<PAGE>


                             C O N F I D E N T I A L




                            SUPPLY AGREEMENT BETWEEN

                     PHILIPS MEDICAL SYSTEMS NEDERLAND B.V.
                                    (PHILIPS)


                                       AND


                       INTERMAGNETICS GENERAL CORPORATION
                                (INTERMAGNETICS)


                                    REGARDING



                           A FAMILY OF ACTIVE SHIELDED
                           SUPERCONDUCTING MRI MAGNETS












<PAGE>


 Content:                                                               Page:
 ----------------------------------------------------------------------------
 1        Scope                                                          2

 2        Definitions                                                    2

 3        Products                                                       2

 4        Change Control                                                 3

 5        Prices                                                         3

 6        Purchase Orders                                                3

 7        Forecast and Ordering Procedures                               4

 8        Production                                                     4

 9        Delivery                                                       5

 10       Warranty                                                       6

 11       Service                                                        9

 12       Branding, Trademarks and Tradenames                            9

 13       Term and Termination                                          10

 14       Purchase Orders placed prior to termination effectivity       10

 15       Prevailing Agreement                                          10

 16       Surviving Terms                                               10

 17       List of Schedules                                             11

 18       Effectiveness                                                 11

 Schedules
 ---------
 A        [CONFIDENTIAL TREATMENT REQUESTED]
 B        Branding instructions
 C        [CONFIDENTIAL TREATMENT REQUESTED]
 D        [CONFIDENTIAL TREATMENT REQUESTED]
 E        Change request form
 F        Configuration management
 G        [CONFIDENTIAL TREATMENT REQUESTED]
 H        Accounting data and procedures
 I        Forwarding instructions
 J        Customs instructions
 K        [CONFIDENTIAL TREATMENT REQUESTED]

                                       i
<PAGE>


This SUPPLY AGREEMENT is

between

PHILIPS MEDICAL SYSTEMS NEDERLAND B.V., of Best, The Netherlands (hereinafter
referred to as "PHILIPS") on the one part

and

INTERMAGNETICS GENERAL CORPORATION acting through its Magnet Business Group of
Latham, New York, the United States of America (hereinafter referred to as
"INTERMAGNETICS") on the other part.

WHEREAS:

o   PHILIPS and INTERMAGNETICS entered into an Umbrella Agreement dated 29
    April, 1999 setting forth the terms and conditions applicable to their
    relationship; and

o   under the Umbrella Agreement, the parties may enter into a Supply Agreement
    for the supply of certain magnet systems from INTERMAGNETICS to PHILIPS; and

o   the Parties now desire to enter into a Supply Agreement to cover the supply
    of existing and future products from INTERMAGNETICS to PHILIPS;


NOW IT IS HEREBY AGREED AS FOLLOWS:

<PAGE>


1.      Scope

This Supply Agreement is an integral part of the Parties' UMBRELLA AGREEMENT
dated 29 April, 1999. Except as expressly stated otherwise herein, all terms and
conditions of the Umbrella Agreement, including definitions, are incorporated as
if fully set forth in this Supply Agreement. This Supply Agreement will
encompass the supply of Products that meet Specifications contained in Schedule
A and shall take effect on 1 January 2000 (the Effective Date).

2.      Definitions

Product(s)                  In addition to the definition of Product in the
                            Umbrella Agreement, Product shall mean, in this
                            Supply Agreement, the products which are specified
                            in Schedule A. Products may be added or deleted to
                            Schedule A by mutual agreement of the Parties in
                            writing.

Spare Parts                 shall mean replaceable Parts of the Products
                            classified by INTERMAGNETICS as spare parts

Specification               shall mean the requirements for the Products as set
                            forth in Schedule A.

Supply Agreement:           shall mean this document and all the Schedules that
                            are presently attached thereto and all Appendixes
                            and amendments that will be attached thereto
                            provided they are signed and/or initialed by the
                            individuals authorized to bind the Parties.

Tools                       shall mean components supplied by INTERMAGNETICS
                            specifically for the purpose of installation or
                            service of the Product(s)


3.       Product(s)

3.1.     INTERMAGNETICS shall only supply Product(s) which have successfully
         passed the agreed upon tests to ensure meeting the Specification and
         which have been subject to the issuance by PHILIPS of a NORD.



                                     Page: 2
<PAGE>

3.2.     INTERMAGNETICS shall be under no obligation to accept orders for any
         Product until a NORD has been issued for that type of Product. PHILIPS
         shall be under no obligation to accept deliveries until a NORD has been
         issued.

4.       Change Control

4.1.     INTERMAGNETICS shall inform PHILIPS in writing by means of the standard
         form for change request as laid out in Schedule E to this Supply
         Agreement of any and all changes affecting form, fit or function to the
         Product(s) and/or Spare Parts that result from its continuing
         engineering activities as they occur. Any changes proposed by
         INTERMAGNETICS such as change in design, material, manufacturing
         process and other aspects which affect form, fit or function and/or the
         Specification(s) will be subject to the prior written consent of
         PHILIPS. The objective of Parties is to conclude the authorization,
         cancellation or rejection of any change request within sixty (60) days
         from its initiation.

4.2.     In the event PHILIPS desires a change in the Product(s) and/or Spare
         Parts, the provision of Article 4.1 hereof shall apply mutatis
         mutandis.


5.       Prices

5.1.     INTERMAGNETICS shall supply the Product(s) and Spare Parts to PHILIPS
         at prices which are set forth in Schedule C to this Supply Agreement.

5.2.     [CONFIDENTIAL TREATMENT REQUESTED]

5.3.     [CONFIDENTIAL TREATMENT REQUESTED]


6.       Purchase Orders

6.1.     Product(s) and/or Spare Part(s) shall be ordered by PHILIPS through the
         written or electronic release of a Purchase Order which shall be
         subject to and governed by this Supply Agreement.

6.2.     Each Purchase Order shall at least specify the type of Product(s)
         and/or Spare Part(s), the quantity(ies), the price(s) and the requested
         delivery date(s).

6.3.     Purchase Order(s) may include additional terms relating to the
         purchase, shipment and other conditions if previously agreed upon
         between PHILIPS and INTERMAGNETICS.

                                    Page: 3
<PAGE>

6.4.     Purchase Order(s) so placed by PHILIPS shall be acknowledged by
         INTERMAGNETICS within five (5) working days after receipt provided that
         such Purchase Order(s) comply with the requirements of Schedule D.


7.       Forecast and Ordering Procedures

7.1      Parties have agreed to the forecast and order lead time provisions as
         specified in Schedule D to this Supply Agreement.


8.       Production

8.1.     Subject to the confidentiality provisions of the Umbrella Agreement
         between Parties, PHILIPS' technical, purchasing, quality, logistic and
         service experts are entitled to visit INTERMAGNETICS' factory in order
         to assess all relevant aspects of the progress of the manufacture of
         the Products, such as without limitation with respect to
         Specifications, quality, serviceability and delivery times, provided
         that in accordance with INTERMAGNETICS' confidentiality needs, PHILIPS'
         experts will not have access to certain, to be agreed upon in advance,
         aspects of the manufacturing process. PHILIPS' experts are entitled to
         make suggestions and proposals, but same shall be binding and valid on
         INTERMAGNETICS and PHILIPS only if confirmed in a document signed by
         authorized representatives of all relevant parties.

8.2.     Each Product shall be tested by INTERMAGNETICS prior to delivery. The
         tests shall enable INTERMAGNETICS to verify that the Products comply
         with the Specifications. Test requirements and procedures have been
         defined in the Specifications. No later than seven (7) working days
         prior to the start of the test, INTERMAGNETICS shall inform PHILIPS
         thereof in writing and PHILIPS is entitled to be represented at these
         tests. Notwithstanding PHILIPS being so represented, Article 9.7 will
         remain applicable. Upon satisfactory completion of the tests a copy of
         the test results per Product authorized by INTERMAGNETICS' responsible
         quality officer shall be transmitted to PHILIPS with a request to
         authorize delivery thereof. PHILIPS will react to this request within
         five (5) working days following receipt of the information. If PHILIPS
         does not respond within said five working days the Product shall be
         deemed to be accepted by PHILIPS and INTERMAGNETICS shall be entitled
         to deliver the Product and forward the relevant invoice to PHILIPS. In
         case the Product appears not to comply with the Specifications PHILIPS
         shall be entitled to reject the Product in which case INTERMAGNETICS
         shall repair or replace the Product.


9.       Delivery

                                    Page: 4
<PAGE>

9.1.     Unless specifically otherwise agreed in writing the Product(s) and
         Spare Part(s) shall be delivered in accordance with the terms of the
         pertaining Purchase Order and this Article 9.

