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Exhibit 10.2    
  


AIG
  Private Bank 


4-D
Neuroimaging, Inc.

Attn: Dr. Scott Buchanan, CEO

9727 Pacific Heights Blvd.

San Diego, CA 92121-3719

USA 


Zurich,
November 5, 2002 


Loan Agreement Nr 2498380  



Dear
Sirs, 


        With
reference to our various discussions, we are pleased to make available to you a loan facility on the following terms and conditions (hereinafter referred to as the "Agreement"): 


Borrower  


        4-D Neuroimaging, Inc. 9727 Pacific Heights Blvd., San Diego, CA 92121-3719, USA, formerly known as Biomagnetic
Technologies, Inc. (hereinafter referred to as the "Borrower") 



Lender  


        AIG Private Bank Ltd., Pelikanstrasse 37, P.O. Box 1376, CH-8021 Zurich 


        (hereinafter
referred to as the "Lender") 


Loan Amount  


        USD 1,000,000 (United States Dollars one million 00/100) 


Purpose  


        For general corporate purposes and for repayment of advances and/or services provided in 2002 to the Borrower totaling USD 570,000 payable to Dassesta
International S.A., as follows: Re. Dr. Enrique Maso, USD 125,000, Re. Swisspartners USD 125,000, Re. Sequoia Int. USD 200,000, Re. Carnet AG USD 120,000. 


Utilization & Payout  


        In the form of a fixed term advance in US Dollars payable as follows: 



	a)
	USD
570,000 to Dassesta International S.A.



	b)
	USD
430,000 to the Borrower, 4-D Neuroimaging, Inc., account number 3650000462 with Union Bank of California, SWIFT code BOFC US 33 MPK 




Term / Duration  


        This credit facility will be granted for an overall duration of one year after disbursement. 


Repayment  


        The Borrower shall repay in full all outstanding advances and interest amounts made to it on the Final Maturity Date, or before at his discretion, on any
roll-over date. 





 



Interest Rate  


        The Borrower agrees to pay interest on all outstanding principal amounts in accordance with the following provisions: 


        The
interest rate for fixed term advances is based on our refinancing costs in line with the current market conditions plus a fixed margin of 2.5% p.a. 


        Interest
will be calculated on the basis of the exact number of days elapsed, divided by a 360-day year (365/360) and will be payable at the end of each interest period. 



        If
any sum due and payable by the Borrower is not paid when due, the interest on any such amounts will be calculated on the basis of the refinancing costs of the Lender, together with
the margin of 5% (five per cent) per annum, for the period beginning with the due date until receipt by the Lender of the payment. 


        If
any payment date shall fall on a day on which banks in Zurich or New York are not open for business, such payment date shall be extended to the next succeeding business day unless
such business day falls in the next calendar month in which event such due date shall be the immediately preceeding business day. 


Security  


	1.
	Pledge
and assignment with the enclosed form "General Deed of Pledge" of Patents, Exhibit 1, currently assigned to 4D Neuroimaging, Inc., as listed in Exhibit A of
Exhibit 1.



	2.
	Pledge
and assignment with the enclosed form "General Deed of Pledge" of the MEG system current installed at the University of Alabama, Birmingham and owned by 4D
Neuroimaging, Inc., as described in Exhibit A of Exhibit 2.



	3.
	Pledge
and assignment by Dassesta International S.A. (hereinafter referred to as "Guarantor 1") in a form acceptable to the Lender of a time deposit in the amount of USD 570,000
(United States Dollars five hundred seventy thousand).



	4.
	Personnel
guarantee in the amount of USD 500,000 (United States Dollars five hundred thousand) by Mr. Martin P. Egli (hereinafter referred to as "Guarantor 2") in a form
acceptable to the Lender. 



Establishment Fee  


        The Borrower shall pay to the lender an Establishment Fee of USD 10,000 flat, due upon signing of this Agreement. At the Lender's discretion, this fee may be
either paid immediately or deducted upon disbursement. 


Costs, Fees and Expenses  


        The Borrower shall pay to the Lender on demand an amount equal to all costs, charges and expenses (including, but not limited to, legal expenses and stamp
registration or other duties) incurred by the Lender in connection with preparation and execution of this Agreement and the security and other
documentation contemplated hereby and all costs, charges and expenses (including legal expenses on a full indemnity basis) of the Lender in connection with the enforcement of or preservation of any of
its rights under this Agreement or otherwise in connection with the facility. 


2





 



Prepayment  


        The Borrower may at any time, upon prior written notice of 3 days to the Lender, prepay a portion of or the entire amount outstanding, as of the end of any
interest period. Amounts prepaid may not be reborrowed. 


Payments and Taxes  


        All payments to be made by the Borrower to the Lender under this Agreement shall be made in United States Dollars, freely disposable outside of bilateral or
multilateral payment agreements which may exist at the time of payment, free and clear of and without deduction of any taxes, levies, imposts, duties, charges, fees, deductions or withholdings of any
nature, now or hereafter imposed by or on behalf of any taxing authority or any other entity. 



Assignability  


        The Lender has the right to assign this Agreement to any party without the consent of the Borrower but it requires the consent of the Guarantor 2. 


Covenants  


        The Borrower covenants that, until full and final payment of all indebtedness and liabilities incurred hereunder, unless the Lender waives compliance in writing,
the Borrower will furnish the Lender with such information concerning the affairs of the Borrower as the Lender may reasonably request. 



