<PAGE>


                                DISTRIBUTION AGREEMENT


    THIS AGREEMENT, effective as of April 2, 1996, between CARDIOVASCULAR
DIAGNOSTICS, INC., a corporation organized and existing under the laws of North
Carolina, with its principal  offices located at 5301 Departure Drive, Raleigh,
North Carolina ("CVDI"), and AVECOR, a Minnesota corporation having its
principal place of business in Minneapolis, MN ("AVECOR").

                                 W I T N E S S E T H:
    WHEREAS, CVDI, among other things, is engaged in the manufacture of certain
hemostasis diagnostic products; and;

    WHEREAS, AVECOR has experience and capability in the marketing and
distribution of hemostasis diagnostic products and desires to distribute such
products;
    NOW, THEREFORE, the parties agree as follows:

1.  DEFINITIONS.
    The following capitalized terms shall have the meanings set forth below:

    1.1   "ACT" means the Food, Drug and Cosmetic Act (21 U.S.C. Sections 301
          et seq.) and the regulations promulgated thereunder and all foreign
          equivalents thereof.
    1.2   "AFFILIATE" means any person or entity which, directly or
          indirectly, through one or more intermediaries, controls, is
          controlled by, or is under common control with, a party. "Control"
          means the direct or indirect, legal or beneficial, (a) ownership of
          more than 50% of the outstanding voting rights of such person or
          entity or (b) the power or ability to direct the management or
          policies of such person or entity.
    1.3   "FDA" means the United States Food and Drug Administration or any
          successor agency, and all foreign equivalents thereof.
    1.4   "FUTURE PRODUCTS" means Heparin Management Panel, AT test card and
          related controls, and ACCENT hardware.
    1.5   "GOOD MANUFACTURING PRACTICES" or "GMP" means the applicable current
          good manufacturing practices promulgated from time to time by the
          FDA in accordance with the Act, and all foreign equivalents thereof. 
          
    1.6   "INSTRUMENTS" means CVDI's manual, compact, single test, portable
          analyzer, the TAS (thrombolytic assessment system), which provides
          point of patient care evaluations of hemostasis. 
    1.7   "NEW PRODUCTS" means improvements and enhancements of Products, but
          shall not include increased card dating, Alliance Cards, Specialty
          Cards, nor AVECOR Alliance Cards.
    1.8   "PRODUCTS" means all products described on SCHEDULE 1.11. 
          "PRODUCTS" includes Instruments and Specialty Cards.


                                          1

<PAGE>

    1.9   "SPECIALTY CARDS" means CVDI's HMT Card and related controls.
    1.10  "TERRITORY" means the United States and Canada.


2.  DISTRIBUTION OF SPECIALTY CARDS.
    2.1   GRANT.  Subject to the limitations contained herein, CVDI hereby
          grants to AVECOR, the sole and exclusive right to sell, market,
          promote, distribute, and otherwise transfer, dispose, provide and
          place ("sell") the Specialty Cards in the Territory. CVDI shall not,
          directly or indirectly, through technology licensing or otherwise,
          grant any third party any right to sell Specialty Cards in the
          Territory during the term of this Agreement.  Subject to the
          limitations contained herein, CVDI hereby grants AVECOR the
          exclusive right to distribute Future Products in the Territory
          during the term of this Agreement, provided the minimum sales
          requirements for Future Products shall be as agreed by the parties
          within ninety (90) days of notice by CVDI of the opportunity
          regarding the distribution of Future Products.  AVECOR may upon the
          prior written approval of CVDI, which may be withheld in its sole
          discretion, distribute the Products directly or through one or more
          agents ("Subdistributors") and shall be solely responsible for
          determining the number, location and qualifications of
          Subdistributors; provided, however that any such permitted
          Subdistributors enter into an agreement which includes the
          substantive provisions of this Agreement.
    2.2   EXCLUSIVITY.  During the term of this Agreement, neither AVECOR, nor
          any of its Affiliates, shall sell in the Territory any whole blood
          or plasma, point of care Specialty Cards except under the terms of
          this Agreement.  Neither AVECOR nor any of its Affiliates or
          distributors shall distribute Products outside the Territory.
    2.3   REQUIREMENTS.  AVECOR and its Affiliates shall purchase, and CVDI
          shall supply all of AVECOR's and it's Affiliates' requirements of
          Products, for resale within the Territory.   During the term of this
          Agreement, neither AVECOR nor any of its Affiliates shall
          manufacture any such Products or purchase any such Products from a
          supplier other than CVDI.
    2.4   PERFORMANCE REQUIREMENTS.  AVECOR shall use reasonable efforts to
          promote the sale of the Products.   AVECOR contemplates that the
          promotional efforts may include preparing promotional materials to
          be used in the Territory by AVECOR, participating in appropriate
          trade shows, advertising in trade publications applicable to the
          Territory and directly soliciting orders from customers within the
          Territory by the appropriate AVECOR sales force.  AVECOR shall be
          responsible for training customers with respect to Products sold. 
          AVECOR shall comply with the Act and other applicable, legal, health
          and safety requirements, laws and regulations in all of their
          marketing and sales activities.  AVECOR shall not promote the
          Products for any uses not approved for Products by applicable
          regulatory agencies.


                                          2

<PAGE>

    2.5   TERMS AND CONDITIONS.  All orders for Products shall be initiated by
          written purchase orders.  No order shall be binding unless
          consistent with this Agreement.  Acceptance by CVDI of AVECOR's
          purchase order is expressly limited to and conditioned upon, and
          only upon, AVECOR's acceptance of the terms and conditions set forth
          in this Agreement, which may not be changed or waived except in a
          writing signed by the parties.  AVECOR's purchase orders submitted
          to CVDI shall be governed by the terms of this Agreement and CVDI's
          published Standard Terms and Conditions of Sale as in effect at the
          time of such purchase; provided, however, that in the event of a
          conflict between the terms of this Agreement and CVDI's Standard
          Terms and Conditions of Sale, this Agreement shall control and any
          additional, inconsistent or different terms and conditions contained
          in any purchase order, acknowledgment, confirmation, acceptance,
          invoice, or other documents supplied by AVECOR or CVDI are hereby
          expressly rejected.  A copy of CVDI's Standard Terms and Conditions
          of Sale is attached hereto as Schedule 2.5.  CVDI shall not
          arbitrarily change its Standard Terms and Conditions.  CVDI shall
          advise AVECOR in writing at least thirty (30) days in advance of any
          proposed material changes to the Standard Terms and Conditions.  
    2.6   REJECTION. AVECOR shall notify CVDI of obvious damage relating to
          the manufacturing or packaging of the Products (other than damage
          solely associated with the shipping of the Products) within 90 days
          of their respective receipt of the Products.  Any such Product not
          rejected for obvious  damage within  ninety (90) days after  receipt
          by AVECOR or its distributors (the "Rejection Period") shall be
          deemed accepted.  A rejection by AVECOR shall mean that CVDI has
          received within the Rejection Period written notice of such
          rejection stating with particularity the reason therefor.  CVDI
          shall as promptly as possible replace any rejected Products.  After
          the Rejection Period, AVECOR may not return any such obviously
          damaged Products for any reason without CVDI's prior written
          consent.
    2.7   FUTURE PRODUCTS.  CVDI and AVECOR shall negotiate the provisions of
          Section 2.1 in good faith for distribution rights to Future
          Products, prices and minimum sales levels relating to such Future
          Products.


