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* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 

 
 

EXHIBIT 10.10    
  

 
 

LICENSE AGREEMENT
  BETWEEN
  CALORIE MANAGEMENT SYSTEMS, INC.
  AND
  SENSORS FOR MEDICINE AND SCIENCE, INC.    
  

        This Agreement dated August 17, 1999 ("Effective Date"), is by and between Calorie Management
Systems, Inc., a Delaware corporation with principal offices at 14586 Aloha Avenue, Saratoga, California 95070 and its Affiliates ("CMS") and
Sensors for Medicine and Science, Inc., a Delaware corporation with principal offices at 12321 Middlebrook Road, Suite 210, Germantown, MD 20874 ("SMSI"). 

 
 

RECITALS    
  

        WHEREAS, SMSI is the owner of certain know-how, and the owner or exclusive licensee, with the right to
sublicense, of certain patents and pending patent applications with claims covering certain oxygen sensor technology; 

        WHEREAS, CMS desires to utilize such technology for devices that have pulmonary function testing, metabolic gas exchange, and/or cardiac
output applications; 

        WHEREAS, CMS desires a license from SMSI under such patents and patent applications and know-how; and SMSI is willing to grant
such license under the terms and conditions set forth in this Agreement; 

        NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants set forth below, CMS and SMSI mutually agree as
follows: 

        1.    DEFINITIONS 

        In
addition to the terms defined in the provisions of this Agreement, the following terms shall have the meanings ascribed below: 

        1.1  "Affiliate" means any entity which controls, is controlled by or is under common control with another entity. An entity
is deemed to be in control of another entity (controlled entity) if the former owns directly or indirectly at least fifty percent (50%), or the maximum percentage allowed by law in the country of the
controlled entity, of the outstanding voting equity (or other equity or ownership interest in the event that such entity is other than a corporation) of the controlled entity. 

        1.2  "Agreement" means this license agreement, including all appendices to this Agreement. 

        1.3  "Agreement Year" means the twelve-month period following the Effective Date of this Agreement or any anniversary thereof. 

        1.4  "CMS Disposable Product" means any component of a Licensed Product that is intended to be replaced between uses. 

        1.5  "CMS Reusable Product" means any component of a Licensed Product that is intended for repeated use or with multiple
users. 

        1.6  "Confidential Information" means the existence and terms of this Agreement and all other information disclosed in writing
by one party to the other pursuant to this Agreement and identified as "CONFIDENTIAL" as well as information disclosed orally or visually to the extent such oral or visual disclosure is
reduced to writing and is identified as "CONFIDENTIAL", which 

writing is provided to the other party within thirty (30) days after such oral or visual disclosure. "Confidential Information" does not include any such information which: 

        (A)  is
known to the receiving party before receipt thereof under this Agreement, or is independently developed by the receiving party without recourse to the other party's
Confidential Information, as evidenced by the receiving party's written records; 

        (B)  is
disclosed to the receiving party without restriction after full execution of this Agreement by a Third Party having a legal right to make such disclosure; or 

        (C)  is
or becomes part of the public domain through no breach of this Agreement. 

        1.7  "FDA" means the United States Food and Drug Administration or any successor agency. 

        1.8  "First Commercial Sale" means the first sale of a Licensed Product to a Third Party customer by CMS or an Affiliate of
CMS as evidenced by the date on the invoice to such Third Party customer, provided, however that it does not include sales of prototype units to a Third Party customer for test, evaluation, or for the
purpose of obtaining FDA clearance. 

        1.9  "Fully Burdened Manufacturing Cost" means the costs of direct labor, direct materials, manufacturing overhead, regulatory
and quality assurance/quality control incurred in the manufacture of an Oxygen Sensor, such calculations being based upon generally accepted accounting principles. 

        1.10 This
section intentionally omitted. 

        1.11 "Know-How" means that proprietary technology, know-how, and/or trade secrets of SMSI relating to
the Patent Rights, Oxygen Sensors or Licensed Products, including without limitation the items listed on Appendix 1.11 hereto. Should any Know-How become a Valid Claim, then such
Know-How will automatically become part of the Patent Rights hereunder. 

        1.12 "Licensed Field" means for use in airway-based gas exchange and/or cardiac output applications involving measurement of
inhaled and/or exhaled oxygen in individual humans or mammals. These applications include instruments designed to perform pulmonary function, metabolic gas exchange, and/or cardiac output
measurements. [*] 

        1.13 "Licensed Product" means any product incorporating the Licensed Technology the manufacture, use or sale of, but for the
license granted under Article 2 of this Agreement, would infringe a Valid Claim of the Patent Rights. 

        1.14 "Licensed Technology" means oxygen sensor technology covered by a Valid Claim under the Patent Rights. 

        1.15 "Oxygen Sensor Development Fee" means the fee described in Section 13.3 of this Agreement. 

        1.16 "Net Sales" means with respect to the CMS Disposable Products, (A) the gross sales of such CMS Disposable
Products billed by CMS or its Affiliates to a Third Party less (i) the allowances and adjustments separately and actually credited or paid to such Third Parties for damaged, outdated and
returned CMS Disposable Products; or (ii) trade discounts granted; (iii) cash discounts actually taken by the Third Party; (iv) transportation charges (including insurance costs),
handling charges, sales taxes, excise taxes and duties, and other similar charges invoiced to such Third Party or a reasonable factor for any such charges if such charges are absorbed by CMS and
included in the CMS Disposable Products selling price, but not itemized on the invoice, which factor shall not exceed five percent (5%) of the selling price; and (v) rebates earned or granted,  provided, however, if CMS or its Affiliates sells at a single price or rate a packaged combination of
products, not all of which if sold individually would be CMS Disposable Products, then "Net Sales" with respect to such sales of packaged products shall equal the number of units of CMS Disposable
Products sold as part of such packaged products (less the items listed in subsection A(i)-(v) above) multiplied by the respective average net selling price of the same type 

of CMS Disposable Products sold individually (excluding the item listed in subsection A(i)-(v) above) during the applicable quarter (or if no such individual sales occurred during such
quarter, the most recent previous quarter during which such individual sales occurred); and (B) with respect to transactions in which CMS provides CMS Disposable Products to Third Parties for
their commercial use and does not charge such Third Parties then Net Sales shall be calculated based on the list price of such CMS Disposable Products or the average selling price of such CMS
Disposable Products over the two prior quarters period, whichever is greater. 

        1.17 "Oxygen Sensor" means an oxygen sensor developed by SMSI, or incorporating Licensed Technology, which complies with the
specifications set forth in Appendix 13.2 hereto, and optionally includes a SMSI Disposable Sensor. 

        1.18 "Patent Rights" means (A) those patents and patent applications set forth in Appendices 1.18(A) and (B);
(B) all patents which have or will issue from the patent applications listed in Appendices 1. 18 (A) and (B) and from divisional, continuation,
continuation-in-part, or reissue applications based on the patents and patents applications listed in Appendices 1.18(A) and (B); (C) all extensions and reexamination
certificates of patents identified in (A) and (B); (D) all foreign patents (including inventor certificates, supplemental protection certificates and the like) which claim priority, in
whole or in part, on the basis of the applications for the patent(s) identified in (A) and (B) above; and (E) Patent and Patent Applications added to the Patent Rights under
Section 1.11 hereof. 

        1.19 "Royalty Year" means for the first Royalty Year, the period beginning from the earlier of the date of First Commercial
Sale of a Licensed Product or the date one year from the Effective Date of this Agreement and ending on the date one year later; thereafter, a Royalty Year is the period beginning the day after the
last day of the prior Royalty Year and ending on the one year anniversary thereafter. 

        1.20 "Royalties" means the royalties described in Sections 3.1 and 13.2 of this Agreement. 

        1.21 "SMSI Disposable Sensor" means a component used in conjunction with a Licensed Product and which is intended to be
replaced between uses and which CMS purchases or licenses from SMSI. 

        1.22 "SMSI Reusable Sensor" means a component used in conjunction with a Licensed Product and which is intended for repeated
use or with multiple users. 

        1.23 "Third Party" means any individual, corporation, partnership, trust or other business organization or entity, and any
other recognized organization other than the parties hereto and their Affiliates. 

        1.24 "Valid Claim" means any claim of an issued and unexpired patent which is part of the Patent Rights which has not been
held unenforceable, unpatentable or invalid by a decision of a court or governmental agency of competent jurisdiction, unappealed and unappealable within the time allowed for appeal nor has been
admitted by the patent holder to be invalid or unenforceable through reissue, disclaimer or otherwise, or a pending claim in a patent application which is part of the Patent Rights or assigned or
exclusively licensed for the relevant field of use with the right to sublicense to SMSI during the term of this Agreement and relating to oxygen measurement, for eight (8) years after the
priority date of the application in which said claim is pending. 

        2.    LICENSE
GRANT 

        2.1  Subject
to the terms and conditions set forth in this Agreement, SMSI hereby grants to CMS and its Affiliates an exclusive (including as to SMSI) worldwide,
royalty-bearing license, under the Patent Rights in Appendix 1.18(A) and Know-How, to make, have made, use, import, offer to sell and sell Licensed Products for use only in the
Licensed Field. 

        2.2  Subject
to the terms and conditions set forth in this Agreement, SMSI hereby grants to CMS and its Affiliates an exclusive (including as to SMSI) worldwide,
royalty-bearing sublicense, 

under the Patent Rights in Appendix 1.18(B) and Know-How, to make, have made, use, import, offer to sell and sell Licensed Products for use only in the Licensed Field. 

        2.3  CMS
hereby agrees not to promote or sell any Licensed Product for use outside the scope of the Licensed Field. 

        2.4  Nothing
herein shall be construed as granting CMS the right to make or have made an Oxygen Sensor, other than as provided in Section 13 hereof. 

        3.    ROYALTY
PAYMENTS 

        3.1  Royalties. CMS shall pay to SMSI a royalty of: 

          i)  [*]
of Net Sales of CMS Disposable Products for use with Licensed Products utilizing a SMSI Reusable Sensor; 

          ii)  [*]
of Net Sales of CMS Disposable Products for use with Licensed Products utilizing a SMSI Disposable Sensor; and 

        iii)  No
royalty shall be paid on the sales of CMS Reusable Products. 

        3.2  Minimum Royalties. If the Royalties accrued under this Agreement do not equal the minimum amounts set forth below in the
time periods noted, then SMSI may notify CMS in writing that SMSI intends to terminate the license granted in Section 2 of this Agreement within sixty (60) days from the date CMS
receives such notification: (A) [*] cumulatively within the first Royalty Year with [*] to be paid each quarter within the first Royalty Year;
(B) [*] within the second Royalty Year with [*] to be paid each quarter within the second Royalty Year; and
(C) [*] for each Royalty Year thereafter, with [*] to be paid each quarter within each such Royalty Year. Within such sixty (60) days, CMS
shall have the right to make up the difference between the minimum amount due and the actual Royalties accrued for such time period. CMS shall notify SMSI in writing whether it intends to make up such
difference or not. If CMS makes such payment within the sixty (60) day period or such other time period to which the parties agree in writing, then the license granted under this Agreement
shall continue; if CMS does not make such payment, then the license granted in Section 2 of this Agreement shall terminate as provided in Section 7 below. Starting in the fifth Royalty
Year all amounts due under this Section must come from Royalties paid by CMS from: (i) sales of Licensed Product; and (ii) purchases of Oxygen Sensors. 

        4.    ROYALTY
PAYMENTS AND REPORTS 

        Royalty
payments shall be made in United States currency within thirty (30) days of the calendar quarter in which such royalties have accrued in the United States and within sixty
(60) days for royalties accrued outside the United States. The calculation of the accrued royalties payable hereunder shall be based on Net Sales converted to U.S. dollars using standard
conversion methodology, which is consistent with generally accepted accounting principles. Such standard conversion methodology for sales shall be based on monthly averages (the spot rate for the end
of the month immediately prior to that which payment is due plus the spot rate for the month ending when payment is due divided by two), using central bank fixing rates in countries where available
and open market rates otherwise. Each royalty payment shall be accompanied by a statement which sets forth the Net Sales, separately listed for the categories of Net Sales set forth in
Section 1.13 in each country, expressed in the currency of the country, the royalty rates and the royalties payable in U.S. dollars. 

        5.    RECORDS
AND AUDIT 

        CMS
shall keep or cause its Affiliates to keep and maintain records of sales made pursuant to the license granted under this Agreement. SMSI shall keep and maintain records of sales of
Oxygen Sensors made under this Agreement and associated development costs. Such records shall be open to inspection at any reasonable time within three (3) years after the royalty period to
which such records relate, but no more often than once per Agreement Year, upon fourteen (14) days prior written notice by one party to the other. Such inspection shall be performed by a
recognized independent certified 

public accountant selected by the party requesting the audit and approved by the other, which approval shall not be unreasonably withheld. All expenses of such inspection shall be borne by the party
requesting the audit; provided that, if the audited party is found to have under paid by more than ten percent (10%), then such party shall bear such expenses. Such accountant shall examine the
records kept pursuant to this Agreement and report the findings of said examination of records to the applicable party as is necessary to evidence that the Net Sales and royalty payment amounts
reported to the other party were accurately reported in accordance with this Agreement. A copy of such report shall be given concurrently to the other party. Any such report shall be considered the
Confidential Information of the applicable party. Any underpayment shall be paid to the applicable party within ten (10) business days of the other party's receipt of the accountant's report.
Any overpayment shall be reimbursed by the applicable party within ten (10) business days of such party's receipt of such report. 

        6.    TAXES 

        All
taxes required by taxing authorities to be withheld from royalty payments due SMSI shall be deducted from amounts payable hereunder and shall be paid to appropriate fiscal or tax
authorities on behalf of SMSI. CMS shall promptly inform SMSI of all such deductions. Tax receipts received by CMS evidencing payment of such taxes shall be forwarded to SMSI. 

        7.    TERM
AND TERMINATION 

        7.1  Term. The term of this Agreement shall commence on the Effective Date and unless sooner terminated as provided below,
shall terminate upon the expiration, on a country-by-country basis, of the last to expire patent included in the Patents Rights for a given country, at which time CMS shall
have a paid-up irrevocable license under the Know-How only in the Licensed Field. 

        7.2  Termination. In addition to termination under Sections 3.2, 13.13 and 14.1(B) this Agreement may be terminated as
follows: 

        (A)  CMS
may terminate this Agreement upon ninety (90) days prior written notice to SMSI and such termination shall not affect any firm orders which have been placed
under Section 13.2 hereof. 

        (B)  By
either party upon written notice to the other party (i) in the event of insolvency of the other party, or the appointment of a receiver by the other party for
all or any substantial part of its properties, provided that such receiver is not discharged within sixty (60) days of his appointment; (ii) the adjudication of the other party as a
bankrupt; (iii) the admission by the other party in writing of its inability to pay its debts as they become due; (iv) the execution by the other party of an assignment for the benefit
of its creditors; or (v) the filing by the other party of a petition to be adjudged a bankrupt, or a petition or answer admitting the material allegations of a petition filed against the other
party in any bankruptcy proceeding, or the act of the other party in instituting or voluntarily being or becoming a party to any other judicial proceeding intended to effect a discharge of the debts
of the other party, in whole or in part. Notwithstanding the foregoing, CMS may not terminate this Agreement under this Section 7.2(B) if CMS or a Third Party manufactures Oxygen Sensors
pursuant to Section 13.2(C) hereof. 

