Document:

Prepared by MerrillDirect

Exhibit 10.1

Confidential
Materials omitted and filed separately with the Securities and

Exchange Commission.  Asterisks denote
omissions.

 

OEM PURCHASE AGREEMENT

BY AND BETWEEN

AGILENT
TECHNOLOGIES, INC.

AND

CAMBRIDGE HEART, INC.

3/16/01

 

 

OEM PURCHASE AGREEMENT

THIS
AGREEMENT is entered into between AGILENT TECHNOLOGIES, INC., a Delaware
corporation (“Agilent”) and CAMBRIDGE HEART, INC., a Delaware corporation
(“Supplier”), effective as of March 16, 2001 (the “Effective Date”).  The parties hereby agree as follows:

1.             SCOPE OF AGREEMENT

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

                

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

                

1.3           Term Of Agreement.  This Agreement will commence as of the
Effective Date and continue for a three–year period following the commercial
release and receipt of appropriate regulatory approval for the first OEM
Products (the “Term”), unless terminated earlier under the terms of this
Agreement. After the initial Term, this Agreement will continue automatically
for two (2) additional one–year periods, unless terminated earlier under the
terms of this Agreement.  This Agreement
may be terminated at the end of the initial Term or at the end of any
subsequent renewal period if one party provides the other at least 60 days
prior notice of its intent to terminate.

  

2.             DEFINITIONS

 

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

                

2.1           “ASP” means average selling
price as defined as the list price for which the OEM products are sold to
customers less the average customer discounts (excluding the government
discounts) from Agilent.

                

2.2           “CH 2000 System” means the
stress test system meeting the specifications of Exhibit A.

2.3           “Contract Year” means the 12
months commencing with January 1, 2001 and then each calendar year thereafter.

                

2.4           “Shipment Date” means the date
specified in an Order for the delivery of OEM Products by Supplier to the
common carrier at the F.O.B. point of origin.

                

2.5           “Documentation” means the user
and technical manuals and other documentation that Supplier will make available
with the OEM Products.

                

2.6           “Eligible Purchasers” mean
those parties authorized to purchase OEM Products under this Agreement as
listed in Section 1.2 above.

                

2.7           “Forecast” means Agilent’s
estimate of its purchase requirements over a rolling three–month period, or
such other period designated by the parties.

                

2.8           “Agilent Products” means the
Agilent products or systems that will incorporate the OEM Products and that
will be marketed and sold to end–user customers by Agilent and its
distributors.

                

2.9           “Agilent Property” means all
property, including without limitation, models, tools, equipment, copies of
designs and documentation and other materials that may be furnished to Supplier
by Agilent or on Agilent’s behalf or separately paid for by Agilent (to a third
party or to Supplier pursuant to a separate agreement) for use by Supplier in
connection with this Agreement.

                

2.10         “Supplier Property” means all
property, including without limitation, models, tools, equipment, copies of
designs and documentation and other materials that may be furnished to
Agilent  by Supplier or on Supplier’s
behalf or separately paid for by Supplier for use by Agilent in connection with
this Agreement.

                

2.11         “Property” means Agilent
Property and Supplier Property.

                

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

                

2.13         “Lead Time” means the time
between the date an Order is sent and the Shipment Date.

                

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

 

2.15         “Noncomplying Product” means any
OEM Product received by Agilent that does not comply with the Specifications,
or otherwise does not comply with the requirements of other provisions of this
Agreement.  Noncomplying Products
include, without limitation, dead–on–arrival products, overshipments and early
shipments.

                

2.16         “OEM Products” means the products
listed in Exhibit A and all related Documentation, Parts and other
deliverables provided pursuant to this Agreement.

                

2.17         “Orders” means a written or
electronic purchase order or release issued by Agilent to Supplier for purchase
of the OEM Products.

                

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

                

2.19         “PM–3” means the patient module
for the stress system meeting the specifications of Exhibit A.

                

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

                

2.21         “Software” means any software or
firmware, in object code form only, included or bundled with the OEM Products,
as designated in the description of OEM Products in Exhibit A.

                

2.22         [**] the specifications in Exhibit A.

                

2.23         “Specifications” means the
technical and functional requirements for the OEM Products as specified or
referenced in Exhibit A or as agreed to by the parties in writing.

                

2.24         “Subcontractor” means Agilent
dealers, distributors and manufacturers representatives that may purchase OEM
Products under the terms of this Agreement on the behalf of Agilent.

                

2.25         “Subdistributors” means Agilent
appointed sub–distributors, sales agents, manufacturer’s representatives and
the like that  promote, distribute and
sell the OEM Products in accordance with this Agreement.

 

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

                

2.27         “Support” means ongoing
maintenance and technical support for the OEM Products provided by Supplier to
Agilent as more fully described in Article 11, Article 12, and Article
13.

                

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

                

2.29         “Technical Materials” means
jigs, fixtures and tools used by Supplier to manufacture the OEM Products, and
any production software used in such manufacture.

                

2.30         “Territory” means the U.S. and
worldwide geographic regions designated in the terms of this Agreement where
Agilent and its channel partners are authorized to exclusively or
non–exclusively distribute the OEM Products designated in the terms of this
Agreement.

3.             APPOINTMENT

3.1           Exclusive Appointment.  Subject to the terms and conditions of this
Agreement and commencing on the Effective Date, the Supplier appoints Agilent
as the Supplier’s exclusive distributor of the CH 2000 System in the United
States. Agilent’s distribution rights shall extend to any improved OEM Product
or other technology for a stress systems (excluding the Alternans technology and
any other technology that is not stress related). The Supplier hereby appoints
Agilent as its worldwide exclusive distributor of the [**], except for Japan.
Agilent’s exclusive distribution rights shall extend to any improved OEM
Product or other technology in a [**] of any system incorporating a stress test
function (excluding the Alternans technology and any other technology that is
not stress related) developed by Supplier.

3.2           INTENTIONALLY OMITTED

                

3.3           Exception to Exclusive Appointment.
Notwithstanding the above, for 90 days after the Effective Date above Supplier
may sell the CH 2000 System to any customer who is a previous purchaser of the
CH 2000 System or for whom there was a quote outstanding for a CH 2000 System
as of the Effective Date.

                

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

 

3.5           Alliance Managers and Meetings.  Each of the parties has appointed an
individual, to facilitate communications between the Parties relating to the
OEM Products and the relationship contemplated herein.  Martha Dolan, Alliance Manager is the
contact for Agilent  and James Sheppard,
Vice President of Operations is the contact for the Supplier.  These individuals shall meet not less than
quarterly to discuss the marketing, distribution, forecasts,  sales and business issues of the OEM
Products as contemplated hereunder; provided, however, that
nothing in this Agreement shall limit Agilent's ability to set prices or ASP
for the OEM Products which charges to third parties.  Notice of any change to these appointed individuals shall be
provided to the other party.  In
addition, Agilent shall provide Supplier (a) within [**] days after the end of
each calendar year, a summary report of its marketing and distribution
activities with respect to the OEM Products during such calendar year and (b)
at least [**] days in advance of the first day of each calendar year, a summary
presentation of its proposed activities.

4.             ORDER AND SHIPMENT OF OEM PRODUCTS

4.1              Orders.  Each shipment of OEM Products will be
initiated by an Order issued to Supplier by Agilent. Each Order will include:
(i) unit quantity; (ii) unit price (as described in Exhibit B hereto);
(iii) shipping destination; (iv) Shipment Date; and (v) other instructions or
requirements pertinent to the Order. 
Agilent may schedule regular intervals for deliveries by an appropriate
Order setting forth the intervals.  To
the extent of any inconsistency between the terms of an Order and the terms of
this Agreement, the terms specified in this Agreement will control and take
precedence.

       

4.2           Order Acknowledgment.   An Order will be deemed to have been placed
as of the date of confirmation of receipt of the Order by Supplier; provided,
however, that Supplier may reject an Order which is otherwise within
Forecasts and Lead Time requirements of this Agreement on the basis of Agilent
requested modifications of OEM Products, or inaccuracies or inconsistencies in
the Order.  Written notification of
rejection of an Order, specifying the reasons therefor, shall be given by
Supplier not more than [**] working days after receipt of the Order.  Supplier will confirm the receipt of an
Order electronically or through facsimile to Agilent within two working
days.  Unless rejected as provided
above, Orders within Forecasts and Lead Time requirements of this Agreement
will be deemed accepted upon confirmation of receipt by Supplier.  For Orders exceeding Forecast or with
requirements outside of the Specifications, Supplier will have [**] additional
working days in which to reject the order with respect to the excess or the
additional requirements.  If an Agilent

 

Order
exceeds the Forecast or shortens the Lead Time, Supplier will use its
commercially reasonable efforts to fill such excess or accommodate such shorter
Lead Time.

 

4.3           Minimum Purchase Obligation.

            

4.3.1        Agilent shall be obligated to purchase a
minimum number of OEM Products, and shall be obligated to make the minimum
payments to Supplier as set forth in Exhibit C.

                

4.3.2        Agilent has the right to purchase OEM
Products in advance.  Purchases by
Agilent in excess of the minimums for the First Contract Year or the Second
Contract Year shall be credited towards the following year’s minimums.

                

4.3.3        Agilent shall maintain the right to sell
the OEM Products which it has purchased from Supplier for a period of [**]
following termination of this Agreement, and the terms of this Agreement shall
continue to apply to any such sales.

    

4.4           Emergency Orders.  If Agilent deems it necessary, Agilent may
order OEM Products by facsimile on an emergency basis (“Emergency Order”)
subject to the availability of such OEM Products in Supplier’s inventory.  Supplier will use its commercially
reasonable efforts to ship the Emergency Order to Agilent’s stipulated
destinations. Supplier shall notify Agilent of any additional expenses related
to such Emergency Orders, and obtain prior approval from Agilent for
reimbursement for such charges.

                

4.5           Forecasts.  On or before the 15th day of each
month, Agilent will provide a three 
month rolling Forecast of its projected Orders using reasonable
commercial efforts to insure the accuracy of such Forecast for each OEM
Product.  Any quantities listed in any
Forecast or other correspondence between the parties are only good faith
estimates made as an accommodation for planning purposes and do not constitute
a commitment on Agilent’s part to purchase such quantity. Should the Forecast
for the CH 2000 Systems exceed the aggregate minimum of [**] units in Exhibit
C at any time during the first three Contract Years, such excess
Forecast  shall  be accompanied by a Purchase Order due
within 30 days for [**]% of the forecasted volume of CH 2000 Systems in order
to mitigate the risk of purchasing the material required to manufacture the CH
2000 Systems. Agilent
may revise any Forecasts in its sole discretion; provided, however,
that Supplier may reject any increase in forecasted quantities which are
greater than [**]% within 30 days of notification or [**]% within 60 days of
notification.

 

4.6           Shipment Requirements.  Supplier will ship  CH2000 Systems directly to Agilent customers, under Agilent’s
instructions.  All other shipments are
to be sent to Agilent or its distributors. 
In the absence of written instructions from Agilent Supplier shall ship
OEM Product(s) in a manner consistent with the Supplier’s usual shipping
practices.  Any special instructions
shall be at Agilent's expense.  All
documentation and arrangements for international shipments shall be the
responsibility of Agilent.  Agilent will
pay all normal and customary shipping charges except as set forth in this Section
4.6 and Section 4.8.  All
Orders are required to be shipped complete. Supplier will give Agilent prompt
notice if it knows that it cannot meet a Shipment Date or that only a portion
of the OEM Products will be available for shipment to meet a Shipment
Date.  For partial shipments; Supplier
will ship the available OEM Products unless directed by Agilent to reschedule
shipment.  If Supplier ships any OEM
Product by a method other than as specified in the corresponding Order Supplier
will pay any resulting increase in the cost of freight. Agilent may utilize
drop shipment options to any Agilent designated delivery destination.  If Agilent designates a drop shipment
location outside the country in which the Order is placed Agilent agrees to pay
any costs associated with the shipment. Agilent shall be responsible for
arranging customer delivery dates with the carrier.  Agilent shall be responsible arranging return shipping via the
same common carrier for any OEM Products which the customer refuses.

