Document:

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                                                                    EXHIBIT 10.6

                                                                        NATUS(R)

                          Natus Medical Incorporated

                            DISTRIBUTION AGREEMENT

TERRITORY:        JAPAN
                  -----

DISTRIBUTOR:      NIPPON EUROTEC CO., LTD.
ADDRESS:          Akasaka Daiichi Building, 9-17
                  Akasaka 4-chome, Minato-ku
                  Tokyo, 107
                  Japan

EFFECTIVE DATE:   June 11, 1997
                  -------------

EXPIRATION:       June 10, 2001
                  -------------

Natus Medical Inc. 1501 Industrial Road, San Carlos, CA 94070 415-802-0400
FAX 415-802-0401

Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
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                             DISTRIBUTOR AGREEMENT

     This Distributor Agreement ("Agreement"), effective as of the 11th day of
June, 1997 (the "Effective Date"), is entered into by and between Natus Medical
Inc., a California corporation having offices at 1501 Industrial Road, San
Carlos, California 94070, United States of America ("Natus"), and Nippon
Eurotec, a corporation organized under the laws of Japan, having offices at
Akasaka Daiichi Building, 9-17, Akasaka 4-chome, Minato-ku, Tokyo, 107 Japan
("Nippon Eurotec").

                                  BACKGROUND

A.   Nippon Eurotec desires to distribute Natus's Products (as defined below)
in Japan on the terms and conditions set forth below.

B.   Natus desires to appoint Nippon Eurotec as Natus's exclusive distributor
of the Products in Japan on the terms and conditions set forth below.

1.        DEFINITIONS

     1.1  "Customers" shall mean end-user customers for the Products solicited
           ---------
by Nippon Eurotec within the Territory.

     1.2  "Documentation" shall mean the end-user manuals, Software license
           -------------
agreement and related materials provided by Natus to Nippon Eurotec hereunder,
as set forth in Exhibit A.
                ---------

     1.3  "Product" or "Products" shall mean Natus ALGO Newborn Hearing
           -------      --------
Screener(TM) and associated disposable products, and related documentation
listed on Exhibit A attached hereto, as such products may be changed by Natus in
          ---------
Natus's discretion from time to time during the term of this Agreement.
Notwithstanding the foregoing, Natus shall not materially change the Products
without first providing [***] notice to Nippon Eurotec.

     1.4  "Software" shall mean the computer program(s) listed in Exhibit A in
           --------                                               ---------
machine executable object code format and Updates thereto which are incorporated
in the Product.

     1.5  "Territory" shall mean Japan.
           ---------

     1.6  "Updates" shall mean error corrections and bug fixes that Natus
           -------
generally makes available to its customers free of charge, but excluding new
versions of the Software that contains significant new features or
functionality, as determined by Natus in Natus' sole discretion.

2.   APPOINTMENT

     2.1  Grant. Natus hereby appoints Nippon Eurotec, and Nippon Eurotec hereby
          -----
accepts the appointment, as Natus's exclusive distributor to distribute Products
in the Territory only for use in the Territory. Natus agrees not to distribute
Products directly in the Territory or to appoint any

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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in the Territory. Natus agrees not to distribute Products directly in the
Territory or to appoint any third party to distribute Products in the Territory.
Inquiries for the Products received by Natus from the Territory shall be
referred to Nippon Eurotec.

     2.2  No Other Rights.  Except as expressly provided herein, no right, title
          ---------------
or interest is granted by Natus to Nippon Eurotec. Natus may distribute products
other than Products in the Territory, either directly or indirectly, for any and
all uses, and no right, title or interest is granted by Natus to Nippon Eurotec
relating to products other than the Products.

     2.3  Software License. Prior to providing any Customer with any Software,
          ----------------
Nippon Eurotec shall ensure that each Customer has read and agreed to the terms
and conditions of the Software license agreement contained in each Software
package (the "Software License Agreement"). Nippon Eurotec shall diligently
enforce Software License Agreements and use its best efforts to ensure that
Customers abide by the terms of Software License Agreements. Nippon Eurotec
shall not, and shall not authorize any third party to, copy, modify, alter,
reverse engineer, disassemble or decompile the Products, and Nippon Eurotec
shall not distribute or market any Product containing any Software
electronically, or by interactive cable, remote processing services, online
services, linkups or multi-user local or area networks. Software provided to
Nippon Eurotec hereunder is subject to license and not sale.

     2.4  No Conflicts. Except for the Products and the products listed in
Exhibit B attached hereto, the parties acknowledge and agree that any efforts by
---------
Nippon Eurotec to sell, license, or distribute products in the market for
newborn hearing screening ("Competing Products") in the Territory would
constitute a conflict of interest with respect to Nippon Eurotec's obligations
to market and distribute the Products, and except for the Products and the
products listed in Exhibit B attached hereto, Nippon Eurotec represents and
                   ---------
warrants that as of the Effective Date of the Agreement, it does not represent
any Competing Products and will not represent any Competing Products during the
term of this Agreement.

2.   OBLIGATIONS OF NIPPON EUROTEC

     3.1  Diligence. Nippon Eurotec shall use its best efforts to promote
          ---------
vigorously the marketing and distribution of the Products to realize the maximum
sales potential for the Products in the Territory. Except as expressly set forth
herein, Nippon Eurotec shall be solely responsible for all costs and expenses
related to the advertising, marketing, promotion, and distribution of the
Products and for performing its obligations hereunder.

     3.2  Import. Nippon Eurotec shall be responsible for the importation of
          ------
the Products, including shipping and duties.

     3.3  Staffing. Nippon Eurotec will dedicate sufficient staff to undertake
          --------
its activities.

     3.4  Inventory. Nippon Eurotec shall maintain a sufficient inventory of
          ---------
Products.

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     3.5  Reports. Nippon Eurotec shall report to Natus, within thirty (30)
          -------
working days after the end of each quarter, on the Nippon Eurotec Sales Report
Form contained in Exhibit C hereto.

     3.6  Application for Government Approvals. The Parties anticipate that
          ------------------------------------
applications will need to be submitted, and approvals obtained, from the
Japanese Ministry of Health and Welfare ("MHW") concerning the importation and
sale of Products in the Territory.

          3.6.1  Shonin. With respect to each Natus product included as a
                 ------
          Product hereunder, Nippon Eurotec agrees to prepare and submit an
          application for Shonin and to exert every effort to obtain Shonin on
                          ------                                     ------
          Products. Shonin for the first Product and all subsequent Products
                    ------
          shall be obtained by no later than the date agreed to in writing by
          Nippon Eurotec and Natus. Natus reserves the right to terminate this
          Agreement pursuant to paragraph 16 herein in the event any Shonin for
                                                                     ------
          any Product is not obtained by such date. Natus will provide up to two
          (2) units of Product for each Shonin application. Nippon Eurotec will
                                        ------
          bear all costs incurred in Shonin application, and Natus shall
                                     ------
          reimburse Nippon Eurotec as set forth below. Natus shall receive draft
          copies of all documents prior to submittal to the MHW, and Natus
          reserves the right to require changes in any such application
          documents.

          3.6.2  Kyoka. The parties anticipate that Kyoka will likely be
                 -----                              -----
          required at the time of importation of Products. Nippon Eurotec shall
          at its own cost obtain Kyoka.
                                 -----

          3.6.3  MHW Reimbursement Schedule. The parties contemplate that it
                 --------------------------
          will be advantageous to obtain MHW approval for Products to allow
          reimbursement under Japan's medical insurance reimbursement system.
          Nippon Eurotec shall obtain medical insurance reimbursement approval,
          the costs for which shall be borne by Nippon Eurotec.

          3.6.4  Ownership of Approvals The parties agree that Shonin may be
                 ----------------------                        ------
          applied for and obtained in Nippon Eurotec's name, and if so, that
          Nippon Eurotec shall hold such Shonin solely for the benefit of Natus
                                         ------
          subject to the terms of this Agreement. Nippon Eurotec agrees that at
          Natus's unilateral request, Nippon Eurotec shall take all actions
          required to transfer Product Shonin to Natus or its nominee, and at
                                       ------
          such time Nippon Eurotec shall be reimbursed for its direct out-of-
          pocket expenses in connection with each Product Shonin obtained by
                                                          ------
          Nippon Eurotec in an amount [***] to [***] by a number the [***] of
          which shall be the [***] of this Agreement and the [***] of which
          shall be the number of [***] in the [***] of this Agreement.
          Notwithstanding the foregoing, Nippon Eurotec shall not be reimbursed
          for its expenses if this Agreement is terminated (i) by Natus for
          Nippon Eurotec's breach; (ii) by expiration of this Agreement; or
          (iii) by Natus for Nippon Eurotec's inability to obtain Shonin under
                                                                  ------
          this section.

     3.7  Product Support. Nippon Eurotec shall be solely responsible for
          ---------------
supporting all Products distributed hereunder. Nippon Eurotec shall provide
reasonable technical support to

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

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Customers, including without limitation (i) maintaining trained and competent
technical and engineering support personnel for the Products who are
sufficiently knowledgeable with respect to the Products to answer Customer
questions regarding the use and operation of Products, (ii) designating a
technical liaison to coordinate Nippon Eurotec's technical support provided to
Customers, (iii) responding promptly to requests for technical support from
Customers, and (iv) providing technical support services to address and resolve
Customers' support requests with respect to the Products. Nippon Eurotec shall
ensure that Nippon Eurotec's technical and engineering support personnel attend
any training provided by Natus with respect to the Products.

     3.8  Customer Inquiries. Nippon Eurotec shall ensure that all Customer
          ------------------
questions regarding the use or operation of Products are initially addressed to
and answered by Nippon Eurotec.

     3.9  Product Support Reports. Without limiting the foregoing and in
          -----------------------
addition to any other obligations set forth in Natus' then current support terms
and conditions, Nippon Eurotec also shall be responsible for (i) providing
sufficient information to Natus for Natus to duplicate any reported error in the
Products; (ii) incorporating Updates into the Products promptly upon receipt
thereof; (iii) reporting errors promptly in English and in writing in accordance
with Natus' standard support procedures; and (iv) providing reasonable
cooperation and full information to Natus in the furnishing of support for the
Products.

     3.10 Insurance. During the term of this Agreement, Nippon Eurotec shall
          ---------
obtain and keep in force comprehensive, general liability, and product liability
insurance, with limits at least equal to the total retail value of all Products
sold by Nippon Eurotec, and naming Natus as a loss payee.

4.   OBLIGATIONS OF NATUS

     4.1  Information and Support. Natus shall use reasonable efforts to provide
          -----------------------
to Nippon Eurotec such back-up telephone or electronic-mail technical support as
Natus makes generally available to its distributors other than Nippon Eurotec.
Such telephone support shall be provided during Natus' normal business hours.

     4.2  Marketing Materials. Natus, at its expense, shall periodically provide
          -------------------
Nippon Eurotec with reasonable quantities of Natus' advertising and promotional
materials, pricing information and technical data related to the Products in
English, in each case to the extent Natus in its discretion makes such materials
generally available to its distributors other than Nippon Eurotec; provided that
Nippon Eurotec shall pay the freight costs and other taxes and duties applicable
to any such items provided or the delivery thereof. Nippon Eurotec, at its
expense, shall produce Japanese language versions of such marketing materials,
but only with Natus' prior written approval; and shall provide Natus with copies
of all Japanese language materials which it has prepared.