        (C)  By
either party 

          (i)  if
one party believes that the other party has committed a breach of any material provision of this Agreement, and the other party has failed to remedy such breach
within sixty (60) days after the receipt of notice in writing of such breach from the non-breaching party and the non-breaching party has submitted the issue of whether
the other party has committed such breach for resolution in accordance with the procedure set forth in Appendix 14.5 (Alternative Dispute Resolution); and 

        (ii)  if
the neutral person in accordance with the procedures set forth in Appendix 14.5 renders a ruling that the alleged breaching party has materially breached the
Agreement; and 

        (iii)  if
the breaching party has materially failed to comply with the terms of such ruling within the time period specified therein for compliance or, if no time period is
stated, then the non-breaching party has served notice upon the breaching party to undertake the actions specified to comply with the terms of the ruling and the breaching party has
materially failed, within forty-five (45) days of such notice with regard to payment obligations, and within ninety (90) days of such notice with regard to other obligations,
to undertake such action, then the non-breaching party shall have the right to terminate this Agreement by delivering written notice to the breaching party within thirty (30) days
after expiration of the applicable period under this Section; and 

        (iv)  except
as provided in Sections 7.2(A)—(B), the foregoing rights to terminate this Agreement and the license herein are the only such rights of the parties
to take such actions under this Agreement. 

        7.3  Consequences of Termination. The consequences of termination of this Agreement or the expiration of this Agreement due to
the last to expire patent under the Patent Rights are as follows: 

        (A)  Promptly
after expiration or termination, each party shall, except as otherwise provided in this Agreement, return or destroy, and certify to such destruction of, all
Confidential Information of the other party; provided that, each party may maintain one copy for archival purposes solely to confirm compliance with the provisions of Article 12. 

        (B)  Upon
termination, CMS's license under this Agreement shall terminate and CMS shall pay all royalties and other obligations which shall have accrued through the date of
termination in accordance with the provisions of Article 4. 

        (C)  Within
one hundred twenty (120) days of termination, CMS shall dispose of, by sale or otherwise, any remaining Licensed Product and any such sales shall be
included in the calculation under 7.3(B) above. 

        7.4  Cumulative Remedies. Except as to those remedies or limitations on remedies specifically set forth in this Agreement,
each party shall have the rights and remedies set forth herein in addition to any other remedies which it may have under applicable statutory or common law. Each party shall have the sole discretion
to determine which of its rights and remedies, if any, it shall pursue and such party shall not be required to exhaust any of its other rights or remedies before pursuing any one of the rights and
remedies set forth in this Agreement. 

        7.5  Survival. Termination of this Agreement shall not relieve either party of its obligations incurred prior to expiration or
early termination. The obligations under Section 14.6 (Publicity); Section 14.5 (Alternative Dispute Resolution); Section 14.3 (Assignment); Section 13.3 (Oxygen Sensor
Development Fee); Article 12 (Confidential Information); Article 11 (Limitation of Liability); Article 10 (Indemnification); Article 9 (Representations and Warranties); and
Sections 7.3 (Consequences of Termination) and 7.5 (Survival); Article 5 (Records and Audit); Article 4 (Royalty Payments and Reports; and Article 3 (Royalties), as applicable to
royalties owed at termination or expiration, shall survive expiration or early termination of this Agreement or of any extensions thereof for a period of five (5) years if a survival period is
not otherwise stated. Any other provisions of this Agreement contemplated by their terms to pertain to a period of time following termination or expiration of this Agreement shall survive. 

        8.    PATENTS

        8.1  Patent Filing and Maintenance. SMSI shall be responsible for filing, prosecuting and maintaining all U.S. and foreign
applications and patents within the Patent Rights. CMS will pay for [*] of these costs when requested to do so by SMSI. CMS shall be given an opportunity to review and comment
upon patent applications under the Patent Rights. If SMSI shall provide such opportunities to CMS, then CMS shall make no claim against SMSI with regard to the discharge of such responsibilities. SMSI
shall keep CMS advised as to all material developments with respect 

to all patents and patent applications within the Patent Rights and shall promptly supply CMS with copies of all papers received and proposed to be filed in connection with the prosecution or defense
thereof in sufficient time for CMS to comment upon. If SMSI fails to maintain any patent under the Patent Rights, upon written notice to SMSI, CMS may file such documents and make such payments as are
necessary to maintain any such patent. Any such payments made by CMS beyond its obligation under this paragraph may be deducted from any royalty payments due to SMSI under this Agreement. 

        8.2  Infringement by Third Party. In the event SMSI or CMS has reason to believe that a Third Party may be infringing any of
the Patent Rights, such party shall promptly notify the other party. SMSI, may in its discretion, elect to enforce the Patent Rights, through legal action or otherwise, and CMS agrees to cooperate
with SMSI in such enforcement. If CMS has given written notification to SMSI of a Third Party infringement and has delivered satisfactory documentation to SMSI evidencing that the Third Party's
infringing product is competitive with CMS's Licensed Product in the same country and total sales of such infringing product of the Third Party infringer are equal to or exceed one hundred thousand
U.S. dollars (US$100,000) in an Agreement Year in the same country, then if SMSI fails to take commercially reasonable steps to enforce the Patent Rights within three (3) months of such
notification, CMS's royalty rate applicable to sales in that country shall be decreased by one-half until such time as SMSI brings such action or otherwise resolves the issue of
infringement. 

        8.3  Patent Marking. CMS shall mark all Licensed Products or their containers or manuals, in accordance with all applicable
United States and foreign patent markings laws of any country where such products are made, sold, or used. 

        9.    REPRESENTATIONS
AND WARRANTIES 

        Each
of SMSI and CMS hereby represents and warrants: 

        (A)  it
has the full right, power and corporate authority to enter into this Agreement, and to make the promises set forth in this Agreement and there are no agreements,
assignments or encumbrances inconsistent with the provisions of this Agreement; 

        SMSI
hereby represents and warrants: 

        (A)  it
has the full right, power and corporate authority to grant the licenses and sublicenses set forth in this Agreement; 

        (B)  it
owns all right, title and interest in the Patent Rights identified in Appendix 1.18(A) by assignment or otherwise, and is a valid licensee with the right to
sublicense the Patent Rights identified in Appendix 1.18(B) and Appendices 1.18(A) and (B) indicate the status of all Patent Rights and all applications are still pending in good
standing and have not been abandoned; 

        (C)  to
the best of its knowledge, no actions are threatened or pending before any court or governmental agency or other tribunal relating to the Patent Rights; 

        (D)  the
Patent Rights have not or will not be obtained through any intentional activity, omission or representation by SMSI that would limit or destroy the validity of the
Patent Rights and SMSI has no knowledge or information that would impact on or affect the validity and/or enforceability of the Patent Rights; 

        (E)  it
has not and will not authorize Third Parties to practice the Patent Rights or the Know-How in the Licensed Field or otherwise grant rights to make, have
made, use, sell and import products that are inconsistent with this Agreement; and 

        (F)  no
Third Party has acquired, owns or possesses in the Licensed Field any right, title or interest in or to the Patent Rights listed in Appendices 1.18(A) and
(B) or Know-How. 

        10.  INDEMNIFICATION 

        10.1 Indemnification by CMS. CMS shall defend, indemnify and hold harmless SMSI and its directors, employees, agents and
affiliates from and against all claims, causes of action, settlement costs, other costs (including reasonable attorney fees and expenses), damages, losses or liabilities of any kind
("Liabilities") incurred in connection with any claim asserted by a Third Party: (A) based on death, personal injury or damage to property
resulting from use of a Licensed Product unless it is judicially determined by entry of a final non-appealable order of a court of competent jurisdiction that such death, personal injury
or damage to property was caused by the gross negligence or willful misconduct of SMSI; or (B) that any Licensed Product containing a CMS Disposable Product or a CMS Reusable Product infringes
upon any presently or future issued U.S. or foreign patent or any copyright or trade secret of any Third Party. 

        10.2 Indemnification by SMSI. SMSI shall defend, indemnify and hold harmless CMS and its directors, employees, agents and
affiliates from and against all Liabilities which arise from: (A) any material breach of a representation or warranty under Article 9; (B) any challenge by a Third Party to the
validity or enforceability of the Patent Rights; and (C) any claim asserted by a Third Party based on death, personal injury or damage to property resulting from use of a Licensed Product
unless it is judicially determined by entry of a final non-appealable order of a court of competent jurisdiction that such death, personal injury or damage to property was caused by the
gross negligence or willful misconduct of CMS. 

        10.3 Conditions of Indemnification. If any indemnified party expects to seek indemnification under this Article, such party
shall promptly give notice to the indemnifying party of its claim of indemnification and the basis therefor. If indemnification is sought based on a claim asserted by a Third Party, the party seeking
indemnification shall also provide to the indemnifying party copies of any pleadings or other documents received from the Third Party evidencing the claim. Failure to notify an indemnifying party in
accordance with this Section 10.3 shall not relieve the indemnifying party of its obligation of indemnity unless such failure materially prejudices the indemnifying party's rights. An
indemnifying party may participate at its own expense in the defense of any Third Party claim as to which it receives a notice of claim of indemnity. If it so elects within a reasonable time after
receipt of such notice, the indemnifying party may assume the defense of such claim with counsel chosen by it and approved by the indemnified party unless the indemnified party reasonably objects to
such assumption on the ground that there may be legal defenses available to it which are different from or in addition to those available to the indemnifying party. If the indemnifying party assumes
the defense of the claim, the indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified party incurred thereafter in connection with the claim. In no event shall
the indemnifying party be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from its own counsel for all indemnified parties in connection with any one
action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or circumstances. No offer of settlement, settlement or compromise shall be binding on either party hereto without its
prior written consent (which consent shall not be unreasonably withheld) unless such settlement fully releases the other party without any liability, loss, cost or obligation to such party. 

        11.  LIMITATION
OF LIABILITY 

        Except
for Third Party Liabilities arising under Article 10, in no event shall either party be liable for indirect, incidental, penal or consequential damages, or other similar
damages, arising out of this Agreement. 

        12.  CONFIDENTIAL
INFORMATION 

        12.1 Due Care. It is recognized by the parties that during the term of this Agreement, the parties will exchange Confidential
Information pertaining to their performance hereunder. Each party will use Confidential Information only as provided by this Agreement and will exercise due care to prevent the disclosure of
Confidential Information of the other party. For purposes of this section, due care means at least the same level of protection that the party to whom Confidential 

Information is disclosed uses to protect its own Confidential Information, but in no event less than a reasonable level of protection. 

        12.2 Permitted Disclosures. Notwithstanding the above, nothing contained in this Agreement shall preclude CMS or SMSI from
utilizing or disclosing to others its Confidential Information, or utilizing Confidential Information received from the other party as may be required (A) for regulatory purposes, including
obtaining FDA clearances; (B) for audit, tax or customs purposes; (C) by court or other government order, provided that the party subject to such order notifies the other party and uses
reasonable efforts to obtain a protective order covering such Confidential Information or (D) as otherwise required by law, provided that if one party makes such disclosure, the other party
shall be given the opportunity for prior review of and comment on such disclosure, which comment shall be taken into consideration by the disclosing party. 

        12.3 Reasonable Need to Know. In addition to the foregoing, SMSI and CMS may disclose the Confidential Information of the
other party to those Third Parties who have a reasonable need for the Confidential Information in the performance of their services in connection with the matters set forth in this Agreement; who are
informed of the confidential nature of the Confidential Information; and who are bound not to disclose such Confidential Information. 

        12.4 Survival. The obligations of the parties set forth in this Article 12 shall apply during the term hereof and for
a period of five (5) years after the date of early termination or expiration of this Agreement or of any extension thereof. 

        13.  MANUFACTURING
CONSIDERATIONS 

        13.1 Reasonable Efforts. CMS shall use commercially reasonable efforts to develop and market a Licensed Product; provided,
however, that CMS shall have no liability (except as otherwise provided herein and specifically subject to 13.3 hereof) if CMS determines in its sole discretion to not commence, not continue or to
abandon the development or manufacture of a Licensed Product. 

        13.2 Purchase
of Oxygen Sensors. 

        (A)  SMSI
will develop and manufacture a proprietary Oxygen Sensor which complies with the specification set forth on Appendix 13.2 hereto. SMSI will provide 100
prototype Oxygen Sensors to CMS within three (3) months of the date of this Agreement at a cost not to exceed [*] each. For the purpose of these prototype sensors, SMSI
will make its good faith efforts to achieve the specifications set forth on Appendix 13.2. Thereafter, SMSI shall make the final Oxygen Sensors available for purchase by CMS at SMSI's Fully
Burdened Manufacturing Cost for such Oxygen Sensor plus [*] (shipping and handling shall be paid by CMS); provided,  however, that if SMSI's Fully Burdened
Manufacturing Cost is less than [*] per Oxygen Sensor, then CMS will purchase the Oxygen
Sensors from SMSI as prescribed in the above clause plus one third of the difference between [*] and the Fully Burdened Manufacturing Cost. The Fully Burdened Manufacturing
Cost for firm purchase orders of: (i) less than [*] units per quarter shall not exceed [*] each; and (ii) [*]
units per quarter or more shall not exceed [*] each. The above [*] and the one-third amounts shall be deemed royalty payments and shall be
included in the computation of Minimum Royalties set forth in Section 3.2 

        (B)  At
least thirty (30) days before the last day of each Agreement Year during the Term of the Agreement, CMS shall provide an annual estimate of units to be
purchased during the next Agreement Year and will place firm purchase orders each quarter of each Agreement Year thereafter. Purchase orders shall specify a delivery date no less than four
(4) months from the date on which the order is placed. Additionally, no purchase order placed in any Agreement Year shall specify a number of units which exceeds fifty percent (50%) of the
annual estimate applicable to that Agreement Year unless CMS receives prior written approval from SMSI. 

        (C)  CMS
intends for SMSI to be its primary supplier for Oxygen Sensors subject to this Section 13 and SMSI agrees to use commercially reasonable efforts to reduce the
Fully Burdened Manufacturing Cost of the Oxygen Sensor while still meeting the specifications set forth in Appendix 13.2. [*] Prior to CMS
manufacturing Oxygen Sensors or placing an order with a Third Party to manufacture Oxygen Sensors, CMS shall promptly deliver to SMSI a written notice of the price, quantity and other terms and
conditions of the offer by the prospective manufacturer and the identity of the prospective manufacturer (the "Notice"). The terms of any such offer may
be audited by SMSI on the terms set forth in Section 5 hereof and CMS agrees to provide SMSI with necessary materials to allow SMSI to determine if such terms are achievable by the prospective
manufacturer. A valid Notice hereunder must contain a quote for a quantity of Oxygen Sensors substantially the same as the quantity included in CMS' last firm order. [*] Upon
the earlier to occur of the following: (i) the expiration of the sixty day period, (ii) SMSI's delivery of a counteroffer which in CMS's reasonable opinion does not contain terms
equivalent to those set forth in the Notice, or (iii) SMSI's rejection of the order on the terms set forth in the Notice, [*] CMS agrees to pay to SMSI the royalty
amounts set forth in Section 13.2(A) above on Oxygen Sensors manufactured by CMS or a Third Party based upon the Fully Burdened Manufacturing Cost which SMSI would have been able to achieve
based upon the bona fide counteroffer delivered to CMS by SMSI within the above 60 day period, or if no such counteroffer was issued by SMSI, then based on the Fully Burdened Manufacturing Cost
for the latest firm order placed by CMS to SMSI. The terms of any such counteroffer may be audited by CMS on the terms set forth in Section 5 hereof and SMSI agrees to provide CMS with
necessary materials to allow CMS to determine if such terms were achievable by SMSI. Any royalty payments made under this Section 13.2(C) shall be included in the computation of Minimum
Royalties set forth in Section 3.2. CMS may send to SMSI no more than one Notice in any calendar year. 

        13.3 Oxygen Sensor Development Fee. CMS agrees to pay SMSI an additional amount equal to [*] of
SMSI's Fully Burdened Manufacturing Cost for each Oxygen Sensor sold pursuant to Section 13.2 until such time as CMS has paid an aggregate of [*] in such additional
amounts in order to cover SMSI's development costs of the Oxygen Sensor (the "Oxygen Sensor Development Fee"); provided, however, that if such
development costs are less than [*], then the Oxygen Sensor Development Fee shall terminate and be deemed fully paid as soon as such payments equal such lesser development cost
amount. CMS shall have the right to audit such development cost amounts as set forth in Section 5 of this Agreement. The Oxygen Sensor Development Fee shall be paid no later than the fourth
Royalty Year. Notwithstanding anything in this Agreement to the contrary, and subject only to SMSI having delivered to CMS an Oxygen Sensor meeting the Appendix 13.2 specifications agreed upon
at the time of such delivery, should this Agreement be terminated for any reason prior to the Oxygen Sensor Development Fee being fully paid, then the unpaid portion of such Fee shall be paid by CMS
within sixty (60) days of such termination. 