Events of Default  


        The principal and accrued interest on any outstanding balances as well as any and all accrued fees and charges whatsoever under this Agreement, shall become
immediately due and payable, without need of further legal formality, at the option of and upon the first demand by the Lender, if: 



	a)
	the
Borrower shall default in the payment of principal or interest on any advance or of any other amount payable thereunder when the same shall become due and payable and such failure
continues for a period of 5 (five) business days without remedy;



	b)
	the
Borrower shall default in the performance of any term, covenant or condition contained in this agreement after written notice and failure to cure such default within thirty
(30) days from the receipt of such notice or an event of default in the performance of any other agreement between the Borrower and the Lender;



	c)
	any
representation or warranty made by the Borrower under this agreement or any certificate or documents furnished pursuant thereto, shall prove to have been untrue when made or at any
subsequent time to be incorrect in any material respect;



	d)
	any
other event occurs or circumstances arise which, in the opinion of the Lender is likely, materially and adversely, to affect the ability of the Borrower or any future mortgagor to
perform all or any of his or its obligations under or otherwise to comply with the terms of this Agreement. 




        The
Borrower shall hold the Lender harmless of and indemnify the Lender against any losses or expenses which the Lender may sustain or incur as a consequence of any Event of Default by
the Borrower as stipulated herein. 


        If
there is an Event of Default, the Lender reserves the right to increase the interest rate and/or the commission rate, not to exceed twelve (12% p.a.) percent per annum. 


3





 



Conditions Precedent  


        This agreement its made under the condition and the Lender's obligation to make this loan available is subject to the conditions precedent that the Lender shall
have received and approved the following: 



	a)
	A
signed copy of this agreement, each page initialed, bearing the authorized signature of the Borrower.



	b)
	Proper
and completed pledge and assignment of all the collateral as per cif. 1 - 3 of the Security paragraph.



	c)
	Personnel
guarantee of Mr. Martin P. Egli of USD 500,000 as per cif. 4 of the Security paragraph. 




Law governing the legal relationship between the Lender and the Borrower and Place of Jurisdiction  


        All legal aspects of the relationship between the Borrower and the Lender shall be governed by Swiss law. The place of performance, the exclusive place of
jurisdiction for lawsuits and all other kinds of legal proceedings and place of foreclosure shall be the domicile of the Lender. 


        The
Lender reserves the right to bring legal proceedings against the Borrower before any competent court at the domicile of the Borrower or any other court having jurisdiction over the
Borrower. 


        No
failure to exercise and no delay in exercising on the part of the Lender any of its rights hereunder shall operate as a waiver thereof, nor shall any single or partial exercise or any
rights preclude any other or further exercise thereof. 


        The
Borrower will furnish the Lender with the actual tested annual reports immediately after publication. 


        The
general pledge and assignment and our "General Banking Conditions" which you already received, form an integral part of this loan agreement. 


        We
hope that the above terms and conditions meet your requirements, and kindly request that you duly sign and return to us the enclosed duplicates of this agreement together will all
other required documents. 


We
look forward to hearing from you and remain 


Yours
truly, 



	AIG Private Bank Ltd.	 	 
	

/s/  WERNER VONTOBEL      
 Werner Vontobel

Member of Executive Management	
 	

/s/  RENATO DEPRETTO      
 Renato DePretto

Member of Management





To
AIG Private Bank Ltd.: 


        We
fully agree with and accept all of the terms and conditions contained in the above mentioned agreement. 


4





 



4-D
Neuroimaging, San Diego 



	Place/Date:	 	San Diego / Nov. 7, 2002
	 	/s/  D. SCOTT BUCHANAN      
 Scott Buchanan, CEO & President





        We
have taken notice of this Agreement and agree with all terms and conditions therein and relevant to the Guarantor. 


Dassesta
International S.A. 



	Place/Date:	 	 	 	 
	 	 	
	 	






        I,
Martin P. Egli, hereby personally guarantee the obligation of this loan agreement up to the amount of USD 500,000. 


Martin
P. Egli 



	Place/Date:	 	 	 	 
	 	 	
	 	
 Martin P. Egli




5





Exhibit 1  


GENERAL DEED OF PLEDGE  


        BE IT KNOWN, for value received, 4-D NEUROIMAGING ("Pledgor"), a California corporation, hereby pledges as collateral security to secure its repayment
of all amounts outstanding under the terms of the Loan Agreement between 4D and AIG Private Bank, Zurich, Switzerland dated November 7, 2002: 


        All
rights, titles, and interests in the United States Patents listed on the attached Exhibit A. 


        Further,
Pledgor hereby warrants and represents that it has good title to the patents being pledged, that they are free from liens and encumbrances or prior pledge, and that Pledgor has
full authority to transfer its interests in each and every patent listed in Exhibit A 


        Pledgor
further agrees that as long as this security is pledged to AIG Private Bank, it will take all reasonable actions to maintain the validity of each and every patent so listed and
that it will take no actions that will in any manner reduce the value of the pledged security. 


        Upon
default of payment of the debt by Pledgor, or upon breach of this pledge agreement, AIG Private Bank shall have full rights to foreclose on the pledged security and to exercise its
rights as a secured party pursuant to Article 9 of the Uniform Commercial Code; and said rights being cumulative with any other rights the Pledgee or holder may have against the Pledgor. 


        The
Pledgor understands that upon foreclosure the pledged security may be sold at public auction or public sale. The Pledgor shall be provided reasonable notice of any said intended sale
and the Pledgor shall have full rights to redeem said security at any time prior to said sale upon payment of the balance due hereunder, and accrued costs of collection. In the event the security
shall be sold for less than the amount then owing, the Pledgor shall be liable for any deficiency. 


