Exhibit 10.4
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXTRACORPOREAL DISPOSABLES DISTRIBUTION AGREEMENT
          This Agreement, dated as of July 25, 2007 (the “Effective Date”), is
between Medisystems Corporation, a Washington corporation with offices at 701
Pike Street, 16th Floor, Seattle, Washington 98101-3016 (“MDS”) and Henry
Schein, Inc. a Delaware corporation with offices at 135 Duryea Road, Melville,
NY 11747 (together with its subsidiaries, “Schein”).
          In consideration of the mutual promises made herein and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
   1.0 BACKGROUND
     1.1 The following are examples of certain disposable medical devices useful
in dialysis and pheresis therapies (collectively, the “Products”):

  a.   Blood, dialysate and/or fluid sets for dialysis such as blood tubing
sets, peritoneal sets, reversing connector sets, priming sets and the like
(“BTL”),     b.   extracorporeal access needle sets such as AVF needle sets,
pheresis needle sets, ButtonHole needle sets, Vasca access needle sets and the
like (“AVF”),     c.   antistick, plastic access needle/connectors and the like
(“Needleless”), and     d.   air filters, such as transducer protectors,
diagnostic pressure measurement devices and the like (“TP”).

     MDS designs and supplies certain Products under Specifications (as
hereinafter defined) including MDS labeling which MDS controls and currently has
produced by subsidiaries or contract manufacturers (“MDS Products”). Schein
wishes to purchase certain MDS Products for resale to its dialysis customers in
certain countries of the world as listed in Exhibit A (the “Territory”).
   2.0 TERM OF AGREEMENT

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     2.1 The term (including any extensions, the “Term”) of this Agreement shall
be for a two year period beginning on the Effective Date of this Agreement. The
Agreement shall terminate at the end of the Term, unless the parties agree on
provisions for an extension of the Term not less than six (6) months prior to
the date on which this Agreement would otherwise terminate.
   3.0 MDS PRODUCTS
     3.1 The MDS Products that Schein wishes to purchase pursuant to this
Agreement are listed in Exhibit B as “MDS BTL”, “MDS AVF”, “MDS Needleless”,
“MDS TP”, etc., as such Exhibit B may be amended from time to time by mutual
agreement of the parties. The codes of the MDS Products that are the subject of
this Agreement are hereafter referred to as “Codes”. The Codes shall meet
specifications as set forth in Exhibit C, or as such specifications, including
labeling may be modified from time to time pursuant to Sections 9.1, 9.2 and 9.3
(the “Specifications”), provided that such modifications are agreed upon in
amendments to Exhibit C signed pursuant to Section 18.3 hereof.
     MDS reserves the right, at its sole discretion, to incorporate clinical use
enhancements or developments in existing Codes of the MDS Products or to supply
existing Codes from alternate manufacturing sites even if MDS designates them
with a different Code prefix, provided that no price increase is requested by
MDS.
   4.0 PURCHASES AND ORDERS
     4.1 Subject to the terms and conditions of this Agreement, MDS shall sell
the MDS Products listed in Exhibit B to Schein and Schein shall purchase the MDS
Products listed in Exhibit B for use or resale by Schein only in the Territory.
     4.2 “Contract Year” shall mean the twelve-month period commencing on the
Effective Date and each subsequent twelve-month period during the Term.
     4.3 During the Term of this Agreement, Schein hereby agrees to sell in the
Territory BTL and AVF sourced only and exclusively from among MDS BTL and MDS
AVF listed in Exhibit B (the “Exclusive Products”). Except as provided in this
Agreement, Schein shall not purchase or sell in the Territory any Products
identical, similar or competitive to Exclusive Products from any other supplier
(“Competing Products”).

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     Further, during each [**] month period during the Term of this Agreement,
Schein shall purchase from MDS, by way of valid Delivery Orders (as hereinafter
defined) only, not less than [**] pairs of MDS BTL and [**] each-equivalents of
MDS AVF (the “Purchase Commitment”).
     Notwithstanding the above, if during any Contract Year during the Term of
this Agreement MDS or its affiliates sells more than $[**] worth of either the
MDS BTL or the MDS AVF listed in Exhibit B directly to any provider of chronic
in-center dialysis services, then for such Contract Year and for any remaining
Contract Year during the Term of this Agreement, Schein shall be relieved of its
obligation not to purchase or sell either BTL and/or AVF, as the case may be,
that are Competing Products.
     The failure of Schein to order the minimum quantities of the Purchase
Commitments shall be a material breach of this Agreement, and shall entitle MDS
to terminate this Agreement pursuant to Section 14.1 hereof and to seek any and
all other remedies provided for in this Agreement.
     4.4 Schein hereby warrants that as of the Effective Date, Schein neither
purchases from any source nor sells, any Competing Products in the Territory.
     4.5 After the Effective Date, except as set forth in Sections 8.1 and 8.9,
MDS shall not sell Exclusive Products to any Med/Surg Distributor (as
hereinafter defined), other than Schein, in the Territory. For the purposes of
this Agreement a “Med/Surg Distributor” is defined as a distributor who
distributes general medical/surgical items such as syringes, gauze, drugs, etc.
rather than one who distributes primarily dialyzers, dialysis services and/or
dialysis machines. Med/Surg Distributors include [**] and other similar general
medical surgical item distributors.
     4.6 Notwithstanding 4.5 above, as of the Effective Date, MDS sells or may
sell MDS Products, including Exclusive Products, to dialysis specialty
distributors currently including Fresenius Medical Care, Inc., Baxter Healthcare
Corporation, NxStage, Inc., Gambro Renal Products, Inc., B. Braun Medical and
Sorb Technology, each of which is a manufacturer or exclusive importer of a
hemodialyzer, hemodialysis machine, implanted dialysis access port or provider
of specific dialysis services. All MDS Products sold to [**] are

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intended for exclusive use by [**] as a provider of specific dialysis services
in its owned or managed facilities and for the home-care patients thereof. MDS,
to the extent allowable by law, will not sell MDS Products to [**] with the
intent that [**] will distribute, redistribute, resell, or otherwise transfer to
any other third party any MDS Products during the term of this Agreement.
     4.7 Except as set forth in Section 8.9, MDS shall not sell Exclusive
Products to any distributor at more favorable prices, including [**], discounts
and the like, than those offered to Schein for similar Delivery Order or
Purchase Commitment quantities.
     4.8 Prior to the [**] day of each month during the Term of this Agreement
(the “Order Date”), Schein will provide MDS with one or more noncancellable
delivery order(s) (a “Delivery Order” or “Delivery Orders”) for the MDS
Products. Any Delivery Order provided to MDS after the [**] day of the month
shall be deemed to have an Order Date on the [**] day of the subsequent month.
The requested delivery date (“Due Date”) provided by Schein on each Delivery
Order shall be not earlier than [**] days after the Order Date for all Products.
Each Schein Delivery Order for delivery to each FOB Location (as hereinafter
defined) shall conform to the per Code or per MDS Product quantity minimums and
multiples stated in Exhibit B.
     Any Delivery Orders with a common Due Date, FOB Location and Manufacturing
Location that cumulatively comprise less than the number of pallets required to
comprise full container loads or truck loads as indicated in Exhibit B, shall be
subject to freight cost premiums as quoted to Schein by MDS at the time the
Delivery Order is accepted.
     4.9 MDS shall not be required to accept any Schein Delivery Orders with a
common Order Date to the extent that the quantity of Codes in any Code Group so
ordered exceeds [**] percent ([**]%) of the average monthly quantity ordered
during the immediately preceding [**] months. If accepted, such excess
quantities shall be deemed to have an Order Date on the [**] day of the next
subsequent calendar month and shall remain subject to the provisions of this
Section. If MDS reallocates any Schein Delivery Orders pursuant to this
Section 4.9, it shall consult with Schein to determine which orders shall be
reallocated to a future Order Date.
     Notwithstanding the foregoing, MDS shall be obligated to deliver MDS
Products in excess of such [**]% if the Delivery