        13.4 Certificate of Analysis. SMSI shall test or cause to be tested each batch of Oxygen Sensors pursuant to this Agreement
before delivery to CMS. Each test shall set forth the items tested, specifications and test results in a certificate of analysis for each batch delivered. SMSI shall send or cause to be sent such
certificates to CMS along with delivery of the Oxygen Sensors. CMS is entitled to rely on such certificates for all purposes of this Agreement. Nothing in this Agreement shall be construed to require
CMS to perform any incoming testing, analytical or otherwise, on any Oxygen Sensors received from SMSI. 

        13.5 Certificate of Manufacturing Compliance. SMSI shall provide or cause to be provided for each batch of Oxygen Sensors
purchased by CMS a certificate of manufacturing compliance which will certify that the batch of Oxygen Sensors (excluding SMSI Disposable Components) was manufactured in accordance with the
appropriate product specifications, set forth on Appendix 13.2. 

        13.6 CMS Inspection. Notwithstanding SMSI's obligation to provide the certificate set forth in Section 13.5, SMSI
shall permit CMS upon 14 days prior notice and during regular business hours, 

but no more often than once in each calendar year, access to those areas of SMSI's manufacturing facilities where the Oxygen Sensors are manufactured, tested, packaged, stored, handled and shipped
and access to the manufacturing records of the Oxygen Sensors manufactured for CMS. 

        13.7 Regulatory Inspection. SMSI shall permit representatives of any regulatory agency having jurisdiction over the
manufacture and/or marketing of the Oxygen Sensors (or of any other product in which the Oxygen Sensor is incorporated) to inspect its facilities in conjunction with the manufacture, testing,
packaging, storage, handling and shipping of the Oxygen Sensors. Further, SMSI shall advise CMS immediately if SMSI receives notice of an impending inspection or if an authorized agent of the FDA or
other governmental agency visits any of SMSI's manufacturing facilities concerning the Oxygen Sensors. SMSI shall furnish to CMS any report, including any FDA Form 483 notices (or comparable
notices of other agencies), regulatory letters or similar documents received from such agency and the application of such report to the Oxygen Sensors, if any, within seven (7) days of SMSI's
receipt of such report. 

        13.8 Regulatory Inquiry. Each party shall promptly inform the other of any formal or informal inquiry relating to any Oxygen
Sensor by any regulatory agency of any state or national government or supranational authority. 

        13.9 Compliance. In the performance of this Agreement, SMSI shall comply with all applicable Federal, state and local laws
and regulations. 

        13.10  Assistance. Upon CMS's reasonable request, SMSI shall reasonably cooperate as necessary with, and provide appropriate
Oxygen Sensor data and information to, CMS regarding the Oxygen Sensors that would assist in, among other items, any application for regulatory approval whether from the FDA or any other regulatory
body (e.g., 510(K), PMA, Koseisho), country product registration and OSHA/safety related requests. 

        13.11  Oxygen Sensor Recall. Should any Oxygen Sensor defect or any governmental action require 

        (A)  the
recall, destruction or withholding from market of any Oxygen Sensors sold hereunder (hereinafter "Recall"); 

        (B)  issuance
of a Medical Device Report within the meaning of the Federal Food, Drug and Cosmetic Act on any Oxygen Sensors sold hereunder (hereinafter a
"MDR"); or 

        (C)  institution
of a field correction of any Oxygen Sensors sold hereunder (hereinafter "Field Correction"), then SMSI shall
bear the costs and expenses of correcting all problems with the Oxygen Sensor and providing replacement Oxygen Sensors to CMS if such Recall, MDR or Field Correction (collectively,
"Product Action") is the direct result of any fault or omission attributable to SMSI, and CMS shall bear the costs and expenses of such Product Action
if such Product Action is the direct result of any fault or omission attributable to CMS. If the parties are equally at fault for such Product Action, then SMSI shall bear costs and expense as set
forth above and CMS shall bear all other costs and expense of the Product Action. All such actions taken by the parties under this provision shall be in accordance with CMS's written policies and
procedures governing the specific event. CMS may temporarily suspend payment of royalties under Article 3 until such corrective action that may be required of SMSI is completed to CMS's
reasonable satisfaction. 

        13.12  Oxygen Sensor Problems. If SMSI has any knowledge of a problem with the Oxygen Sensors which significantly affects
compliance with the Appendix 13.2 specifications, then SMSI immediately will notify CMS in writing of the problem and forward to CMS all information concerning the problem which is in SMSI's
possession. If CMS is made aware of a problem with the device that utilizes the Oxygen Sensors or receives a customer complaint regarding such device and determines the problem is related to the
Oxygen Sensors or to a responsibility of SMSI under the Agreement, then SMSI shall assist CMS in the further investigation and/or correction of the 

problem by providing relevant documentation, agreeing to run reasonable tests and providing other assistance as reasonably requested by CMS. 

        13.13  Failure to Supply. In the event that SMSI is unable, or notifies CMS that it is unable, for any reason (including an
event of force majeure) to supply the Oxygen Sensors (other than the prototype Oxygen Sensors referred to in Section 13.2) in accordance with the quantities and/or delivery dates specified by
CMS pursuant to Section 13.2, SMSI shall promptly notify CMS. If such failure to supply will continue or does continue for a period of thirty (30) consecutive days, CMS may at its
discretion (A) require SMSI to supply the undelivered Oxygen Sensors at a future date agreed upon by the parties; or (B) manufacture or have manufactured by a Third Party designated by
CMS that quantity of Oxygen Sensors as CMS may determine or (C) partially terminate the Agreement as to the purchase of Oxygen Sensors without further liability as to any firm purchase orders
tendered to SMSI. If CMS determines to manufacture or have the Oxygen Sensors manufactured by a Third Party, SMSI shall provide to CMS or such Third Party all necessary information, documentation,
technical assistance and cooperation by appropriate employees of SMSI at SMSI's expense on an expedited basis to enable CMS or such Third Party to manufacture the Oxygen Sensors in accordance with the
appropriate specifications. Without liability or breach of this Agreement, CMS may enter into a Third Party manufacturing contract that specifies a term of such contract that runs beyond the time that
SMSI may or is able to resume supply of the Oxygen Sensors to CMS. The disclosure of any SMSI Confidential Information to a Third Party manufacturer shall be governed by Section 12 of this
Agreement. Notwithstanding the foregoing, this paragraph shall have no applicability if SMSI is able to supply during an Agreement Year at least ninety percent (90%) of CMS's annual estimate for that
Agreement Year. 

        13.14  Supply Resumption. SMSI shall have sixty (60) days from the original delivery date of the Oxygen Sensors to CMS
in which to resume supply of the Oxygen Sensors to CMS. At the time that SMSI notifies CMS that SMSI can resume supply and provides CMS with a firm date for delivery of the Oxygen Sensors in
accordance with CMS's needs, then CMS will cease production of the Oxygen Sensors in a reasonable time and manner if CMS is self-manufacturing the Oxygen Sensors or will terminate the
contract with the Third Party manufacturer under the terms and conditions of that contract; and will resume supply from SMSI as soon as possible, but in no event later than four (4) months
after the firm date for resumed delivery. 

        13.15  Insurance. Each party, at its sole cost and expense, shall obtain and keep in force during the term of this Agreement a
policy of comprehensive liability insurance with bodily injury, death and property damage limits of not less than [*] per occurrence and [*] in the
aggregate. The insurance policy shall be endorsed to provide for written notification to the other party by the insurer not less than thirty (30) days prior to cancellation, expiration, or
modification. A certificate of insurance evidencing compliance with this Section and referencing this Agreement shall be furnished by each party to the other within ten (10) days of this
Agreement's Effective Date, or other date as agreed by the parties, and of any insurance renewal. 

        13.16  SMSI
shall have no obligation and assumes no liability under this Agreement with respect to Oxygen Sensors manufactured by CMS or manufactured for CMS by a Third
Party, except as provided in Sections 13.2 and 13.13 hereof. 

        13.17  Before
CMS shall enter into an agreement with a Third Party or an Affiliate for the manufacture of Oxygen Sensors under Sections 13.2(C) or 13.13, CMS, SMSI and such
Third Party or Affiliate shall enter into a binding agreement, enforceable in the country in which such Third Party or Affiliate manufacture will take place, restricting the Third Party's or
Affiliate's sales of Oxygen Sensors strictly to CMS and further restricting the use of any SMSI Licensed Technology, Know-How and other information the Third Party or Affiliate may receive
from SMSI to only the manufacture of Oxygen Sensors for CMS; provided, however, SMSI may in its sole discretion allow such Third Party or Affiliate to manufacture and sell Oxygen Sensors to SMSI for
SMSI's use outside of the Licensed Field of this Agreement. 

        14.  MISCELLANEOUS 

        14.1 Force
Majeure. 

        (A)  Delay
or failure on the part of either party in performing its obligations under this Agreement (except for payment of money) shall not subject such party to any
liability to the other if such delay or failure is caused by or results from acts such as but not limited to acts of God, fire, explosion, flood, drought, war, riot, sabotage, embargo, strikes or
other labor trouble, or compliance with any law, order or regulation of any government entity acting with color of right. 

        (B)  Upon
occurrence of an event of force majeure, the party affected shall promptly notify the other in writing, setting forth the details of the occurrence, and making
every attempt to resume the performance of its obligations as soon as practicable after the force majeure event ceases. If such event prevents or will prevent performance of a material provision of
this Agreement by one party for more than six (6) months, then the other party may immediately terminate this Agreement upon written notice to the non-performing party and in
accordance with Article 7. 

        14.2 Notices. Any notice permitted or required by this Agreement shall be sent by (A) facsimile with a written
confirmation copy, (B) registered mail or (C) a recognized private mail carrier service, and such notice shall be effective on the date received as indicated by the facsimile imprint
date in the case of (A) and the carrier receipt in the case of (B) and (C), if sent and addressed as follows or to such other address as may be designated by a party in writing: 

	If to SMSI:	 	Sensors for Medicine and Science

Attention: Marc R. Schneebaum

12321 Middlebrook Road, Suite 210

Germantown, MD 20874

TeleFax: (301) 515-0988
	

With a copy to:	
 	

Rothwell, Figg, Ernst & Kurz, p.c.

Attention: E. Anthony Figg

555 13th Street, N.W., Suite 701 E

Washington, D.C. 20004

TeleFax: (202) 783-6031
	

If to CMS:	
 	

Calorie Management Systems, Inc.

14586 Aloha Avenue

Saratoga, California 95070

Attention: Noel Johnson, Ph.D.

TeleFax: (408) 867-9395

	

With copy to:	
 	

General Counsel Associates LLP

Attention: Susan J. Skaer

1891 Landings Drive

Mountain View, CA 94043

TeleFax: (650)-428-3901

        14.3 Assignment. This Agreement may not be assigned or transferred by either party, whether by operation of law or otherwise
except under the following circumstances: 

        (A)  CMS
may assign this Agreement to a wholly-owned subsidiary of CMS or of its Affiliates. 

        (B)  Either
party may assign or transfer this Agreement to an Affiliate or Third Party in the event of a sale of all or substantially all of its assets to which this
Agreement pertains or the merger into, acquisition by, or sale to such Affiliate or Third Party. 

        14.4 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
successors and permitted assigns. 

        14.5 Alternative Dispute Resolution. The parties agree that any dispute that arises in connection with this Agreement shall
be resolved by binding Alternative Dispute Resolution ("ADR") in the manner described in Appendix 14.5. 

        14.6 Publicity. The parties agree that upon the execution of this Agreement, no press release will be issued. Neither party
shall (A) originate any publicity, news release or other public announcement, written or oral, whether to the public press, public stockholders or otherwise, relating to this Agreement, any
amendment hereto or performance hereunder, or (B) use the name of the other in any publicity, news release or other public announcement, unless (i) the other party is given reasonable
prior notice of the proposed publicity, news release or other public announcement and the opportunity to request reasonable changes thereto, or (ii) as required by law, in which case the
originating party will give reasonable prior notice of such proposed disclosure to the other party, will provide the basis for the disclosure and the content. Consistent with applicable law, the other
party will have the right to request reasonable changes to the disclosure, including the redaction of Confidential Information, to protect its interests. 

        14.7 Relationship of Parties. The relationship of the parties under this Agreement is that of independent contractors.
Nothing contained in this Agreement is intended or is to be construed so as to constitute
the parties as partners, joint venturers, or either party as an agent or employee of the other. Neither party has any express or implied right under this Agreement to assume or create any obligation
on behalf of or in the name of the other, or to bind the other party to any contract, agreement or undertaking with any Third Party, and no conduct of the parties shall be deemed to infer such right. 

        14.8 Year 2000 Compliance. All hardware and software used by SMSI in the manufacturing process, and all hardware and software
used by SMSI in its business relationship with CMS, will have no lesser functionality with respect to records containing dates after January 1, 2000, than previously with respect to dates prior
to January 1, 2000. 

        14.9  Appendices. All appendices referenced herein are hereby made a part of this Agreement. 

        14.10  Headings. The headings used in this Agreement are for convenience only and are not a part of this Agreement. 

        14.11  Waiver. No waiver by either party of any default, right or remedy shall be effective unless in writing, nor shall any
such waiver operate as a waiver of any other or of the same default, right or remedy respectively, on a future occasion. 

        14.12  Severability. If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and 

construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein. 

        14.13  Entire Agreement; Amendment. This Agreement sets forth the entire understanding of the parties with respect to the
subject matter hereof and supersedes all prior agreements, written and oral, between the parties. No modification of any of the terms of this Agreement shall be deemed to be valid unless it is in
writing and signed by both parties. No course of dealing or usage of trade shall be used to modify the terms and conditions in this Agreement. 

        14.14  Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware,
excluding its conflict of laws principles. 

        14.15  Governing Language. The English language version of this Agreement shall be controlling in all respects,
notwithstanding any translation of this Agreement made for any purpose whatsoever. 

        IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its duly authorized representative. 

	CALORIE MANAGEMENT SYSTEMS, INC.	 	SENSORS FOR MEDICINE AND SCIENCE, INC.
	

By:	
 	

/s/  JAMES R. MAULT      
	
 	

By:	
 	

/s/  MARC R. SCHNEEBAUM      
 Marc R. Schneebaum
	

Title:	
 	

President
	
 	

Title:	
 	

President & COO

	

Date:	
 	

17 August 1999
	
 	

Date:	
 	

August 23, 1999

 
 

CONFIDENTIAL TREATMENT REQUEST    
  

*
Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 

 
 

APPENDIX 1.11    
  

        1.    Know-how
relating to high-speed analog microelectronics. 

        2.    Know-how
relating to the spectral sensitivity of photodiodes and photoresistors. 

        3.    Know-how
relating to differential LED anode/cathode drive (anode compensation) to eliminate inductive and electrostatic effects of the LED drive circuitry on
the fluorescent signal amplifier. 

        4.    Know-how
relating to the grounding of microelectronics circuits to minimize electrostatic coupling effects. 

        5.    Know-how
relating to ambient light interference/reduction approaches. 

        6.    Know-how
relating to moisture effects on the materials and electronic sensor components. 

        7.    Know-how
relating to frequency modulation approaches and associated signal processing electronics for time-resolved fluorescence measurements. 

        8.    Know-how
relating to the assembly of flip-chip photodiodes on an optical sensor platform. 

        9.    Know-how
relating to the placement of LED die and photodetectors such that optical signal-to-noise ratio is optimized to enhance
performance. 