 

4.7           Agilent Option To Accept
Overshipments.  If Supplier ships
more OEM Products than ordered, the amount of the overshipment may either be
kept by Agilent for credit against future Orders or returned to Supplier
pursuant to Article 7 below, at Agilent’s election.

                

4.8           Meeting Shipment Dates. Except
to the extent an Order exceeds the forecast or shortens the Lead Time, Supplier
(i) agrees to use its commercially reasonable efforts to ship within [**] days
of Order Acknowledgement unless a longer ship date is requested by the customer
(in which case the Supplier will ship to a warehouse and charge Agilent for
storage, then ship to the customer) and (ii) guarantees to ship within [**]
days of Order Acknowledgement. If due to Supplier’s failure to make a timely
shipment, the specified method of transportation would not permit Supplier to
meet the Shipment Date, the OEM Products affected will be shipped by air
transportation or other expedient means acceptable to Agilent.  Supplier will pay for any resulting increase
in the freight cost over that which Agilent would have been required to pay by
the specified method of transportation.

                

4.9           No Advance Shipment.  If OEM Products are shipped more than [**]
days in advance of the Shipment Date, Agilent may, at its option, either return
the OEM Products pursuant to Article 7 below or delay payment by the
amount that the date shipped was earlier than the Shipment Date.

4.10         Title And Risk Of Loss.  Shipments will be F.O.B. Supplier.  Title to OEM Product hardware and media
ordered under this Agreement and risk of loss or damage will pass from Supplier
to Agilent upon Supplier’s delivery of the OEM Products to the common carrier
specified by Agilent subject to the provisions in Sections 4.11 and
4.12 below 

with respect to packing and handling.

 

4.11         Packing List.  Each shipment of OEM Products to Agilent
must include a packing list that contains at least:

                

(a)           The Order number and the Agilent part
number;

                

(b)           The quantity of OEM Products or Parts
shipped; and

                

(c)           The Shipment Date.

    

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

                

4.13
        Responsibility For Damage.  Supplier will be liable for any loss or
damage due to its failure to properly preserve, package, handle, or pack OEM
Products. Further, Agilent will not be liable for any loss or damage due to a
release of chemicals or other hazardous materials to the environment prior to
delivery of such OEM Products to the common carrier.

5.             PRICES AND PAYMENT TERMS

5.1           OEM Product Prices.  Supplier’s prices for the OEM Products are
listed in Exhibit B, in U.S. currency. 
The prices for Parts will be Supplier’s published prices as listed in Exhibit
H, less any applicable discounts. Supplier may change the prices for Parts
in Exhibit H with [**] notice to Agilent every[**]. OEM Products and
Parts will also be subject to any applicable prompt payment discounts.

                

5.2           INTENTIONALLY OMITTED

                

5.3           Changed Prices.  If during the Term changed prices or price
formulas are put in effect on Parts listed in Exhibit H, such prices or
price formulas will apply to all Orders issued by Agilent after the effective
date of such prices or price formulas and to all unshipped Orders.

                

5.4           Payment Procedure.  Payment for OEM Products will be net [**]
days, after the latest of: (a) issuance by Supplier of an appropriate invoice
or (b) shipment of OEM Products.  
Supplier reserves the right to require payment for OEM Products on a
C.O.D. or prepaid basis in the event that payment for previously delivered OEM
Products has been more than [**] days after the latest of (i) issuance by Supplier
of an appropriate invoice or (ii) shipment of OEM Product by Supplier.  Except as otherwise provided in this
Agreement associated freight expenses and duties will be paid directly by
Agilent.  Agilent will not be liable for
any costs related to or payments for unordered or Noncomplying Products.  Any amounts due and owing to Supplier
hereunder but not paid by Agilent for [**] days shall bear interest (in U.S.
Dollars) at the rate of the lesser of: (i) one per cent (1%) per month; and
(ii) the maximum lawful interest rate permitted under applicable law.  Such interest shall accrue on the balance of
unpaid amounts from time to time outstanding from the date on which portions of
such amounts become due and owing until payment thereof in full.

 

5.5           [**] Purchaser Warranty.  [**] during the Term, [**] other [**] which,
[**] to the [**] under this Agreement for similar volumes of the [**] as of the
date [**] to the [**]. Supplier agrees [**] in this Section in good faith and
further agrees that it will [**] of its f[**]. 
In addition, [**] under this Agreement [**].

                

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

6.             NONCOMPLYING PRODUCTS

6.1           Repair Or Replacement.  Agilent may elect in its sole discretion,
subject to the provisions of Article 19 below, to return, within [**]
days of receipt by Agilent, a Noncomplying Product for replacement or repair at
Supplier’s expense.  In the event of an
overshipment, Agilent may elect to keep the additional units, subject to the
payment procedures in Section 5.3.

 

6.2           Repair Period.  Supplier will return the replacement or
repaired OEM Products as soon as possible but in no event later than [**] work
days after receipt of the Noncomplying Product from Agilent.

 

6.3           Product Defect.  Supplier will notify Agilent within [**]
hours should a defect in any of the OEM Products be found which it believes is
likely to be associated with an Epidemic Failure as set forth in Section
10.4 or cause a Safety Standard Change as set forth in Section 8.6.

 

 

7.             RETURN OF PRODUCTS

7.1           Return Materials Authorization.  All OEM Products returned by Agilent to
Supplier must be accompanied by a Return Materials Authorization (“RMA”).  Unless further verification is reasonably
required by Supplier, Supplier will supply a RMA within [**] work days of Agilent’s
request.  Agilent may return the OEM
Product without a RMA if Supplier fails to provide one.

                

7.2           Return Charges.  All Noncomplying Products returned by
Agilent to Supplier, and all replacement or repaired OEM Products shipped by
Supplier to Agilent to replace Noncomplying Products, will be at Supplier’s
risk and expense, including transportation charges (round trip charges for
replacement or repaired OEM Products). 
If Agilent returns Products which are not Noncomplying Products, then
the shipment of those Products to Supplier and then back to Agilent shall be at
Agilent's expense, and Agilent shall pay Supplier's normally hourly charges for
time spent testing such Products and investigating such claim.

                

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

8.             ENGINEERING PROCESS OR DESIGN
CHANGES

8.1           Supplier Product Development.

8.1.1        Windows 2000 CH 2000 System.  Supplier agrees to [**] that which is [**]
Windows 2000 release of the CH 2000 no later than [**] as set forth in the
Specifications in Exhibit A which is attached hereto (the “[**]”).  Should Supplier fail to deliver this, with
appropriate FDA regulatory approval by [**], then Agilent’s minimum purchase
obligations for the CH 2000 System will be modified as shown in Exhibit D.  Should Supplier [**] then the minimums for
the contract [**].

 

8.1.2        Windows 2000 [**] Development.  With respect to the [**] of the CH 2000
only, Supplier agrees to [**] as set forth in this Paragraph 8.1.2, [**]
that which is [**] Windows 2000 [**] of the CH 2000 associated as described in Exhibit
A with appropriate CE Mark no later than [**]. If the Supplier meets the
[**] release date, Agilent shall  place
a purchase order for [**]on the release date. 
These [**] shall be credited towards Agilent’s minimum purchase
requirement for  [**]. Should Supplier
fail to deliver the Windows 2000 [**] of the CH 2000 with appropriate
regulatory approval by [**], then Agilent’s minimum purchase obligations for
the [**] of the CH 2000 will be modified as shown in Exhibit D.  Should Supplier [**] then the minimums for
the contract [**]. Agilent shall provide 
$[**] in  non–recurring
engineering (NRE) funding  to ensure
that the database is [**] specified in Exhibit A, and that the [**]  is tested against an HP PC and printer which
meets the minimum hardware specification. 
Acceptance by Agilent shall be based on whether the deliverables
detailed in Exhibit A meet the Specifications.  Agilent shall be refunded the $[**] paid to supplier if the
deliverables do not meet Specifications. 
Supplier shall be obligated to obtain the appropriate CE Mark at its
expense.

                

8.1.3        Windows 2000 [**] Release. With
respect to the [**] of the CH 2000 only, Supplier agrees to exert best efforts
to obtain appropriate FDA regulatory approval as required by Exhibit A
no later than [**].  Agilent will
reimburse Supplier for their actual, documented costs incurred in developing
and obtaining regulatory approval for this release not to exceed $[**].  Reimbursement is contingent on Agilent’s
receiving the Supplier’s development/regulatory plan prior to 510K submission
for this release, [**] is commercially available and with the appropriate FDA
approval and an itemized bill documenting the actual costs is delivered to
Agilent. For purposes of this Agreement and termination rights, this funding
shall be considered NRE.  Estimated date
for providing Agilent with a copy of the regulatory plan  is [**].

  

8.2           Agilent Product Development.
Agilent agrees to [**] its sales of Supplier’s OEM Products.  Supplier agrees to provide a documented
output as specified in Exhibit A.

                

8.3           Supplier Proposed Changes.  Supplier will not, without the prior written
consent of Agilent, which shall not be unreasonably denied, make or incorporate
in OEM Products any changes (collectively, “Engineering Changes”) which affect
the specifications for such OEM Products as set out in Exhibit A hereto.

 

8.4           Supplier Geographical Relocation.  Supplier will notify Agilent if the final
assembly and test processes are going to be relocated with [**] days notice
upon approval from Agilent. Supplier is free to relocate domestically without
prior approval from Agilent.

                

8.5           Notice Of Proposed Change.  Supplier will give Agilent notice of any
proposed Engineering Change, and will provide evaluation samples and other
appropriate information as specified by Agilent at least [**] days prior to the
first proposed shipment of any OEM Products involving an Engineering
Change.  Regardless of whether Agilent
approves a proposed Engineering Change, Lead Time will not be changed except as
provided in Section 4.4 above.

                

8.6           Safety Standard Changes.  Supplier will immediately give notice to
Agilent if any upgrade, substitution or other change to an OEM Product is required
to make that product meet applicable safety standards or other governmental
statutes, rules, orders or regulations, even those that are not defined as
Engineering Changes in Section 8.3 above.  All affected OEM Products already purchased by Agilent may, at
Agilent’s election, either be returned to Supplier for upgrade to current
revisions or upgraded by Agilent in the field pursuant to the procedures
outlined in Section 11.7 below. 
If an OEM Product meets applicable safety standards and other governmental
requirements at the time of manufacture, Agilent and Supplier will allocate the
costs of any subsequent upgrade, substitution or other required change required
in an equitable manner based on good faith discussions between the parties. If
such discussions render no equitable solution, the parties may either mutually
agree to escalate the matter to their respective vice presidents or general
managers, as applicable, or in the alternative, divide the costs equally
between them.  If discussions between their
respective vice presidents or general managers, as applicable, reach no
equitable solution, then the parties shall be entitled to pursue their rights
as set forth in this Agreement.

9.             QUALITY

9.1           Quality Program.  Supplier agrees to maintain an objective
quality program for all OEM Products. 
Supplier’s program will be communicated to Agilent within [**] days
of  the Effective Date, and Supplier
shall maintain such Quality program for the term of this agreement and any time
where ongoing support is provided to Agilent by the Supplier. Supplier will,
upon Agilent’s request, provide to Agilent copies of Supplier’s program and
supporting test documentation.