9.2.     [CONFIDENTIAL TREATMENT REQUESTED]

9.3.     [CONFIDENTIAL TREATMENT REQUESTED]

9.4.     [CONFIDENTIAL TREATMENT REQUESTED]

9.5.     [CONFIDENTIAL TREATMENT REQUESTED]

9.6      [CONFIDENTIAL TREATMENT REQUESTED]

9.7.     Upon receipt, PHILIPS is entitled to retest (incoming inspection) at
         PHILIPS location the Product(s) and Spare Part(s) in accordance with
         the agreed upon tests, set forth in Schedule A to this Supply
         Agreement. In the event a Product does not comply with the agreed
         Specifications and acceptance test requirements, or subsequent
         change(s) agreed upon in accordance with Article 4 PHILIPS is entitled
         to reject the pertaining Product(s) and it shall inform INTERMAGNETICS
         thereof in writing with an indication of the deficiencies as they
         appear to PHILIPS. Subject to the provisions of Article 10,
         INTERMAGNETICS shall, at its option, either repair or replace the
         Product(s) and Spare Part(s) rejected by PHILIPS within a reasonable
         time taking into account PHILIPS' interests but at the latest within 90
         (ninety) days after PHILIPS' notice of rejection. All costs related to
         such repair or replacement shall be borne by INTERMAGNETICS unless
         caused by damage incurred under PHILIPS ownership.


10.      Warranty

10.1.    [CONFIDENTIAL TREATMENT REQUESTED]

10.2.    [CONFIDENTIAL TREATMENT REQUESTED]

10.3.    [CONFIDENTIAL TREATMENT REQUESTED]

10.4.    [CONFIDENTIAL TREATMENT REQUESTED]

10.5.    [CONFIDENTIAL TREATMENT REQUESTED]

10.6.    [CONFIDENTIAL TREATMENT REQUESTED]

10.7.    [CONFIDENTIAL TREATMENT REQUESTED]

                                    Page: 5
<PAGE>

10.8.    [CONFIDENTIAL TREATMENT REQUESTED]

10.9.    [CONFIDENTIAL TREATMENT REQUESTED]


11.      Service

11.1.    INTERMAGNETICS undertakes that it will have available Spare Part(s),
         make the same available to PHILIPS at PHILIPS' request at prices as set
         forth in Schedule C to this Supply Agreement and will continue to
         enhance software, if applicable, for the Products during a period of
         seven (7) years after the last dispatch of Products by INTERMAGNETICS.

11.2.    INTERMAGNETICS may, at its discretion, substitute functionally
         equivalent Spare Parts, subject to informing PHILIPS previously in
         writing and making available free of charge a number of such equivalent
         Spare Parts for PHILIPS to test and provided PHILIPS approves these
         Spare Parts in writing. After completion of such tests, PHILIPS will
         either purchase or return such Spare Parts to INTERMAGNETICS.

11.3.    Together with each Product, INTERMAGNETICS will supply to PHILIPS one
         copy of the necessary updated operating and technical/maintenance
         manual, both for hardware and software in the English language and will
         forward same separately to PHILIPS' attention to the address PHILIPS
         will specify per case.

11.4.    Other Service aspects are as set forth in Schedule G to this Supply
         Agreement.


12.      Branding Trademarks and Trade Names

12.1.    The Products and packing supplied under this Supply Agreement will be
         branded with PHILIPS' and INTERMAGNETICS' trademarks and trade names in
         accordance with each Party's instructions as set forth in Schedule B to
         this Supply Agreement. INTERMAGNETICS recognizes PHILIPS' rights in and
         to PHILIPS' trademarks and trade names. In this respect it is
         understood that PHILIPS may require a separate letter of acknowledgment
         from INTERMAGNETICS of PHILIPS' rights in and to the said trademarks
         and trade names.

12.2.    The arrangements of Article 12.1 are not to be understood as a
         restriction of INTERMAGNETICS' rights and title in the design and
         programming applied in the Products.


                                    Page: 6
<PAGE>

13.      Term and Termination

13.1     Term of Supply Agreement
         The Term as defined in the Umbrella Agreement applies to this Supply
         Agreement.

13.2     Termination by mutual agreement
         The Parties may, by mutual agreement, decide to discontinue the supply
         of certain Products supplied under this Supply Agreement with a minimum
         of twenty four (24) months advance written notice.

13.3     Termination for breach
         The provision for termination for breach from the Umbrella Agreement
         shall apply as if fully set forth herein, provided, however, that as an
         additional remedy for breach, the non-breaching Party may terminate the
         supply of a particular Product or Product(s) under this Supply
         Agreement (rather than the entire Supply Agreement) by notice in
         writing.


14.      Purchase Orders placed prior to termination effectivity

         In the event of termination of a particular Product pursuant to Article
         13.2 of this Supply Agreement, PHILIPS shall be entitled until the
         actual date the supply of the affected Product(s) terminates, to place
         Purchase Orders for the affected Product(s) in accordance with the
         terms and conditions of this Supply Agreement and INTERMAGNETICS agrees
         to honor such Purchase Orders, provided always that the delivery times
         for such Purchase Orders do not exceed the prevailing lead time and
         comply with Article 6 and Schedule D.

         After the notice of termination coming into effect, PHILIPS shall not
         be entitled to change, modify or cancel any Purchase order placed by it
         for any reason other than INTERMAGNETICS' inability to honor such
         Purchase Order nor to place any additional Purchase Orders.


15.      Prevailing Agreement
         If there is any conflict between any provision of this Supply Agreement
         with any provision of a Schedule to this Supply Agreement or a Purchase
         Order the provisions of this Agreement shall prevail.


16.      Surviving Terms
         In the event of termination of this Supply Agreement, the provisions of
         Articles 10, 11 and 15 shall survive.


                                    Page: 7
<PAGE>

17.      List of Schedules to this Supply Agreement

         A        [CONFIDENTIAL TREATMENT REQUESTED]

         B        Branding instructions

         C        [CONFIDENTIAL TREATMENT REQUESTED]

         D        [CONFIDENTIAL TREATMENT REQUESTED]

         E        Change request form

         F        Configuration management

         G        [CONFIDENTIAL TREATMENT REQUESTED]

         H        Accounting data and procedures

         I        Forwarding instructions

         J        Customs instructions

         K        [CONFIDENTIAL TREATMENT REQUESTED]


18.      Effectiveness

         This Supply Agreement becomes binding when signed by duly authorized
         officers of each party and will come into effect on 1 January 2000.


                                    Page: 8
<PAGE>

IN WITNESS WHEREOF the parties have caused this Agreement to be signed by their
authorized representatives:
<TABLE>
<CAPTION>
<S>                                                             <C>
INTERMAGNETICS GENERAL                                          PHILIPS MEDICAL SYSTEMS
CORPORATION                                                     NEDERLAND B.V.


Signature /s/ Glenn H. Epstein                                  Signature /s/ Ir. C.F. Knoet
                  Glenn H. Epstein                                                Ir. C.F. Knoet
                  President and                                                   Director PMC MR/CT/EVM
                  Chief Operating Officer

Date: 30 April 1999                                             Date: 28 April 1999

INTERMAGNETICS GENERAL                                          PHILIPS MEDICAL SYSTEMS
CORPORATION                                                     NEDERLAND B.V.


Signature: /s/ Leo Blecher                                      Signature: /s/ Dr A.H. van Ommen
                  Leo Blecher                                                     Dr A.H. van Ommen
                  VP and General Manager                                          Director
                  Magnet Business Group                                           PMG Magnetic Resonance

Date: 30 April 1999                                             Date: 29 April 1999

INTERMAGNETICS GENERAL                                          PHILIPS MEDICAL SYSTEMS
CORPORATION                                                     NEDERLAND B.V.


Signature: /s/ Garry Morrow                                     Signature: /s/ Boyd van der Plas
                  Garry Morrow                                                    Boyd van der Plas,
                  Marketing Manager                                               Purchasing Manager
                  Magnet Business Group                                           PMG Magnetic Resonance

Date: 30 April 1999                                             Date: 29 April 1999

</TABLE>

                                    Page: 9
<PAGE>


                           UMBRELLA AGREEMENT BETWEEN

                     PHILIPS MEDICAL SYSTEMS NEDERLAND B.V.


