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Exhibit 10.1

For Purchases and Leases Direct From Supplier
Subject to Competitive Bid Process

 

PATIENT SECURITY SYSTEMS
CAPITAL EQUIPMENT SUPPLIER AGREEMENT

between

NOVATION, LLC

and

eXI WIRELESS SYSTEMS, INC.
(Supplier Name)

CE50122
(Contract Number)

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NOVATION, LLC

CAPITAL EQUIPMENT SUPPLIER AGREEMENT

 
1.    Introduction.

a.    Purchasing and Leasing Opportunities for Members. Novation, LLC
(“Novation”) is engaged in providing purchasing opportunities with respect to
high quality products and services to participating health care providers
(“Members”). A list of Members entitled to participate in Novation’s programs
through their membership or other participatory status in any of the following
client organizations: VHA Inc., University HealthSystem Consortium, and
HealthCare Purchasing Partners International, LLC (collectively, “Clients”), is
maintained in an electronic database (“Novation Database”). Novation is acting
as the exclusive agent for each of the Clients and certain of each Client’s
subsidiaries and affiliates, respectively (and not collectively), with respect
to this Agreement. Novation and the Clients and their subsidiaries and
affiliates will not be responsible or liable for any breach of any purchasing
commitment or for any other actions of any Member. In addition, none of the
Clients will be responsible or liable for the obligations of another Client or
its subsidiaries or affiliates or the obligations of Novation or Supplier under
this Agreement. All Clients and Members are intended third party beneficiaries
of this Agreement.

b.    Supplier. Supplier is the manufacturer of the equipment (“Equipment”),
and/or parts and supplies (collectively, “Supplies”), and/or the provider of
services (“Services”), all as listed on Exhibit A. The Equipment, Supplies,
and/or Services are collectively referred to herein as “Products” and any
specifications are attached hereto as Exhibit B (“Non-Price Specifications”).

2.    Contract Award.
 
a.    Letter of Award. By executing and delivering the Letter of Award attached
hereto as Exhibit C (“Award Letter”) to Supplier, Novation will have accepted
your written offer to the Invitation to Bid (“Bid”), and Novation and Supplier
therefore agree that Supplier will make the Products available for purchase to
the Members as of the effective date (“Effective Date”) in the Award Letter in
accordance with the terms of this Agreement and for the term (“Term”) stated in
the Non-Price Specifications for any renewal terms set forth in the Non-Price
Specifications and the forms of purchase, lease, license, financing or servicing
agreements, if any, attached hereto as Exhibit D (collectively, “Forms”);
provided, however, that Novation’s award of this Agreement to Supplier will not
constitute a commitment by any person to purchase any of the Products. Supplier
will not impose any purchasing commitment on any Member as a condition to the
Member’s purchase of any Products pursuant to this Agreement. Supplier
acknowledges that, in making its award to Supplier, Novation has materially
relied on all representations, warranties and agreements made by Supplier as
part of the Bid and that all such representations, warranties and agreements
will survive acceptance of the Bid.
 
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b.    Use of Names, Etc. Supplier agrees that it will not use in any way in its
promotional, informational or marketing activities or materials (i) the names,
trademarks, logos, symbols or a description of the business or activities of
Novation or any Client or Member without in each instance obtaining the prior
written consent of the person owning the rights thereto; or (ii) the award or
the content of this Agreement without in each instance obtaining the prior
written consent of Novation.

c.    Optional Purchasing or Leasing Arrangements. Supplier shall reserve the
right to contract directly with each Member for Products included in this
Agreement in exceptional circumstances; provided, however, Supplier shall give
prior notice to Novation in writing of such exceptional circumstances and the
essential terms of such agreement. Additional value required in such exceptional
cases will be defined in an individual contract that will, at Novation’s
discretion, be an exhibit to the Supplier Agreement. Supplier shall maintain the
Reporting Requirements and fees (“Fees”) payable to Novation in Sections 5 and 7
for Products purchased through such independent contracts in recognition of the
Novation contribution to and support for any such exceptional independent
arrangement required. In addition, Supplier agrees to give Novation prior
written notice and must obtain Novation’s prior consent to any proposed offer
Supplier wishes to make to any Member to sell products that are not covered by
this Agreement in conjunction with Products covered by this Agreement under
circumstances where the Member has no real economic choice other than to accept
such terms.
 
d.    Market Competitive Pricing and Terms. 