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Orders for such excesses are for Codes to be sold by Schein to customers already
purchasing such Codes from another MDS Contract Distributor, but only to the
extent that the excesses in Delivery Orders are for such sales.
     4.10 To the extent Schein commences sale to any new customer with more than
[**] hemodialysis patients and, as a result, Schein’s Delivery Orders to MDS
increase significantly, MDS’s timely delivery of such increased quantities of
MDS Products shall not be subject to the provisions of Section 8.5. In such a
circumstance, however, MDS will use reasonable commercial efforts to fulfill all
of Schein’s requirements as soon as commercially possible.
     4.11 Notwithstanding the foregoing, during the final [**] months of this
Agreement as determined in accordance with Section 2.1 hereof, MDS shall not be
obligated to accept Delivery Orders to the extent that they cumulatively exceed
[**]% of the cumulative quantity of MDS Products ordered pursuant to Delivery
Orders placed in the immediately preceding [**] month period.
     4.12 In the event that either Schein or MDS determines that [**], Schein
and MDS shall [**]. In the event that Schein and MDS agree on a [**], MDS and
Schein shall [**] agree to a [**] which will include such [**]; provided,
however, that Schein [**] to the extent of [**]. As of the Effective Date, all
[**] under any previous agreement between MDS and Schein are [**], and new [**]
may be [**]. All [**]. The [**] will be [**] as reasonably possible

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based on [**].
     MDS shall be [**] including but not limited to; [**].
     4.13 By the [**] day of each month during the Term of this Agreement,
Schein shall provide MDS with a non-binding forecast of the quantity of each
Code Schein estimates it shall place orders for during the following [**]
months. These forecast figures will be e-mailed to the Marketing Services
Manager [**].
     By the [**] day of each month, Schein shall also provide Schein end-user
sales information to MDS from the previous month, including MDS Product sales
across all Schein divisions. Such sales information shall include; the Code,
quantity, end-user name, end-user city and end-user state. By the [**] day of
each month, Schein shall also provide its ending inventory information from the
previous month to MDS, including inventory amounts across all Schein divisions,
by Code and warehouse.
   5.0 SHIPMENT OF MDS PRODUCTS
     5.1 MDS will ship the MDS Products, freight and insurance paid, to the
F.O.B. location specified on Schein’s Delivery Order (“F.O.B. Location”) at the
prices listed in Exhibit D, provided however, Schein shall only specify F.O.B.
Locations listed in Exhibit D. MDS and Schein may agree to add new F.O.B.
Locations at any time provided the prices for delivery to such F.O.B. Locations
shall be added by amendment to Exhibit D, signed pursuant to Section 18.3
hereof.
     5.2 MDS shall prepare and send by facsimile transmission or via e-mail to
Schein a packing list for each shipment of MDS Products. This shipping
information will include Schein’s specific purchase order number, item shipping
quantities, and item back order information. When MDS has the necessary systems
and procedures in place, the packing slip will also accompany

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the shipment to avoid loss of missing faxes and to reduce the chance of
mismatching the paper to the shipment.
     5.3 MDS shall notify Schein as soon as MDS becomes aware that any shipment
may not be delivered within a period commencing [**] days prior to the Due Date
and ending [**] days after the Due Date applicable to a Delivery Order, such
period being hereinafter referred to as the “Delivery Window”. Except as set
forth in Section 8.1, if MDS is delinquent with Delivery Orders properly placed
by Schein and accepted by MDS in accordance with the terms of this Agreement,
and as a result, to the degree that Schein has insufficient MDS Products to ship
to its customer in its customary manner and at customary prices, MDS will be
responsible for incremental freight costs including all priority and cross
shipping charges associated with MDS delayed order fulfillment provided that the
proper documentation of such incremental charges is produced, with prior written
authorization by MDS, of which such authorization shall not be unreasonably
withheld.
     5.4 Schein will notify MDS in writing of any receiving discrepancy (over,
short or patently damaged), within [**] business days of receipt of such
delivery. Schein hereby agrees to hold the relevant part (over, short or
patently damaged) intact pending resolution by MDS. At the time of receipt of
MDS Products by Schein, any damage, shortage or overage noted at that time must
be noted by Schein on the Bill of Lading. Credit will be issued only upon MDS’
verification of such damage, shortage or overage, which verification shall not
be unreasonably with-held. MDS hereby agrees to arrange verification and to
provide a disposition of such receiving discrepancy within [**] business days
from receipt of such notice. In the event of a receiving discrepancy, for the
purpose of Section 7.1, MDS’s invoice shall be deemed to be dated on the date
MDS provides the disposition.
     5.5 Schein accepts MDS’s standard packaging and palletizing methods. MDS
will examine proposals to modify the palletizing methods as requested by Schein,
and provided these modifications are approved by MDS, Schein agrees to pay any
additional costs and to accept responsibility for any damage related to the new
packaging methods. MDS will use reasonable best efforts to revisit its pallet
size and work to conform to the Schein rack height configurations.
   6.0 PRICES

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     6.1 During [**] of this Agreement, MDS will sell the Codes meeting the
Specifications set forth in Exhibit C to Schein, and Schein agrees to buy the
MDS Products from MDS at the base prices and at F.O.B. Locations listed in
Exhibit D (“Base Prices”). MDS makes no commitment to provide any Code at these
Base Prices beyond [**] of this Agreement. Any price increase for [**] shall be
limited to MDS’ increased costs of goods sold. MDS shall notify Schein of the
prices for the second Contract Year [**] months after the Effective Date.
     6.2 [**] months prior to the end of the initial two year Term of this
Agreement, and [**] months prior to the end of the last year of any extension of
the Term of this Agreement, MDS may submit to Schein a written proposal for a
revised Exhibit D which, if submitted, shall set forth MDS’ proposed prices for
MDS Products applicable during the next term of this Agreement, subject to the
other terms and conditions of this Agreement, if the parties agree to extend
this Agreement.
     6.3 The quantity prices listed in Exhibit D are set forth on the basis of
the total quantity of Delivery Orders placed during each Contract Year for
Codes. Prices include all United States import duties, clearing charges, and
freight up to the F.O.B. Location designated.
     6.4 It is expressly agreed that Base Prices for the MDS Products include
delivery in full trailer load or container load quantities to each F.O.B.
Location, by ocean freight or least cost overland method. Premiums for (i) air
freight, (ii) LTL shipments, (iii) expedited delivery, (iv) shipments of partial
orders, or (v) other unusual or extra transportation expenses, if authorized in
advance by Schein in writing, (“Premiums”) will be invoiced to Schein.
     6.5 Schein will qualify for an additional [**]% discount (“Additional
Discount”) from MDS, provided their Net Purchases (as hereinafter defined) from
MDS are greater than $[**] over the most recent [**]-month period. If Schein
does qualify for such Additional Discount, the Additional Discount will be
calculated at the conclusion of each calendar quarter, and shall be credited to
Schein within 30 days of the end of the calendar quarter. Net Purchases are
equal to the dollar amount invoiced by MDS to Schein, less all credits and
discounts, including but not limited to all product returns, [**] and quick-pay
discounts. MDS and Schein agree that should a change occur within section 4.6 of
this Agreement with respect to a dialysis specialty customer, and as a result of
such change the amount of

