Exhibit 10.1



         (Portions of this Agreement and its Exhibits have been omitted
              and marked confidential [****] and filed separately
                 with the Securities and Exchange Commission.)


                             OEM PURCHASE AGREEMENT

                                 BY AND BETWEEN

                           PHILIPS MEDICAL SYSTEMS AND

                                  BRAEMAR, INC.

                                  OEM AGREEMENT

                                      REV.5




















Date: 10/01/03                Philips Confidential

<PAGE>

                                TABLE OF CONTENTS

1.    SCOPE OF AGREEMENT.....................................................1

2.    DEFINITIONS............................................................2

3.    ORDERS AND SHIPMENT OF OEM PRODUCTS....................................3

4.    PRICES AND PAYMENT TERMS...............................................4

5.    NONCOMPLYING PRODUCTS..................................................4

6.    RETURN OF PRODUCTS.....................................................4

7.    ENGINEERING PROCESS OR DESIGN CHANGES..................................5

8.    QUALITY................................................................6

9.    WARRANTIES.............................................................6

10.   SUPPORT SERVICES.......................................................6

11.   OBSOLESCENCE AND MANUFACTURING RIGHTS..................................8

12.   TRAINING...............................................................9

13.   MARKETING AND LICENSING................................................9

14.   INTELLECTUAL PROPERTY PROTECTION......................................10

15.   COUNTRY OF MANUFACTURE AND DUTY DRAWBACK RIGHTS.......................10

16.   GOVERNMENTAL COMPLIANCE...............................................10

17.   FORCE MAJEURE EVENTS..................................................11

18.   EVENTS OF DEFAULT.....................................................11

19.   CONFIDENTIAL INFORMATION..............................................12

20.   INSURANCE REQUIREMENTS................................................12

21.   LIMITATION OF LIABILITY...............................................13

22.   TERMINATION...........................................................13

23.   MISCELLANEOUS.........................................................13












Date: 10/01/03                Philips Confidential

<PAGE>

                             OEM PURCHASE AGREEMENT

THIS AGREEMENT is entered into between PHILIPS MEDICAL SYSTEMS, a division of
Philips Electronics North American Corporation, a Delaware corporation
("Philips") and BRAEMAR, INC., a North Carolina corporation ("Supplier"),
effective as of September 1, 2003 (the "Effective Date"). The parties hereby
agree as follows:

1.       SCOPE OF AGREEMENT

1.1      General. This Agreement specifies the terms and conditions under which
         Supplier will sell, license and support the OEM Products listed in
         Exhibit A to this Agreement. The OEM Products are regarded as "Original
         Equipment Manufacturer" products that will either be sold separately or
         incorporated into Philips Products for resale worldwide under the
         Supplier's label or under Philips private label. The OEM Products and
         the Philips Products will be marketed, serviced, and supported by
         Philips field organization and channel partners, subject to the
         marketing, service, and support obligations of Supplier pursuant to
         this Agreement.

1.2      Eligible Purchasers. This Agreement enables Philips, Philips
         Subsidiaries and Philips Subcontractors to purchase OEM Products from
         Supplier under the terms of this agreement or any subsequent Product
         Addendum. Unless a Product Addendum specifically refers to and amends a
         term of this Agreement, the terms and conditions of this Agreement will
         control and take precedence over any conflicting terms in a Product
         Addendum.

1.3      Term Of Agreement. This Agreement will commence as of the Effective
         Date and continue for a three-year period (the "Term"), unless
         terminated earlier under the terms of this Agreement. After the initial
         Term, this Agreement will continue automatically for two additional
         one-year periods. This Agreement may be terminated at the end of the
         initial Term or at the end of any subsequent renewal period if one
         party provides the other at least 60 days prior notice of its intent to
         terminate.

1.4      Non-exclusive Appointment. Subject to the terms and conditions of this
         Agreement the Supplier appoints Philips as the Supplier's non-exclusive
         distributor of the OEM Products worldwide commencing on the Effective
         Date. Philips' distribution rights shall extend to any improved OEM
         Products for Holter and event monitoring recorders.

1.5      Exclusive Appointment. Subject to the terms and conditions of this
         Agreement and commencing on the Effective Date, the Supplier appoints
         Philips as the Supplier's exclusive distributor of the OEM Products
         that have been made compatible with EASI. The Supplier has the royalty
         free rights to distribute through Philips the OEM Products that have
         been made compatible with the EASI technology. The royalty free license
         for EASI in the OEM Products is in effect only for the period of the
         Agreement.

1.6      Product Ownership.

         (1)      DigiTrak Plus: Philips owns the case, mold, and PM Dx circuit.
                  Braemar owns the electrical design, circuits, firmware,
                  cabling, and developer software.
         (2)      7XX Event Recorders Braemar owns 100%.
         (3)      930 Event Recorder with EASI front end in the EASITrak case:
                  Philips will own 40% of the ER930 case with planned NRE funds.
                  If the 930 Event Recorder with EASI front end is released in
                  the new DigiTrak Plus improved case -- Philips owns the case
                  and the associated tools.
         (4)      For simplicity, Braemar will sell the ER 930 with EASI only to
                  Philips.

1.7      Sub-distributors and Manufacturer's Representatives. Philips may
         appoint Sub-distributors, sales agents and manufacturer's
         representatives to promote, distribute and sell the OEM Products in
         Accordance with this Agreement. Philips shall be entitled to use its
         standard form of distribution agreement for such Sub-distributors;
         provided, however, that Philips shall at all times remain responsible
         for performance of all of its obligations under this Agreement and
         shall use its commercially reasonable efforts to bring its
         Sub-distributors into compliance with this Agreement. If Supplier has
         actual knowledge of improper acts or omissions on the part of such
         Sub-distributors, it will use reasonable efforts to inform Philips of
         such acts or omissions; provided, however, that such obligation shall
         not relieve Philips of any of its obligations under this Agreement with
         respect to such Sub-distributors.

1.8      Alliance Managers and Meetings. Each of the parties has appointed an
         individual, to facilitate communications between the Parties relating
         to the OEM Products and the relationship contemplated herein. These
         individuals are shown in Exhibit C. These individuals shall meet not
         less than quarterly to discuss the marketing, distribution, forecasts,
         sales and business issues of the OEM Products as contemplated
         hereunder; provided, however, that


Date: 10/1/03                 [****] CONFIDENTIAL                   Page 1 of 43
<PAGE>

         nothing in this Agreement shall limit Philips' ability to set prices or
         ASP for the OEM Products which charges to third parties. Notice of any
         change to these appointed individuals shall be provided to the other
         party.

2.       DEFINITIONS

The following capitalized terms will have these meanings throughout this
Agreement.

2.1      "Delivery Date" means the date specified in an Order for the delivery
         of OEM Products by Supplier to the destination required under the
         Order.

2.2      "Documentation" means the user and technical manuals and other
         documentation that Supplier will make available with the OEM Products.

2.3      "Eligible Purchasers" mean those parties authorized to purchase OEM
         Products under this agreement as listed in Section 1.2 above.

2.4      "Failure Rate" means defects in design, material and workmanship
         (excluding customer abuse) that occurred in warranted product over the
         past year divided by the number of OEM products under warranty in the
         past year.

2.4      "Forecast" means Philips' estimate of its purchase requirements over a
         six-month period, or such other period designated by the parties.

2.5      "Intellectual Property Rights" means all rights in patents, copyrights,
         moral rights, trade secrets, mask works, Marks and other similar
         rights.

2.6      "Lead Time" means the time between the date an Order is sent and the
         Delivery Date.

2.7      "Marks" means the trademarks, service marks, trademark and service mark
         applications, trade dress, trade names, logos, insignia, symbols,
         designs or other marks identifying a party or its products.

2.8      "Noncomplying Product" means any OEM Product received by Philips that
         does not comply with the Specifications, or otherwise does not comply
         with the requirements of an Order or other provisions of this
         Agreement. Noncomplying Products include, without limitation,
         dead-on-arrival products, overshipment and early shipments.

2.9      "OEM Products" means the products listed in Exhibit A all related
         Documentation, Parts and other Deliverables provided pursuant to this
         Agreement.

2.10     "Orders" means a written or electronic purchase order or release issued
         by Philips to Supplier for purchase of the OEM Products.

2.11     "Parts" means the replacement parts, components, consumables or other
         products that may be supplied in conjunction with or as additions to
         the OEM Products.

2.12     "Philips Products" means the Philips products or systems that will
         incorporate or be sold with the OEM Products and that will be marketed
         and sold to end-user customers by Philips and its distributors.

2.13     "Philips Property" means all property, including without limitation,
         models, tools, equipment, copies of designs, documentation and other
         materials that may be furnished to Supplier by Philips or on Philips'
         behalf or separately paid for by Philips for use by Supplier in
         connection with this Agreement.

2.14     "Product Addendum" means an addendum to this Agreement entered into
         between Supplier and an Eligible Purchaser naming additional OEM
         Products and product specific requirements in addition to those
         requirements specified in this Agreement.

2.15     "Software" means any software or firmware included or bundled with the
         OEM Products, as designated in the description of OEM Products in
         Exhibit A.

2.16     "Specifications" means the technical and functional requirements for
         the OEM Products as specified or referenced in Exhibit A or as agreed
         to by the parties.


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<PAGE>

2.17     "Subcontractor" means Philips dealers, distributors and manufacturers
         representatives that may purchase OEM Products under the terms of this
         Agreement on behalf of Philips.

2.18     "Subsidiary" means an entity controlled by or under common control with
         a party to this Agreement, through ownership or control of more than
         50% of the voting power of the shares or other means of ownership or
         control, provided that such control continues to exist.

2.19     "Support" means ongoing maintenance and technical support for the OEM
         Products provided by Supplier to Philips as more fully described in
         Exhibit D.

2.20     "Technical Information" means Information means Supplier's
         manufacturing information and technology deemed necessary by Philips to
         support OEM Products and to exercise any manufacturing rights provided
         under this Agreement, including, but not limited to: (i)
         specifications, software, schematics, designs, drawings or other
         materials pertinent to the most current revision level of manufacturing
         of the OEM Products; (ii) copies of all inspection, manufacturing, test
         and quality control procedures and any other work processes; (iii) jig,
         fixture and tooling designs; (iv) supplier history files; (v) support
         documentation; and (vi) any additional technical information or
         materials listed in the Escrow Agreement (as described in Exhibit F
         hereto) agreed to by the parties.

2.21     "Technical Materials" means jigs, fixtures, production software and
         tools used by Supplier to manufacture the OEM Products.

3.       ORDERS AND SHIPMENT OF OEM PRODUCTS

3.1      Orders, Order Acknowledgment, Forecasts, Lead Time, Inventory
         Requirements, Order Changes, Shipment Requirements, Philips Options to
         Accept Overshipments, Requirements for Meeting Delivery Dates and
         Information Regarding No Advance Shipments. Each delivery of OEM
         Products will be initiated by an Order issued to Supplier by Philips.
         Philips' and Supplier's purchasing terms are listed in Exhibit G SMI
         Agreement and the Philips Purchase Order Terms and Conditions attached
         to each purchase order.

3.2      Emergency Orders. If Philips deems it necessary, Philips may order OEM
         Products by facsimile on an emergency basis ("Emergency Order") subject
         to the availability of such OEM Products in Supplier's inventory.
         Supplier will use its best efforts to ship the Emergency Order to
         Philips' stipulated destinations within [****] after the receipt by
         Supplier. Subject to Philips' approval, Philips will pay any additional
         expenses related to such Emergency Orders.

3.3      Title and Risk of Loss. Unless otherwise specified in writing by
         Philips, shipments will be F.O.B. destination. If Philips designates
         the carrier, shipments will be F.O.B. carrier. Title to OEM Product
         hardware and media ordered under this Agreement and risk of loss or
         damage will pass from Supplier to Philips upon Supplier's delivery of
         the OEM Products to the common carrier specified by Philips, subject to
         the provisions in Sections 3.4 and 3.5 below with respect to packing
         and handling.

3.4      Packing List. Each delivery of OEM Products to Philips must include a
         packing list that contains at least:
         (a)      The Order number and the Philips part number;
         (b)      The quantity of OEM Products or Parts shipped; and
         (c)      The date of shipment.

3.5      Packaging. Supplier must preserve, package, handle, and pack all OEM
         Products so as to protect the OEM Products from loss or damage, in
         conformance with good commercial practice, the Specifications,
         Government Regulations, and other applicable standards. Special static
         protection must be provided for OEM Products requiring such packaging.

3.6      Responsibility for Damage. Supplier will be liable for any loss or
         damage due to its failure to properly preserve, package, handle, or
         pack OEM Products. Philips will not be required to assert any claims
         for such loss or damage against the common carrier involved. Further,
         Philips will not be liable for any loss or damage due to a release of
         chemicals or other hazardous materials to the environment prior to
         Philips' actual receipt of the corresponding OEM Products.





Date: 10/1/03                 [****] CONFIDENTIAL                   Page 3 of 43

<PAGE>

4.       PRICES AND PAYMENT TERMS

4.1      OEM Product Prices. Supplier's prices for the OEM Products are listed
         in Exhibit B in U.S. currency unless otherwise stated, and may not be
         increased without Philips' consent. The prices for Parts will be
         Supplier's published prices, less any applicable discounts, unless the
         parties agree to a price schedule for Parts. OEM Products and Parts
         will also be subject to any applicable prompt payment discounts.
         Supplier and Philips agree to review OEM Product prices semi-annually.
         If, during the term, Supplier effectuates cost reductions in its
         manufacturing and delivery processes, it will pass such reductions to
         Philips and amend the prices accordingly.

