which extends beyond the distal ends of the intermediate and
outer tubes) at the other end. The distal end of the outer tube is closed by a
barrier 296, which may be radiopaque, to block the exit of the treating elements
from the distal end of lumen 290. In this embodiment, the same liquid used to
transport the treating elements is also used to inflate the balloon membrane,
although that is not required if a separate inflation lumen were provided. To
inflate the balloon membrane, a side opening 298 or port is provided in the wall
of the outer tube 284 and also in the intermediate tube 286 if desired. With
this construction, pressurized blood-compatible liquid, such as sterile saline,
may be used to advance the treating elements while simultaneously advancing the
treating elements to the distal end portion of the catheter. The treating
elements may be retrieved by reversing the flow of the liquid through the return
and treating element lumen 292 and 290, respectively. Further release of
pressure exerted upon the liquid will allow the balloon to deflate and the
catheter to be removed.

     Figure 13 illustrates a still further embodiment of a balloon catheter 300
which has a pair of adjacent parallel inner tubes, 302 and 304, forming guide
wire lumen 306 and a treating element lumen 308. In a manner similar to Figures
7 and 8, the inner tubes are contained within an outer tube, and the interior
space therebetween forms a return lumen. A balloon membrane 310 is bonded to the
outer surface of the outer tube, forming an inflatable balloon. The balloon
membrane may be inflated, through side port 312 in the wall of inner tube 304,
by the same blood-compatible liquid that is used to propel the treating elements
along the lumen 308. As in Figure 12, this catheter permits expansion of the
balloon membrane to carry out an angioplasty procedure within a blood vessel at
the same time the treating elements are being moved to the distal end portion of
<PAGE>

                                      35

the catheter (where the balloon is located) to effect radiation treatment of the
tissue being subjected to the balloon angioplasty procedure.

     Figure 14 shows a device that is essentially identical to that shown in
Figure 2C and described in detail earlier, except that the body member 94
includes a latch 314, such as spring loaded pin, to retain insert 110 within
chamber of cavity 108. A release mechanism 316 may also be provided to release
the insert.

     Figures 15A-15C show another embodiment of treatment delivery system that
is similar in many respects to the embodiment shown in Figure 2C. In this
embodiment, however, the gate 114 is in the form of a disc 318 pivotally mounted
at the distal end of the insert 110. The disc includes a pair of spaced-apart
apertures 320 and 322, of different sizes, therethrough, which may be moved into
alignment with the center bore 112 of the insert. One of the apertures 320 is
smaller in diameter than the treating elements 22, and when aligned with the
bore 112 blocks the passage of treating elements from the bore while allowing
liquid to pass therethrough for priming and the like. Alternatively, the disc
may be pivoted to a position where the larger aperture 322 is aligned with the
center bore 112, which allows the treating elements to be ejected from the
insert by liquid flow pressure and advanced into and through the catheter. For
shipment and storage, the disc may be positioned to fully cover the bore 112 of
the insert.

     In this embodiment, the body 94 includes a pair of opposed side access
openings 324 for accessing the disc 318 to pivot it between the desired
positions, and a pair of opposed viewing access openings 326 for visually
verifying the location of the treating elements. In this embodiment, the
catheter 92 has a proximal fitting 328 for attachment to the distal end of the
body 94. This fitting may be keyed to assure that it is attached in the proper
relationship to the body and the correct lumen of the catheter are aligned with
the proper passageways of the body.

     Figure 16 shows a simplified version of the treating system of the present
invention.  As shown there, the treating elements
<PAGE>

                                      36

22 are contained in a central passageway 330 of a solid body 332. Female luer
lock connector 334 is provided at the inlet end of the passageway and male luer
lock connector 336 is provided at the outlet end of the passageway, although a
keyed fitting as described above also may be used.

     During travel and storage a temporary female luer lock connector 338 is
attached to the outlet connector 336.  The connector 338 includes a pin 340 that
extends from the connector into the passageway to hold the treating elements in
place and provide a barrier against the escape of radiation. The inlet end of
the passageway is smaller than the treating elements, thereby keeping the
treating elements located in generally the center of the body 332.