                                       AND


                       INTERMAGNETICS GENERAL CORPORATION



                                    REGARDING


                           A FAMILY OF ACTIVE SHIELDED
                 SUPERCONDUCTING MAGNET SYSTEMS FOR MRI SYSTEMS








<PAGE>

Content:                                                     Page:
------------------------------------------------------------------

1        Scope                                                 2

2        Definitions                                           2

3        Quality System                                        5

4        Environmental                                         5

5        [CONFIDENTIAL TREATMENT REQUESTED] Consultation       8

6        [CONFIDENTIAL TREATMENT REQUESTED]                   10

7        (reserved)                                           12

8        [CONFIDENTIAL TREATMENT REQUESTED]                   12

9        Continuity of Supply                                 13

10       Intellectual Property Rights                         14

11       IPR Licenses                                         17

12       Ownership of Information and licenses                18

13       Confidentiality                                      19

14       Product Liability                                    20

15       Patent Indemnity                                     22

16       Duration and Termination                             23

17       Surviving Terms                                      24

18       Force Majeure                                        25

19       Miscellaneous                                        25

Schedules
---------

A        Environmental

B        [CONFIDENTIAL TREATMENT REQUESTED]

C        Contingency Plans

D        [CONFIDENTIAL TREATMENT REQUESTED]

E        Applicable regulatory codes

                                       i

<PAGE>
Underlying Agreements
---------------------

[CONFIDENTIAL TREATMENT REQUESTED]

Supply Agreement

                                       ii
<PAGE>

This Agreement is made this 29 April, 1999, (hereinafter the Effective Date) by
and between:


PHILIPS MEDICAL SYSTEMS NEDERLAND B.V., of Best, The Netherlands ("PHILIPS") on
the one part

and

INTERMAGNETICS GENERAL CORPORATION of Latham, New York, the United States of
America ("INTERMAGNETICS") on the other part


WHEREAS:
o    PHILIPS is engaged amongst others, in the development, design, engineering,
     manufacture and marketing of magnetic resonance imaging systems (MRI
     systems); and
o    INTERMAGNETICS is engaged, amongst others, in the development, design,
     engineering, manufacture and marketing of magnet systems (Magnet systems)
     and certain components for use in MRI systems; and
o    INTERMAGNETICS manufactures and supplies certain actively shielded
     superconducting Magnet systems and associated components to PHILIPS under
     the terms and conditions of an Amended and Restated Supply Agreement dated
     November 6, 1998; and
o    Parties intend to enter into a termination of the Amended and Restated
     Supply Agreement effective December 31, 1999; and
o    [CONFIDENTIAL TREATMENT REQUESTED];

NOW, THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:




                                    Page: 1
<PAGE>

                                    Article 1
                                      Scope

This Agreement sets forth the principles for a mutually beneficial relationship
governing all agreements between Parties as of the Effective Date except the
Amended and Restated Supply Agreement dated November 6, 1998 and the Termination
Agreement dated April 29, 1999. This Agreement applies only to the business
relationship between PHILIPS and INTERMAGNETICS' Magnet Business Group.


                                    Article 2
                                   Definitions

The below mentioned terms shall have the following meaning in this Agreement:

Agreement                       shall mean this document and all underlying
                                agreements, the Schedules and amendments
                                thereto.

Associated Companies            shall mean any and all companies, firms and
                                persons with respect to which now or hereafter
                                Koninklijke PHILIPS Electronics N.V. or
                                INTERMAGNETICS respectively directly or
                                indirectly holds 50 % or more of the nominal
                                value of the issued share capital or has 50 % or
                                more of the voting power at general meetings or
                                has the power to appoint a majority of the
                                directors or otherwise directs the activities of
                                such company, firm or person but any such
                                company, firm or person shall be deemed an
                                Associated Company only as long as such control
                                exists.

Background Information          such Information (other than Foreground
                                Information) which at the date hereof is or
                                during the continuance of the activities set out
                                in this Agreement comes into the ownership or
                                control of a Party and which such Party is free
                                to disclose without the consent of or need to
                                account to any third party.

Background Intellectual         such Intellectual Property (not being Foreground
Property Rights (Background     Intellectual Property Rights) which at the date
IPRs)                           hereof are or during the continuance of the
                                activities set out in this Agreement come into
                                the ownership or control of a Party and which
                                such Party is free to disclose without the
                                consent of or need to account to any third
                                party.

Contract Manager                shall have the meaning set forth in Article 5.7.



                                    Page: 2
<PAGE>

[CONFIDENTIAL
TREATMENT REQUESTED]

[CONFIDENTIAL
TREATMENT REQUESTED]

First Articles                  Shall mean an initial delivery of a Product
                                intended to be used for type approval tests for
                                compliance with the Specifications, leading to
                                NORD of the Product.

Foreground Information          such Information (other than Background
                                Information) as is generated solely by either
                                Party or both Parties hereto from the activities
                                set out in this Agreement.

Foreground Intellectual         such Intellectual Property as is generated
Property Rights (Foreground     solely by either Party or both Parties hereto
IPRs)                           from the activities set out in this Agreement.

Information                     shall mean valuable technical information,
                                software, industrial secrets, trade secrets,
                                descriptions of manufacturing processes,
                                technical information inherent in Prototypes or
                                First Articles, know-how, product
                                specifications, or other proprietary information
                                used by either Party in carrying on its
                                business, which are not considered IPRs as
                                defined above.

Intellectual Property (IPR)     shall mean inventions, whether patented or not
                                including the conception or reduction to
                                practice of an invention, patents, petty
                                patents, utility models, design patents, (both
                                registered and unregistered), copyrights,
                                industrial designs, trade secrets and any other
                                form of intellectual property right protection
                                afforded by law to inventions, designs or
                                technical information, and applications
                                therefor.

INTERMAGNETICS                  Shall mean Intermagnetics General Corporation.

Magnet system                   Shall mean magnet windings, cryostat, cryogenic
                                refrigerator and electronic monitor for MRI
                                systems.

[CONFIDENTIAL TREATMENT REQUESTED]

MRI system                      Shall mean a magnetic resonance imaging system
                                for medical imaging including components such as
                                gradient, radio frequency, spectrometer;
                                processing, physiology, patient handling and
                                user interface sub-systems, but for purposes of
                                this Agreement, shall not include Magnet
                                systems.

                                    Page: 3
<PAGE>

[CONFIDENTIAL TREATMENT REQUESTED]

Party(ies)                      Shall mean PHILIPS and/or INTERMAGNETICS and,
                                for purposes of Articles 10, 11 and 12 their/its
                                Associated Companies.

PHILIPS                         Shall mean Philips Medical Systems Nederland
                                B.V.

Product(s)                      Shall mean those products PHILIPS shall
                                [CONFIDENTIAL TREATMENT REQUESTED] purchase from
                                time to time from INTERMAGNETICS pursuant to the
                                terms of, and as more fully described in
                                [CONFIDENTIAL TREATMENT REQUESTED] Supply
                                Agreement(s).

[CONFIDENTIAL TREATMENT REQUESTED]

[CONFIDENTIAL TREATMENT REQUESTED]

[CONFIDENTIAL TREATMENT REQUESTED]

Purchase Order                  Shall mean a written or electronic purchase
                                order issued to INTERMAGNETICS by PHILIPS.

[CONFIDENTIAL TREATMENT REQUESTED]

Spare Part(s)                   Shall mean replaceable part(s) of the Products
                                classified by the Parties in [CONFIDENTIAL
                                TREATMENT REQUESTED] Supply Agreements as field
                                replaceable units (FRU).

Specifications                   shall mean the requirements for a Product in
                                [CONFIDENTIAL TREATMENT REQUESTED]Supply
                                Agreement(s).

Substantially Similar           shall be defined in a Schedule to [CONFIDENTIAL
Product(s)                      TREATMENT REQUESTED] Supply Agreement, for
                                defining the scope of any exclusivity.


                                    Page: 4
<PAGE>

Supply Agreement                shall mean an agreement to govern supply and
                                service of Products and Spare Parts.

Term                            Duration of this Agreement as set forth in
                                Article 16.1.


                                    Article 3
                                 Quality System

3.1      INTERMAGNETICS shall establish, document and maintain an effective
         quality system to ensure and demonstrate that all processes, in
         particular the development, design, engineering and manufacture of
         Products, are in conformance with the specified requirements and
         standards contained in the Specifications.

3.2      INTERMAGNETICS will use its best efforts to ensure that its quality
         system will continue to meet the requirements of ISO 9001.

3.3      INTERMAGNETICS shall verify by means of planned and periodic audits,
         conformance to the requirements and standards of the quality system.
         The results of these audits will be documented and will be available
         for review by PHILIPS upon request.

3.4      INTERMAGNETICS agrees that audits with respect to the quality system
         may be performed at INTERMAGNETICS' facilities by certain qualified
         employees of PHILIPS, governmental bodies and official test houses to
         the extent necessary for compliance to the requirements and standards.


                                    Article 4
                                  Environmental

4.1      INTERMAGNETICS represents and warrants that on the Effective Date, the
         Products, Service Parts and packaging, do not contain banned substances
         as specified in the PHILIPS list of banned substances set forth in
         Schedule A, except for substances for which dispensation has been
         requested by INTERMAGNETICS on the form of Part C of Schedule A to this
         Agreement, and are in compliance with additional legislation, as
         mentioned in Part B of Schedule A to this Agreement. For future
         deliveries, INTERMAGNETICS is responsible for the implementation of
         effective controls to assure continuous compliance with the above
         requirements. In case INTERMAGNETICS cannot meet above requirements,
         PHILIPS' approval is required prior to delivery, using the "Request for
         Dispensation", Part C of Schedule A to this Agreement.