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MDS Products that Schein is purchasing would materially increase, the companies
agree to adjust the Net Purchases requirement of $[**] to a new figure mutually
agreeable to both companies.
   7.0 PAYMENT
     7.1 The terms of payment for the MDS Products purchased by Schein under
this Agreement shall be [**] days [**] from MDS’s invoice date, as determined by
the date of collected funds receipt of wire transfer or ACH transfer to MDS’
designated financial institution. Any amounts not paid within [**] days from the
invoice date shall be subject to a service charge until paid, in an amount equal
to [**]% per month. Such service charge shall be computed on the last working
day of the calendar month, on a pro rata basis if applicable, for invoices
[**] days old or more. In addition, if full payment including service charge is
not received by MDS within [**] days from MDS’s invoice date MDS may restrict
weekly sales to Schein to a dollar amount equal to the payments received from
Schein in the previous week. If full payment is not received by MDS within
[**] days of MDS’s invoice date Schein shall be considered to be in material
breach of this Agreement and subject to Section 14.1.
     MDS may invoice Schein upon email notification to Schein that MDS Products
are available for carrier pickup at the FOB location listed in Exhibit D.
     7.2 All Schein payments are to be made by either wire transfer or ACH
transfer and remitted to the financial institution designated by MDS to receive
such payments.
   8.0 DELAYED AND REPLACEMENT PRODUCTS
     8.1 MDS assumes no liability and shall not be liable to Schein for any
failure to fill or delay in filling Delivery Orders received from Schein to the
extent such failure or delay results from strikes, lockouts, or any other labor
troubles, floods, fires, accidents, delays in the delivery of raw materials,
parts or completed merchandise by the supplier thereof or any cause beyond the
control of or occurring without the fault of MDS. In the event of any delay
caused by any of the above, MDS shall use commercially reasonable best efforts
to fulfill Schein’s orders in a timely fashion, provided, however, that in the
event of a shortage of available MDS Products, whether resulting from market
conditions, manufacturing

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constraints, FDA action against any company or otherwise, MDS may allocate
supply between Schein and other MDS customers at its discretion, but will use
commercially reasonable best efforts to allocate in reasonable proportion to
Schein’s market share, as compared to the total market size. MDS shall notify
Schein promptly if it anticipates any potential delay in the filling of any of
Schein’s Delivery Orders caused by any of the above.
     In the event an FDA action against any company results in a reduction of
[**]% or more in the overall market supply within the Territory of any product
type (AVF, BTL, etc.) MDS may allocate supply of MDS Products within such
product type to any customer or distributor at its discretion without regard to
the provisions of Sections 4.5, 4.6 or 4.7.
     8.2 Schein assumes no liability and shall not be liable to MDS for any
failure to place Delivery Orders to the extent that such failure is because of
strikes, lockouts, or any other labor troubles, floods, fires, accidents, or any
cause beyond the control of or occurring without the fault of Schein.
     8.3 Notwithstanding Section 4.3, Schein may be relieved of its commitment
to purchase Exclusive Products only from MDS, in whole or in part, at Schein’s
option, should MDS be in material breach of this Agreement, if such breach
remains uncured [**] days after MDS receives notice from Schein of such breach.
     8.4 Notwithstanding Sections 4.3 and 4.8 Schein may, at its option, be
relieved of its obligations with respect to any specific Delivery Order, in
whole or in part, at Schein’s option, should a delay caused by an event
described in Section 8.1 occur, if such delay is uncured within [**] days after
the Delivery Window of such Delivery Order. To the extent MDS is unable to
deliver within [**] days after the Delivery Window applicable to any Delivery
Order MDS Products delayed by an event described in Section 8.1, Schein may
purchase replacement Products from others.
     8.5 Except as set forth in Sections 4.8 and 8.1, if MDS is unable to
deliver MDS Products during the Delivery Window applicable to a Schein Delivery
Order, or MDS replaces MDS Products pursuant to sections 11.3, 13.2 or 16.1, MDS
will deliver or replace the MDS Products as soon as possible, on an expedited
basis (via air freight, exclusive use truck, overtime customs clearance or
similar means) at MDS’ expense if requested by Schein.

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     8.6 To the extent MDS is unable to deliver MDS Products within [**] days of
the Delivery Window applicable to a Schein Delivery Order, Schein may, at its
option, purchase Products from other suppliers to meet its immediate needs.
Schein also reserves the right to cancel outstanding orders if the [**] day
Delivery Window is not met, up to the amount of orders not delivered to Schein
within the Delivery Window.
     8.7 To the extent that Schein, pursuant to Sections 8.6, 10.1, 12.1 or
16.1, but not Section 8.1, purchases replacement products from others, which are
documented to be not of MDS origin and more expensive than the relevant MDS
Products, MDS shall credit Schein a portion of the cost of such replacement
products up to [**]% of the applicable price of the MDS Products which were
replaced or the cost of the replacement products, whichever is less, provided
that Schein supplies MDS with copies of such orders and the invoices related
thereto. To the extent Schein purchases and is credited for such replacement or
fill-in products from others, it shall be relieved of its obligation to take
delivery of and pay for equivalent quantities of MDS Products pursuant to
Delivery Orders.
     8.8 Schein and MDS will make a cooperative effort to evaluate and implement
supply chain improvement opportunities, as mutually agreed upon.
     8.9 To the degree that Schein has Obsolete Inventory or Excess Inventory
(as hereinafter defined) and Schein advises MDS of such Product inventory,
Schein and MDS will make reasonable cooperative efforts to transfer to other MDS
Contract Distributors; return to MDS; or promote to Schein’s customers at a
reduced price. Products that are no longer sold by MDS as a Code or
specification (“Obsolete Inventory”) or Products considered by Schein to be at
inventory levels greater than sales projections (“Excess Inventory”) may be
requested for return to MDS, up to a maximum MDS invoice value of $[**] per
calendar quarter (“Quarterly Credit”) without carryover of such Quarterly
Credit, provided that any such Products returned to MDS are no older than [**]
months after Sterilization Date and provided further that if MDS notifies Schein
(in a form substantially similar to Exhibit I) that Schein is placing an order
for Products that MDS reasonably believes will become Obsolete Inventory or
considered Excess Inventory by Schein before such product can be sold, and
notwithstanding such advice Schein refuses to revise such orders within [**]
business days, and orders such volume, MDS will not accept the return of such
Products. Schein must submit in writing any potential Quarterly Credit, within
the calendar quarter, or it cannot be submitted

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for that quarter. MDS shall have the right to resell such returned Products to
any party that it wishes to, including any Med/Surg Distributor. In addition,
any approved returns pursuant to section 11.3 of this Agreement will not be
included in the Quarterly Credit.
     MDS must receive any such qualified returned Products at MDS’ specified
location within [**] days after providing written return authorization to
Schein, or such return shall be disallowed.
     8.10 [**] each calendar quarter, Schein shall conduct a physical inventory
review of all MDS Products at all Schein warehouses for the purpose of
determining any inventory greater than [**] months and [**] months old based
upon the lot number. Schein shall report to MDS each such Code, lot, quantity
and location. Schein shall prioritize all MDS Products over [**] months old for
early shipment. Schein shall manage all MDS Products [**] months old in a high
priority fashion for immediate shipment to the next order, or in accordance with
Section 8.9 if applicable.
   9.0 MDS PRODUCT CHANGES AND NEW MDS PRODUCTS
     9.1 During the Term of this Agreement, MDS shall offer, on a non-exclusive
basis, to incorporate into the MDS Products any clinical use enhancements or
developments or new MDS BTL or MDS AVF that MDS designs, which enhancements,
developments or products MDS controls, such enhancements being subject to prior
sale, exclusive license or exclusive contract.
     9.2 If Schein agrees in writing to accept any such enhancement or
development or new MDS BTL or MDS AVF, and the parties agree in writing on any
price adjustment made necessary or possible by such enhancement or development,
Exhibits B, C and D shall be amended to incorporate such changes.
Notwithstanding the above, MDS reserves the right to incorporate clinical use
enhancements or developments in MDS Products as described herein, in accordance
only with Section 9.3, provided that no price increase is requested by MDS.
     9.3 MDS shall notify Schein in writing, using the “Vendor Notice of Change”
form attached as Exhibit F, at least [**] days prior to any substantial change
in design of the MDS Products, components of the MDS Products or packaging which
may necessitate in-servicing or notification to end-users.