                                          3

<PAGE>

3.  MARKETING AND SUPPORT ACTIVITIES.
    3.1   MARKETING MEETINGS; REPORTS.  The parties shall meet at least semi-
          annually to discuss market plans, product improvement suggestions
          and other information concerning the marketing and development of
          the Products.  AVECOR shall provide information available to it
          about the Products and its ability to compete with other diagnostic
          products for related uses and to meet customer needs.  AVECOR shall
          provide CVDI general information regarding sales of the Products
          such as pricing trends by geographic region as well as sales
          information indicating sales by country and by geographic region. 
    3.2   PROMOTIONAL MATERIAL.  CVDI will furnish AVECOR with copies of
          promotional literature and advertisements it prepares for the
          Product.  AVECOR shall not copy or utilize any promotional material
          prepared by it without obtaining the prior written approval thereof
          from CVDI. CVDI's approval shall not be unreasonably withheld or
          delayed.  CVDI and AVECOR shall comply with all requirements of the
          Act, local laws, regulations and other laws in their advertising and
          other promotional activities.
    3.3   PACKAGING, LABELING.  CVDI shall manufacture, label and package the 
          Products in final form for distribution by AVECOR.  In addition to
          all applicable legal requirements, the labels shall comply with the
          requirements set forth in Section 3.4 below, shall display "CVDI"
          and shall identify CVDI as the manufacturer of the Products.  AVECOR
          shall not repackage or label any Products and shall not alter any
          Products or any package or label used in connection with any
          Products except as specifically authorized by CVDI.  In the event
          that CVDI shall authorize or require repackaging or re-labeling,
          AVECOR shall comply in all respects with the instructions of CVDI,
          at the expense of CVDI.
    3.4   TRADEMARKS AND TRADE NAMES.  CVDI hereby grants AVECOR the
          nontransferable, nonexclusive right to use in the Territory the
          trademarks and tradenames listed on Schedule 3.4, and any other
          trademarks owned by CVDI which it may designate in writing for use
          by AVECOR (the "Trademarks"), in connection with the marketing and
          sale of the Products for the duration of the Agreement.  The
          Products shall be marketed and sold only under the Trademarks, and
          the name "CVDI" as required under Section 3.3.  AVECOR acknowledges
          that it has and will obtain no proprietary interest in the
          Trademarks and agrees not to use the same as part of its corporate
          or business name.  AVECOR's right to the use of any Trademark or
          other property of CVDI shall terminate immediately upon termination
          of this Agreement; provided, however, such right shall be extended
          for the period of time specified in Section 11.5, at the end of
          which all such rights shall terminate.  AVECOR shall use the
          Trademarks only in the manner prescribed by CVDI.  The Products are
          offered for sale and sold by CVDI subject in every case to the
          condition that such sale does not convey any licenses, express or
          implied, to manufacture, duplicate or otherwise copy or 

                                          4

<PAGE>

          reproduce any Product.  In the event of termination of this
          Agreement, AVECOR shall not manufacture or have manufactured any
          devices, cards, components or assemblies utilizing any information
          belonging to CVDI. 
    3.5   MARKETING ASSISTANCE/TRAINING.  CVDI agrees to provide technical
          training, and technical assistance to AVECOR personnel at periodic
          intervals, with the frequency and content to be determined by mutual
          agreement.  The training and technical assistance provided to AVECOR
          shall be no less than that provided to CVDI employees and sales
          force, and shall be updated from time to time with at least the
          frequency such updates are provided to CVDI employees and sales
          force.  Each party to this Agreement shall be responsible for its
          own expenses in connection with any such training and assistance.
    3.6   SUPPORT.  CVDI will use reasonable efforts to support the sale of
          Products by AVECOR where requested by AVECOR.  Such support shall be
          provided in the sole discretion of CVDI.
    3.7   SERVICE.  Except as otherwise provided in this Section, CVDI agrees
          to provide service and maintenance for Instruments sold by AVECOR
          for its standard fees, as they exist from time to time, and in
          accordance with its then applicable standard service agreement. 
          CVDI shall offer service contracts for Instruments to customers to
          provide maintenance and services in accordance with its standard
          contract.  CVDI shall provide AVECOR with its service contract price
          list and AVECOR shall be entitled to sell such contracts on behalf
          of CVDI.  AVECOR shall bill for the service contracts which it sells
          and payment by AVECOR to CVDI shall be within thirty (30) days after
          AVECOR receives payment for  such service/maintenance contract. 
          Service and maintenance may be provided by CVDI or an independent
          third party service company. 
    3.8   PRODUCT WARRANTY.  AVECOR shall make no representation or warranty
          about the Products, whether in writing or orally, except as is
          contained in written materials delivered to AVECOR by CVDI expressly
          for use in promoting the sale of the Product or as may otherwise be
          agreed to by CVDI in writing.
    3.9   DEVELOPMENT AND MARKETING COOPERATION.  AVECOR will have the right
          to discuss with, and propose to, CVDI additional specifications for
          the Products and specifications for Future Products.

4.  REGULATORY COMPLIANCE.
    4.1   REGISTRATIONS.
          (a) CVDI shall use commercially reasonable efforts, including
              conducting clinical trials, to obtain and maintain
              regulatory approvals and requirements for it to sell the
              Products in the Territory.  CVDI shall have sole discretion
              as to the commercial reasonableness of any acts required on
              its part to maintain any regulatory approval or requirement.