4.2      Changed Prices. If during the Term changed prices or price formulas are
         put in effect by mutual agreement of Philips and Supplier, or reduced
         prices or price formulas are otherwise put in effect by Supplier, such
         prices or price formulas (if resulting in lower prices than the then
         current price) will apply to all Orders issued by Philips after the
         effective date of such prices or price formulas and to all unshipped
         Orders.

4.3      Payment Procedure. Philips' and Supplier's purchasing terms are listed
         in Exhibit G SMI Agreement and the Philips' Purchase Order Terms and
         Conditions attached to each purchase order.

4.4      [****]. [****]. In addition, Philips may credit any amounts due under
         this Agreement against future invoices.

4.5      Sales Taxes And Duties. Prices are exclusive of all taxes or duties
         after delivery to the designated destination (other than taxes levied
         on Supplier's income) that Supplier may be required to collect or pay
         upon shipment of the OEM Products. Any such taxes or duties must appear
         as a separate item on Supplier's invoice. Philips agrees to pay such
         taxes or duties unless Philips is exempt from such taxes or duties.
         Where applicable, Philips will provide Supplier with an exemption
         resale certificate.

5.       NONCOMPLYING PRODUCTS

5.1      Repairs Or Replacement. Philips may elect in its sole discretion,
         subject to the provisions of Article 18 below, to return a Noncomplying
         Product for replacement at Supplier's expense. In addition, Philips may
         return for replacement an entire lot of OEM Products if a tested sample
         of that lot contains Noncomplying Products. In the event of an
         overshipment, Philips may elect to keep the additional units, subject
         to the payment procedures in Section 4.3.

5.2      Repair Period. Supplier will return the replacement OEM Products as
         soon as possible but in no event later than [****] workdays after
         receipt of the Noncomplying Product from Philips. Supplier's
         opportunity to cure any failure to meet such deadline, pursuant to
         Article 18 below, will apply to only one such breach per part number
         during the Term.

5.3      Product Defect. Supplier will notify Philips should a defect in any of
         the OEM Products be found which it believes is likely to be associated
         with an Epidemic Failure as set forth in Section 10.5 or cause a Safety
         Standard Change as set forth in Section 7.5.

6.       RETURN OF PRODUCTS

6.1      Return Materials Authorization. All OEM Products returned by Philips to
         Supplier must be accompanied by a Return Materials Authorization
         ("RMA") as noted in Exhibit D. Unless further verification is
         reasonably required by Supplier, Supplier will supply an RMA within
         [****] of Philips' request. Philips may return the OEM Product without
         an RMA if Supplier fails to provide one.

6.2      Return Charges. All Noncomplying Products returned by Philips to
         Supplier, and all replacement or repaired OEM Products shipped by
         Supplier to Philips to replace Noncomplying Products, will be at
         Supplier's risk and expense, including transportation charges (round
         trip charges for replacement or repaired OEM Products).

6.3      Duty To Remove Marks Or Destroy Noncomplying Products. Supplier agrees
         not to sell, transfer distribute or otherwise convey any part,
         component, product or service bearing or incorporating Philips Marks,
         part numbers or other identifiers, including any Philips packaging,
         copyrights or code, to any party other than to Eligible Purchasers.
         Supplier will remove from all rejected, returned or un purchased OEM
         Products any such Philips Marks or identifiers, even if such removal
         would require destruction of the OEM Products. Supplier further agrees
         not to represent that such OEM Products are built for Philips or to
         Philips specifications. Supplier will defend and indemnify Philips

Date: 10/1/03                 [****] CONFIDENTIAL                   Page 4 of 43
<PAGE>

         against any claims, losses, liabilities, costs or expenses that Philips
         may incur as a result of Supplier's breach of this obligation.

7.       ENGINEERING PROCESS OR DESIGN CHANGES

7.1      Supplier Proposed Changes. Supplier will not, without the prior written
         consent of Philips, make or incorporate in OEM Products any of the
         following changes (collectively, "Engineering Changes"):

         (1)      Process or design changes;

         (2)      Geographical relocation of manufacturing processes; or

         (3)      Process step discontinuances affecting the electrical
                  performance, the mechanical form, fit, or function, the
                  environmental compatibility or chemical characteristics,
                  software compatibility, or the life, reliability, or quality
                  of OEM Products.

7.2      Notice Of Proposed Change. Supplier will give Philips notice of any
         proposed Engineering Change, and will provide evaluation samples and
         other appropriate information as specified by Philips at least 90 days
         prior to the first proposed shipment of any OEM Products involving an
         Engineering Change. Regardless of whether Philips approves a proposed
         Engineering Change, Lead Time will not be changed except as provided in
         Section 3.1 above.

7.3      Philips Proposed Changes. Philips may change Philips-supplied drawings,
         designs, or Specifications at any time prior to manufacture of
         corresponding released OEM Products. Any such change will be effective
         upon notice to Supplier. If any such change reasonably and directly
         affects the prices or delivery schedules of OEM Products, an equitable
         adjustment will be made provided that Supplier makes a written claim
         for an adjustment within 30 days from the date Philips gives notice to
         Supplier of the change and Philips agrees in writing to the adjustment.

7.4      Option To Terminate. If the parties are unable to agree, acting
         reasonably and in good faith, upon an adjustment pursuant to Section
         7.3 above, Philips may without any liability terminate this Agreement
         as to any OEM Products affected.

7.5      Safety Standard Changes. Supplier will immediately give notice to
         Philips if any upgrade, substitution or other change to an OEM Product
         is required to make that product meet applicable safety standards or
         other governmental statutes, rules, orders or regulations, even those
         that are not defined as Engineering Changes is Section 7.1 above. All
         affected OEM Products already purchased by Philips may, at Philips'
         election, either be returned to Supplier for upgrade to current
         revisions or upgraded by Philips in the field pursuant to the
         procedures outlined in Section 10.7 below. If an OEM Product meets
         applicable safety standards and other governmental requirements at the
         time of manufacture, Supplier will absorb the costs of any subsequent
         upgrade; substitution or other required change between the parties. If
         such discussions render no equitable solution, the parties may either
         mutually agree to escalate the matter to their respective vice
         presidents or general managers, as applicable, or in the alternative,
         divide the costs equally between them.

7.6      Supplier Product Development. Supplier agrees to integrate Philips'
         EASI algorithm and software code into the OEM Products with NRE funding
         as specifically identified in the addendums attached. Philips retains
         ownership of the design of the OEM Products as adapted to work with the
         EASI algorithm. Specific ownership rights are detailed in Section 1.6.
         Supplier will be responsible for improvements to the design,
         manufacture and verification of the OEM Products. Philips will be
         responsible for NRE to complete product improvements above and beyond
         product specification. Supplier agrees to supply Philips updateable
         software releases with complete documentation to aid the Philips in
         updating the OEM Products. Philips is responsible for using best
         efforts to fully implement all Supplier provided software releases
         across the entire installed product base in a timely manner. [****].

7.7      Philips Product Development. Philips will be available to support the
         Supplier's efforts to integrate the EASI algorithm and as apart of the
         acceptance testing of the adapted OEM Products (which include the EASI
         algorithm), will test to verify that the Holter software and the OEM
         Products continue to be compatible. It is understood by both parties
         that the PC platforms to be tested include Windows 98,Windows 2000, and
         Windows XP. Philips agrees to fund this testing as well as any
         incremental regulatory approvals and localizations of the manuals that
         are not covered in Exhibit A.

Date: 10/1/03                 [****] CONFIDENTIAL                   Page 5 of 43

<PAGE>

8.       QUALITY

8.1      Quality Program. Supplier agrees to maintain an objective quality
         program for all OEM Products. Supplier's program will be in accordance
         with the current revision of Philips' Supplier Quality System
         Requirements, and if applicable, any additional or substitute quality
         requirements agreed to by the parties. Supplier will, upon Philips'
         request, provide to Philips' copies of Supplier's program and
         supporting test documentation.

8.2      Philips' Right To Inspect. Philips has the right to inspect, at
         Supplier's plant, the OEM Products and associated manufacturing
         processes. Manufacturing processes may be inspected at any time during
         the Term. Philips' inspection may be for any reason reasonably related
         to this Agreement, including assuring Supplier's compliance with
         Philips' requirements. Philips' right of inspection will apply as well
         to any vendor or subcontractor of Supplier. Supplier will inform such
         vendors or, subcontractors of Philips' right to inspect, and, if
         necessary, use all reasonable effort to secure such rights for Philips.

8.3      Supplier's Right to Audit. Supplier has the right to audit, at Philips
         repair facilities, the service and repair processes at any time during
         the Term. Supplier's audit may be Philips compliance with Supplier's
         service repair requirements. This includes any vendor of Philips.
         Philips will inform such vendors of Supplier's right to audit.

9.       WARRANTIES

9.1      Product Warranties. Supplier warrants that all OEM Products will:

         (1)      Be manufactured, processed, and assembled by Supplier or by
                  companies under Supplier's direction.

         (2)      Conform to the Product Specifications, and other criteria
                  referred to in this Agreement or agreed to by the parties in
                  writing.

         (3)      Be new, except as otherwise provided by the parties.

         (4)      Conform strictly to the requirements of all Orders.

         (5)      Be free from defects in Supplier's design, material and
                  workmanship.

         (6)      Be free and clear of all liens, encumbrances, restrictions,
                  and other claims against title or ownership.

         (7)      Not violate or infringe any third party Intellectual Property
                  Rights and Supplier warrants that it is not aware of any facts
                  upon which such claim could be made. If Supplier learns of any
                  claim or any facts upon which claim could be made, it will
                  promptly notify Philips of this information.

         (8)      The DigiTrak Plus 24 hour, 48 hours, and Raytel labeled OEM
                  products are sold to Philips with the understanding that
                  Philips will absorb the cost of repair up to the repair rate
                  identified in Section 10.5.

         (9)      Excluded from this Warranty are expendable supply items
                  including, but not limited to electrodes, lead wires, patient
                  cables and batteries. End user abuse of any kind is also
                  excluded from the limited warranty.

9.2      Epidemic Failure Warranty. In addition to the warranties specified
         above, Supplier warrants all OEM Products against epidemic failure for
         a period of three years after receipt of that OEM Product or the
         associated Philips Product by Philips customers. An epidemic failure
         means the occurrence of same failure in any [****] or [****]% of OEM
         Products, within a one-year time frame.

10.      SUPPORT SERVICES

10.1     General. Philips will provide Primary Support for the Products supplied
         by Supplier. Supplier will provide Philips with Secondary Support as
         outline in Exhibit D. Supplier will maintain such number of qualified
         personnel as necessary to provide timely and knowledgeable maintenance
         and support service. Supplier warrants that all Support will be
         provided in a professional and workmanlike manner. However, in no event
         may Supplier us Philips Confidential Information or Philips Property to
         provide such support without Philips' prior consent.

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<PAGE>

10.2     New Philips Products. Upon request by Philips, Supplier will use all
         reasonable efforts to provide Philips with the OEM Products adapted for
         use with new releases of Philips Products within timeframes and at such
         additional costs, if any, to be negotiated by the parties, provided
         that Philips makes available to Supplier such Philips Property as may
         be reasonably necessary for Supplier to develop any adaptation.

10.3     Philips Property. Philips may provide to Supplier Philips Property
         solely for use in Supplier's manufacturing, testing, adapting and
         supporting the OEM Products. This includes latest versions of Philips
         Analysis Software for product development and testing. All Philips
         Property will be clearly segregated from Supplier's property and
         identified as the sole property of Philips. Philips Property may not be
         transferred, assigned, loaned or otherwise encumbered in any way.
         Philips Property may be provided to third parties for fulfillment of
         Supplier's obligations hereunder only upon Philips' prior written
         consent. Philips property will be returned to Philips, at Supplier's
         expense, upon termination of this Agreement.

10.4     Substitute Products. If Supplier develops any products that are more
         efficient or less expensive than the comparable OEM Products available
         under this Agreement, Philips will have the right to substitute the
         newer products at the same price as the comparable OEM Products for all
         subsequent purchases under this Agreement. Such substitute products
         must be compatible with the current version of the Philips Products.

10.5     Failure Rate. Notwithstanding that the warranties given in Section 9.1
         above apply to 100% of OEM Products, Supplier and Philips acknowledge
         that the OEM Products are software based and it is expected that
         defects will be addressed through software patches designed to be
         installed directly by the Customers. Any defects that prohibit the
         normal use of the OEM Products, as defined, or that require significant
         workarounds must be addressed in a timely fashion, free of charge to
         all Customers for the life of the OEM Products. A failure rate (as
         defined in Section 2.4) of [****]% per year or less is expected. If the
         actual failure rate for OEM Products exceeds this expected rate,
         Supplier will provide additional engineering and technical support as
         needed to bring the actual failure rate within the specified failure
         rate. Supplier and Philips will review this data quarterly. Complete
         documentation (as attached to Exhibit D), and reporting of product
         failures, service, repair, and any RMA documentation shall be reported
         monthly to Supplier as per Supplier's written requirements. Defective
         materials, parts shall be returned with documentation monthly by the
         tenth of each month to Supplier for ongoing Quality Improvement
         initiatives.