     4.3  Translation; Software Localization.
          ----------------------------------

          4.3.1  Translation of Documentation. Documentation including end-user
                 ----------------------------
          manuals, Software License Agreement, promotional and advertising
          materials and related

                                                                               4
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          materials provided by Natus pertaining to Products shall be translated
          into Japanese by Nippon Eurotec's expense. Prior to using any such
          translated materials, however, Nippon Eurotec shall provide to Natus
          full Japanese text drafts of all such translated Documentation, and
          shall refrain from releasing to any third party any such translated
          Documentation without the prior written approval of Natus. Natus owns
          the copyright to all such translated Documentation. The schedule for
          preparing such translated Documentation shall be agreed to by the
          parties.

          4.3.2  Software Localization. Natus Software shall be "localized"
                 ---------------------
          according to a schedule and budget to be agreed to by the parties. It
          is expected that after an initial number of Products have been
          purchased and are being used by end-users, that Natus and Nippon
          Eurotec will meet and confer to determine which functions and features
          of Software need to be "localized." Natus, as project manager, and
          Nippon Eurotec will [***] in the "localization" expenses, provided
          that no expenses for "localization" shall be incurred by either party
          without the prior written consent of both parties. Natus shall hold
          copyright to all such "localized" Software.

     4.4  Training and Personnel Exchanges. The parties agree that technical
          --------------------------------
service training, product training, and ongoing personnel exchanges, shall occur
as follows:

          4.4.1  Nippon Eurotec shall dispatch [***] competent technical
          service employees to Natus to be trained in Product technical
          service. Training for a period of up to [***] shall be offered at
          [***] by Natus. Travel, housing, and all other incidental costs to be
          incurred by such Nippon Eurotec Employees shall be the responsibility
          of Nippon Eurotec.

          4.4.2  Natus shall dispatch up to [***] of its personnel to conduct
          Product training in Japan of Nippon Eurotec sales personnel, as well
          as end-users as appropriate. Such Product training for up to [***]
          in duration shall be offered [***] by Natus. International air
          transportation and Tokyo lodging costs shall be borne by [***];
          domestic Japanese travel outside Tokyo, including transportation,
          lodging, and meals, shall be borne by Nippon Eurotec. Training
          necessitated by Product Software updates shall be conducted as
          necessary.

          4.4.3  The parties agree that it is mutually beneficial to regularly
          exchange sales, technical, or executive personnel, at a frequency of
          at least annually, during the term of this Agreement. Accordingly,
          each party shall reasonably accommodate the other at such time as one
          party desires to send sales, technical, or executive personnel to the
          other party. Each party shall pay all its own expenses in connection
          with any such exchanges.

5.   PRICE/PRICE CHANGE

     5.1  Price. The prices and fees to be paid by Nippon Eurotec to Natus for
          -----
Products shall be as set forth in price purchase schedules issued by Natus from
time to time during the term of this

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             5
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Agreement ("Price"). The Prices of Products as of the Effective Date are as set
forth in EXHIBIT D attached hereto.

     5.2  Price Changes Generally. Prices are subject to change by Natus at any
          -----------------------
time in its sole discretion. However, price changes shall be effective after
[***] written notice to Nippon Eurotec, and Natus shall reasonably accept
orders at the earlier price received during such [***] period.

6.   TAXES AND OTHER CHARGES. Prices do not include and are net of any Japanese
or United States governmental taxes or charges of any kind. All payments by
Nippon Eurotec shall be made free and clear of, and without reduction for, any
withholding taxes.

7.   PAYMENT Unless otherwise specified, Products are priced FCA ("Free
Carrier," INCOTERMS 1990) Natus shipping dock, San Carlos, California. Payment
shall be by international, irrevocable, negotiable letters of credit, permitting
partial shipment and partial payment, payable in no longer than thirty (30)
days, in U.S. Dollars, and confirmed through such bank as Natus may from time to
time require, presented at least thirty days prior to requested shipment, and on
such other commercially reasonable terms as Natus requires from time to time. At
the request of Nippon Eurotec, Natus may provide for or allow other reasonable
payment terms on any particular sale.

8.   ORDERS

     8.1  Order and Acceptance. All orders for Products submitted by Nippon
          --------------------
Eurotec shall be initiated by written purchase order sent to Natus and
requesting a shipment date during the term of this Agreement; provided, however,
that an order may be initially placed orally, by telecopy or fax if a
conformational written purchase order is received by Natus within ten (10) days
of said oral, telecopy or fax order. All orders for Products are subject to
acceptance by Natus in writing, and Natus shall have no liability to Nippon
Eurotec with respect to purchase orders that are not accepted. No partial
acceptance of a purchase order shall constitute the acceptance of an entire
order, absent the written acceptance of such entire order. To facilitate Natus's
production scheduling, Nippon Eurotec shall submit purchase orders to Natus in
accordance with Natus's lead times then in effect which shall be communicated to
Nippon Eurotec upon Nippon Eurotec's request. Notwithstanding the foregoing,
Nippon Eurotec acknowledges and agrees that the shipment and delivery dates are
estimates only.

     8.2  Minimum Purchase Requirements For Products. Nippon Eurotec shall
          ------------------------------------------
purchase the minimum quantities of Products set forth in Exhibit D.
                                                         ---------

     8.3  Failure to Meet Purchase Requirements. If, at the end of any period
          -------------------------------------
referred to in Exhibit D, Nippon Eurotec has not, for any reason, purchased the
corresponding minimum amount, such failure shall be deemed a material breach of
this Agreement under Section 16(b) below.

     9.   SHIPMENT/RISK OF LOSS Products delivered pursuant to the terms of this
Agreement shall be suitably packed for export in Natus's standard shipping
cartons, marked for shipment to the

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               6
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destination specified in Nippon Eurotec's purchase order, and delivered to the
carrier FCA Natus shipping point.

10.  ORDER CHANGES Purchase orders for Products may be canceled or rescheduled
only with Natus's prior written approval.

11.  REJECTION Nippon Eurotec shall inspect all Products promptly upon receipt
thereof and may reject any defective Product, provided that Nippon Eurotec
shall (i) within the earlier of [***] after receipt of such alleged defective
Product or [***] after discovery of such alleged defect, notify Natus of its
rejection and request a Return Material Authorization ("RMA") number, and (ii)
within [***] of receipt of the RMA number from Natus, return such rejected
Product to Natus, such shipment to be FCA ("Free Carrier", INCOTERMS 1990) into
the custody of Natus' shipping agent in Japan, using the carrier and shipping
mode specified by Natus. Products not rejected within the foregoing time periods
shall be deemed accepted by Nippon Eurotec. In the event that Natus determines
that the returned Product is defective and properly rejected by Nippon Eurotec,
Natus shall at its option repair or replace such defective Product, or accept
return for credit of such defective Product. Natus shall return to Nippon
Eurotec, freight prepaid, all repaired or replaced Products properly rejected by
Nippon Eurotec. In the event that any rejected Product is determined by Natus to
not be defective or to have been modified or subjected to unusual electrical or
physical stress, misuse, abuse or unauthorized repair, Nippon Eurotec shall
reimburse Natus for all costs and expenses related to the shipping, insurance,
inspection, repair, if any, and return of such Product to and from Nippon
Eurotec. Except as set forth in this Section 11, Nippon Eurotec shall only
return Products to Natus with Natus's prior written approval.

12.  PRODUCT CHANGES Natus reserves the right from time to time in its sole
discretion, without incurring any liability to Nippon Eurotec with respect to
any previously placed purchase order, to discontinue or to limit its
production of any Product; to allocate, terminate or limit deliveries of any
Product in time of shortage; to alter the design or construction of any
Product; to add new and additional products to the "Products;" and upon at
least [***] notice to Nippon Eurotec, to change its sales and distribution
policies, not inconsistent with the terms of this Agreement.

13.  FORECASTS By the end of the first week of each quarter, Nippon Eurotec
shall provide Natus with a good faith six (6) month rolling forecast commencing
with the next calendar quarter showing Nippon Eurotec's prospective requirements
for the Products and anticipated purchase order submittal dates, including all
sales and business prospects, in such format as specified by Natus ("Forecast").
Forecasts shall commence on the first day of the quarter following submission of
the Forecast to Natus. Forecasts are for Natus's planning purposes only and
shall not constitute a binding obligation on the part of Natus to supply
Products in accordance with such Forecasts, nor shall Forecasts constitute firm
purchase orders by Nippon Eurotec.

14.  RETURNED PRODUCT Any Product returned to Natus by Nippon Eurotec as
authorized under this Agreement shall be shipped FCA (INCOTERMS, 1990) into the
custody of the carrier and using the shipping method as specified by Natus, to
Natus' San Carlos U.S.A. facility or such other

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             7
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location as Natus may instruct Nippon Eurotec, and shall be packed in its
original packing material. Natus may refuse to accept any Product not packed and
shipped as herein provided.

15.  LIMITED WARRANTY

     15.1 Limited Warranty. Subject to the provisions of this Section 15, Natus
          ----------------
warrants to Nippon Eurotec that Products, as delivered, will be free from
defects in materials and workmanship for a period the shorter of [***]
from sale to the Customer by Nippon Eurotec and [***] from shipping the
Product to Nippon Eurotec ("Warranty Period"). The foregoing warranty is
contingent upon proper use of the Products in the applications for which they
were intended and shall not apply to Products that are modified or subjected
to unusual physical or electrical stress, misuse, abuse, or unauthorized
repair. Natus's sole liability and Nippon Eurotec's exclusive remedy shall be
limited to repair, replacement, credit or refund, at Natus's sole option and
election. Natus shall pay all freight charges for shipment of any replacement
Product to Nippon Eurotec during the Warranty Period. Replacement or repair of
a Product shall not extend the original warranty for that unit, and Nippon
Eurotec may return Product only during the original Warranty Period.

     15.2 Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 15.1
          ------------------------
ABOVE, NATUS MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED, OR
OTHERWISE, AND NATUS SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND
CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
NOTWITHSTANDING THE FOREGOING, NATUS DOES NOT EXCLUDE LIABILITY TO THE EXTENT
THAT SUCH LIABILITY MAY NOT BE EXCLUDED OR LIMITED BY LAW.

     15.3 Nippon Eurotec Limitations. Except to the extent required by
          --------------------------
applicable law, Nippon Eurotec shall not pass on to its customers a warranty of
greater scope or protection than the warranty (including the limited remedy,
exclusions, and limitation of liability) set forth in this Section 15 and
Section 20 below. Nippon Eurotec shall indemnify, defend and hold harmless Natus
from any claim or liability arising out of or relating to breach of the
foregoing provisions of this Section 15.3 or representations or warranties which
exceed Natus's express warranties set forth in this Section 15.