                                          5

<PAGE>

          (b) CVDI shall promptly provide to AVECOR copies of all required
              Product notifications and registrations to regulatory
              agencies (including device listing reports) including copies
              of all letters received from the FDA.
    4.2   REPORTING OBLIGATIONS.  AVECOR shall maintain, or cause to be
          maintained, all complaint files and other records required to be
          maintained by the FDA and other regulatory agencies with respect to
          Products purchased by AVECOR from CVDI.  CVDI shall promptly provide
          to AVECOR copies of all complaints received with respect to the
          Products sold to AVECOR as well as responses sent, if any.  AVECOR
          shall promptly provide CVDI with copies of any complaints relating
          to the Products received by AVECOR.  Except to the extent AVECOR is
          otherwise required by law, CVDI shall submit to the FDA all reports
          of complaints, malfunctions, failures or deterioration in the
          characteristics or performance or instructions for use or inadequacy
          in labeling which may have led or lead to death or serious injury
          and all other information about the Products required to be
          submitted to any regulatory agency. 
    4.3   MANUFACTURING.  CVDI shall use its best efforts to comply with all
          applicable GMP requirements, including all national technical and
          quality standards applicable to the Products which are incorporated
          into GMP.  CVDI shall have sole discretion as to the commercial
          reasonableness of any acts required on its part with respect to GMP
          compliance, provided, however, CVDI shall notify AVECOR of any
          citations from discussions with a regulatory body where such
          discussions and citations relate to a material aspect of GMP
          compliance.
    4.4   SAMPLES.  CVDI shall retain samples of each lot of the Products for
          time periods which are in accordance with GMP.
    4.5   PRODUCT RECALLS AND FIELD CORRECTIVE ACTIONS.  In the event (i) any
          government authority issues a directive or order that a Product be
          recalled, (ii) a court of competent jurisdiction orders such a
          recall or (iii) CVDI determines that a Product should be recalled or
          that a Field Corrective Action should occur, the parties shall take
          all appropriate corrective actions.  AVECOR will provide notice to
          customers of the recall of the Product.  Upon determination of the
          party responsible for the recall or Field Corrective Action, such
          party shall be responsible for the cost of notifying end users and
          for determining the corrective actions to be taken and the costs
          associated with such actions.  CVDI and AVECOR shall fully cooperate
          with one another and provide all reasonable assistance in conducting
          any recall or Field Corrective Action under this Paragraph.  AVECOR
          shall maintain records of all sales of the Products sufficient to
          carry out a recall with respect to Products purchased under the
          Agreement.


                                          6

<PAGE>

    4.6   GENERAL OBLIGATIONS OF CVDI AND AVECOR.
          (a) Except as otherwise expressly provided in the Agreement,
              CVDI shall manufacture, test, package, and label the
              Products.  AVECOR shall price, invoice and have shipped in
              the Territory all Products.
          (b) CVDI shall manufacture, test, package, label and release and
              AVECOR shall maintain, store and ship the Products in
              accordance with all applicable GMP requirements.
          (c) Each party shall promptly notify the other party of, and
              shall provide the other party with copies of, any
              correspondence and other documentation received or prepared
              in connection with any of the following events: (1) receipt
              of any material correspondence from the FDA in connection
              with the manufacture, sale or use of the Products; (2) any
              recall of the Products; (3) the withdrawal of the Products
              from the market; (4) any regulatory comments relating to the
              manufacture of the Products requiring a response or action
              by either party.
          (d) CVDI shall maintain all manufacturing and analytical
              records, all records of shipments of the Products from CVDI,
              and all validation data relating to the Products for the
              time periods required by applicable laws and regulations. 
              CVDI shall make such data available to the FDA upon request
              of the FDA, such request being made either directly to
              AVECOR or to CVDI, or otherwise as required by applicable
              law. 
    4.7   ORDERS.
          (a) FORECASTS. Beginning with the execution hereof, AVECOR shall
              provide monthly, by the fifteenth day of each month, its
              estimated forecast of its and its Affiliates requirements
              for the Products for each of the six (6) months following
              the end of the month in which such forecast is submitted
              (each a "Forecast"). All Forecasts under this Agreement and
              updates thereof for any period will constitute a firm
              obligation of AVECOR to purchase the quantities of Products
              (Specialty Cards and Instruments) indicated only for the
              first three months of such Forecast.
          (b) WRITTEN ORDERS.  AVECOR shall initiate orders for Products
              by written purchase orders, which may be submitted by
              facsimile.  Orders are subject to acceptance by CVDI,
              preferably by reply facsimile.  In the event AVECOR's
              purchase order contains terms conditions which are in
              addition to, or differ from or contradict the terms of this
              Agreement, the terms of this Agreement shall control.
          (c) DELIVERY.  CVDI shall use its best efforts to supply the
              Products ordered by AVECOR and shall supply Products in
              accordance with the delivery schedule and in the quantities
              specified by AVECOR provided; however, CVDI shall not be
              obligated to deliver Specialty Cards to the extent that
              orders for such Specialty Cards exceed 125% of the
              quantities stated in the portion of any forecast which
              contains the firm obligation of AVECOR to purchase 

                                          7

<PAGE>

              Specialty Cards.  CVDI shipments of Products shall be delivered
              FOB freight collect CVDI's distribution site, Raleigh, North
              Carolina, to AVECOR's carrier at which time title, ownership and
              risk of loss and damage shall pass to AVECOR.  CVDI shall deliver
              Products, properly packed for distribution (including, but not
              limited to refrigerated distribution), to the carrier selected by
              AVECOR at its distribution site.  All freight and insurance
              expenses, as well as any special handling or special packing
              expenses requested by AVECOR, shall be paid by AVECOR.  AVECOR
              shall bear any and all applicable taxes, duties and similar
              charges that may be assessed against the Products after delivery
              to the carrier at CVDI's distribution site.  CVDI shall include
              shipping documents with Products in accordance with AVECOR's
              reasonable requests.
    4.8   PACKAGING. CVDI shall provide all necessary labels and package
          inserts for all Specialty Cards as well as for the shipping
          container, which labels and package inserts shall comply with
          applicable FDA requirements.  AVECOR shall not use any other labels
          or package inserts for any of such Specialty Cards.
    4.9   TAXES; DUTIES.  The actual amount of sales, use, excise, value-added
          and similar taxes levied upon or applicable to the transfer of
          Product to AVECOR are payable by AVECOR.  AVECOR shall pay all
          duties, tariffs, surcharges and other customs and other governmental
          fees levied in connection with the export of the Specialty Cards
          outside of the United States but within the Territory.

5.  PRODUCT WARRANTY.
    5.1   STANDARD LIMITED WARRANTY.  CVDI warrants that the Specialty Cards
          and controls shall, at the time of shipment, (a) comply with the
          requirements of the Act, if applicable, and shall until their
          expiration date conform to the labeling and package inserts; (b)
          will not be products that are adulterated or misbranded within the
          meaning of the Act; (c) shall have been manufactured, packaged,
          stored and shipped in conformity with applicable GMP requirements;
          and (d) will not be products that may not be introduced into
          interstate commerce pursuant to applicable federal or state law. 
          CVDI warrants that all Instruments shall, until the earlier of
          twenty-four (24) months from shipment by CVDI; or twelve (12) months
          after the date of installation with the customer: (a) comply with
          the requirements of the Act, if applicable, (b) will not be products
          that are adulterated or misbranded within the meaning of the Act;
          (c) shall have been manufactured, packaged, stored and shipped in
          conformity with applicable GMP requirements; and (d) will not be
          products that may not be introduced into interstate commerce
          pursuant to applicable federal or state law. 
          This limited warranty is contingent upon proper use of a Product in
          the application for which such Product was intended and does not
          cover Products that were modified without CVDI's written approval,
          that have expired, or that were  improperly stored or handled. 