                

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

 

10.           WARRANTIES

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

 

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

                

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

                

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

                

(4)           INTENTIONALLY OMITTED

                

(5)           Be free from defects in design,
material and workmanship, when given normal, proper usage;

                

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

                

(7)           Be “Year 2000 Compliant.”  Year 2000 Compliant products will perform
without error, loss of data or loss of functionality arising from any failure
to process, calculate, compare or sequence date data accurately.  In addition, Year 2000 Compliant products
will not cause any associated products or systems in which they may be used to
fail in any of the ways described above. 
This Year 2000 Compliance Warranty will remain in effect through
December 31, 2000, notwithstanding any other warranty period specified in this
Agreement;

                

(8)           To the best of its knowledge and belief,
not violate or infringe any third party Intellectual Property Rights and
Supplier warrants that it is not aware of any facts upon which such claim could
be made.  If Supplier learns of any
claim or any facts upon which claim could be made, it will promptly notify
Agilent of this information;

 

10.2         Replacement Parts Warranty.  Supplier will provide warranty for one year
for replacement parts from date of the training/installation is completed at
the site of Agilent's customer.

 

10.3         Survival Of Warranties.  All warranties specified above will survive
any inspection, delivery, acceptance, or payment by Agilent and be in effect
for the shorter of eighteen months from the date of shipment by Supplier to
Agilent or the one year period following the date of shipment of the OEM
Product or the Agilent Product containing the OEM Product to Agilent’s end–­user
customers.

                

10.4         Epidemic Failure Warranty.   In addition to the warranties specified
above, Supplier warrants all OEM Products against epidemic failure for a period
of three years after receipt of that OEM Product or the associated Agilent
Product by Agilent’s customers.  An
Epidemic Failure means the occurrence of the same failure in any [**] OEM
Products delivered or [**] OEM Products delivered, whichever is greater,  within a one–year time frame. Excluded from
this are Patient Lead sets and  software
bugs which do not materially interfere with the ability of the CH 2000 System
to perform its intended function.

                

10.5         DISCLAIMER.  EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, SUPPLIER MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED,
REGARDING ANY OEM PRODUCTS, OR REGARDING THEIR MERCHANTABILITY, OR THEIR
FITNESS FOR ANY PARTICULAR PURPOSE OR NON–INFRINGEMENT.

                

10.6         This warranty shall not apply to the
following expendable components: fuses, bulbs, Clip end of Patient cables; nor
shall Supplier have any obligation under this Agreement to make repairs or
replacements which result, in whole or in part, from catastrophe, fault or
negligence of Agilent, any Agilent customer or anyone claiming through or on
behalf of Agilent or any Agilent customer, or from improper or unauthorized use
of the OEM Products, or use of the OEM Products in a manner for which they were
not designed, or by causes external to the OEM Products.

                

10.7         Agilent's sole remedy and Supplier's
exclusive liability for a breach of the warranties specified above shall be, at
Supplier's option, the repair or replacement of the Noncomplying Product, or a
refund of the price paid for such Product. 
SUPPLIER DOES NOT WARRANT THAT USE OF THE OEM PRODUCTS SHALL BE
UNINTERRUPTED OR ERROR–FREE.

11.           SUPPORT SERVICES

11.1         General.  Supplier will provide Agilent with Support
for the OEM Products as specified in the Support Terms attached in this Section
11 and Sections 12 and 13. 
Supplier will maintain such number of qualified personnel as is
necessary to provide timely and knowledgeable maintenance and support
service.  Supplier warrants that all Support
will be provided in a professional and workmanlike manner. Agilent acknowledges
that Supplier may independently offer and provide support services to OEM
Product customers.  However in no event
may Supplier use Agilent Confidential Information or  Agilent Property to provide such support without Agilent’s prior
consent. SUPPLIER ON BEHALF OF ITSELF AND ITS AFFILIATES AND SUCCESSORS HEREBY
EXPRESSLY DISCLAIMS  ALLOTHER WARRANTIES
EXPRESS OR IMPLIED WITH REGARD TO SUCH SUPPORT SERVICES INCLUDING BUT NOT
LIMITED TO ANY WARANTIES OF MERCHANTABILITY NON–INFRINGEMENT OR FITNESS FOR A
PARTICULAR PURPOSE.

 

 

11.2         Customer Support.  Agilent shall be the first line of customer
support for the OEM Products. Agilent will triage the Customer call to
determine which part needs to be repaired. 
Agilent will place an order on the Supplier for the replacement parts.
The Supplier will ship the parts directly to the Customer.  If the Customer is under warranty there is
no charge for the parts.  If the
Customer is not under warranty the cost of the replacement parts is shown in Exhibit
H. However, Supplier recognizes that certain inquiries may not be
answerable by Agilent and Supplier agrees to provide second tier support and
assistance to Agilent as may be necessary after Agilent has made reasonable
attempts to resolve customer issues.

                

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

                

11.4         Substitute Products.  If Supplier develops any products that are
more efficient or less expensive than the comparable CH 2000 System [**] the CH
2000 System available under this Agreement, Agilent will have the right to
substitute the newer products for all subsequent purchases under this Agreement
at the price then being charged for comparable volumes of such newer products
to Supplier's best customer.  Such
substitute products must be compatible with the current version of the Agilent
Products.

                

11.5         Failure Rate Calculation. As the
first line of customer support Agilent will be responsible for calculating the
failure rate of the OEM products.  If a
part is replaced or repaired and the customer problem is eliminated then the
part will be counted as a failure. If the parts that have been replaced are
tested by the Supplier and then are not defective the Supplier will be
responsible for communicating back to Agilent to ensure that the Agilent
support team is not incorrectly swapping parts. Software bugs which do not
materially interfere with the ability of the CH 2000 System [**] to perform its
intended function are excluded from the Failure Rate Calculation.

 

11.6         Trigger Failure Rate: Supplier
shall use reasonable commercial efforts to achieve an actual failure rate below
[**]%.  Should Agilent notify the
Supplier in writing that: (i) the actual failure rate reached [**] units or
[**]% per year, whichever is greater, for all OEM Products (other than patient
lead sets and cables) delivered; or (ii) the actual failure rate reached [**]
units or [**]%, whichever is greater, for patient lead sets and cables (the
rate in (i) or (ii), as the case may be, the "Trigger Failure Rate"),
Supplier will provide additional engineering and technical support to develop a
root cause analysis and action plan that, upon full field implementation, will
bring the actual failure rate down to below the Trigger Failure Rate within
[**] days of written notice from Agilent. 
This trigger rate is applied only after Agilent has supplied Supplier
with all failed parts and the circumstances of their failure, so that Supplier
can perform a failure analysis. If the root cause analysis shows that a portion
of the actual failure rate is due to rejected parts that have been found to be
conforming, then the Supplier will meet with Agilent and the failure rate will
be recalculated.  If the recalculated
failure exceeds the Trigger Failure Rate, then Supplier will then implement
such root cause analysis and action plan within the immediately succeeding [**]
day period. Should Supplier fail to provide such support, Agilent shall have
the option to provide such engineering and technical support, or use a third
party to do so, at Supplier’s expense. Supplier shall provide Agilent or its
subcontractors with immediate access to the information on Deposit pursuant to
the Escrow Agreement for the purpose of remedying this failure.

                

11.7         Class Failure Remedies.  Upon the occurrence of any of the following
events: (i) a failure rate exceeding the Trigger Failure Rate; (ii) an epidemic
failure as described in Section 10.4 for which Agilent has given
Supplier written notice; or (iii) a safety change under Section 8.6
above (each referred to as a “Class Failure”), Agilent will have the following
additional remedies for a [**] period commencing upon receipt by Agilent’s
end–user customer of the OEM Product or the corresponding Agilent Product.

   

(1)           In the event of notification by
Agilent of a Class Failure, Supplier will provide Agilent no later than  [**] days following such notification, a
root cause analysis and corrective action plan.  Agilent will make available such information and assistance
reasonably required to allow Supplier to conduct its root cause analysis and
provide its corrective action report. Supplier will then implement such root cause
analysis and action plan within the immediately succeeding [**] day period.

(2)           If, after review of the root cause
analysis and corrective action plan, Agilent determines in its reasonable
opinion that the Class Failure necessitates a field stocking recall or customer
based recall or retrofit, Agilent may then elect to have the OEM Products: (i)
returned to Supplier for repair or replacement; (ii) repaired or replaced by
Agilent in the field, including products in distributor inventory and Agilent’s
installed base.  If Agilent chooses to
perform a field repair, Supplier will provide the appropriate replacement OEM
Products, Parts or upgrades free of charge to Agilent.  Such OEM Products, Parts or upgrades will
have the highest shipping priority.

(3)           Except as provided in Section 8.6
above regarding safety standard changes, Supplier will, within [**] days after
completion of the recalls or retrofits, reimburse Agilent for its reasonable
and direct labor costs in performing such services.

                

(4)           In the event of a Class Failure which
Supplier has failed to remedy within [**] days from the initial occurrence of
Class Failure, Agilent shall be entitled to terminate this Agreement without
penalty.  Should such Class Failure
occur within the First Contract Year for any OEM Product, Supplier shall
reimburse Agilent for all NRE payments made by Agilent to Supplier.

11.8         Survival Of Support Obligations.  Supplier’s maintenance and support
obligations specified in this Section 11, and in Sections 12, 13 and
14 will run for the Term and any additional periods under Section 1.3
above and will continue for a period of the lesser of [**] after Supplier ship
the last OEM product to Agilent or [**] after Agilent ships the last Agilent
Product or an OEM Product.  This obligation
includes making necessary Parts available to Agilent, as further provided in
the Support Terms.

   

12.           OBSOLESCENCE AND MANUFACTURING RIGHTS

12.1         Lifetime Buy Rights. Supplier
acknowledges its obligation to manufacture, supply and support the OEM Products
without interruption for the Term.  If,
however, Supplier seeks to discontinue the supply or support of any OEM Product
(a “Discontinued Product”), Supplier will give notice to Agilent no less than
[**] in advance of the last date the Discontinued Product can be ordered.  After receipt of notice of discontinuance,
Agilent may, at its option, purchase from Supplier on a one-time basis such
quantity of the Discontinued Product as Agilent deems necessary for its future
requirements.

12.2         Agilent’s Right to Manufacture.  Subject to the terms of Section 12.1
above, Supplier grants to Agilent, under Supplier’s Intellectual Property
Rights, a non–exclusive, worldwide, royalty–bearing  license to use, modify, reproduce, import, manufacture,
distribute, offer for sale and sell the Discontinued Product.  Agilent may sublicense these rights to third
parties, provided any such third party complies with the terms of this license
and any associated obligations of confidentiality.  Agilent will pay Supplier a royalty of $[**] for each CH 2000
[**] Agilent produces and sells.  This
Right shall continue for the length of the Term of the contract and shall be
extendable in accordance with Section 1.3.  In the event Agilent elects to exercise this right:

   

(1)           Supplier will release to Agilent all
Technical Information or other materials deposited under the terms of the
Escrow Agreement described below, necessary for the manufacture of the
Discontinued Product.  Agilent will keep
all Technical Information confidential in accordance with the terms of Article
19 below.  If Supplier has failed to
place Technical Information in escrow or to update the escrow as provided
below, Agilent may use the measures described in paragraphs 2–5 below to obtain
such information.

                

(2)           Supplier will furnish to Agilent all
Technical Materials at their book value within [**]  days after Agilent has notified Supplier of its exercise of its
rights under this Article 12.2. 
If the materials are not delivered within this time period, Agilent will
have the right to collect such materials at Supplier’s plant or offices and
Supplier agrees to assist Agilent in such collection.  Agilent will pay amounts due on such Technical Materials within
[**] days after receipt of Supplier’s invoice or receipt of the Technical
Materials, whichever is later.  If
Agilent has to use measures to collect the Technical Materials itself, it may
deduct its reasonable costs from the book value of the Technical Materials.