                                    Page: 5
<PAGE>

4.2      INTERMAGNETICS represents that on the Effective Date the Products,
         Service Parts and packaging, are not manufactured with the ozone
         depleting substances as specified in 40 CFR Part 82. If INTERMAGNETICS
         cannot meet above requirements, PHILIPS' approval is required prior to
         delivery, using the "Request for Dispensation", Part C of Schedule A to
         this Agreement. INTERMAGNETICS must label such Products in compliance
         with PHILIPS' written instructions.

4.3      INTERMAGNETICS will inform PHILIPS, from the Effective Date onwards, of
         the presence of relevant substances in the Products, Service Parts and
         packaging, as specified in PHILIPS list of relevant substances (Part D
         of Schedule A to this Agreement).INTERMAGNETICS is responsible for the
         implementation of effective controls on the use of these substances.
         INTERMAGNETICS will inform PHILIPS on the use of these relevant
         substances, using the "Declaration of Relevant Substances", Part D of
         Schedule A to this Agreement.

4.4      INTERMAGNETICS will actively search for possibilities to replace banned
         and relevant substances, including those for which a waiver has been
         granted, which substances are specified in the PHILIPS list of banned
         and relevant substances, Part B and Part D of Schedule A to this
         Agreement.

4.5      INTERMAGNETICS shall comply with all applicable environmental E.U.,
         U.S. Federal or International environmental laws, rules, regulations,
         ordinances, covenants, standards and the like, and PHILIPS'
         implementation thereof (collectively "Environmental Regulations")
         concerning the Products, Service Parts and packaging as well as all
         applicable US Federal and State environmental laws for plant
         operations, enabling PHILIPS to distribute on a world-wide basis
         Products, Service Parts and packaging as of the Effective Date.
         Environmental Regulations can also include issues such as labeling
         (e.g. in connection with the US Clean Air Act or US Department of
         Transportation regulations), information requirements, and take-back
         regulations relating to Products, Service Parts and packaging.

4.6      INTERMAGNETICS' obligation to take back Products, Spare Parts and
         packaging as a result of one or more Environmental Regulations shall be
         limited to those cases in which the reason for such return is based
         solely on the failure of INTERMAGNETICS' Products, Spare Parts and
         packaging to meet the requirements of such Environmental Regulation(s)
         in effect at the time they were delivered, unless agreed otherwise.

4.7      In the event any new Environmental Regulation will be promulgated after
         the Effective Date of this Agreement, the Parties will negotiate to
         establish within a reasonable period of time equitable terms to prevent
         or remedy any non-compliance by INTERMAGNETICS of this Article 4 as a
         consequence of such promulgation to include such new Environmental
         Regulation in the obligations of INTERMAGNETICS under this Article 4.

                                    Page: 6
<PAGE>

4.8      INTERMAGNETICS will use its best efforts to ensure that Products,
         Service Parts and packaging are designed and manufactured in such a way
         that these can be recycled or recovered at the end of their life cycle
         without special precautions and that no hazardous residues will remain.

4.9      INTERMAGNETICS shall provide PHILIPS with the following information:
         (a)      prior to acceptance of the Products, Service Parts and
                  packaging, all Material Safety Data Sheets, in accordance with
                  the ISO 11014-1 Standard or 91/155/EC Directive for
                  components, materials and substances which during all phases
                  of the Product life-cycle, except relating to the
                  manufacturing as such, may be hazardous for human health;
         (b)      upon request, and at PHILIPS' expense, all necessary
                  information for disassembling and recycling of the Products,
                  Service Parts and packaging;
         (c)      an "Environmental Declaration for Products", Part A of
                  Schedule A to this Agreement, to confirm that the delivered
                  Products comply with all Environmental Requirements set forth
                  in this Agreement;
         (d)      prior to first delivery of a Product, a "Request for
                  Dispensation", Part C of Schedule A to this Agreement, if the
                  Product is not in compliance with the in Part B of Schedule A
                  to this Agreement;
         (e)      prior to first delivery of a Product a "Declaration of
                  Relevant Substances", Part D of Schedule A to this Agreement,
                  if one of the substances as specified in Part D is present in
                  the Product;
         (f)      prior to acceptance of the Product, all labeling information
                  as required by the Environmental Regulations.

4.10     INTERMAGNETICS shall control the environmental aspects of the design
         and manufacturing through an adequate and effective environmental
         management system complying with ISO 14001, including certification by
         an accredited certification body. In case said system has not yet been
         implemented or said certification has not yet been awarded prior to the
         Effective Date of this Agreement, then INTERMAGNETICS shall use its
         best efforts to achieve the requirements of this Article 4.10 by
         September 1999.

4.11     INTERMAGNETICS undertakes on a best efforts basis to participate in
         PHILIPS' environmental programs, such as:

         (a)      Reduction and elimination of Environmental banned and relevant
                  substances in Products.
         (b)      Reduction of Packaging weight.
         (c)      ECO-design.
         (d)      Re-usability of Products. (Design for recycling, less waste
                  by End of Life.)

         INTERMAGNETICS will apply (within reasonable limits) the results of
         such environmental programs in its implementation of this Agreement.

                                    Page: 7
<PAGE>

4.12     PHILIPS shall have the right to audit the implementation and adherence
         to this Article 4, to assure continuous compliance with Environmental
         Regulations.

                                    Article 5
                 [CONFIDENTIAL TREATMENT REQUESTED] Consultation

5.1      Meetings
         During the Term, senior representatives of the Parties shall meet
         (either in person, video conference or by telephone) on a regular basis
         as their relationship requires, but in any case not less than once
         every calendar quarter, to confer on and review [CONFIDENTIAL TREATMENT
         REQUESTED] issues including, but not limited to:

         5.1.1    [CONFIDENTIAL TREATMENT REQUESTED]

         5.1.2    [CONFIDENTIAL TREATMENT REQUESTED]

         5.1.3    Continuity of supply
                  The Parties shall review the items covered in Article 9
                  (contingency plans, impending strike, regulatory compliance)
                  of this Agreement when deemed appropriate by either one of the
                  Parties.

         5.1.4    Information/Data
                  The Parties will also discuss any other information, data,
                  etc. required to be provided from time to time under the terms
                  of this Agreement.

5.2      [CONFIDENTIAL TREATMENT REQUESTED]

5.3      [CONFIDENTIAL TREATMENT REQUESTED]

5.4      [CONFIDENTIAL TREATMENT REQUESTED]

5.5      Other Products
         From time to time the Parties may explore the expansion of their
         business relationship to include products other than Magnet systems.

5.6      Changes in Management
         As they are foreseen and/or occur, the Parties shall discuss major
         changes to their management and staffing critical to the mutual success
         of their business relationship with the objective of preventing
         disruptions to Product supply and/or the relationship of the Parties.

                                    Page: 8
<PAGE>

5.7      Contract Managers
         PHILIPS and INTERMAGNETICS shall appoint a Contract Manager in their
         respective organizations who shall be responsible for the organization
         and implementation of strategic consultation and review meetings and
         who shall be responsible for the implementation of all business and
         supply related issues, including delegation of work within each
         organization. The respective Contract Managers also shall meet (either
         in person or by telephone) at least every 2 weeks to discuss day-to-day
         business operations and keep minutes of the subject(s) discussed. The
         Parties respective Contract Managers will be appointed by the
         management of the Parties.


                                    Article 6
                       [CONFIDENTIAL TREATMENT REQUESTED]


                                    Article 7

(Reserved)


                                    Article 8
                       [CONFIDENTIAL TREATMENT REQUESTED]



                                    Article 9
                              Continuity of Supply

9.1      Contingency plans
         To ensure continuity of purchase and supply, each Party shall prepare
         contingency plans for the following events:

         (a)      A catastrophe, e.g., fire or explosion, which interferes with
                  the Party continuing its manufacturing operation;

         (b)      Major disruption of a critical process in a Party's
                  manufacturing operation;

         (c)      Major disruption in the Party's supply chain;

         (d)      Major disruption of transportation.

9.2      [CONFIDENTIAL TREATMENT REQUESTED]

                                    Page: 9
<PAGE>

9.3      Regulatory Compliance
         Each Party will inform the other, through the Parties' strategic
         consultations, of the status of its compliance with all significant
         applicable governmental regulations that could interfere with
         continuity of supply (e.g., Food and Drug Administration, Occupational
         Safety and Health Administration, Environmental Protection Agency,
         etc.).

                                   Article 10
                          Intellectual Property Rights

10.1     Each Party shall retain exclusive ownership of its Background IPRs.

10.2     Foreground IPRs based on work performed solely by one or more
         employee(s) of a Party under this Agreement shall be solely owned by
         that Party.