                                          8

<PAGE>

    5.2   NO OTHER WARRANTY.  EXCEPT FOR THE EXPRESS LIMITED WARRANTIES SET
          FORTH IN SECTION 5.1 ABOVE, CVDI GRANTS NO WARRANTIES FOR THE
          PRODUCTS, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
          BY STATUTE OR OTHERWISE, AND CVDI SPECIFICALLY DISCLAIMS ANY IMPLIED
          WARRANTY OF QUALITY, WARRANTY OF MERCHANTABILITY, WARRANTY OF
          FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF NON-INFRINGEMENT.
    5.3   REMEDY AND LIMITATION OF LIABILITY.  EXCEPT AS OTHERWISE PROVIDED
          HEREIN, CVDI'S LIABILITY AND AVECOR AND ITS CUSTOMERS SOLE REMEDY
          UNDER THIS AGREEMENT AND THE LIMITED WARRANTY WITH RESPECT TO ANY
          PRODUCTS SHALL BE LIMITED TO A REFUND OF AVECOR'S COST OF PRODUCTS 
          OR REPAIR OR REPLACEMENT, AT CVDI'S SOLE DISCRETION.  IN NO EVENT
          SHALL CVDI BE LIABLE FOR THE COST OF PROCUREMENT OF SUBSTITUTE
          PRODUCT OR FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR
          BREACH OF WARRANTY OR OTHERWISE.

6.  PAYMENTS FOR PRODUCT.
    6.1   PURCHASE PRICE.  AVECOR shall pay CVDI a purchase price per
          Specialty Card (the "Card Purchase Price") of US$2.00.  Except as
          otherwise provided herein, AVECOR shall pay CVDI a purchase price
          per Instrument (the "Instrument Purchase Price") of US$1,850.00. 
          During the first twelve months of the term of this Agreement, CVDI
          will sell AVECOR 36 Instruments to be used as samples for U.S.$1500
          each.  Specialty Card controls shall be priced at $62.50 per box of
          25.
    6.2   RESALE PRICES.  AVECOR may offer the Products to its customers at
          such prices as it, in its sole discretion, may determine.  CVDI
          shall have no right to determine the prices at which AVECOR may
          offer the Products for resale.
    6.3   SAMPLES.  Upon AVECOR's request, during the first twelve months in
          which this Agreement is in effect, CVDI shall supply 12,000
          Specialty Cards as samples for demonstration purposes.  The price
          for such cards shall be US$1.90 per card FOB CVDI.
    6.4   MINIMUM SALES.  CVDI shall be entitled to terminate this Agreement
          and to enter into alternative exclusive distribution agreements in
          the Territory in the event that AVECOR fails to attain the
          applicable percentage of the following annual minimum sales of
          Products to end users (where the definition of sales to end users
          shall include firm written orders received but not yet shipped by
          AVECOR) in the United States or Canada calculated at the end of each
          twelve month period for the applicable year:  Said order to be
          shipped within 30 days of receipt.


                                          9

<PAGE>

<TABLE>
<CAPTION>
                                  April 1, 1997   April 1, 1998  April 1, 1999    April 1, 2000           Each Year
                                       to               to             to              to                 Thereafter
                                 March 31, 1998   March 31, 1999 March 31, 2000   March 31, 2001         During Term
                                 --------------   -------------- --------------   --------------         -----------
<S>                              <C>              <C>            <C>              <C>                    <C>
Level of Sales of Cards to End
Users                                108,000          216,000        500,000          650,000              650,000

Applicable Percentage To 
Maintain Rights                        80%              90%            90%              90%                  95%

Level of Sales of Instruments 
to End Users                            167            250              313                              Subject to 
                                                                                                     Renegotiation but 
                                                                                                    not less than 1/3 of
                                                                                                      prior year sales
                                                                                                           level.

Applicable Percentage to
Maintain Rights                        75%              75%            75%
</TABLE>
    6.5   PAYMENT.  All CVDI invoices shall be paid net 30 days from date of
          invoice in US Dollars.  Any invoiced amounts not paid when due shall
          be subject to a service charge at the lower of the rate of one and
          one-half (1.5%) percent per month or the maximum rate permitted by
          law.  If AVECOR fails to make any payment to CVDI when due, CVDI may
          upon thirty (30) days written notice to AVECOR without affecting any
          other rights under this Agreement, terminate this Agreement, cancel
          or delay shipments hereunder, or terminate the grant of exclusivity
          to AVECOR, provided, however, CVDI shall not be entitled to
          terminate this Agreement with respect to any invoice which is being
          contested by AVECOR in good faith; provided, further, that AVECOR
          may not be late more than two (2) times during any twelve (12) month
          period in order to be entitled to the referenced notice prior to
          termination or other action by CVDI.


                                          10

<PAGE>

7.  CONFIDENTIALITY.
    7.1   "PROPRIETARY INFORMATION" means: all financial information,
          marketing information, sales information, customer information, raw
          materials, know-how, drawings, compositions, manufacturing and other
          specifications, analytical procedures, flow sheets, reports, market
          studies, preclinical and clinical test results, FDA and other
          regulatory submissions, software and other medical, research,
          technical, and marketing information disclosed, directly or
          indirectly, by either party or any of its Affiliates to the other
          party in writing, marked "Confidential", "Proprietary" or the like,
          or, if transmitted orally or by observation of equipment or other
          material, confirmed by a writing so marked within sixty (60) days of
          its disclosure, or which by its nature is information normally
          intended to be held in confidence, unless the same:  (a) is or
          becomes public knowledge through no fault of the receiving party;
          (b) is legally in the possession of the receiving party prior to
          receipt from the disclosing party; (c) is subsequently and lawfully
          received from a third party without its breach of any nondisclosure
          obligation; or (d) is independently developed by employees of the
          receiving party who have had no access to the Proprietary
          Information of the disclosing party.
    7.2   NON-DISCLOSURE.  During the duration of this Agreement and
          thereafter, neither party shall disclose to third parties, or use
          for its benefit, in whole or in part, any Proprietary Information
          received from other party, except to the extent required to comply
          with the Act or other laws. Each party shall take all reasonable
          steps to minimize the risk of disclosure of Proprietary Information,
          including, without limitation:
          (a) ensuring that only its employees whose duties require them
              to possess such information have access thereto; and
          (b) exercising at least the same degree of care that it uses for
              its own Proprietary Information.
    7.3   DUTIES UPON TERMINATION.  Except as otherwise permitted under this
          Agreement, upon request by the disclosing party after expiration or
          termination of this Agreement, the other party shall either return
          all of such disclosing party's Proprietary Information (including
          data, memoranda, drawings and other writings and tapes and all
          copies thereof) received or prepared by it or destroy the same, 


                                          11

<PAGE>

          and in any event shall make no further use of such Proprietary
          Information provided, however, that counsel for the receiving party
          may keep one copy of the Proprietary Information for purposes of
          ascertaining the receiving party's obligations pursuant to this
          Section 8.
    7.4   USE OF PROPRIETARY INFORMATION.  During the duration of this
          Agreement and thereafter, neither party  shall use the other party's
          Proprietary Information for any purposes, except to perform its
          obligations hereunder.
    7.5   INJUNCTIVE RELIEF.  Each party acknowledges that the other party
          would not have an adequate remedy at law for breach of any of the
          covenants contained in this Section 8 and hereby consents to the
          enforcement of same by the other party by means of temporary or
          permanent injunction issued by any court having jurisdiction thereof
          and further agrees that the other party shall be entitled to assert
          any claim it may have for damages resulting from the breach of such
          covenants in addition to seeking injunctive or other relief.