        10.  Know-how
relating to the use of high frequency fluorochrome modulation, e.g. 1 MHz, to measure sensor background interference, noise, and/or
red-tail. 

        11.  Know-how
relating to the use of high frequency modulation to maintain long-term sensor calibration. 

        12.  Know-how
relating to calibration curves and algorithms to compensate for various environmental variables other than analyte concentration that affect the
sensor. 

        13.  Know-how
relating to methods of fabrication and component selection so as to maximize signal-to-noise ratio. 

        14.  Know-how
relating to optimal amplitude measurement techniques and signal processing for fluorochromic membranes. 

        15.  Know-how
pertaining to the characterization and performance of LEDs and LED die beyond the component manufacturers' published specifications. 

        16.  Know-how
relating to the manufacture of extremely small sensors. 

        17.  Know-how
pertaining to the fluorescent properties of typical manufacturing materials used in optical sensors that may interfere with the operation of said
sensors. Specific examples include but are not limited to: wavelength cutoff filters, glass, epoxy resins, and printed circuit board material. 

        18.  Know-how
relating to the performance speed of photodiodes and performance differences between the active and inactive areas of the surface. 

        19.  Know-how
relating to disposable sensing membranes and test results. 

        20.  Know-how
relating to fluorochromic temperature correction methods utilizing a reference channel with 100 ms or faster response times. 

        21.  Know-how
relating to temperature correction algorithms. 

        22.  Know-how
relating to the efficacy of heating various sensor surfaces and the benefit in medical and respiratory applications. 

        23.  Know-how
relating to the design and construction of effective sensor heaters for the purpose of mitigating surface condensation in respiratory applications. 

        24.  Know-how
relating to inductive power of a micro-sized sensor. 

        25.  Know-how
relating to RF telemetry of sensor data to remote receiver locations. 

        26.  Know-how
relating to the bandwidth and noise cancellation techniques employed to minimize LED switching current interference. 

        27.  Know-how
relating to the response time of various oxygen sensing membranes. 

        28.  Know-how
relating to the formulation and deposition of fast oxygen sensing membranes. 

        29.  Know-how
relating to thermal heating relationships of LEDs and the effect on adjacent or nearby fluorochromic membranes. 

        30.  Know-how
and test data relating to the optical transmissivity and opacity of various manufacturing materials used in optical sensors. 

        31.  Know-how
relating to the fabrication of low-cost oxygen sensors. Specific examples include but are not limited to: sources, components, and
methods of economical assembly. 

        32.  Know-how
relating to the bum-in and stability characteristics of fluorochromic oxygen sensors. 

        33.  Know-how
relating to novel sensor calibration methods used in high volume low-cost sensor manufacture. 

        34.  Know-how
relating to the laser trimming of fluorochromic sensing membranes for the purposes of sensor calibration. 

        35.  Know-how
relating to the optimum electrical layout of micro-sized optical sensors utilizing thin film ceramic, thick film ceramic, copper on flex, and copper
on FR-4 materials. 

        36.  Know-how
relating to the design of efficient optical sensors whereby low power designs are achieved, permitting the use of small batteries or inductive
power. 

        37.  Know-how
and data relating to the geometry and size of various photodetectors so that optimum performance is attained. 

        38.  Know-how
relating to permselective membrane dynamics for aqueous and gaseous analytes including chemical formulation and synthesis methodologies. 

        39.  Know-how
relating to thin film, thick film, and monolithic membrane and active indicator element formulation and fabrication. 

        40.  Know-how
relating to polymer selection and synthesis criteria for specific analytes facilitating ionic, covalent, and entrapped or encaged indicator
immobilization strategies. 

        41.  Know-how
relating to organic and inorganic polymer membrane matrix optimization for analyte mass transport and compatibility. 

        42.  Know-how
relating to sensing membrane scatter dopants for the purposes of increasing signal to noise ratios in both optical and physical chemical methods. 

        43.  Know-how
relating to methods for applying active indicator elements in micro and nano-volumes to miniaturized optical sensors. 

        44.  Know-how
relating to particular and distinctive properties of optical adhesives. 

        45.  Know-how
relating to waveguide architecture for optimization of solid state and thin or thick film hybrid gaseous or liquid sensors. 

        46.  Know-how
relating to psychrometric control of immediate dew point levels in the vicinity of an active indicator element. 

        47.  Know-how
relating to isotopic excitation of indicators. 

        48.  Know-how
relating to electron excited primary fluors and phosphors to pump indicator matrices. 

        49.  Know-how
relating to molecular level manipulation of optimal indicator performance by chemical species substituents in the primary fluorescent indicator
structure. 

        50.  Know-how
relating to indicator cross-reactivity remediation. 

        51.  Know-how
relating to de-rating LED power output by laser trimming, routing or customization instead of electrical de-rating (causing
altered optical performance). 

        52.  Know-how
relating to waveguide materials (inorganic). 

*
Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 

 
 

APPENDIX 1.18(A)    
  

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	U.S.	 	[*]	 	[*]	 	 	 	 	 	No substantive action.

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	U.S.	 	[*]	 	[*]	 	 	 	 	 	No substantive action.

Foreign filing deadline 8/26/99

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	Taiwan	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	U.S.	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	WO	 	[*]	 	[*]	 	 	 	 	 	No substantive action.

[*]

 
 

APPENDIX 1.18(A) CONTINUED    
  

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	U.S.	 	[*]	 	[*]	 	 	 	 	 	[*]

No substantive action.

[*]

*
Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 

 
 

APPENDIX 1.18(B)    
  

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	Australia	 	49897/96	 	2/15/96	 	693007	 	11/5/98	 	Issued
	Canada	 	[*]	 	[*]	 	 	 	 	 	Examination request due 2/15/2003
	China	 	96192171.4	 	8/27/97	 	 	 	 	 	Published
	EPO	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	Finland	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	Japan	 	[*]	 	[*]	 	 	 	 	 	Examination request due 2/15/2003
	Korea	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	Mexico	 	[*]	 	[*]	 	 	 	 	 	Allowed.
	Norway	 	[*]	 	 	 	 	 	 	 	No substantive action.
	U.S.	 	08/393,166	 	2/21/95	 	5,517,313	 	5/14/96	 	Issued
	WO	 	[*]	 	[*]	 	 	 	 	 	 

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	India	 	[*]	 	[*]	 	 	 	 	 	Abandoned
	Taiwan	 	[*]	 	[*]	 	 	 	 	 	Abandoned
	U.S.	 	08/855,235	 	5/13/97	 	5,910,661	 	6/8/99	 	Issued
	WO	 	[*]	 	[*]	 	 	 	 	 	Abandoned

 
 

APPENDIX 1.18(B) CONTINUED    
  

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	India	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	Taiwan	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	U.S	 	08/855,236	 	5/13/97	 	5,917,605	 	6/29/99	 	Issued
	WO	 	[*]	 	[*]	 	 	 	 	 	National phase deadline 11/13/99

	Docket No.: [*]
 

	Title: [*]
 

	Inventors: [*]
 

	Country
	 	Application No.
	 	Filing Date
	 	Patent No.
	 	Issue Date
	 	Status

	India	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	Taiwan	 	[*]	 	[*]	 	 	 	 	 	No substantive action.
	U.S.	 	08/855,234	 	5/13/98	 	5,894,351	 	4/13/99	 	Issued
	WO	 	[*]	 	[*]	 	 	 	 	 	National phase deadline 11/13/99

Preliminary Examination Report received.

*
Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 

Appendix 13.2 CMS O2 Sensor Specification  

        1.    Sensor
Description 

        1.1  A
PC board mounted oxygen sensor consisting of a reference cell and a sensing cell. 

        1.2  The
O2 sensor assembly is to be embodied in a "standard" PC board mounted electronic package (ex. DIP, SOIC, SSOP) with the specific package and pin-out to
be determined by S4MS and approved by CMS based on functional requirements and cost. 

        1.3  The
width and height are to be determined by the internal component requirements of the sensor. 

        1.4  [*] 

        1.5  The
base substrate will be ceramic or another material intended to minimize thermal gradients within the package. 

        2.    [*]

        2.1  [*]

        2.2  [*]

        2.3  [*] 

        2.4  [*] 

        2.5  [*] 

        2.6  [*]

        2.7  [*]

        3.    Operating
Conditions 

        3.1  The
sensor is used to measure the partial pressure of oxygen in ambient room air and human exhalant under the following conditions: 

	Parameter
 
	 	Min
	 	Typ
	 	Max
	 	Units

	Ambient Pressure(1)	 	[*]	 	[*]	 	[*]	 	mm Hg
	Ambient Temperature	 	[*]	 	[*]	 	[*]	 	deg C
	Ambient Humidity	 	[*]	 	—	 	[*]	 	% RH
	Operating Temperature(2)	 	[*]	 	[*]	 	[*]	 	deg C
	Flow Temperature(3)	 	[*]	 	[*]	 	[*]	 	deg C
	Peak Flow Velocity(4)	 	[*]	 	[*]	 	[*]	 	m/s
	Power Requirements	 	—	 	TBD	 	 	 	mW

	(1)
	[*]

	(2)
	[*]

	(3)
	[*]

	(4)
	[*]

        3.2  Operational
modes: 

        3.2.1  OFF:
no power applied to the sensor 

        3.2.2  WARM-UP:
heater on, but sensor has not reached sensor operating temperature (3.1). LED off 

        3.2.3  CALIBRATE:
heater on and sensor at operating temperature. Sensor single-point calibration routine (to be determined by S4MS) performed by control electronics on the
CMS product. 

        3.2.4  STANDBY:
heater on with temperature set-point set to the operating temperature. LED off 

        3.2.5  ON:
heater on with temperature set-point set to the operating temperature, LED on. Power and duty cycle of LED to be determined by S4MS to meet measurement
and life requirements. 

        3.3  The
sensor will be interrogated at [*]. 

        3.4  Contaminants:
sensor resistance to contaminants (smoke, alcohol, etc.) to be determined. 

        3.5  Storage
Temperature: [*]. 

        4.    Measurement
requirements: 

        The
following table lists the measurement requirements for the O2 sensor. These requirements should be maintained over the operating conditions described in Sec. 3.1. 

	Parameter
 
	 	Min
	 	Typ
	 	Max
	 	Units

	Partial Pressure of Oxygen(5)	 	[*]	 	[*]	 	[*]	 	mm Hg
	Measurement Accuracy(6)	 	—	 	—	 	[*]	 	% of reading
	Response Time(7)	 	[*]	 	[*]	 	[*]	 	ms

	(5)
	[*]

	(6)
	[*]

	(7)
	[*]

        5.    Sensor
Life 

        5.1  Shelf
life: Defined as the length of time the sensor can be stored in the OFF mode (3.2.1) while maintaining measurement and accuracy requirements (see Sec. 4). It
assumed that the sensor will be stored in a package which minimizes exposure to ambient light. Value to be determined based on
testing of 100 pre-production prototypes. Testing procedures to be mutually agreed upon by CMS and S4MS. 

        5.2  Usage
life: Defined as the length of time the sensor can be operated continuously in the ON mode (3.2.3) while maintaining measurement and accuracy requirements (see
Sec. 4). Value to be determined based on testing of 100 pre-production prototypes. Testing procedures to be mutually agreed upon by CMS and S4MS. 

        5.3  Usage
profile: The sensor will be designed to operate periodically with a profile of [*] minutes of continuous measurement (in the ON mode),
[*] measurement periods per hour, 8 hours per day, 7 days per week, 50 weeks per year for the usage life. Between measurement periods, the sensor may be
maintained in either the STANDBY or OFF modes. Under these conditions the sensor will maintain measurement and accuracy requirements (see Sec. 4) with the allowance for single-point calibration
during usage. 

        6.    Calibration

        6.1  Unit
will be factory calibrated with a multi-point calibration over the measurement range (see Sec. 4), with the number of points to be determined from test results of
initial 100 pre-production prototypes. Calibration procedure for the reference cell to be determined by S4MS. 

        6.2  Factory
calibration coefficients will be stored in an EEPROM packaged within the sensor. 

        6.3  The
sensor will maintain measurement and accuracy requirements (see Sec. 4) over the usage life of the sensor with single-point calibrations performed prior to
each usage of the device. 

        7.    Fully
Burdened Manufacturing Cost 

        7.1  Fully
burdened manufacturing cost of sensor shall not exceed [*] for orders in quantities less than [*] units. 

        7.2  Fully
burdened manufacturing cost of sensor shall not exceed [*] for orders in quantities of [*] units or greater. 

 
 

APPENDIX 14.5
  ALTERNATIVE DISPUTE RESOLUTION    
  

        The parties recognize that bona fide disputes as to certain matters may arise from time to time during the term of this Agreement which relate to either party's
rights and/or obligations. To have such a dispute resolved by this Alternative Dispute Resolution ("ADR") provision, a party first must send written notice of the dispute to the other party for
attempted resolution by good faith negotiations between their respective presidents (or their equivalents) of the affected subsidiaries, divisions, or business units within ninety (90) days
after such notice is received (all references to "days" in this ADR provision are to calendar days). 

        If
the matter has not been resolved within ninety (90) days of the notice of dispute, or if the parties fail to meet within such ninety (90) days, either party may initiate
an ADR proceeding as provided herein. The parties shall have the right to be represented by counsel in such a proceeding. 

        1.    To
begin an ADR proceeding, a party shall provide written notice to the other party of the issues to be resolved by ADR. Within fourteen (14) days after its
receipt of such notice, the other party may, by written notice to the party initiating the ADR, add additional issues to be resolved within the same ADR. 

        2.    Within
twenty-one (21) days following receipt of the original ADR notice, the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are unable to agree on a mutually acceptable neutral within such period, either party may request the President of the JAMS/Endispute
in San Jose, California (JAMS) (1-800-352-5267), to select a neutral pursuant to the following procedures: 

        (a)  JAMS
shall submit to the parties a list of not less than five (5) candidates within fourteen (14) days after receipt of the request, along with a  Curriculum Vitae for each candidate. No candidate
shall be an employee, director, or shareholder of either party or any of their subsidiaries or
Affiliates. 

        (b)  Such
list shall include a statement of disclosure by each candidate of any circumstances likely to affect his or her impartiality. 

        (c)  Each
party shall number the candidates in order of preference (with the number one (1) signifying the greatest preference) and shall deliver the list to JAMS
within seven (7) days following receipt of the
list of candidates. If a party believes a conflict of interest exists regarding any of the candidates, that party shall provide a written explanation of the conflict to JAMS along with its list
showing its order of preference for the candidates. Any party failing to return a list of preferences on time shall be deemed to have no order of preference. 

        (d)  If
the parties collectively have identified fewer than three (3) candidates deemed to have conflicts, JAMS immediately shall designate as the neutral the
candidate for whom the parties collectively have indicated the greatest preference. If a tie should result between two candidates, JAMS may designate either candidate. If the parties collectively have
identified three (3) or more candidates deemed to have conflicts, JAMS shall review the explanations regarding conflicts and, in its sole discretion, may either (i) immediately designate
as the neutral the candidate for whom the parties collectively have indicated the greatest preference, or (ii) issue a new list of not less than 

five (5) candidates, in which case the procedures set forth in subparagraphs 2(a)—2(d) shall be repeated. 

        3.    No
earlier than twenty-eight (28) days or later than fifty-six (56) days after selection, the neutral shall hold a hearing to resolve each of
the issues identified by the parties. The ADR proceeding shall take place at a location agreed upon by the parties. If the parties cannot agree, the neutral shall designate a location other than the
principal place of business of either party or any of their subsidiaries or Affiliates. 

        4.    At
least seven (7) days prior to the hearing, each party shall submit the following to the other party and the neutral: 

        (a)  a
copy of all exhibits on which such party intends to rely in any oral or written presentation to the neutral; 

        (b)  a
list of any witnesses such party intends to call at the hearing, and a short summary of the anticipated testimony of each witness; 

        (c)  a
proposed ruling on each issue to be resolved, together with a request for a specific damage award or other remedy for each issue. The proposed rulings and remedies
shall not contain any recitation of the facts or any legal arguments and shall not exceed one (1) page per issue; and 

        (d)  a
brief in support of such party's proposed rulings and remedies, provided that the brief shall not exceed twenty (20) pages. This page limitation shall apply
regardless of the number of issues raised in the ADR proceeding but may be amended by the neutral to the extent required to justly resolve the disputes related thereto. 