     15.4 Product Returns. In order to return Product that fails to conform to
          ---------------
the foregoing warranty set forth in this Section 15, Nippon Eurotec shall (i)
notify Natus in writing that such Product failed to conform with the warranty
set forth in this Section 15 and furnish a detailed explanation of any alleged
nonconformity; (ii) obtain a RMA number for the nonconforming Product from
Natus; and (iii) within ten (10) days of receipt of the RMA number, return such
Product to Natus as specified by Natus with the RMA number prominently attached,
shipped FCA (INCOTERMS 1990) into the custody of Natus' agent in Japan, to
Natus' San Carlos U.S.A. facility address first set forth above or such other
location as Natus may designate in writing in each case during the Warranty
Period.

16.  TERM AND TERMINATION

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               8
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     16.1 Term. This Agreement shall commence upon the Effective Date and
          ----
continue in full force and effect for a fixed term of four (4) years, and shall
terminate on that date unless earlier terminated in accordance with the
provisions of this Agreement or unless otherwise agreed to in writing by the
parties.

     16.2 Termination for Cause. Natus may terminate this Agreement effective
          ---------------------
upon written notice to Nippon Eurotec stating its intention to terminate in the
event Nippon Eurotec breaches any of the provisions of Sections 2 or 17. Without
limiting the foregoing, either party may terminate this Agreement effective upon
written notice to the other party stating such party's intention to terminate,
in the event the other party:

               (i)   ceases to function as a going concern or to conduct
               operations in the normal course of business or enters into any
               composition proceedings, or

               (ii)  has a petition filed by or against it under any state or
               federal bankruptcy or insolvency law which petition has not been
               dismissed or set aside within sixty (60) days of its filing; or

               (iii) fails to perform any of its obligations under this
               Agreement so as to be in default hereunder and fails to cure such
               default within thirty (30) days after written notice of such
               default.

     16.3 Minimum Purchase Amounts and Forecasts. Natus shall have the right to
          --------------------------------------
terminate this Agreement with six (6) months notice to Nippon Eurotec if Nippon
Eurotec does not purchase the minimum amounts set forth in Exhibit D hereto.

     16.4 Purchase Orders: No Waiver. Nippon Eurotec shall be obligated to
          --------------------------
accept deliveries of Products for which purchase orders were accepted by Natus
prior to the effective date of termination. After any notice of termination has
been delivered by either party hereunder, deliveries of Product from Natus to
Nippon Eurotec, unless otherwise agreed by Natus, shall require prepayment by
Nippon Eurotec to Natus. The acceptance of any purchase order from, or the sale
or license of any Product, to Nippon Eurotec after the termination or expiration
of this Agreement shall not be construed as a renewal or extension of this
Agreement nor as a waiver of termination of this Agreement.

     16.5 No Liability for Termination. Except as expressly required by law, in
          ----------------------------
the event of termination of this Agreement by either party in accordance with
any of the provisions of this Agreement, neither party shall be liable to the
other, because of such termination, for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of Natus or Nippon Eurotec. Termination shall not,
however, relieve either party of obligations incurred prior to the termination.

     16.6 Survival. Nippon Eurotec may sell Products existing in its inventory
          --------
as of the effective date of termination of this Agreement for a period of
[***]

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             9
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after the effective date of such termination ("Wind-Down Period"). During the
Wind-Down Period, the provisions of Sections 6, 7 and 9 shall survive. In
addition to the provisions set forth in this Section 16.6, the following
provisions shall survive expiration or any termination of this Agreement:
Sections 1, 15, 16.4-16.7, 17, 20, 21, 22 and the last sentence of Section 19.2.

     16.7 Return of Materials. All Products, trademarks, marks, trade names,
          -------------------
patents, copyrights, any customer information not yet provided to Natus under
Section 3(f), designs, drawings, formulas or other data, photographs, samples,
literature, and sales and promotional aids of every kind shall remain the
property of Natus. Within thirty (30) days after the effective date of
termination of this Agreement, Nippon Eurotec shall at Natus's option destroy
all tangible items bearing, containing, or contained in, any of the foregoing,
in its possession or control and provide written certification of such
destruction, or prepare such tangible items for shipment to Natus or Natus's
designee, as Natus may direct, at Natus's expense. Nippon Eurotec shall not make
or retain any copies of any Confidential Information (as defined in Section 17
below) which may have been entrusted to it.

17.  CONFIDENTIALITY AND PROPRIETARY RIGHTS

     17.1 Confidentiality. Nippon Eurotec acknowledges that by reason of its
          ---------------
relationship to Natus hereunder it will have access to certain information and
materials concerning Natus's business, plans, Customers, technology, and
products that are confidential and of substantial value to Natus, which value
would be impaired if such information were disclosed to third parties
("Confidential Information"). Nippon Eurotec agrees that it will not use in any
way for its own account or the account of any third party, nor disclose to any
third party, any Confidential Information revealed to it by Natus. Nippon
Eurotec shall take every reasonable precaution to protect the confidentiality of
Confidential Information. Upon request by Nippon Eurotec, Natus shall advise
whether or not it considers any particular information or materials to be
confidential. Nippon Eurotec shall not publish any technical description of the
Products beyond the description published by Natus. In the event of termination
of this Agreement, there shall be no use or disclosure by Nippon Eurotec of any
Confidential Information of Natus, and Nippon Eurotec shall not manufacture or
have manufactured any devices, components or assemblies utilizing any of Natus's
confidential information.

     17.2 Proprietary Rights. Nippon Eurotec agrees that Natus retains all of
          ------------------
its right, title and interest in and to all patent rights, trademarks, trade
names, inventions, copyrights, know-how and trade secrets relating to the
Products or the product lines that include the Products, and the design,
manufacture, operation or service of the Products. The use by Nippon Eurotec of
any of these property rights is authorized only for the purposes herein set
forth and upon termination of this Agreement for any reason such authorization
will cease. Nippon Eurotec shall not (and shall require that its customers do
not) remove, alter, cover or obfuscate any proprietary rights notices placed or
embedded by Natus on or in any Product. Nippon Eurotec shall not apply to
register any proprietary rights covered by the Products in its own name.

18.  PATENT/COPYRIGHT/TRADEMARK AND PRODUCT LIABILITY INDEMNIFICATION

                                                                              10
<PAGE>

     18.1 Indemnity. Nippon Eurotec agrees that Natus has the right to defend,
          ---------
or at its option to settle, and Natus agrees, at its own expense, to defend or
at its option to settle, any third party claim, suit or proceeding
(collectively, "Action") brought against Nippon Eurotec alleging the Products
infringe any patent, copyright or trademark in existence as of the Effective
Date, subject to the limitations hereinafter set forth. Natus will have sole
control of any such Action or settlement negotiations, and Natus agrees to pay,
subject to the limitations hereinafter set forth, any final judgment entered
against Nippon Eurotec on such issue in any such Action defended by Natus.
Nippon Eurotec agrees that Natus will be relieved of the foregoing obligations
unless Nippon Eurotec notifies Natus promptly in writing of such Action, gives
Natus authority to proceed as contemplated herein, and gives Natus proper and
full information and assistance to settle and/or defend any such Action. If it
is adjudicatively determined, or if Natus believes, that the Products, or any
part thereof, infringe any patent, copyright or trademark, or if the sale or use
of the Products, or any part thereof, is, as a result, enjoined, then Natus may,
at its election, option, and expense: (i) procure for Nippon Eurotec the right
under such patent, copyright or trademark to sell or use, as appropriate, the
Products or such part thereof; or (ii) replace the Products, or part thereof,
with other noninfringing suitable Products or parts; or (iii) suitably modify
the Products or part thereof; or (iv) remove the Products, or part thereof,
terminate distribution or sale thereof and refund the payments paid by Nippon
Eurotec for such Products less a reasonable amount for use and damage. Natus
will not be liable for any costs or expenses incurred without its prior written
authorization, or for any installation costs of any replaced Products.

     18.2 Limitations. Notwithstanding the provisions of Section 18.1 above,
          -----------
Natus has no liability to Nippon Eurotec for (i) any infringement of patent or
copyright claims alleging infringement by completed equipment or any assembly,
combination, method or process in which any of the Products may be used but not
covering the Products standing alone; (ii) any trademark infringements involving
any marking or branding not applied by or requested by Natus, or involving any
marking or branding applied by Natus at the request of Nippon Eurotec; or (iii)
the modification of the Products, or any part thereof, unless such modification
was made by Natus, where such infringement would not have occurred but for such
modifications.

     18.3 Disclaimer. NATUS' LIABILITY ARISING OUT OF OR RELATING TO THIS
          ----------
SECTION 18 SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY NIPPON EUROTEC TO
NATUS FOR THE ALLEGEDLY INFRINGING PRODUCTS THAT ARE THE SUBJECT OF THE
INFRINGEMENT CLAIM. THE FOREGOING PROVISIONS OF THIS SECTION 18 STATE THE ENTIRE
LIABILITY AND OBLIGATIONS OF NATUS AND THE EXCLUSIVE REMEDY OF NIPPON EUROTEC
AND ITS CUSTOMERS, WITH RESPECT TO ANY ALLEGED PATENT, COPYRIGHT OR TRADEMARK
INFRINGEMENT BY THE PRODUCTS OR ANY PART THEREOF.

     18.4 Product Liability Indemnification. Natus shall at its own expense
          ---------------------------------
indemnify and hold harmless Nippon Eurotec, and its directors, officers,
employees and agents, from and against any and all third party claims for
losses, damages (actual, consequential or indirect), liabilities, penalties,
demands, suits or actions, and related costs and expenses of any kind
(including, without limitation, Nippon Eurotec's reasonable out-of-pocket
expenses of investigation and recall, counsel fees, judgements and settlements)
for injury to or death of any person or property damage or any other

                                                                              11
<PAGE>

loss suffered or allegedly suffered by any person or entity and arising out of
or otherwise in connection with any defect or alleged defect of the Products
sold by Natus to Nippon Eurotec under this Agreement (the "Claim"). Natus will
have sole control of any such Claim or settlement negotiations. Nippon Eurotec
agrees that Natus will be relieved of the foregoing obligations unless Nippon
Eurotec notifies Natus promptly in writing of such Claim, gives Natus authority
to proceed as contemplated herein, and gives Natus proper and full information
and assistance to settle and/or defend any such Claim.

19.  USE OF TRADEMARKS/TRADE NAMES

     19.1 Trademarks. Natus, at its expense, shall seek registration of
          ----------
appropriate Natus trademarks in the Territory. During the term of this
Agreement, Nippon Eurotec shall have the right to indicate to the public that it
is an authorized distributor of the Products and to advertise such Products
under the trademarks, marks, and trade names of Natus set forth in Exhibit E
                                                                   ---------
("Natus' Trademarks") and in the promotion and distribution of the Products;
provided, however, that upon ninety (90) days prior written notice to Nippon
Eurotec, Natus may substitute alternative marks for any or all of the Natus's
Trademarks. All representations of Natus' Trademarks that Nippon Eurotec intends
to use shall first be submitted to Natus for approval (which shall not be
unreasonably , withheld) of design, color and other details or shall be exact
copies of those used by Natus. In addition, Nippon Eurotec shall fully comply
with all reasonable guidelines, if any, communicated by Natus concerning the use
of Natus' Trademarks.