8.  INDEMNIFICATION.
    8.1   INDEMNIFICATION BY CVDI.  Subject to AVECOR's compliance with its
          obligations set forth in Section 9.3 below, CVDI shall indemnify,
          defend and hold AVECOR and its Subdistributors, Affiliates, their
          shareholders, directors, officers, employees and agents harmless
          from and against any and all losses, damages, liabilities, claims,
          demands, judgments, settlements, costs and expenses (including,
          without limitation, reasonable attorneys' fees and other costs of
          defense) (collectively "Losses") attributable to, or arising out of
          a breach by CVDI of any of CVDI's warranties, representations,
          covenants or obligations hereunder or any claim, lawsuit or other
          action by a third party for breach of contract, personal injury or
          property damage to the extent caused by a breach by CVDI or any of
          its Affiliates of this Agreement, or out of or connected with the
          use or sale of the Product to the extent directly caused by CVDI's
          fault, negligence or breach of any of its obligations hereunder
          concerning the use or sale of the Product.
    8.2   INDEMNIFICATION BY AVECOR.  Subject to CVDI's compliance with its
          obligations set forth in Section 9.3 below, AVECOR shall indemnify,
          defend and hold CVDI and its Affiliates, their 


                                          12

<PAGE>

          shareholders, directors, officers, employees and agents harmless
          from and against any and all Losses attributable to, or arising out
          of a breach by AVECOR of any of AVECOR's warranties,
          representations, covenants or obligations hereunder, or any claim,
          lawsuit or other action by a third party for, breach of contract,
          personal injury or property damage to the extent caused by a breach
          by AVECOR or any of its Affiliates of this Agreement, or out of or
          connected with the use or sale of the Product to the extent directly
          caused by AVECOR's fault, negligence or breach of any its
          obligations hereunder concerning the use or sale of the Product.
    8.3   NOTICE AND ASSISTANCE.  A party (the "indemnitee") which intends to
          claim indemnification under this Section 9 shall promptly notify the
          other party (the "indemnitor") in writing of any action, claim or
          other matter in respect of which the indemnitee or any of its
          employees or agents intend to claim such indemnification.  The
          indemnitee shall permit, and shall cause its employees and agents to
          permit, the indemnitor, at its discretion, to settle any such
          action, claim or other matter and agrees to the complete control of
          such defense or settlement by the indemnitor; PROVIDED, however,
          that such settlement does not adversely affect the indemnitee's
          rights hereunder or impose any obligations on the indemnitee in
          addition to those set forth herein in order for it to exercise such
          rights.  No such action, claim or other matter shall be settled
          without the prior written consent of the indemnitor and the
          indemnitor shall not be responsible for any legal fees or other
          costs incurred other than as provided herein.  At the expense of the
          indemnitor, the indemnitee shall render the indemnitor all
          assistance reasonably necessary in defending against such claim,
          suit, or action.  The indemnitee party shall have the right at its
          expense, to retain separate counsel to act in an advisory capacity
          in connection with any matter involving a claim for indemnity and
          the indemnitor will cooperate with such counsel.

9.  PATENTS.
    9.1   OWNERSHIP.  Except as provided herein with respect to trademarks,
          AVECOR acknowledges that it does not have, nor does it hereby
          acquire, any right, title and interest in and to any patents, patent
          applications, trademarks or other proprietary rights of CVDI.


                                          13

<PAGE>

    9.2   PATENT INFRINGEMENT.
          (A) DEFENSE.  AVECOR agrees that CVDI has the right to defend or
              at CVDI's option to settle, and CVDI agrees at CVDI's
              expense, to defend or at CVDI's option to settle, each
              claim, suit or proceeding brought against AVECOR or AVECOR's
              customers arising out of or related to an allegation of
              infringement of any United States patent, copyright, or
              trademark or misappropriation of trade secrets by the sale
              of Products sold hereunder or the use thereof, subject to
              the limitations hereinafter set forth.  CVDI shall have sole
              control of any such action or settlement negotiations, and
              CVDI agrees to pay, subject to the limitations hereinafter
              set forth, any final judgment (including all pre-judgment
              and post-judgment interest) entered against AVECOR or
              AVECOR's customers on such issue in any such suit or
              proceeding defended by CVDI.  AVECOR agrees that CVDI at
              CVDI's sole option, shall be relieved of the foregoing
              obligations unless AVECOR or AVECOR's customers shall notify
              CVDI promptly in writing of such claim, suit or preceding
              and gives CVDI authority to proceed as contemplated herein,
              and at CVDI's expense, cooperates with CVDI to settle and/or
              defend any such claim, suit or proceeding.  CVDI shall not
              be liable for any costs or expenses incurred without CVDI's
              written authorization.
          (B) LIMITATION.  Notwithstanding the provisions of subsection
              10.2(a) above, CVDI assumes no liability for (i)
              infringements covering completed Products or any
              composition, assembly, combination method or process in
              which any of the Products may be used but not covering
              Products when used  alone; provided, however, that such
              limitation shall not apply where the sale or use of the
              Product (whether or not in any composition, assembly,
              combination, method or process) is a sale for a use or a use
              intended or approved by CVDI; (ii) infringements involving
              any marking or branding not applied by CVDI or applied at
              the request of AVECOR; or (iii) infringements involving the
              modification or servicing of the Products, or any part
              thereof unless such modification or servicing was performed
              by CVDI or in accordance with CVDI's written instructions or
              approved by CVDI.


                                          14

<PAGE>

          (C) THE FOREGOING PROVISIONS OF THIS SECTION 10.2 STATE THE
              ENTIRE LIABILITY AND OBLIGATION OF CVDI AND THE EXCLUSIVE
              REMEDY OF AVECOR AND CUSTOMER WITH RESPECT TO ANY ALLEGED
              INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS, OR OTHER
              INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS OR ANY PART
              THEREOF.
          (D) PATENT ENFORCEMENT.  If AVECOR believes that a third party
              is reasonably likely infringing CVDI's patent rights in the
              Territory, AVECOR shall promptly notify CVDI of that fact
              and shall provide to CVDI reasonable evidence of any such
              claim based upon materials available to AVECOR.  Upon
              receipt of evidence satisfactory to CVDI of infringement, in
              CVDI's sole discretion CVDI shall then have the sole right
              to take action against such infringing third party.  
          (E) COOPERATION.  If either party takes action against a third
              party pursuant to this Section 10.2, or if a third party
              claims the manufacture, use or sale of Product in the
              Territory infringes its patent or other proprietary rights,
              the other party agrees to provide reasonable assistance by
              supplying information within its control which may assist
              the party taking the enforcement action or defending such
              claim.
    9.3   DISTRIBUTION RIGHTS.  CVDI hereby grants to AVECOR the right to act
          as its authorized distributor in the Territory to sell the Products
          for the term of this Agreement.  During the term of this Agreement
          CVDI shall not bring any claim or action against AVECOR for the
          infringement or misappropriation of any intellectual property owned
          or licensed to CVDI based upon the use or sale by AVECOR or any of
          its Affiliates of Products pursuant to the terms and conditions of
          this Agreement.