Price Terms 

§  Supplier represents and warrants that the prices charged for the Products
and/or Services purchased hereunder, net of all discounts and rebates, to not
exceed Supplier’s net prices for the particular Products and/or Services charged
to others who are the same class of purchaser as are Members and who purchase in
comparable volume and terms of purchase. If Supplier Provides any general,
“across the board” price decreases for Products to a substantial number of its
customers during the Term, Supplier agrees to make such decreases available to
Members immediately and in like amounts.

§  Non-price Terms.
Supplier will improve non-price terms, such as quality, technology or other
non-price financial value as necessary to assure market competitiveness, and in
addition Supplier agrees to adjust non-price terms for a specific Member or
group of Members at all times in the event Supplier offers more favorable
non-price terms to any competitor of such Member or group of Members.

If at any time during the Term Novation receives information from any source
that indicates Supplier’s pricing or non-price terms are not market competitive,
Novation may provide written

 
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notice of such information to Supplier, and Supplier will, within five (5)
business days for Novation’s private label Products and within ten (10) business
days for all other Products, advise Novation in writing of all adjustments
necessary to assure market competitiveness, provided Novation provides
certifiable evidence of such non-competitive pricing such as published standard
pricing from a direct competitor.

e.    Notification of Changes in Pricing Terms. Supplier will provide not less
than sixty (60) days’ prior written notice to Novation and not less than
forty-five (45) days’ prior written notice to all Members of any change in
pricing terms (such as list prices, discounts or pricing tiers or schedules)
permitted or required by this Agreement.

f.    Underutilized Businesses. Certain Members may be required by law,
regulation and/or internal policy to do business with underutilized businesses
and Supplier will assist Novation in helping Members meet these requirements by
complying with all Novation policies and programs with respect to such
businesses. Novation, in its discretion, may make an award and/or negotiate
another agreement with a HUB in addition to any sole or multi-source award.
 
g.    E-Commerce Business. Certain Members have chosen to utilize the service of
the Marketplace@Novation™ through Novation’s relationship with Neoforma, Inc.
(“Neoforma”), to transact business associated with this Agreement with Supplier.
To assist Novation in helping Members meet those needs, Supplier agrees to sign,
prior to the issuance of any Award Letter, and comply with the Novation
E-Commerce Agreement attached hereto as Exhibit F and support Novation’s
programs with respect to e-commerce.

3.    Product Supply.

a.    Delivery and Invoicing. On and after the Effective Date, Supplier agrees
to promptly deliver Products ordered by the Members to the Members, FOB Origin,
and will direct its invoices to the Members in accordance with this Agreement.
Supplier agrees to prepay and add charges to invoice, if any, for transporting
Products to the Members. Payment terms are specified in Exhibit B. Within seven
(7) calendar days after receipt of a purchase order from a Member, Supplier will
provide estimated lead time from the date of a Member’s purchase order until
delivery of the Product at the Member’s location. The actual delivery lead times
may be increased by the ordering Member based on its needs.

b.    Return or Recall of Products. Any Member, in addition to and not in
limitation of any other rights and remedies, will have the right to return
Products to Supplier, in accordance with Supplier’s return goods policy as
stated in Exhibit B. In addition, Supplier will reimburse Members for any cost
associated with any Product corrective action, withdrawal or recall requested by
Supplier or required by any governmental entity. In the event a product recall
or a court action impacting supply occurs, Supplier will notify Novation in
writing within twenty-four (24) hours of any such recall or action. Supplier’s
obligations in this Subsection will survive the expiration or earlier
termination of this Agreement.

