Exhibit 10.1


    
      
        

      


      Exhibit
        10.1

      


      For
        Purchases and Leases Direct From Supplier

      Subject
        to Competitive Bid Process

      


       

      


      


      


      


      PATIENT
        SECURITY SYSTEMS

      CAPITAL
        EQUIPMENT SUPPLIER AGREEMENT

      


      between

      


      NOVATION,
        LLC

      


      and

      


      eXI
        WIRELESS SYSTEMS, INC. 

      (Supplier
        Name)

      


      


      CE50122

      (Contract
        Number) 

      


      


      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      


      NOVATION,
        LLC

      


      CAPITAL
        EQUIPMENT SUPPLIER AGREEMENT

      


       

      1.    Introduction.

      


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

      


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

      


      2.    Contract
        Award.

       

      a.    Letter
        of Award.
        By
        executing and delivering the Letter of Award attached hereto as Exhibit C
        (“Award Letter”) to Supplier, Novation will have accepted your written offer to
        the Invitation to Bid (“Bid”), and Novation and Supplier therefore agree that
        Supplier will make the Products available for purchase to the Members as
        of the
        effective date (“Effective Date”) in the Award Letter in accordance with the
        terms of this Agreement and for the term (“Term”) stated in the Non-Price
        Specifications for any renewal terms set forth in the Non-Price Specifications
        and the forms of purchase, lease, license, financing or servicing agreements,
        if
        any, attached hereto as Exhibit D (collectively, “Forms”); provided, however,
        that Novation’s award of this Agreement to Supplier will not constitute a
        commitment by any person to purchase any of the Products. Supplier will not
        impose any purchasing commitment on any Member as a condition to the Member’s
        purchase of any Products pursuant to this Agreement. Supplier acknowledges
        that,
        in making its award to Supplier, Novation has materially relied on all
        representations, warranties and agreements made by Supplier as part of the
        Bid
        and that all such representations, warranties and agreements will survive
        acceptance of the Bid. 

       

      
        
          
          

        

        
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      b.    Use
        of Names, Etc.
        Supplier
        agrees that it will not use in any way in its promotional, informational
        or
        marketing activities or materials (i) the names, trademarks, logos,
        symbols
        or a description of the business or activities of Novation or any Client
        or
        Member without in each instance obtaining the prior written consent of the
        person owning the rights thereto; or (ii) the award or the content
        of this
        Agreement without in each instance obtaining the prior written consent of
        Novation.

      


      


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

       

      d.    Market
        Competitive Pricing and Terms. 

      


      Price
        Terms 

      


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

      


      §  Non-price
        Terms. 

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

      


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


       

      
        
          
          

        

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

      


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

      


      f.    Underutilized
        Businesses.
        Certain
        Members may be required by law, regulation and/or internal policy to do business
        with underutilized businesses and Supplier will assist Novation in helping
        Members meet these requirements by complying with all Novation policies and
        programs with respect to such businesses. Novation, in its discretion, may
        make
        an award and/or negotiate another agreement with a HUB in addition to any
        sole
        or multi-source award.

       

      g.    E-Commerce
        Business.
        Certain
        Members have chosen to utilize the service of the Marketplace@NovationTM through
        Novation’s relationship with Neoforma, Inc. (“Neoforma”), to transact business
        associated with this Agreement with Supplier. To assist Novation in helping
        Members meet those needs, Supplier agrees to sign, prior to the issuance
        of any
        Award Letter, and comply with the Novation E-Commerce Agreement attached
        hereto
        as Exhibit F and support Novation’s programs with respect to e-commerce.


      


      3.    Product
        Supply.

    

    
      


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

      


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


      
 

      
        
          
          

        

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

      


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

      


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

      


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

      


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

      


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

      


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

      
 

      
        
          
          

        

        
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      j.    Training.
        Members
        may attend eXI technical service training school at no charge, however members
        are responsible for all travel and out of pocket expenses. Supplier will
        also
        allow the Member to reproduce all training material for use by the Member’s
        personnel at the Member’s facility. In addition, Supplier will provide the
        initial in-service training for both operators and technical service staff
        of
        the Member at the Member’s site as part of the installation price for the
        system. Supplier will provide follow-up in-service training as mutually agreed
        with the Member for the life of the Equipment at a negotiated
        price.