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   10.0 REGULATORY RESPONSIBILITY; LABELING; ADVERTISING, PROMOTIONS AND TRADE
NAMES
     10.1 MDS shall be responsible, at its expense, for complying with all
applicable regulatory requirements of the U.S. Food and Drug Administration
(“FDA”) relating to the sale or use of the MDS Products, including but not
limited to obtaining authorization under Section 510(k) of the United States
Federal Food, Drug and Cosmetic Acts, as amended (the “Acts”). For MDS Products
bearing the CE mark of the European Community MDS shall also be responsible, at
its expense, for complying with all applicable requirements of the Council
Directive 93/42/EEC of the European Community (commonly known as the Medical
Device Directive “MDD”) and all amendments thereto. Failure of an MDS Product to
meet the applicable FDA requirements, and where applicable the MDD requirements,
or to obtain FDA approval or approval to display the CE mark as applicable,
shall be considered a material breach of this Agreement by MDS as to which
Schein’s exclusive remedies shall be to terminate this Agreement under
Section 14.1, to terminate any specified Delivery Order(s) under Section 12.1
and/or to purchase Products from others to replace those MDS Products which fail
to meet the applicable FDA requirements and as applicable, the MDD requirements,
or which fail to obtain FDA approval or approval to display the CE mark. Except
as specifically set forth in Section 12.1 of this Agreement, MDS shall have no
obligation or liability to ensure that, and makes no representation or warranty
that, any MDS Product complies with any applicable product regulations or laws
of any regulatory agency in the Territory other than the FDA and where
applicable the MDD regulations, but agrees to give to Schein any reasonable
assistance requested in order to demonstrate that the MDS Products do so comply.
     10.2 Each use on the MDS Products of any MDS trade name owned or controlled
by MDS (a “MDS Trade Name”)shall inure to the benefit of MDS. Should any such
use vest in Schein any rights in any MDS Trade Name, Schein shall transfer such
rights to MDS or its designee upon request of MDS.
     10.3 MDS represents and warrants to Schein that MDS has the right to
authorize and so authorizes Schein to use any MDS Trade Name that MDS requests
be used on or with MDS Products sold under this Agreement. MDS shall indemnify
and hold Schein harmless from any and all claims, liability, damages, loss,
cost, or expense (including reasonable attorneys’ fees and expenses) arising out
of, based on, or caused by any claim that the use by Schein of an MDS Trade Name
in a manner approved by

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MDS infringes (or is alleged to infringe) upon any copyright, right to use,
trade name, trademark or other right of any person or entity.
     10.4 Except as provided in this Agreement, MDS will not use any Schein
Trade Name, or any trademark, trade name or logo confusingly similar therewith,
during or after the Term of this Agreement. Except as provided in this
Agreement, Schein shall not use any MDS Trade Name, trademark, logo, or any
trade name, trademark or logo confusingly similar therewith in any MDS Product
advertisement or display.
     10.5 Packaging for each unit-of-sale comprises multiples of each Code,
whether such Codes are individually pouched or not, in cartons which are sealed,
shippable and contain all such Codes’ labeling or references required by
end-users (the “Unit-of-Sale”). Such Codes’ Unit-of-Sale are detailed in
Exhibit B herein. Schein acknowledges that it will store, ship, handle and sell
the MDS Products in their original, unopened Unit-of-Sale and in accordance with
the labeling, and Schein will not remove, modify, repack, amend or relabel such
Unit-of-Sale without prior, written approval of MDS.
     10.6 Schein hereby agrees that any written or oral statement, warning or
representation made by Schein or its representatives in any advertising,
publicity, promotion or sale regarding any of the MDS Products shall be
consistent with the labeling of the MDS Products.
     10.7 Schein agrees to use its best reasonable efforts to promptly notify
MDS whenever it becomes aware of the use of the MDS Products in a manner
inconsistent with the labeling or the indications for use.
     10.8 Schein agrees to obtain MDS’s written authorization prior to the
publication or distribution of any advertising, displays or promotional material
regarding or referencing the MDS Products.
     10.9 During the Term of this Agreement, Schein shall allow MDS to buy back
MDS Product from Schein’s inventory. Such product shall be used at MDS’
discretion for post market testing, product quality audits, market acceptance
studies, stock rotation, market withdrawal, or other purposes in compliance with
21 CFR € 806, “Medical Devices; Reports of Corrections and Removals.” The
definitions of stock rotation and market withdrawal shall be according to 21 CFR
€ 806.2(h). MDS shall issue a returned goods authorization to Schein for

14

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such inventory of MDS Products to be purchased by MDS. MDS agrees to purchase
such inventory of MDS Product from Schein at a cost equal to Schein’s original
purchase price from MDS, plus any shipping or freight charges.
   11.0 QUALITY CONTROL
     11.1 All MDS Products shall be subjected to a quality control inspection in
accordance with MDS’s quality control standards and the applicable FDA
regulations.
     11.2 The term “Lot” shall mean all MDS Products bearing the same lot
number.
     11.3 If any customer of Schein returns to Schein MDS Products which fail to
perform as intended when used in accordance with the labeled indications for
use, such MDS Products may be returned to MDS, at MDS’ expense and option,
provided that such MDS Products are returned within [**] days of Schein’s
receipt of the customer complaint regarding the MDS Products. Prior to any MDS
Product return, Schein shall submit a written request to MDS to accept the MDS
Product return. Schein’s request shall include, at a minimum, the reason for the
return or the relevant complaint reference, and the Code(s), quantities, and
Lots of the MDS Products Schein wishes to return. MDS shall approve or reject
Schein’s request within 10 days of receipt. MDS shall not unreasonably refuse to
accept a return. Within [**] days of the receipt of such return, Schein shall
receive, at its option, a credit or refund for such MDS Products returned to
MDS, or by mutual agreement of Schein and MDS, Schein shall receive replacements
for such MDS Products returned to MDS.
     11.4 In the event that Schein receives any complaint regarding the MDS
Products, Schein shall notify MDS promptly using a complaint communication form
which form shall be substantially in the form of Exhibit G. MDS will be
responsible for evaluating these complaints and promptly submitting to Schein a
statement of its findings and corrective actions as appropriate. Nothing in this
section shall be deemed to relieve either party of its own reporting
responsibilities under applicable FDA and MDD regulations.
     11.5 MDS shall be responsible for issuing all written and oral
communications with third parties regarding any complaint about, alleged defect
in, or recall of the MDS Products. Except as required by law, Schein will make
no written or oral statements regarding any complaint about, alleged defect in,
or

15

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recall of the MDS Products without the prior written approval of MDS.
     11.6 During normal Schein working hours, with prior written notice to
Schein, and until Schein shall institute systems to control its MDS Product
inventory on a strict MDS-lot by MDS-lot FIFO basis, Schein shall allow MDS to
enter Schein’s facilities in which MDS’ Products are stored in order for MDS to
determine inventories by MDS lot number. In addition, MDS shall have regulatory
access to MDS Products in Schein’s inventory in order for MDS to obtain MDS
Product samples or otherwise analyze MDS Products in Schein inventory for MDS
trending purposes. Schein agrees to assist MDS in such action. MDS agrees to
reimburse Schein for reasonable cost for Schein’s labor and handling resulting
from Schein’s assistance for such action.
   12.0 GUARANTEE
     12.1 All MDS Products sold to Schein under this Agreement are hereby
guaranteed by MDS, as of the time the title to the MDS Products is transferred
to Schein, to be not adulterated or misbranded within the meaning of the Acts or
any similar federal, state or local laws or regulations, and not articles which
may not, under the provisions of Section 510, 514, 515 or 516 of the Acts, be
introduced into interstate commerce. All MDS Products bearing the CE sold to
Schein under this Agreement are hereby guaranteed by MDS, as of the time the
title to the MDS Products is transferred to Schein to be not in violation of any
applicable law or regulation of the MDD. If MDS breaches this guarantee with
respect to any Lot, Schein may immediately return to MDS, at MDS’s expense, any
MDS Products of such Lot received by Schein. At Schein’s option, MDS either will
immediately credit Schein for such MDS Products, or repay to Schein any moneys
paid by Schein for such MDS Products. Schein may purchase Products to replace
any MDS Products which are in breach of this guarantee from another supplier.
   13.0 WARRANTIES AND INDEMNIFICATIONS
     13.1 MDS warrants that MDS Products sold to Schein under this Agreement are
free from defects in design, workmanship and materials and are merchantable and
fit for their intended purposes. EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE,
SECTION 12.1 AND IN THE LABELING FOR THE MDS PRODUCT, MDS MAKES NO
REPRESENTATION OR WARRANTY WHATSOEVER, WRITTEN OR ORAL, EXPRESS OR IMPLIED, AS
TO ANY OF THE MDS PRODUCTS, OR THEIR MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE, AND MDS HEREBY EXPRESSLY DISCLAIMS ANY SUCH REPRESENTATION
AND WARRANTY.