        Except
as expressly set forth in subparagraphs 4(a)—4(d), no discovery shall be required or permitted by any means, including depositions, interrogatories, requests for
admissions, or production of documents. 

        5.    The
hearing shall be conducted on two (2) consecutive days and shall be governed by the following rules: 

        (a)  Each
party shall be entitled to five (5) hours of hearing time to present its case. The neutral shall determine whether each party has had the five
(5) hours to which it is entitled. 

        (b)  Each
party shall be entitled, but not required, to make an opening statement, to present regular and rebuttal testimony, documents or other evidence, to cross-examine
witnesses, and to make a closing argument. Cross-examination of witnesses shall occur immediately after their direct testimony, and cross-examination time shall be charged against the party conducting
the cross-examination. 

        (c)  The
party initiating the ADR shall begin the hearing and, if it chooses to make an opening statement, shall address not only issues it raised but also any issues raised
by the responding party. The responding party, if it chooses to make an opening statement, also shall address all issues raised in the ADR. Thereafter, the presentation of regular and rebuttal
testimony and documents, other evidence, and closing arguments shall proceed in the same sequence. 

        (d)  Except
when testifying, witnesses shall be excluded from the hearing until closing arguments. 

        (e)  Settlement
negotiations, including any statements made therein, shall not be admissible under any circumstances. Affidavits prepared for purposes of the ADR hearing also
shall not be admissible. As to all other matters, the neutral shall have sole discretion regarding the admissibility of any evidence. 

        6.    Within
seven (7) days following completion of the hearing, each party may submit to the other party and the neutral a post-hearing brief in support of
its proposed rulings and remedies, provided 

that such brief shall not contain or discuss any new evidence and shall not exceed ten (10) pages. This page limitation shall apply regardless of the number of issues raised in the ADR
proceeding. 

        7.    The
neutral shall rule on each disputed issue within fourteen (14) days following completion of the hearing. Such ruling shall adopt in its entirety the proposed
ruling and remedy of one of the parties on
each disputed issue but may adopt one party's proposed rulings and remedies on some issues and the other party's proposed rulings and remedies on other issues. The neutral shall not issue any written
opinion or otherwise explain the basis of the ruling. 

        8.    The
neutral shall be paid a reasonable fee plus expenses. Unless otherwise determined by the neutral, each party shall bear its own fees and expenses, and shall each pay
one half of the neutral's fees and expenses. 

        9.    The
rulings of the neutral the allocation of fees and expenses shall be binding, non-reviewable, and non-appealable, and may be entered as a final
judgment in any court having jurisdiction. 

        10.  Except
as provided in paragraph 9 or as required by law, the existence of the dispute, any settlement negotiations, the ADR hearing, any submissions (including
exhibits, testimony, proposed rulings, and briefs), and the rulings shall be deemed Confidential Information. The neutral shall have the authority to impose sanctions for unauthorized disclosure of
Confidential Information. 

QuickLinks

EXHIBIT 10.10

LICENSE AGREEMENT BETWEEN CALORIE MANAGEMENT SYSTEMS, INC. AND SENSORS FOR MEDICINE AND SCIENCE, INC.

RECITALS

CONFIDENTIAL TREATMENT REQUEST

APPENDIX 1.11

APPENDIX 1.18(A)

APPENDIX 1.18(A) CONTINUED

APPENDIX 1.18(B)

APPENDIX 1.18(B) CONTINUED

APPENDIX 14.5 ALTERNATIVE DISPUTE RESOLUTIONQuickLinks
 -- Click here to rapidly navigate through this document

        *Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 

        EXHIBIT 10.22  

  
 

    MICROLIFE—HEALTHETECH
  INTERNATIONAL DISTRIBUTION AGREEMENT    
  

        This International Distribution Agreement ("Agreement") is made and entered into as of this 19th day
of March, 2002 ("Effective Date"), by and between HEALTHETECH INC., a Delaware corporation having its
principal place of business at 523 Park Point Drive, Third Floor, Golden, Colorado 80401 USA ("HealtheTech"), and MICROLIFE
CORPORATION ("Distributor"), a Taiwanese corporation having its registered
office at 9F, 431, RuiGang Road, NeiHu, Taipei 114, Taiwan, R.O.C. 

 
 

RECITALS    
  

        WHEREAS, HealtheTech is a personal health monitoring company that develops, manufactures, and markets various
devices, software, and services for consumer health, fitness, and nutrition. 

        WHEREAS, Distributor is the world's leader in blood pressure monitoring and thermometer monitoring technology. 

        WHEREAS, HealtheTech wishes to appoint Distributor as an authorized exclusive distributor of certain HealtheTech products in the
Territories, and Distributor wishes to accept this appointment, subject to the terms and conditions of this Agreement. 

        ACCORDINGLY, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows: 

        1.    DEFINITIONS. 

        1.1  "Affiliate" means, with respect to a party, any person or entity that controls, is controlled by, or is under common
control with such party, where "control" means ownership of fifty percent (50%) or more of the outstanding voting securities (but only as long as such person or entity meets these requirements). 

        1.2  "End User" means a person, company, or other legal entity that purchases a Product for its own internal purposes and not
for distribution to, or use on behalf of, others. 

        1.3  "End User Agreement" means the written agreement between HealtheTech and an End User pursuant to which such End User
receives a limited, non-exclusive, non-transferable right to use any software associated with the Products in accordance with such agreement. 

        1.4  "HealtheTech Marks" means the trademarks, service marks and trade names of HealtheTech listed in Exhibit D (as
such list may be updated from time to time by HealtheTech upon notice to Distributor). 

        1.5  "Intellectual Property Rights" means all present and future worldwide copyrights, trademarks, trade secrets, patents,
patent applications, moral rights, contract rights, and other 

        1.6  "Markets" means those markets set forth in Exhibit C 

        1.7  "BodyGem Measurement Services" means the providing of metabolic measurements using the BodyGem metabolic measurement
device manufactured by HealtheTech. 

        1.8  "Products" means only those devices of HealtheTech that are specifically listed in the attached Exhibit A.
HealtheTech may change the specifications, components, design, performance and appearance of any Product at any time. HealtheTech will give Distributor written notice of any such change, whereupon
Exhibit A will be amended to reflect the change. 

        1.9  "Sales Targets" means the annual and quarterly sales targets established by the parties in accordance with this
Agreement. The Sales Targets for the Term are set forth in the attached 

 

Exhibit B. Distributor hereby acknowledges the sales targets are reasonable and constitute a material obligation herein. 

        1.10 "Single Use Breathing Insert" means the "disposable" facemask or mouthpiece that an individual breathes into during a
BodyGem metabolic measurement. This Insert is designed for one-time use and must be discarded at the end of a successful measurement. 

        1.11 "Service Affiliate" means a joint venture, cooperative or other entity fifty one percent (51%) or more owned by
Distributor and established to provide BodyGem Measurement Services to customers in the Territories in each Market using Products. 

        1.12 "Sponsor" means to financially support or officially endorse through contribution of funds, Products or other resources. 

        1.13 "Territories" means the geographical areas described in the attaches Exhibit C 

        1.14 "User Documentation" means the user documentation and instruction manuals furnished to Distributor by HealtheTech for
distribution along with the Products. 

        2.    RELATIONSHIP OF THE PARTIES. 

        2.1  Appointment. HealtheTech hereby appoints Distributor, and Distributor hereby accepts HealtheTech's appointment, as
HealtheTech's exclusive Distributor of Products in the Markets in the Territories during the Term and subject to and in accordance with the provisions of this Agreement, including the restrictions and
conditions of exclusivity provided in Exhibit B. 

        2.2  License Fee. As consideration for exclusivity within the Territories and within the Markets through December 31,
2003. Distributor will pay to HealtheTech a non-refundable up front fee of Two Million
Dollars ($2,000,000 U.S.) which will be paid in accordance with the following license fee payment schedule: 

	Payment Amount (U.S. $t:
	 	Payment Due Date:

	$	110,000.00	 	Upon the Effective Date
	$	110,000.00	 	April 15, 2002
	$	110,000.00	 	May 15, 2002
	$	1,670,000.00	 	June 1, 2002

        2.3  Exclusivity. Exclusivity will be maintained beyond 2003 on a year by year basis through the term of the agreement by
meeting or exceeding minimum sales targets as defined in Exhibit B. During the exclusivity period, HealtheTech will not: 

        (a)  appoint
another distributor of Products in markets whose territory includes any portion of the Markets in the Territories; or 

        (b)  make
direct sales of Products to dealers or retailers in the Markets located in the Territories. 

        2.4  Proprietary Information. Subject to all the terms and conditions of this Agreement, HealthTech may provide to
Distributor, during the Term of this Agreement. Proprietary Information in connection with Distributor's distribution of the Product in accordance with this Agreement.
"Proprietary Information" means the following information of HealtheTech, to the extent previously, currently or subsequently disclosed to Distributor
under this Agreement or otherwise: know-how and information relating to the Products, training for the Products, Product technology, the composition, structure, organization, and use of
the Products, the software incorporated in the Products (including, code, algorithms, schematics, data, processes), ideas and inventions (whether patentable or not) related to the Products,
information about HealtheTech's business, (including, names and expertise of employees and consultants and other technical, business, financial, customer and product development plans, forecasts,
strategies and information). 

2

 

        2.5  Independent Contractor. Distributor is an independent contractor and not an agent, employee, franchise or partner of
HealtheTech, and is acting in the ordinary course of business. Distributor does not have any authority to, and will not create or assume any obligation, express or implied, on behalf of HealtheTech.
Distributor shall be responsible for all taxes and payments concerning Distributor, its employees and its sales representatives. This Agreement does not create or evidence any joint venture or
partnership of the parties. 

        3.    LICENSES. 

        3.1  Proprietary Information Sublicense. HealtheTech grants to Distributor the right to sublicense any Proprietary Information
to Distributor's Service Affiliates necessary to enable Distributor's Service Affiliates to perform Measurement Services using Products. Distributor agrees to obligate any such Service Affiliates to
the obligations defined in Exhibit F attached hereto. 

        3.2  Subdistributor Agreements. Before distributing the Products to any subdistributor, Distributor must enter into a binding,
written agreement with such subdistributor, that contains terms no less restrictive than, and providing substantially similar protection under the law of the applicable countries in the Territories
to, those set forth in this Agreement. Distributor will provide HealtheTech with a copy of the form of the Subdistributor Agreement prior to first use in connection with the Products. Distributor will
provided complete and accurate copies of all such agreements to HealtheTech prior to execution and within thirty (30) days after the execution thereof. Distributor will enforce each such
agreement with at least the same degree of diligence that Distributor uses to enforce similar agreements for its own products or other software products that it distributes, but in no event less than
reasonable efforts. Distributor will immediately notify HealtheTech if Distributor becomes aware of any breach of any such agreement relating to the Products. Upon the termination of any such
agreement, Distributor will use all reasonable efforts to obtain from the subdistributor all Products in such subdistributor's possession or control. 

        4.    SALES TARGETS. 

        4.1  Distributor
shall either (a) purchase a minimum total volume of Products per calendar year during the duration of this agreement equal to the Sales Targets each
calendar year provided in Exhibit B, or (b) pay HealtheTech the amounts equivalent to the calendar year Sales Targets as set forth in the Sales Targets definitions of Exhibit B.
Sales Targets for years beyond 2002 and 2003 will be mutually agreed upon by the parties in writing in accordance with Exhibit B. 

        5.    MARKETING OF PRODUCTS. 

        5.1  Obligations of Distributor. 

        (a)  Distributor
will use its best efforts aggressively to develop sales of the Products as well as to co-market HealtheTech products and services in the
Territories. In furtherance thereof, Distributor will fulfill the obligations defined in Exhibit F and shall cause any Service Affiliate or sublicense to conform to the obligations defined in
Exhibit F. 

        (b)  Provide
to HealtheTech the right of first negotiation to evaluate and negotiate rights to re-sell products manufactured by Distributor that have not yet been
offered to other distributors. This right of first negotiation shall consist of Distributor notifying HealtheTech of the availability of a new product and its associated proposed pricing, and
providing HealtheTech sixty (60) days to evaluate and exclusively negotiate with Distributor terms for reselling the product in the United States. In the event that the parties are unable to
come to a mutual agreement on the terms for reselling the product within that 60 day period, Distributor shall have the right to negotiate with other parties concerning the products offered to
HealtheTech. 

        (c)  Distributor
hereby grants to HealtheTech a non-exclusive right to distribute any Chinese language version of any nutrition and exercise logging software
program that it has or 

3

 

will develop during the Term of this Agreement at pricing to be mutually agreed to by the parties. 

        5.2  Obligations of HealtheTech. HealtheTech will: 

        (a)  provide
Distributors reasonable advance notice in the event that it discontinues production of any of the Products; 

        (b)  refer
to Distributor all inquiries for purchase of Products received from within the Territories; 

        (c)  keep
Distributor informed of any Product complaints or adverse reactions that are, in HealtheTech's reasonable judgment, significant, and of all matters that are, in
HealtheTech's reasonable judgment, important concerning the quality and performance of Products; and 

        (d)  provide
technical specifications and other information required to support Distributor's securing of registrations, permits, licenses, approvals and other governmental
actions required to import, handle, market, sell, demonstrate, use or distribute Products in the Territories. 

        (e)  Qualify
all Products shipped to the Distributor in the European Market for "CE" certification marking, and appropriately mark all such Products shipped to Distributor in
the European Market with the CE mark. 

        (f)    Qualify
all Products shipped to the Distributor in the Taiwan Market for either "UL" or "CE" certification marking, and appropriately mark all such
Products shipped to Distributor in the Taiwanese Market with either the UL or CE mark 

        (g)  Provide
to Distributor the right of first negotiation to add new products offered by HealtheTech to the list of Products provided in Exhibit A hereto for the
Territories and the Markets subject to the terms of this Agreement. This right of first negotiation shall consist of HealtheTech notifying Distributor of the availability of a new product and its
associated proposed pricing to Distributor, and providing Distributor sixty (60) days to evaluate and exclusively negotiate with HealtheTech pricing and Sales Targets associated with the new
product. In the event Distributor elects not to include the new product to the list of Products, or in the event the parties are unable to come to a mutual agreement on the pricing and Sales Targets
associated with the new product terms within that 60 day period, HealtheTech shall have the right to negotiate with other parties for distribution rights for that product in the Markets and
Territories defined herein. 

        (h)  Provide
to Distributor the first right of competitive bid for the manufacture of the disposable mouthpiece and mask units outside of the continental US. This first right
of competitive bid shall consist of HealtheTech notifying Distributor of the potential of manufacturing outside of the US and providing Distributor with product specifications. After which, sixty
(60) days will be provided to Distributor to evaluate and exclusively negotiate with HealtheTech production pricing and quantities associated with the manufacture of said product. In the event
Distributor elects not to manufacture said product, or in the event the parties are unable to come to a mutual agreement on the production pricing and quantities associated with the said product
within that 60 day period, HealtheTech shall have the right to negotiate with other parties for manufacturing rights for that product outside of the continental US. 

        (i)    use
reasonable efforts to negotiate a license agreement with Health Hero Network that may encompass rights to Health Hero Network's remote health monitoring products and
services, to include manufacturing and sales distribution rights within the Territory and Markets described herein. 

4

 

        5.3  Forecasts. At least fifteen (15) days before the beginning of each calendar quarter, Distributor will furnish
HealtheTech with a rolling forecast of sales for the following six (6) months of Product by units within each Product group, and an estimate of Distributor's forthcoming orders for Products by
units for the same six (6) month period. Forecasts are not binding on Distributor; however, Distributor acknowledges that compliance with this provision is a material obligation herein. 