        Upon
full repayment of the obligation for which the security is pledged, this security interest shall be returned to the Pledgor and this pledge agreement shall be terminated. 


        This
pledge agreement shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives. 



        This
pledge shall be governed by the laws of Switzerland. 


        Upon
default the Pledgor shall pay all reasonable attorneys' fees and cost of collections. 


        Signed
this 7th day of November, 2002 



	/s/  D. SCOTT BUCHANAN      
 D. Scott Buchanan

President and CEO

4-D Neuroimaging	 	    
 AIG Private Bank





        List
of Exhibits 



        Exhibit A        Active
U.S. Patents Held By 4-D Neuroimaging 







EXHIBIT A  


ACTIVE U.S. PATENTS held by 4-D NEUROIMAGING

as of October 24, 2002
  (Sort by Patent Number) 



	4,773,952	 	9/27/88	 	10185	 	Nonmetallic cylindrical cryogenic container
	4,827,217	 	5/2/89	 	10167	 	Low noise cryogenic apparatus for making magnetic measurements (Ferritometer)
	4,872,321	 	10/10/89	 	10238	 	Nonimmersive cryogenic cooler (cryocooler)
	4,933,040	 	6/12/90	 	10311	 	Hollow article formed of composite material
	4,977,896	 	12/18/90	 	10256	 	Analysis of biological signals using data from arrays of sensors
	5,027,819	 	7/2/91	 	10449	 	Measurement of Visually Induced Biomagnetic Response
	5,043,529	 	8/27/91	 	10435	 	Construction of shielded rooms using sealants
	5,061,680	 	10/29/91	 	10364	 	Superconducting biomagnetometer with remote pickup coil
	5,081,071	 	1/14/92	 	10239	 	Magnetically shielded enclosure
	5,121,055	 	6/9/92	 	10436	 	Verification of the operation of a biomagnetometer
	5,134,117	 	7/28/92	 	10552	 	High TC microbridge superconductor device utilizing stepped edge-to-edge SNS junction
	5,142,229	 	8/25/92	 	10541	 	Thin film three-axis magnetometer and SQUID detectors for use therein
	5,158,932	 	10/27/92	 	10442	 	Superconducting biomagnetometer with inductively coupled pickup coil
	5,220,921	 	6/22/93	 	10556	 	Nonmagnetic tactile stimulator and biomagnetometer utilizing the stimulator
	5,265,609	 	11/30/93	 	10555	 	Nonmagnetic body movement detector and biomagnetometer utilizing the detector
	5,269,325	 	12/14/93	 	10450	 	Analysis of biological signals using data from arrays of sensors
	5,305,751	 	4/26/94	 	10632	 	Measurement of liquid flows in a living organism
	5,313,944	 	5/24/94	 	10544	 	Measurement of internal body structure during biomagnetometry
	5,341,555	 	8/30/94	 	10696	 	Method of preparing film adhesive thermal foil
	5,346,570	 	9/13/94	 	10695	 	Cryogenic dewar and method of fabrication
	5,367,178	 	11/22/94	 	10694	 	High-Tc microbridge superconductor device utilizing stepped edge-to-edge SNS junction
	5,441,107	 	8/15/95	 	10793	 	Solid conductor thermal feedthrough
	5,442,289	 	8/15/95	 	10573	 	Biomagnetometer having flexible sensor
	5,444,372	 	8/22/95	 	10557	 	Magnetometer and method of measuring a magnetic field
	5,444,373	 	8/22/95	 	10629	 	Biomagnetometer with selectable pickup coil array
	5,452,550	 	9/26/95	 	10907	 	Magnetically shielded room with sliding door (cont. from 10545)
	5,471,985	 	12/5/95	 	10890	 	Biomagnetometer with whole head coverage of a seated or reclined subject
	5,494,033	 	2/27/96	 	10774	 	Biomagnetometer with sealed vacuum enclosure and solid conduction cooling
	5,494,101	 	2/27/96	 	11034	 	Solid conductor thermal feedthru (divisional #2 to 10793)
	5,497,828	 	3/12/96	 	11033	 	Solid conductor thermal feedthru (divisional #1 to 10793)
	5,506,200	 	4/9/96	 	10590	 	Compact superconducting magnetometer having no vacuum insulation
	5,526,811	 	6/18/96	 	10607	 	Apparatus and process for determining the sources of biomagnetic activity
	5,713,354	 	2/3/98	 	11019	 	Biomagnetometer with whole head coverage of a seated reclined subject
	5,794,622	 	8/18/98	 	10899	 	Measurement of Liquid Flows in a Living Organism
	5,806,318	 	9/15/98	 	11072	 	Cooling using a cryogenic liquid and a contacting gas
	5,962,866	 	10/5/99	 	10745	 	Microbridge superconductor device utilizing stepped junctions
	6,144,872	 	11/7/00	 	11418	 	Analyzing Events in the Thalamus by Noninvasive Measurements of the Cortex of the Brain








Exhibit 2  


GENERAL DEED OF PLEDGE  


        BE IT KNOWN, for value received, 4-D NEUROIMAGING ("Pledgor"), a California corporation, hereby pledges as collateral security to secure its repayment
of all amounts outstanding under the terms of the Loan Agreement between 4D and AIG Private Bank, Zurich, Switzerland dated November 7, 2002: 


        The
Magnes 2500 WH Magnetoencephalography ("MEG") System currently installed at the University of Alabama under the terms of THE MAGNES 2500 LEASE AGREEMENT dated January 26, 2000
("Lease"), attached hereto as Exhibit A. 