10.6     Cost of Repair. The expected annualized failure rate is [****]%
         (excluding customer abuse). Philips will absorb the cost of repair for
         all products below that rate. Philips agrees to service, repair OEM
         products in accordance with Supplier service and repair standards.
         However, cost sharing for failure rate analysis will commence six
         months after contract signature and final agreement of Supplier
         service/repair form with monthly service/repair data is fully
         functional. Failed parts will be sent with service forms to Supplier
         for product quality analysis and continual quality improvement. After
         these conditions have been met for every percentage point above [****]%
         that has been calculated at the quarterly review the Supplier will
         cover the cost of parts and direct labor costs of product repair above
         [****]% annualized failure rate until the rate falls below [****];
         (excluding any unit opened outside Supplier factory after original ship
         date). This Cost of Repair basis assumes that the actual measured
         failure rate during the period from Contract signing until June 1, 2004
         is around [****]%. If the actual failure rate is substantively
         different Philips and the Supplier may renegotiate the failure rate for
         cost of repair.

10.7     Class Failure Remedies. Upon the occurrence of any of the following
         events: (i) a failure rate exceeding the rate specified in Section 10.5
         above; (ii) an epidemic failure as described in Section 9.2; or (iii) a
         safety standard change under Section 7.5 above (each referred to as a
         "Class Failure"), Philips will have the following additional remedies
         for a three-year period commencing upon receipt by Philips' end-user
         customer of the OEM Product or the corresponding Philips Product.

         (1)      In the event of a Class Failure, Supplier will provide Philips
                  no later than [****] days following the Class Failure a root
                  cause analysis and corrective action plan. Philips will make
                  available such information and assistance reasonably required
                  to allow Supplier to conduct its root cause analysis and
                  provide its corrective action report.

         (2)      If, after review of the root cause analysis and corrective
                  action plan, Philips determines in its reasonable opinion that
                  the Class Failure necessitates a field stocking recall or
                  customer based recall or retrofit, Philips may then elect to
                  have the OEM Products: (i) updated by Supplier (via Customer
                  installable updater); (ii) replaced by Supplier in the field;
                  or (iii) replaced by Philips in the field, including products
                  in distributor inventory and Philips' installed base. If
                  Philips chooses to perform a field repair, Supplier will cover
                  the costs of the Philips Support organization as well as
                  provide the appropriate replacement OEM Products, Parts or
                  upgrades free of charge to Philips. Such OEM Products, Parts
                  or upgrades will have the highest shipping priority.

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         (3)      Except as provided in Section 7.5 above regarding safety
                  standard changes, Supplier will, within [****] days after
                  completion of the recalls or retrofits, reimburse Philips for
                  its reasonable and direct costs in performing such services.

10.8     Survival Of Support Obligations. Supplier's maintenance and support
         obligations specified in this Section 10, and in the Support Terms in
         Exhibit D will run for the Term and any additional periods under
         Section 1.3 above and will continue for a period of five years after
         Philips ships the last Philips Product or an OEM Product. This
         obligation includes making necessary Parts available to Philips, as
         further provided in the Support Terms.

11.      OBSOLESCENCE AND MANUFACTURING RIGHTS

11.1     Lifetime Buy Rights. Supplier acknowledges its obligation to
         manufacture, supply and support the OEM Products without interruption
         for the Term. If, however, after the first year of shipment of such
         products, Supplier seeks to discontinue the supply or support of any
         OEM Product (a "Discontinued Product"), Supplier will give notice to
         Philips no less than [****] months in advance of the last date the
         Discontinued Product can be ordered. After receipt of notice of
         discontinuance, Philips may, at its option:

         (1)      Purchase from Supplier such quantity of the Discontinued
                  Product as Philips deems necessary for its future
                  requirements; and

         (2)      Manufacture the Discontinued Product under the manufacturing
                  rights granted in Section 11.2 below, without payment to
                  Supplier of any royalties or other charges.

11.2     Philips' Right To Manufacture. Subject to the terms of Section 11.1
         above, Supplier grants to Philips, under Supplier's Intellectual
         Property Rights, a perpetual, non-exclusive, worldwide, royalty-free
         license to use, modify, reproduce, import, manufacture, distribute,
         offer for sale and sell the Discontinued Product. Philips may
         sublicense these rights to third parties, provided any such third party
         complies with the terms of this license and any associated obligations
         of confidentiality. In the event Philips elects to exercise this right:

         (1)      Supplier will release to Philips all Technical Information or
                  other materials deposited under the terms of the Deposit
                  Agreement, described below in Section 11.4, necessary for the
                  manufacture of the Discontinued Product. Philips will keep all
                  Technical Information confidential in accordance with the
                  terms of Article 19 below. If Supplier has failed to place
                  Technical Information in escrow or to update the escrow as
                  provided below, Philips might use the measures described in
                  paragraph (b) below to obtain such information.

         (2)      Supplier will furnish to Philips all Technical Materials at
                  their book value within [****] days after Philips has notified
                  Supplier of its exercise of its rights under this Article 11.
                  If the materials are not delivered within this time period,
                  Philips will have the right to collect such materials at
                  Supplier's plant or offices and Supplier agrees to assist
                  Philips in such collection. Philips will pay amounts due on
                  such materials within [****] days after receipt of Supplier's
                  invoice or receipt of the materials, whichever is later. If
                  Philips has to use measures to collect the materials itself,
                  it may deduct its costs from the book value of the materials.

         (3)      Supplier will furnish to Philips within seven days after
                  Philips' written request, the names and addresses of
                  Supplier's sources for Parts not manufactured by Supplier,
                  including the appropriate part numbers for commercially
                  available equivalents of electronic parts. Supplier will use
                  all reasonable efforts to ensure that Philips will have the
                  right to purchase all such Parts directly from Supplier's
                  vendors.

         (4)      Supplier will furnish to Philips without charge all Parts
                  catalogues, schematics, material lists, engineering change
                  orders, and other servicing documentation deemed necessary by
                  Philips to service and support the Discontinued Product.

         (5)      Supplier will assign to Philips any license rights it may have
                  with third parties for software, documentation or any
                  intellectual property used in the manufacture of the
                  Discontinued Product.

11.3     Consulting Services. In support of Technical Information conveyed to
         Philips, Supplier will provide:

         (1)      Up to [****] hours of consulting services, as required by
                  Philips, provided that Philips bears the cost of reasonable
                  travel expenses; and

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         (2)      Additional consulting services at the rate of [****] per
                  eight-hour workday, plus reasonable travel expenses of those
                  so engaged.

11.4     Escrow Agreement. At Philips' request and as security for the
         fulfillment of Supplier's obligations under this Agreement, Supplier
         will deposit a copy of the Technical Information, including any source
         code for all software contained in the OEM Products (the "Deposit")
         pursuant to the terms of Philips' standard Deposit Agreement, [attached
         as Exhibit F]. Philips will have the right to inspect and verify that
         the appropriate Deposit of current and complete information is being
         made. Supplier will update the Deposit on a regular basis, but no less
         than semi-annually, and at least once immediately prior to Philips'
         exercise of its rights hereunder.

12.      TRAINING

12.1     Technical Training. Supplier will provide to Philips up to three
         technical/service training sessions for up to one day each, sufficient
         to allow Philips to become fully familiar with the technical/support
         attributes, service, and repair requirements/standards for each new OEM
         Product. Training will be at no charge to Philips. Supplier will
         provide product literature, learning products and service manuals for
         each new OEM Product. Training may be conducted at the Supplier factory
         or at the Philips repair center.

12.2     Sales Training. Supplier will develop for Philips to use with Customers
         a computer based or web based training for use for each new OEM
         Product. In addition Supplier will hold up to three sales training
         sessions for up to one day each to allow Philips to become fully
         familiar with each new OEM Product and its market. Training will be at
         no charge to Philips. Supplier will provide product literature,
         learning products; laptop based sales demonstration software, and all
         other sales tools that have been created (such as PowerPoint
         presentations) for each new OEM Product.

12.3     Additional Training. Philips may further request and Supplier will
         provide additional training at no charge as reasonably necessary to
         inform Philips personnel of upgraded, enhanced or new versions of the
         OEM Products. Other training will be provided upon mutually agreeable
         terms and conditions.

12.4     Philips' Rights In Training Classes And Materials. Philips may at no
         charge use, reproduce, modify, display and perform either internally or
         for Philips' customers, all training classes, methods, and materials
         supplied or developed by Supplier under this Agreement. Philips' use
         may be in any manner Philips reasonably deems appropriate.

13.      MARKETING AND LICENSING

13.1     Marketing Authority. Philips will have the authority to market the OEM
         Products and the Philips Products containing the OEM Products to the
         extent it deems appropriate, in its sole discretion. Without limiting
         the generality of the foregoing sentence, nothing in this Agreement
         will be construed or interpreted to place a "best efforts" obligation
         upon Philips with respect to marketing the Philips Products or OEM
         Products or preclude Philips from independently developing, purchasing,
         licensing, or marketing any product which performs the same or similar
         function as the OEM Products. Philips will have the right to use its
         own business and license terms for all marketing and distribution of
         the OEM Products and Philips Products.

13.2     No Rights In Marks. Except as otherwise specified in the private
         labeling section below, nothing in this Agreement should be construed
         to grant either party any rights in the Marks of the other party.
         Supplier acknowledges, however, that Philips may use the name of
         Supplier and the name of the OEM Products in advertising and marketing
         the OEM Products or the Philips Products. The OEM Products will be
         affixed with copyright notices sufficient to give notice as to the
         rights of the parties in their respective products.

13.3     Private Labeling. If Philips decides during the Term to create Philips
         private label versions of the OEM Products, Supplier will ensure that
         the OEM Products contain the Philips Marks, serial number format and
         packaging specified by Philips and conforming to Philips specifications
         for external appearance (which will not require any material change in
         form or dimensions of the OEM Products or require commercially
         unreasonable actions). Except as provided herein, Supplier will have no
         other right or license in any Philips and are Philips private labels.

13.4     Software License. If the OEM Products include Software, Supplier hereby
         grants to Philips, under Supplier's Intellectual Property Rights in
         such Software, a non-exclusive, worldwide, fully paid-up license to
         use, import, offer for sale and distribute the Software in object code
         form as integrated with the OEM Products or the Philips Products. These
         rights will extend to Philips Subsidiaries and third party channels of
         distribution.

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13.5     Documentation License. Supplier hereby grants Philips a non-exclusive,
         non-transferable, worldwide, fully paid up license to use, reproduce,
         distribute and prepare derivative works in Philips' name all
         Documentation and other information, other than confidential
         information, furnished by Supplier under this Agreement. Philips may
         reproduce such Documentation without Supplier's logo or other
         identification of source, subject to affixing copyright notices to all
         copies of Documentation. These rights with respect to the Documentation
         will extend to Philips Subsidiaries and third party channels of
         distribution.

14.      INTELLECTUAL PROPERTY PROTECTION

14.1     Supplier's Duty To Defend. Except as provided in Section 14.4 below,
         Supplier will defend and hold harmless Philips and its Subsidiaries,
         Subcontractors and customers from any claim that any OEM Product, any
         combination of an OEM Product with an Philips Product, any Software,
         Documentation or a Supplier Mark, or any product provided as part of
         Supplier's Support services constitutes an unauthorized use or
         infringement of any third party's Intellectual Property Rights.
         Supplier will pay all costs; damages and expenses (including reasonable
         attorneys' fees) incurred by Philips, its Subsidiaries, Subcontractors
         or customers and will pay any award with respect to any such claim or
         agreed to in any settlement of that claim.

14.2     Philips' Duty To Notify. Philips will give Supplier prompt notice of
         any such claim or action, and will give Supplier the authority,
         information, and reasonable assistance (at Supplier's expense)
         necessary to defend. If Supplier does not diligently pursue resolution
         of the claim nor provide Philips with reasonable assurances that it
         will diligently pursue resolution, then Philips may, without in any way
         limiting its other rights and remedies, defend the claim.

14.3     Remedies For Infringing Products. If the use or combination of any
         product provided hereunder is enjoined (the "Infringing Product"),
         Supplier will, at its sole expense and option:

         (1)      Procure for Philips and its customers the right to continue
                  using or combining the Infringing Product;

         (2)      Replace the Infringing Product with a non-infringing product
                  of equivalent function and performance; or

         (3)      Modify the Infringing Product to be non-infringing, without
                  detracting from function or performance.

14.4     Limitations. Supplier will be relieved of its indemnification
         obligations under this Article 14 to the extent that the claim arises
         solely and directly from Supplier's compliance with an Philips
         Specification provided that all implementations of that Specification
         constitute an unauthorized use or infringement of a third party
         Intellectual Property Right.

15.      COUNTRY OF MANUFACTURE AND DUTY DRAWBACK RIGHTS

15.1     Country Of Origin Certification. Upon Philips' request, Supplier will
         provide Philips with an appropriate certification stating the country
         of origin for OEM Products, sufficient to satisfy the requirements of
         the customs authorities of the country of receipt and any applicable
         export licensing regulations, including those of the United States.

15.2     Country Of Origin Marking. Supplier will mark each OEM Product, or the
         container if there is no room on the OEM Product, with the country of
         origin. Supplier will, in marking OEM Products, comply with the
         requirements of the customs authorities of the country of receipt.

15.3     Duty Drawback. If OEM Products delivered under this Agreement are
         imported, Supplier will when possible allow Philips to be the importer
         of record. If Philips is not the importer of record and Supplier
         obtains duty drawback rights to OEM Products, Supplier will, upon
         Philips' request, provide Philips with documents required by the
         customs authorities of the country of receipt to prove importation and
         to transfer duty drawback rights to Philips.

16.      GOVERNMENTAL COMPLIANCE

16.1     Duty To Comply. Supplier agrees to comply with all federal, state,
         local and foreign laws, rules, and regulations applicable to its
         performance of this Agreement or to OEM Products. Without limiting the
         generality of the foregoing sentence, Supplier represents that:

         (1)      Supplier will comply with all equal employment opportunity and
                  non-discrimination requirements prescribed by Presidential
                  Executive Orders, including the requirements of Executive
                  Order 11246, the Vocational Rehabilitation Act, and the
                  Vietnam Era Veterans' Readjustment Assistance Act.