                

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

                

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

 

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

                

12.3         Consulting Services.  In support of Technical Information conveyed
to Agilent, Supplier will provide

 

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

                

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

12.4         Escrow Agreement. At Agilent’s
request and as security for the fulfillment of Supplier’s obligations under
this Agreement, Supplier will deposit a copy of the Technical Information,
including any source code for all software contained in the OEM Products (the
“Deposit”) pursuant to the terms of the third–party Escrow Agreement, attached
as Exhibit G.  Agilent will have
the right to inspect and verify that the appropriate Deposit of current and
complete information is being made.  
The Deposit will be updated by Supplier on a regular basis, but no less
than semi–annually, and at least once immediately prior to Agilent’s exercise
of its rights hereunder upon giving Supplier five (5) days prior written
notice.

13.           TRAINING

13.1         Technical Training.  Supplier will provide up to [**]
technical/service training sessions for up to [**] days each at its place of
business or at Agilent’s Andover facility sufficient to allow Agilent personnel
skilled in the relevant field to become fully familiar with the technical
attributes each OEM Product and the service of each OEM Product.  If training is held elsewhere, Agilent will
be responsible for reasonable travel expenses for Supplier's personnel,
provided expenses are discussed and agreed upon in advance.  Training will be at no charge to
Agilent.  Supplier will provide product
literature, learning products, and service manuals for each OEM Product,
provided that in no event shall the source code or source listings of Software
by required to be disclosed or provided by Supplier to Agilent pursuant to this
Section 13 or as otherwise required under this Agreement.  Agilent may further request and Supplier
will provide additional training at no charge as reasonably necessary to inform
Agilent personnel of upgraded, enhanced or new versions of the OEM Products,
but in no event shall Supplier's personnel be required to spend more than [**]
man-hours per year in providing such additional training.  Other training will be provided upon
mutually agreeable terms and conditions.

 

13.2         Sales Training. Supplier will
provide up to [**] sales training sessions for up to [**] days each at its
place of business or at Agilent’s Andover facility sufficient to allow Agilent
to become fully familiar with each OEM Product and its market.  If training is held elsewhere, Agilent will
be responsible for reasonable travel expenses of Supplier's personnel, provided
expenses are discussed and agreed upon in advance.  Training will be at no charge to Agilent.  Supplier will provide product literature,
learning products, service manuals, lap-top based sales demonstration software,
and all other sales tools that have been created for each OEM Product.  Agilent may further request and Supplier
will provide additional training at no charge as reasonably necessary to inform
Agilent personnel of upgraded, enhanced or new versions of the OEM Products,
but in no event shall Supplier's personnel be required to spend more than [**]
man-hours per year in providing such additional training.  Other training will be provided upon
mutually agreeable terms and conditions.

                

13.3         Agilent’s Rights In Training Classes
and Materials. Subject to the terms of Section 20 of this Agreement,
Agilent may at no charge use, reproduce, modify, display and perform either
internally or for Agilent’s customers, all training classes, methods, and
materials supplied or developed by Supplier under this Agreement.  Agilent’s use may be in any manner Agilent
reasonably deems appropriate.

  

14.           MARKETING AND LICENSING

14.1         Marketing and Promotional Material.  Agilent and Supplier must approve all
marketing and promotional materials that reference the other party’s products
prior to their use by the other party.

                

14.2         Marketing Authority. Subject to
the territorial limitations set forth in Section 3.1  above, Agilent will have the authority to
market the OEM Products and the Agilent Products containing the OEM Products to
the extent it deems appropriate, in its sole discretion.  Without limiting the generality of the
foregoing sentence, nothing in this Agreement will be construed or interpreted
to place a “best efforts” obligation upon Agilent with respect to marketing the
Agilent Products or OEM Products or preclude Agilent from independently
developing, purchasing, licensing, or marketing any product which performs the
same or similar function as the OEM Products. 
Agilent will have the right to use its own business and license terms
for all marketing and distribution of the OEM Products and Agilent Products.

  

 

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

                

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

                

14.5         Documentation License. Supplier
hereby grants Agilent a non–exclusive, non–transferable, worldwide fully paid
up license to use, reproduce, distribute and prepare derivative works in
Agilent’s name all Documentation and other information, other than confidential
information, furnished by Supplier under this Agreement.  Agilent's use of such derivative works shall
be subject to Supplier's prior written approval, such approval not to be
unreasonably withheld or delayed. Agilent may not reproduce such Documentation
without Supplier’s logo, other identification of source, and copyright notices
affixed to such copies of Documentation in the same manner in which they were
affixed to those copies of Documentation provided by Supplier to Agilent
("Supplier Marks").  Agilent
shall not remove or obscure any such logo, identification and notices if
Agilent is distributing such copies of Documentation provided by Supplier.  These rights with respect to the
Documentation will extend to Agilent Subsidiaries and third party channels of
distribution.

                

14.6         Software License.

    

14.6.1      Supplier grants to Agilent a nonexclusive,
nontransfer­able license to use the Software included in the OEM Products and,
for each OEM Product that it purchases from Supplier, to distribute one copy of
such Software to end users in who have signed a Software License Agreement in a
form substantially the same as the attached Exhibit F.

                

14.6.2      Agilent shall not distribute the Software
or enable its use except in accordance with this Section 14.6.

                

14.6.3      Agilent shall promptly notify Supplier of
any breaches of such terms that become known to Agilent.

                

14.6.4      Supplier shall have reasonable rights, not
more than one time per year and at Supplier’s expense, via an independent
auditor to audit those records of Agilent necessary to insure adherence to this
Article 14 and shall not use any information learned in such audit for
any other purpose.

                

14.6.5      The licenses granted shall survive the
termination of this Agreement.

                

14.6.6      Agilent may add a warranty of its own
choosing to the license agreement with its licensees, after the Effective Date
of this Agreement without Supplier’s consent. Agilent may also change that
warranty from time to time without Supplier’s consent.  Agilent shall disclaim for itself and
Supplier any other warranty to its licensees other than the warranty included
in the software license.

15.           INTELLECTUAL PROPERTY PROTECTION

15.1         Supplier’s Duty To Defend.  Except as provided in this Section 15.1,
Supplier will defend and hold harmless Agilent and its Subsidiaries,
Subcontractors and customers from any claim that:  (A) any OEM Product, any Software, Documentation or a Supplier
Mark, or any product provided as part of Supplier’s Support services
constitutes an unauthorized use or infringement of any third party’s
Intellectual Property Rights; or (B) a violation of Section 7.3 above; provided,
however, that with respect to both (A) and (B):  (i) Agilent shall have provided Supplier
notice of the claim pursuant to Section 15.2; and (ii) Supplier shall
have sole control and authority with respect to the defense, settlement and
compromise thereof. Supplier will pay all costs, damages and expenses
(including reasonable attorneys’ fees) incurred by Agilent, its Subsidiaries,
Subcontractors or customers and will pay any award with respect to any such
claim or agreed to in any settlement of that claim in accordance with the terms
of this Section 15.1.  Supplier
shall have no obligation for any claim of unauthorized use or infringement
arising from: (i) any combination of the OEM Product with products not supplied
by Supplier, where such unauthorized use or infringement would not have
occurred but for such combination; (ii) the adaptation or modification of the
OEM Product, where such unauthorized use or infringement would not have
occurred but for such adaptation or modification; (iii) the use of the OEM
Product in an application for which it was not designed or intended, where such
unauthorized use or infringement would not have occurred but for such use; (iv)
Agilent's continued use of a version of an OEM Product other than the most
recently released version, where such unauthorized use or infringement would
not have occurred if such most recently released version had been used; or (v)
a claim based on intellectual property rights owned by Agilent or any of its
Affiliates.

  

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

                

 

15.3         Remedies For Infringing Products.  If the use of any OEM Product provided
hereunder is enjoined (the “Infringing Product”), Supplier will, at its sole
expense and option:

  

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

                

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

                

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

                

                If Supplier is not able to
provide any of the above remedies, Supplier may withhold further shipments of
infringing or potentially infringing OEM Products and Agilent shall be relieved
of its minimum purchase obligations.

    

15.4            INTENTIONALLY OMITTED

15.5         Agilent's Duty to Defend.  Except as provided in this Section 15.5,
Agilent will defend and hold harmless Supplier and its subsidiaries and
subcontractors from any claim that any Agilent product containing an OEM
Product constitutes an unauthorized use or infringement of any third party’s
Intellectual Property Rights; provided, however, that:  (i) Supplier shall have provided Agilent
notice of the claim pursuant to Section 15.6; and (ii) Agilent shall
have sole control and authority with respect to the defense, settlement and
compromise thereof.  Agilent will pay
all costs, damages and expenses (including reasonable attorneys’ fees) incurred
by Supplier, its subsidiaries and subcontractors and will pay any award with
respect to any such claim or agreed to in any settlement of that claim in
accordance with the terms of this Section 15.5.  Agilent shall have no obligation for any
claim of unauthorized use or infringement arising from: (i) any combination of
the Agilent product with products not supplied by Agilent, where such
unauthorized use or infringement would not have occurred but for such
combination; (ii) the adaptation or modification of the Agilent product, where
such unauthorized use or infringement would not have occurred but for such
adaptation or modification; (iii) the use of the Agilent product in an
application for which it was not designed or intended, where such unauthorized
use or infringement would not have occurred but for such use; (iv) Supplier's
continued use of a version of an Agilent product other than the most recently
released version, where such unauthorized use or infringement would not have
occurred if such most recently released version had been used; (v) a claim for
which Supplier is required to defend and hold harmless Agilent in accordance
with Section 15.1 above; or (vi) a claim based on intellectual property
rights owned by Agilent or any of its Affiliates.

                

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

 

15.7         This Section 15 states the sole
remedy and the exclusive liability of each party in the event that an OEM
Product infringes on or misappropriates the intellectual property rights of any
third party.

  

16.           COUNTRY OF MANUFACTURE AND DUTY
DRAWBACK RIGHTS

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

                

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

                

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

17.           GOVERNMENTAL COMPLIANCE

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

  

(1)           Each party will comply with all equal
employment opportunity and non–discrimination requirements prescribed by
Presidential Executive Orders, including the requirements of Executive Order
11246, the Vocational Rehabilitation Act, and the Vietnam Era Veterans’
Readjustment Assistance Act;

                

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

                

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

                

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

 

17.2         Procurement Regulations.  For OEM Products purchased under this
Agreement for incorporation into products to be sold under a federal contract
or subcontract, those applicable procurement regulations that are required by
federal statute or regulation to be inserted in contracts or subcontracts will
be deemed incorporated in this Agreement and made to apply to all Orders so
long as Agilent provides a copy of those procurement regulations when
submitting such Order to Supplier. 
Supplier may reject such Order if it is unwilling or unable to comply
with such procurement regulations.

  

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

  

(1)           Contains any “Class 1 Substance” or
“Class 2 Substance”, as those term are defined in 42 USC Section 7671 and
implementing regulations of the United States Environmental Protection Agency
at 40 CFR Part 82, as now in existence or hereafter amended; or

                

(2)           Has been manufactured with a process
that uses any Class 1 or Class 2 Substance within the meaning of 42 USC Section
7671 and implementing regulations of the United States Environmental Protection
Agency at 40 CFR Part 82, as now in existence or hereafter amended.

18.           FORCE MAJEURE EVENTS

18.1         Delaying Causes.  Subject to the provisions of this Article,
Supplier will not be liable for any delay in performance under this Agreement
caused by any “act of God” or other cause beyond Supplier’s reasonable control
and without Supplier’s fault or negligence (a “delaying cause”).  Notwithstanding the above, Supplier will not
be relieved of any liability for any delay or failure to perform its defense
obligations with respect to third party Intellectual Property Rights or furnish
remedies for Infringing Products as described in Article 15 above or
from Indemnity in Article 22 below.