10. TERM; TERMINATION.
    10.1  TERM.  The initial term of this Agreement shall be from the
          Effective Date until March 31, 2002, unless terminated earlier under
          the provisions of this Agreement.  This Agreement shall renew
          automatically for one year periods unless at least thirty (30) days
          prior to year end, either party provides to the other written notice
          of its intent to terminate.


                                          15

<PAGE>

    10.2  TERMINATION FOR CAUSE  --  EITHER PARTY.  Without prejudice to any
          other rights it may have hereunder or at law or in equity, either
          party may terminate this Agreement immediately by written notice to
          the other party upon the occurrence of any of the following:
          (a) the other party becomes insolvent, an order for relief is
              entered against the other party under any bankruptcy or
              insolvency laws or laws of similar import;
          (b) the other party makes an assignment for the benefit of its
              creditors or a receiver or custodian is appointed for it or
              its business is placed under attachment, garnishment or
              other process involving a significant portion of its
              business;
          (c) after sixty (60) days' written notice from the terminating
              party without cure by the other party of any material breach
              of this Agreement by the other party not involving minimum
              sales or payments;
          (d) the failure by AVECOR to make any payment due under this
              Agreement; or
          (e) the failure by AVECOR to maintain minimum sales to end users
              under this Agreement. 
    10.3  RIGHTS AND DUTIES UPON TERMINATION.
          (a) Termination of this Agreement, for whatever reason, shall
              not affect any rights or obligations accrued by either party
              prior to the effective date of termination, including under
              any purchase order for Products placed prior to the
              effective date of termination.
          (b) Except as provided otherwise in this Section 10.3, upon
              termination of the Agreement, CVDI shall use reasonable
              efforts to continue to sell and supply Products to AVECOR's
              Customers.  CVDI will honor the terms and conditions of
              AVECOR Customer contracts to the extent such agreements have
              been entered into in arms-length transactions and the prices
              charged for the supply of Products are consistent with the
              market price for similar products sold by CVDI.  Upon
              termination of this Agreement, AVECOR, upon CVDI's request,
              shall assign to CVDI (or such other entities designated by
              CVDI) all product approvals, registrations and regulatory
              approvals to sell Products in each country in the Territory;
              or, if assignment of any such registration or approval is
              not permissible under applicable law, 


                                          16

<PAGE>

              where requested by CVDI, AVECOR shall grant CVDI (or its
              designee) a right of reference to such registrations and
              approvals.  AVECOR shall otherwise use reasonable efforts to
              enable CVDI to import and sell the Products in such countries.
          (c) Upon termination of this Agreement, AVECOR will not for a
              period of two (2) years sell products which are competitive
              with special Cards or Instruments.  
          (d) Sections of this Agreement shall survive any termination of
              this Agreement which relate to confidentiality and
              indemnification, or otherwise which by their nature cannot
              be accomplished or fulfilled prior to termination or which
              relate to obligations of the parties accrued prior to
              termination. 
          10.4 NON-COMPETITION.  AVECOR shall not during the term of this
          Agreement manufacture, sell, distribute or cause to be distributed
          products competitive with Specialty Cards or Instruments.

11. ARBITRATION.
    Except for terminations pursuant to Section 10.2(d) above, all disputes,
    controversies and differences which may arise between the parties out of,
    in relation to or in connection with this Agreement, or for the breach
    thereof, or any claim based on or arising from any alleged wrongful conduct
    or omission related to this Agreement, may upon mutual agreement of the
    parties, be determined by arbitration.  The arbitration shall be conducted
    in accordance with the Rules of the American Arbitration Association
    ("AAA"), Supplementary Procedures for Large Complex Disputes, in effect as
    of the commencement of the arbitration, as modified by the provisions of
    this paragraph.  The arbitration shall be held in Raleigh, North Carolina.
    Whenever a party desires to request arbitration proceedings, such party
    shall first cause its chief executive officer or other designated and
    authorized officer to contact the other party; which shall cause its chief
    executive officer or other designated and authorized officer to make good
    faith efforts to resolve any such dispute prior to arbitration or
    litigation.
    No provision of this section shall limit the right of either party to this
    Agreement to obtain provisional or ancillary remedies from a court of
    competent jurisdiction before, after or during the pendency of any
    arbitration if injunctive relief from the court is necessary to prevent
    serious and irreparable injury to one party 


                                          17

<PAGE>

    or the other.  The parties acknowledge that for purposes of this Agreement
    (1) preliminary injunctions, appointments of receivers, attachments,
    temporary protective orders and writs of possession constitute "provisional
    remedies," and (2) judicial actions to enforce a decision reached pursuant
    to this section constitute "ancillary remedies."


                                          18

<PAGE>

12. MISCELLANEOUS.
    12.1  CHOICE OF LAW.  This Agreement and all purchase orders issued
          hereunder shall be governed and interpreted, and all rights and
          obligations of the parties shall be determined, in accordance with
          the laws of the State of North Carolina, without regard to its
          conflict of laws rules.
    12.2  NOTICES. All notices, approvals or other communications required
          hereunder shall be in writing and shall be deemed to have been duly
          given if delivered personally to such party or sent to such party by
          facsimile transmission (confirmed in writing by other permitted
          means), air courier or by certified mail, postage prepaid, to the
          following addresses:

          TO AVECOR:

          AVECOR Cardiovascular Inc.
          7611 Northland Drive
          Minneapolis, MN 55428
          Attn:  Gregory J. Melsen

          TO CVDI:

          Cardiovascular Diagnostics, Inc.
          5301 Departure Drive
          Raleigh, NC  27604
          Attn: President
          Fax:  (919) 954-9932

          and WITH A COPY TO:

          Larry E. Robbins, Esq.
          Wyrick Robbins Yates & Ponton, L.L.P.
          4101 Lake Boone Trail
          Suite 300
          Raleigh, NC  27607
          Fax (919) 781-4865


          or to such other address as the addressee may have specified in
          notice duly given to the sender as provided herein. Such notice,
          request, demand, waiver, consent, approval or other communications
          will be deemed to have been given as of the date so delivered,
          transmitted by facsimile or fifteen (15) days after so mailed.
    12.3  SEVERABILITY.  In the event that any provision of this Agreement
          shall be found in any jurisdiction to be in violation of public
          policy or illegal or unenforceable in law or equity, such finding
          shall in no event invalidate any other provision of this Agreement
          in that jurisdiction, and this Agreement shall be deemed amended to
          the minimum extent required to comply with the law of such
          jurisdiction.