 
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c.    Supplies. Supplies necessary for the operation of the Equipment will be
made available by Supplier to the Members at the prices or discounts listed on
Exhibit A. All warranties and guarantees will remain in force for purchases made
under this Agreement.

d.    Manuals/Schematics/Inspection Procedures. Supplier will provide to the
Members two complete and unabridged sets of operator service manuals for each
model of Equipment purchased or leased, including all subassemblies and
peripheral devices manufactured by eXI. The technical service manuals furnished
to the Members will be at least as complete and comprehensive as those furnished
to Supplier’s technical service personnel. All updates to such manuals will be
provided to the applicable Members within two (2) weeks after the release of
such updates. Member must sign a Non-Disclosure Agreement before manual will be
initially released.

e.    Product Acceptance. Upon completion of the installation, the Equipment
will meet or exceed the specifications set forth in Supplier’s published
documentation included in Exhibit B. Acceptance testing will include, but is not
limited to, safety testing, calibration, performance testing, documentation
inspection and testing for adherence to specifications. Formal acceptance and
invoice payment will occur according to the terms agreed to between the Member
and Supplier and the specified scope of work. A complete set of all test
documentation and procedures will be made available to the Member prior to final
acceptance. If the Equipment passes the acceptance testing, the Warranty Period
for the Equipment will begin per the terms of Supplier’s Warranty.

f.    Site Preparation. Supplier will provide the Members with a specific
description of pre-installation planning and site preparation services and site
preparation costs at the time the Member requests a quote from Supplier.

g.    Installation/Assembly. When Member requests a quote from Supplier,
Supplier will provide as part of the quote a scope of work for the installation
to be performed by the authorized eXI Dealer in the local area.

h.    Installation/Environmental Issues. Supplier will bear all costs associated
with the removal of packaging, crating and other material associated with the
installation of the Equipment. Supplier, at the discretion of the Member, will
remove the retired equipment at a cost previously agreed to with the Member,
including any expenses associated with the proper disposal of hazardous or other
wastes.

i.    Member Services. Supplier will consult with each Member to identify the
Member’s policies relating to access to facilities and personnel. Supplier will
comply with such policies and will establish a specific timetable for sales
calls by sales representatives and, if applicable, service calls by service
representatives, to satisfy the needs of the Member. Supplier will promptly
respond to Members’ reasonable requests for verification of purchase or leasing
history.

 
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j.    Training. Members may attend eXI technical service training school at no
charge, however members are responsible for all travel and out of pocket
expenses. Supplier will also allow the Member to reproduce all training material
for use by the Member’s personnel at the Member’s facility. In addition,
Supplier will provide the initial in-service training for both operators and
technical service staff of the Member at the Member’s site as part of the
installation price for the system. Supplier will provide follow-up in-service
training as mutually agreed with the Member for the life of the Equipment at a
negotiated price.
 
4.    Product Quality.
 
a.    Free From Defects. Supplier warrants the Products, including, but not
limited to, all attachments, subsystems and components thereof, against defects
in material, workmanship, design and manufacturing for the warranty period set
forth in Exhibit E attached hereto (“Warranty Period”). Supplier will make all
necessary arrangements to assign such warranty to the Members. Supplier further
represents and warrants that the Products will conform to the specifications,
drawings, and samples furnished by Supplier or contained in the Non-Price
Specifications and will be safe for their intended use. eXI Warranty terms will
apply.
 
b.    New Technology.
 
 
(i)  During the Term, Supplier will disclose to Novation new technology
developed by Supplier which provides the same function as the Products. Upon 
troduction of the new technology by Supplier, each Member will be provided the
option to exchange any Product purchased hereunder for the new technology upon
the terms and conditions set forth in Exhibit B attached hereto. In the event
Supplier fails to provide such option to the Members, (1) Novation will have the
right to terminate any or all of the Products which have been superceded by such
new technology providing the same function as the Products or (2) Novation may
elect at its discretion to contract with one or more additional suppliers of
comparatively similar new technology.
   