                

18.2         Agilent Option.  Supplier will immediately give Agilent
notice of any delaying cause and its best estimate of the expected duration of
such cause.  In the event of a delaying
cause, Agilent may act in its sole discretion to:

                

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

                

(2)           Suspend this Agreement in whole or in
part for the duration of the delaying cause, buy similar products elsewhere,
and deduct from any quantities specified under this Agreement the quantity so
purchased; provided, however, that Agilent may not excuse its payment
obligations under this Section 18.2, to the extent that Supplier
continues to perform its obligations under this Agreement.

 

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

19.           EVENTS OF DEFAULT

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

19.2         Causes Of Breach.  For purposes of Section 19.1 above,
the term “breach” includes without limitation any:

                

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

                

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

                

(3)           Failure by Supplier to make [**]
shipments of OEM Products in accordance with the requirements of this Agreement
or any Order;

                

(4)           Failure by Supplier to replace or
repair Noncomplying Products over a period of three months in a timely manner
as required by Articles 4 or 6 above;

                

(5)           Failure by Agilent to make timely
payment of any sums due the Supplier and such failure is not cured within 30
days after notice thereof from Supplier; or

                

(6)           Other failure by a party to comply
with any material provision of this Agreement which is not cured within 30 days
after receipt of notice.

    

19.3         Agilent’s Rights Upon Breach.  Upon any event of default by Supplier, and
in addition to any other remedies Agilent may have at law or in equity and in
addition to any other remedies provided Agilent under this Agreement, Agilent
shall be relieved of its obligations for minimum payments to Supplier and shall
have the right to reimbursement for any NRE expenses previously paid by Agilent
under Article 8, such NRE expenses depreciated on a straight–line basis
over a 12–month period.  In addition
Agilent may procure, upon such terms and in such manner as Agilent reasonably
deems appropriate, products similar to the OEM Product as to which this
Agreement is terminated or may exercise its manufacturing rights as set forth
in Article 12.  Supplier agrees
to continue the performance of this Agreement to the extent not terminated
under the provisions of this Section 19.3.

 

19.4         Supplier’s Rights Upon Breach.  Upon any event of default by Agilent, and in
addition to any other remedies Supplier may have at law or in equity, Supplier
may cancel any outstanding Order, refuse to take further Orders or make further
deliveries, cancel any discount given, and declare all obligations immediately
due and payable.  Supplier shall have
all the remedies of a secured party under the Uniform Commercial Code and any
other applicable law.

                

19.5         Purchase Hold.  If any Eligible Purchaser having the right
to purchase an OEM Product under this Agreement or under any other agreement
with Supplier believes in good faith that an OEM Product is defective and
cannot be resold in its current state, then, irrespective of any other rights
provided Agilent hereunder, Agilent may implement a purchase hold to suspend
purchases of such OEM Products without any liability.  Such purchase hold may be removed if Agilent reasonably believes
that Supplier has taken sufficient action to correct the defect or given
sufficient assurances that such defect will be corrected within a reasonable
time.

 

20.           CONFIDENTIAL INFORMATION

20.1         Confidential Information.  During the Term, a party (the “Recipient”)
may receive or have access to certain information of the other party (the
“Discloser”) that is marked as “Confidential Information” at the time of
disclosure or if unmarked (e.g., orally or visually disclosed) is designated as
being confidential at the time of disclosure and is confirmed as such in
writing by the Discloser within thirty (30) days of the disclosure.  Confidential Information shall include,
though not limited to, information or data concerning the Discloser’s products
or product plans, business operations, strategies, customers and related
business information.  The Recipient
will protect the confidentiality of Confidential Information of the Discloser
with the same degree of care as the Recipient uses for its own similar
information, but no less than a reasonable degree of care, under the terms of
the Confidential Disclosure Agreement attached as Exhibit E (the “CDA”)
for a period of [**] after the termination or expiration of this Agreement,
except as otherwise provided in this Agreement 
or its Exhibits.  To the extent
any term of this Agreement conflicts with any term in the CDA, the terms of
this Agreement will control and take precedence.  Confidential Information may only be used by those employees of
the Recipient who have a need to know such information for the purposes related
to this Agreement.  The parties
acknowledge that all Technical Information and Forecasts are deemed
Confidential Information to be protected for a term of [**] from the date of
disclosure.

                

20.2         Exclusions.  The foregoing confidentiality obligations
will not apply to any information that is (a) already known by the Recipient
prior to disclosure, (b) independently developed by the Recipient prior to or
independent of the disclosure without violating any rights of confidentiality,
(c) publicly available through no fault of the Recipient, (d) rightfully
received from a third party with no duty of confidentiality to the Discloser,
(e) disclosed by the Recipient with the Disclosure’s prior written approval,
(f) disclosed under operation of law, or (g) required to be disclosed under the
rules and regulations promulgated by the Securities and Exchange Commission.

21.           INSURANCE REQUIREMENTS

21.1         Insurance Coverage. Supplier
will maintain Comprehensive or Commercial General Liability Insurance
(including but not limited to premises and operations, products and completed
operations, broad form contractual liability, broad form property damage and personal
injury liability) with a minimum limit of $5,000,000 combined single limit per
occurrence and $7,000,000 in the aggregate, for claims of bodily injury,
including death, and property damage that may arise from use of the OEM
Products or acts or omissions of Supplier under this Agreement.  Each policy obtained by Supplier will name
Agilent, its officers, directors and employees as additional insurers.  Such insurance will apply as primary
insurance and no other insurance will be called upon to contribute to a loss
covered thereunder. In addition, such policies will permit Supplier to waive,
on its own behalf and on behalf of its insurers, any rights of subrogation
against Agilent.  Such insurance
policies will be written with appropriately licensed and financially
responsible insurers, and will provide for a minimum of 30 days written notice
to Agilent of any cancellation or reduction in coverage.  Certificates of insurance evidencing the
required coverage and limits will be furnished to Agilent before any work is
commenced hereunder, and Supplier will deliver copies of policies or
certificates to the Agilent contact listed in Section 3.5.

 

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

                

21.3         Additional Requirements. All
deductibles on policies providing coverage will be paid by Supplier.   In the event Supplier is self insured for
matters described in Section 21.1, Supplier agrees to respond to any
claims or losses made against or incurred by Agilent in the same fashion as if
insurance had been purchased with the same or broader coverage terms than what
is generally available to similar suppliers. 
In no event will the coverages or limits of any insurance required under
this Article 21, or the lack or unavailability of any other insurance,
be deemed to limit or diminish Supplier’s obligations or liability to Agilent
under this Agreement.

22.           INDEMNITY AND LIMITATION OF LIABILITY

22.1         Indemnity by Supplier.  Supplier shall indemnify and hold harmless
Agilent, its directors, officers, trustees, subcontractors, employees and
agents from all causes of action, liability, claims, suits, damages, expenses,
costs incurred, including reasonable attorneys’ fees, by or imposed upon
Agilent to the extent they are determined by a court of competent jurisdiction
in a proceeding to which Supplier is a party to result from (i) any act or
omissions, intentional or negligent on the part of Supplier, its employees or
agents; or (ii) product liability claims or strict liability claims resulting
from Supplier’s design or manufacture of OEM Products.

                

22.2         Indemnity by Agilent.  Agilent shall indemnify and hold harmless
Supplier, its directors, officers, trustees, subcontractors, employees and
agents from all causes of action, liability, claims, suits, damages, expenses,
costs incurred including reasonable attorneys’ fees by or imposed upon Supplier
to the extent they are determined by a court of competent jurisdiction in a
proceeding to which Agilent is a party to result from (i) the act or omissions,
intentional or negligent on the part of Agilent, its employees or agents in
connection with this Agreement or (ii) product liability claims or strict
liability claims resulting from Agilent's products.

 

22.3         LIMITATION OF LIABILITY.  NEITHER PARTY WILL BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR OTHER INDIRECT DAMAGES OR FOR
LOSS OF PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES OF THE OTHER ARISING OUT
OF ANY PERFORMANCE OF THIS AGREEMENT, OR DELAY OR FAILURE TO SUPPLY THE OEM
PRODUCTS, OR IN FURTHERANCE OF THE PROVISIONS OR OBJECTIVES OF THIS AGREEMENT,
REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED ON TORT, WARRANTY, CONTRACT OR ANY
OTHER LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
NOTWITHSTANDING THE ABOVE, (1) SUPPLIER AND AGILENT  WILL BE RESPONSIBLE FOR ANY DAMAGES OF ANY KIND INCLUDED IN AN
AWARD OR SETTLEMENT OF A THIRD PARTY CLAIM UNDER ARTICLE 15 ABOVE; (2)
SUPPLIER WILL BE RESPONSIBLE FOR PRODUCT LIABILITIY CLAIMS ARISING FROM OEM
PRODUCTS NOT COMPLYING WITH THE TERMS OF THIS AGREEMENT; AND (3) AGILENT WILL
BE REPSONSIBLE FOR PRODUCT LIABILITY CLAIMS ARISING FROM DEFECTS IN AGILENT
PRODUCTS (EXCEPT TO THE EXTENT THAT THOSE DEFECTS ARE COVERED UNDER (2) ABOVE).

23.           TERMINATION

23.1         Reason for Termination. Either
party may terminate as defined in Article 19. In addition Agilent may
terminate after 90 days notice if Supplier is purchased by or merged into
another Company which owns more than 50% of the shares of Supplier after such
purchase or merger.  Should Agilent
terminate this Agreement based on the purchase or merger of Supplier, Agilent
shall have the option to a one–time lifetime buy of 12 months from Supplier
pursuant to the terms of Section 12.1 above, including support as set
forth in Articles 11, 12, 13 and 14. Should such
purchase or acquisition occur during the First Contract Year for the CH 2000
System, Agilent shall have the additional remedy of recovering its NRE paid to
Supplier.  Supplier may terminate after
90 days notice if Agilent is purchased by or merged into another Company which
owns more than 50% of the shares of Agilent after such purchase or merger other
than any purchase of HSG by Koninklijke Philips Electronics N.V.

                

23.2         Outstanding Orders. Orders
issued prior to the expiration of this Agreement with Shipment Dates prior to
or within 90 days of expiration must be fulfilled pursuant to and subject to
the terms of this Agreement. Upon termination of this Agreement for Supplier’s
breach, Agilent may cancel any outstanding Order or require Orders to be
fulfilled even if a Shipment Date is after the date of termination.   Upon termination for Agilent’s breach,
Supplier may, at its option, refuse to fulfill any orders outstanding as of the
date of termination.

 

23.3         Return of Property. Each party
must return all Property and Confidential Information of the other party to the
other party upon expiration or termination. 
All such property must be in good condition, normal wear and tear
excepted.  Each party will determine the
manner and procedure for return of its property. The party receiving the
returned property will bear all return freight costs if return is due to such
party’s convenience or an uncured breach by such party.  Otherwise, the party returning the property
will bear all such costs.

                

23.4         Surviving Provisions.
Notwithstanding the expiration or early termination of this Agreement, the
provisions regarding Warranties in Article 10, Support in Article 11,
Manufacturing Rights in Article 12, Marketing and Licensing in Article
14, Intellectual Property in Article 15, Confidentiality in Article
20, Insurance Requirements in Article 21, Limitation of Liability in
Article 22, and the Miscellaneous provisions below will each survive in
accordance with their terms.

24.           MISCELLANEOUS

24.1         Notices. All notices to be given
under this Agreement must be in writing addressed to the receiving party’s
designated recipient specified in Section 3.5.  Notices are validly given upon the earlier of confirmed receipt
by the receiving party or threedays or seven days, for international
notices, after dispatch by courier or certified mail, postage prepaid, properly
addressed to the receiving party. 
Notices may also be delivered by telefax and will be validly given upon
written confirmation of receipt.  Either
party may change its address for purposes of notice by giving notice to the
other party in accordance with these provisions.