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         (2)      Each chemical substance contained in OEM Products is on the
                  inventory of chemical substances compiled and published by the
                  Environmental Protection Agency pursuant to the Toxic
                  Substances Control Act;

         (3)      All OEM Products will be shipped in conformance with
                  government or freight regulations and requirements applicable
                  to chemicals; and

         (4)      Supplier will provide complete and accurate material safety
                  data sheets prior to shipping any OEM Product.

16.2     Procurement Regulations. For OEM Products purchased under this
         Agreement for incorporation into products to be sold under a federal
         contract or subcontract, those applicable procurement regulations that
         are required by federal statute or regulation to be inserted in
         contracts or subcontracts will be deemed incorporated in this Agreement
         and made to apply to all Orders.

16.3     Ozone Depleting Substances. Supplier hereby certifies that no OEM
         Product nor any component of any OEM Product:

         (1)      Contains any "Class I Substance" or "Class 2 Substance", as
                  those term are defined in 42 USC Section 767: and implementing
                  regulations of the United States Environmental Protection
                  Agency at 40 CFR Part 82; as now in existence or hereafter
                  amended; or

         (2)      Has been manufactured with a process that uses any Class or
                  Class 2 Substance within the meaning of 42 USC Section 7671
                  and implementing regulations of the United States
                  Environmental Protection Agency at 40 CFR Part 82, as now in
                  existence or hereafter amended.

17.      FORCE MAJEURE EVENTS

17.1     Delaying Causes. Subject to the provisions of this Article, Supplier
         will not be liable for any delay in performance under this Agreement
         caused by any "act of God" or other cause beyond Supplier's control and
         without Supplier's fault or negligence (a "delaying cause").
         Notwithstanding the above, Supplier will not be relieved of any
         liability for any delay or failure to perform its defense obligations
         with respect to third party Intellectual Property Rights or furnish
         remedies for Infringing Products as described in Article 14 above.

17.2     Philips Option. Supplier will immediately give Philips notice of any
         delaying cause and its best estimate of the expected duration of such
         case. In the event of a delaying cause, Philips agrees to work with
         Supplier to resolve the delay in a reasonable timeframe acceptable to
         both parties. If agreement is not reached, Philips may act in its sole
         discretion to:

         (1)      Terminate this Agreement or any part hereof as to OEM Products
                  not shipped; or

         (2)      Suspend this Agreement in whole or in part for the duration of
                  the delaying cause, buy similar products elsewhere, and deduct
                  from any quantities specified under this Agreement the
                  quantity so purchased.

17.3     Resumption Of Agreement. If Philips elects to purchase other similar
         products in the event of a delaying cause, Philips may resume
         performance under this Agreement once the delaying cause ceases and
         extend the Term up to the length of time the delaying cause endured.
         Unless Philips gives notice of termination as provided above within 30
         days after notice from Supplier of the delaying cause, Philips will be
         deemed to have elected to suspend this Agreement for the duration of
         the delaying cause.

18.      EVENTS OF DEFAULT

18.1     Notice Of Breach. If either party is in breach of any provision of this
         Agreement, the non-breaching party may, by notice to the breaching
         party, except as otherwise prohibited by the United States bankruptcy
         laws, terminate the whole or any part of this Agreement or any Order,
         unless the breaching party cures the breach within 30 days after
         receipt of notice.

18.2     Causes Of Breach. For purposes of Section 18.1 above, the term "breach"
         includes without limitation any:

         (1)      Proceeding, whether voluntary or involuntary, in bankruptcy or
                  insolvency by or against a party;

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         (2)      Appointment, with or without a party's consent, of a receiver
                  or an assignee for the benefit of creditors;

         (3)      Failure by Supplier to make a delivery of OEM Products in
                  accordance with the requirements of this Agreement or any
                  Order;

         (4)      Failure by Supplier to replace or repair Noncomplying Products
                  in a timely manner as required by Article 5 above; or

         (5)      Other failure by a party to comply with any material provision
                  of this Agreement with additional failure to provide the
                  non-breaching party, upon request, with reasonable assurances
                  of future performance.

18.3     Philips' Rights Upon Breach by Supplier for Cause. In the event Philips
         terminates this Agreement in whole or in part as provided above, in
         addition to any other remedies provided Philips under this Agreement,
         Philips may procure, upon such terms and in such manner as Philips
         reasonably deems appropriate, products similar to the OEM, Product as
         to which this Agreement is terminated. Supplier agrees to reimburse
         Philips upon demand for all additional costs incurred by Philips in
         purchasing, qualifying and testing such similar products. Supplier
         further agrees to continue the performance of this Agreement to the
         extent not terminated under the provisions of this Section.

18.4     Purchase Hold. If any Eligible Purchaser having the right to purchase
         an OEM Product under this Agreement or under any other agreement with
         Supplier believes in good faith that an OEM Product is defective, then,
         irrespective of any other rights provided Philips hereunder, Philips
         may implement a purchase hold to suspend purchases of such OEM Products
         without any liability. Such purchase hold may be removed if Philips
         reasonably believes that Supplier has taken sufficient action to
         correct the defect or given sufficient assurances that such defect will
         be corrected within a reasonable time.

19.      CONFIDENTIAL INFORMATION

19.1     Confidential Information. During the Term, a party (the "Recipient")
         may receive or have access to certain information of the other party
         (the "Discloser") that is marked as "Confidential Information,"
         including, though not limited to, information or data concerning the
         Discloser's products or product plans, business operations, strategies,
         customers and related business information. The Recipient will protect
         the confidentiality of Confidential Information with the same degree of
         care as the Recipient uses for its own similar information, but no less
         than a reasonable degree of care, under the terms of the Confidential
         Disclosure Agreement attached as Exhibit E (the "CDA"). To the extent
         any term of this Agreement conflicts with any term in the CDA, the
         terms of this Agreement will control and take precedence. Confidential
         Information may only be used by those employees of the Recipient who
         have a need to know such information for the purposes related to this
         Agreement. The parties acknowledge that all Technical Information and
         Forecasts are deemed Confidential Information to be protected for a
         term of three years from the date of disclosure.

19.2     Exclusions. The foregoing confidentiality obligations will not apply to
         any information that is (a) already known by the Recipient prior to
         disclosure, (b) independently developed by the Recipient prior to or
         independent of the disclosure, (c) publicly available through no fault
         of the Recipient, (d) rightfully received from a third party with no
         duty of confidentiality, (e) disclosed by the Recipient with the
         Discloser's prior written approval, or (f) disclosed under operation of
         law.

20.      INSURANCE REQUIREMENTS

20.1     Insurance Coverage. Supplier will maintain Comprehensive or Commercial
         General Liability Insurance (including but not limited to premises and
         operations, products and completed operations, broad form contractual
         liability, broad form property damage and personal injury liability)
         with the following minimum limits:

                  Comprehensive General Liability: $1,000,000 combined single
                  limit Bodily Injury/Property Damage per occurrence and
                  $1,000,000 Products/Completed Operations Aggregate.

                  Commercial General Liability: $1,000,000 combined single limit
                  Bodily Injury/Property Damage per occurrence; and $1,000,000
                  General Aggregate (where applicable); $1,000,000
                  Products/Completed Operations Aggregate; and $1,000,000
                  Personal/Advertising Injury.

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         Coverage provided will extend to Supplier's legal liabilities that may
         arise from use of the OEM Products or acts or omissions of Supplier
         under this Agreement. Each policy obtained by Supplier will name
         Philips, its officers, directors and employees as additional insureds.
         In addition, such policies will permit Supplier to waive, on its own
         behalf and on behalf of its insurers, any rights of subrogation against
         Philips.

         Such insurance policies will be written with appropriately licensed and
         financially responsible insurers, and will provide for a minimum of 30
         days written notice to Philips of any cancellation or reduction in
         coverage. Certificates of insurance evidencing the required coverage
         and limits will be furnished to Philips before any work is commenced
         hereunder, and Supplier will deliver copies of policies or certificates
         to the Philips contact listed in Exhibit C.

20.2     Claims Made Coverage. If any policies have "claims made" coverage,
         Supplier will maintain such coverage with Philips named as an
         additional insured for a minimum of three years after termination of
         this Agreement. Any such coverage must have a retroactive date no later
         than the date upon which work commenced under this Agreement.

20.3     Additional Requirements. All deductibles on policies providing coverage
         will be paid by Supplier. In the event Supplier is self insured for
         matters described in Section 20.1, Supplier agrees to respond to any
         claims or losses made against or incurred by Philips in the same
         fashion as if insurance had been purchased with the same or broader
         coverage terms than what is generally available to similar suppliers.
         In no event will the coverages or limits of any insurance required
         under this Article, or the lack or unavailability of any other
         insurance, be deemed to limit or diminish Supplier's obligations or
         liability to Philips under this Agreement.

21.      LIMITATION OF LIABILITY

         UNLESS OTHER WISE STATED IN THIS AGREEMENT, NEITHER PARTY WILL BE
         LIABLE FOR ANY SPECIAL OR CONSEQUENTIAL DAMAGES OF THE OTHER ARISING
         OUT OF ANY PERFORMANCE OF THIS AGREEMENT OR IN FURTHERANCE OF THE
         PROVISIONS OR OBJECTIVES OF THIS AGREEMENT, REGARDLESS OF WHETHER SUCH
         DAMAGES ARE BASED ON TORT, WARRANTY, CONTRACT OR ANY OTHER LEGAL
         THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
         NOTWITHSTANDING THE ABOVE, SUPPLIER WILL BE RESPONSIBLE FOR ANY DAMAGES
         OF ANY KIND INCLUDED IN AN AWARD OR SETTLEMENT OF A THIRD PARTY CLAIM
         UNDER ARTICLE 14 ABOVE.

22.      TERMINATION

22.1     Outstanding Orders. All Orders issued prior to the expiration of this
         Agreement must be fulfilled pursuant to and subject to the terms of
         this Agreement, even if the Delivery Dates are after expiration. Upon
         termination of this Agreement for Supplier's breach, Philips may cancel
         any outstanding Order or require Orders to be fulfilled even if a
         Delivery Date is after the date of termination.

22.1     Return Of Philips Property. Supplier must return all Philips Property
         to Philips upon expiration or termination. All such property must be in
         good condition, normal wear and tear expected. Philips will determine
         the manner and procedure for return. Philips will bear all return
         freight costs if return is due to Philips convenience or an uncured
         breach by Philips. Otherwise, Supplier will bear all such costs.

22.2     Surviving Provisions. Notwithstanding the expiration or early
         termination of this Agreement, the provisions regarding Warranties in
         Article 9, Support in Article 10, Manufacturing Rights in Article 11,
         Marketing and Licensing in Article 13, Intellectual Property in Article
         14, Confidentiality in Article 19, Insurance Requirements in Article
         20, Limitation of Liability in Article 21, and the Miscellaneous
         provisions below will each survive in accordance with their terms.

23.      MISCELLANEOUS

23.1     Notices. All notices to be given under this Agreement must be in
         writing addressed to the receiving party's designated recipient
         specified in Exhibit C. Notices are validly given upon the earlier of
         confirmed receipt by the receiving party or three days after dispatch
         by courier or certified mail, postage prepaid, properly addressed to
         the receiving party. Notices may also be delivered by telefax and will
         be validly given upon oral or written confirmation of receipt. Either
         party may change its address for purposes of notice by giving notice to
         the other party in accordance with these provisions.

23.2     Exhibits. Each Exhibit attached to this Agreement is deemed a part of
         this Agreement and incorporated herein wherever reference to it is
         made.

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23.3     Independent Contractors. The relationship of the parties established
         under this Agreement is that of independent contractors and neither
         party is a partner, employee, agent or joint venturer of or with the
         other. Nothing in this Agreement precludes either party from
         independently developing, manufacturing, selling or supporting products
         similar to the OEM Products.

23.4     Assignment. Neither this Agreement nor any right, license, privilege or
         obligation provided herein may be assigned, transferred or shared by
         either party without the other party's prior written consent, and any
         attempted assignment or transfer is void. Any merger, consolidation,
         reorganization, transfer of substantially all assets of a party, or
         other change in control or ownership will be considered an assignment
         for the purposes of this Agreement (other than an Philips merger into a
         wholly owned subsidiary). This Agreement will be binding on the
         successors and permitted assigns of the parties and the name of the
         party appearing herein will be deemed to include the names of such
         party's successors or permitted assigns to the extent necessary to
         carry out the intent of this Agreement.

23.5     No Waiver. The waiver of any term, condition, or provision of this
         Agreement must be in writing and signed by an authorized representative
         of the waiving party. Any such waiver will not be construed as a waiver
         of any other term, condition, or provision except as provided in
         writing, nor as a waiver of any subsequent breach of the same term,
         condition, or provision.

23.6     Reference To Days. All references in this Agreement to "days" will,
         unless otherwise specified herein, mean calendar days.

23.7     Headings. The Section headings used in this Agreement are for
         convenience of reference only. They will not limit or extend the
         meaning of any provision of this Agreement, and will not be relevant in
         interpreting any provision of this Agreement.

23.8     No Publication. Neither party may publicize or disclose to any third
         party, without the written consent of the other party, the terms of
         this Agreement. Without limiting the generality of the foregoing
         sentence, no press releases may be made without the mutual written
         consent of each party.