16

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ALL OF THE WARRANTIES SET FORTH IN THIS SECTION 13.1 ARE VOID AND OF NO EFFECT
IF THE MDS PRODUCTS ARE NOT STORED AND USED IN ACCORDANCE WITH THE DIRECTIONS ON
THE LABELING OR PRODUCT INSERTS ACCOMPANYING THE MDS PRODUCTS.
     13.2 SCHEIN ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE PROVISIONS OF
SECTION 13.3, MDS’ SOLE RESPONSIBILITY TO SCHEIN IN THE CASE OF BREACH OF THE
FOREGOING WARRANTY SHALL BE FOR MDS, BY MUTUAL AGREEMENT OF SCHEIN AND MDS, TO
REPAIR OR REPLACE THE MDS PRODUCTS WITH RESPECT TO WHICH SUCH WARRANTY IS
BREACHED, OR, AT SCHEIN’S ELECTION TO RETURN ALL PAYMENTS MADE BY SCHEIN TO MDS
WITH RESPECT TO SUCH MDS PRODUCTS OR TO CREDIT SCHEIN IN THE AMOUNT OF ALL
PAYMENTS MADE BY SCHEIN TO MDS WITH RESPECT TO SUCH MDS PRODUCTS. IN NO EVENT
SHALL MDS BE LIABLE FOR SCHEIN’S LOSS OF PROFITS, LOSS OF USE, OR INCIDENTAL,
CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY KIND.
     13.3 MDS hereby indemnifies and agrees to hold Schein, its affiliates,
successors and assigns harmless from and against all claims, liability, damage,
cost or expense of Schein, including its attorneys’ fees, with respect to any
Schein customer arising out of, or in connection with, or as a result of (i) the
failure of any of the MDS Products to meet the warranty set forth in
Section 13.1 at the time of delivery to Schein or (ii) usage of the MDS Products
in accordance with instructions for use (if any) supplied from time to time by
MDS. In order to discharge its obligations under this Section 13.3, MDS shall
obtain and keep in force during the Term of this Agreement, product liability
insurance with a limit of liability of not less than $3,000,000.
     13.4 MDS shall defend, indemnify and hold Schein harmless with respect to
any liability of Schein for infringement of any patent or copyright arising out
of the use or sale in the Territory of the MDS Products supplied to Schein under
this Agreement. Schein shall communicate to MDS all charges of alleged
infringement within a reasonable time after their receipt. Schein will cooperate
fully with MDS in defending or otherwise resolving any charges of infringement.
MDS will have full control of the defense of any litigation brought against
Schein for alleged infringement by MDS Products supplied under this Agreement;
however, Schein, at its expense, may be represented by its own counsel in any
such litigation. MDS agrees to bear all other costs and expenses of litigation,
including any bonds required by a court and its own attorneys’ fees in
connection with such alleged infringement, and MDS will reimburse Schein for any
disbursement made by Schein in satisfaction of any final judgment issued in such
litigation.

17

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     13.5 Schein shall indemnify and hold MDS harmless from any and all claims,
liability, damages, loss, cost, or expense (including reasonable attorneys’
fees) arising out of, based on, or caused by (i) any product claims,
representations, descriptions or other statements, whether oral or written, made
or alleged to be made by Schein or its representatives in any advertising,
publicity, promotion or sale of any of the MDS Products where such product
claims were inconsistent with the labeling, and (ii) any product claim arising
out of, based on, or caused by negligent handling of the MDS Products by Schein
or its agents (including, without limitation, failure to sell MDS Products in
the original, unopened Units of Sale, as described in Exhibit B).
   14.0 TERMINATION
     14.1 Either party may terminate this Agreement for any material breach of
it by the other party, by giving ninety (90) days written notice to the other
party, if such breach shall, as of the expiration of [**] day period, remain
uncured.
     14.2 Either party may terminate this Agreement effective immediately upon
the giving of notice, if the other party shall file a petition in bankruptcy, or
shall be adjudicated as bankrupt, or shall take advantage of the insolvency laws
of any state, or shall make an assignment for the benefit of creditors, shall be
voluntarily or involuntarily dissolved, or shall have a receiver, trustee or
other court officer appointed for its property.
   15.0 EFFECT OF TERMINATION
     15.1 No termination of this Agreement, other than by reason of breach of
this Agreement by Schein or if Schein has received notice of termination
pursuant to Section 14.2 of this Agreement, will relieve MDS from its obligation
to deliver all MDS Products ordered pursuant to any Delivery Order of Schein
properly placed by Schein in accordance with the provisions of this Agreement,
nor will any termination, other than by reason of breach of this Agreement by
MDS or if MDS has received notice of termination pursuant to Section 14.2 of
this Agreement, relieve Schein from accepting and paying for all MDS Products
ordered by Schein under any Delivery Order properly issued by Schein in
accordance with the provisions of this Agreement or relieve Schein of its
obligation pursuant to Section 4.3.
   16.0 MDS PRODUCT RECALL

18

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     16.1 In the event that it shall be deemed necessary by MDS or Schein to
recall from the U.S. and/or European market any of the MDS Products sold or
distributed by Schein because the MDS Products are believed to violate any
provision of any U.S. law or regulation or the MDD, subject to Section 16.4
below, MDS shall bear all out-of-pocket costs and expense of such recall,
including, without limitation, refunds to customers for recalled MDS Products
but only in an amount not to exceed the sum of the purchase price paid by Schein
to MDS for the recalled MDS Products, the cost of notifying customers, and costs
associated with the shipment of recalled MDS Products from customers to Schein,
Schein to MDS or customers to MDS. Schein shall maintain complete and accurate
records, for such periods as may be required by applicable law, of all the MDS
Products sold by Schein. Schein may purchase from another supplier replacement
Products for recalled MDS Products.
     16.2 In the event of a recall of any of the MDS Products sold by Schein,
the parties will cooperate fully with each other in effecting such a recall,
including without limitation promptly contacting any customer of Schein and
communicating to such customer of Schein any information or instructions that
either party may desire be communicated to such customer of Schein in
conformance with the obligations of Section 11.5.
     16.3 Unless required by law, Schein shall not initiate any recall of MDS
Products until Schein has consulted with MDS.
     16.4 In the event that Schein determines that it will recall any MDS
Products sold or distributed by Schein because the MDS Products are believed to
violate any provision of U.S. law, and MDS has not agreed with Schein’s
determination, MDS may, once the recall has been substantially completed, have
an arbitrator appointed by the American Arbitration Association who shall
determine whether Schein’s determination to recall was necessary and reasonable;
the arbitrator may require that Schein bear all costs, damages and expenses of
such recall or may apportion such costs and expenses between the parties as the
arbitrator deems just.
     16.5 Schein shall bear all costs and expenses of a recall of the MDS
Products caused by the negligence of Schein or its agents.
   17.0 DISCLOSURE OF INFORMATION
     17.1 Unless specifically covered by a non-disclosure agreement between the
parties hereto, any information disclosed