10.3     In the event that during the term of this Agreement an invention is
         made jointly (as defined under U.S. or E.U. patent law) by one or more
         employees of INTERMAGNETICS and/or its Associated Companies and one or
         more employees of Philips and/or its Associated Companies, the
         invention shall be jointly owned by the Parties and each joint owner
         shall have an equal, undivided interest in and to such joint invention,
         as well as in and to Foreground IPRs thereon in all countries, subject
         to the terms and conditions set forth below.

         10.3.1   In case of joint inventions, each Party concerned shall
                  promptly inform in writing the other Party whose employee is
                  or employees are involved in such joint invention.

         10.3.2   For non-patented joint Foreground IPRs, control and use of
                  such joint Foreground IPRs shall be as follows:

                  (a) Control over the potential filing of a patent application
                      is construed as follows:

                      o all joint Foreground IPRs regarding MRI systems will be
                        controlled solely by Philips;

                      o all joint Foreground IPRs regarding the interface
                        between the Magnet system and the MRI System will be
                        subject to Article 10.5 below;

                      o all joint Foreground IPRs regarding Magnet systems will
                        be controlled solely by INTERMAGNETICS.

                  (b) Subject to Articles 11.2, 11.3, 11.4 and 11.5:

                      o PHILIPS will retain control over the use of non-patented
                        joint Foreground IPRs regarding MRI systems.

                      o INTERMAGNETICS will retain control over the use of
                        non-patented joint Foreground IPRs regarding Magnet
                        systems.

                                    Page: 10
<PAGE>

10.4     The Party controlling the patent application process as described above
         in Article 10.3.2 may decide at its sole discretion if it will prepare,
         file and prosecute a patent application for joint Foreground IPRs under
         its control, upon prior written approval of the other Party, which
         approval will not be unreasonably withheld. The Parties will confer in
         a timely manner regarding the patent application and countries in which
         to file such application. All out of pocket costs related to
         applications for joint Foreground IPRs shall be shared equally between
         the Parties. The same applies for the maintenance fees and other costs
         - but not including litigation - for such joint Foreground IPRs on
         patents granted. If, however, the non-controlling Party is not
         interested in filing an application for the joint Foreground IPRs, the
         controlling Party may file or have filed such application at its own
         expense and shall be the sole owner of any resulting Foreground IPRs
         subject to a free, fully paid-up, non-exclusive, unrestricted license
         for the lifetime of the Foreground IPRs concerned for the own use of
         the non-controlling Party but the rights of third parties under already
         existing licenses and agreements shall not be prejudiced. The
         non-filing Party shall assign all other rights in such joint invention
         to the filing Party at no charge.

         10.4.1   The controlling Party shall be designated to maintain
                  applications for joint Foreground IPRs. The other Party shall
                  at its own cost furnish the filing Party with all documents,
                  or other assistance, that may be necessary for the filing and
                  prosecution of each such application.

         10.4.2   If a patent is allowed for any joint Foreground IPRs, each
                  Party shall have the right to exercise its ownership of such
                  joint Foreground IPRs, including the non-assignable right to
                  grant non-exclusive licenses, under the Foreground IPRs on
                  such a joint invention without the consent of and without
                  accounting to the other owner, so long as the owner granting
                  such license fulfills its obligation, if any, to pay its
                  proportionate share of the costs related to such Foreground
                  IPRs on a joint invention.

10.5     Foreground IPRs on a joint invention regarding the interface between
         the Magnet system and the MRI system will be treated as follows
         ("Interface Foreground IPRs"):

         10.5.1   The filing of applications for Interface Foreground IPRs shall
                  be subject to mutual agreement between the Parties. The
                  Parties will agree within a reasonable period of time after
                  notification provided under Article 10.3.1, on an appropriate
                  course of action for filing such applications, including which
                  Party is to be designated with the preparation, filing and
                  prosecution of such applications and in which countries of the
                  world to file such applications for Interface Foreground IPRs.
                  All out of pocket costs related to applications for Interface
                  Foreground IPRs or IPRs resulting from such applications shall
                  be shared equally between the Parties. One of the Parties
                  shall be designated to file or have filed, prosecute and
                  maintain applications for Interface Foreground IPRs and any
                  IPRs resulting therefrom on joint inventions. The other Party
                  shall at its own cost furnish the filing Party with all
                  documents, or other assistance, that may be necessary for the
                  filing and prosecution of each such application.

                                    Page: 11
<PAGE>

         10.5.2   If, however, one Party is not interested in filing an
                  application for Interface Foreground IPRs on a joint
                  invention, the other Party may file or have filed such
                  application at its own expense and shall be the sole owner of
                  any resulting Interface Foreground IPRs subject to a free,
                  fully paid-up, non-exclusive, unrestricted license for the
                  lifetime of the Interface Foreground IPRs concerned for the
                  own use of the Party who was not interested in filing such
                  application. The non-filing Party shall assign its rights in
                  such joint invention to the filing Party.

10.6     In the event that one of the joint owners of Foreground IPRs or a Party
         filing an application for Foreground IPRs on a joint invention wants to
         stop the payment of its share of the maintenance fees or other costs in
         any particular country, the other owner may take over the payment of
         such share. The Party discontinuing to pay its proportionate share for
         one or more countries shall forthwith relinquish to the other Party
         which continues such payments, its title to and interest in such
         jointly owned Foreground IPRs for the countries concerned, subject,
         however, to the retention of a free, fully paid-up, non-exclusive,
         non-assignable and unrestricted license under the Foreground IPRs in
         the countries concerned in favor of the relinquishing Party for the own
         use of the relinquishing Party. However, the relinquishing owner shall
         no longer have the right to grant licenses thereunder to third parties,
         but the rights of third parties under already existing licenses and
         agreements shall not be prejudiced. The rights of the relinquishing
         Party in other (i.e., continued) countries shall not be affected.

10.7     A joint owner shall have the right to bring an action for infringement
         of a jointly-owned Foreground IPR only with the consent of the other
         owner. This consent may only be withheld if such action would be
         prejudicial to the other owner's commercial interests as can be
         demonstrated to the reasonable satisfaction of the joint owner
         interested to bring such infringement action.


                                   Article 11
                                  IPR Licenses

11.1     Each Party hereby grants the other Party, subject to prior commitments,
         a free, non-exclusive license, without the right to grant sublicenses,
         under its Background IPRs and/or Foreground IPRs to the extent such IPR
         is required by the other Party solely for performing the [CONFIDENTIAL
         TREATMENT REQUESTED] Agreement.

11.2     Philips shall cause Koninklijke Philips Electronics N.V. to grant
         hereby to INTERMAGNETICS a world-wide, irrevocable, fully paid up,
         non-exclusive license, without the right to grant sublicenses, under
         Philips' Foreground IPRs to make, have made - according to
         INTERMAGNETICS' design -, use, sell, service, and practice any method
         of Products and Substantially Similar Products taking into account the
         exclusivity arrangement in Article 6 above.

                                    Page: 12
<PAGE>

11.3     INTERMAGNETICS hereby grants to Philips and to Philips' Associated
         Companies a world-wide, irrevocable, fully paid up, non-exclusive
         license, without the right to grant sublicenses, under INTERMAGNETICS'
         Foreground IPRs to use, sell, lease, service, practice any method or
         otherwise dispose of Products taking into account the exclusivity
         arrangement in Article 6 above.

11.4     If INTERMAGNETICS willfully and with the intent to force termination of
         this Agreement, fails to perform a material obligation hereunder
         resulting in termination by PHILIPS pursuant Article 15.2(a), then the
         license provided in Article 11.3 above, shall include the right, under
         INTERMAGNETICS' Foreground IPRs to make, or have made by a third party,
         the Products or natural commercial successors of the Products resulting
         from the normal evolution of the design (but not to include material
         reconfiguration that would result in the development of new products).

11.5     The licenses granted under Articles 11.2, 11.3 and 11.4 shall be for
         the lifetime of the Foreground IPRs concerned.

11.6     Philips is prepared to cause Koninklijke Philips Electronics N.V. to
         grant to INTERMAGNETICS at its request, subject to prior commitments, a
         non-exclusive license under its Background IPRs against reasonable
         terms and conditions to be agreed upon, provided that such license,
         which shall be limited to the field of Products and Substantially
         Similar Products, is demonstrated to the reasonable satisfaction of
         Philips to be technically indispensable for INTERMAGNETICS in order to
         operate under the licenses granted by Philips under Article 11.2
         hereof.

11.7     INTERMAGNETICS is prepared to grant to Philips at its request, subject
         to prior commitments, a non-exclusive license under its Background IPRs
         against reasonable terms and conditions to be agreed upon, provided
         that such license, which shall be limited to the field of Products, is
         demonstrated to the reasonable satisfaction of INTERMAGNETICS to be
         technically indispensable for Philips in order to operate under the
         licenses granted by INTERMAGNETICS under Article 11.3, and Article 11.4
         hereof but only if such Article becomes applicable.