       

      4.    Product
        Quality.

       

      a.    Free
        From Defects.
        Supplier
        warrants the Products, including, but not limited to, all attachments,
        subsystems and components thereof, against defects in material, workmanship,
        design and manufacturing for the warranty period set forth in Exhibit E attached
        hereto (“Warranty Period”). Supplier will make all necessary arrangements to
        assign such warranty to the Members. Supplier further represents and warrants
        that the Products will conform to the specifications, drawings, and samples
        furnished by Supplier or contained in the Non-Price Specifications and will
        be
        safe for their intended use. eXI Warranty terms will apply.

       

      b.    New
        Technology.
        

       

      
        	
                 

              	
                (i) 
                  During the Term, Supplier will disclose to Novation new technology
                  developed by Supplier which provides the same function as the Products.
                  Upon  troduction of the new technology by Supplier, each
                  Member will
                  be provided the option to exchange any Product purchased hereunder
                  for the
                  new technology upon the terms and conditions set forth in Exhibit
                  B
                  attached hereto. In the event Supplier fails to provide such option
                  to the
                  Members, (1) Novation will have the right to terminate any or all
                  of the
                  Products which have been superceded by such new technology providing
                  the
                  same function as the Products or (2) Novation may elect at its
                  discretion
                  to contract with one or more additional suppliers of comparatively
                  similar
                  new technology.

              
	 	 
	
                 

              	
                (ii) 
                  If
                  at any time during the Term new technology (as defined by a Novation
                  Council) a product becomes available from any source which provides
                  incremental patient care benefits and/or incremental safety benefits
                  over
                  technology currently available under this Agreement, Novation shall
                  provide written notice of such information to Supplier and may
                  elect to
                  contract with a third party vendor, or terminate the Agreement
                  and re-bid
                  the category so Members have access to New Technology at all times.
                  Such
                  action will not constitute a breach of this Agreement by
                  Novation.

              


      

      
 

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

      


      d.    Replacement
        Parts.
        Replacement
        parts supplied by Supplier at any time, whether during or after the Warranty
        Period or the term of any service agreement, will be newly manufactured parts
        or
        assemblies, unless the Member agrees otherwise. In the case where
        new

       

      
        
          
          

        

        
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      parts
        are
        not available, the service representative may install rebuilt parts in order
        to
        make the unit operational. Within thirty (30) days after the repair, the
        rebuilt
        parts must be replaced with newly manufactured parts. The Member may retain
        all
        parts that are not eligible for or are not returned by the Member for Supplier
        credit will remain the property of the Member. In all cases where Supplier
        is
        permitted to charge the Member for parts, Supplier will only replace and
        charge
        for parts necessary to bring the Equipment to operating condition. Supplier
        will
        warrant replacement parts and labor associated with such replacement parts
        for
        the period of time set forth in Supplier’s standard warranty.

       

      
        e.    Service
          Response Time.
           Supplier
          guarantees a response time of one (1) hour by phone and for on-site as
          agreed to
          by the Member for all warranty, contract or time and materials service
          calls
          requested by any Member during the life of the Equipment. The Supplier’s
          authorized dealer providing local service will provide first-level
          support.

        


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

        


        uptime
          =
(T
          - TNF) X 100

        T

         

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

        


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


        
          
            
            

          

          
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        external
          codes (state, JCAHO, etc.), and all internal policies developed by the
          Member.
          During the Warranty Period, Supplier will provide preventive maintenance
          after
          hours at a cost agreed to with the Member. This does not include required
          system
          operational duties such as system backups and functional testing.

         

        h.    Upgrades.
          A list
          of optional software available from Supplier, including costs for the software
          both during the Warranty Period and after the Warranty Period, is attached
          hereto as Exhibit A. Since software upgrade are sometimes customized to
          meet a
          specific need, Members will be given the option of acquiring this software
          if
          they elect to upgrade the system at the discounts provide for in this Agreement.
          If a Software Maintenance Agreement (SMA) is purchased with system, software
          upgrades will be provided at no charge for the duration of the SMA. Labor
          charges for installing software upgrades are not included in the
          SMA.