 
(ii)  If at any time during the Term new technology (as defined by a Novation
Council) a product becomes available from any source which provides incremental
patient care benefits and/or incremental safety benefits over technology
currently available under this Agreement, Novation shall provide written notice
of such information to Supplier and may elect to contract with a third party
vendor, or terminate the Agreement and re-bid the category so Members have
access to New Technology at all times. Such action will not constitute a breach
of this Agreement by Novation.

 
c.    Warranty Service. Warranty repairs will be per the eXI Warranty policy
provided in Exhibit E.

d.    Replacement Parts. Replacement parts supplied by Supplier at any time,
whether during or after the Warranty Period or the term of any service
agreement, will be newly manufactured parts or assemblies, unless the Member
agrees otherwise. In the case where new
 
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parts are not available, the service representative may install rebuilt parts in
order to make the unit operational. Within thirty (30) days after the repair,
the rebuilt parts must be replaced with newly manufactured parts. The Member may
retain all parts that are not eligible for or are not returned by the Member for
Supplier credit will remain the property of the Member. In all cases where
Supplier is permitted to charge the Member for parts, Supplier will only replace
and charge for parts necessary to bring the Equipment to operating condition.
Supplier will warrant replacement parts and labor associated with such
replacement parts for the period of time set forth in Supplier’s standard
warranty.
 
e.    Service Response Time.  Supplier guarantees a response time of one (1)
hour by phone and for on-site as agreed to by the Member for all warranty,
contract or time and materials service calls requested by any Member during the
life of the Equipment. The Supplier’s authorized dealer providing local service
will provide first-level support.

f.    Uptime Guarantee. For any calendar quarter during the Warranty Period and
the term of any service agreement, Supplier guarantees that the Exit
infrastructure will maintain a level of uptime equal to or better than 95%.
Uptime will be calculated using the following formula:

uptime = (T - TNF) X 100
T
 
where “T” is the total number of hours that the eXI infrastructure is typically
used per quarter (determined by multiplying the number of hours per day that the
eXI infrastructure is typically used by the number of days per week that the eXI
infrastructure is typically used, and multiplying the result by 13 weeks in a
quarter), and “TNF” is the number of hours the eXI infrastructure or any
component of the eXI infrastructure is not functional during the quarter (the
hours calculated will only include those hours that the eXI infrastructure would
typically be in use). If any portion of the total functionality of the eXI
infrastructure is unavailable for operational use, the eXI infrastructure will
be considered down. Downtime scheduled for preventive maintenance or any other
scheduled event, including those for the convenience of Member, will not be
included in the downtime calculation. Member will calculate uptime after each
calendar quarter. Supplier will extend the Warranty Period or the service
agreement without charge by one day for every day the eXI infrastructure or
component thereof is not operational beyond the allowable 5%. This uptime
guarantees only relates to the performance of the Supplier’s Products. Downtime
cause by electrical or mechanical interference cause by other type of equipment
such as other radio frequency generating equipment, monitors, microwaves, etc.
is not covered by this uptime guarantee.

g.    Preventive Maintenance. During the Warranty Period for fixed equipment,
Supplier will perform preventive maintenance according to the manufacturer’s
recommendations at no charge to the Member. Supplier will supply the Member with
a written procedure that will be followed by Supplier’s representative during
the preventive maintenance process. Reasonable additional testing will be
performed by Supplier at a charge to the Member, upon request, to meet the
requirements of procedures developed by the Member. The frequency of preventive
maintenance and tests performed will comply with the manufacturer’s
recommendations,

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external codes (state, JCAHO, etc.), and all internal policies developed by the
Member. During the Warranty Period, Supplier will provide preventive maintenance
after hours at a cost agreed to with the Member. This does not include required
system operational duties such as system backups and functional testing.
 
h.    Upgrades. A list of optional software available from Supplier, including
costs for the software both during the Warranty Period and after the Warranty
Period, is attached hereto as Exhibit A. Since software upgrade are sometimes
customized to meet a specific need, Members will be given the option of
acquiring this software if they elect to upgrade the system at the discounts
provide for in this Agreement. If a Software Maintenance Agreement (SMA) is
purchased with system, software upgrades will be provided at no charge for the
duration of the SMA. Labor charges for installing software upgrades are not
included in the SMA.
 