        Further,
Pledgor hereby warrants and represents that it has good title to the Magnes 2500 WH MEG System being pledged, that it is free from any liens and encumbrances or prior pledge
other than those under the terms of the Lease, and that Pledgor has full authority to transfer its interests in this System. 



        Pledgor
further agrees that as long as this security is pledged to AIG Private Bank, it will take all reasonable actions to maintain the Magnes 2500 WH MEG System pledged in good working
order, to fully meet Pledgor's obligations under the terms of the Lease, and that it will take no actions that will in any manner reduce the value of the pledged security. 


        Upon
default of payment of the debt by Pledgor, or upon breach of this pledge agreement, AIG Private Bank shall have full rights to foreclose on the pledged security and to exercise its
rights as a secured party pursuant to Article 9 of the Uniform Commercial Code; said rights being cumulative with any other rights the Pledgee or holder may have against the Pledgor. 



        The
Pledgor understands that upon foreclosure the pledged security may be sold at public auction or public sale, subject to any limitations arising under the terms of the Lease. The
Pledgor shall be provided reasonable notice of any said intended sale and the Pledgor shall have full rights to redeem said security at any time prior to said sale upon payment of the balance due
hereunder, and accrued costs of collection. In the event the security shall be sold for less than the amount then owing, the Pledgor shall be liable for any deficiency. 


        Upon
full repayment of the obligation for which the security is pledged, this security interest shall be returned to the Pledgor and this pledge agreement shall be terminated. 



        This
pledge agreement shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives. 


        This
pledge shall be governed by the laws of Switzerland. 


        Upon
default the Pledgor shall pay all reasonable attorneys' fees and cost of collections. 


        Signed
this 7th day of November, 2002 



	/s/  D. SCOTT BUCHANAN      
 D. Scott Buchanan

President and CEO

4-D Neuroimaging	 	    
 AIG Private Bank





        List
of Exhibits

                Exhibits A        Magnes 2500 Lease Agreement dated January 26, 2000 








Exhibit A  


 MAGNES 2500 LEASE AGREEMENT  


        THIS MAGNES 2500 LEASE AGREEMENT (hereinafter "Agreement") is made effective as of January 26, 2000 (hereinafter "Effective Date"), by and between
University of Alabama Health Services Foundation, P.C. ("Lessee") and 4-D Neuroimaging, Inc. ("Lessor"). 


WITNESSETH: 


        WHEREAS,
Lessor manufactures and supplies medical equipment necessary to perform magnetoencephalography (hereinafter "MEG"), a valuable new neurophysiologic tool that allows the combined
study of brain localization, described as magnetic source imaging ("MSI"); 


        WHEREAS,
Lessor owns a Magnes 2500 WH System used to provide MSI services; 


        WHEREAS,
Lessee believes that the use of the Magnes 2500 WH System at The Kirklin Clinic operated by Lessee will improve patient care and facilitate research opportunities; 



        WHEREAS,
Lessee desires to lease, with an option to purchase, a Magnes 2500 WH System from Lessor, and Lessor desires to so contract with Lessee, on the terms and conditions set forth
herein below; 


        NOW,
THEREFORE, in consideration of the premises and mutual covenants hereinafter set forth, the parties hereto agree as follows: 


        Section 1.    The System.    Subject to the provisions hereof, Lessor shall lease to Lessee, and Lessee shall
lease from Lessor, a Magnes 2500 WH System, as described in Exhibit A attached hereto and made a part hereof, together with all necessary replacement parts and accessories ("the System"), for
Lessee's exclusive use during the term of this Agreement. Lessee shall provide adequate space for the operation of the System. Lessor, at its sole cost and expense, shall construct a magnetically
shielded room to house the System and its supporting gantry, a patient table and other patient monitoring equipment, and shall install the System in good working condition at the location specified by
Lessee. 


        Section 2.    Maintenance and Warranty.    Lessor shall, at its sole cost and expense, be responsible for all
service and maintenance, including without limitation labor and parts, necessary to maintain the System in good working condition and repair during the entire term of this Agreement. Lessor warrants
and represents to Lessee that the System is and will be sufficient, safe and adequate for the uses to which it is intended to be put, specifically, the performance of MEG and related procedures. 


        Section 3.    Training.    Lessor shall ensure that Lessee's staff acquires the training necessary to operate
the System properly. Without limiting said training obligation, Lessor agrees to train one (1) technologist and one (1) physician designated by Lessee for up to four (4) weeks at
a site designated by Lessor. Lessor shall be solely responsible for all local expenses of said technologist and physician during the training, including without limitation reasonable food, lodging and
miscellaneous living expenses. Lessee shall be solely responsible for the travel expenses of said technologist and physician to and from the site of such training. Lessor will train additional Lessee
personnel during the same training session upon Lessee's request, provided Lessee agrees to be responsible for all of the local and travel expenses of each such additional trainee. 


        Section 4.    Supplies.    Lessee shall be responsible for purchasing all disposable materials used in
connection with the operation of the System. 