                

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

  

Exhibit
A                OEM Products and
Specifications

Exhibit
B                Supplier’s Prices

Exhibit
C                Schedule of Minimum OEM
Shipments

Exhibit
D                Release Delays Schedule
of Minimum Shipments

Exhibit
E                 CDA

Exhibit
F                 Software License Terms

Exhibit G                Deposit Agreement

Exhibit H                Cost of Replacement Parts

Exhibit I                  Support Flowchart

   

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

 

24.4         Assignment.  Neither party may, directly or indirectly,
in whole or in part, neither by operation of law or otherwise, assign or
transfer this Agreement or delegate any of its obligations under this Agreement
without the other party’s written consent, except to the extent permitted by
this Section 24.4.  Any attempted
assignment, transfer or delegation without such prior written consent or as
otherwise permitted under this Section 24.4 will be void.  Notwithstanding the foregoing, Agilent, or
its permitted successive assignees or transferees, may assign or transfer this
Agreement or delegate any rights or obligations hereunder without consent:  (1) to any entity controlled by, or under
common control with, Agilent, or its permitted successive assignees or
transferees; or (2) in connection with a merger, reorganization, transfer, sale
of assets or product lines, or change of control or ownership of Agilent or all
or substantially all of the assets or business of the Healthcare Solutions
Group, or its permitted successive assignees or transferees.  Without limiting the foregoing, this
Agreement will be binding upon and inure to the benefit of the parties and
their permitted successors and assigns. In the event that Supplier assigns or
transfers this Agreement or delegates any rights or obligations hereunder
without Agilent's consent Agilent may terminate this Agreement by giving
Supplier written notice within ninety (90) days after receiving written notice
from Supplier of such assignment, transfer or delegation.

                

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

                

24.6         Reference to Days.  All references in this Agreement to “days”
will, unless otherwise specified herein, mean calendar days.

                

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

                

24.8         No Publication.  Neither party may publicize or disclose to
any third party, without the prior written consent of the other party, the
terms of this Agreement, except as may required by law or regulation.  Without limiting the generality of the foregoing
sentence, no press releases may be made without the prior, mutual written
consent of each party.

                

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

 

 

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

                

24.11       Governing Law.  This Agreement will be governed in all
respects by the laws of the Commonwealth of Massachusettswithout
reference to any choice of laws provisions.

 

	APPROVED
  AND AGREED TO:	 	 
	 	 	 
	SUPPLIER:	 	AGILENT TECHNOLOGIES, INC.
	 	 	 
	By:    /s/David Chazanovitz

	 	By:    /s/Gary E. Hutchinson

	 	 	 
	Typed Name: David
  Chazanovitz	 	Typed Name: Gary E.
  Hutchinson
	 	 	Vice President & General
  Mgr.
	Title: President &
  CEO	 	Title: Cardiology
  Division
	 	 	 

 

EXHIBIT A

OEM PRODUCTS AND SPECIFICATIONS

1.             WINDOWS
2000 VERSION OF CH 2000 SYSTEM

General Description

Computer–based Cardiac Diagnostic System
controls both treadmill and ergometer stress test protocols. Cart–mounted
computer, display, keyboard, and output devices for both hospital and office
settings.

	Computer
	 	Type: 
    IBM–compatible Pentium III® (or
  equivalent), with 64 Mbytes (minimum) RAM, 
	 	and
  500 MHz (minimum) processor with 3.5 floppy disk.
	 	Operating System: Windows 2000.
	 	Data storage:
  2 Gbyte (minimum) hard drive provides full disclosure ECG storage for 30 full
  tests. Optional features to include a magnetic optical disk.
	 	Removable media:
  3 1/2 inch, 1.44 Mbytes PC–compatible diskette for software update
	 	Keyboard:
  Dedicated keys for common functions.
	 	 
	Display
	 	Type: 15–inch, high–resolution, color monitor mounted
  on swivel–tilt bracket.
	 	ECG Screen: Displays
  full 12 leads of diagnostic ECG, 2.1 sec. each, plus 9.4 sec. rhythm lead,
  and 3 or 6 leads of 6.5 sec., all on 1 mm color grid background (patented).
	 	Medians:  Displays 12 lead median beats,
  continuously updated, with rest reference medians.
	 	Graphs:
  Selectable trends of BP, HR and ST levels, continuously updated.
	 	Data:  Displays stage, stage time, exercise time,
  speed, grade, heart rate, blood pressure, and other variables.
	 	Sweep speeds:
  25 or 50mm/sec.
	 	Freeze:  Freezes 3, 6 or 12 lead ECG with
  continuous update of rhythm lead.
	 	Gain:  5, 10 or 20 mm/mV.
	 	WaveReview:
  Captures and stores every beat for efficient screen–review of entire test, or
  of selected time periods. Stores up to 30 tests.
	 	 
	ECG
  Amplifier
	 	Packaging: Belt mounted patient amplifier module with
  removable patient cable.
	 	Leads:  (1)
  Standard 12–lead.
	 	Sample rate: 1000 Hz. nominal
	 	Frequency response: 0.05 to 250 Hz.
	 	Common mode
  rejection: 100 dB min.
	 	Input impedance:  10 Mohm
  min.  (per ANSI/AMI EC–11 1991)
	 	Line filter:
  50/60 Hz adaptive canceller.
	 	Pacemaker detection:
  Detects pacemaker spikes between 0.5 – 2.0 ms and 2 – 250 mV.
	 	Defibrillation
  protection:
  Protected to 5000V and 400J (per ANSI/AAMI EC–11 1991).
		

 

	Signal Processing/ECG
  Computations	 
	 	WaveStarTM Signal Processing Technology: Removes motion and muscle artifact specifically
  in the ST segment and T–wave while preserving the QRS complex. Minimizes
  distortion to enhance more accurate diagnostic interpretation.
	 	Heart rate computation: Sliding average of last 8 beats.
	 	ST–T computations: ST level, slope, integral, and index.
	 	QRS
  detection:
  Threshold detection using bandpass filtered ASV (Absolute Spatial Vector).
	 	ST
  reference:
  Automatic J–point calculation based on ASVV (Absolute Spatial Vector
  Velocity) of median beats, continuously updated.
	 	Median
  beat calculation:
  Incremental update of median beats, including “relearn" response to
  gross changes in morphology and elimination of artifact and ectopic or
  aberrant beats.
	 	Artifact
  filter: Linear phase
  low–pass filter at 40Hz, independently applied to screen display and printer
  output.
	 	Baseline
  filter:
  Zero Distortion Linear Baseline Stabilization filter reduces wander without
  distorting ST segment, is independently selectable to screen and printer
  output; meets ANSI/AAMI diagnostic standards.
			

Stress Test Controller

Treadmill Interface: Computer
controls treadmill speed and incline; standard RS–232 interface or optional
Analog Interface Card. Compatible with:

	 	·                    
  TrackMaster 400 and
  425
	 	·                    
  Parker PM Medical
  (TM425 Serial Interface Protocol)
	 	·                    
  Quinton Q50, Q55, Q55XT, Q65 and Series 90
	 	·                    
  Marquette 1800 analog
	 	·                    
  Marquette 1800 CASE 12
  compatible, 1900 and 2000.
	Optional
  analog interface card required for Quinton treadmills and Marquette 1800
  analog treadmills. Optional interface cables required for all treadmills.
		

Bicycle
Interface:
Computer controls
bicycle resistance and measures RPM; standard RS–232 or optional analog
interface. Compatible with:

	 	·                    
  Quinton Lode Corival
	 	·                    
  Ergoline 900
	 	·                    
  Seca CardioTest 100.
	Optional
  Analog Interface Card required for Lode Corival. Optional interface cables
  required for all bicycles.
		

Stress
Echo Interface: Optional interface to
HP 2500 and Acuson XP.  Requires Analog
Interface Card.

Protocols: Bruce, modified Bruce,
Naughton, Astrand, and physician customized protocols.

User Programming: User–defined
protocols, screen and report formats, calculations, metrics, and other
preferences saved in site–specific file.

 

Strip Chart Recorder Output

	Paper
  Supply: 8.5 x 11 in. or A4,
  8 dots/mm vertical 16 dots/mm horizontal.
	12
  lead reports:
  3x4+1,  6x2+median and 6x2 formats; Rhythm report: Three
  user–selectable leads.
	Full
  Disclosure Report:
  Displays the entire arrhythmia record.
	Alternans
  Trend Report:
  Displays alternans levels vs. heart rate for the entire study.
	Write
  from Display:
  All printouts start with data leaving the ECG display.
	Summaries:  Exercise summary, medians summary, worse
  case 12 lead, maximum exercise, and ST–HR loops.
	Trend
  Reports: Trend graphs of ST
  level, ST slope, ST integral, and ST index.

 

Data Export Interface

	Not available in
  initial release of Windows 2000 Version of the CH2000 System.  Available upon release of [**] described
  in Section 2 of this Exhibit.  Data
  output of Exercise Summary Report Median Summary 12 lead ECG at each phase
  end to file in XML format. Each filed of report (e.g. “bp value at stage 3”)
  is tagged in the with a unique indentifying code.

 

Safety and Performance
Standards

	Designed
  to meet or exceed:
  ANSI/AAMI Standards EC 11–1991 and EC 13–1992; EN 60601–1:; EN
  60601–1–1:1991; EN 60601–1–2: 1993; EN 60601–2–27; CSA 22.2, No. 601.1–M90;
  EN 55011, Group 1, Class A; and UL2601–1.
	Chassis
  leakage:  <100 microamps RMS when measured in
  accordance with EN 60601–1.
	Patient
  leakage:  < 10 microamps sink current RMS when
  measured at the patient end of the patient cable in accordance with EN
  60601–1.

 

Regulatory

	Released Code will have
  appropriate FDA regulatory approval

 

Physical
and Environmental Specifications

	Size: Height: 58 in.; Width: 25.75 in; Depth: 27
  in.   Shipping weight 450 Lb.
	Power requirements: 90V to 127V, or 207V to 253V; 50/60 Hz +/–1Hz.
	Power consumption: 600 watts maximum.
	Operating temperature: 10–32.5 degrees C .
	Relative Humidity: 30 – 80% non–condensing.

[**]

EXHIBIT B

SUPPLIER’S
PRICES

March – December, 2001

To be updated each August and February
thereafter

 

	Product	Supplier’s
  Price 
	CH2000
  System
Including PM–3 Module, 10 Wire Set and
  cable to attach PM–3 to CH2000 and 1 year support (price will be reduced by
  $[**] during any year that Agilent agrees to increase minimum commitments by
  50% ([**] in year one, [**] in year two or [**] in year three)	$[**]
	[**]	$[**]
	Analogue
  Interface Card (required
  for stress echo or analogue treadmill)	$[**]
	Sensors
  	3rd
  party sensors can be used
	Tier
  2 Support (Parts & Consulting to Agilent)	$[**]
	Magnetic
  Optical Drive Option (includes SCCI controller board)	$[**]
	[**]
  Tier 2 Support (Parts & Consulting to Agilent)	$[**]

 

EXHIBIT C

SCHEDULE OF MINIMUM SHIPMENTS

 

	 	CH 2000 Systems 	[**]	Total CH 2000 Systems
	[**](*Assuming
  section 8 conditions are met)	Units [**]	Cost to
  Agilent	Units [**]	Cost to
  Agilent	Units [**]	Cost to
  Agilent
	[**]	[**]	$[**]	 	 	[**]	$[**]
	[**]	[**]	$[**]	 	 	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	 Total
  for 2001	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	Total for
  2002 	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	[**]	[**]	$[**]	[**]	$[**]	[**]	$[**]
	Total for
  2003  

	[**]	$[**]	[**]	$[**]	[**]	$[**]
	Total
  Contract	 	$[**]	 	$[**]	 	$[**]
	 	 	 	 	 	 	 
	Each year thereafter	[**]	$[**]	[**]	$[**]	[**]	$[**]
	 	 	 	 	 	 	 
	       
  Agilent Cost of CH 
        2000 Agilent Cost [**]	 	$[**]	 	$[**]	 

EXHIBIT D

Minimum Units Schedule if Release Date Slips for CH 2000
Systems

Any
units in excess of this schedule will count towards the total minimum commitment.  If the release slips beyond [**] the
minimums [**].