     19.2 Use. Nippon Eurotec shall not alter or remove any of Natus' Trademarks
          ---
affixed to the Products by Natus. Except as set forth in this Section 19,
nothing contained in this Agreement shall grant or shall be deemed to grant to
Nippon Eurotec any right, title or interest in or to Natus's Trademarks. All
uses of Natus' Trademarks will inure solely to Natus and Nippon Eurotec shall
obtain no rights with respect to any of Natus' Trademarks, other than the right
to distribute Products as set forth herein, and Nippon Eurotec irrevocably
assigns to Natus all such right, title and interest, if any, in any of Natus'
Trademarks. At no time during or after the term of this Agreement shall Nippon
Eurotec challenge or assist others to challenge Natus' Trademarks (except to the
extent expressly prohibited by applicable law) or the registration thereof or
attempt to register any trademarks, marks or trade names confusingly similar to
those of Natus. Upon termination of this Agreement, Nippon Eurotec shall
immediately cease to use all Natus' Trademarks and any listing by Nippon Eurotec
of Natus' name in any telephone book, directory, public record or elsewhere,
shall be removed by Nippon Eurotec as soon as possible, but in any event not
later than the subsequent issue of such publication.

20.  LIMITATION OF LIABILITY Natus's liability arising out of or relating to
this Agreement, including liability under Section 16(e), shall not exceed the
aggregate amounts paid by Nippon Eurotec to Natus hereunder. IN NO EVENT SHALL
EITHER PARTY BE LIABLE FOR LOST PROFITS, COST OF PROCUREMENT OF SUBSTITUTE
GOODS, OR ANY OTHER SPECIAL, RELIANCE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), OR OTHERWISE. THE FOREGOING LIMITATIONS SHALL APPLY
REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE

                                                                              12
<PAGE>

POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE
OF ANY LIMITED REMEDY STATED HEREIN.

21.  COMPLIANCE WITH LAWS

     21.1 Export Control. Nippon Eurotec understands and acknowledges that Natus
          --------------
is subject to regulation by agencies of the United States Government, including,
but not limited to, the U.S. Department of Commerce, which prohibit export or
diversion of certain products and technology to certain countries. Any and all
obligations of Natus to provide the Products, as well as any other technical
information or assistance shall be subject in all respects to such United States
laws and regulations as shall from time to time govern the license and delivery
of technology and products abroad by persons subject to the jurisdiction of the
United States, including the Export Administration Act of 1979, as amended, any
successor legislation, and the Export Administration Regulations issued by the
Department of Commerce, Bureau of Export Administration. Nippon Eurotec agrees
to cooperate with Natus including without limitation, providing required
documentation, in order to obtain export licenses or exemptions therefrom.
Nippon Eurotec warrants that it will comply with the Export Administration
Regulations and other United States laws and regulations governing exports in
effect from time to time. Nippon Eurotec further agrees not to resell Products
to any organization, public or private, which engages in the research or
production of military devices, armaments, or any instruments of warfare,
including biological, chemical and nuclear warfare.

     21.2 Governmental Approvals. Nippon Eurotec represents and warrants that it
          ----------------------
has obtained or will obtain all required approvals and registrations (which
include Shonin ("Approvals") of the government of Japan in connection with this
        ------
Agreement and that the provisions of this Agreement and the rights and
obligations of the parties hereunder, are enforceable under the laws of Japan.
Nippon Eurotec shall notify Natus of all Approvals obtained by it and shall
provide Natus with copies of all material documents relating thereto.

22.  MISCELLANEOUS PROVISIONS

     22.1 Independent Contractors. The relationship of Natus and Nippon Eurotec
          -----------------------
established by this Agreement is that of independent contractors, and neither
party is an employee, agent, partner or joint venturer of the other. All
financial obligations associated with Nippon Eurotec's business are the sole
responsibility of Nippon Eurotec. All sales and other agreements between Nippon
Eurotec and its customers are Nippon Eurotec's exclusive responsibility and will
have no effect on Nippon Eurotec's obligations under this Agreement.

     22.2 Assignment. Nippon Eurotec may not transfer or assign its rights or
          ----------
obligations under this Agreement without the prior written consent of Natus.
Subject to the foregoing sentence, this Agreement will be binding upon and inure
to the benefit of the parties hereto, their successors and assigns. Successors
of Natus shall include any party which acquires Natus or into which Natus
merges.

                                                                              13
<PAGE>

     22.3  Indemnity. Except for warranty claims for which Natus is liable under
           ---------
Section 15 and infringement claims covered by Section 18, Nippon Eurotec agrees
to indemnify and hold Natus harmless against any cost, loss, liability or
expense (including attorneys' fees) arising out of third party claims against
Natus relating to Nippon Eurotec's use and distribution of the Products.

     22.4  No Implied Waivers. The failure of either party at any time to
           ------------------
require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall the
waiver of either party of a breach of any provision hereof be taken or held to
be a waiver of a provision itself.

     22.5  Severability. If any provision of this Agreement is held to be
           ------------
invalid by a court of competent jurisdiction, then the remaining provisions will
nevertheless remain in full force and effect. The parties agree to renegotiate
in good faith those provisions so held to be invalid to be valid, enforceable
provisions which provisions shall reflect as closely as possible the original
intent of the parties, and further agree to be bound by the mutually agreed
substitute provision.

     22.6  Force Majeure. Except for payment of monies, neither party shall be
           -------------
liable for failure to fulfill its obligations under this Agreement or any
purchase order issued hereunder or for delays in delivery due to causes beyond
its reasonable control, including, but not limited to, acts of God, man-made or
natural disasters, earthquakes, fire, riots, flood, material shortages, strikes,
delays in transportation or inability to obtain labor or materials through its
regular sources. The time for performance of any such obligation shall be
extended for the time period lost by reason of the delay.

     22.7  Conflicting Terms. The parties agree that the terms and conditions of
           -----------------
this Agreement shall prevail, notwithstanding contrary or additional terms, in
any purchase order, sales acknowledgment, confirmation or any other document
issued by either party effecting the purchase and/or sale of Products, unless
the parties agree otherwise in writing.

     22.8  Headings. Headings of paragraphs herein are inserted for convenience
           --------
of reference only and shall not affect the construction or interpretation of
this Agreement.

     22.9  Liability of Natus. The provisions of this Agreement under which the
           ------------------
liability of Natus is excluded or limited shall not apply to the extent that
such exclusions or limitations are declared illegal or void under the laws
applicable in the Territory in which Products are sold, unless the illegality or
invalidity is cured under the laws of the Territory by the fact that the law of
California governs this Agreement.

     22.10 Notice. Any notice required or permitted to be given under this
           ------
Agreement shall be delivered (i) by hand, (ii) by registered or certified mail,
postage prepaid, return receipt requested, to the address of the other party
first set forth above, or to such other address as a party may designate by
written notice in accordance with this Section 22.10, (iii) by overnight
courier, or (iv) by fax with confirming letter mailed under the conditions
described in (ii) above. Notice so given shall be deemed effective when
received, or if not received by reason of fault of addressee, when delivered.

                                                                              14
<PAGE>

     22.11 Entire Agreement. This Agreement contains the entire understanding of
           ----------------
the parties with respect to the subject matter hereof and supersedes all prior
agreements relating thereto, written or oral, between the parties. Amendments to
this Agreement must be in writing, signed by the duly authorized officers of the
parties. The terms of any purchase order are expressly excluded.

     22.12 Governing Law. This Agreement shall be governed by and construed
           -------------
under the law of the State of California, without regard to conflict of laws
principles or the U.N. Convention on Contracts for the International Sale of
Goods.

     22.13 Arbitration. Any dispute or claim arising out of or in relation to
           -----------
this Agreement, or the interpretation, making, performance, breach or
termination thereof, shall be finally settled by binding arbitration under the
Rules of Conciliation and Arbitration of the International Chamber of Commerce
as presently in force ("Rules") and by three (3) arbitrators appointed in
accordance with said Rules. Judgment on the award rendered may be entered in any
court having jurisdiction thereof. The place of arbitration shall be San
Francisco, California, U.S.A. Any monetary award shall be in U.S. dollars and
the arbitration shall be conducted in the English language. The parties may
apply to any court of competent jurisdiction for temporary or permanent
injunctive relief, without breach of this Section 22.13 and without any
abridgment of the powers of the arbitrator. The prevailing party at any such
arbitration or in any legal proceeding brought to enforce terms of this
Agreement shall be entitled to an award of attorney's fees and other costs of
such arbitration or proceeding.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the Effective Date.

NIPPON EUROTEC Co., Ltd.                  NATUS MEDICAL INC.

By: /s/ Toshifumi Wakayama               By: /s/ Tom C. Johnson
    --------------------------------         ----------------------------------

Name: Toshifumi Wakayama                 Name: Tom C. Johnson
      ------------------------------           --------------------------------
      (Typed or Printed)                         (Typed or Printed)

Title: President                         Title: President
       -----------------------------            -------------------------------

Exhibit A:  Product List

Exhibit B:  Nippon Eurotec Products
Exhibit C:  Nippon Eurotec Sales Report Form
Exhibit D:  Product Prices; Minimum Purchase Requirements
Exhibit E:  Natus' Trademarks

                                                                              15
<PAGE>

                                   EXHIBIT A

                    NATUS PRODUCT LISTING AND DOCUMENTATION

ALGO(TM)2 NEWBORN HEARING SCREENER
----------------------------------
Product Manual
Technical Service Manual
Product (Inservice) Video
Software License Agreement

ALGO(TM)2e NEWBORN HEARING SCREENER
-----------------------------------
Product Manual
Technical Service Manual
Product (Inservice) Video
Software License Agreement

Replacement Parts for ALGO(TM) Newborn Hearing Screeners
Natus Screening Supplies for ALGO(TM) Newborn Hearing Screeners
Natus Software for ALGO(TM) Newborn Hearing Screeners
Natus Neonatal Supplies

(See price list in EXHIBIT D for descriptions of the above products.)
----------------------------------------------------------------------

MARKETING MATERIALS:/1/
-----------------------
Newborn Hearing Screening Program Handbook
Parent Education Video
"Ten Fingers Ten Toes..." poster
"The importance of Newborn Hearing Screening..." brochure
ALGO DataBook(TM) NHS Data Tracking System Product Sheet
ALGO 2e(TM) Newborn Hearing Screener Product Sheet
AABR(TM) Automated Auditory Brainstem Response Product Sheet

___________________
/1/ Marketing Materials provided in English final printed format

                                                                              16
<PAGE>

                                   EXHIBIT B

                            NIPPON EUROTEC PRODUCTS

[To be listed by Nippon Eurotec; to include a detailed list of all products now
being sold by Nippon Eurotec in the newborn market category.]

                                                                              17
<PAGE>

                                    EXHIBIT C

                       Nippon Eurotec Sales Repart Form

1.   Sales during Quarter ended ____/____/____:
                     a.  Units sold
                     b.  Disposables sold
                     c.  Purchaser's name, address, telephone number, fax
               number; responsible contact person.