23.9     Severability. If any provision in this Agreement is held invalid or
         unenforceable by a body of competent jurisdiction, such provision will
         be construed, limited or, if necessary, severed to the extent necessary
         to eliminate such invalidity or unenforceability. The parties agree to
         negotiate in good faith a valid, enforceable substitute provision that
         most nearly effects the parties' original intent in entering into this
         Agreement or to provide an equitable adjustment in the event no such
         provision can be added. The other provisions of this Agreement will
         remain in full force and effect.

23.10    Entire Agreement. This Agreement comprises the entire understanding
         between the parties with respect to its subject matters and supersedes
         any previous communications, representations, or agreements, whether
         oral or written. For purposes of construction, this Agreement will be
         deemed to have been drafted by both parties. No modification of this
         Agreement will be binding on either party unless in writing and signed
         by an authorized representative of each party.

23.11    Governing Law. This Agreement will be governed in all respects by the
         laws USA without reference to any choice of laws provisions.


<TABLE>
<S>                                                          <C>

APPROVED AND AGREED TO:

SUPPLIER:                                                    PHILIPS TECHNOLOGIES, INC.

By:  /s/ Harry A. Strandquist                                By:  [****]
     ---------------------------------------

Typed Name:  Harry A. Strandquist                            Typed Name:  [****]
             --------------------

Title:  President and CEO                                    Title:  Vice President/General Manager - [****]
        -----------------                                            ---------------------------------------
</TABLE>


Date: 10/1/03                 [****] CONFIDENTIAL                  Page 14 of 43


<PAGE>

<TABLE>
<CAPTION>
                                       EXHIBIT A - EXISTING OEM PRODUCTS AND SPECIFICATIONS

------------------------------------------------ ---------------------- ----------------------------------------------
                   PHILIPS                             SUPPLIER                         PRODUCT NAME
                   PART NO.                            PART NO.
------------------------------------------------ ---------------------- ----------------------------------------------
<S>                                              <C>                    <C>
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
                    [****]                              [****]          [****]
------------------------------------------------ ---------------------- ----------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
                            ACCESSORIES / SPARES / EVENT RECORDERS / SCANNERS

------------------------------------ ------------------------------ -------------------------------------
             PHILIPS                           SUPPLIER                         PRODUCT NAME
             PART NO.                          PART NO.
------------------------------------ ------------------------------ -------------------------------------
<S>                                  <C>                            <C>
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
              [****]                            [****]              [****]
------------------------------------ ------------------------------ -------------------------------------
</TABLE>


LANGUAGES: English, Spanish, French, German, Italian and Dutch. All languages
are included on each recorder.

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 15 of 43
<PAGE>


EXHIBIT B - EXISTING OEM PRODUCTS SUPPLIER PRICING
OCTOBER 1, 2003

<TABLE>
<CAPTION>
---------------------------- ------------------ -------------------------------------------- -----------------------
         PHILIPS                 SUPPLIER                      PRODUCT NAME                       PHILIPS COST
         PART NO.                PART NO.
---------------------------- ------------------ -------------------------------------------- -----------------------
<S>                          <C>                <C>                                          <C>
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------
          [****]                  [****]        [****]                                               [****]
---------------------------- ------------------ -------------------------------------------- -----------------------

                                                      ACCESSORIES AND SPARES

------------------------------- ------------------- --------------------------------------------- ----------------------
           PHILIPS                   SUPPLIER                       PRODUCT NAME                  PHILIPS COST
           PART NO.                  PART NO.
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
[****]                                [****]        [****]                                        [****]
------------------------------- ------------------- --------------------------------------------- ----------------------
</TABLE>


Date: 10/1/03                 [****] CONFIDENTIAL                  Page 16 of 43

<PAGE>



                  EXHIBIT C - RECIPIENTS FOR RECEIPT OF NOTICES


                  Collette White
                  Materials Manager
                  Philips Medical Systems
                  1201 N. Rice Ave.
                  Oxnard, CA  93030
                  (805) 988-7344 phone
                  (805) 604-0493 fax


                  Harold Strandquist
                  President & CEO
                  BRAEMAR, Inc.
                  11481 Rupp Drive
                  Burnsville, MN 55337-1276
                  (952) 822-6543 phone
                  (952) 882-6550 fax























Date: 10/1/03                 [****] CONFIDENTIAL                  Page 17 of 43

<PAGE>

                            EXHIBIT D - SUPPORT TERMS



Braemar DigiTrak Plus recorder repairs follow two separate, but related paths.
The repair process is dependent on the customer's geographic location. All
domestic customers follow an express repair process while all international
customers follow an exchange process.

Domestic customers call Philips North American Response Center (Atlanta), where
an electronic customer case is created (in Clarify), if required the customer is
routed to a Response Center Engineer RCE. If the RCE determines a repair is
needed, the repair details are noted in Clarify, the customer is faxed a sheet
telling them to ship the repair to the Repair Center (Dallas) and a repair case
is opened (Polaris). The Response Center case is closed. The information in
Clarify includes serial number, customer, symptoms etc. and can be queried from
SAP. The engineers at the Repair Center work a list of repair cases (Polaris)
and perform the required repair, update and or configuration. When the repair is
complete the technician closes the repair case and the device is shipped back to
the customer. During the repair the data required by Braemar for warranty
repairs and product feedback is collect on a form that is under development and
will be completed by September 30, 2003. During the repair process details of
the repair are directly entered into SAP. The details include the device s/n,
most pervasive failures and the former firmware version. A detailed failure
report is pulled from SAP and provided to Braemar monthly. The report includes
monthly input data in an format, agreed upon by both parties. Reconfiguration
data is stored in an electronic format with backups/archiving performed monthly.

International customers contact their individual SSD's (service Support
Divisions), request a repair and send their device to the local SSD. The device
is sent to SLI (Systems Logistics International) and a replacement is sent to
the customer. SLI periodically ships batches of recorders to the Repair Center
where they are repaired and documented in the same way as Domestic repairs.
Batches of recorders are returned to SLI when ordered.























Date: 10/1/03                 [****] CONFIDENTIAL                  Page 18 of 43
<PAGE>

                  EXHIBIT E - CONFIDENTIAL DISCLOSURE AGREEMENT

                    PHILIPS CONFIDENTIAL DISCLOSURE AGREEMENT

================================================================================
Effective Date:  4/1/02

The parties as specified below agree on the following terms:

I.       DEFINITION OF CONFIDENTIAL INFORMATION

         In this Agreement, Confidential Information shall mean information
         exchanged on or after the Effective Date, which:
         is disclosed by both parties, or, if checked here, is disclosed D only
         by Participant or X only by Philips, concerns WIRELESS CONNECTIVITY,
         EASI ALGORITHM AND HOLTER FORECAST/FUTURE PLANS AND EVENT RECORDER
         FUTURES is MARKED AS BEING CONFIDENTIAL at the time of disclosure, or
         if unmarked (e.g. orally or visually disclosed), is designated as being
         confidential at the time of disclosure and is confirmed as such in
         writing by the disclosing party within thirty days of the disclosure,
         and prior to receipt from the disclosing party was neither publicly
         available nor in the receiving party's possession without a duty of
         confidentiality. Information shall cease to qualify as Confidential
         Information once it becomes publicly available without breach of this
         Agreement, is rightfully obtained by the receiving party from another
         source without a duty of confidentiality, or is independently developed
         or ascertained by the receiving party.

         1.       In this Section 1, the term 'receiving party' shall include
                  such party's Associates. An Associate is any subsidiary,
                  parent, subsidiary of the parent, or corporate affiliate of a
                  receiving party, whether any such relationship is of direct or
                  indirect nature.

II.      OBLIGATIONS

         1.       Confidential Information may only be used:

                  (a)      if received by Participant or its Associates, for the
                           purpose of: DEVELOPING FUTURE PRODUCT PLANS AND
                           ENHANCING THE PARTNERSHIP. THIS INFORMATION IS
                           ACCEPTED "AS IS" PHILIPS MEDICAL SYSTEMS MAKES NO
                           WARRANTY, EXPRESSED OR IMPLIED TO THE FITNESS OF THIS
                           INFORMATION FOR ANY PURPOSE. NO SUPPORT, TECHNICAL OR
                           OTHERWISE, WILL BE PROVIDED BY PHILIPS MEDICAL
                           SYSTEMS IN CONNECTION WITH THE USE OF THIS
                           INFORMATION, AND PHILIPS MEDICAL SYSTEMS DOES NOT
                           GUARANTEE THAT THIS APPLICATION WILL FUNCTION.

                  (b)      if received by Philips or its Associates, for the
                           purpose of:


         2.       A party receiving Confidential Information shall use the same
                  degree of care, but in any case no less than a reasonable
                  degree of care, to prevent unauthorized use, dissemination or
                  publication thereof, as it uses to protect its own information
                  of a similar confidential nature.

         3.       The obligations under this Section II shall terminate three
                  years or, if filled in here, then 10 years after the Effective
                  Date.

III.     WARRANTIES

         4.       A receiving party may pass Confidential Information to its
                  Associates and hereby warrants that these Associates will
                  abide by all terms and conditions of this Agreement.

         5.       Each party warrants that it has the right to make the
                  disclosures under this Agreement.

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 19 of 43
<PAGE>

         6.       NO OTHER WARRANTIES ARE MADE BY EITHER PARTY UNDER THIS
                  AGREEMENT. CONFIDENTIAL INFORMATION IS PROVIDED "AS IS" WITH
                  NO WARRANTY AS TO ITS ACCURACY OR COMPLETENESS.

IV.      MISCELLANEOUS

         7.       Without regard to choice of law provisions, this Agreement is
                  governed by and will be construed in accordance with the laws
                  of the State of New York and the USA or, if filled in here,
                  then the laws of: ______

         8.       Neither party acquires any intellectual property rights under
                  this Agreement except the rights granted in Section 11.1.

         9.       This Agreement imposes no obligation on either party to
                  purchase, sell, license, transfer or otherwise dispose of any
                  technology, services or products.

         10.      This Agreement does not create any agency or partnership
                  relationship.

<TABLE>
<S>                                                           <C>
Philips                                                       Participant

Philips Medical Systems North America Company                 Company Name:  BRAEMAR, Inc

Address: 3000 Minuteman Road                                  Address:  11481 Rupp Drive

Address:  Andover MA 01810                                    Address:  Burnsville, MN 55337 Functional Mgr.'s Signature:
                                                              Authorized Signature:  Harry Strandquist

Printed Name: Jim Polewaczyk                                  Printed Name:  Harold Strandquist

Title, Entity/Division:  Marketing/OP Manager CDY             Title:  Vice President and General Manager
</TABLE>
























Date: 10/1/03                 [****] CONFIDENTIAL                  Page 20 of 43
<PAGE>





                    EXHIBIT F - THREE PARTY ESCROW AGREEMENT





                                       BY

                                       AND

                                      AMONG

                            PHILIPS MEDICAL SYSTEMS,

                                  BRAEMAR, INC.

                                       AND
                      DSI TECHNOLOGY ESCROW SERVICES, INC.

                                      DATED

                                 OCTOBER 1, 2003


























Date: 10/1/03                 [****] CONFIDENTIAL                  Page 21 of 43

<PAGE>

THREE PARTY ESCROW AGREEMENT

Account Number:  __________________________

THIS ESCROW AGREEMENT is entered into by and among, DSI TECHNOLOGY ESCROW
SERVICES, INC. a Delaware corporation located at 9265 Sky Park Court, Suite 202,
San Diego, CA 92123 ("DSI"); BRAEMAR, Inc., a corporation with offices at 11481
Rupp Drive, Burnsville, MN 55337 ("Supplier") and Philips Medical Systems, a
Delaware corporation with principal offices at 3000 Minuteman Road, Andover MA
01810 ("Philips").

AGREEMENT

The parties hereby agree as follows:

1.       GENERAL. This Escrow Agreement is entered into in furtherance of the
         provisions and objectives of that certain OEM Purchase Agreement
         effective as of September 1, 2003 between Philips and Supplier (the
         "Master Agreement") regarding supply of those products specified in
         such Master Agreement ("Product(s)"). This Escrow Agreement is
         effective as of (the "Effective Date"). Contrary terms contained in the
         Master Agreement will supersede and take precedence over the terms
         contained in this Escrow Agreement.

2.       DEPOSIT.

         2.1      Supplier will deposit with DSI those materials specified in
                  Exhibit I (the "Deposit"), and keep the Deposit at the current
                  revision level on a quarterly basis commencing with the
                  Effective Date. All Deposits will be in either printed or
                  machine-readable format. The Deposit must also include current
                  regulatory concurrence letters.

         2.2      In addition, during the initial or any renewal term of this
                  Escrow Agreement, Supplier will promptly update the Deposit
                  whenever Supplier issues a new version or release of the
                  product that is the subject matter of the Master Agreement, or
                  otherwise makes any revisions or changes to its manufacturing
                  process relating to the Deposit. Supplier also agrees to
                  comply with DSI's reasonable requests for the replacement of
                  Deposit materials likely to physically degrade.

         2.3      DSI will destroy any replaced Deposit unless Philips instructs
                  DSI to retain it within twenty (20) days of notice from DSI of
                  such replacement. Retention of the replaced Deposit may incur
                  an additional fee, as specified in DSI's fee schedule.

3.       VERIFICATION AND DELIVERY. The Deposit will be packaged for storage as
         reasonably instructed by DSI and accompanied by a cover sheet
         identifying the contents as indicated in Exhibit 2. Risk of loss or
         damage to the Deposit during shipment will lie with the party sending
         it. Philips will have the right to verify, at Supplier's site, each
         Deposit before shipment. Supplier will give Philips fifteen (15) days
         advance written notice and opportunity to inspect, witness compilation,
         test and otherwise reasonably assure itself of the contents of the
         Deposit to be shipped. Philips may authorize a third party to act in
         its

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 22 of 43

<PAGE>

         place, provided that the third party agrees to any confidentially
         obligations assumed by Philips in the Master Agreement. Supplier hereby
         grants Philips and DSI, free of charge, the right to use the facilities
         of Supplier, including its computer systems, to verify the Deposit.
         Supplier will make available technical support personnel as necessary
         to verify the Deposit.