        Section 5.    Title to the System.    Lessor owns the System and shall retain title to the System at all times
during the term of this Agreement. This Agreement authorizes Lessee's exclusive use of the System only, and nothing in this Agreement transfers to Lessee any right, title or interest in the System,
except the exclusive right to use the System during the term of this Agreement. At the request of Lessor, Lessee will affix to the System a notice provided by Lessor identifying the System as owned by
Lessor. Lessee agrees to keep the System free from all liens, claims and other legal process of its creditors and other parties. Lessee shall give Lessor notice in writing of any lien, claim or other
legal 










process of its creditors and other parties that involves the System. Provided the parties do not enter into a lease extension or an alternative arrangement, including without limitation the exercise
of the purchase option described in Section 11 hereof, Lessee agrees to make the System available to Lessor upon expiration or termination of this Agreement. In such event, Lessor shall be
responsible for all costs associated with recovering the System. 


        Section 6.    Billing.    Lessee shall be solely responsible for the submission of all claims for payment for
procedures performed using the System, and all payments received by Lessee for such procedures shall be the sole property of Lessee. Lessee shall make best effort attempts to obtain claims for
payment. Lessor agrees not to bill under any circumstances any amounts for procedures performed using the System. 


        Section 7.    Lease Payment.    



        (a)  For
use of the System and all other services provided by Lessor pursuant to this Agreement, Lessee shall pay Lessor the amount due calculated in accordance with
Exhibit B attached hereto and made a part hereof. The parties hereby acknowledge that because the technology associated with the System is new and the reimbursement rates for procedures
performed using the System are currently uncertain, said Exhibit B may be modified upon mutual agreement of the parties as of each anniversary of the Effective Date of this Agreement to ensure
that it adequately reflects fair market value for the lease of the System. 


        (b)  At
the end of each month during the term of this Agreement, Lessee will determine the amounts received by Lessee in reimbursement for procedures performed by Lessee
using the System and calculate the amount due to Lessor in accordance with Exhibit B. Lessee's payments shall be made on or before the tenth (10th) day of the following month.
Lessee will provide reasonable documentation supporting its lease payments hereunder upon Lessor's request. 




        Section 8.    Insurance; Risk of Loss.    Lessor shall, at its sole cost and expense, at all times during the
term of this Agreement maintain liability insurance covering the System against and all damage, loss or theft. Lessor shall be solely liable for any damage to the System from any cause whatsoever, and
shall indemnify and hold harmless Lessee and its directors, officers, employees and agents from any and all claims, actions, liability, and expenses (including costs of judgments, settlements, court
costs, and attorneys fees, regardless of the outcome of such claim or action) caused by or resulting from the operations of the System, unless such items are the sole result of the negligent acts or
omissions of Lessee. Said indemnification and hold harmless obligation on the part of Lessor shall survive termination or expiration of this Agreement. 


        Section 9.    Taxes.    Lessee will assist Lessor in qualifying the System for a personal property tax
exemption. In the event the exemption is not granted, or until the granting of the exemption, Lessor shall pay, at its sole cost and expense, any and all personal property taxes attributed to the
System. Lessor shall indemnify and hold harmless Lessee and its directors, officers, employees and agents from any and all claims, actions, liability and expense expenses (including costs of
judgments, settlements, court costs, and attorneys fees, regardless of the outcome of such claim or action) caused by or resulting from Lessor's failure to comply with this Section 9. 


        Section 10.    Term and Termination.    



        (a)  Subject
to the termination provisions set forth below, this Agreement shall be for a term of two (2) years, commencing on the Effective Date and ending
twenty-four (24) months thereafter. 


        (b)  Subject
to the provisions of Section 13, if any term, condition or provision of this Agreement violates and applicable regulation, law or agency interpretation
thereof, either party may terminate this Agreement in accordance with Section 13. 


        (c)  Either
party may terminate this Agreement upon breach by the other party of any material provisions of this Agreement, provided such breach continues for thirty
(30) days after receipt by the breaching party of written notice of such breach from the non-breaching party. 










        (d)  Upon
the expiration or any termination of this Agreement, Lessee shall pay Lessor in accordance with Section 7 hereof for all MEG procedures performed with the
System while this Agreement was in effect, in accordance with Exhibit B. 




        Section 11.    Option to Purchase.    Lessee shall have the option, at any time during the term of this
Agreement, to purchase the System. In such event, Lessee shall notify Lessor in writing of its intent to purchase the System, and the parties will negotiate in good faith a purchase price for the
System and an agreement of purchase and sale. The parties agree to use their best efforts to consummate said transaction within sixty (60) days of the date of Lessee's notice to Lessor under
this Section 11. 


        Section 12.    Confidential Information.    All information that has not been specifically designated for
release to the public by an authorized representative of the party owning the information, or that has not actually been released to the public, including without limitation, trade secrets, plans,
pricing information, medical records, patient lists, and other information developed by or originated by either party for its own use (hereinafter "Confidential Information"), which comes into the
possession of the other party by reason of this Agreement is, and shall remain, the sole property of the originating party. Neither party shall, during the term of this Agreement or thereafter,
disclose or acknowledge the contents of any Confidential Information of the other party to any person, other than as authorized in writing by an authorized representative of the party to whom the
information belongs. The provisions of this Section 12 shall survive the termination of this Agreement. 