        5.4  Reports. Distributor will furnish HealtheTech with an annual marketing plan (detailing planned sales training, staffing,
convention and trade show attendance, advertising, etc.) not less than ninety (90) days before the start of each HealtheTech's calendar year. Distributor will also give HealtheTech a written
summary of Distributor's marketing initiatives, quarterly sales reports, and such other information as HealtheTech may reasonably request within fifteen (15) days after the end of each calendar
quarter. No later than the fifth work day of each month, Distributor shall report to Healthetech in writing the number of units of Product and the number of units of Single Use Breathing Inserts that
were sold to (their) customers in the previous month. 

        5.5  Audits. HealtheTech will have the right, during normal business hours and upon at least ten (10) days prior
notice, to have an independent audit firm selected by HealtheTech and reasonably acceptable to Distributor inspect Distributor's facilities and audit Distributor's records relating to Distributor's
activities pursuant to this Agreement in order to verify that Distributor has paid to HealtheTech the correct amounts owed under this Agreement and otherwise complied with the terms of this Agreement.
The audit will be conducted at HealtheTech's expense, unless the audit reveals that Distributor has underpaid the amounts owed to HealtheTech by five percent (5%) or more in any month, in which case
Distributor will reimburse HealtheTech for all reasonable costs and expenses incurred by HealtheTech in connection with such audit. Distributor will promptly pay to HealtheTech any amounts shown by
any such audit to be owing plus interest as provided in Section 6.6. Any confidential or proprietary information of Distributor disclosed to HealtheTech in the course of the audit will be
subject to the confidentiality provisions between Distributor and HealtheTech in this Agreement. 

        6.    PURCHASE AND SALE OF PRODUCTS. 

        6.1  Orders. Distributor's orders for Products are subject to acceptance by HealtheTech and to the provisions of this
Agreement. Distributor shall submit a written purchase order to HealtheTech for each order and HealtheTech shall transmit a written or verbal (telephone call) order confirmation within two
(2) business days from receipt of the purchase order confirming the Product quantities to be shipped and the estimated shipping date. Once a purchase order is accepted, HealtheTech will fill
and ship orders in accordance with its customary procedures subject to Product availability. HealtheTech may allocate its output according to its sole judgment if demand exceeds its manufacturing
capacity. HealtheTech may choose the mode of shipment and carrier unless otherwise specified in the order. 

        6.2  Delivery. HealtheTech will deliver all Products sold to Distributor Ex Works at HealtheTech's warehouse (Incoterms 2000).
Title to and all risk of loss of or damage or casualty to such Products will pass to Distributor upon delivery to the carrier. If Product is not shipped freight collect, Distributor will reimburse
HealtheTech on demand for all shipping charges, premiums for freight insurance, customs duties, import and export fees, and transportation costs incurred by HealtheTech. HealtheTech may, at its
option, select the freight forwarder. In addition, if no customs broker is specified, HealtheTech may, at its option, select a customs broker for the specified shipment. 

        6.3  Price. HealtheTech will sell Products to Distributor under the Agreement at the prices set forth in HealtheTech's
international price list in effect on the date of HealtheTech's acceptance of Distributor's order. A copy of HealtheTech's international price list in effect on the Effective Date 

5

 

of this Agreement is attached as Exhibit E. HealtheTech may change its international price list from time to time, provided that any such change will not be effective under this Agreement
unless and until the expiration one (1) calendar year after HealtheTech gives Distributor written notice of the change. Notice of price changes shall be set forth in revisions to HealtheTech's
international price lost or international order form, if HealtheTech increases its prices by more than fifteen percent (15%) in any twelve (12) month period during the Term. All prices are
payable in United States currency unless provided otherwise on the applicable invoice. 

        6.4  Payment. Unless otherwise specified in the applicable order, Distributor will pay each of HealtheTech's invoices within
forty-five (45) days after the date of the invoice. HealtheTech may at its discretion refuse orders, require payment in full, ship C.O.D. or halt shipments in transit if any prior
invoice is not paid in full or if HealtheTech deems such steps necessary to secure payment. HealtheTech may establish and modify credit limits for Distributor and require payment through a sight draft
or an irrevocable letter of credit issued or confirmed by a bank acceptable to HealtheTech and shall refuse to accept an order or ship Products until such letter of credit has been delivered to
HealtheTech. 

        6.5  Taxes. The purchase prices and other amounts specified in this Agreement do not include sales, use or other applicable
taxes, duties, tariffs, or customs fees unless expressly stated to the contrary. Distributor will pay all such taxes, duties, tariffs, customs fees or other required import/export fees. 

        6.6  Interest. Any amount not paid when due will be subject to finance charges at the rate of one and one-haft
percent (1.0%) per month or the maximum rate permitted by applicable law, whichever is less, determined and compounded on a daily basis from the date due until the date paid. Payment of such finance
charges will not excuse or cure Distributor's breach or default for late payment. If HealtheTech retains a collection agency, attorney or other person or entity to collect overdue payments, all
collection costs, including but not limited to reasonable attorney's fees, will be payable by Distributor. 

        6.7  Returns. Authorization is required for all returns and a Returned Goods Authorization
("RGA") number must be obtained prior to returning product to HealtheTech. An RGA number can be obtained by calling HealtheTech Customer Support
Services at 800 345-4207 and requesting an RGA number for specified product(s). Please include quantity, part numbers and lot numbers. All returns are to be sent to
HealtheTech, Inc. 325 Los Gatos-Saratoga, Los Gatos, CA 95030 USA. Returns of Products from Distributor's European Market shall be returnable to HealtheTech's European Manufacturing facility
when and if that facility becomes operational, and HealtheTech agrees to provide Distributor notification of when such a facility becomes operational and the corresponding return shipping address at
that time. For all returns, an RGA number must appear on the outside of the box. HealtheTech will not accept or return any merchandise that: (a) is a special order; (b) has been held by
the Distributor for more than ninety (90) days; (c) is in unsalable condition, used merchandise, or merchandise returned in damaged packaging or shelf box; or (d) has not been
shipped freight prepaid (C.O.D. shipments will not be accepted). HealtheTech reserves the right to have final approval on all merchandise returns. All
returns will be subject to a 20% reprocessing and restocking charge unless otherwise agreed in writing by HealtheTech. 

        7.    SUPPORT. 

        7.1  By Distributor. Distributor will be solely responsible for performing, in a manner consistent with good industry
practice, all installation, training, support of Products, and other services requested or required by subdistributors or End Users who obtain Product from Distributor. Distributor may not refer any
subdistributor or End User to HealtheTech for such 

6

 

support. Distributor may require subdistributors to provide such support to End Users but shall ensure that subdistributors do not refer End Users to HealtheTech for such support. 

        7.2  By HealtheTech. HealtheTech will provide to Distributor reasonable second-level maintenance and support services for the
Products. HealtheTech will provide standard and reasonable maintenance and support to Distributor during regular business hours (Monday through Friday, 8:30 a.m. to 5:00 p.m. MT,
excluding holidays). HealtheTech has no obligation under this Agreement to provide any services to, or respond to any requests from, subdistributors or End Users. However, HealtheTech reserves the
right to establish and maintain contact with any subdistributor or End User in order to facilitate the second level support. 

        8.    CONFIDENTIALITY. 

        8.1  Confidential Information. Each party (the "Disclosing Party") may from
time to time during the term of this Agreement disclose to the other party (the "Receiving Party") certain information regarding the Disclosing Party's
business, including technical, marketing, financial, employee, planning, and other confidential or proprietary information ("Confidential Information").
The Disclosing Party will mark all Confidential Information in tangible form as "confidential" or "proprietary" or with a similar legend. The Disclosing Party will identify all Confidential
Information disclosed orally as confidential at the time of disclosure. Regardless of whether so marked or identified, however, any information that the Receiving Party knew or should have known,
under the circumstances, was considered confidential or proprietary by the Disclosing Party, will be considered Confidential Information of the Disclosing Party. 

        8.2  Protection of Confidential Information. The Receiving Party will not use any Confidential Information of the Disclosing
Party for any purpose not expressly permitted by this Agreement, and will disclose the Confidential Information of the Disclosing Party only to the employees or contractors of the Receiving Party who
have a need to know such Confidential Information for purposes of this Agreement and who are under a duty of confidentiality no less restrictive than the Receiving Party's duty hereunder. The
Receiving Party will protect the Disclosing Party's Confidential Information from unauthorized use, access, or disclosure in the same manner as the Receiving Party protects its own confidential or
proprietary information of a similar nature and with no less than reasonable care. 

        8.3  Exceptions. The Receiving Party's obligations under Section 8.2 with respect to any Confidential Information of
the Disclosing Party will terminate if and when the Receiving Party can document that such information: (a) was already known to the Receiving Party at the time of disclosure by the Disclosing
Party; (b) is disclosed to the Receiving Party by a third party who had the right to make such disclosure without any confidentiality restrictions; (c) is, or through no fault of the
Receiving Party has become, generally available to the public; or (d) is independently developed by the Receiving Party without access to, or use of, the Disclosing Party's Confidential
Information. In addition, the Receiving Party will be allowed to disclose Confidential Information of the Disclosing Party to the extent that such disclosure is (i) approved in writing by the
Disclosing Party, (ii) necessary for the Receiving Party to enforce its rights under this Agreement; or (iii) required by law or by the order or a court of similar judicial or
administrative body, provided that the Receiving Party notifies the Disclosing Party of such required disclosure promptly and in writing and cooperates with the Disclosing Party, at the Disclosing
Party's reasonable request and expense, in any lawful action to contest or limit the scope of such required disclosure. 

        8.4  Return of Confidential Information. The Receiving Party will either, at its option, return to the Disclosing Party or
destroy all Confidential Information of the Disclosing Party in the Receiving Party's possession or control and permanently erase all electronic copies of such Confidential Information promptly upon
the written request of the Disclosing Party or the expiration or termination of this Agreement, whichever comes first. At the Disclosing Party's 

7

 

request, The Receiving Party will certify in writing signed by an officer of the Receiving Party that it has fully complied with its obligations under this Section 8.4. 

        8.5  Confidentiality of Agreement. Neither party will disclose any terms of this Agreement to anyone other than its Affiliates
attorneys, accountants, and other professional advisors under a duty of confidentiality except (a) as required by law or (b) pursuant to a mutually agreeable press release or
(c) in connection with a proposed merger, financing, or sale of such party's business (provided that any third party to whom the terms of this Agreement are to be disclosed signs a
confidentiality agreement reasonably satisfactory to the other party to this Agreement). 

        9.    PROPRIETARY RIGHTS. 

        9.1  Ownership. 

        9.1.1  Products. The Products and all worldwide Intellectual Property Rights therein, are the exclusive property of
HealtheTech and its suppliers. All rights in and to the Products not expressly granted to Distributor in this Agreement are reserved by HealtheTech and its suppliers. Nothing in this Agreement will be
deemed to grant, by implication, estoppel, or otherwise, a license under any of HealtheTech's existing or future patents; HealtheTech agrees that it will not assert any of its rights under such
patents against Distributor or its Affiliates based upon the use, distribution, and sublicensing by Distributor or its Affiliates or their distributors of the Products as permitted by this Agreement. 

        9.2  Enforcement. Distributor will immediately notify HealtheTech of any infringement, misappropriation or violation of any
HealtheTech's proprietary rights. In the event of any such infringement, misappropriation or violation relating to the activities of Distributor or any of its employees, agents, representatives or
customers, Distributor will take all steps reasonably necessary to terminate the same. Distributor will immediately notify HealtheTech of any legal proceeding initiated by Distributor in connection
with such infringement, misappropriation or violation. HealtheTech may, at its option and expense, assume control of any such proceeding. If HealtheTech assumes control, HealtheTech will have
exclusive control over the prosecution and settlement of the proceeding and Distributor will provide such assistance related to such proceeding as HealtheTech may reasonably request and assist
HealtheTech in enforcing any settlement or order made in connection with such proceeding. 

        9.3  Trademark License. Subject to the terms and conditions of this Agreement, HealtheTech grants to Distributor and those of
its Affiliates which agree in writing to be bound by the terms of this Agreement a non-exclusive, non-transferable (except as permitted under Section 15.2 (Assignment)),
revocable, royalty-free license (without the right to grant sublicenses) to use and reproduce the HealtheTech Marks solely in connection with marketing the Products in the Territories.
Distributor agrees to state in appropriate places on all materials using the HealtheTech Marks that the HealtheTech Marks are trademarks of HealtheTech and to include the symbol TM or
® as appropriate. HealtheTech grants no rights in the HealtheTech Marks other than those expressly granted in this Section 9.3. Distributor acknowledges HealtheTech's exclusive
ownership of the HealtheTech Marks. Distributor agrees not to take any action inconsistent with such ownership and to cooperate, at HealtheTech's request and expense, in any action (including the
conduct of legal proceedings) which HealtheTech deems necessary or desirable to establish or preserve HealtheTech's exclusive rights in and to the HealtheTech Marks. Distributor will not adopt, use,
or attempt to register any trademarks or trade names that are confusingly similar to the HealtheTech Marks or in such a way as to create combination marks with the HealtheTech Marks. Distributor will
provide HealtheTech with samples of all products and materials that contain the HealtheTech Marks prior to their public use, distribution, or display for HealtheTech's quality assurance purposes and
will obtain HealtheTech's written approval before such use, distribution, or display. At HealtheTech's request, Distributor will modify or discontinue any use of the 

8

 

HealtheTech Marks if HealtheTech determines that such use does not comply with HealtheTech's then-current trademark usage policies and guidelines. 

        9.4  Assignments. At the end of the Term, Distributor will assign to HealtheTech or such other person or entity as HealtheTech
may designate all rights, registrations, reservations, licenses, permits and similar items made or obtained by Distributor relating to the Products, the Trademarks, or any other proprietary rights of
HealtheTech. 

        10.  WARRANTIES, REMEDIES AND DISCLAIMERS. 

        10.1 Device Warranty. HealtheTech warrants to and for the benefit of Distributor only that all Products, as delivered
pursuant to Section 6.2, will be free from defects in materials and workmanship in the
course of normal use in compliance with the instructions in the User Documentation, for a period of fifteen (15) months after delivery to Distributor or subdistributors or twelve
(12) months after commercial sale to an end-user customer, whichever is shorter, for BodyGem devices, and for Single Use Breathing Inserts (disposables) the warranty period shall be
ninety (90) days after commercial sale to an end-user customer, unless local law in the Territory dictates a longer period by law, in which the warranty period shall be in
accordance with that law but will not exceed twenty four (24) months after commercial sale to an end-user customer (the "Device Warranty
Period"). HealtheTech will, at its own expense and as its sole obligation and Distributor's exclusive remedy for any breach of this warranty reported to HealtheTech by
Distributor in writing during the Device Warranty Period, at its option, repair, replace or otherwise correct any Product that does not conform to the warranty set forth in this Section 10.1,
provided that Distributor, at HealtheTech's request and Distributor's expense, returns the nonconforming Product to HealtheTech's plant; and such nonconformity is not the result of any use of the
Products other than in strict accordance with HealtheTech's instructions and user manual. 

        10.2  Warranties Made by Distributor. Distributor will not make or publish any representations, warranties, or guarantees on
behalf of HealtheTech or its suppliers concerning the Products that are inconsistent with any warranties made by HealtheTech concerning the Products. 

        10.3  Warranties by Both Parties. Each party represents and warrants that it has full power and authority to enter into and
perform this Agreement, and the person signing this Agreement on such party's behalf has been duly authorized and empowered to enter into this Agreement. Each party represents and warrants it is free
to enter into and perform this Agreement without thereby being in breach of or default under the terms of any other contract, commitment or understanding. 

        10.4  Disclaimer. THE EXPRESS WARRANTIES IN THIS SECTION 10 ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR
STATUTORY, REGARDING THE PRODUCTS OR SOFTWARE OR THE USER DOCUMENTATION, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT OF
THIRD-PARTY RIGHTS. DISTRIBUTOR ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT. 