4.       STORAGE OF DEPOSIT. DSI will safe keep the Deposit in a security vault
         and exercise the same high standard of care to protect the Deposit
         which DSI would use to protect other items of this nature which DSI
         might hold, but in no event less than that standard of care customary
         in the industry.

5.       USE AND NONDISCLOSURE. Except as provided in this Escrow Agreement, DSI
         will not disclose or make any use of the Deposit, nor will DSI disclose
         or make use of any confidential information provided to DSI by Supplier
         or Philips in connection with this Escrow Agreement without the prior
         written consent of Supplier or Philips, respectively. These obligations
         will continue indefinitely notwithstanding termination of this Escrow
         Agreement.

6.       RECORDS AND AUDIT RIGHTS. DSI will keep complete written records of the
         activities undertaken and materials prepared pursuant to this Escrow
         Agreement. Upon reasonable notice to DSI during the term of this Escrow
         Agreement, Supplier and Philips will be entitled to inspect the records
         of DSI with respect to this Escrow Agreement at reasonable times during
         normal business hours at DSI's facilities and to inspect the Deposit
         required then to be held by DSI; Provided, however, that Supplier shall
         be given the opportunity to be present whenever Philips inspects the
         Deposit.

7.       RELEASE OF DEPOSIT

         7.1.     The Deposit will be released to Philips upon the occurrence of
                  any of the following events:

                  Failure of Supplier, within ninety (90) days after Philips'
                  giving notice, to fulfill a material obligation as required in
                  the Master Agreement (e.g. manufacturing, required engineering
                  changes, support);

                  Failure of Supplier, within (90) days after Philips' giving
                  notice, to fulfill its obligations to update the Deposit as
                  required hereunder;

                  Immediately upon breach by Supplier of Section 11.6 or 11.7
                  of the Master Agreement;

                  Failure of the Supplier to continue to do business in the
                  ordinary course;

                  Unless prohibited by law, the filing of a petition by or
                  against Supplier for relief under the United States Bankruptcy
                  Code; a general assignment for the benefit of creditors by
                  Supplier; the appointment of a general receiver or trustee in
                  bankruptcy for Supplier's business or property; or action by
                  Supplier under any state insolvency or similar law for the
                  purpose of its bankruptcy, reorganization,

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 23 of 43
<PAGE>

                  or liquidation. However, the occurrence of the described
                  events will not apply if, within thirty days thereafter,
                  Supplier (including its receiver or trustee in bankruptcy)
                  provides assurances, reasonably satisfactory to Philips, of
                  Supplier's continuing ability and willingness to fulfill all
                  of its material obligations under the Master Agreement; or

                  The occurrence of a force majeure, event relating to an
                  obligation of Supplier under the Master Agreement uncured
                  within 120 days after its occurrence.

         7.2      If Philips notifies DSI of the occurrence of a release
                  condition as defined above, and a request for release, DSI
                  will immediately notify Supplier and provide Supplier with a
                  copy of the notice from Philips. Supplier will have ten (10)
                  business days from the date DSI sends its notice to notify
                  DSI, with a copy to Philips, that the release condition has
                  not occurred or has been cured. Failing such timely notice,
                  DSI will release a copy of the Deposit to Philips. However, if
                  DSI receives timely notice from Supplier, DSI will not, unless
                  Philips exercises its rights to the procedures as specified
                  below in Section 9, release a copy of the Deposit but will
                  instead institute the Dispute Resolution Process in Section 10
                  within ten (10) business days of such timely notice.

8.       RELEASE PENDING DETERMINATION. In the event that Philips, despite
         Supplier's assertion otherwise, determines in good faith that an
         uncured release condition has occurred, then Philips will have the
         right to demand immediate release of the Deposit, subject to the
         following. Prior to the release of the Deposit, Philips will be
         required to post a bond with Supplier, payable to Supplier, in an
         amount to be mutually agreed not to exceed the total amount Philips
         would owe Supplier under the Master Agreement with respect to the
         Product that is subject of the Deposit. Should the Dispute Resolution
         Process ultimately determine that an uncured release condition has in
         fact not occurred, then Philips will immediately return the Deposit to
         DSI and Philips will release the bond to Supplier. Philips' aggregate
         liability to Supplier under this Article for causing a release of the
         Deposit under this Section 8 based on an alleged uncured release
         condition which has in fact not occurred will be limited to the sum of:
         (a) the $1,000 royalties for each CH 2000and CH 2000 Software Kit
         payable to Supplier in accordance with Section 12.2 of the Master
         Agreement; and (b) $2,000 for each CH 2000 and $500 for each CH 2000
         Software Kit which is sold by Philips after such release of the
         Deposit.

9.       DISPUTE RESOLUTION PROCESS. DSI will first notify Supplier and Philips
         in writing of contrary instructions from Philips and Supplier for
         release of the Deposit. Within ten (10) business days after the date
         the notice is sent by DSI, three neutral, independent arbitrators will
         be appointed from a list supplied by either the American Arbitration
         Association or JAMS Endispute, one each by Supplier, Philips and DSI.
         Each party will notify the others of its arbitrator's identity within
         the ten-day (10) period or forfeit its right to appoint one.

         On the tenth (10th) business day after the dispute notice from DSI
         notifying Supplier and Philips of the receipt of contrary instructions,
         the arbitrators will meet at the offices of DSI and will hear testimony
         and other evidence that Supplier and Philips may wish to

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 24 of 43
<PAGE>

         present with respect to the dispute. The meetings will proceed with at
         least two appointed arbitrators who attend the meetings, and will be
         conducted from 8:00 am. to 5:00 p.m. on no more than five (5)
         consecutive business days, national holidays excluded. Philips will
         present up to two days of evidence followed by up to two days of
         presentation from Supplier, followed by a final day reserved for
         rebuttal by each party in the morning and afternoon, respectively.
         Supplier, Philips and DSI agree that the evidence and, results of the
         hearings will not be disclosed to third parties.

         Within two (2) business days after the close of the presentations, the
         arbitrators will resolve the dispute by majority vote. An abstention
         will be deemed a vote in favor of release. The parties agree that this
         decision will be final, binding, not subject to appeal and enforceable
         by a court of competent jurisdiction. All costs of the arbitrators will
         be borne by the unsuccessful party.

10.      JOINT RELEASE. Philips and Supplier may, by joint written instruction
         to DSI, authorize the release of the Deposit or a copy of it to the
         party named in the instruction.

11.      RIGHTS IN THE DEPOSIT

         11.1     DSI's Rights. Supplier hereby grants to DSI ownership of and
                  title to those physical copies of the Deposit delivered to DSI
                  subject to DSI's agreement to use, reproduce and release the
                  Deposit only as necessary to fulfill its obligations under
                  this Escrow Agreement.

         11.2     Philips' Rights. Supplier hereby grants to Philips a present
                  license in the intellectual property content of the Deposit,
                  exercisable upon release of the Deposit by DSI to Philips.
                  Philips' license is worldwide, non-exclusive and royalty
                  bearing in accordance with Section 12.2 of the Master
                  agreement. Philips' license is limited in duration to the term
                  of the Master Agreement, as may be renewed. Philips' license
                  is restricted to the furtherance of Philips' rights or
                  fulfillment of Supplier's obligations as set forth in the
                  Master Agreement, as may be amended or extended. If the Master
                  Agreement is terminated before, concurrently with or after the
                  exercise of Philips' right to access the Deposit under this
                  Escrow Agreement, the duration and scope of the foregoing
                  license will be interpreted as if the Master Agreement was not
                  so terminated. The foregoing license includes the right to
                  reproduce, translate, modify and distribute copies,
                  translations, derivative works, compilations and collective
                  works of any Deposit user documentation or software (in
                  machine-readable form only). For all other intellectual
                  property content of the Deposit, Philips' license includes the
                  right to make, have made, use, sell, import, offer for sale
                  and distribute products based on the Deposit under any
                  intellectual property right including patent, copyright, mask
                  work, trade secret or other similar right. In all cases,
                  Philips' license includes the right to use subcontractors or
                  sublicensees provided they comply with any confidentiality
                  obligations assumed by Philips in the Master Agreement. In
                  addition, Supplier grants to Philips the right to use the
                  materials from Supplier's vendors and subcontractors
                  reasonably required for the manufacture, support and
                  distribution of the products to which the Deposit relates
                  ("Related Materials") or

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 25 of 43
<PAGE>

                  will use its best efforts to allow Philips to procure the
                  Related Materials from Supplier's vendors and subcontractors.
                  Philips will treat the Deposit and Related Materials as
                  confidential information according to the terms of the Master
                  Agreement. If permitted by local authority, Supplier hereby
                  grants to Philips the right to utilize its manufacturing and
                  distribution approvals anywhere in the world.

12.      TERM AND TERMINATION. This Escrow Agreement will have an initial term
         of one (1) year, renewable upon receipt by DSI of the specified renewal
         fee. If DSI does not receive the renewal fee by the anniversary date of
         this Escrow Agreement, DSI will give notice to Supplier and Philips. If
         the fee is not received from Supplier or Philips within thirty (30)
         days of such notice, this Escrow Agreement will expire. Upon expiration
         of this Escrow Agreement, DSI will, at Supplier's option, either
         destroy or return the Deposit to Supplier. All obligations of DSI under
         this Escrow Agreement will terminate thereafter, except for those
         stated in the Use and Nondisclosure Section of this Escrow Agreement.

13.      FEES. Unless otherwise agreed, all fees will be due from Philips in
         full upon receipt of DSI's invoice. Fees will be those specified in
         DSI's schedule of fees in effect for the initial term of this Escrow
         Agreement plus taxes. DSI shall notify Supplier and Philips at least
         ninety (90) days prior to expiration of the initial term (or any
         renewal term) of this Escrow Agreement of any scheduled increase for
         the succeeding renewal term.

14.      INDEMNIFICATION. DSI will be responsible for performing its obligations
         under this Agreement and to act in a reasonable and prudent manner with
         regard to this escrow arrangement. Provided DSI has acted in the manner
         stated in the preceding sentence, Supplier and Philips each agree to
         indemnify, defend and hold harmless DSI from any and all claims,
         actions, damages, arbitration fees and expenses, costs, attorney's fees
         and other liabilities incurred by DSI relating in any way to this
         escrow arrangement.

15.      MISCELLANEOUS.

         15.1     Account Representatives and Notices. Supplier, Philips and DSI
                  will each designate an authorized individual(s) to receive
                  notices and otherwise act on behalf of Supplier in connection
                  with this Escrow Agreement, as set forth in Exhibit 3.
                  Representatives may be changed by written notice to the other
                  parties. Notices are validly given upon the earlier of
                  confirmed receipt by the receiving party or three days after
                  dispatch by courier or certified mail, postage prepaid,
                  properly addressed to the receiving party. Notices may also be
                  delivered by telefax and will be deemed received upon oral or
                  written confirmation of receipt. Unless otherwise provided in
                  this Agreement, all documents and communications may be
                  delivered by first class mail.

         15.2     Authenticity. DSI may act in reliance upon any instruction;
                  instrument or signature believed to be genuine and may assume
                  that it has been duly authorized. DSI will not be required to
                  inquire into the truth or evaluate the merit of any statement
                  or representation contained in any notice or document.

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 26 of 43

<PAGE>

         15.3     Merger. The Master Agreement and this Escrow Agreement,
                  including the Exhibits, constitutes the entire agreement
                  between the parties concerning the subject matter hereof and
                  will supersede all previous communications, representations,
                  understandings, and agreements, oral or written, between the
                  parties. DSI is not a party to the License Agreement between
                  Supplier and Philips and has no knowledge of the terms or
                  provisions of any such License Agreement. DSI's only
                  obligations to Supplier and Philips are as set forth in this
                  Agreement.

         15.4     Depositor's Representations. Supplier represents as follows:
                  Supplier lawfully possesses all of the Deposit Materials
                  deposited with DSI; With respect to all of the Deposit
                  Materials, Supplier has the right and authority to grant to
                  DSI and Philips the rights as provided in this Agreement; The
                  Deposit Materials are not subject to any lien or other
                  encumbrance.

         15.5     Right to Make Copies. DSI shall have the right to make copies
                  of the Deposit Materials as reasonably necessary to perform
                  this Agreement. DSI shall copy all copyright, nondisclosure,
                  and other proprietary notices and titles contained on the
                  Deposit Materials onto any copies made by DSI. With all
                  Deposit Materials submitted to DSI, Supplier shall provide any
                  and all instructions as may be necessary to duplicate the
                  Deposit Materials including but not limited to the hardware
                  and/or software needed.

         15.6     Disposition of Deposit Materials Upon Termination. Subject to
                  the foregoing termination provisions, and upon termination of
                  this Agreement, DSI shall destroy, return, or otherwise
                  deliver the Deposit Materials in accordance with Supplier's
                  instructions. If there are no instructions, DSI may, at its
                  sole discretion, destroy the Deposit Materials or return them
                  to Supplier. DSI shall have no obligation to destroy or return
                  the Deposit Materials if the Deposit Materials are subject to
                  another escrow agreement with DSI.