     To use this embodiment, the temporary connector 338 is removed and a female
luer lock connector (or keyed connector, as discussed above) connector 342 at
the proximal end of single lumen catheter 344 is attached to the outlet
connector 336. A source, such as a syringe or suspended container, of
blood-compatible liquid, such as saline, is attached to the inlet connector 334,
and liquid is allowed to flow through the center passageway, ejecting the
treating elements 22 and forcing them along the length of the catheter from the
proximal to the distal end portion, which is presumable located at the site in
the vascular system where treatment is desired. After the treatment is complete,
the treating elements are removed by withdrawing the catheter from the patient's
body or by applying a suction to the proximal end to return the treating
elements by the force of reversed liquid flow.

     Figure 17 is identical to Figure 12, except that a fourth co-axial outer
tube 346 is provided over tube 284, and the end of the balloon membrane 294 is
bonded to the outer tube 346 instead of the tube 284. The distal end of the
outermost tube 346 terminates just inside the balloon membrane, and the space
between the outermost tube 346 and the tube 284 provides an inflation lumen 348
through which pressurized fluid may flow directly into the area beneath the
membrane to inflate the balloon. This construction allows a separate source of
<PAGE>

                                      37

pressurized fluid to be used to inflate the balloon membrane, and inflation of
the balloon membrane is not dependent on the pressure of the liquid used to move
the treating elements to the distal end portion of the catheter.

     Similarly, Figure 18 is identical to Figure 13, except that an additional
tube 350 is provided over the other tubes described in connection with Figure
13, and one end of the balloon membrane 310 is bonded to surface of the tube
350. As with Figure 17, the space between the additional tube 350 and the tubes
described earlier provides an inflation lumen 352, the distal end of which lumen
opens directly in the area beneath the balloon membrane. This construction also
allows a source of fluid, independent of the liquid used to move the treating
elements, to be used to inflate the membrane in carrying out an angioplasty
procedure.

     Figure 19 shows a still further embodiment of the distal end portion of a
catheter 354 having an elongated inner tube 356 (which extends from a proximal
end portion, not shown) defining an inner lumen 358. The inner tube 356 extends
co-axially within an outer tube 360, the distal end of which stops short of the
distal end of the inner tube. Balloon membrane 362 is attached at one end to the
surface of outer tube 360 and is attached at the other end to the surface of the
inner tube 356. The space between the inner and outer tubes forms an inflation
lumen 364, through which liquid may be introduced to inflate the balloon.

     A separate elongated catheter tube 364 is insertable into inner
lumen 358 such that the distal end portion of the separate tube lies within the
area of the balloon.  The separate tube also has a lumen 366 extending from the
proximal end (not shown) through which treating elements 22 are movable under
the force of flowing liquid from the proximal to the distal end portion of the
catheter (the liquid in this embodiment exits through the distal end of the
lumen 358).

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Confidential treatment has been requested for portions of this page and for all
of pages 38 through 62 of this Exhibit B. The copy filed herewith omits the
information subject to the confidentiality request. The portions omitted have
been filed separately with the Securities and Exchange Commission pursuant to
such request for confidential information.
<PAGE>

                                     FIG.1



                                    FIG.2A
<PAGE>

                                  FIG. 2B
<PAGE>

                                    FIG.2C
<PAGE>

                                     FIG.3
                                    
                                     FIG.4

                                     FIG.5
<PAGE>

                                    FIG.6A

                                    FIG.6B

                                    FIG.7A

                                    FIG.7B
<PAGE>

                                    FIG. 8A

                                    FIG. 8B
<PAGE>

                                    FIG. 9

                                    FIG. 10
<PAGE>

                                    FIG. 11

                                    FIG. 12
<PAGE>

                                    FIG. 13

                                    FIG. 14
<PAGE>

                                   FIG. 15A

                                   FIG. 15B

                                   FIG. 15C
<PAGE>

                                    FIG. 16

                                    FIG. 17
<PAGE>

                                    FIG. 18

                                    FIG. 19
<PAGE>

FIG. 20-37a

--------------------------------------------------------------------------------
Confidential treatment has been requested for figures 20 through 37a of this
Exhibit B. The copy filed herewith omits the information subject to the
confidentiality request. The portions omitted have been filed separately with
the Securities and Exchange Commission pursuant to such request for confidential
information.
<PAGE>

                                     38-62


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