	Release Date per 

  specifications in Exhibit A	Before [**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	Total 2001	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	Total 2002	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	Total 2001	[**]	[**]	[**]	[**]
	Total Contract	[**]	[**]	[**]	[**]

 

Minimum Units Schedule if [**] Release Date Slips.

Any
units in excess of this schedule will count towards the total minimums.  If release slips beyond [**] for [**] or
[**] for [**] minimums [**].

 

	Release Date per specifications in Exhibit A	[**] 	[**] 	 [**]  	[**]  
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	Total 2001	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	31–Dec–02	[**]	[**]	[**]	[**]
	Total 2002	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]
	Total 2001	[**]	[**]	[**]	[**]
	Total Contract	[**]	[**]	[**]	[**]

 

EXHIBIT
E

CONFIDENTIAL DISCLOSURE
AGREEMENT

 

 

EXHIBIT F

SOFTWARE LICENSE TERMS

AGILENT LICENSE TERMS

LEGAL NOTICE:  PLEASE READ THESE TERMS BEFORE INSTALLING OR OTHERWISE USING THE
LICENSED MATERIALS.  ALL USE OF THESE
LICENSED MATERIALS IS SUBJECT TO THE LICENSE TERMS SET FORTH BELOW.  “LICENSED MATERIALS” INCLUDES THE SOFTWARE,
ANY WHOLE OR PARTIAL COPIES, AND ANY ACCOMPANYING INSTRUCTIONS, DOCUMENTATION,
TECHNICAL DATA, IMAGES, RECORDINGS AND OTHER RELATED MATERIALS.

USE OF THE SOFTWARE IS SUBJECT TO THE
AGILENT SOFTWARE LICENSE TERMS SET FORTH BELOW. USING THE SOFTWARE INDICATES
YOUR ACCEPTANCE OF THESE LICENSE TERMS. IF YOU DO NOT ACCEPT THESE LICENSE
TERMS, YOU MAY RETURN THE SOFTWARE FOR A FULL REFUND. IF THE SOFTWARE IS
BUNDLED WITH ANOTHER PRODUCT, YOU MAY RETURN THE ENTIRE UNUSED PRODUCT FOR A
FULL REFUND.

AGILENT SOFTWARE LICENSE TERMS

The following License Terms govern your
use of the accompanying Software unless you have a separate signed agreement
with Agilent.

License Grant.
Agilent grants you a license to Use one copy of the Software.   “Use” means storing, loading, installing,
executing or displaying the Software. You may not modify the Software or
disable any licensing or control features of the Software. If the Software is
licensed for “concurrent use”, you may not allow more than the maximum number
of authorized users to Use the Software concurrently.

Ownership.
The Software is owned and copyrighted by Agilent or its third party suppliers.
Your license confers no title to, or ownership in, the Software and is not a
sale of any rights in the Software. Agilent’s third party suppliers may protect
their rights in the event of any violation of these License Terms.

Copies and Adaptations.
You may only make copies or adaptations of the Software for archival purposes
or when copying or adaptation is an essential step in the authorized Use of the
Software. You must reproduce all copyright notices in the original Software on
all copies or adaptations. You may not copy the Software onto any public
network. You may not lease, rent or sublicense the Software without Agilent’s
prior written consent.

No Disassembly or
Decryption. You may not
disassemble or decompile the Software unless Agilent’s prior written consent is
obtained, or in the case of software provided by a third party, unless such
third party's consent is obtained. You may not modify, enhance, supplement,
create derivative work from, adapt, translate, reverse engineer, decompile,
disassemble or otherwise reduce the Software to human readable form; provided,
however, that if reproduction of the code and translation of its form are
necessary to obtain the information required to achieve the interoperability of
the Software with other programs, You shall inform Agilent in writing
accordingly and Agilent shall notify You within twenty (20) business days from
receipt of Your request that: (i) Agilent or its licensor will perform the work
in order to achieve such interoperability and charge You a reasonable expense
allowance for such work, or (ii) You yourself will be entitled to undertake
those actions, but only to the extent required to achieve the interoperability
of the Software with other programs. Upon request, you will provide Agilent
with reasonably detailed information regarding any disassembly or
decompilation.   You may not cause or
permit the disclosure, copying, renting, licensing, sublicensing, leasing,
dissemination or other distribution of the Software or the Documentation by any
means or in any form, without the prior written consent of Agilent.  You may not use the Software to conduct a
service bureau or similar business for the benefit of third parties.

Transfer.
Your license will automatically terminate upon any transfer of the Software.
Upon transfer, you must deliver the Software, including any copies and related
documentation, to the transferee. The transferee must accept these License
Terms as a condition to the transfer.

Termination.
Agilent may terminate your license upon notice for failure to comply with any
of these License Terms. Upon termination, you must immediately destroy the
Software, together with all copies, adaptations and merged portions in any
form.

Export Requirements.
You may not export or re–export the Software or any copy or adaptation in
violation of any applicable laws or regulations.

U.S. Government
Restricted Rights. The Software and any
accompanying documentation have been developed entirely at private expense.
They are delivered and licensed as “commercial computer software” as defined in
DFARS 252.227–7013 (Oct 1988), DFARS 252.211–7015 (May 1991) or DFARS 252.227–7014
(Jun 1995), as a “commercial item” as defined in FAR 2.101(a), or as
“Restricted computer software” as defined in FAR 52.227–19 (Jun 1987)(or any
equivalent agency regulation or contract clause), whichever is applicable. You
have only those rights provided for such Software and any accompanying
documentation by the applicable FAR or DFARS clause or the Agilent standard
software agreement for the product involved.

Limitation of Liability.  AGILENT AND ITS LICENSORS SHALL NOT BE
LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR OTHER INDIRECT
DAMAGES, EVEN IF AGILENT OR ITS LICENSORS ARE ADVISED OF OR AWARE OF THE
POSSIBILITY OF SUCH DAMAGES.  IN NO
EVENT SHALL AGILENT'S AND ITS LICENSORS' AGGREGATE LIABILITY EXCEED THE
PURCHASE PRICE OF THIS SOFTWARE.

EXHIBIT G

 

 

THREE
PARTY ESCROW AGREEMENT

BY

AND

AMONG

AGILENT
TECHNOLOGIES, INC.,

CAMBRIDGE
HEART

AND

DSI
TECHNOLOGY ESCROW SERVICES, INC.

DATED

March
16, 2001

 

 

THREE PARTY ESCROW AGREEMENT

Account Number: _______________

THIS ESCROW AGREEMENT
is entered into by and among, DSI TECHNOLOGY ESCROW SERVICES, INC. a Delaware
corporation with an office in Burlington, MA ("Holder"); Cambridge
Heart, Inc., a Delaware corporation with offices at One Oak Park Drive,
Bedford, MA ("Supplier"); and Agilent Technologies, Inc., a Delaware
corporation with principal offices at 395 Page Mill Road, Palo Alto, California
94304 ("Agilent").

AGREEMENT

The
parties hereby agree as follows:

1.             General.  This Escrow Agreement is entered into in
furtherance of the provisions and objectives of that certain OEM Purchase
Agreement effective as of March 15 2001 between Agilent and Supplier (the
"Master Agreement") regarding supply of those products specified in
such Master Agreement ("Product(s)").  This Escrow Agreement is effective as of March 15, 2001 (the
"Effective Date").  Any
additional or contrary terms contained in the Master Agreement will supersede
and take precedence over the terms contained in this Escrow Agreement.

                

2.             Deposit.

                

2.1              Supplier will deposit with Holder
those materials specified in Exhibit 1 (the "Deposit"), and
keep the Dep­osit at the current revision level on a quarterly basis commencing
with the Effective Date. All Deposits will be in either printed or
machine–readable format.  The Deposit
must also include current regulatory concurrence letters.

   

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

   

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

                

3.             Verification and Delivery.  The Deposit will be packaged for storage as reasonably instructed
by Holder and accompanied by a cover sheet identifying the contents as
indicated in Exhibit 2.  Risk of
loss or damage to the Deposit during shipment will lie with the party sending
it.  Agilent will have the right to
verify, at Supplier's site, each Deposit before shipment.  Supplier will give Agilent fifteen (15) days
advance written notice and opportunity to inspect, witness compilation, test
and otherwise reasonably assure itself of the contents of the Deposit to be
shipped.  Agilent may authorize a third
party to act in its place, provided that the third party agrees to any
confidentially obligations assumed by Agilent in the Master Agreement.  Supplier hereby grants Agilent and Holder,
free of charge, the right to use the facilities of Supplier, including its
computer systems, to verify the Deposit. 
Supplier will make available technical support personnel as necessary to
verify the Deposit.

 

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

                

5.             Use and Nondisclosure. 
Except as provided in this Escrow Agreement, Holder will not disclose or
make any use of the Deposit, nor will Holder disclose or make use of any
confidential information provided to Holder by Supplier or Agilent in
connection with this Escrow Agreement without the prior written consent of
Supplier or Agilent, respectively. 
These obligations will continue indefinitely notwithstanding termination
of this Escrow Agreement.

                

6.             Records and Audit RightsError!
Bookmark not defined..  Holder will keep complete written records of
the activities undertaken and materials pre­pared pursuant to this Escrow
Agreement.  Upon reasonable notice to
Holder during the term of this Escrow Agreement, Supplier and Agilent will be
entitled to inspect the records of Holder with respect to this Escrow Agreement
at reasonable times during normal business hours at Holder's facilities and to
inspect the Deposit required then to be held by Holder; provided, however,
that Supplier shall be given the opportunity to be present whenever Agilent
inspects the Deposit.

                

7.             Release of Deposit.

                

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

   

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

     

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

     

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

     

d.  Failure of Supplier to continue to do business
in the ordinary course.

e.  Unless prohibited
by law, the filing of a petition by or against Supplier for relief under the
United States Bankruptcy Code; a general assignment for the benefit of
creditors by Supplier; the appointment of a general receiver or trustee in
bankruptcy for Supplier's business or property; or action by Supplier under any
state insolvency or similar law for the purpose of its bankruptcy,
reorganization, or liquidation. However, the occurrence of the described events
will not apply if, within thirty days thereafter, Supplier (including its
receiver or trustee in bankruptcy) provides assurances, reasonably satisfactory
to Agilent, of Supplier's continuing ability and willingness to fulfill all of
its material obligations under the Master Agreement; or

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

7.2              If Agilent notifies Holder of the
occurrence of a release condition as defined above, Holder will immediately
notify Supplier and provide Supplier with a copy of the notice from
Agilent.  Supplier will have ten (10)
business days from the date Holder sends its notice to notify Holder, with a
copy to Agilent, that the release condition has not occurred or has been
cured.  Failing such timely notice,
Holder will release a copy of the Deposit to Agilent.  However, if Holder receives timely notice from Supplier, Holder
will not, unless Agilent exercises its rights to the procedures as specified
below in Section 9, release a copy of the Deposit but will instead institute
the Dispute Resolution Process in Section 10 within five (5) business days of
such timely notice from Supplier.

 

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

 

9.               Dispute Resolution Process.  Holder will first notify Supplier and Agilent in writing of
contrary instructions from Agilent and Supplier for release of the
Deposit.  Within five (5) business days
after the date the notice is sent by Holder, three referees will be appointed,
one each by Supplier, Agilent and Holder. 
Each party will notify the others of its referee's identity within the
five–day (5) period or forfeit its right to appoint one.