        11.  INDEMNIFICATION. 

        11.1  Indemnification by Distributor. 

        11.1.1  Distributor
agrees to defend, indemnify and hold harmless HealtheTech and its Affiliates from and against any claims, suits, losses, damages,
liabilities, costs, and expenses (including reasonable attorneys' fees) brought by third parties (including any End User or subdistributor) resulting from or relating to: 

        (a)  any
breach by Distributor of its obligations, duties, or responsibilities under this Agreement; 

9

 

        (b)  any
actions or omissions on the part of Distributor or any of its subdistributors in reproducing, marketing or distributing the Products; 

        (c)  any
representations, warranties, guarantees, or other written or oral statements made by or on behalf of Distributor relating to the Products other than as authorized by
HealtheTech in writing or made in the User Documentation; or 

        11.1.2  Distributor's
obligations under this Section 11.1 are subject to the conditions that HealtheTech give Distributor prompt written notice of any such claim,
allowing Distributor to control the defense and settlement of the claim, and cooperate with Distributor, at Distributor's reasonable request and expense, in defending or settling the claim. 

        11.2  Indemnification by HealthTech. 

        11.2.1  HealtheTech
will defend at its own expense any action against Distributor brought by a third party to the extent that the action is based upon a claim (a) of
bodily injury (including death) or damage to personal property to the extent caused by negligence in the design or manufacture of the Products or (b) that a Product infringes any patents,
copyrights or misappropriates any trade secrets or that the HealtheTech Marks, when used in accordance with this Agreement, infringe any trademark rights of a third party. HealtheTech will pay those
costs and damages finally awarded against Distributor in any such action that are specifically attributable to such claim or those costs and damages agreed to in a monetary settlement of such action. 

        11.2.2  The
foregoing obligations are conditioned on Distributor notifying HealtheTech promptly in writing of such action, Distributor giving HealtheTech sole control of the
defense thereof and any related settlement negotiations, and Distributor cooperating and, at HealtheTech's reasonable request and expense, assisting in such defense. 

        11.2.3  If
the Products or any of the HealtheTech Marks becomes, or in HealtheTech's opinion is likely to become, the subject of an infringement claim, HealtheTech may, at
its option and expense, either (a) procure for Distributor the right to continue exercising the rights licensed to Distributor in this Agreement, (b) replace or modify the Products or
such HealtheTech Mark so that it becomes non-infringing and remains functionally equivalent, or (c) refund to Distributor any payments of license fees or advance royalties made by
Distributor to HealtheTech pursuant to Section 6 (to the extent that
such payments have not been recouped through credits against accrued royalties), and terminate this Agreement by written notice to Distributor, subject to Section 13 (Termination). 

        11.2.4  Notwithstanding
the foregoing, HealtheTech will have no obligation under this Section 11.2 or otherwise with respect to any infringement claim based upon
(i) any unauthorized use, reproduction, or distribution of the Products by Distributor or any of its subdistributors or End Users, (ii) any use of the Products in combination with other
products, equipment, software, or data not supplied by HealtheTech, or (iii) any modification of Products by any person other than HealtheTech or its authorized agents or contractors. This
Section 11.2 states HealtheTech's entire liability and Distributor's sole and exclusive remedy for infringement claims and actions. 

        12.  OTHER OBLIGATIONS OF DISTRIBUTOR. 

        12.1  No Unauthorized Warranties. Distributor will not make or extend on behalf of HealtheTech any written or oral warranty in
repeat of any of the Products except as may be contained in sales literature or brochures that are published or approved in writing by HealtheTech. Distributor will not advise, perform or demonstrate
any use or application of any Product that is not specifically approved in writing by HealtheTech. Distributor will not impair the sterility or integrity of the Products while they are in
Distributor's custody. 

10

 

        12.2  Compliance With Laws. Distributor represents and warrants that is thoroughly familiar with applicable laws, ordinances,
regulations other governmental requirements concerning the importation, handling, marketing, sale, demonstration, use and distribution of Products in the Territories. Distributor will comply with all
laws, ordinances, regulations and other governmental requirements applicable to its business and to the importation, handling, marketing, sale, demonstration, use and distribution of Products pursuant
to this Agreement Distributor will provide to HealtheTech an accurate English translation of the applicable laws, ordinances, regulations and other governmental requirements referenced herein and any
other related documents as may be reasonably requested by HealtheTech. 

        12.3  U.S. Export Controls. Without limiting the generality of Paragraph 8.2, Distributor will not, directly or
indirectly, export or re-export any Products, technical data associated with the Products, or the immediate Products (including, but not limited to, processes, services, data and reports)
derived from use of the Products from the Territories, without first obtaining the appropriate license from the United States Office of Export License from the United States Office of Export Licensing
or its successor. 

        12.4  Insurance. During the Term, Distributor will maintain liability insurance coverage issued by a responsible insurer
satisfactory to HealtheTech as an additional insured and afford HealtheTech not less than twenty (20) days advance notice of cancellation or material change in the policy. Upon HealtheTech's
request, Distributor will provide a certificate of insurance from the insurer certifying that
coverage is in place. Also during the Term, HealtheTech will maintain liability insurance coverage issued by a responsible insurer satisfactory to Distributor as an additional insured and afford
Distributor not less than twenty (20) days advance notice of cancellation or material change in the policy. Upon Distributor's request, HealtheTech will provide a certificate of insurance from
the insurer certifying that coverage is in place. 

        12.5  Noncompete. Distributor warrants and agrees that it does not now and will not during the Term, without the prior written
consent of HealtheTech, directly or indirectly market, sell or promote any product in the Territories that measures metabolism, other than the Products herein. Distributor further warrants and agrees
that it will not manufacture or cause to have manufactured, nor purchase from a third party, any Single Use Breathing Inserts that are not approved in writing by HealtheTech. 

        13.  TERM AND TERMINATION. 

        13.1  Term. Unless earlier terminated pursuant to Section 13.2, the initial term of this Agreement will begin on the
Effective Date and expire on December 31, 2007 (the "Term"). The Term can be extended by mutual written agreement by the parties, subject to
re-negotiation of the Price List. 

        13.2  Termination by HealtheTech. Upon the occurrence of any of the following, HealtheTech may terminate the Term by giving
Distributor written notice of such termination: 

        (a)  any
failure of the Distributor to meet or exceed the most recent annual applicable Sales Targets, including, but not limited to, Distributor's failure at any time during
the Term to have purchased in the applicable calendar year Products at a rate which would meet or exceed the applicable annual Sales Targets (as defined in Exhibit B) then in effect, or
Distributor's failure to meet or exceed the Q1 2002 Sales Targets set forth; 

        (b)  any
material change in the general management, ownership or control of Distributor, including without limitation the sale, transfer or relinquishment by Distributor of
any substantial interest in the ownership of the business to be carried on by Distributor under this Agreement, unless such change is approved in advance and in writing by an officer of HealtheTech; 

11

 

        (c)  any
assignment or attempted assignment of this Agreement by Distributor without the prior written consent of HealtheTech; 

        (d)  the
failure of Distributor to make any payment when due; 

        (e)  Distributor
directly or indirectly markets, sells or promotes any product in the Territories that competes with any HealtheTech Product or has a significant financial
interest in any company or individual that is manufacturing, assembling, producing, marketing, selling or distributing any product that competes with any HealtheTech Product; 

        (f)    Distributor
promotes or solicits the sale of Products directly or indirectly to customers located outside the Territories; 

        (g)  the
insolvency of Distributor, the filing of a petition in bankruptcy by or against Distributor, the appointment of a receiver for Distributor or Distributor's property,
the execution of an assignment by Distributor of all or substantially all of its assets for the benefit of its creditors, or the conviction of Distributor or any principal or manager of the
Distributor for any crime tending to adversely affect the ownership or operation of business; or 

        (h)  any
conduct by the Distributor, its agents, employees or other representatives which is unlawful unprofessional or otherwise detrimental to the business reputation of
HealtheTech; 

        (i)    any
failure by Distributor to perform any of its obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof
by HealtheTech to Distributor. 

        13.3  Termination by Distributor. Upon the occurrence of any of the following, Distributor may terminate the Term by giving
HealtheTech written notice of such termination: 

        (a)  HealtheTech
increases the prices at which Distributor may purchase Products under this Agreement by more than fifteen percent (15%) in any twelve (12) month
period during the Term, provided that the Distributor gives HealtheTech written notice of such termination prior to such increased prices becoming effective pursuant to Paragraph 6.3; 

        (b)  the
insolvency of HealtheTech, the filing of a petition in bankruptcy by or against HealtheTech, the appointment of a receiver for HealtheTech or HealtheTech's property,
or the execution of an assignment by HealtheTech of all or substantially all of its assets for the benefit of its creditors; or 

        (c)  any
failure by HealtheTech to perform any of its obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof
by Distributor of HealtheTech. 

        13.4  Effect of Termination. 

        13.4.1  Any
termination pursuant to Paragraph 13.2 or 13.3 will be without prejudice to any other right or remedy afforded to either party under this Agreement or any
applicable law (e.g., in the case of any breach or default by the other party), and will not affect any rights or obligations which have arisen prior to the date of such termination. Termination of
the Agreement shall not relieve the parties of any obligation or liability arising prior to such termination, including the obligation to maintain the confidentiality of certain information as
referenced in Section 8.1 above. In the event of termination, Distributor will: 

        (a)  not
have any further right to market, sell or distribute Products in the Territories; 

        (b)  furnish
HealtheTech with such information relating to the marketing, sale or distribution of Products in the Territories as HealtheTech may reasonably request 

12

 

(including, but not limited to, information as to calls or the status of any negotiations for the sale of the Products); and 

        (c)  will
return to HealtheTech any Products, sales materials, manuals, price lists, and mailing lists provided by HealtheTech to Distributor for demonstration, promotional,
or marketing purposes. 

        (d)  will
return to HealtheTech any products which have not been committed for sale to a customer. HealtheTech will repurchase these Products at the Distributor's cost. 

        13.5  Standards of Performance. Distributor acknowledges that the standards of performance imposed on it by this Agreement are
reasonable and that any failure on its part to comply fully with alt of the terms and conditions set forth in this Agreement shall constitute a material breach and good cause for termination of this
Agreement. 

        13.6  Acknowledgment. Any expiration or termination of the Term will be final and absolute Distributor waives any right,
either express or implied by applicable law or otherwise, to renewal of this Agreement or to any damages or compensation for any expiration or termination of the Term in accordance with this
Section 13. Each of the parties have considered the possibility of such expiration or termination and the possibility of loss and damage resulting therefrom in making expenditures pursuant to
the performance of this Agreement. It is the express intent and agreement of the parties that neither will be liable to the other for damages or otherwise by reason of the expiration or termination of
the Term as provided for herein. 

        13.7  Survival. Sections 2.5, 5.5, 6.6, 8, 10.1, 11, 14, and 15.5-15.11 will survive expiration or termination of
this Agreement for any reason. 

        14.  LIMITATION
OF LIABILITY. EXCEPT FOR CLAIMS ARISING UNDER SECTION 11.2 HEALTHETECH'S LIABILITY (WHETHER IN TORT, CONTRACT OR OTHERWISE AND NOTWITHSTANDING ANY FAULT,
NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY, OR STRICT LIABILITY OF HEALTHETECH) UNDER THIS AGREEMENT OR WITH REGARD TO ANY PRODUCTS OR OTHER ITEMS FURNISHED UNDER THIS
AGREEMENT WILL IN NO EVENT EXCEED THE COMPENSATION PAID TO HEALTHETECH UNDER THIS AGREEMENT. IN NO EVENT WILL HEALTHETECH BE LIABLE FOR ANY INDIRECT, INCIDENTAL SPECIAL OR CONSEQUENTIAL DAMAGES
ARISING OUT OF ITS PERFORMANCE OR NONPERFORMANCE OF THIS AGREEMENT OR THE USE OF, INABILITY TO USE, OR RESULTS OF USE OF ANY PRODUCTS. 

        15.  MISCELLANEOUS. 

        15.1  Force Majeure. Neither party will be liable for, or be considered to be in breach of or default under this Agreement on
account of, any delay or failure to perform as required by this Agreement (other than for payments owed) as a result of any cause or condition beyond such party's reasonable control. 

        15.2  Assignment. Distributor may not assign or transfer, by operation of law or otherwise, any of its rights under this
Agreement or delegate any of its duties under this Agreement to any third party other than Distributor's Affiliates without HealtheTech's prior written consent. Any attempted assignment or transfer in
violation of the foregoing will be void. No assignment by Distributor, with or without HealtheTech's consent, will relieve Distributor's right to hire its own employees to assist in the discharge of
Distributor's responsibilities under this Agreement. 

        15.3  Notice. Notices or consents under this Agreement will be in writing and delivered personally or, if mailed, will be sent
certified mail, return receipt requested, or by telex or facsimile or overnight express service, if addressed to the recipient s address set forth on the signature page 

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of this Agreement, or in either case to such other address as may be established by notice to the other party Notice will be effective only upon actual receipt. 

        15.4  Nonwaiver. The failure of either party to insist upon or enforce strict performance of any of the provisions of this
Agreement or to exercise any rights or remedies under This Agreement will not be construed as a waiver or relinquishment to any extent of such party' right to assert or rely upon any
such provisions, rights or remedies in that or any other instance; rather, the same will be and remain in full force and effect. 

        15.5  Interpretation. The English language of the Agreement will govern any interpretation of or dispute regarding the terms
of this Agreement. Paragraph captions are for convenience of reference and do not alter or limit the terms of this Agreement. 

        15.6  Remedies. Except as provided in Section 10 (Warranties, Remedies and Disclaimers) and Section 11
(Indemnification), the parties' rights and remedies under this Agreement are cumulative. Distributor acknowledges that the Products contains valuable trade secrets and proprietary information of
HealtheTech, that any actual or threatened breach of Section 9.3 (Trademark License) or Section 8 (Confidentiality) will constitute immediate, irreparable harm to HealtheTech for which
monetary damages would be an inadequate remedy, and that injunctive relief is an appropriate remedy for such breach. If Distributor continues to distribute the Products after its right to do so has
terminated or expired, HealtheTech will be entitled to immediate injunctive relief without the requirement of posting bond, including an order directing that any Products that Distributor attempts to
import into any country or territory be seized, impounded, and destroyed by customs officials. If any legal action is brought to enforce this Agreement, the prevailing party will be entitled to
receive its attorneys' fees, court costs, and other collection expenses, in addition to any other relief it may receive. 

        15.7  Severability. If any provision of this Agreement is unenforceable, such provision will be changed and interpreted to
accomplish the objectives of such provision to the greatest extent possible under applicable law and the remaining provisions will continue in full force and effect. Without limiting the generality of
the foregoing, Distributor agrees that Section 14 (Limitation of Liability) will remain in effect notwithstanding the unenforceability of any provision in Section 10 (Warranties,
Remedies and Disclaimers). 

        15.8  Construction. The headings of Sections of this Agreement are for convenience and are not to be used in interpreting this
Agreement. As used in this Agreement, the word "including" means "including but not limited to." 

        15.9  Counterparts. This Agreement may be executed in counterparts, each of which will be considered an original, but all of
which together will constitute the same instrument. 

        15.10  Governing Law; Venue. The rights and obligations of the parties under this agreement shall not be governed by the
provisions of the 1980 United Nations Convention on Contracts for the International Sale of Goods or the United Nations Convention on the Limitation Period in the International Sale of Goods, as
amended; rather, these rights and obligations shall be governed in all respects by the laws of the State of Colorado exclusively, as such laws apply to contracts between Colorado residents performed
entirely within Colorado. Distributor agrees that upon HealtheTech's request, all disputes arising hereunder shall be adjudicated in the state and federal courts having jurisdiction over disputes
arising in Denver, Colorado, and Distributor hereby agrees to consent to the personal jurisdiction of such courts. 