19

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by MDS or Schein to the other prior to or during the Term of this Agreement
concerning the MDS Products has been or shall be disclosed on a non-confidential
basis and neither party shall be liable for the disclosure or use of such
information, except for any liability that may arise under any patent or
copyright laws.
   18.0 OTHER PROVISIONS
     18.1 For purposes of enumerating the Purchase Commitment, BTL are pouched
in arterial and venous line pairs and each pair is counted as one MDS Product.
AVF may be supplied in pairs or individually. Each AVF Code pouched as a pair
shall be counted as two (2) each-equivalents for the purpose of this Agreement.
All other MDS Products are counted as eaches.
     18.2 All sales of MDS Products to Schein under this Agreement shall be
subject to the provisions of this Agreement and shall not be subject to the
terms and conditions contained in any Delivery Order of Schein, or confirmation
or invoice of MDS except insofar as any such Delivery Order, confirmation or
invoice establishes (i) the quantity of Codes ordered for delivery, (ii) the Due
Date of such Codes, and (iii) the quantity of Codes to be delivered at each
F.O.B. Location.
     18.3 This Agreement contains the entire agreement between the parties
relating to the MDS Products and all prior proposals, discussions, and writings
by and between the parties and relating to the subject matter herein are
superseded by this Agreement. None of the terms of this Agreement shall be
deemed to be waived by either party or amended unless such waiver or amendment
is in writing and is signed by the party to be charged with such waiver or
amendment, and such writing recites specifically that it is a waiver of, or
amendment to, the terms of this Agreement.
     18.4 All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first-class mail, facsimile
transmission, or air courier which guarantees overnight delivery:
If to Schein:
General Counsel
Henry Schein, Inc.
135 Duryea Road,
Melville, NY 11747
If to MDS:

20

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President
Medisystems Corporation
701 Pike Street, 16th Floor
Seattle, WA 98101
or to such other address as to which either party may properly notify the other.
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; three business days after
being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if sent by facsimile transmission; and on the day delivered, if
sent by overnight air courier guaranteeing next day delivery.
     18.5 This Agreement shall be binding upon and inure to the benefit of the
parties, their successors and permitted assigns. This Agreement shall be
assignable by either party with the written consent of the other; provided,
however, that either party may assign this Agreement to any entity controlled by
or under common control with such party and in such event the assigning party
shall provide the other party with written notice of such assignment.
     18.6 This Agreement is deemed to have been entered into in the State of New
York and its interpretation, construction, and the remedies for its enforcement
or breach are to be applied pursuant to and in accordance with the laws of the
State of New York.
     18.7 In the event that a court of competent jurisdiction holds that
particular provisions or requirements of this Agreement are in violation of any
law, such provisions or requirements shall be enforced and shall remain in full
force and effect to the extent they are not in violation of any such law or are
not otherwise unenforceable, and all other provisions and requirements of this
Agreement shall remain in full force and effect.
   19.0 DEFINITIONS
     The following list of defined terms used in this Agreement is provided for
convenience only. Reference must be made to the relevant sections of this
Agreement for the complete definitions.
     19.1 The “Acts” means the United States Federal Food, Drug and Cosmetic
Acts (Section 10.1).

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     19.2 “AVF” means extracorporeal access needle sets such as AVF needle sets,
pheresis needle sets, ButtonHole needle sets, Vasca access needle sets and the
like (Section 1.1).
     19.3 “Base Prices” means the prices indicated on Exhibit D as Base Prices
which shall be the unrebated prices invoiced to Schein (Section 6.1).
     19.4 “BTL” means blood, dialysate and/or fluid sets for dialysis such as
blood tubing sets, peritoneal sets, reversing connector sets, priming sets and
the like (Section 1.1).
     19.5 “Codes” means the codes of each MDS Product that meet the
Specifications (Section 3.1).
     19.6 “Competing Products” means any Products identical, similar or
competitive to Exclusive Products (Section 4.3).
     19.7 “Contract Year” means the twelve-month period following the Effective
Date and each subsequent twelve-month period of this Agreement (Section 4.2).
     19.8 “Delivery Order” means noncancellable monthly order(s) for MDS
Products that Schein commits to purchase from MDS (Section 4.8.).
     19.9 “Delivery Window” means the period commencing [**] days prior to the
Due Date and ending [**] days after the Due Date applicable to a Delivery Order
(Section 5.3).
     19.10 “Due Date” means the requested delivery date provided by Schein on
each Delivery Order that shall be not earlier than [**] days after the Order
Date (Section 4.8).
     19.11 “Effective Date” means the date set forth in the preamble of this
Agreement (Preamble).
     19.12 “Exclusive Products” means BTL and AVF that Schein agrees to sell in
the Territory sourced only and exclusively from among MDS BTL and MDS AVF listed
in Exhibit B (Section 4.3).
     19.13 “FDA” means the United States Food and Drug Administration
(Section 10.1).
     19.14 “F.O.B. Location” means the F.O.B. location specified on Schein’s
Delivery Order for shipment of MDS Products, freight and insurance paid
(Section 5.1).

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     19.15 “Lot” means all Products bearing the same lot number (Section 11.2).
     19.16 “MDD” means the Medical Device Directive of the Council of the
European Community (Section 10.1).
     19.17 “MDS” means Medisystems Corporation, a Washington corporation
(Preamble).
     19.18 “MDS Products” means Products under Specifications including MDS
labeling which MDS controls and currently has produced by subsidiaries or
contract manufacturers, i.e. MDS BTL, MDS AVF, MDS Needleless and MDS TP
(Section 1.1).
     19.19 “Med/Surg Distributor” means a distributor who distributes general
medical/surgical items such as syringes, gauze, drugs, etc. rather than one who
distributes primarily dialyzers, dialysis services and/or dialysis machines.
Med/Surg Distributors include [**] and other similar general medical surgical
item distributors (Section 4.5).
     19.20 “Needleless” means antistick, plastic access needle/connectors and
the like (Section 1.1).
     19.21 Intentionally left blank
     19.22 “Order Date” means that date prior to the [**] day of each month, or
such later date as may be determined in accordance with Section 4.8 hereof, on
which a noncancellable Delivery Order is deemed provided to MDS (Section 4.8).
     19.23 “Premiums” means premium freight and handling charges invoiced by MDS
to Schein for (i) air freight, (ii) LTL shipments, (iii) expedited delivery,
(iv) shipments of partial orders, or (v) other unusual or extra transportation
expenses, if authorized in advance by Schein in writing (Section 6.4).
     19.24 “Products” means certain disposable medical devices useful in
dialysis and pheresis therapies including the following examples: BTL, AVF,
Needleless, TP (Section 1.1).
     19.25 “Purchase Commitment” means Schein’s commitment to purchase from MDS,
by way of valid Delivery Orders only, not less than [**] pairs of MDS BTL and
[**] each equivalents of MDS AVF during each [**] month period during the Term
of this Agreement (Section 4.3).

23

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     19.26 “[**]” means an agreement relating to [**] in the event that Schein
and MDS [**], after Schein and MDS [**].
     19.27 “Schein” means Henry Schein, Inc., a Delaware corporation with
offices at 135 Duryea Road, Melville, NY 11747 and its affiliates (Preamble).
     19.28 “Specifications” means the specifications of the Codes as set forth
in Exhibit C, or as such Exhibit may be amended from time to time pursuant to
Sections 9.1 or 9.2 hereof, or as modified by Section 9.3 (Section 3.1).
     19.29 “Term” means the two (2) year period beginning on the Effective Date
of this Agreement and any extensions thereof (Section 2.1).
     19.30 “Territory” means the countries set forth in Exhibit A (Section 1.1).
     19.31 “TP” means air filters, such as transducer protectors, diagnostic
pressure measurement devices and the like (Section 1.1).
     19.32 “Unit of Sale” means the packaging which comprises multiples of each
Code, whether such Codes are individually pouched or not, in cartons which are
sealed, shippable and contain all such Codes’ labeling or references required by
end-users and are described in Exhibit B (section 10.5).
     19.33 “Vendor Notice of Change” means the form set forth in Exhibit F
(Section 9.3).

24

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their authorized representatives as of the date first set forth above.

             
 
      MEDISYSTEMS CORPORATION      
 
  By:   /s/ David S. Utterberg
 
        David S. Utterberg         President         Henry Schein, Inc.    
 
           
 
  By:   /s/ Richard G. Alexander    
 
           
 
  Name:   Richard G. Alexander    
 
  Title:   Vice President    

25

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Exhibit A
Territory
The Territory is the United States of America.