 

On
the tenth (10th) business day after the dispute notice from Holder, the
referees will meet at the offices of Holder and will hear testimony and other
evidence that Supplier and Agilent may wish to present with respect to the
dispute.  The meetings will proceed with
whatever number of duly appointed referees attend the meetings, and will be
conducted from 8:30 am. to 5:30 p.m. on no more than five (5) consecutive
business days, national holidays excluded. 
Agilent will present up to two days of evidence followed by up to two
days of presentation from Supplier, followed by a final day reserved for
rebuttal by each party in the morning and afternoon, respectively.  Supplier, Agilent and Holder agree that the
evidence and results of the hearings will not be disclosed to third parties.

 

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

 

10.              Joint Release. 
Agilent and Supplier may, by joint written instruction to Holder,
authorize the release of the Deposit or a copy of it to the party named in the
instruction.

 

11.              Rights in the Deposit.

 

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

 

11.2            Agilent’s Rights.

a.  Supplier hereby grants to Agilent a present
license in the intellectual property content of the Deposit exercisable upon
release of the Deposit by Holder to Agilent. 
Agilent's license is worldwide non–exclusive and royalty–bearing in
accordance with Section 12.2 of the Master Agreement.  Agilent's license is limited in duration to the term of the
Master Agreement as may be renewed. 
Agilent's license is restricted to the furtherance of Agilent's rights
or fulfillment of Supplier's obligations as set forth in the Master Agreement
as may be amended or extended.  If the
Master Agreement is terminated before concurrently with or after the exercise
of Agilent's right to access the Deposit under this Escrow Agreement the duration
and scope of the foregoing license will be interpreted as if the Master
Agreement was not so terminated.

 

b.  The foregoing license includes the right to
reproduce, translate, modify and distribute copies, translations, derivative
works, compilations and collective works of any Deposit user documentation or
software (in machine–readable form only). 
For all other intellectual property content of the Deposit, Agilent's
license includes the right to make, have made, use, sell, import, offer for
sale and distribute products based on the Deposit under any intellectual
property right including patent, copyright, mask work, trade secret or other
similar right.  In all cases, Agilent's
license includes the right to use subcontractors or sublicensees provided they
comply with any confidentiality obligations assumed by Agilent in the Master
Agreement.

c.  In addition,
Supplier grants to Agilent the right to use the materials from Supplier's
vendors and subcontractors reasonably required for the manufacture, support and
distribution of the products to which the Deposit relates ("Related
Materials") or will use its best efforts to allow Agilent to procure the
Related Materials from Supplier's vendors and subcontractors.

 

d.  Agilent will treat the Deposit and Related Materials
as confidential information according to the terms of the Master Agreement.

 

e.  If permitted by local authority, Supplier
hereby grants to Agilent the right to utilize its manufacturing and
distribution approvals anywhere in the world.

 

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

 

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

  

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

  

15.             Miscellaneous.

 

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

 

 

15.2           Authenticity.  Holder may act in reliance upon any
instruction, instrument or signature believed to be genuine and may assume that
it has been duly authorized.

  

15.3           Merger.  The Master Agreement and this Escrow
Agreement, including the Exhibits, constitutes the entire agreement between the
parties concerning the subject matter hereof and will supersede all previous
communications, representations, understandings, and agreements, oral or
written, between the parties.

  

15.4           Assignment.  No party may assign any rights or
obligations of this Escrow Agreement without the prior written consent of the
others.

  

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

            

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

  

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

  

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

  

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

            

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

  

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

 

 

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

  

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

AGREED:

	HOLDER:	 
	By:

	 
	Print Name:

	 
	Title:

	 
	 	 
	SUPPLIER:

	 
	By:

	 
	Print Name:

	 
	Title:

	 
	 	 
	AGILENT
  TECHNOLOGIES, INC.	 
	By:

	 
	Print Name:

	 
	Title:

	 

EXHIBIT 1

DEPOSIT

	Hardware Manufacturing Materials (whenever
  relevant)	 
	 	 
	1.	Design Specifications for the Product.
	 	 
	2.	Electronic or paper copies of
  manufacturing drawings, specifications, schematics, and other drawings
  pertinent to manufacture Products and Spare Parts at the revision level then
  in effect.
	 	 
	3.	Final test procedures.
	 	 
	4.	Printed circuit board layouts in
  machine–readable form.
	 	 
	5.	Materials lists, broken down by
  assembly, including reference designators.
	 	 
	6.	Source code of and master samples of
  programmable hardware, such as ROM/PROM firmware, PALs, etc.
	 	 
	7.	Vendor contact information.
	 	 
	Source Code (whenever relevant)	 
	 	 
	1.	A copy of source code.
	 	 
	2.	A description of the development
  system, hardware, software, compilers and the like sufficient for Agilent to
  continue development and sup­port of the software included n the Master
  Agreement.
			

 

EXHIBIT 2

DEPOSIT COVER SHEET

 

Cover
Sheet for Delivery of Deposit

Deposit
Account Name                                        
                                          
                                          
                                          

Deposit
Account Number                                        
                                          
                                          
                                      

                 Deposit                  
Supplement to Deposit                     
Replacement of Deposit

Program
Name ____________________________________________________ Version                                
             

Date _____________________________
CPU/OS _______________________ Compiler                                    
        

Application
                                          
                                          
                                          
                                          
                  

Utilities
needed                                         
                                          
                                          
                                          
             

Special
Operating Instructions                                       
                                          
                                          
                               

Media
_______________________________________ Quantity                                  
                                          
            

 

EXHIBIT 3

ACCOUNT REPRESENTATIVES

 

	SUPPLIER:	Copy
  to:
	 	 
	Name
                                           
                             	 
	Title
                                           
                               	 
	Address
                                           
                       	 
	                                   
                              	 
	Phone
                                           
                           	 
	 	 
	AGILENT:                            
                                 	Copy
  to:
	 	 
	Name
                                           
                             	 
	Title
                                           
                               	 
	Address
                                           
                       	 
	                                   
                              	 
	Phone
                                           
                           	 
	 	 
	HOLDER:	 
	 	 
	Name
                                           
                             	 
	Title
                                           
                               	 
	Address
                                           
                       	 
	                                   
                              	 
	Phone
                                           
                           	 

 

EXHIBIT H

Service Parts Price
List – 2000

Agilent Parts only

 

	Part Number	Description	Distr.  $
	 	 	 
	 	MISC	 
	 	 	 
	 	Replacement PM–3 Module	$[**]
	00100–000	Manual, Service CH2000 	$[**]
	10–0093–002	Manual, Operators CH2000	$[**]
	10056–001	Center Bin	$[**]
	10072–001	Analog Interface PCB	$[**]
	10089–001	Keyboard Assembly, U.S. version	$[**]
	10097–001	Hard Disk Drive (Win2000 domestic)	$[**]
	10097–003	Hard Disk Drive (Win2000 International)	$[**]
	20002–001	System Power Cable (US)	$[**]
	20002–003	System Power Cable (Unterminated for inter. )	$[**]
	20008–003	PS2 Mouse	$[**]
	20009–004	Monitor Iiyama	$[**]
	20045–001	Monitor fastening screw	$[**]
	20128–001	Monitor slotted washer 	$[**]
	20129–002	Spare Fuse 5x20 Slow Blow, 5A (Europe)	$[**]
	20129–003	Spare Fuse 5x20, Slow Blow, 6.3A (US) 	$[**]
	20298–001	2 3/8”" caster	$[**]
	20298–002	4”" caster	$[**]
	20517–001	Loopback Plug, 9 pin Serial	$[**]
	20517–002	Loopback Plug, 25 pin Serial	$[**]
	20518–001	Loopback Plug, 25 pin Parallel	$[**]
	20550–002	Molded Top Deck assembly. (new cart)	$[**]
	99999–999	Labor rate	$[**]
	 	Assembly. Computer 	$[**]
	20131–003	Thermal Recorder 8 1⁄2 
  X  11   AR300	$[**]
	10069–001	Magnetic Optical Drive Option

  (incl. SCCI controller board)	$[**]

 

Confidential
Materials omitted and filed separately with the Securities and

Exchange Commission. Asterisks denote omissions.

	 	Service Parts Price List – 2000	 
	 	Agilent Parts only	 
	Part Number	Description	Distr.  $
	 	 	 
	 	CABLES	 
	 	 	 
	10–0150–001	PM–3 Data Cable 	$[**]
	10075–001	I/F Cable, Marquette 1800,1900,and  Case 12	$[**]
	20062–002	I/F Cable, Quinton Q55, Q65, and Series 90	$[**]
	20062–003	I/F Cable, Marquette 1800
  Analog	$[**]
	20062–007	BE 350 Ergometer Cable	$[**]
	20062–009	I/F Cable, Trackmaster TM425, 
  (9 pin – 9 pin)	$[**]
	20063–001	Interface Cable, Lode Corival 400 Ergometer	$[**]
	20063–004	Interface Cable, Seca Cardiotest 100 Ergometer	$[**]
	20063–007	Interface Cable, Ergoline 900	$[**]
	10–0154–001	PM–3  Lead set, Std
  Stress 10 Electrode,  US format	$[**]
	10–0154–002	PM–3 lead set, Std Stress 10 Electrode,  Inter.	$[**]
	20367–001	Interface Cable, Strip chart printer	$[**]
	20470–001	Interface Cable, Stress Echo 	$[**]

 

 EXHIBIT I

Agilent/Cambridge Heart Support
Flowchart

 

 

[**]

 

[**] Confidential materials omitted and
filed separately with the Securities and Exchange Commission. Asterisks denote
omissions.Prepared by MerrillDirect

EXHIBIT 10.1

Amendment to Form of Severance Letter Agreement

between the Company and Terry Vandewarker

 

 

March 14, 2001

Mr. Terry Vandewarker

6059 Cornerstone Court West

San Diego, CA  92121

Dear Mr. Vandewarker:

                We are pleased to inform you that the Company’s Board
of Directors has recently approved an amendment to your existing special
severance benefit program established for you on January 21, 2000 (“Letter
Agreement”). The purpose of this letter is to set forth those changes, and to
evidence your agreement to them. Unless specifically noted in this letter, all
of the terms and condition of your existing Letter Agreement will be preserved.

                The following Section of your Letter Agreement is
hereby amended and restated in its entirety to read as follows:

PART TWO — CHANGE IN CONTROL BENEFITS

                Subject
to the release requirement of Part Four of this letter agreement, should your
employment be terminated Without Cause within eighteen (18) months after a
Change in Control, then you will become entitled to receive the special
severance benefits provided in this Part Two. 

                You
will be entitled to a lump sum payment equal to two (2.0) times your Total
Compensation and payable within thirty (30) days after your termination Without
Cause.

                Your
payments will be subject to the Company’s collection of applicable federal and
state income and employment withholding taxes.

                Each
of your outstanding Options shall (to the extent not then otherwise fully
excercisable) automatically accelerate so 
that each such Option shall become fully vested and immediately
excercisable for the total number of shares of Common Stock at the time subject
to that Option.  Each such accelerated
Option, together with all of your other vested Options, shall remain
excercisable for fully-vested shares until the earlier of (i) the expiration
date of the option term or (ii) the end of the three (3)-month period measured
from the date of your Termination Without Cause.

                Please
indicate your agreement to the foregoing by signing the enclosed copy of this
letter and returning it to the Company.

	 	Very truly yours,
	 
	 
	ENCAD, INC.
	 
	 
	By:   /s/
  Charles E. Volpe

	 
	Name: Charles E. Volpe
	Title:  Director

 

 

AGREEMENT

                I hereby agree to and accept all of the modifications
to the terms and provisions of the Letter Agreement made hereinabove, governing
the severance benefits to which I may become entitled upon a termination of my
employment under certain prescribed circumstances. 

	Dated:  April 25, 2001	 
	 	 
	 	 
	 	/s/ Terry Vandewarker

	 	Terry Vandewarker

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