        Section 13.    Compliance With Laws.    It is not a purpose, nor is it a requirement, of this Agreement or of
any other agreement between the parties, to offer, receive, solicit or pay any remuneration directly or indirectly to induce or encourage the referral of any patient for items and services for which
payment may be made in whole or in part by any federal or state health care program, including, but not limited to, Medicare, Medicaid or TRICARE/CAMPUS. The parties expressly acknowledge that it has
been and continues to be their intent to comply fully with all applicable federal, state and local laws, rules and regulations governing the health care industry and tax-exempt entities.
Accordingly, the parties agree to renegotiate, in good faith, any term, condition or provision of this Agreement that any applicable governmental or regulatory authority, or counsel for either party
hereto, determines to be in contravention of any regulation or law or agency interpretation thereof. In conducting the negotiations, the parties shall consult and negotiate with each other in good
faith and, recognizing their mutual
interest, attempt to reach a just and equitable solution satisfactory to both parties. If they are not able to reach a mutually acceptable solution within thirty (30) days of the date on which
a party notifies the other in writing of the need for negotiation, then the party providing such notice may terminate this Agreement on thirty (30) days written notice. Either party may
withhold any payments it believes violate the applicable law, regulation or agency interpretation thereof. 


        Section 14.    Independent Contractors.    The parties are independent contractors. Neither party is an agent,
partner, associate, joint venturer or employee of the other. The employees of each party shall not be eligible for any employee benefit programs of the other party. Neither party shall withhold or be
responsible for the payment of any income taxes, social security payments, unemployment payments, or other like taxes imposed by any federal, state, or local government on account of any amounts due
from any party to its employees under the terms of this Agreement. Neither party shall be responsible for the direct payment of any compensation to any employees of the other party for any services
performed pursuant to this Agreement, and each party acknowledges that it shall be solely responsible for the payment of any such compensation or other remuneration to any of its employees. Nothing in
this Agreement shall be construed to be inconsistent with this independent relationship or status. 


        Section 15.    Interpretation.    This Agreement has been negotiated at arm's-length by the Lessor and Lessee,
and its terms shall not be construed against or interpreted to the disadvantage of any party by reason of such party having being deemed to have structured or dictated such provision. 








        Section 16.    Notices.    Any notice, report or demand required or permitted by any provision of this
Agreement shall be deemed to have been sufficiently given or served for all purposes if it is sent by certified mail, postage and charges prepaid, and as follows: 




To
Lessor:

Aron Stern

4-D Neuroimaging. Inc.

9727 Pacific Heights Blvd.

San Diego, CA 92121 


To
Lessee:

Patricia J. Pritchett, Esquire

Office of Counsel

University of Alabama Health Services Foundation, P.C.

300 Liberty National Building

301 20th Street South

Birmingham, Alabama 35233-2023 





        Section 17.    Entire Agreement.    This Agreement contains the entire understanding and agreement of the
parties, and no modifications hereto or additions hereto have been agreed to or will be binding hereafter unless agreed to in writing by the parties to the Agreement. This Agreement supersedes all
prior agreements concerning the subject matter herein between the parties, and such prior agreements are hereby terminated by this Agreement. 


        Section 18.    Severability.    Should any court of competent jurisdiction decide, hold, adjudge or decree that
any provision, paragraph, clause or term of this Agreement is void or unenforceable, in whole or as applied in a particular situation, such determination shall not affect any other provision of this
Agreement, and all other provisions of this Agreement shall remain in full force and effect in such situation, and all provisions of this Agreement shall remain in full force and effect in any and all
other situations. 


        Section 19.    Assignment.    The Agreement may not be assigned by either party, whether voluntarily or by
operation of law, except with the prior written consent of the other party, which consent shall not be unreasonably withheld. In the event Lessor makes any such assignment, it shall in any event
continue to be responsible for its warranty and maintenance obligations as set forth in Section 2 hereof, and its indemnification obligations as set forth in Section 8 hereof. 



        Section 20.    Binding Effect of Agreement.    This Agreement shall be binding upon annd inure to the benefit
of the successors and permitted assigns of any party hereto, and any such successor or assign shall be deemed substituted for such party under the terms of this Agreement. 


        Section 21.    Waiver.    No provision hereof may be waived except by an agreement in writing signed by the
waiving party. The waiver of any term or provision of this Agreement shall not be construed as a waiver of any other term or provision hereof. The waiver by any party hereto of a breach or violation
of any provision of this Agreement shall not operate as or be construed to be a waiver of any subsequent breach hereof. 


        Section 22.    Governing Law.    This Agreement shall be interpreted, construed and enforced according to the
laws of the State of Alabama without regard to provisions relating to conflicts of law. 


        Section 23.    Counterparts.    This Agreement may be executed in any number of counterparts, each of which
when executed and delivered shall be an original, but all of which together shall constitute one and the same instrument. 


        Section 24.    Captions and Headings.    The captions and headings throughout this Agreement are for
convenience and reference only, and the words contained therein shall in no way be held or deemed to
define, limit, describe, explain, modify, amplify or add to the interpretation, construction or meaning of any provision of, or to the scope or intent of this Agreement nor in any way affect this
Agreement. 








        IN
WITNESS WHEREOF, each of Lessee and Lessor have caused this Agreement to be executed by its duly authorized officer, all as of the day and year first above written. 



	 	 	University of Alabama Health Services Foundation, P.C.
	

 	
 	

By:	

/s/  STEVEN C. SCHULTZ      

	 	 	Its:	Executive President

	

 	
 	

4-D Neuroimaging, Inc.
	

 	
 	

By:	

/s/  D. SCOTT BUCHANAN      

	 	 	Its:	President & CEO






	ACKNOWLEDGEMENT:	 	 
	

DEPARTMENT OF NEUROLOGY	
 	

 
	

By:	

/s/  JOHN N. WHITAKER      
 John N. Whitaker, M.D.