11.8     The licenses granted by PHILIPS to INTERMAGNETICS under the Parties'
         Amended and Restated Supply Agreement (dated November 13, 1998) shall
         remain in full force and effect and are not intended in any way to be
         limited by the terms and conditions of this Agreement.

11.9     Except for the licenses granted under this Agreement, PHILIPS shall
         have no rights to, or ownership of, the specific design of the
         Prototype and/or First Articles or the Product(s) or INTERMAGNETICS'
         engineering or production technologies, to the extent such design
         and/or technologies are proprietary to INTERMAGNETICS.

                                    Page: 13
<PAGE>

                                   Article 12
                      Ownership of Information and Licenses

12.1     Each Party shall retain exclusive ownership of its Background
         Information and the Foreground Information solely developed by one or
         more employee(s) of that Party.

12.2     In the event that during the term of this Agreement and as a result of
         and in the course of [CONFIDENTIAL TREATMENT REQUESTED] any Foreground
         Information is jointly developed by one or more employees of Philips
         and/or its Associated Companies and one or more employees of
         Intermagnetics and/or its Associated Companies and the contributions of
         both Parties are undividable, then both Parties will jointly own such
         jointly developed Foreground Information and each joint owner shall
         have an equal, undivided interest in and to such jointly developed
         Foreground Information.

12.3     Each joint owner in accordance with Article 12.2, shall have the
         non-assignable, non-exclusive and unrestricted right, including the
         right to grant sublicenses to third parties, to use jointly developed
         Foreground Information without the consent of and without accounting to
         the other owner for the duration and within the scope of this Agreement
         only. In case only one of the Parties upon termination of this
         Agreement wishes to use such jointly owned Foreground Information the
         Parties shall treat as Confidential Information the other Party's
         interest or lack thereof in such jointly owned Foreground Information
         until such other Party's interest or lack thereof , in such jointly
         owned Foreground Information is, or otherwise becomes, generally known
         or available through no act or disclosure of the other Party or its
         personnel.

12.4     Each Party hereby grants the other Party, subject to prior commitments,
         a free, non-exclusive license, without the right to grant sublicenses,
         under its Background Information and/or Foreground Information to the
         extent such Information is required by the other Party solely for
         performing the work allocated to it under [CONFIDENTIAL TREATMENT
         REQUESTED Agreement.

12.5     Philips shall cause Koninklijke Philips Electronics N.V. hereby to
         grant to INTERMAGNETICS and its Associated Companies a world-wide,
         fully paid up, perpetual and non-exclusive license, without the right
         to grant sublicenses, to use its Foreground Information to make, have
         made, use, sell or otherwise dispose of Products or Substantially
         Similar Products.

12.6     INTERMAGNETICS and its Associated Companies hereby grant Philips and
         its Associated Companies a world-wide, fully paid up, perpetual and
         non-exclusive license, without the right to grant sublicenses, to use
         its Foreground Information to use, sell, lease, service or otherwise
         dispose of Products.

                                    Page: 14
<PAGE>

12.7     Philips and its Associated Companies are prepared to grant and to cause
         Koninklijke Philips Electronics N.V. to grant to INTERMAGNETICS and its
         Associated Companies at their request, subject to prior commitments, a
         non-exclusive license under its Background Information against
         reasonable terms and conditions to be agreed upon, provided that such
         license, which shall be limited to the field of Products and
         Substantially Similar Products, is demonstrated to the reasonable
         satisfaction of Philips to be technically indispensable for
         INTERMAGNETICS in order to exercise the licenses granted by Philips to
         INTERMAGNETICS under Article 12.5.

12.8     INTERMAGNETICS and its Associated Companies are prepared to grant to
         Philips and its Associated Companies at their request, subject to prior
         commitments, a non-exclusive license under its Background Information
         against reasonable terms and conditions to be agreed upon, provided
         that such license, which shall be limited to the field of Products, is
         demonstrated to the reasonable satisfaction of INTERMAGNETICS to be
         technically indispensable for Philips in order to exercise the licenses
         granted by INTERMAGNETICS to Philips under Article 12.6.


                                   Article 13
                                 Confidentiality

13.1     Confidential Information
         All specifications, including the Specifications, drawings, industrial
         designs, samples, marketing plans, software and all other information
         disclosed in writing by either Party to the other and being marked as
         "Confidential", "Proprietary" or similar indications or disclosed
         visually or orally and confirmed in writing within 14 days after such
         oral or visual disclosure, as well as the contents of this Agreement,
         [CONFIDENTIAL TREATMENT REQUESTED] and any Supply Agreement, including
         Purchase Orders placed pursuant to those agreements ("Confidential
         Information"), shall be kept in strictest confidence by the receiving
         Party, shall remain the disclosing Party's property, may be divulged
         only to such of the receiving Party's personnel as has need to know and
         as has undertaken to keep Confidential Information secret, and shall be
         returned to the disclosing Party upon its request. Confidential
         Information shall not be reproduced, disclosed or used by the receiving
         Party except to the extent required for due performance of this
         Agreement and the receiving Party shall protect Confidential
         Information from further disclosure by itself and by its personnel in
         the same manner as it would do with regard to its own Confidential
         Information. Exceptions are allowed only after prior mutual agreement
         or where required by law.

                                    Page: 15
<PAGE>

13.2     Duration
         The Parties' obligations under this Article 13 shall continue for a
         period of five (5) years after termination of this Agreement.

13.3     Exceptions
         This Article 13 shall not apply to Confidential Information that the
         receiving Party can demonstrate:

         (a)      is or becomes generally known or available through no act or
                  disclosure of the receiving Party or its personnel; or

         (b)      was available to the receiving Party prior to disclosure or
                  has been furnished to it by a third party entitled to disclose
                  same without restrictions as to disclosure or use or by the
                  other Party; or

         (c)      was, subsequent to disclosure, independently developed by the
                  receiving Party without use of Confidential Information; or

         (d)      is required to be disclosed under applicable law.

13.4     Confidential disclosure agreements with third parties
         Neither Party shall enter into a confidential disclosure agreement with
         a third party which would prohibit strategic consultation between
         Parties as provided for in Article 5.2 and 5.3.


                                   Article 14
                                Product Liability

14.1     In no event will INTERMAGNETICS' Product liability be greater for any
         Prototype and/or First Article than for any Product purchased by
         PHILIPS.

14.2     INTERMAGNETICS shall indemnify PHILIPS and all PHILIPS' Associated
         Companies and assume the defense of, any and all claims for bodily
         injury and/or death arising solely as a direct result of (i) design or
         manufacturing defects in the Products, (ii) failure by INTERMAGNETICS
         to provide PHILIPS with reasonable warnings with respect to known risks
         (or risks which should have been known to INTERMAGNETICS) of bodily
         injury or harm caused by the Product, except risks relating to magnetic
         fields in general, or (iii) installation performed by INTERMAGNETICS of
         Products sold to PHILIPS. If PHILIPS has actual notice that such a
         claim shall be or has been made against it involving INTERMAGNETICS,
         PHILIPS shall immediately inform INTERMAGNETICS in writing and allow
         INTERMAGNETICS and its insurers the opportunity to conduct the defense
         of such claim including possible negotiations for settlement. PHILIPS
         shall cooperate fully with INTERMAGNETICS and its insurers in the
         disposition of any such matters whenever reasonably requested to do so.
         The obligations of INTERMAGNETICS to indemnify and defend shall not
         extend to claims solely attributable to the negligence or intentional
         malfeasance of PHILIPS or PHILIPS' Associated Companies, their agents,
         distributors and/or their customers or other users of the MRI systems
         nor to any claims attributable solely to or arising out of actions
         solely by them which are outside the scope of or inconsistent with
         INTERMAGNETICS' operating instructions and/or technical/maintenance
         manuals.

                                    Page: 16
<PAGE>

14.3     PHILIPS shall indemnify INTERMAGNETICS against, and assume the defense
         of, any and all product liability and other third party claims for
         bodily injury and/or death arising or attributable (i) solely to the
         use of those parts of the Products sold or provided free of charge by
         PHILIPS to INTERMAGNETICS for incorporation in the Products, (ii) to
         the effect of magnetic fields (iii) solely to the negligence or
         intentional malfeasance of PHILIPS or PHILIPS' Associated Companies,
         their agents or distributors or (iv) solely to parts of the MRI system
         other than the Products supplied by INTERMAGNETICS. If INTERMAGNETICS
         has actual notice that such a claim shall be or has been made against
         INTERMAGNETICS involving PHILIPS, INTERMAGNETICS shall immediately
         inform PHILIPS in writing and allow PHILIPS and its insurers the
         opportunity to conduct the defense of such claim, including possible
         negotiations for settlement. INTERMAGNETICS shall cooperate fully with
         PHILIPS and its insurers in the disposition of any such matters,
         whenever reasonably requested to do so. To this end, INTERMAGNETICS
         shall keep records of all relevant design and test documentation which
         INTERMAGNETICS normally keeps in order to defend product liability
         claims at least thirteen years after delivery of each Product and on
         request provide PHILIPS' insurers with copies thereof under relevant
         confidentiality obligations, solely for the purpose of defending such
         third party claims. The obligation of PHILIPS to indemnify and defend
         shall not extend to claims attributable solely to the negligence or
         intentional malfeasance of INTERMAGNETICS or INTERMAGNETICS' vendors or
         agents.