i.    Customization Software. Pricing relating to the customization of software
and additional charges that the Member will incur for annual maintenance,
training, documentation, backup, etc. is attached hereto as Exhibit A.
 
j.    Operational Software. The form of software licensure agreements available
to the Members will be included as part of any quote requested by a Member. All
software necessary to operate the Equipment, unless otherwise provided in any
exhibit hereto, will be licensed to the Member upon acceptance of the Equipment
pursuant to Subsection 3.f. above. If a SMA is purchased with the system,
software upgrades will be provided at no charge for the duration of the SMA. Any
new operational software that provides additional functionality must be
submitted to Novation as an addition to Exhibit A. New software will be
installed as scheduled with facility.
 
k.    Diagnostic Software. Not applicable, Infant Protection Systems/Wandering
Patient Systems do not require diagnostic software.
 
l.    Data Conversion/Interfaces. Typically, systems to not require conversion
of data, they operate on a stand-alone basis. Interfaces to other information
systems may be quoted on a custom basis, and will not be part of this agreement.
 
m.    Service Contract Cancellation. Service contracts are provided through
Supplier’s authorized dealers. Terms of the service contract with the authorized
dealer will apply.
 
n.    Product Compliance. Supplier represents and warrants to Novation, the
Clients and the Members that the Products are, if required, registered, and will
not be distributed, sold, leased or priced by Supplier in violation of any
federal, state or local law. Supplier represents and warrants that as of the
date of delivery to the Members all Products will not be adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic Act and
will not violate or cause a violation of any applicable law, ordinance, rule,
regulation or order. Supplier agrees it will comply with all applicable Good
Manufacturing Practices and Standards contained in 21 C.F.R. Parts 210, 211,
225, 226, 600, 606, 610, 640, 660, 680 and 820. Supplier represents and warrants
that it will provide adequate warnings and instructions to inform users of the
Products of the risks, if any, associated with the use of the Products.
Supplier’s representations, warranties

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and agreements in this Subsection will survive the expiration or earlier
termination of this Agreement.
 
o.    Product Condition. Unless otherwise stated in the Non-Price Specifications
or unless agreed upon by a Member in connection with Products it may order, all
Products will be new. Products, which are demonstrators, used, obsolete,
seconds, or which have been discontinued are unacceptable unless otherwise
specified in the Non-Price Specifications or the Member accepts delivery after
receiving notice of the condition of the Products. A description of and pricing
for demonstrators or refurbished Products is attached hereto as Exhibit A.

5.    Reports and Other Information Requirements. Within twenty (20) days after
the end of each full and partial quarter during the Term (“Reporting Quarter”),
Supplier will submit to Novation a Sales report in form and content reasonably
satisfactory to Novation (“Net Sales Report”) and any other information during
the time period required as set forth in the Information Requirements Guidebook.
Such Guidebook may be found at the Novation website at www.novationco.com.

6.    Obligations of Novation.

a.    Information to Members. After issuing the Award Letter, Novation, in
conjunction with the Clients, will deliver a summary of the purchasing and/or
leasing arrangements covered by this Agreement to each Member and will, from
time to time, at the request of Supplier, deliver to each Member reasonable and
appropriate amounts and types of materials supplied by Supplier to Novation
which relate to the purchase or lease of the Products.

b.    Marketing Services. Novation, in conjunction with the Clients, will market
the purchasing and/or leasing arrangements covered by this Agreement to the
Members. Such promotional services may include, as appropriate, the use of
direct mail, contact by Novation’s field service delivery team, member support
services, and regional and national meetings and conferences. As appropriate,
Novation, in conjunction with the Clients, will involve Supplier in these
promotional activities by inviting Supplier to participate in meetings and other
reasonable networking activities with Members.
 