                                          19

<PAGE>

    12.4  ENTIRE AGREEMENT.  This Agreement states the entire agreement
          between the parties hereto about the transactions contemplated
          hereby and may not be amended or modified except by written
          instrument duly executed by the parties hereto.
    12.5  NO WAIVER. The failure of either party hereto to enforce at any
          time, or for any period of time, any provision of this Agreement
          shall not be construed as a waiver of such provision or of the right
          of such party thereafter to enforce each and every provision.
    12.6  ASSIGNMENT, BINDING EFFECT.  Neither party shall assign this
          Agreement nor any of their respective rights or obligations
          hereunder without the prior written consent of the other party,
          except that either party may assign this Agreement to any of its
          Affiliates or to any person to which substantially all of the assets
          comprising its hemostasis products business are transferred by
          operation of law or otherwise, including, but without limitation, by
          merger or transfer of stock.  Any other attempted assignment without
          such consent shall be void.  Any assignee or transferee of this
          Agreement and/or the rights or obligations hereunder shall expressly
          assume in writing all obligations of the assignor/transferor
          pursuant to this Agreement.  For purposes of this Section 12.6, a
          transfer of more than fifty (50%) percent of the stock of AVECOR
          shall be deemed on assignment where such transfer is engaged in the
          sale of hemostasis products.
    12.7  INDEPENDENT CONTRACTOR.  Each party shall act as the independent
          contractor of the other party. Neither party shall be the legal
          agent of the other for any purpose whatsoever and therefore has no
          right or authority to make or underwrite any promise, warranty or
          representation, to execute any contract or otherwise to assume any
          obligation or responsibility in the name of or in behalf of the
          other party, except to the extent specifically authorized in writing
          by the other party.  Neither of the parties hereto shall be bound by
          or liable to any third persons for any act or for any obligation or
          debt incurred by the other toward such third party, except to the
          extent specifically agreed to in writing by the party so to be
          bound.
    12.8  HEADINGS.  All section headings contained in this Agreement are for
          convenience of reference only, do not form a part of this Agreement
          and shall not affect in any way the meaning or interpretation of
          this Agreement.
    12.9  COUNTERPARTS.  This Agreement may be executed in any number of
          counterparts and any party hereto may execute any such counterpart,
          each of which when executed and delivered shall be deemed to be an
          original and all of which counterparts taken together shall
          constitute but one and the same instrument.  It shall not be
          necessary in making proof of this Agreement or any counterpart
          hereof to account for any of the other counterpart.
    12.10 FORCE MAJEURE.  Neither party shall be deemed to be in default for
          failure or delay in performance to the extent of causes which are
          reasonably unforeseeable or, if foreseeable, reasonably unremediable
          in spite of diligent efforts to effect a reasonable remedy, and
          which are caused by act or omission of 


                                          20

<PAGE>

          any governmental authority or of the other party, compliance with
          new governmental regulations, insurrection, riot, embargo, delays or
          shortages in transportation or inability to obtain necessary
          materials, and Acts of God or Nature.
    12.11 INSURANCE. CVDI and AVECOR shall at all times maintain insurance,
          including product liability insurance, in the amount of $5,000,000. 
          Each party shall, at the request of the other party, provide such
          evidence of such insurance as requested, including a certificate of
          insurance.  


                                          21

<PAGE>

    IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as
of the day and year first above written. 

CARDIOVASCULAR     
DIAGNOSTICS, INC.                      AVECOR


  By:                                  By:                             
    -------------------------             -----------------------------
       As its                                         As its


                                          22

<PAGE>

                                    SCHEDULE 1.11
                                           

PRODUCTS                           CATALOG #           INITIAL SALES PRICE
                                                           TO AVECOR
--------------------------------------------------------------------------------

HMT                                                    $2.00 per Specialty Card

TAS                                                    $1850.00 per Instrument

HMT Controls                                           $62.50 per box of 25

Future Products

 AT                                                    $7.50 per card

HMT Management Panel                                   To be determined

 Accent                                                To be determined


                                          23

<PAGE>

                                     SCHEDULE 2.5

                            STANDARD TERMS AND CONDITIONS

1.   DEFINITIONS.
     CVDI:  Cardiovascular Diagnostics, Inc.  The person or organization that
     has placed an Order with CVDI or with whom CVDI has concluded an agreement.
     STANDARD TERMS:  The Standard Terms and Conditions of Sale
     Products:  The whole of the Products the subject of  this Contract, as
     specified in the Offer or in the Order.
     OFFER:  The written proposition, made by CVDI, which includes these
     Standard Terms, a specification of the Products and the current price.
     ORDER:  The written request, made by the Buyer, including a specification
     of the Products to be ordered.

II.  OFFERS, GOODS, AND SPECIFICATIONS.
     1.   All offers, Orders and Contracts of Sale by CVDI shall be subject to
          these Standard Terms
     2.   These Standard Terms can only be amended with the specific written
          consent of CVDI.

III.      ORDERS.
          1.   No Order shall be binding on CVDI until expressly accepted by 
               CVDI in writing.
          2.   No Order may be canceled and/or amended by the Buyer except with 
               the written consent of CVDI.
          3.   Save as provided in a distribution agreement between CVDI and the
               Buyer, these Standard Terms and any special terms agreed upon in
               writing represent the Understanding between the parties and shall
               supersede and exclude any previous agreements between CVDI and 
               the Buyer in relation to their subject matter and all terms 
               and/or General Conditions of whatever nature which the Buyer may 
               in any way seek to impose.

IV.       PRICES.
          1.   Unless otherwise agreed upon, all prices mentioned in CVDI 
               current standard price list are based on deliver FOE, CVDI.
          2.   The price shall be exclusive of, and the Buyer shall pay, all 
               duties or taxes arising in connection with the sale unless 
               otherwise agreed to by CVDI in writing.

V.        PAYMENT.
          1.   Subject to any agreement to the contrary, payment must be made 
               within 30 days from the date of the invoice.
          2.   If the Buyer commits any breach of this Contract, all monies 
               accrued and owing under this Contract shall immediately become 
               due and payable.


                                          24

<PAGE>

          3.   In the event of any later payment, the Buyer shall pay CVDI 
               interest from the date payment became due, to be calculated at 
               the Wall Street Journal Prime Rate increased by 5% per month.
          4.   All payments shall be made in full without deducting any right of
               equity, set-off or counterclaim.