 

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Exhibit B
List of Codes

                                              Minimum Quantity                  
          Unit of   per Code per   U/M per   Units of Sale   Cases              
  Measure   Delivery Order per   Inner Box   (Units per   per   Case Dimensions
  Pallet Dimensions Product Line   Code   (See note)   FOB Location   or Bag  
Case)   Pallet   (L X W X H) in Inches   (L x W x H) in Inches MDS BTL —
Manufactured in Mexico
 
  D3-8630M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9630M9793 D3-9630M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9633M9793 D3-9633M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9642M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9680M9793 D3-9680M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9681M9793 D3-9681M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9682M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9692M9793 D3-9692M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9696M9793 D3-9696M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  D3-9892M9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9992M9792   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  SL-2000M2095   Pr   [**]   [**]   [**]   [**]   [**]   [**] MDS BTL —
Manufactured In Thailand
 
  K3-8630/9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9601/9700   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9603/9750   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9603/9792   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9605/9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9630/9750   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9642/9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9689/9793   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9690/9792   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9691/9792   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9692/9793   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9694/9793   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9696/9793   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9892/9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9990/9792   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  K3-9992/9792   Pr   [**]   [**]   [**]   [**]   [**]   [**] MDS BTL Special
Codes — Manufactured in Thailand
 
  B3-3632/3705   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  B3-4630/4705   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  B3-6604/6792   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  B3-6605/6792   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  M3-9676/9795   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  M3-9792   Ea   [**]   [**]   [**]   [**]   [**]   [**]

 

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                                              Minimum Quantity                  
          Unit of   per Code per   U/M per   Units of Sale   Cases              
  Measure   Delivery Order per   Inner Box   (Units per   per   Case Dimensions
  Pallet Dimensions Product Line   Code   (See note)   FOB Location   or Bag  
Case)   Pallet   (L X W X H) in Inches   (L x W x H) in Inches MDS AVF —
Manufactured in Thailand
 
  See Note for Explanation of Coding                            
 
  BH-30XY   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  BH-40XY   Ea                        
 
  BH-70XY   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  BH-76XY   Ea                        
 
  D9-20XYBB   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  D9-20XYMGLB   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  M9-30XYBB   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  S9-40XYBB   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  S9-50XYBB   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  D9-60XYBB   Pr   [**]   [**]   [**]   [**]   [**]   [**]
 
  S9-70XYBB   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  S9-70XYMGLB   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
  S9-74XYBB   Ea                        
 
  S9-76XYBB   Ea                        
 
  V9-92XYD/G   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
                                MDS TP — Manufactured in Mexico
 
  M8-2006   Ea   [**]   [**]   [**]       [**]   [**]
 
  M8-8000 Access Alert   Pr   [**]   [**]   [**]   [**]   [**]   [**] MDS DPS —
Manufactured in Mexico
 
  M4-9440   Ea   [**]   [**]   [**]   [**]   [**]   [**] MDS Medic —
Manufactured in Mexico
 
  M8-5007   Ea   [**]   [**]   [**]   [**]   [**]   [**]
 
                                NOTES:   Unit of Measure “Pr” means Pair, “Ea”
means Each.
 
                               
 
  [**]                            
 
                                    Minimum Delivery Order Quantities to each
FOB Location:
Products Manufactured In Thailand, Combined: [**] pallets or exact multiples
thereof.
Products Manufactured in Mexico, Combined: [**] pallets or exact multiples
thereof.

 

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

 

Ex. C — Specifications
(sample page)
[**]

 

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

 

Exhibit D
Base Prices

         
Blood Tubing Sets (BTL)
       
All ReadySet® Codes except “Specials”
  $[**]/pr
 
       
Specials
         
B3-3632/3705
  $[**]/pr
B3-4630/4705
  $[**]/pr
B3-6604/6792
  $[**]/pr
B3-6605/6792 and B3-6606/6792
  $[**]/pr
M3-9676/9795
  $[**]/pr
M3-9792
  $[**]/pr
 
       
StreamLine Airless Sets
         
SL-2000M2095
  $[**]/pr
 
       
AV Fistula Needles (AVF):
         
Single Pack, Fixed Wing, Clamp/BE
  $[**]/ea
TwinPack+™, Fixed Wing, Clamp/art.BE
  $[**]/ea equiv.
Single Pack, Fixed Wing, Clamp/BE/MasterGuard
  $[**]/ea
TwinPack+, Fixed Wing, Clamp/art.BE/MasterGuard
  $[**]/ea equiv.
Single Needle, Fixed Wing, 16” tubing, Clamp/BE
  $[**]/ea  
Add for Rotatable Hub
  $[**]/ea
Add for ButtonHole™ AVF
  $[**]/ea
Add for 16” Tubing
  $[**]/ea
Add for 3/5” Cannula
  $[**]/ea
Add for CE Mark, Multi-language labeling
  $[**]/ea

See Section 18.1 for information on how TwinPack+ AVF are counted.

 

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

 

         
Dialysis Priming Sets (DPS):
         
All Quantities
       
M4-9440 With Needleless Access Port
  $[**]/ea
 
       
Transducer Protectors (TP):
         
M8-2006 ViraGuard®, Viral Retentive
  $[**]/ea
M8-8000 Access Alert® Filters
  $[**]/pr
 
       
Medic®Anti-Stick Plastic Needles (Medic):
         
M8-5007 Sterile bevel tip Medic (bucket pkg)
  $[**]/ea
 
       
Miscellaneous
         
M8-8100 Access Alert Pressure Gauge
  $[**]/ea

 
Note 1: Prices are for delivery to the following FOB Locations
          Schein Warehouse, Reno, NV
          Schein Warehouse, Denver, PA
          Schein Warehouse, Grapevine, TX
          Schein Warehouse, Indianapolis, Indiana
          Schein Warehouse, Jacksonville, Florida
Note 2: See Exhibit A for the list of “Special BTL Codes”.

 

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

 

Exhibit E
Net Margins* to Schein by [**]

      MDS BTL (Standard ReadySets)   Net Margin per BTL pair
[**]
  $[**]
[**]
  $[**]

      MDS BTL (StreamLine Code SL-2000M2095)   Net Margin per BTL pair
[**]
  $[**]
[**]
  $[**]

      MDS AVF (TwinPack+ w/MasterGuard)   Net Margin per AVF pair
[**]
  $[**]
[**]
  $[**]

 

*   Net Margin = [**]

 

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Exhibit F
VENDOR NOTICE OF CHANGE
Reference is made to the Extracorporeal Disposables Distribution Agreement dated
                     between Medisystems Corporation (MDS) and Henry Schein
Incorporated (Schein), pursuant to which MDS has agreed to notify Schein in
writing of any substantial change in design, components, or packaging of the MDS
Products which may necessitate in-servicing or notification to end-users:
MDS hereby notifies Schein of the following change:
 
 
 
Plans for initiation of this change are as follows:
 
 
 

                  MEDISYSTEMS CORPORATION
 
           
 
  By:                  
 
      Signature    
 
           
 
      Name:    
 
           
 
           
 
  Title:                  
 
           
 
      Date:    
 
           

 

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

 

Exhibit G
Medisystems Field Experience Worksheet
Date Received:                     
Received Via (Circle): Fax, Telephone, Letter     From:                     
Received By:                                         
Incident Date:                                         
No. of Patients/Donors:                          No. of Incidents:
                    
Product Code:                     
Lot Numbers(s):                                                               
No. of Products Involved:                     
Complainant: Name:                     
Title:                                                             
Health Care Professional (Circle): Yes/No
Occupation:                     
Facility:                     
Address:                                                             
City:                      State & Zip:                                         
Telephone: (___)                     
Complainant’s Ref. No:                     
Distributor(s):                         
Contact:                                                             
Complaint Description:
                                                                
                                                                              
                  
 
 
Patient/Donor Injury? (Circle): Yes / No

 

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

 

If yes, describe injury and any medical intervention (i.e., transfusion)
required:                                                                                           
 
 

         
Blood Loss? (Circle): Yes/No.
  Amount of Blood Loss:   <20cc. 20-100cc. >100cc.
 