14.4     Each Party shall maintain such insurance as it may deem necessary to
         cover its Product liability, and upon the other Parties' request shall
         produce for inspection these insurance policies and premium payment
         receipts.


                                   Article 15
                                Patent Indemnity

15.1     INTERMAGNETICS shall fully indemnify to the limit of the total invoice
         value of any allegedly infringing Products, PHILIPS, PHILIPS'
         Associated Companies, their distributors, agents and/or customers,
         against all reasonable fines, losses, damages, costs and expenses
         including attorney fees, arising from any valid claim brought by a
         third party claiming that a Product (or any part thereof) infringes on
         the third party's patent rights or other industrial or intellectual
         property right; provided PHILIPS gives INTERMAGNETICS full authority,
         at the option of INTERMAGNETICS, either to settle or to defend such
         claim, suit or proceeding and - at INTERMAGNETICS' request and expense
         - full cooperation, assistance and information as needed by
         INTERMAGNETICS to address the claim. PHILIPS shall promptly notify
         INTERMAGNETICS in writing of any allegation of infringement and shall
         not make any admission without INTERMAGNETICS' prior consent. If the
         use of any Product or Spare Part is enjoined, INTERMAGNETICS shall, at
         its own expense and at its option, either procure for PHILIPS, the
         PHILIPS' Associated Companies and their customers the right to continue
         using Product and/or Spare Part, or replace same with a non-infringing
         Product or Spare Part or modify it so that it becomes non-infringing,
         always without substantially affecting the Product or Spare Part's
         compatibility with PHILIPS' MRI system device in conjunction with which
         it is to be used and without substantially affecting conformance to the
         Specifications. INTERMAGNETICS' indemnification does not cover any
         claim in respect of any patent or patent application of PHILIPS or
         others of which PHILIPS or PHILIPS' Associated Companies is presently
         aware that is to be used in Products to be supplied by INTERMAGNETICS
         to PHILIPS under this Agreement and which it does not bring to
         INTERMAGNETICS' attention before execution of this Agreement.

                                    Page: 17
<PAGE>

15.2     If and to the extent that the infringement is the result of (a) parts
         supplied by PHILIPS, or (b) modifications or enhancements of Products
         or Parts as specifically designed by PHILIPS or specifically requested
         by PHILIPS to be implemented in the Products or Parts, INTERMAGNETICS
         shall not be liable under this Article 15. INTERMAGNETICS shall not be
         required to meet any design requests by PHILIPS if INTERMAGNETICS
         advises PHILIPS that it would infringe patents of a third party in
         order to meet such requests. INTERMAGNETICS' indemnification does not
         extend to any suit based upon any infringement or alleged infringement
         of any industrial or intellectual property rights on the basis of
         combining, incorporating and/or inserting Products furnished by
         INTERMAGNETICS into MRI systems if the infringement would be avoided by
         the use of the Products alone. PHILIPS shall similarly indemnify
         INTERMAGNETICS to the limit of the total invoice value of the allegedly
         infringing Products for suits and proceedings and all reasonable
         damages and costs awarded, including attorneys fees, with respect to
         all these occurrences covered by this paragraph.

15.3     PHILIPS shall indemnify INTERMAGNETICS, to the limit of the total
         invoice value of the Products, for alleged infringement of:

         (a)      OMT active shielded magnet patent US4587504 and its
                  corresponding patents/applications in any country;

         (b)      Siemens B-zero field compensation patent EP0299325 and its
                  corresponding patents/applications in any country; and

         (c)      any patent of any third party which cannot be avoided if
                  PHILIPS' active shielded magnet patent EP0138270 and/or its
                  corresponding patents/applications in any country are used.

         PHILIPS' indemnification to INTERMAGNETICS for suits and proceedings
         shall cover all reasonable damages, expenses and costs, including
         attorney fees as provided above with respect to such Products using
         such patents and supplied to PHILIPS.

                                    Page: 18
<PAGE>

15.4     The foregoing states the entire liability of INTERMAGNETICS and PHILIPS
         respectively for infringement of the said rights by Products or any
         Spare Parts.


                                   Article 16
                            Duration and Termination

16.1     Term
         The initial term of this Agreement shall commence on the Effective Date
         through and up to 31 December 2005. Starting Calendar year 2001, at the
         end of each calendar year of this Agreement, the term shall be extended
         automatically for an additional twelve (12) month period, unless either
         Party provides a written notice to the other of its intent to terminate
         at the end of the then applicable term.

16.2     Termination
         In addition to termination in accordance with Article 18, this
         Agreement may be terminated as follows:

         (a)      If a Party is in material breach of this Agreement, the
                  non-breaching Party is entitled to give written notice to the
                  breaching Party. The notice must specify the breach and
                  provide a reasonable opportunity to remedy the breach to the
                  reasonable satisfaction of the non-breaching Party as quickly
                  as commercially reasonable but in any event no longer than six
                  (6) months.

                  If the breaching Party fails to remedy the breach, the
                  non-breaching Party is entitled to take any action open to it
                  under this Agreement and in law, including immediate
                  termination of this Agreement by notice in writing; provided,
                  however, that (i) neither Party shall be liable to the other
                  for any special or consequential damages at any time, and (ii)
                  any action is subject to the arbitration procedure set forth
                  in Article 19.8. In addition, if INTERMAGNETICS' breach is the
                  result of its repeated failure to supply Products on a
                  prolonged basis, the Parties will negotiate for a second
                  source of supply.

         (b)      Either Party may terminate this Agreement immediately by
                  written notice to the other Party in the event the latter
                  Party becomes insolvent, files or is the subject of a
                  bankruptcy action which is not dismissed within sixty (60)
                  days, has a receiver appointed, or makes an assignment for the
                  benefit of creditors.

                                    Page: 19
<PAGE>

         (c)      PHILIPS may terminate this Agreement upon two (2) years
                  written notice to INTERMAGNETICS if more than 50% of the
                  voting shares of INTERMAGNETICS are acquired by, or more than
                  a majority of INTERMAGNETICS' directors have been nominated
                  by, a principal competitor of PHILIPS in MR imaging.

         (d)      INTERMAGNETICS may terminate this Agreement upon two (2) years
                  written notice to PHILIPS if PHILIPS or its Associated
                  Companies acquire control over, or become controlled by, an
                  entity engaged in the manufacture of superconductive magnets
                  for MR imaging systems.

16.3     Effect of Termination
         Any notice of termination given under this Agreement shall be deemed to
         be a notice of termination under any [CONFIDENTIAL TREATMENT REQUESTED]
         Supply Agreement. Termination of an individual [CONFIDENTIAL TREATMENT
         REQUESTED] and/or Supply Agreement will not affect the Term of this
         Agreement, any (other) Supply Agreement or any (other) [CONFIDENTIAL
         TREATMENT REQUESTED] entered into by the Parties, unless such
         termination constitutes a material breach under the terms of this
         Agreement.


                                   Article 17
                                 Surviving Terms

17.1     In the event of termination of this Agreement, the provisions of
         Articles 2, 4.6 , 10, 11, 12, 13, 14, 15, 17, 19.1, 19.5, 19.7, 19.8,
         19.9, 19.10, 19.11, 19.12 of this Agreement shall survive.

17.2     Upon termination of this Agreement neither Party shall be liable to the
         other Party except if otherwise stated in this Agreement.


                                   Article 18
                                  Force Majeure

18.1     Effect of Force Majeure
         If either Party is prevented from or delayed in the performance of this
         Agreement due to the occurrence of force majeure either Party shall be
         entitled to suspend performance of its obligation for the duration of
         the prevention or delay caused by such force majeure, without being
         responsible for any damages resulting therefrom to the other Party.

18.2     Force Majeure Exceeding Three Months
         If the period of prevention or delay caused by force majeure exceeds
         three consecutive months, then either Party shall be entitled to
         terminate this Agreement upon thirty (30) days written notice without
         being liable for any damages whatsoever towards the other Party. This
         does not affect however commitments which remain applicable upon
         termination of this Agreement as stated elsewhere in this Agreement.

                                    Page: 20
<PAGE>

18.3     Information and Action by Affected Party
         The Party affected by force majeure shall inform the other Party
         promptly in writing specifying the force majeure as well as its
         expected duration. The Party so affected shall take all reasonable
         steps to limit the period of prevention or delay as much as possible.