         

        i.    Customization
          Software.
          Pricing
          relating to the customization of software and additional charges that the
          Member
          will incur for annual maintenance, training, documentation, backup, etc.
          is
          attached hereto as Exhibit A.

         

        j.    Operational
          Software. The form of software licensure
          agreements available to the Members will be included as part of any quote
          requested by a Member. All software necessary to operate the Equipment,
          unless
          otherwise provided in any exhibit hereto, will be licensed to the Member
          upon
          acceptance of the Equipment pursuant to Subsection 3.f. above. If a SMA
          is
          purchased with the system, software upgrades will be provided at no charge
          for
          the duration of the SMA. Any new operational software that provides additional
          functionality must be submitted to Novation as an addition to Exhibit A.
          New
          software will be installed as scheduled with facility.

        
           

          k.    Diagnostic
            Software.
            Not
            applicable, Infant Protection Systems/Wandering Patient Systems do not
            require
            diagnostic software.

        

         

        l.    Data
          Conversion/Interfaces.
          Typically, systems to not require conversion of data, they operate on a
          stand-alone basis. Interfaces to other information systems may be quoted
          on a
          custom basis, and will not be part of this agreement.

         

        m.    Service
          Contract Cancellation.
          Service
          contracts are provided through Supplier’s authorized dealers. Terms of the
          service contract with the authorized dealer will apply.

         

        n.    Product
          Compliance.
          Supplier
          represents and warrants to Novation, the Clients and the Members that the
          Products are, if required, registered, and will not be distributed, sold,
          leased
          or priced by Supplier in violation of any federal, state or local law.
          Supplier
          represents and warrants that as of the date of delivery to the Members
          all
          Products will not be adulterated or misbranded within the meaning of the
          Federal
          Food, Drug and Cosmetic Act and will not violate or cause a violation of
          any
          applicable law, ordinance, rule, regulation or order. Supplier agrees it
          will
          comply with all applicable Good Manufacturing Practices and Standards contained
          in 21 C.F.R. Parts 210, 211, 225, 226, 600, 606, 610, 640, 660, 680 and
          820.
          Supplier represents and warrants that it will provide adequate warnings
          and
          instructions to inform users of the Products of the risks, if any, associated
          with the use of the Products. Supplier’s representations,
          warranties


        
          
            
            

          

          
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        and
          agreements in this Subsection will survive the expiration or earlier termination
          of this Agreement.

        
           

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

        

        


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

        


        6.    Obligations
          of Novation.

        


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

        


        b.    Marketing
          Services.
          Novation, in conjunction with the Clients, will market the purchasing and/or
          leasing arrangements covered by this Agreement to the Members. Such promotional
          services may include, as appropriate, the use of direct mail, contact by
          Novation’s field service delivery team, member support services, and regional
          and national meetings and conferences. As appropriate, Novation, in conjunction
          with the Clients, will involve Supplier in these promotional activities
          by
          inviting Supplier to participate in meetings and other reasonable networking
          activities with Members.

         

        7.    Fees.

         

        a.    Calculation.
          Supplier
          will pay to Novation, as the authorized collection agent for each of the
          Clients
          and certain of each Client’s subsidiaries and affiliates, respectively (and not
          collectively), Fees belonging to any of the Clients or certain of their
          subsidiaries or affiliates equal to the Agreed Percentage of all Net Sales
          of
          the Products to the Members directly or indirectly from Supplier, whether
          under
          the pricing and other terms of this Agreement or under the terms of any
          other
          purchasing or pricing arrangements that may exist between the Members and
          Supplier. As used herein, Net Sales shall mean invoiced sales of Products
          less
          related Product returns. The “Agreed Percentage” will be defined in the Award
          Letter.