2.   Projection for upcoming Quarter ending  ____/____/___:

                                                                              18
<PAGE>

                                   EXHIBIT D

                 PRICE LIST AND MINIMUM PURCHASE REQUIREMENTS

Prices quoted in U.S. dollars                                             Nippon
-----------------------------
                                                                         Eurotec
Part Number                                                                Price
-----------                                                          -----------

010011     ALGO(TM)2 Newborn Hearing Screener                        $     [***]
           Includes: Screener with keyboard, Printer,
           Rollstand, Workstation with Platform, Acoustic
           Transducer Assembly (ATA) Cable, Patient
           Cable Assembly (PCA) and pre-amplifier
           cable, Acoustic Check Kit, Starter Kit of
           supplies

41000      ALGO(TM)2E Newborn Hearing Screener                       $     [***]
           Includes: Detachable screening module with
           laptop computer, Natus screening station with
           built-in storage, Printer for self-adhesive
           patient results labels, Patient Cable Assembly
           (PCA) and pre-amplifier cable, Acoustic
           Transducer Assembly (ATA) Cable, Acoustic
           Check Kit, Starter Kit of supplies

Replacement Parts for ALGO(TM) Newborn Hearing Screeners

040176     Acoustic Transducer Assembly (ATA) Cable                  $     [***]
040144     Acoustic Check Kit                                        $     [***]
040127     Patient Cable Assembly (PCA)                              $     [***]
040119     Pre-amplifier Cable                                       $     [***]

           ALGO 2 Carrying Case                            Please Call for Quote
           ALGO 2e Carrying Case                           Please Call for Quote

700090     Power Cord                                                $     [***]
900081     ALGO 2e Label Printer                                     $     [***]

Natus Screening Supplies for ALGO(TM) Newborn Hearing Screeners

040112     ALGO-COLORADO PAK - Case Of 288 Screenings                $     [***]
           Includes: 8 boxes/ 288 pairs Ear Coupiers(R)
           disposable ear phones, 320 Jelly Button(R)Sensors

__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
                                                                              19
<PAGE>

                                   EXHIBIT D

                 PRICE LIST AND MINIMUM PURCHASE REQUIREMENTS

Prices quoted in U.S. dollars.                                            NIPPON
------------------------------
                                                                         Eurotec
Part Number                                                                Price
-----------                                                          -----------

Printing Supplies for ALGO(TM)2e Newborn Hearing Screeners

900079    Printer Labels - Four rolls (560 labels)                   $     [***]

Individual Screening Supplies for ALGO(TM) Newborn Hearing Screeners
030097    Jelly Button(R) Sensors - Box of 50 triplets               $     [***]
040069    DriPrep(TM) Prepping Pads - Pouch of 25 pads               $     [***]
900072    NuPrep(R)Prepping Gel - One 1 oz. tube (28.35 g)           $     [***]

Natus Neonatal Supplies

040048    MiniMuffs(TM) Neonatal Noise Attenuators - 36 pairs        $     [***]
040048    MiniMuffs(TM) Neonatal Noise Attenuators - 288 pairs       $     [***]

Natus Software for ALGO(TM) Newborn Hearing Screeners

040181    70/40(TM) Screening Application Software                   $     [***]
040240    Algo DataBook(TM) NHS Data Tracking Software               $     [***]
900123    Time/Date Software                                         $     [***]

MINIMUM PURCHASE REQUIREMENTS
-----------------------------

Period                                 Minimum Purchases
------                                 -----------------
Effective Date through First Six Months:    [***] Units                    [***]
Months Seven through Eighteen:              [***] Units                    [***]
Months Nineteen through Thirty:             [***] Units                    [***]
Months Thirty-One through Forty-two:        [***] Units                    [***]
Months Forty-three through Forty-eight:     [***] Units                    [***]
                                            -----
                                            [***] Units
                                            =====
__________
[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              20
<PAGE>

                                    EXHIBIT E

                                NATUS TRADEMARKS

NATUS(R)
ALGO 2(TM) Newborn Hearing Screener
ALGO  2e(TM) Newborn  Hearing  Screener
ALGO(TM) Newborn Hearing Screener
ALGO  DataBook(TM) NHS Data Tracking System
AABR(TM) Automated Auditory Brainstem Response
Ear Couplers(TM) Disposables
Jelly Button(TM) Sensors
DriPrep(TM) Prepping Pads
MiniMuffs(TM)Neonatal Noise Attenuators
70/40/(TM) Screening Aplication
<PAGE>

                    Exhibit F to the Distributor Agreement

                    LOAN AGREEMENT: UNIVERSAL TEST FIXTURE

This Agreement is made between Natus Medical Incorporated ("Natus"), a
California corporation, and Nippon EUROTEC Co., Ltd.("Distributor"), and is
                            ------------------------
intended to serve as Exhibit F to the Distributor Agreement between the parties
dated June 22, 1998. Accordingly, the terms and conditions of the Distributor
           --
Agreement are incorporated by reference herein.

The parties agree as follows:

1.  Loan AGreement. Natus will loan a Universal Test Fixture ("UTF") to the
Distributor identified above for use as a service and maintenance tool for a
maximum period of time which is described in Paragraph 5 below. Distributor
agrees that the UTF remains the property of Natus, and that Distributor must, at
the request of Natus, return the UTF to Natus. Distributor agrees to follow all
written procedures for operation of UTF, and to use UTF solely for the purposes
for which it is intended, as described is the UTF Operating Procedures.

2.  Definitions.  The definitions in the Distributor  Agreement apply throughout
this Agreement. The UTF, including all information contained within the UTF, and
the UTF Operating Procedures, which may include but is not limited to all
written documentation, hardware, software or firmware contained within the UTF
and its accompanying UTF Operating Procedures, constitute Confidential
Information pursuant to Section 17 of the Distributor Agreement.

3. Trade Secrets. Distributor acknowledges and agrees that the contents of the
UTF and the UTF Operating Procedures (Trade Secrets) are valuable property of
Natus. Distributor will hold in confidence any Trade Secrets which are disclosed
to Distributor pursuant to this Agreement, and will not disclose such Trade
Secrets to any other person, firm, or corporation. Distributor agrees to take
all reasonable steps to protect the secrecy of and avoid disclosure or
unauthorized use of the Trade Secrets. Distributor will not, nor will
Distributor allow or encourage any third party to modify, repair, reverse
engineer, decompile, or disassemble the UTF without the express and prior
written consent of Natus Medical Inc. The UTF is expressly recognized as
proprietary and confidential under the provisions of the Distribution Agreement
with respect to ss 17, "Confidentiality and Proprietary Rights."

4. Sole Authorized User. The UTF will be used only by trained and authorized
technical services representatives of the Distributor. Distributor will provide
the names of trained and authorized technical service representatives to the
Company, and will not permit use of the UTF by other individuals or entities,
nor will Distributor permit physical relocation of the UTF without the prior
written consent of Natus Medical Inc.

5. Miscellaneous. This Agreement contains the entire agreement of the parties
with respect to the subject matter hereof, and supersedes all prior oral and
written agreements, negotiations, understandings and communications regarding
subject matter. If any of the provisions of this Agreement are different from
those in the Distributor Agreement, these terms apply insofar as
<PAGE>

the UTF is concerned. Otherwise, the terms of the Distributor Agreement are
incorporated herein mutatis mutandis. This Exhibit will be governed by and
construed in accordance with the laws of the State of California, United States
of America, as applied to agreements made and performed in the State of
California, United States of America.

6. Term of Agreement. Breach by Distributor of any of these terms constitutes
breach of the Distributor Agreement. The Agreement is effective only during the
term of the Distributor Agreement between Natus Medical and Distributor.

Natus Representative                     Distributor Representative

By     /s/ W. H. Lawrenson                By  /s/ Nippon EUROTEC Co., Ltd.
       ------------------------               ----------------------------

Name      W. H. Lawrenson                Name  /s/ Kenji Tomita
       ------------------------                ---------------------------

Title     CEO                            Title    Director
       ------------------------                ---------------------------

Date      7/13/98                        Date    June 22 1998
       ------------------------                 --------------------------<PAGE>

                                                                  EXHIBIT 10.6.2

                                  Transition
                                   Agreement

                                Natus, Eurotec,
                           Wakayama, Kuroiwa, Tomita

                                 July 28, 2000

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [***]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
<PAGE>

                                   AGREEMENT

      THIS AGREEMENT ("Agreement") is effective July 28, 2000, and is made and
entered into by, among and between:

      Natus Medical, Inc. a California corporation having is principal place of
business at 1501 Industrial Road, San Carlos, CA, 94070 ("Natus");

      Toshibumi Wakayama ("Wakayama"), acting personally, and in his capacity as
President and Managing Director of Nippon Eurotec Co., Ltd. ("Eurotec"), a
limited liability corporation under the laws of Japan having its principal place
of business at Akasaka Daiichi Building, 9-17, Akasaka 4-Chome, Minato-Ku,
Tokyo, 107, Japan;

      Masaaki Kuroiwa ("Kuroiwa"), an employee of Eurotec who is acting herein
in his personal capacity; and

      Kenji Tomita ("Tomita"), an employee of Eurotec who is acting herein in
his personal capacity.

RECITALS:

      WHEREAS, Natus and Nippon Eurotec are parties to an agreement dated June
11, 1997, pursuant to which Natus has appointed Eurotec as exclusive distributor
for designated Natus products in Japan ("Natus Products"), which such agreement
expires by its terms on June 10, 2001 ("Distribution Agreement"; Exhibit A
hereto);

      WHEREAS, Wakayama, Tomita and Kuroiwa, have established a highly cordial
and successful working relationship with Natus, based on mutual trust, and would
like to continue to work in some capacity to support sales and distribution of
the Natus Products despite termination of the Distribution Agreement on June 10,
2001;

      WHEREAS, the parties agree that in order to continue the successful sales
and distribution of the Natus Products in Japan after June 10, 2001
("Distribution Agreement Expiration Date"), Natus should establish a wholly-
owned subsidiary Natus Japan K.K., ("NJKK"), and that Wakayama, Kuroiwa, and
Tomita should serve as members of the Board of Directors and, in the future, as
employees, of NJKK, and in this manner continue their personal involvement in
the sales of Natus Products, and to do so pursuant to these terms;

      WHEREAS, the parties agree that in order to assure and to accomplish the
smooth transition from Eurotec to NJKK of the Natus Products sales and
distribution business in Japan, and the personal involvement of Wakayama, Tomita
and Kuroiwa, it will be helpful to set forth in writing those terms already
discussed and agreed upon by the parties during the amicable and mutually
cooperative discussions held to date.
<PAGE>

          NOW, THEREFORE, based on the foregoing premises and on the mutual
promises contained in this Agreement, the parties hereto agree as follows:

          1.  Distribution Agreement Reaffirmed

              1.1  The parties acknowledge and agree that this Agreement is not
in intended to, and shall not, modify or amend the terms of the Distribution
Agreement. The parties further reaffirm their commitment to the terms of the
Distribution Agreement including, among other terms, those pertaining to the
performance by Natus and by Eurotec through June 10, 2001. The parties further
agree that this Agreement is not intended to interfere with or interrupt
Eurotec's and Natus' business with respect to sales and distribution of the
specified Natus products pursuant to the Distribution Agreement.