VI.       CARRIAGE AND DELIVERY.
          1.   Unless otherwise agreed upon, delivery of the Products shall be 
               FOB, CVDI.
          2.   Any delivery time specified by the Buyer or indicated by CVDI is 
               an estimate only and CVDI shall not have any liability whatsoever
               for failure to deliver the Products at or within any such 
               delivery time. In case of any later deliver, CVDI must be 
               formally declare to be in default and must be granted a 
               reasonable term to comply with its delivery obligation.
          3.   If the Buyer refused to take prompt delivery or is negligent in
               providing necessary information or instructions in accordance 
               with these Standard Terms, then the Products shall be stored at 
               the Buyers risk.  The Buyer shall pay CVDI all additional 
               delivery, storage and insurance costs and any other costs 
               incurred along with any loss arising in connection with this 
               neglect or refusal.
          4.   The Buyer shall inspect all Products promptly upon receipt 
               thereof. Such inspection shall include, without limitation, a 
               quality control analysis.  Any Product not properly rejected 
               within 4 weeks after receipt by the Buyer shall be deemed 
               accepted.  The Buyer shall be deemed to have received the 
               correct quantity of Products upon CVDI's delivery note being 
               signed on behalf of the Buyer or by its carrier. In the event of 
               any incomplete or excessive delivery, the Buyer shall not be 
               entitled to reject the Products included in the Contract or to
               treat the Contract as repudiated.
          5.   Buyer shall notify CVDI in writing within 5 days from the moment 
               of discovery of any other defect or within 5 days from the moment
               the defect should have been discovered.  Save only as provided 
               under these General Conditions, CVDI shall not be held liable for
               any defect w2hich is not so notified.  Unless expressly agreed 
               otherwise, the risk of loss ensuing from loading and  
               transporting the Products shall be borne by the Buyer even if the
               transport is handled by CVDI at the Buyer's request.

VII.      RETENTION OF TITLE.
          1.   Notwithstanding delivery, title to the Products shall remain in 
               CVDI and shall not pass to the Buyer until CVDI has received 
               payment in full with respect to all Products delivered or to be 
               delivered, work done in relation to sales agreements, interest 
               owed and/or accrued including any cost which may arise in respect
               of letters of credit, bills of exchange or cheques along with any
               storage and other costs, resulting from a breach of the sales 
               agreement by the Buyer.

VIII.     INTELLECTUAL PROPERTY RIGHTS.
          1.   All patents, designs, trademarks, copyrights and other 
               intellectual property rights of CVDI or whatever nature in 
               respect of the Products, any of their constituent parts, 
               their packaging or other material supplied with the Products 
               shall remain the absolute property of CVDI and shall remain 
               vested in CVDI.
          2.   The Buyer shall indemnify CVDI against any and all loss, damage,
               claims, costs, and expenses suffered or incurred by CVDI in 
               connection with any material, 


                                          25

<PAGE>

               information or instruction supplied by the Buyer in relation to 
               the Products, including the industrial or intellectual property 
               rights as stated in Article VIII.1.

IX.       LIABILITY.
          1.   CVDI's liabilities regarding the Products shall be limited in
               accordance with the provisions of CVDI's Standard Limited 
               Warranty attached hereto as Exhibit A and incorporated by this 
               reference.  CVDI does not give any warranty beyond these 
               specifications.
          2.   CVDI's aggregate liability to the Buyer in respect of any and all
               causes of action arising at any time in connection with the 
               Products, including but not limited to action in relation to 
               negligence, shall be limited to the amount paid the Buyer for the
               Products or replacement of the Product at CVDI's option.  In no 
               event shall CVDI be liable for costs or procurement of substitute
               goods by anyone.  In no event shall CVDI be liable for any 
               special, consequential, incidental, or indirect damages, 
               including but not limited to damages resulting from late 
               delivery and loss of profit.

X.        ALTERATIONS TO THE PRODUCTS AND DESCRIPTION.
          1.   After delivery of the Products, the Buyer shall not alter the 
               Products or alter any marks, designs or artwork on the Products 
               or on the packaging.  The Buyer shall not apply its own marks on 
               the Products or on their packaging, and shall not cause, allow 
               or permit any third party to do so.

XI.       DEFAULT.
          1.   If any of the following events occur, all monies accrued and 
               owing under the Contract shall become immediately due and payable
               and CVDI shall be entitled at any time thereafter to terminate 
               the Contract and any other Contract between CVDI and the Buyer by
               written notice, or to suspect further deliveries of Products, 
               without prejudice to its right to full indemnification:
                  - if the Buyer defaults or commits to breach of the Contract
                    or of any other obligations to CFDI and if, in CVDI's 
                    reasonable judgment, termination of the contract or 
                    suspension of further deliveries is justified;
                  - if an attachment or execution is levied upon the Buyer's 
                    property and/or assets;
                  - if the Buyer makes, offers or proposes a settlement, 
                    arrangement or composition with its creditors.  If a 
                    resolution or petition to wind up the Buyer's business is 
                    passed or presented, if a petition for an administrative 
                    order in respect of the Buyer is presented, if a petition 
                    for a bankruptcy order is made against the Buyer, or if a 
                    receiver, liquidator, trustee or manager of the Buyer's 
                    undertaking, property, assets or any part thereof is
                    appointed;
                  - if CVDI considers that the Buyer may be unable to provide 
                    payment in full and/or to perform any of its other 
                    obligations under the Contract, and the Buyer is 
                    (in CVDI's reasonable judgment) not able to provide security
                    covering his obligation.
          2.   Should the Buyer fail to fulfill one or more of his obligations, 
               all reasonable costs incurred in and out of count in order to 
               realize fulfillment will be at his expense.  Such costs will in 
               any event include those for collecting agencies, bailiffs and 
               attorneys.


                                          26

<PAGE>

XII.      FORCE MAJEURE.
          1.   CVDI shall not be liable, if it is prevented from or hindered or
               delayed in performing any of its obligations by reason of force
               majeure.  Force majeure shall consist of, but shall not be 
               limited to, the following:
                  - strike, lock-out or trade dispute (in each case whether 
                    involving CVDI's or a third party's employees);
                  - non-availability, interruption, failure of or delay in 
                    CVDI's usually supply sources, manufacturing facilities, 
                    transportation routes or facilities;
                  - breakdown of machinery or power failure;
                  - default or delay by CVDI's sub-contractors, acts of national
                    or local government or other authorities;
                  - storm, tempest, fire, flood, explosion, accident, theft, 
                    civil disturbance, insurrection or war.

XIII.     GOVERNING LAW.
          1.   Those Standard Terms and any Contract in conjunction therewith 
               shall be governed by the laws of the State of North Carolina.
          2.   In any proceeding instigated by the Buyer in respect of any 
               matter which may arise in connection with the contract or these 
               Standard Terms, the counts of North Carolina shall have exclusive
               jurisdiction. In any such proceedings brought by CVDI, CVDI shall
               be at liberty to bring the proceeding before the courts of North 
               Carolina or any other court which would have jurisdiction in the 
               absence of this clause.


                                          27

<PAGE>

                                     SCHEDULE 3.4

                                TRADEMARKS AND PATENTS


                                          28