7.    Fees.
 
a.    Calculation. Supplier will pay to Novation, as the authorized collection
agent for each of the Clients and certain of each Client’s subsidiaries and
affiliates, respectively (and not collectively), Fees belonging to any of the
Clients or certain of their subsidiaries or affiliates equal to the Agreed
Percentage of all Net Sales of the Products to the Members directly or
indirectly from Supplier, whether under the pricing and other terms of this
Agreement or under the terms of any other purchasing or pricing arrangements
that may exist between the Members and Supplier. As used herein, Net Sales shall
mean invoiced sales of Products less related Product returns. The “Agreed
Percentage” will be defined in the Award Letter.

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b.    Payment. Supplier will submit fees on all net sales within twenty (20)
days of the close of any calendar quarter during the term of this agreement.

Fee checks must be made payable to Novation, LLC and sent to:

If Sent By First Class Mail: 

Novation, LLC
75 Remittance Dr., Suite 1420
Chicago, IL 60675-1420

If Sent Via Courier (i.e., Federal Express, United Parcel Service, Messenger):
The Northern Trust Company
350 North Orleans Street
Receipt & Dispatch 8th Floor
Chicago, IL 60654

Attn: Novation, LLC, Lockbox Number 1420
Telephone No. (312) 444-3576

On the airbill please remember to list the bank’s telephone number, as recipient
at this location. You should also include your telephone number as the sender.

IMPORTANT REMINDER: ALL checks for Fees should be made payable to Novation, LLC,
regardless of whether they are sent first-class mail or by courier. Under no
circumstances should checks be made payable to The Northern Trust Company.

8.    Compliance With Law and Government Program Participation.

a.    Compliance With Law. Supplier represents and warrants that to the best of
its knowledge, after due inquiry, it is, and for the Term shall be, in
compliance with all federal, state and local statutes, laws, ordinances and
regulations applicable to it (“Legal Requirements”) which are material to the
operation of its business and the conduct of its affairs, including Legal
Requirements pertaining to the safety of the Products, occupational health and
safety, environmental protection, nondiscrimination, antitrust, and equal
employment opportunity. In the event of Supplier’s failure to comply with the
foregoing, Novation will have the right to immediately terminate any or all of
the Product(s) subject to such failure, with notice to Supplier, or to terminate
this Agreement in its entirety pursuant to Section 12.a. During the Term,
Supplier will: (1) promptly notify Novation of any lawsuits, claims,
administrative actions or other proceedings asserted or commenced against it
which assert in whole or in part that Supplier is in noncompliance with any
Legal Requirement which is material to the operation of its business and the
conduct of its affairs and (2) promptly provide Novation with true and correct
copies of all written notices of adverse findings from the U.S. Food and Drug
Administration (“FDA”) and all written results of FDA inspections which pertain
to the Products.

b.    Government Program Participation. Supplier represents and warrants that it
is not excluded from participation, and is not otherwise ineligible to
participate, in a “Federal health care program” as defined in 42 U.S.C. §
1320a-7b(f) or in any other government payment

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program. In the event Supplier is excluded from participation, or becomes
otherwise ineligible to participate in any such program during the Term,
Supplier will notify Novation in writing within three (3) days after such event,
and upon the occurrence of such event, whether or not such notice is given to
Novation, Novation may immediately terminate this Agreement upon written notice
to Supplier.

9.      Insurance.

  a.    Policy Requirements. Supplier will maintain and keep in force during the
Term product liability, general public liability, and property damage insurance
against any insurable claim or claims, which might or could arise regarding
Products, purchased or leased from Supplier. Such insurance will contain a
minimum combined single limit of liability for bodily injury and property damage
in the amounts of not less than $1,000,000 per occurrence and $3,000,000 in the
aggregate After award of contract, Supplier will provide to Novation within
fifteen (15) days after Novation’s request, an insurance certificate indicating
the foregoing coverage, issued by an insurance company licensed to do business
in the relevant states and signed by an authorized agent.

  b.    Self-Insurance. Notwithstanding anything to the contrary in
Subsection a. above, Supplier may maintain a self-insurance program for all or
any part of the foregoing liability risks, provided such self-insurance policy
in all material respects complies with the requirements applicable to the
product liability, general public liability and property damage insurance set
forth in Subsection a.

  c.    Amendments, Notices and Endorsements. Supplier will not amend, in any
material respect that affects the interests of Novation, the Clients or the
Members, or terminate said liability insurance or self-insurance program except
after thirty (30) days’ prior written notice to Novation and will provide to
Novation copies of all notices and endorsements as soon as practicable after it
receives or gives them.