        
          
            
            

          

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

        


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

        


        If
          Sent
          By First
          Class Mail: 

        


        Novation,
          LLC

        75
          Remittance Dr., Suite 1420

        Chicago,
          IL 60675-1420

        


        If
          Sent
          Via Courier (i.e.,
          Federal Express, United Parcel Service, Messenger): 

        The
          Northern Trust Company

        350
          North Orleans Street

        Receipt
          & Dispatch 8th
          Floor

        Chicago,
          IL 60654

        


        Attn:
          Novation, LLC, Lockbox Number 1420

        Telephone
          No. (312) 444-3576

        


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

        


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

        


        8.    Compliance
          With Law and Government Program Participation.

        


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

        


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


        
          
            
            

          

          
            -9-

            
              

            

          

          
            
            

          

        


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

        


        9.     
          Insurance.

        


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

        


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

        


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

        


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


        
          
            
            

          

          
            -10-

            
              

            

          

          
            
            

          

        


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

        


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

        


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

        


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

        


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

         

        13.    Confidential
          Information.

        


         
          a.    Nondisclosure.
          Supplier
          agrees that it will:

         

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


        

        
          
            
            

          

          
            -11-

            
              

            

          

          
            
            

          

        


        


        
          
            	
                     

                  	
                    (2) not
                      use the Confidential Information for any purpose other than
                      the
                      performance of its obligations under this Agreement, without
                      the prior
                      written consent of Novation;

                  
	 	 
	 	(3) not
                    disclose the Confidential Information to any third party (unless
                    required
                    by law) without the prior written consent of Novation; and
	 	 
	
                     

                  	
                    (4) not
                      later than thirty (30) days after the expiration or earlier
                      termination of
                      this Agreement, return to Novation, the Client or the Member,
                      as the case
                      may be, the Confidential
                      Information.

                  


          
 
          

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

        


         
          c.         
HIPAA.
          If a
          Member determines, in its sole reasonable discretion, that Supplier is
          a
“business associate,” as that term is defined in the privacy rules promulgated
          pursuant to The Health Insurance Portability and Accountability Act of
          1996
          (“HIPAA”) codified at 42 CFR Parts 160 and 164, Supplier will negotiate with
          Member a mutually acceptable written agreement which will govern Supplier’s
          access to “protected health information” as defined under HIPAA (a “Business
          Associate Contract”).

         

        
          14.    Miscellaneous.

           

                  
            a.   Choice
            of Law.
            This
            Agreement will be governed by and construed in accordance with the internal
            substantive laws of the State of Delaware and the Delaware courts will
            have
            jurisdiction over all matters relating to this Agreement; provided, however,
            the
            terms of any agreement between Supplier and a Member will be governed
            by and
            construed in accordance with the choice of law and venue provisions set
            forth in
            such agreement.

        

        


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

        


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


        
          
            
            

          

          
            -12-

            
              

            

          

          
            
            

          

        


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

        


        If
          to
          Supplier:

        


        eXI
          Wireless Systems, Inc.

        Attn:
          Daniel Drebnicki

        Suite
          100-13551 Commerce Parkway

        Richmond,
          BC, Canada V6V 2L1

        


        If
          to
          Novation:

        


        Novation

        Attn:
          General Counsel

        125
          East
          John Carpenter Freeway

        Irving,
          TX 75062-2324

        


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

        


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

        


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

        


        Exhibit
          A    Product
          and Service Description and Pricing

        


        Exhibit
          B    Non-Price
          Specifications

        


        Exhibit
          C    Award
          Letter


        
          
            
            

          

          
            -13-

            
              

            

          

          
            
            

          

        


        


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

        


        Exhibit
          E    Warranty

        


        Exhibit
          F    Neoforma
          Master Supplier Agreement

        


        


        SUPPLIER:    
          eXI
          Wireless Systems, Inc.

        ADDRESS:     
          Suite
          100
          - 13551 Commerce Parkway

                                 
          Richmond,
          BC V6V 2L1

        


        


        SIGNATURE:
          /s/ Alan Foster

        TITLE:
          President    DATE:
          April 18, 2005

         

         

        
          
            
            

          

          
            -14-