      Exact Amount if Available; if not circle closest estimate

As appropriate list device and/or machine codes and lots which interfaced with
the complaint device: Item:                     
Code:                      Lot:                     
Item:                      Code:                      Lot:                     
 Will the complainant return samples? Yes / No.
Samples may be returned via Fedex with billing to Medisystems Account #
1058-39626
Did the user clinic or distributor file a MedWatch form with the FDA? (Circle)
Yes / No

       
(Signature)
  (Date)

Immediately fax form with all available information to Medisystems Seattle
(206) 621-6501.FRM-14-002a Rev 00

 

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

 

     
Exhibit H
[**] Format

                                                                               
                                                              Customer/        
                  [**]   Extended                                              
Ship To           Ship   Ship To   Ship     External   Supplier Item   Quantity
  File   Net   Per Unit   [**]           Shipped   Invoice   Order   Ship To  
Ship To   Address   Ship To   To   Postal   To   Adj. Contract   Number  
Shipped   Cost   Cost   Amount   Amount   Order Date   Date   Number   Number  
Number   Name   Lines   City   ST   Code   Ctry   Schedule
[**]
    K3-9690/9792       [**]       [**]       [**]       [**]       [**]      
[**]       [**]       7028506       5015015       773650     [**]   [**]   [**]
  OH     434208550     US     [**]  
[**]
    K3-9690/9792       [**]       [**]       [**]       [**]       [**]      
[**]       [**]       7028506       5015015       773650     [**]   [**]   [**]
  OH     434208550     US     [**]  
[**]
    K3-9690/9792       [**]       [**]       [**]       [**]       [**]      
[**]       [**]       7028506       5015015       773650     [**]   [**]   [**]
  OH     43420550     US     [**]  
[**]
    K3-9690/9792       [**]       [**]       [**]       [**]       [**]      
[**]       [**]       7028506       5015015       773650     [**]   [**]   [**]
  OH     43428550     US     [**]  

 

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

 

Exhibit I
[Date)
Mr. Richard Alexander
Vice President, Dialysis Division
Henry Schein, Inc.
135 Duryea Road
Melville, NY 11747
Dear Dick,
Per the Extracorporeal Disposables Distribution Agreement between Medisystems
Corporation (“MDS”), and Henry Schein, Inc. (“Schein”), (the “Agreement”),
following are a listing of items to be addressed by Henry Schein pursuant to the
Delivery Order(s) placed by Schein to MDS on                     .
Order Quantity: Pursuant to section 4.9 of the Agreement, “MDS shall not be
required to accept any Schein Delivery Orders with a common Order Date to the
extent that the quantity of Codes in any Code Group so ordered exceeds [**]
percent ([**]%) of the average monthly quantity ordered during the immediately
preceding [**] months.”
The table below depicts the averages of Delivery Orders accepted over the most
recent [**]-month period, the calculated maximum on-time delivery quantities per
the Agreement, and the                      Delivery Order quantities placed by
Schein in
                                                                       :

                              [**]-mo.                         Avg. of      
Original                 orders       Orders   Orders   Contractual  
Contractual     accepted   [**]%   Placed   accepted   Overage   Overage not    
(____-____)   Maximum                                                 Accepted  
Accepted
AVF Manufactured in Thailand (ea)
                       
 
                       
BTL Manufactured in Thailant (pr)
                       
 
                       
BTL Manufactured in Mexico (pr)
                       

The quantities listed in the Contractual Overage section are accepted for
delivery to Schein at dates exceeding the standard [**] day lead time window,
with estimated delivery dates to be confirmed to Schein via monthly Order
Fulfillment Reports.
Order Date: Pursuant to section 4.8 of the Agreement, “Any Delivery Order
provided to MDS after the [**] day of the month shall be deemed to have an Order
Date on the [**] day of the subsequent month.”

 

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

 

Exhibit I
The orders placed on                      are accepted as Delivery Orders placed
on the [**] and for delivery to Schein (for the quantities accepted for on-time
delivery) within the [**] day lead time delivery window from the accepted order
date of                     .
Obsolete Inventory / Excess Inventory: Pursuant to section 8.9 of the Agreement,
“if MDS notifies Schein that Schein is placing an order for Products that MDS
reasonably believes will become Obsolete Inventory or considered Excess
Inventory by Schein before such product can be sold, and notwithstanding such
advice Schein refuses to revise such orders within [**] business days, and
orders such volume, MDS will not accept the return of such Products.”
MDS Client Services and Schein’s purchasing group have agreed on revised
quantities on the delivery orders placed in                      per MDS’
notification. No further action is required at this time.
Purchase Commitment: Pursuant to section 4.3 of the Agreement, “during each [**]
month period during the Term of this Agreement, Schein shall purchase from MDS,
by way of valid Delivery Orders (as hereinafter defined) only, not less than
[**] pairs of MDS BTL and [**] each-equivalents of MDS AVF (the “Purchase
Commitment. The failure of Schein to order the minimum quantities of the
Purchase Commitments shall be a material breach of this Agreement, and shall
entitle MDS to terminate this Agreement pursuant to Section 14.1 hereof and to
seek any and all other remedies provided for in this Agreement.”

          Month   AVF (Ea)   BTL (Pr)
                                         *
       
                                         *
       
                                         *
       
 Totals
       
Purchase Commitment
       

 

*Final order quantity after mutually agreed upon revisions/

Additional Discount: Pursuant to section 6.5 of the Agreement, “Schein will
qualify for an additional [**]% discount (“Additional Discount”) from MDS,
provided their Net Purchases (as hereinafter defined) from MDS are greater than
$[**] over the most recent [**]-month period. If Schein does qualify for such
Additional Discount, the Additional Discount will be calculated at the
conclusion of the calendar quarter, and shall be credited to Schein within
[**] days of the end of the calendar quarter. Net Purchases are equal to the
dollar amount invoiced by MDS to Schein, less all credits and discounts,
including but not limited to all product returns, [**] and quick-pay discounts.”
The following are Schein’s Net Purchases over the [**]-month period ending
___/___/___:

                                                          MDS           Less:  
          Month   Invoices   Less: Credits   Discounts   Less: [**]   Less:
Returns   Net Purchases                            

                                                 
Totals
                                               
Requirement
    N/A       N/A       N/A       N/A       N/A     $ [**]  

 

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

 

Exhibit I
Obsolete or Excess Inventory: Pursuant to section 8.9 of the Agreement, “To the
degree that Schein has Obsolete Inventory or Excess Inventory (as hereinafter
defined) and Schein advises MDS of such Product inventory, Schein and MDS will
make reasonable cooperative efforts to transfer to other MDS Contract
Distributors; return to MDS; or promote to Schein’s customers at a reduced
price. Products that are no longer sold by MDS as a Code or specification
(“Obsolete Inventory”) or Products considered by Schein to be at inventory
levels greater than sales projections (“Excess Inventory”) may be requested for
return to MDS, up to a maximum of [**]% of the rolling [**] months Sales from
MDS to Schein, as measured on a pro rata basis at the end of each calendar
quarter during the Term of this Agreement, or $[**] per calendar quarter,
whichever is greater, (“Quarterly Credit”) without carryover of such Quarterly
Credit, provided that any such Products returned to MDS are no older than [**]
months after Sterilization Date.”
The following are MDS’ Sales to Schein over the past 12 months, by quarter:

          Quarter   Sales
Q_ ____
       
Q_ ____
       
Q_ ____
       
Q_ ____
       
Totals
       
[**]% of Sales
       
[**]% of Sales, pro-rata
       
Fixed amount per quarter
  $ [**]  
Amount submitted by Schein for return (Q_ ____)
       
Amount agreed to for return (Q_ ____)
       
Excess not allowed for return, if any (Q_ ____)
       

Thank you for your attention,
Sincerely,
Melanie Imperial
Senior Vice President
Medisystems Corporation

     
cc:
  Henry Schein Inc.
 
  [**]
 
  [**]
 
  [**]
 
   
 
  Medisystems Corporation
 
  [**]

 

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

 

Exhibit I

     
 
  [**]
 
  [**]