10.    Release and Indemnity. Supplier will release, indemnify, hold harmless,
and, if requested, defend Novation, the Clients and the Members, and their
respective officers, directors, regents, agents, subsidiaries, affiliates and
employees (collectively, the “Indemnitees”), from and against any claims,
liabilities, damages, actions, costs and expenses (including, without
limitation, reasonable attorneys’ fees, expert fees and court costs) of any kind
or nature, whether at law or in equity, arising from or caused in any part by
(1) the breach of any representation, warranty, covenant or agreement of
Supplier contained in this Agreement or in the Bid; (2) the condition of any
Product, including a defect in material, workmanship, design or manufacturing;
or (3) the warnings and instructions associated with any product. Such
indemnification, hold harmless and right to defense will not be applicable to
the extent the claim, liability, damage, action, cost or expense arises as a
result of an act or failure to act of Indemnitees. In addition, Supplier
represents and warrants that sale or use of the products will not infringe any
United States patent and will, at its

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own expense, defend every suit which will be brought against Novation or a
member for any alleged infringement of any patent by reason of the sale or use
of the products and will pay all costs, damages and profits recoverable in any
such suit. This Section and the obligations contained herein will survive the
expiration or earlier termination of this Agreement. The remedies set forth in
this Section are in addition to and not a limitation on any other rights or
remedies that may be available against Supplier.

11.    Books and Records; Facilities Inspections. Supplier agrees to keep,
maintain and preserve complete, current and accurate books, records and accounts
of the transactions contemplated by this Agreement and such additional books,
records and accounts as are necessary to establish and verify Supplier’s
compliance with this Agreement. All such books, records and accounts will be
available for inspection and audit by Novation representatives at any time
during the Term and for two (2) years thereafter, but only during reasonable
business hours and upon reasonable notice. Novation agrees that its routine
audits will not be conducted more frequently than twice in any consecutive
twelve (12) month period, subject to Novation’s right to conduct special audits
whenever it deems it to be necessary. In addition, Supplier will make its
manufacturing and packaging facilities available for inspection from time to
time during the Term by Novation representatives, but only during reasonable
business hours and upon reasonable notice. The exercise by Novation of the right
to inspect and audit is without prejudice to any other or additional rights or
remedies of either party.

12.    Termination. Either party may terminate this Agreement at any time for
any reason whatsoever by delivering not less than ninety (90) days’ prior
written notice thereof to the other. In addition, either party may terminate
this Agreement immediately by delivering written notice thereof to the other
upon the occurrence of either of the following events:

(a) The other party breaches this Agreement and does not cure such breach within
thirty (30) days of receipt of such notice, except for Supplier’s monetary
breach or breach of Compliance with Laws, for which a cure period shall not be
allowed; or

(b) The other party becomes bankrupt or insolvent or makes an unauthorized
assignment or goes into liquidation or proceedings are initiated for the purpose
of having a receiving order or winding up order made against it or the other
party and applies to the courts for protection from its creditors.
 