          2.  Transition of Natus Products Business to Natus Japan K.K.

              2.1  Natus Japan K.K. The parties hereby acknowledge the
incorporation of Natus Japan K.K., a wholly-owned subsidiary of Natus duly
incorporated as a limited liability company under the laws of Japan. The parties
agree to carry out the smooth transition to NJKK of the Natus Products business
in Japan currently being handled by Eurotec, and to do so according to the
timetable specified in Exhibit B hereto and to the other terms of this
Agreement.

              2.2  Transition Details, Schedule. The parties agree to exert
their best efforts to accomplish the transfer of the Natus Products business to
NJKK according to the time table in Exhibit B, which transition is to be
completed by no later than July 1, 2001. In preparation for this transition,
Wakayama shall present to Natus a list compiling all items (tangible as well as
intangible) used by Eurotec in connection with the Natus Products business,
together with Wakayama's advice as to which such items are necessary or helpful
to NJKK as NJKK assumes the Natus Products business. Natus shall make the final
determination as to which such items shall be assumed by NJKK. At this time, the
parties contemplate that Eurotec shall transfer to NKJJ, and NJKK shall assume,
the following items:

                   2.2.1  Natus Products regulatory approvals (Shonin; Kyoka;
others); customer data in all forms including and electronic and hard-copy;
advertising and marketing materials in all forms including electronic and hard-
copy; accounts opened or maintained with advertisers, consultants, customers,
resellers, leasing companies, and the like, with respect to marketing, sales,
distribution or purchasing, leasing or servicing Natus Products; all technical
data developed or maintained by Eurotec related to Natus Products; all
information in whatever format related to marketing, clinical studies, and the
like, developed or maintained by Eurotec regarding Natus Products; and such
other items as are determined by the parties according to these terms. In
connection with the transfer of Shonin to NJKK, the parties acknowledge and
affirm their intent to apply the reimbursement formula in section 3.6.4 of the
Distribution Agreement. In addition, NJKK shall bear the MHW fees charged to
transfer the Shonin to NJKK.

                   2.2.2  NJKK shall also evaluate and assess the prospects of
hiring current Eurotec employees involved in the Natus Products business, and in
this connection shall obtain the cooperation and assistance of Wakayama to
review such employee's performance,

                                      -2-
<PAGE>

credentials, employment history, etc. Final determination on any NJKK employment
matter shall be made by the President of NJKK. Eurotec shall fully release such
employees who are hired by NJKK, and NJKK shall be indemnified and help harmless
by Eurotec with respect to matters arising from their employment by Eurotec
including payments for insurance, retirement, social benefits, and the like.

          2.3  Business Plan: NJKK President.  The parties agree to work
together to establish a definitive business plan for NJKK, and to recruit and
hire a highly competent operating president for NJKK.

          2.4  Asahi Chemical Relationship.  The parties acknowledge the current
sub-distributorship between Eurotec and Asahi Chemical Ltd., and as well the
highly important role played by Asahi in connection with the Natus Products
business.  The parties agree to exert their strongest and best faith efforts to
continue to conduct their affairs so as to promote the strongest possible
business relationship with Asahi through the Distribution Agreement Expiration
Date, and to promote and facilitate a relationship between NJKK and Asahi on the
most productive terms possible after that date.

      3.  Matters Pertaining to Wakayama

          3.1  Natus Medical Inc. Stock Options.  Natus hereby offers Wakayama,
and Wakayama accepts such offer, the option to purchase [***] shares of Natus
Common Stock, at an option price of $[***] per share, pursuant to the terms of
the Natus Medical Inc. 1991 Stock Plan (as amended) (attached as Exhibit C).
Wakayama's right to exercise such Stock Options and to purchase Natus shares
vests according to the following schedule:

          [***] shares vesting one year after date of incorporation of Natus
Japan K.K.;
          [***] shares vesting one year thereafter; and
          [***] shares vesting one year thereafter.

          3.2   Member of the Board of Directors and Chairman of Natus Japan K.
K.  Natus hereby appoints Wakayama to the Board of Directors of Natus Japan
K.K., and with this appointment, the title of Chairman (in Japanese, "Kaicho"),
and Wakayama accepts such appointment.  The term of Wakayama's appointment is
effectively immediately and continues until Natus shall appoint Wakayama's
successor or replacement.

                3.2.1 As Director, Wakayama agrees to take actions consistent
with the instructions of Natus or NJKK, and to refrain from taking actions that
are inconsistent with such instructions, as well as to vote as Director
according to Natus' instructions, and to this end to enter into written
agreement with Natus and with NJKK which shall be binding on Wakayama to the
extent permissible under Japanese law. Wakayama shall sign and be bound by the
Natus Confidentiality and Non-Competition Agreement attached hereto as Exhibit
E.

           3.3.   Employment from July 1, 2001.  NJKK offers to employ Wakayama
from July 1, 2001, to perform the duties, and to pay the salary and to allocate
the budget, as set forth below, and Wakayama accepts such offer:

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<PAGE>

                  3.3.1 Duties: Wakayama shall work at least half-time for NJKK,
and shall be responsible for lobbying towards UNHS, helping create and implement
strategies in marketing Natus Products, serve as an idea generator for NJKK,
inspire and magnetize the staff of NJKK, make him self available from time to
time to work on other Natus international marketing efforts, and in general,
shall support to the fullest extent of his ability, the activities of NJKK.
Wakayama shall not be required to regularly attend the NJKK office in performing
these duties, it being understood that Wakayama will continue to use his office
at Eurotec while performing these duties for NJKK. Wakayama shall report
regularly to the President and to the Board of Directors of NJKK, and his
continued employment by NJKK is subject at all times to the discretion of the
Board of Directors of NJKK.

                  3.3.2 Wakayama Salary and Budget. NJKK shall allocate annually
a maximum of Yen [***] as salary and expense budget for Wakayama. Wakayama in
coordination with NJKK's accountants shall apportion such Yen [***] between his
personal salary, and NJKK's expense budget in connection with lobbying and
government relations efforts towards UNHS. Such apportionment shall be made
prior to July 1, 2001 for the following year, and annually each year thereafter
during the term of Wakayama's employment. Amounts apportioned to Wakayama's
salary shall be paid monthly by NJKK as ordinary payroll, and Wakayama solely
shall be responsible for personal taxation at the national, prefectural, or
local levels on such compensation amounts. Amounts expended on lobbying and
government relations activities shall be properly receipted, and such amounts
shall be used solely towards promotion of Natus Products and not for any other
purpose.

             3.4  Payment of Lobbying Fees.  Natus hereby offers Wakayama, and
Wakayama accepts, an Annual UNHS Lobbying Bonus for "Major Areas" (as set forth
in Exhibit D) adopting UNHS before March 31, 2004, to be awarded according to
these terms:

                  3.4.1  Natus will compensate Wakayama US$[***] for each
Major Area in Japan adopting UNHS, provided that:

              (a)  Nippon Eurotec (prior to 6/30/01) or Natus Japan K.K. (after
7/101) must have met its combined ALGO 2eC and Portable minimum purchase
commitments from Natus for the year during which such Major Area adopts UNHS
("Total Minimum Annual Sales Value").

              (b)  If the Total Minimum Annual Sales Value for any year was not
achieved, then the Lobbying Bonus will be pro-rated according to the chart
below.

              (c)  For Major Areas adopting UNHS before 7/1/01, the Total
Minimum Annual Sales Value shall be equal to the value of Natus ALGO 2eC and
Portables that Nippon Eurotec has committed to purchasing through 6/30/01.

              (d)  Natus shall pay the Annual UNHS Lobbying Bonus for up to ten
Major Areas adopting UNHS before 3/31/04, based on the Calculation Method below:

                                      -4-

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treatment filed with the Securities and Exchange Commission. Omitted portions
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<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
 Annual UNHS Lobbying Bonus Calculation Method for Major Areas Adopting UNHS Before 3/31/04
---------------------------------------------------------------------------------------------
<S>                         <C>                          <C>
"Total Minimum Annual       If:                          Then:
 Sales Value" (to Natus)
 of ALGO 2eC & Portable     The percentage of "Total     The following formula is used to
 by Year (Yr 1 Ending       Minimum Annual Sales         Calculate Annual UNHS Lobbying
 6/30/02):                  Value" Actually Achieved     Bonus to be Paid for Major Areas
                            by  Year End (Total $        adopting UNHS during that year:
                            Value Algo2eC & Portable)
7/00-6/01: To be determined is:
Yr 1: [***]: $[***]         -----------------------------------------------------------------
Yr 2: [***]: $[***]         100%   or more               $[***] X [***] X No. of Major Areas
Yr 3: [***]: $[***]                                      adopting UNHS that year
                            -----------------------------------------------------------------
                            90-99%      "       "        $[***] X [***] X No. of Major Areas
                                                         adopting UNHS that year
                            -----------------------------------------------------------------
                            75-89%      "       "        $[***] X [***] X No. of Major Areas
                                                         adopting UNHS that year
                            -----------------------------------------------------------------
                            50-74%      "       "        $[***] X [***] X No. of Major Areas
                                                         adopting UNHS that year
                            -----------------------------------------------------------------
                            0-49%       "       "        $[***] X [***] X No. of Major Areas
                                                         adopting UNHS that year
---------------------------------------------------------------------------------------------
</TABLE>

          3.4.2. By way of example and not of limitation:

          (a)    Example: If Saitama is the only Major Area that adopts UNHS
by 6/31/01, Wakayama (or Eurotec, as determined by Wakayama) will then receive
an Annual Lobbying Bonus of $[***] multiplied by the formula in Column 3,
above, based on the actual percentage achieved of Eurotec's Total Minimum Annual
Sales Value through 6/30/01.

          (b)    Example: Five Major Areas adopt UNHS between 7/1/01 and
6/30/02, and Natus sells more than $[***] of Algo 2eC and Portables to NJKK
during that period. Therefore, $[***] Annual UNHS Lobbying Bonus is to be
paid by Natus for that year ending 6/30/02.

          (c)    Further Example: Five Major Areas adopt UNHS between 7/1/02
and 6/30/03, and Natus sells more than $[***] of Algo 2eC and Portables to
NJKK during that period. Therefore, $[***] Annual UNHS Lobbying Bonus is
to be paid by Natus for that year ending 6/30/03.

          3.4.3  The maximum cumulative Annual UNHS Lobbying Bonus payments to
be made by Natus pursuant to this Agreement is US$[***] representing the
cumulative total possible bonus payments for ten Major Areas adopting UNHS
before March 31,

                                      -5-

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treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
<PAGE>

2003, and when during each year in which any Major Area adopted UNHS the Total
Minimum Annual Sales Value has been achieved.

               3.4.4  For purposes of this bonus, the parties agree to define
Major Areas as the prefectures, cities and districts listed in Exhibit D hereto.
The parties agree to define "adopting UNHS" to mean written legislative or
administrative action by the highest government body in any Major Area that
mandates universal hearing screening of babies born in that Major Area and that
establishes a reimbursement scheme that complies with the MHW rules regarding
reimbursement for UNHS .