         15.7     Regulations. Supplier and Philips are responsible for and
                  warrant compliance with all applicable laws, rules and
                  regulations, including but not limited to customs laws,
                  import, export, and re-export laws and government regulations
                  of any country from or to which the Deposit Materials may be
                  delivered in accordance with the provisions of this Agreement.

         15.8     Assignment. No party may assign any rights or obligations of
                  this Escrow Agreement without the prior written consent of the
                  others. Notwithstanding the foregoing, PHILIPS, or its
                  permitted successive assignees or transferees, may assign or
                  transfer this Agreement or delegate any rights or obligations
                  hereunder without consent in connection with a merger,
                  reorganization, transfer, sale of assets or product lines, or
                  change of control or ownership of PHILIPS or all or
                  substantially all of the assets or business of the Healthcare
                  Solutions Group, or its permitted successive assignees or
                  transferees. Without limiting the foregoing, this Agreement
                  will be binding upon and inure to the benefit of the parties
                  and their permitted successors and assigns. However, DSI shall
                  have no obligation in performing this Agreement to recognized
                  any successor or assign of Depositor or

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 27 of 43
<PAGE>

                  Preferred Beneficiary unless DSI receives clear, authoritative
                  and conclusive written evidence of the change of parties.

         15.9     Exhibits. Each Exhibit attached to this Agreement is deemed a
                  part of this Escrow Agreement and incorporated herein wherever
                  reference to it is made.

         15.10    Independent Contractors. The relationship of the parties
                  established under this Agreement is that of independent
                  contractors and neither party is a partner, employee, agent
                  or joint venturer of or with the other.

         15.11    No Waiver. The waiver of any term, condition, or provision of
                  this Agreement must be in writing and signed by an authorized
                  representative of the waiving party. Any such waiver will not
                  be construed as a waiver of any other term, condition, or
                  provision except as provided in writing, nor as a waiver of
                  any subsequent breach of the same term, condition, or
                  provision.

         15.12    Definition Of Days. All references in this Agreement to "days"
                  will, unless otherwise specified herein, mean calendar days.

         15.13    Headings. The Section headings used in this Agreement are for
                  convenience of reference only. They will not limit or extend
                  the meaning of any provision of this Agreement, and will not
                  be relevant in interpreting any provision of this Agreement.

         15.14    No Publication. Neither party may publicize or disclose to any
                  third party, without the written consent of the other party,
                  the terms of this Agreement. Without limiting the generality
                  of the foregoing sentence, no press releases may be made
                  without the mutual written consent of each party.

         15.15    Severability. If any provision in this Agreement is held
                  invalid or unenforceable by a body of competent jurisdiction,
                  such provision will be modified or, if necessary, severed to
                  the extent necessary to eliminate such invalidity or
                  unenforceability. The parties agree to negotiate in good faith
                  a valid, enforceable substitute provision that most nearly
                  effects the parties' original intent in entering into this
                  Agreement or to provide an equitable adjustment in the event
                  no such provision can be added. The other provisions of this
                  Agreement will remain in full force and effect.

         15.16    Governing Law. This Agreement will be governed in all respects
                  by the laws of the State of California without reference to
                  any choice of laws provisions. The parties hereby consent to
                  the exclusive jurisdiction and venue of the courts located in
                  California. The parties hereby waive any application of the
                  United Nations Convention on the Sale of Goods with respect to
                  the performance or interpretation of this Agreement.

         15.17    Counterparts. This Agreement may be executed in counterparts,
                  each of which will be deemed an original.


Date: 10/1/03                 [****] CONFIDENTIAL                  Page 28 of 43

<PAGE>

EXHIBIT 1: DEPOSIT

Hardware Manufacturing Materials (whenever relevant)
----------------------------------------------------
         1.       Design Specifications for the Product.
         2.       Electronic or paper copies of manufacturing drawings,
                  specifications, schematics, and other drawings pertinent to
                  manufacture Products and Spare Parts at the revision level
                  then in effect.
         3.       Final test procedures.
         4.       Printed circuit board layouts in machine-readable form.
         5.       Materials lists, broken down by assembly, including reference
                  designators.
         6.       Source code of and master samples of programmable hardware,
                  such as ROM/PROM firmware, PALs,
         7.       Vendor contact information.

Source Code (whenever relevant)
-------------------------------
         1.       A copy of source code.
         2.       A description of the development system, hardware, software,
                  compilers and the like sufficient for Philips to continue
                  development and support of the software included in the Master
                  Agreement.

EXHIBIT 2: DEPOSIT COVER SHEET

Deposit Account Name ____________________________

Deposit Account Number _________________________

_____ Deposit _____ Supplement to Deposit _____ Replacement of Deposit

Program Name ____________________________________________________ Version _____
Date _____________CPU/OS _____________ Compiler______________
Application ___________
Utilities needed ___________
Special Operating Instructions ________________________________________________
Media _______________________________________ Quantity _____










Date: 10/1/03                 [****] CONFIDENTIAL                  Page 29 of 43
<PAGE>


EXHIBIT 3: ACCOUNT REPRESENTATIVES

SUPPLIER:
---------
                                                           Copy to:
                                                           --------
Name
     ---------------------------------------
Title
      --------------------------------------
Address
       -------------------------------------
                                                -------------------------------
Phone
      --------------------------------------

PHILIPS:
--------
                                                           Copy to:
                                                           --------
Name
     ---------------------------------------
Title
      --------------------------------------
Address
       -------------------------------------
                                                -------------------------------
Phone
      --------------------------------------

HOLDER:
-------
Name
     ---------------------------------------


















Date: 10/1/03                 [****] CONFIDENTIAL                  Page 30 of 43

<PAGE>

                            EXHIBIT G - SMI AGREEMENT

1.       This Agreement is effective as of _____4/01/03______ (Effective Date)
         between Philips Medical Systems, 3000 Minuteman Road, Andover, MA 01810
         USA, and BRAEMAR INC., BURNSVILLE, MN 55337

2.       The intent of this Agreement is to outline items and topics specific to
         the Supplier Managed Inventory (SMI) Program. This Agreement, and
         attached exhibits, represent the entire agreement of the parties with
         respect to supply of Philips Product and notice of objection to any
         additional or different terms or conditions is hereby given. No
         modification of any of the terms or conditions of this Agreement shall
         be binding on either party unless in wilting and signed by the
         authorized representative of each party. In the event of a conflict
         between the terms in the body of this Agreement and the terms in the
         Exhibits to this Agreement or purchase order terms, the terms stated in
         the body of this Agreement shall control.

3.       Supplier shall deliver the finished goods inventory listed in Exhibit B
         to Philips as Philips Product.

4.       The Agreement Term shall be for a period of [ONE (1) YEAR], unless
         otherwise terminated. This Term may be extended by mutual agreement
         between Philips and Supplier. Upon expiration of the Term, existing
         stock will be carried over to the next agreement.

5.       This SMI Agreement may be terminated at the option of either party upon
         [SIXTY (60)] days written notice to the other. Philips will only be
         responsible for finished goods inventory as described in Exhibit A plus
         raw materials and work in process required to support the Upper Stock
         Limits (USL) and Lower Stock Limits (LSL) for the finished goods
         inventory, up to the maximum commitment levels associated with each
         part number.

         Upon notice of termination of Agreement, Supplier agrees (a) to offer
         Philips first right of purchase, then (b) to dispose of finished goods
         inventory described in Exhibit A, raw materials and work in process at
         no charge to Philips where possible, and to inform Philips of potential
         charges for disposal otherwise. Supplier agrees not to sell, transfer,
         distribute or otherwise convey any part, component, product or service
         -- bearing or incorporating Philips Marks, part numbers or other
         identifiers, including any Philips packaging, copyrights or code, to
         any other party. Upon Philips approval, Supplier will remove from all
         Philips Products at Supplier any such Philips Marks or identifiers,
         even if such removal would require destruction of the Philips Products.
         Supplier further agrees not to represent that such Philips Products are
         built for Philips or to Philips specifications. Supplier will defend
         and indemnify Philips against any claims, losses, liabilities, costs or
         expenses that Philips may incur as a result of Supplier's breach of
         this obligation.

         The rights and obligations of this Agreement, which by their nature
         extend beyond the termination or expiration of this Agreement, shall
         survive and continue after any termination or expiration of this
         Agreement.

6.       Philips will issue blanket purchase orders to serve as authorizations
         for receipt of Philips Product. Supplier will use the SMI forecasts,
         USL and LSL in determining shipment quantity and frequency for each
         Philips Product listed in Exhibit A. At any time during the


Date: 10/1/03                 [****] CONFIDENTIAL                  Page 31 of 43
<PAGE>

         term of this agreement, SMI forecast quantities may be increased or
         decreased by Philips. If during the Term changed prices or price
         formulas are put in effect by mutual agreement of Philips and Supplier,
         or reduced prices or price formulas are otherwise put in effect by
         Supplier, such prices or price formulas (if resulting in lower prices
         than the then current price) will apply to all purchase orders issued
         by Philips after the effective date of such prices or price formulas
         and to all unshipped purchase orders.

7.       Supplier has the responsibility to direct their procurement,
         production, and shipping activities in part by utilizing the tools/data
         available in the Noctume daily reports to deliver Philips Product at
         levels driven by the agreed upon metrics/parameters. The primary
         measures of success are the Supplier's ability to maintain inventory
         levels between the USL and LSL, and further to meet the targeted
         inventory levels for each part. If due to Supplier's failure to timely
         ship Philips Product the specified method of transportation would not
         permit Supplier to maintain the LSL, the actions and consequences
         specified in Section 3.2 of Philips Purchase Order Terms and Conditions
         (A-Q2920-40540 Rev. A) apply. If the Supplier exceeds the USL by more
         than three days of inventory over the Average Usage reported by
         Nocturne for the previous thirty (30) days, the actions and
         consequences specified in Section 3.3 of Philips Purchase Order Terms
         and Conditions (A-Q2920-40540 Rev. A) apply.

8.       The parties designated the following persons as their agreement
         Coordinators. Each party will advise the other party in writing of any
         successor or designee of the named Agreement Coordinator. Unless
         otherwise agreed by the parties, notices concerning this Agreement will
         be provided to the appropriate Agreement Coordinator and addressed as
         follows:

<TABLE>
<S>                                                          <C>
------------------------------------------------------------ ---------------------------------------------------------
                  PHILIPS MEDICAL SYSTEMS                                          BRAEMAR INC.
------------------------------------------------------------ ---------------------------------------------------------
Coordinator:  Ed Plumley                                     Coordinator: Harry Strandquist President
------------------------------------------------------------ ---------------------------------------------------------
3000 MINUTEMAN ROAD                                          11481 RUPP DRIVE
ANDOVER, MA 01810                                            BURNSVILLE, MINNESOTA 55337.1276
------------------------------------------------------------ ---------------------------------------------------------
Phone:  [****]                                               Phone:  952-882-6543
Fax:  [****]                                                 Fax:  952-882-6550
------------------------------------------------------------ ---------------------------------------------------------
By signing and dating this document, the parties below indicate their agreement
with and acceptance of this Agreement, including all Exhibits.
                                                                              /s/ Harry Strandquist
-------------------------------------                                        --------------------------------------
    Name                   Date                                              Name                      Date
    Title:                                                                   Title: President & CEO
          ---------------------------                                              --------------------------------
          PHILIPS MEDICAL SYSTEMS                                                       BRAEMAR INC.
</TABLE>

















Date: 10/1/03                 [****] CONFIDENTIAL                  Page 32 of 43

<PAGE>


              EXHIBIT H - NEW EVENT RECORDER WITH LCD SPECIFICATION
                            (EASITRAK 12 REPLACEMENT)


1.       SCOPE

This device is intended to replace the EASITrak model ER730 product. The design
is to incorporate the ER730 case with new LCD and utilize the new technology
(ER800) platform. Hardware, interfaces, and programming, etc. will be the same
as existing ER730 device as much as possible to speed time to market and
minimize costs. This document is to define the market requirements for an EGG
measurement device to be used by the patient in the home. The device will
automatically send the ECG data file via RF to another device in the house. The
cost of the device is a primary consideration. Cost goal does not include
accessories (manuals, cases, lead set, or batteries) but these designs are to be
equally cost effective.

This document is to be superseded by an Engineering Specification at an
appropriate point in the project as defined by the project plan.

2.       APPLICABLE DEVICE REQUIREMENTS: THE DEVICE WILL MEET THE REQUIREMENTS
         OF THE FOLLOWING:

         2.1.     ANSI/AAMI EC38-1998
         2.2.     FDA 510K
         2.3.     Medical Device Directive
         2.4.     FDAQSR
         2.5.     EN60601-1-1 Safety
         2.6.     EN60601-1-2 Emissions & Immunity
         2.7.     EN60601-2-47

3.       DEVICE DESIGN

         3.1.     The ERNG is to incorporate all the features and functions of
                  the current EASITrak and the new ER800 series device with the
                  following requirements of this document.