Chairman	
 	

 








Exhibit A  


MAGNES® 2500 WH DESCRIPTION  


 PRODUCT DESCRIPTION AND SPECIFICATIONS  



	 	SENSOR	 	 
	 	

Sensor Geometry	
 	

Helmet-Style design
	

 	
 	

Accommodates 98th percentile adult head size
	

 	
 	

Eye clearance allows for visual studies and reduces claustrophobia
	

 	
 	

Ear relief provides greater patient comfort, closer average coil-to-head spacing and room for auditory stimulus delivery
	 	

Area of coverage	
 	

Covers entire cortical surface
	 	

Magnetic detection coils	
 	

148
	 	

Average inter-coil spacing	
 	

2.9 cm (varies between 2.8 and 3.2 cm)
	 	

Coil configuration	
 	

Magnetometers with fixed weight noise reduction
	 	

Coil distance to helmet surface	
 	

Not to exceed 1.6 cm
	 	

Ambient noise detectors	
 	

8
	 	

Measuring position	
 	

Any angle between vertical and horizontal to accommodate both seated and supine patient/subject positions
	 	

INTRINSIC SYSTEM NOISE	
 	

 
	 	

Definition	
 	

Intrinsic system noise is the system noise measured in the absence of any noise due to environmental sources and without a patient or test subject present
	 	

0.5 Hz to 1500 Hz	
 	

<10 fT/vHz average over frequency and across all channels
	 	

SENSOR GANTRY	
 	

 
	 	

Mounting	
 	

Ceiling mounted to conserve floor space
	 	

 	
 	

Mechanical construction reduces sensitivity to external vibration
	 	

Positioning adjustment	
 	

Sensor can be positioned to accommodate patient positions ranging from seated to supine
	 	

LOCALIZATION ACCURACY (PHANTOM)
	 	

Dipole source localization in spherical test phantom surface	
 	

Within 4 mm of true position for dipoles at depths from 1.5 to 5.5 cm below phantom
	 	

MINIMUM DETECTABLE DIPOLE (PHANTOM)
	 	

Minimum detectable dipole in spherical test phantom	
 	

0.2nAm/vHz at 2 cm depth
	

 	
 	

2nAm/vHz at 5 cm depth
	
 	
 	

 







	 	

DATA ACQUISITION	
 	

 
	 	

Number of channels	
 	

258 channels total
	

 	
 	

148 magnetic signal channels
	

 	
 	

8 noise reference channels
	

 	
 	

3 derived reference channels
	

 	
 	

96 auxiliary channels available for electrical signals (e.g., user determined combination of EEG/ECG/EMG signals; preamplifiers not optional)
	

 	
 	

1 utility channel
	

 	
 	

2 trigger/response channels
	 	

Signal coupling	
 	

DC or AC (high pass filtered at 0.1Hz or 1.0 Hz; other cutoffs available digital processing)
	 	

A/D Conversion	
 	

16 bit per channel (>92 dB dynamic range)
	

 	
 	

2 kHz sampling rate for all channels, 4 kHz for 193 channels
	 	

DC offset control	
 	

Automatic for magnetic channels (post processing)
	 	

Analog bandwidth	
 	

User selectable from 12-1500 Hz
	 	

Stimulus synchronization	
 	

Controlled via trigger inputs and outputs
	 	

 	
 	

Multiple stimulus recording is supported
	 	

Trigger input	
 	

1-16 TTL-level single bit ports with 16-31 bits for trigger coding (user configurable)
	 	

Trigger output	
 	

16 TTL-level single bit ports (BNC connection)
	 	

Acquisition modes	
 	

Continuous
	

 	
 	

Stimulus trigger epochs
	

 	
 	

Manually triggered epochs
	

 	
 	

Threshold triggered epochs (triggered from external channels)
	 	

Signal Processing	
 	

Collect individual epochs or averages only Multi-processor architecture
	

 	
 	

Real-time averaging
	

 	
 	

User selectable digital filters
	

 	
 	

On-line noise removal using reference channels
	 	

EEG Interface	
 	

Interfaces to existing Analog EEG interface provided at no charge

        —Up to 96 channels

        —Includes cabling and head box interface
	
 	
 	

 







	 	

Real-time outputs	
 	

Continuous mode: Video display of up to 76 user-selected channels
	

 	
 	

Epoch mode: Video display of up to 32 user-selected output signals (averaged and/or raw data)
	

 	
 	

Sensor geometry layout display in epoch mode for user-selected regions
	

 	
 	

Mixed Continuous and Epoch mode display available
	 	

DATA ANALYSIS SOFTWARE
	 	

Post acquisition processing tools	
 	

Average and variance calculation
	

 	
 	

DC offset removal
	

 	
 	

Digital filtering
	

 	
 	

Selected channels may be deleted from analysis
	

 	
 	

Dipole location estimation using entire array or user-defined subset
	

 	
 	

Dipole selection and display (with labels)
	

 	
 	

Decimation
	

 	
 	

Waveform polarity inversion
	

 	
 	

Fast Fourier Transformation
	

 	
 	

Event identification
	

 	
 	

Boolean averaging according to stimulus and response criteria
	 	

Other features	
 	

Selective averaging Rapid dipole fitting and automated screening of dipole fits against user-selected criteria (especially valuable for spontaneous data analysis)
	

 	
 	

Dipole modeling accounts for head shape (local sphere) and volume currents; multiple local spheres can be used to account for variations in head shape over the extent of the array
	

 	
 	

MR/CT image data import for dipole overlay display (file conversion provided for one user-specified MR/CT scanner)
	

 	
 	