18.4     Definition
         The expression "force majeure" shall mean and include a happening or
         event beyond a Party's reasonable control in consequence of which it
         cannot execute or cannot reasonably be required to execute its
         obligations. Such circumstances include but are not restricted to: acts
         of God, war, civil war, insurrection, flood, strikes, epidemics,
         governmental regulations, freight embargoes, non-availability of any
         permits, licenses and/or authorizations required unless such
         non-availability is attributable to the Party claiming the force
         majeure. [CONFIDENTIAL TREATMENT REQUESTED]

                                   Article 19
                                  Miscellaneous

19.1     Entire Agreement
         It is understood and agreed that this Agreement and the attached
         Schedules contain the entire understanding between the Parties relating
         to the subject matter and that any representation, promise, or
         condition not contained in this Agreement shall not be binding on
         either Party, unless otherwise agreed and confirmed in writing;
         provided, however, that this Agreement shall not in any way affect or
         supersede the Parties' obligations under the Amended and Restated
         Supply Agreement dated November 6, 1998 and the Termination Agreement
         dated April 29, 1999.

19.2     Non-applicability of Standard Terms and Conditions
         The terms and conditions contained in this Agreement and the attached
         Schedules shall take precedence over any standard terms and conditions
         which appear on any documents previously or subsequently issued by
         PHILIPS or INTERMAGNETICS under or with reference to this Agreement
         inclusive of any Purchase Order or any documents incorporated by
         reference, unless such document is signed by both Parties and
         explicitly states that it is a modification of this Agreement.

19.3     Assignment
         This Agreement shall be binding on the Parties hereto and their
         successors and assigns, provided, however, that this Agreement may not
         be assigned, transferred or hypothecated by either Party, in whole or
         in part, directly or indirectly, without the prior written consent of
         the other Party and provided further that either Party is entitled to
         assign its rights (but not its obligations) under this Agreement in
         part or in whole to any of its Associated Companies without the other
         Party's consent.

                                    Page: 21
<PAGE>

19.4     Waiver
         No failure by either Party to insist upon strict compliance by the
         other Party with any of the terms, provisions or conditions of this
         Agreement in any instance shall be construed as a waiver or
         relinquishment by either Party of the other Party's rights to insist
         upon strict compliance in the future.

19.5     Notices
         Notices, consents, approvals and other communications from one Party to
         the other pursuant to this Agreement shall be deemed to have been
         sufficiently given if sent by registered airmail, or, by telefax or
         telex confirmed the same day by registered airmail, and addressed as
         specified below, or, addressed in such other manner as previously
         notified in writing by the addressee. All communications shall be
         deemed to have arrived, in the case of a communication by registered
         airmail only as of the 6th (sixth) day following posting, and, in the
         case of a communication by telefax or telex confirmed by registered
         airmail, as of the business day following the day the telefax or telex
         is dispatched.

         Communications to PHILIPS shall be addressed as follows:

         (by mail)     :   PHILIPS Medical Systems Nederland B.V.
                           f.a.o. General Counsel PMS
                           Veenpluis 6
                           P.O. Box 10000
                           5680 DA Best
                           The Netherlands
         (by telefax)  :   +31-40-2762561
                           with  a copy to Purchasing Department MR
Communications to INTERMAGNETICS shall be addressed as follows to:

         (by mail)     :   V.P. and General Manager, Magnet Business Group
                           Intermagnetics General Corporation
                           450 Old Niskayuna Road
                           P.O. Box 461
                           Latham, New York 12110-0461
                           U.S.A.
         (by telefax)  :   + 1-518-783-2623
                           with a copy to Intermagnetics' Finance Department

                                    Page: 22
<PAGE>

19.6     Modification of Agreement
         This Agreement may not be modified or amended except by a writing
         signed by the authorized representatives of the Parties which shall be
         attached to this Agreement.

19.7     Consent
         Whenever under this Agreement a Party's consent, permission, agreement,
         acceptance, satisfaction or approval is required, it shall not be
         unreasonably or arbitrarily withheld or delayed.

19.8     Applicable Law and Settlement of Disputes
         This Agreement shall be governed by, and the rights of the Parties
         shall be determined under, the laws of the State of New York, not
         including New York rules of conflicts of laws or private international
         law that may refer to the law of another jurisdiction as the applicable
         governing law.

         The Parties agree to endeavor to identify in advance issues that could
         generate controversies or disputes, in order to permit their early
         resolution by friendly negotiations, and to use their best efforts to
         negotiate in good faith, for a period of sixty (60) days or such other
         period as shall be mutually agreed upon by them, to resolve all such
         controversies or disputes in an amicable manner. All disputes arising
         out of or in connection with the interpretation or execution of this
         Agreement during its life or thereafter shall be finally settled by
         arbitration in New York City, New York, USA, accordingly to the Rules
         of Conciliation and Arbitration of the International Chamber of
         Commerce by three (3) arbitrators in accordance with the Rules. The
         language of the arbitration shall be English. The award of the Court of
         Arbitration shall be final and binding and may be enforced in any court
         of competent jurisdiction.

19.9     Headings
         Headings in this Agreement are included for convenience of reference
         only and shall not constitute a part of this Agreement for any other
         purpose.

19.10    Publicity
         Neither INTERMAGNETICS nor PHILIPS shall, without the prior written
         consent of the other Party, (a) make any news release or public
         announcement, relating to this Agreement or its subject matter, nor (b)
         in any manner advertise or publish the fact that Parties entered into
         this Agreement except as required by law.

19.11    Trademarks
         PHILIPS herewith grants INTERMAGNETICS the right to use the following
         trademarks: (a) the word mark "Philips" and Philips' Shield Emblem and
         (b) such other trademark(s) as may be designated at any time by Philips
         on the Products during the Term, if INTERMAGNETICS strictly adheres to
         the instructions of PHILIPS laid down in a Schedule to a Supply
         Agreement. INTERMAGNETICS acknowledges all rights of PHILIPS in and to
         the said trademarks and further agrees that the design, development,
         manufacture and supply of Product(s), Spare Part(s), and packing, if
         any, bearing such trademarks shall not be construed as a grant of any
         rights in such trademarks or as the use of such trademarks, either on
         or relating to INTERMAGNETICS' products, in INTERMAGNETICS' sales
         literature or other publications, or otherwise, by or for the benefit
         of INTERMAGNETICS without PHILIPS' prior written consent.

                                    Page: 23
<PAGE>

19.12    Severability
         If any of the provisions of this Agreement are held to be void or
         unenforceable by or as a result of a determination of an arbitrator or
         judicial authority having competent jurisdiction, the decision of which
         is binding upon the Parties with respect to one or more of the
         countries to which this Agreement applies, the Parties agree that such
         determination shall not result in the nullity or unenforceability of
         the remaining portions of this Agreement in such country(ies). The
         Parties further agree to replace such void or unenforceable provisions
         of this Agreement with respect such country(ies) by valid and
         enforceable provisions which will achieve, to the extent possible, the
         economic, business and other purposes of the void or unenforceable
         provisions. The provisions so determined to be void or unenforceable
         shall, however, remain in full force and effect with respect to all
         other countries to which this Agreement applies.

IN WITNESS WHEREOF the parties have caused this Agreement to be signed by their
authorized representatives:
<TABLE>
<CAPTION>
<S>                                                             <C>
INTERMAGNETICS GENERAL                                          PHILIPS MEDICAL SYSTEMS
CORPORATION                                                     NEDERLAND B.V.


Signature /s/ Glenn H. Epstein                                  Signature /s/ Ir. C.F. Knoet
                  Glenn H. Epstein                                                Ir. C.F. Knoet
                  President and                                                   Director PMC MR/CT/EVM
                  Chief Operating Officer

Date: 30 April 1999                                             Date: 28 April 1999

INTERMAGNETICS GENERAL                                          PHILIPS MEDICAL SYSTEMS
CORPORATION                                                     NEDERLAND B.V.


Signature: /s/ Leo Blecher                                      Signature: /s/ Dr A.H. van Ommen
                  Leo Blecher                                                     Dr A.H. van Ommen
                  VP and General Manager                                          Director
                  Magnet Business Group                                           PMG Magnetic Resonance
</TABLE>

                                    Page: 24
<PAGE>
<TABLE>
<CAPTION>
<S>                                                             <C>
Date: 30 April 1999                                             Date: 29 April 1999

INTERMAGNETICS GENERAL                                          PHILIPS MEDICAL SYSTEMS
CORPORATION                                                     NEDERLAND B.V.


Signature: /s/ Garry Morrow                                     Signature: /s/ Boyd van der Plas
                  Garry Morrow                                                    Boyd van der Plas,
                  Marketing Manager                                               Purchasing Manager
                  Magnet Business Group                                           PMG Magnetic Resonance

Date: 30 April 1999                                             Date: 29 April 1999
</TABLE>

                                    Page: 25