         3.2.     Physical Requirements

                  3.2.1.   Case Design
                           3.2.1.1.     [****]
                           3.2.1.2.     [****]
                           3.2.1.3.     [****]
                           3.2.1.4.     [****]
                           3.2.1.5.     [****]
                           3.2.1.6.     [****]
                           3.2.1.7.     [****]
                           3.2.1.8.     [****]
                           3.2.1.9.     [****]
                           3.2.1.10.    [****]


Date: 10/1/03                 [****] CONFIDENTIAL                  Page 33 of 43
<PAGE>

                           3.2.1.11.    [****]
                           3.2.1.12.    [****]
                           3.2.1.13.    [****]

                  3.2.2.   Case LCD
                           3.2.2.1.     [****]
                           3.2.2.2.     [****]

                  3.2.3.   Case Power
                           3.2.3.1.     [****]
                           3.2.3.2.     [****]
                           3.2.3.3.     [****]
                           3.2.3.4.     [****]

                  3.2.4.   Case Ruggedness
                           3.2.4.1.     [****]
                           3.2.4.2.     [****]
                           3.2.4.3.     [****]
                           3.2.4.4.     [****]

                  3.2.5.   Patient Cabling
                           3.2.5.1.     [****]
                           3.2.5.2.     [****]
                           3.2.5.3.     [****]
                           3.2.5.4.     [****]
                           3.2.5.5.     [****]

                  3.2.6.   Programming
                           3.2.6.1.     [****]
                           3.2.6.2.     [****]
                           3.2.6.3.     [****]
                           3.2.6.4.     [****]
                           3.2.6.5.     [****]

                  3.2.7.   Speaker
                           3.2.7.1.     [****]
                           3.2.7.2.     [****]
                           3.2.7.3.     [****]
                           3.2.7.4.     [****]

         3.3.     Functional requirements

                  3.3.1.   Algorithm
                           3.3.1.1.     [****]
                           3.3.1.2.     [****]
                           3.3.1.3.     [****]
                           3.3.1.4.     [****]


Date: 10/1/03                 [****] CONFIDENTIAL                  Page 34 of 43
<PAGE>

                           3.3.1.5.     [****]
                           3.3.1.6.     [****]
                           3.3.1.7.     [****]
                           3.3.1.8.     [****]

                  3.3.2.   Data Communication
                           3.3.2.1.     [****]
                           3.3.2.2.     [****]
                           3.3.2.3.     [****]
                           3.3.2.4.     [****]
                           3.3.2.5.     [****]
                           3.3.2.6.     [****]
                           3.3.2.7.     [****]
                           3.3.2.8.     [****]
                           3.3.2.9.     [****]
                           3.3.2.10.    [****]

                  3.3.3.   Patient Cable
                           3.3.3.1.     [****]
                           3.3.3.2.     [****]
                           3.3.3.3.     [****]
                           3.3.3.4.     [****]
                           3.3.3.5.     [****]
                           3.3.3.6.     [****]

                  3.3.4.   Program Protocols - Pre/Post (exact) recording time
                           TBD by Philips
                           3.3.4.1.     [****]
                           3.3.4.2.     [****]
                           3.3.4.3.     [****]
                           3.3.4.4.     [****]
                           3.3.4.5.     [****]
                                        3.3.4.5.1.      [****]
                                        3.3.4.5.2.      [****]
                                        3.3.4.5.3.      [****]
                                        3.3.4.5.4.      [****]
                                        3.3.4.5.5.      [****]
                                        3.3.4.5.6.      [****]
                           3.3.4.6.     [****]

                  3.3.5.       Audible Indicators - Polite Tones
                           3.3.5.1.     [****]
                           3.3.5.2.     [****]
                           3.3.5.3.     [****]
                           3.3.5.4.     [****]
                           3.3.5.5.     [****]
                           3.3.5.6.     [****]

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 35 of 43

<PAGE>

                  3.3.6.  Battery Life
                           3.3.6.1.     [****]
                           3.3.6.2.     [****]

                  3.3.7.   Upgrade Strategy
                           3.3.7.1.     [****]
                           3.3.7.2.     [****]
                           3.3.7.3.     [****]

         3.4.     Electrical Requirements similar new technology ER800 platform

                  3.4.1.   [****]
                  3.4.2.   [****]
                  3.4.3.   [****]
                  3.4.4.   [****]
                  3.4.5.   [****]
                  3.4.6.   [****]
                  3.4.7.   [****]
                  3.4.8.   [****]
                  3.4.9.   [****]
                  3.4.10.  [****]

         3.5.     Data Communications requirement

                  3.5.1.   [****]
                  3.5.2.   [****]
                  3.5.3.   [****]

         3.6.     Patient Interface requirements

                  3.6.1.   [****]
                  3.6.2.   [****]
                  3.6.3.   [****]
                  3.6.4.   [****]
                           3.6.4.1.     [****]
                           3.6.4.2.     [****]
                           3.6.4.3.     [****]
                           3.6.4.4.     [****]
                           3.6.4.5.     [****]
                           3.6.4.6.     [****]

         3.7.     Language Support requirements

                  3.7.1.   Same as [****]
                  3.7.2.   Will support Philips CE Mark

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 36 of 43

<PAGE>

                  3.7.3.   Operation/Service manuals must be localized and
                           available on a single CD - Dutch, French, German,
                           Italian, Spanish

         3.8.     ESD/EMC requirements
                  3.8.1.   [****]
                  3.8.2.   [****]

4.       DESIGN VERIFICATION AND VALIDATION

         4.1.     [****]
         4.2.     [****]
         4.3.     [****]

5.       PROJECT DELIVERABLES

         5.1.     [****]
         5.2.     [****]
         5.3.     [****]
         5.4.     [****]
         5.5.     [****]
         5.6.     [****]
         5.7.     [****]

6.       NRE REQUIREMENTS

         6.1.     [****]
                  6.1.1.   [****]
                           6.1.1.1.     [****]
                           6.1.1.2.     [****]
                           6.1.1.3.     [****]
                  6.1.2.   [****]
                  6.1.3.   [****]
                  6.1.4.   [****]
                  6.1.5.   [****]

7.       DEVICE COST

         7.1.     Complete kit cost including device, cable, case, IFU,
                  physician user IFU, foam, patient use card will be $[****] per
                  unit.

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 37 of 43


<PAGE>

8.       PRODUCT FORECAST

         8.1.     Philips to provide six month rolling forecast

9.       PROJECTED SCHEDULE

         9.1.     [****]
         9.2.     [****]
         9.3.     [****]
         9.4.     [****]




























Date: 10/1/03                 [****] CONFIDENTIAL                  Page 38 of 43
<PAGE>

            EXHIBIT I - NEW EVENT RECORDER WITHOUT LCD SPECIFICATION
                             (HOMETRAK REPLACEMENT)



1.0      SCOPE
This document is intended to define the market requirements for a next
generation Philips Event Recorder targeted at the low cost market segment. The
device is not to have an LCD and provide similar functionality as the ER730 with
ER 800 platform technology - I channel recording, with and without algorithm,
basic feature set. It is designed to be a low end offering along with an updated
EASITrak with LCD full-featured model. The Low Cost ER will be cased in the
EASITrak case (without LCD) and will be offered with the updated LCD model to
Philips customers. The Low Cost ER will replace the HomeTrak device. This
document is to define the market requirements for an ECG measurement device to
be used by the patient in the home. The device will automatically send the ECG
data file via RF to another device in the house. The cost of the device is a
primary consideration. Cost goal does not include accessories (manuals, cases,
lead set, or batteries) but these designs are to be equally cost effective.
Utilize parts from the ER730 and DigiTrak Plus programs if they are compatible
with the design concepts of this ER. Likely candidates may be patient cables,
battery doors, belt clips, necklaces, program plugs, etc.

2.       APPLICABLE DEVICE REQUIREMENTS: THE DEVICE WILL MEET THE REQUIREMENTS
         OF THE FOLLOWING:
         2.1.     ANSI/AAMI EC38-1998
         2.2.     FDA 510K
         2.3.     Medical Device Directive
         2.4.     FDA QSR
         2.5.     EN60601-1-1 Safety
         2.6.     EN60601-1-2 Emissions & Immunity
         2.7.     EN606601-2-47

3.       DEVICE DESIGN

         3.1.     The [****] is a low cost design intended to incorporate the
                  BASIC features and functions of the ER800 series device with
                  the following requirements of this document. The device will
                  not incorporate lead loss or two channel recording.

         3.2.     Physical Requirements

                  3.2.1.   Case Design
                           3.2.1.1.     [****]
                           3.2.1.2.     [****]
                           3.2.1.3.     [****]
                           3.2.1.4.     [****]
                           3.2.1.5.     [****]
                           3.2.1.6.     [****]
                           3.2.1.7.     [****]

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 39 of 43


<PAGE>

                           3.2.1.8.     [****]
                           3.2.1.9.     [****]
                           3.2.1.10.    [****]
                           3.2.1.11.    [****]

                  3.2.2.   Case Power
                           3.2.2.1.     [****]
                           3.2.2.2.     [****]
                           3.2.2.3.     [****]

                  3.2.3.   Case Ruggedness
                           3.2.3.1.     [****]
                           3.2.3.2.     [****]
                           3.2.3.3.     [****]
                           3.2.3.4.     [****]

                  3.2.4.   Patient Cabling
                           3.2.4.1.     [****]
                           3.2.4.2.     [****]

                  3.2.5.   Programming
                           3.2.5.1.     [****]
                           3.2.5.2.     [****]
                           3.2.5.3.     [****]
                           3.2.5.4.     [****]
                           3.2.5.5.     [****]
                           3.2.5.6.     [****]
                           3.2.5.7.     [****]
                           3.2.5.8.     [****]
                           3.2.5.9.     [****]
                           3.2.5.10.    [****]
                           3.2.5.11.    [****]
                           3.2.5.12.    [****]
                           3.2.5.13.    [****]

                  3.2.6.   Speaker
                           3.2.6.1.     [****]
                           3.2.6.2.     [****]
                           3.2.6.3.     [****]
                           3.2.6.4.     [****]
                           3.2.6.5.     [****]
                           3.2.6.6.     [****]

         3.3.     Functional requirements

                  3.3.1.   Algorithm

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 40 of 43


<PAGE>

                           3.3.1.1.     [****]
                           3.3.1.2.     [****]
                           3.3.1.3.     [****]
                           3.3.1.4.     [****]
                           3.3.1.5.     [****]
                           3.3.1.6.     [****]
                           3.3.1.7.     [****]
                           3.3.1.8.     [****]
                           3.3.1.9.     [****]

                  3.3.2.   Recording Time
                           3.3.2.1.     [****]
                           3.3.2.2.     [****]
                           3.3.2.3.     [****]
                           3.3.2.4.     [****]
                           3.3.2.5.     [****]

                  3.3.3.   Data Communication
                           3.3.3.1.     [****]
                           3.3.3.2.     [****]
                           3.3.3.3.     [****]
                           3.3.3.4.     [****]
                           3.3.3.5.     [****]
                           3.3.3.6.     [****]
                           3.3.3.7.     [****]
                           3.3.3.8.     [****]
                           3.3.3.9.     [****]
                           3.3.3.10.    [****]
                           3.3.3.11.    [****]
                           3.3.3.12.    [****]
                           3.3.3.13.    [****]

                  3.3.4.   Audible Indicators - Polite Tones
                           3.3.4.1.     [****]
                           3.3.4.2.     [****]
                           3.3.4.3.     [****]
                           3.3.4.4.     [****]
                           3.3.4.5.     [****]
                           3.3.4.6.     [****]

                  3.3.5.   Battery Life
                           3.3.5.1.     [****]
                           3.3.5.2.     [****]

                  3.3.6.   Upgrade Strategy
                           3.3.6.1.     [****]


Date: 10/1/03                 [****] CONFIDENTIAL                  Page 41 of 43
<PAGE>

                           3.3.6.2.     [****]

         3.4.     Electrical Requirements similar new technology ER800 platform

                  3.4.1.   [****]
                  3.4.2.   [****]
                  3.4.3.   [****]
                  3.4.4.   [****]
                  3.4.5.   [****]
                  3.4.6.   [****]
                  3.4.7.   [****]
                  3.4.8.   [****]
                  3.4.9.   [****]
                  3.4.10.  [****]

         3.5.     Data Communications requirement

                  3.5.1.   [****]
                  3.5.2.   [****]
                  3.5.3.   [****]

         3.6.     Patient Interface requirements

                  3.6.1.   [****]
                  3.6.2.   [****]
                  3.6.3.   [****]
                  3.6.4.   [****]

         3.7.     Language Support requirements

                  3.7.1.   Same as [****]
                  3.7.2.   Will support Philips CE Mark
                  3.7.3.   Operation/Service manuals must be localized and
                           available on a single CD - Dutch, French, German,
                           Italian, Spanish

         3.8.     ESD/EMC requirements

                  3.8.1.   [****]
                  3.8.2.   [****]

4.       DESIGN VERIFICATION AND VALIDATION

         4.1.     [****]
         4.2.     [****]
         4.3.     [****]

Date: 10/1/03                 [****] CONFIDENTIAL                  Page 42 of 43


<PAGE>

5.       PROJECT DELIVERABLES

         5.1.     [****]
         5.2.     [****]
         5.3.     [****]
         5.4.     [****]
         5.5.     [****]
         5.6.     [****]
         5.7.     [****]

6.       NRE REQUIREMENTS

         6.1.     [****]
         6.2.     [****]
         6.3.     [****]

7.       DEVICE COST

         7.1.     The device is intended to fill a low cost product niche for
                  Event Recording identified by Philips. Complete kit cost (no
                  LCD, without algorithm) including device, cable, case, IFU,
                  physician user IFU, foam, patient use card will be $[****] per
                  unit.

         7.2.     Complete kit cost (no LCD, with algorithm) including device,
                  cable, case, IFU, physician user IFU, foam, patient use card
                  will be $[****] per unit.

8.       PRODUCT FORECAST

         8.1.     Philips to provide six month rolling forecast. Currently
                  projected at [****] levels but Philips has had historically
                  low unit sales experience. Therefore, this device will be
                  launched with minimal inventory and sales will drive inventory
                  levels and finished goods levels.

9.       PROJECTED SCHEDULE

         9.1.     [****]
         9.2.     [****]
         9.3.     [****]















Date: 10/1/03                 [****] CONFIDENTIAL                  Page 43 of 43