        15.11  Entire Agreement. This Agreement contains the entire agreement, and supersedes any and all prior agreements, between
the parties with regard to the appointment of Distributor as a distributor of Products and Distributor's purchase and sale of Products. HealtheTech will not be bound be, and specifically objects to,
any terms, conditions, or other provisions that are different 

14

 

from or in addition to the provisions of the Agreement (whether or not it would materially alter this correspondence, or otherwise. Without limiting the generality of the foregoing, any printed
terms, conditions of other provisions that are included in or accompany any of the Distributor's orders for Products under this Agreement will not apply to be binding on HealtheTech. This Agreement
may not be waived, amended or rescinded except by a writing signed by the party to be charged thereby. 

        IN WITNESS THEREOF, the parties have executed this Agreement as of the date first above written. 

	 HEALTHETECH, INC.:	 	MICROLIFE CORPORATION:
	

 	

 	
 	

 	

 
	By:	/s/  JAMES R. MAULT      
 James R. Mault, MD

Chairman and CEO

523 Park Point Drive, 3rd Floor

Golden, CO 80401	 	By:	/s/  MORTEN BRUNVOLL      
 Morten Brunvoll

Group Vice President

Hafnerwisenstrasse 4

CH-9442 Berneck / Switzerland

15

 
 

EXHIBIT A
  PRODUCT LIST    
  

        1.    Products.

        (a)  The
HealtheTech BodyGemTM Metabolic Measurement Device and its associated disposable Single-Use Breathing Inserts (disposable mouthpieces or
facemasks). 

        (b)  HealtheTech's
BalanceLogTM Software. 

        (c)  HealtheTech's
BodyGem AnalyzerTM Software. 

        The
parties can add products by mutual written agreement 

 
 
 
EXHIBIT B

SALES TARGETS  

        Distributors Sales Targets are defined for calendar years 2002 and 2003 below. For subsequent calendar years during the Term, the parties agree to use best
efforts to negotiate and mutually agree upon new Sales Targets for the coming calendar year between November 1 and November 30 of the year prior. The mutually agreed upon Sales Targets
shall then apply for the approaching calendar year. For example, the parties shall negotiate and agree upon Sales Targets for year 2004 during the time period November 1 through 30, 2003. This
cycle shall then apply for each subsequent calendar year during the Term. 

        If
all Product minimum Sales Targets are met or exceeded for both calendar year 2002 and 2003, then Distributor's Exclusivity for the Markets and the Territories shall extend through the
following calendar year, year 2004. Likewise, if subsequent calendar year Sales Targets established via the annual cycle
defined above are met or exceeded in any calendar year, Distributor's Exclusivity for the Markets and the Territories shall extend through the following calendar year. Failure by Distributor to meet
or exceed the Sales Targets established in year 2004 shall result in loss of Exclusivity in the subsequent calendar year, and Distributors rights shall convert to non-exclusive upon
January 1, 2005. 

 Sales Targets for European and Taiwanese Markets Combined:  

	1.
	BodyGems. Distributor agrees to meet the following cumulative Sales Targets for BodyGems in the combined European Market and Taiwanese
Markets in the years 2002 and 2003: 

        Year 2002:    [*] total BodyGem units, with [*] of those units purchased before
March 27, 2002. 

        Year 2003:    [*] total BodyGem units. 

        To
facilitate Distributor inventory sufficient to meet the above minimum Sales Targets, the following minimum Distributor purchase volumes per calendar quarter are recommended.
Distributor shall order the specified purchase quantity of BodyGems in each calendar quarter, or at Distributor's option, may elect to pay HealtheTech the equivalent amount of any the required
quantity not purchased (quantity × unit price) due net thirty (30) days from date of invoice and HealthTech shall invoice Distributor for any such amounts at the end
of each quarter ("take or pay") 

        *Portions
denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. 

	BodyGems, Recommended Purchase Volumes

	Calendar Quarter
	 	Units per Quarter

	Q1, 2002	 	[*]
	Q2, 2002	 	[*]
	Q3, 2002	 	[*]
	Q4, 2002	 	[*]
	Q1, 2003	 	[*]
	Q2, 2003	 	[*]
	Q3, 2003	 	[*]
	Q4, 2003	 	[*]

        2.    Disposables. Distributor agrees to meet the following cumulative Sales Targets for Single Use Breathing Inserts
(Disposables) in the combined European Territory and Taiwanese Territory in the years 2002 and 2003: 

        Year 2002:    [*] total units, with [*] of those units purchased before
March 27, 2002. 

        Year 2003:    [*] total units. 

        To
facilitate Distributor inventory sufficient to meet the above minimum Sales Targets, the following minimum Distributor purchase volumes per calendar quarter are required. Distributor
shall order the specified purchase quantity in each calendar quarter, or at Distributor's option, may elect to pay HealtheTech the equivalent amount of any the required quantity not purchased
(quantity × unit price) due net thirty (30) days from date of invoice and HealthTech shall invoice Distributor for any such amounts at the end of each quarter
("take or pay"): 

	Disposables, Recommended Purchase Volumes

	Calendar Quarter
	 	Units per Quarter

	Q1, 2002	 	[*]
	Q2, 2002	 	[*]
	Q3, 2002	 	[*]
	Q4, 2002	 	[*]
	Q1, 2003	 	[*]
	Q2, 2003	 	[*]
	Q3, 2003	 	[*]
	Q4, 2003	 	[*]

 
 

EXHIBIT C
  TERRITORIES AND MARKETS    
  

	I.
	For
Microlife European Distribution, the Territory is defined as Europe.

	II.
	For
Microlife European Distribution, the Market is the retail pharmacy channel.

	III.
	For
Microlife Taiwan Distribution, the Territory is the country of Taiwan

	IV.
	For
Microlife Taiwan Distribution, the Market is the weight management and fitness/exercise channel, specifically excluding applications of medical
nutrition therapy (i.e., applications of indirect calorimetry for medical nutrition therapy) 

 
 

EXHIBIT D
  TRADEMARKS    
  

        Trademarks and tradenames of HealtheTech: 

        HealtheTech
(name and stylized mark) 

        BodyGem

        Your
Body Is Talking. Listen. 

        BalanceLog 

        Calorie
Checkbook 

        Listen
To Your Body 

 
 

EXHIBIT E
  PRICE LIST
  (all prices are Distributor prices in U.S. Dollars)    
  

	1.
	BodyGemTM Metabolic Measurement Device: [*] per unit.

	2.
	BalanceLogTM Software
	a.
	BalanceLog
for Windows: [*]/each (packaged on CD)

	b.
	BalanceLog
for Windows and Palm OS: [*]/each (packaged on CD)

	c.
	Localized
versions for Each Territory: To Be Determined by HealtheTech after localized version requirements are specified 

	3.
	BodyGem AnalyzerTM Software
	a.
	English
version: [*]/each (packaged on CD)

	b.
	Localized
versions for each Territory: To Be Determined by HealtheTech after localized version requirements are specified 

	4.
	Disposables for BodyGem: Single Use Breathing Inserts (Disposables) are packaged in boxes of 20 units. Disposable pricing is based on
the volume quantity of each individual purchase order as follows: 

	Quantity per Purchase Order
	 	Price per Unit ($USD)

	<10,000	 	$	[*]
	10,001-25,000	 	$	[*]
	25,001-50,000	 	$	[*]
	50,001-100,000	 	$	[*]
	>100,000	 	$	[*]

Note: A purchase order for disposables can be placed for any given quantity to secure the disposable volume pricing above and
may specify split shipments over time if all shipments are specified for delivery within the current calendar year. Payment for the full ordered quantity on the purchase order will be invoiced at one
time and full payment for the entire quantity must be made net thirty (30) days from the date of invoice per Section 6.4 

 
 

EXHIBIT F
  DISTRIBUTOR OBLIGATIONS    
  

        Distributor shall, for the Term of this Agreement, perform the following obligations and shall cause any Service Affiliate of Distributor to perform the following
obligations, for the Term of this agreement: 

	(i)
	Provide
for appropriate training to applicable Service Affiliates and Service Affiliate employees sufficient to enable use and promotion of metabolic measurement
services using the BodyGem in 

compliance
with the operating instructions and any training provided by HealtheTech to Distributor, and proper promotion of BalanceLog software and use all reasonable marketing and promotional
efforts to promote the Products. 

    (ii)  Use
its best efforts to market and provide metabolic measurements using the Products to customers in the Market and the Territory. 

  (iii)  Allow
HealtheTech access to visit any Distributor or Service Affiliate operated location during normal business hours and at HealtheTech's sole expense to conduct a
review the Distributor or Service Affiliate facilities and their Products capabilities and if applicable, make suggestions for improvement based upon HealtheTech's experience with the Products.
Distributor agrees to consider such suggestions and make changes it believes, in Distributor's sole discretion, are reasonable. 

    (iv)  Allow
HealtheTech access to visit any Distributor or Service Affiliate location during normal business hours at HealtheTech's sole expense, to confirm calibration and
proper operation of Distributor's or Service Affiliate's BodyGem metabolic measurement devices and at HealtheTech's sole election, to upgrade or exchange out (with upgraded units) Distributor's or
Distributor's Service Affiliate's BodyGem devices when and if HealtheTech deems appropriate. 

    (v)  Use
HealtheTech Products exclusively in Distributor's or Distributor's Service Affiliate's locations, and will not deploy or offer in any of such locations metabolic
measurement services using metabolic measurement devices other than the HealtheTech BodyGem metabolic measurement device and it's Single Use Breathing Inserts. 

    (vi)  Not
knowingly incur any liability on behalf of HealtheTech, nor in any way pledge or purport to pledge HealtheTech's credit; nor describe or hold itself out as an
employee of HealtheTech; nor describe itself other than as a service provider of metabolic measurements using the Products in
relation to HealtheTech metabolic measurement technologies; nor make any claims (medical or otherwise) inconsistent with written product manuals or HealtheTech provided BodyGem training. 

  (vii)  Not
distribute or publish advertising (whether written, broadcast, telecast, posted on web sites or otherwise) created by or for Distributor or Distributor's Service
Affiliate's referring to the Products or using HealtheTech branding (including HealtheTech logos, trademarks, or graphics) without submitting the same to HealtheTech for review and securing specific
HealtheTech approval in writing with regard to the form, manner, extent and wording of each such item of advertising and printed matter, prior to causing such distribution or publishing. Distributor
agrees to comply with the written promotional guidelines provided by HealtheTech. HealtheTech advertising copy, brochures, promotional materials and manuals provided to Distributor by HealtheTech
shall be deemed to be so approved by HealtheTech, unless HealtheTech otherwise informs Distributor in writing. All advertising by Distributor shall be without recourse to HealtheTech for any expense
incurred unless such expense is specifically and reimbursement approved in writing by HealtheTech. 

  (viii)  Acknowledge
that the BodyGem device being supplied to Distributor by HealtheTech is not a medical device, is not approved or cleared by the U.S. Food and Drug
Administration (FDA) as a medical device, and is not being offered by HealtheTech as a medical device. Distributor agrees not to make any medical claims about the HealtheTech Products. 

    (ix)  Order
from HealtheTech its full requirements of supply for the BodyGem and/or components thereof, and shall not use any non-HealtheTech approved Disposable
components with the BodyGem metabolic measurement device. Distributor acknowledges that use of any non-HealtheTech approved breathing insert (mouthpiece or facemask) with the BodyGem
device voids the warranty for such device and may cause the device to operate inaccurately. 

    (x)  Acknowledge
that the Single Use Breathing Inserts are disposable components and are not intended for re-use and that any re-use may present a
risk of transmission of infectious or communicable diseases. Distributor agrees it shall instruct and cause all the Distributor operated clubs not to re-use the Single Use Breathing
Inserts of the BodyGem Metabolic Measurement Device, or 

otherwise misuse the BodyGem Metabolic Measurement Device in a way that is not consistent with HealtheTech provided instructions for use located in the BodyGem Operator's Manual. 

    (xi)  Will
deliver to HealtheTech a binding 3-month forecast and non-binding additional nine-month forecast of BodyGem device and Single
Use Breathing Insert purchase projections no later than the first day of each calendar month. 

  (xii)  Keep
on hand a reasonable inventory of Products (not less than one month's average projected sales) sufficient to allow for prompt delivery of Products to purchasers; 

  (xiii)  Provide
appropriate and professional application advice and counseling for each Product sold by Distributor, and provide prompt follow-up service and
advice to purchasers of Products when so requested by the purchaser; 

  (xiv)  maintain
and furnish periodically, as reasonable requested by HealtheTech, complete and accurate records of sale of each Product sold under this Agreement (e.g.,
showing the date of sale, name and address of the purchaser and the Product serial number or lot number); 

  (xv)  Distribute
to all purchasers of the Product, as requested by HealtheTech, revisions and/or supplements to the Product's operations manual. Product information bulletins
and all other Product related documents or information, and assist in translating accurately such documents or information into a language other than English as appropriate or necessary for
distribution of the Products in the Territories. 

  (xvi)  Assist
in promptly executing Product recalls as directed by HealtheTech, in which event HealtheTech will reimburse Distributor for all documented, reasonable,
out-of-pocket expenses reasonably incurred by Distributor to comply with HealtheTech's directives in connection with repurchasing Products subject to recall; 

 (xvii)  Promptly
advise HealtheTech of complaints that Distributor may receive or become aware of concerning the Products, and telephone or otherwise contact HealtheTech to
report any information of which Distributor becomes aware that suggests that any of the Products may be operating improperly. 

(xviii)  refer
to HealtheTech any inquiry other than a purchase order or potential purchase order from the public, any governmental authority, any trade association or any
news media, publication or reporter concerning the Products or HealtheTech; 

  (xix)  not
market or sell Products outside the Territories or Markets; sell, lease, give away or otherwise provide the Product to any individual for home use or any person or
entity other than as expressly provided herein (selling to a sub-distributor or who in turn sells to a retail pharmacist is not prohibited), and in the case of a Service Affiliate
providing Metabolic Measurement Services, not re-sell the Products; 

  (xx)  Secure
and maintain, in the name of HealtheTech and Distributor any and all registrations, permits, licenses, approval, and other governmental actions required to
import handle, market, sell, demonstrate, use and distribute Products in the Territories, provide to HealtheTech quarterly progress report's on any such action, and promptly provide HealtheTech copies
of all registrations, permits, licenses, approvals, certificates, correspondence and other documentation related to any such action. 

  (xxi)  Provide
to HealtheTech all information, documents and other assistance required by HealtheTech to obtain U.S. export approvals, if any, required to import, handle,
market, sell, demonstrate, use and distribute Product in Territories. 

 (xxii)  Conduct
its business, including, but not limited to the obligations set forth herein, in a professional and lawful manner. 

(xxiii)  if
Distributor appoints any Service Affiliates, sub-distributors, dealers, retailers or other non-employee representatives in accordance with
Paragraph 2.1, Distributor hereby acknowledges that HealtheTech shall have the right to communicate directly with said Service Affiliate, sub-distributor, 

dealer, retailer, or other non-employee representative on all issues related to distribution of the Product in the Territories or any issues arising directly or indirectly from the
distribution of said products. 

 (xxiv)  Distributor
shall contact HealtheTech, in writing, of its interest or intent to sponsor a clinical study that includes any Product, and allow HealtheTech to provide
input, guidance and advice concerning the use of Product in the clinical study, specifically to include the establishment of any protocol or other technical matter related to the Product. 

QuickLinks

MICROLIFE—HEALTHETECH INTERNATIONAL DISTRIBUTION AGREEMENT

RECITALS

EXHIBIT A PRODUCT LIST

EXHIBIT B SALES TARGETS

EXHIBIT C TERRITORIES AND MARKETS

EXHIBIT D TRADEMARKS

EXHIBIT E PRICE LIST (all prices are Distributor prices in U.S. Dollars)

EXHIBIT F DISTRIBUTOR OBLIGATIONS

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