          3.5  Commission Bonus on Exceeding Sales Objectives.  Natus hereby
offers to pay to Eurotec or to Wakayama, and Wakayama accepts, a bonus as
follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
     Year
   (1 July-                    Algo2eC                             Algo Portable
   30 June)
----------------------------------------------------------------------------------------
   <C>          <S>                                     <C>

   2001-02      For purchases from Natus of [***] or    On purchase from Natus of more
                more units: $[***] per unit on units    than [***] units: $[***] per
                number [***] and higher                 unit on units [***] and higher
----------------------------------------------------------------------------------------
   2002-03      For purchases from Natus of [***] or    On purchase from Natus of more
                more units: $[***] per unit on units    than [***] units: $[***] per
                number [***] and higher                 unit on units [***] and higher
----------------------------------------------------------------------------------------
   2003-04      For purchases from Natus of [***] or    On purchase from Natus of more
                more units: $[***] per unit on units    than [***] units: $[***] per
                number [***] and higher                 unit on units [***] and higher
-----------------------------------------------------------------------------------------
</TABLE>

               3.5.1  These bonus commission amounts are payable by Natus by the
end of the first quarter after the completion of each respective year.

               3.5.2  Natus is prepared to make the payments described in 3.4
and 3.5, above, either directly to Wakayama or to Nippon Eurotec, based on
Wakayama's discretion. If such payments are paid to Nippon Eurotec, the parties
understand that there may be requisite written agreement between Nippon Eurotec
and NJKK, but in no event shall any such payment or the need for any such
written agreement be interpreted as extending or continuing the Distribution
Agreement. Notwithstanding the foregoing, the activities described herein
Wakayama's employment and UNHS lobbying efforts are acknowledged by the parties
to personal services and must be performed by Wakayama personally, and cannot be
assigned or delegated to anyone whether an employee of Eurotec or otherwise:

          3.6  Other Details.  Natus expects to work with you to terminate or
transition your agreement with Asahi as we may determine is in the best
interests of NJKK, and in this connection, we expect that you will conduct
Eurotec's affairs with Asahi in a manner that will promote a strong relationship
with Asahi and NJKK after 6/31/01.

          In exchange for the payments to be made to you, Natus assumes your
highest level of cooperation and assistance in transferring the Algo business to
Natus Japan K.K. over a

                                      -6-

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treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
<PAGE>

schedule to be mutually determined, but to be substantially completed by July 1,
2001. This would include the customer data, leasehold if suitable for NJKK,
advertising and marketing materials, Shonin and all technical data on Natus
products, and the like. Natus would expect effective on that date to receive a
full release by all parties and individuals involved with the earlier Natus-
Nippon EUROTEC business, including Eurotec, its officers, directors and
shareholders, and Asahi.

          4.  Matters Pertaining to Tomita.

              4.1  Natus Medical Inc. Stock Options. Natus hereby offers Tomita,
and Tomita hereby accepts, the option to purchase [***] shares of Natus Common
Stock, at an option price of $[***] per share, pursuant to the terms of the
Natus Medical Inc. 1991 Stock Plan (as amended) (attached as Exhibit C).
Tomita's right to exercise such Stock Options and to purchase Natus shares vests
according to the following schedule:

          [***] shares vesting one year after date of incorporation of Natus
Japan K.K.; and
          [***] shares vesting one year thereafter.

              4.2  Member of the Board of Directors of Natus Japan K. K. Natus
hereby appoints Tomita to the Board of Directors of Natus Japan K.K., and Tomita
hereby accepts such appointment. The term of Tomita's appointment is effectively
immediately and continues until Natus shall appoint his successor or
replacement.

                   4.2.1 As Director, Tomita agrees to take actions consistent
with the instructions of Natus or NJKK, and to refrain from taking actions that
are inconsistent with such instructions, as well as to vote as Director
according to Natus' instructions, and to this end to enter into written
agreement with Natus and with NJKK which shall be binding on Tomita to the
extent permissible under Japanese law. Tomita shall sign and be bound by the
Natus Confidentiality and Non-Competition Agreement attached hereto as Exhibit
E.

              4.3  Employment from July 1, 2001. Natus acknowledges Tomita's
resignation for Eurotec on June 30, 2001, and NJKK hereby offers to employ
Tomita starting July 1, 2001, to perform the duties and to pay the salary as set
forth below, and Tomita hereby accepts such offer:

                   4.3.1  Duties. Tomita shall perform the duties of General
Manager, Sales (in Japanese, "bucho"). Tomita shall also perform the duties of
Technical Services Manager ("shurii sekinin gijitsusha"). Tomita shall also
perform the duties of MHW Responsible Technician (in Japanese, "sekinin
gijitsunin"). As Sales General Manager, Tomita shall be responsible for setting
and meeting quarterly, semi-annual, and annual sales goals. Tomita shall be
responsible for hiring, training, motivating, terminating, and otherwise
managing, the NJKK sales staff as well as the outside sales representatives.
Tomita shall perform his duties on a full-time basis, and shall have such
additional duties as may be determined by the President of NJKK.

                                      -7-

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treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
<PAGE>

              4.3.2  Compensation. Tomita shall receive as compensation an
amount no less then his current compensation from Eurotec, which is represented
to be annually Yen [***]. Tomita shall be eligible for bonuses, salary increases
and other incentive awards that are adopted by NJKK and made available to other
management members. Tomita shall work under the direction of, and shall report
to, the President of NJKK, and his continued employment by NJKK is subject at
all times to the discretion of the Board of Directors of NJKK.

     5.  Matters Pertaining to Kuroiwa.

         5.1  Natus Medical Inc. Stock Options. Natus hereby offers Kuroiwa, and
Kuroiwa hereby accepts, the option to purchase [***] shares of Natus Common
Stock, at an option price of $[***] per share, pursuant to the terms of the
Natus Medical Inc. 1991 Stock Plan (as amended) (attached as Exhibit C).
Kuroiwa's right to exercise such Stock Options and to purchase Natus shares
vests according to the following schedule:

     [***] shares vesting one year after date of incorporation of Natus Japan
K.K.; and
     [***] shares vesting one year thereafter.

         5.2  Member of the Board of Directors of Natus Japan K. K. Natus hereby
appoints Kuroiwa to the Board of Directors of Natus Japan K.K., and Kuroiwa
hereby accepts such appointment. The term of Kuroiwa's appointment is
effectively immediately and continues until Natus shall appoint his successor or
replacement.

              5.2.1 As Director, Kuroiwa agrees to take actions consistent with
the instructions of Natus or NJKK, and to refrain from taking actions that are
inconsistent with such instructions, as well as to vote as Director according to
Natus' instructions, and to this end to enter into written agreement with Natus
and with NJKK which shall be binding on Kuroiwa to the extent permissible under
Japanese law. Kuroiwa shall sign and be bound by the Natus Confidentiality and
Non-Competition Agreement attached hereto as Exhibit E.

         5.3  Employment from July 1, 2001.  Natus acknowledges Kuroiwa's
resignation for Eurotec on June 30, 2001, and NJKK hereby offers to employ
Kuroiwa starting July 1, 20001, to perform the duties and to pay the salary as
set forth below, and Kuroiwa hereby accepts such offer:

              5.3.1  Duties. Kuroiwa shall be General Manager (in Japanese
"bucho") for new product development, for regulatory affairs, as well as
Clinical Advisor Program Manager, and Intervention Program Relationship Manager.
Kuroiwa shall be responsible for developing a program, and for successfully
conducting the program, for device approvals, Good Manufacturing
Practices/Importer Approvals, and all other matters pertaining to obtaining
government or regulatory approvals of Natus Products, NJKK or its facilities,
licenses, etc. As Clinical Advisor Program Manager, Kuroiwa shall be responsible
for successful creation, and implementation, of the CA Program in Japan. As
Intervention Program Relationships Manager Kuroiwa shall be responsible for
liaison with the Dr. Tanaka Institute, and shall create and manage a program to
successfully coordinate the activities of the Tanaka Institute with those of

                                      -8-

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treatment filed with the Securities and Exchange Commission. Omitted portions
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<PAGE>

NJKK to maximize the sales of Natus Products. Kuroiwa shall perform his duties
on a full-time basis and in a highly competent and professional manner.

              5.3.2  Compensation. As compensation, Kuroiwa shall receive as
compensation an amount no less then his current compensation from Eurotec, which
is represented to be annually Yen [***], and shall be eligible for bonuses,
raises and other incentive awards that may be adopted by NJKK and made available
to other management members of NJKK. Kuroiwa shall report to and be supervised
by the President of NJKK, and his continued employment by NJKK is subject at all
times to the discretion of the Board of Directors of NJKK.

     6.  Additional Undertakings.

         6.1  Consent of Eurotec to this Agreement.

              6.1.1  Indemnification by Eurotec of Wakayama, Tomita, Kuroiwa and
Natus. The offers by Natus made hereunder, and accepted by Wakayama, Kuroiwa and
Tomita, and the other promises exchanged hereunder, are exchanged with the full
knowledge and consent of Wakayama as controlling shareholder, Representative
Director and President of Eurotec, and as a result Eurotec and its directors,
officers, agents, assigns and shareholders (collectively in this paragraph only,
referred to as "Eurotec") shall indemnify and hold harmless Natus and NJKK and
any of their officers, directors, shareholders, agents and employees from and
against any and all claims, demands, disputes, complaints, actions, suits,
liabilities and damages (including attorney fees and costs) of any kind to the
extent that any such claim, demand, etc., may relate to or arise from (a)
Wakayama's, Tomita's or Kuroiwa's services as employee or Director of Eurotec,
or (b) any actions taken by the parties in performance of the promises made in
this Agreement (herein collectively referred to as "Claim"). Eurotec further
agrees, at its sole cost and expense, to release, defend (at Natus or NJKK's
option), indemnify, and hold harmless Natus and NJKK, their directors, officers,
agents, employees, and shareholders from and against all such Claims. Without
limiting the generality of the foregoing, Eurotec's duty to release, defend,
indemnify, and hold harmless shall specifically include those Claims arising
from (a) the employment relationship between NJKK and Wakayama, Tomita and
Kuroiwa, or service by them as members of the Board of Directors of NJKK,
including any compensation offered or paid to them hereunder; (b) Eurotec's
status as Wakayama's, Tomita's or Kuroiwa's employer, including (but not limited
to) all Claims by Eurotec based on loss of personal services, lost or diminished
business opportunity, or usurpation of business opportunity, and the like, as a
result of the actions contemplated hereunder; or (c) the transfer hereunder of
the Natus Product business to NJKK.

              6.1.2 No Payments to Eurotec. It is understood, acknowledged and
agreed by the parties that no payments shall be made, nor shall any be claimed
due or owing, to Nippon Eurotec, Ltd., as a result of the termination of the
Distribution Agreement nor as a result of any action contemplated by this
Agreement to be taken by the parties, it being clearly understood that, as
stated in the Distribution Agreement, there shall be no liability for
termination of the Distribution Agreement pursuant to its terms.

                                      -9-

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treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.
<PAGE>

     7.  General Terms.

         7.1  Cooperation.  Each of the parties hereto shall use its reasonable
efforts to take or cause to be taken all actions, to cooperate with the other
party hereto, with respect to all actions, and to do or cause to be done all
things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.