Patient database management
	

 	
 	

Somatosensory evoked response protocol
	

 	
 	

Optical disk-to-tape data transfer utility
	

 	
 	

Helium level and gas flow monitoring
	 	

HOST COMPUTER
	 	

Internal description	
 	

Sun Microsystems TM Ultra 60
	

 	
 	

Solaris® 2.6
	

 	
 	

Accelerated 3D color graphics
	

 	
 	

256 MB of RAM
	 	

Display	
 	

20-inch color monitor, 1280 X 1024 pixel resolution
	 	

On-line data storage	
 	

18 GB hard disk
	
 	
 	

 







	 	

Data archive	
 	

1.3 GB erasable optical disk drive
	 	

Local network	
 	

Ethernet interface
	 	

Software	
 	

Sun Operating system Magnes MSI Software license
	 	

REMOTE ANALYSIS WORKSTATION
	 	

Internal description	
 	

Sun Microsystems Ultra 60
	

 	
 	

Solaris 2.6
	

 	
 	

Accelerated 3D color graphics
	

 	
 	

256 MB of RAM
	 	

Display	
 	

20-inch color monitor, 1280 X 1024 pixel resolution
	 	

On-line data storage	
 	

18 GB hard disk
	 	

Data archive	
 	

1.3 GB erasable optical disk drive
	 	

Local network	
 	

Ethernet interface
	 	

Peripherals	
 	

Laser Printer

        —1200 dpi print quality

        —16 ppm at 600 dpi

        —4 MB RAM

        —Postscript Level 2 emulation
	

 	
 	

Color LaserPrinter

        —Fully networkable

        —Image Scaling, color adjustment and multiformatting

        —Paper and transparency output

        —Postscript Level 3
	 	

Software	
 	

Solaris Operating system
	

 	
 	

Magnes MSI Software license
	

 	
 	

DAT tape drive
	

 	
 	

CD Plus Package
	 	

CRYOGENIC SYSTEM
	 	

Helium boil-off rate	
 	

12 liters/day maximum with Dewar in vertical position
	 	

Average refill interval	
 	

2 times/week
	 	

Helium liquid level	
 	

Video display monitor
	 	

Helium gas flow	
 	

Monitored for abnormally high or low flow rate with alarm
	 	

Helium gas recovery	
 	

Interface connector available
	 	

Service tools	
 	

Helium transfer line
	 	

 	
 	

Liquid helium handling accessories
	 	

HEAD DIGITIZATION UNIT
	 	

Description	
 	

Digitizing stylus with remote on/off switch to record head shape information used in dipole modeling analysis

May also be used to record locations of EEG electrodes
	
 	
 	

 







	 	

SENSOR/HEAD POSITION INDICATOR
	 	

Description	
 	

Sensor position is automatically determined with respect to locating coils affixed to the subject's head at anatomically defined locations
	 	

HEAD PHANTON	
 	

 
	 	

General description	
 	

Spherical container (95 cm diameter) filled with saline solution and mounted on stand
	 	

Sources	
 	

5 individually selectable current dipoles at calibrated positions between 1.5 and 5.5 cm below surface
	 	

Signal	
 	

Computer triggered waveform
	 	

Dipole strength	
 	

Adjustable current
	 	

PATIENT TABLE	
 	

 
	 	

Positioning	
 	

As required to accommodate both seated and supine positions
	 	

Vacuum pillow	
 	

Vacuum pillow for patient stabilization
	 	

MANUALS	
 	

 
	 	

Manuals	
 	

Operator's Manual
	

 	
 	

Software Reference Manual
	

 	
 	

Programmer's Reference Guide
	

 	
 	

Solaris documentation on CD ROM
	

 	
 	

Operating manuals for third-party equipment supplied with system
	 	

MAGNETICALLY SHIELDED ROOM
	 	

Internal Dimensions	
 	

2.90 m wide × 3.94 m deep × 2.40 m high (minimum dimensions without wall covering)
	 	

External Dimensions	
 	

3.30 m wide × 4.47 m deep × 2.90 m high (maximum dimensions without wall covering)
	 	

Door Dimensions	
 	

1 m wide × 2 m high
	 	

Total Weight	
 	

Not to exceed 10,200 kg (22,400 lb)
	 	

Internal Coverings	
 	

4 walls, ceiling and floor
	 	

External Coverings	
 	

As required for exposed surfaces
	 	

Accessories	
 	

Video camera
	

 	
 	

2-way voice intercom
	

 	
 	

Magnetically compatible lighting
	

 	
 	

Feedthrough panel, connectors and covers







Exhibit B  


        Lessee shall calculate the lease payment due under this Agreement in one of the following three manners, depending upon the type of patient served: 


        1.    Indigent Patients.    Lessee shall not be required to pay to Lessor any amount for services provided to indigent
patients using the System, provided each patient is determined to be indigent in accordance with UAHSF-MSO Policy Manual Charity and Discounted Care Guidelines, as amended from time to
time. 


        2.    Research Patients.    Lessee shall pay Lessor a per-use fee for each research patient evaluated
using the System, equal to sixty percent (60%) of the amount paid for the procedure under the arrangement negotiated by Lessee with the applicable research sponsor organization. 


        3.    Patients other than Indigent Patients and Research Patients.    Lessee shall pay Lessor a per use fee equal to
fifty percent (50%) of the Global Fee (such professional and technical fees as may be collected by Lessee) received from each third-party payor for each MEG procedure provided to a patient with the
use of System. 











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Exhibit 10.2