13.    Confidential Information.

  a.    Nondisclosure. Supplier agrees that it will:
 

  (1) keep strictly confidential and hold in trust all Confidential Information,
as defined in Subsection 13.b. below, of Novation, the Clients and the Members;

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(2) not use the Confidential Information for any purpose other than the
performance of its obligations under this Agreement, without the prior written
consent of Novation;
      (3) not disclose the Confidential Information to any third party (unless
required by law) without the prior written consent of Novation; and    
 
(4) not later than thirty (30) days after the expiration or earlier termination
of this Agreement, return to Novation, the Client or the Member, as the case may
be, the Confidential Information.

 
  b.         Definition. “Confidential Information,” as used in Subsection 13.a.
above, will consist of all information relating to the prices and usage of the
Products (including all information contained in the reports produced by
Supplier pursuant to Section 5 above) and all documents and other materials of
Novation, the Clients and the Members containing information relating to the
programs of Novation, the Clients or the Members of a proprietary or sensitive
nature not readily available through sources in the public domain.

  c.          HIPAA. If a Member determines, in its sole reasonable discretion,
that Supplier is a “business associate,” as that term is defined in the privacy
rules promulgated pursuant to The Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”) codified at 42 CFR Parts 160 and 164,
Supplier will negotiate with Member a mutually acceptable written agreement
which will govern Supplier’s access to “protected health information” as defined
under HIPAA (a “Business Associate Contract”).
 
14.    Miscellaneous.
 
         a.   Choice of Law. This Agreement will be governed by and construed in
accordance with the internal substantive laws of the State of Delaware and the
Delaware courts will have jurisdiction over all matters relating to this
Agreement; provided, however, the terms of any agreement between Supplier and a
Member will be governed by and construed in accordance with the choice of law
and venue provisions set forth in such agreement.

         b.   No Assignment.  No assignment of all or any part of this Agreement
may be made without the prior written consent of the other party. As used
herein, “assignment” shall mean a transfer by virtue of operation of law, under
an order of any court, or pursuant to any plan of merger, consolidation or sale
of stock or assets. Any assignment of all or any part of this Agreement by
either party will not relieve that party of the responsibility of performing its
obligations hereunder to the extent that such obligations are not satisfied in
full by the assignee. This Agreement will be binding upon and inure to the
benefit of the parties’ respective successors and assigns.

         c.   Notices. Except as otherwise expressly provided herein, all
notices or other communications required or permitted under this Agreement will
be in writing and will be

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deemed sufficient when mailed by United States mail, or delivered in person to
the party to which it is to be given, at the address of such party set forth
below:

If to Supplier:

eXI Wireless Systems, Inc.
Attn: Daniel Drebnicki
Suite 100-13551 Commerce Parkway
Richmond, BC, Canada V6V 2L1

If to Novation:

Novation
Attn: General Counsel
125 East John Carpenter Freeway
Irving, TX 75062-2324

Or such other address as the party will have furnished in writing in accordance
with the provisions of this Subsection.

d.    Severability. Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement will be prohibited by or invalid under
applicable law, such provision will be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement. Each party will, at its own
expense, take such action as is reasonably necessary to defend the validity and
enforceability of this Agreement and will cooperate with the other party as is
reasonably necessary in such defense.

e.    Entire Agreement. This Agreement, together with the exhibits listed below,
will constitute the entire agreement between Novation and Supplier. This
Agreement, together with the exhibits listed below and each Member’s purchase
and/or lease order and/or other applicable Form will constitute the entire
agreement between each Member and Supplier. In the event of any inconsistency
between this Agreement and a Member’s purchase and/or lease order and/or other
applicable Form, the terms of this Agreement will control, except that the
Member’s purchase and/or lease order and/or other applicable Form will supersede
Sections 3 and 4 of this Agreement in the event of any inconsistency with such
Sections. No other terms and conditions in any document, acceptance, or
acknowledgment will be effective or binding unless expressly agreed to in
writing. The following exhibits are incorporated by reference in this Agreement:

Exhibit A    Product and Service Description and Pricing

Exhibit B    Non-Price Specifications

Exhibit C    Award Letter

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Exhibit D    Forms of Purchase, Lease, License, Financing and/or Service
Agreements

Exhibit E    Warranty

Exhibit F    Neoforma Master Supplier Agreement

SUPPLIER:     eXI Wireless Systems, Inc.
ADDRESS:      Suite 100 - 13551 Commerce Parkway
                          Richmond, BC V6V 2L1

SIGNATURE: /s/ Alan Foster
TITLE: President    DATE: April 18, 2005
 
 
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