         7.2  Waiver. Any failure of Wakayama, Tomita or Kuroiwa to comply with
any obligations or agreements herein contained to be performed by any such party
may be waived only in writing by Natus.

         7.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given upon receipt of: hand
delivery; certified or registered mail; return receipt requested; or telecopy
transmission with confirmation of receipt:

         (i)    If to Natus, to:

                Tim Johnson
                Natus Medical, Inc.
                1501 Industrial Road
                San Carlos, CA  94070
                Phone:  (800) 255-3901
                Fax:  (650) 802-0401

                (with a copy to)

                Mark Foster
                Law Offices of Mark Foster
                9615 SW Allen Blvd, Ste 103
                Portland, OR 97005
                Phone: (503) 643-0065
                Fax: (503) 643-6800

         (ii)   If to Wakayama, to:
                  Mr. Toshibumi Wakayama
                  Hakusan 5-6-15,  Bunkyo-ku, Tokyo, Japan
                  Postal code: 112-0001
                  Phone: 81-(0)3-3941-0865,  Fax: 81-(0)3-3941-5693
                  (No e-mail )

         (iii)  If to Kuroiwa, to:
                  Mr. Masaaki Kuroiwa
                  Sumiyoshidai 22-35, Aoba-ku, Yokohama, Japan
                  Postal code: 227-0035
                  Phone & Fax: 81-(0)45-960-1393
                  E-mail: mkuro@pop02.odn.ne.jp (home)

                                      -10-
<PAGE>

         (iv)  If to Tomita, to:
                  Mr. Kenji Tomita
                  Totsuka-cho 2730-31 , Totsuka-ku, Yokohama, Japan
                  Phone : 81-(0)45-865-5360  (No fax)
                  E-mail : CZB07140@nifty.ne.jp(home)

Such names and addresses may be changed by written notice to each person listed
above.

         7.4  Governing Law and Consent to Jurisdiction (Dispute Resolution)

         (a)  This Agreement shall be governed by and construed in accordance
with the internal substantial laws and not the choice of law rules of the State
of California, USA.

         (b)  Any judicial proceeding brought with respect to this Agreement
must be brought in any court of competent jurisdiction in the State of
California, and, by execution and delivery of this Agreement, each party (i)
accepts, generally and unconditionally, the exclusive jurisdiction of such
courts and any related appellate court, and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement and (ii)
irrevocably waives any objection it may now or hereafter have as to the venue of
any such suit, action or proceeding brought in such a court or that such court
is an inconvenient forum.  THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT.

         (c)  Any dispute, claim or controversy arising out of or relating to
this Agreement, or the interpretation or breach thereof, shall be referred to
arbitration under the rules of the American Arbitration Association, to the
extent such rules are not inconsistent with this Section.  Judgment upon the
award of the arbitrators may be entered in any court having jurisdiction thereof
or such court may be asked to judicially confirm the award and order its
enforcement, as the case may be.  The demand for arbitration shall be made
within a reasonable time after the claim, dispute or other matter in question
has arisen, and in any event shall not be made after the date when institution
of legal or equitable proceedings, based on such claim, dispute or other matter
in question, would be barred by the applicable statute of limitations.

         (d)  The arbitration panel shall consist of one arbitrator, who shall
be appointed by a representative of each party hereto.  The two representatives
thus appointed shall choose the arbitrator; PROVIDED, HOWEVER, that if, within
thirty days after the selection of the second of the two representatives, the
two representatives are unable to agree on the appointment of the arbitrator,
either representative may petition the American Arbitration Association to make
the appointment. The place of arbitration shall be San Francisco, California.

         7.5  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

                                      -11-
<PAGE>

         7.6  Term and Termination.  This Agreement shall become effective on
the Effective Date and shall remain in force until July 1, 2001, (the
"Termination Date"), and on an effective the Termination Date this Agreement
shall terminate, provided that certain terms of this Agreement shall survive
termination pursuant to this section.

              7.6.1  Termination for Cause.  This Agreement shall be terminated
for cause:

         (i)  If the Eurotec Executives (or any of them) on one hand, or Natus
on the other, materially defaults in the performance of any provision of this
Agreement, then the non-defaulting party may give written notice to the
defaulting party that if the default is not cured within thirty (30) calendar
days, the Agreement will be terminated at the end of that period and such
termination shall not prejudice or limit either party's remedies; or

         (ii) Upon:

              (a)  the institution by or against Natus, or any of the Eurotec
Executives, of insolvency, receivership or bankruptcy proceedings or any other
proceedings for the settlement of its debts; or

              (b)  any party's making an assignment for the benefit of
creditors; or

              (c)  any party's death or incapacity, or the dissolution of Natus,
this Agreement shall terminate immediately without notice and shall be deemed to
have been terminated by the party not so affected and such termination shall not
prejudice or limit either party's remedies.

              7.6.2  Duties upon Termination.  Upon any termination or
expiration of this Agreement no party shall retain any copies of any
Confidential Information which may have been entrusted to.

              7.6.3  Survival.  The terms of this Agreement which by their
nature may survive the termination or expiration of this Agreement shall survive
the termination or expiration of this Agreement.

         7.7  Entire Agreement.  The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. The Recitals form an integral part
of this Agreement. This Agreement, including the Exhibits and Schedules hereto
and the documents referred to herein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.

         7.8  Amendment and Modification.  This Agreement may be amended or
modified only by written agreement of the parties hereto.

                                      -12-
<PAGE>

         7.9  Binding Effect; Benefits.  This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns; nothing in this Agreement, express or implied, is
intended to confer on any Person other than the parties hereto and their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

         7.10  Assignability.  This Agreement shall not be assignable by
Wakayama, Tomita or Kuroiwa without the prior written consent of Natus. Natus
may assign its rights under the Agreement to any affiliate of Natus.

         7.11  Consents.  No consent required to be given under this Agreement
shall be unreasonably withheld.

         7.12  Counterparts.  This Agreement shall be prepared in two identical
and original counterparts and both of which together shall be one and the same
instrument and either of which may be used for purposes of proof.

         7.13  Cumulation of Remedies.  All remedies available to a party under
this Agreement are cumulative and may be exercised concurrently or separately,
and the exercise of any one remedy shall not be deemed an election of such
remedy to the exclusion of other remedies.

         7.14  Independent Parties.  Each party shall remain an independent
contractor and shall be responsible for compliance with all laws, rules and
regulations involving, but not limited to, employment of labor, hours of labor,
health and safety, working conditions and payment of wages. Each party shall
also be solely responsible for payment of taxes, including federal, state and
municipal taxes, chargeable or assessed with respect to its employees, such as
social security, unemployment, worker's compensation, liability insurance and
federal and state withholding. Neither party nor its employees, officers,
directors, or agents shall hold itself out as the agent, employee, legal
partner, or joint venturer of the party, and shall make no commitment or
engagement on the account of or on behalf of the other party.

         7.15  Force Majeure.  Nonperformance of either party shall be excused
to the extent that performance is rendered impossible by strike, fire, flood,
governmental acts, orders or restrictions, or any other reason where failure to
perform is beyond the control and not caused by the negligence of the
nonperforming party. In the event of any delay caused by such contingency, the
delayed party may defer any performance or delivery prevented by the Force
Majeure condition for a period equal to the time lost by reason of such delay,
provided, however, that the delayed party promptly commences and reasonably and
diligently pursues actions to cure or circumvent such cause. Whenever any cause
delays or threatens to delay the timely performance of this Agreement, the party
with such knowledge shall immediately notify the others of all relevant
information with respect to such cause. If Wakayama is delayed in any
performance or delivery by more than thirty (30) days, Natus may terminate the
delayed performance or delivery or this Agreement and such terminating shall not
be a breach of this Agreement and shall be without penalty.

                                      -13-
<PAGE>

         7.16  Governing Language.  English shall be the language of this
Agreement and the English language shall govern all disputes, performance and
interpretations.

         7.17  Joint Work Product.  The parties further acknowledge that they
have thoroughly reviewed this Agreement and bargained over its terms and that
for convenience, Natus has written down the terms of this Agreement.
Accordingly, this Agreement shall be construed without regard to the party or
parties for its preparation and shall be deemed to have been prepared jointly by
the parties.

         7.18  Notices.  Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to be sufficiently given if
delivered by hand or if sent by courier with a receipt requested or by
registered air mail, postage prepaid, addressed to each party, at the addresses
set forth above or to such other address as may be furnished for such purpose by
notice duly given under this Agreement. Such notice shall be deemed to have been
given when delivered by hand or five (5) days after deposit with the courier or
mail service. Any party may change its address for such communications by giving
such notice to the other party in conformance with this section.

         7.19  Severance.  If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions
shall nevertheless remain in full force and effect. The parties agree to
renegotiate any term held invalid and to be bound by the mutually agreed
substitute provisions.

                                      -14-
<PAGE>

         7.20  Waiver.  The failure of any party to this Agreement at any time
or times to require performance of any provision of this Agreement shall in no
manner affect such party's available remedies or right at a later time to
enforce the same. No waiver by any party of any condition, or of the breach of
any term, covenant, representation or warranty contained in this Agreement,
whether by conduct or otherwise (in any one or more instances) shall be deemed
to be or construed as a further or continuing waiver of any such condition or
breach or of any remedy or as a waiver of any other condition or as a breach of
any other term, covenant, representation or warranty of this Agreement.

Natus Medical, Inc.                 Toshibumi Wakayama, Personally
                                    And on behalf of Nippon Eurotec Ltd.,K.K.

By:   /s/ Tim C. Johnson            By:   /s/ Toshibumi Wakayama
    --------------------                ------------------------

Name:   Tim C. Johnson              Name:   Toshibumi Wakayama
      ----------------                    --------------------

Title:   President and CEO          Title:   President
       -------------------                 -----------

Date:   8/23/00
      ---------

Masaaki Kuroiwa, Personally, as pertaining solely to those obligations that
relate to him:

By:   /s/ Masaaki Kuroiwa
    ---------------------

Name:   Masaaki Kuroiwa
      -----------------

Kenji Tomita, Personally, as pertaining solely to those obligations that relate
to him:

By:   /s/ Kenji Tomita
    ------------------

Name:   Kenji Tomita
      --------------

Exhibit A Distribution Agreement
Exhibit B Transaction Timetable
Exhibit C Natus Medical, Inc. 1991 Stock Plan (as amended)
Exhibit D Major Areas
Exhibit E Confidentiality and Nondisclosure Agreement

                                      -15-
<PAGE>

                        Exhibit A  Distribution Agreement

                               (See Exhibit 10.6)

                                      -16-
<PAGE>

                        Exhibit B  Transaction Timetable

<TABLE>
<CAPTION>
ID                 Task Name                             Duration  Start Date  Finish Date   Predecessor Resource Names
---------------    -----------------------------------   --------  ----------  -----------   --------------------------
<S>                <C>                                   <C>       <C>         <C>           <C>
                   1 Prepare draft Wakayama proposal     2 wks     19-Jun-00    30-Jun-00
                   2 Finalize Arrangements w/Wakayama    22 days   17-Jul-00    15-Aug-00
                   3 Transition Agreement                22 days   17-Jul-00    15-Aug-00
                   4 Finish draft Wakayama agr           22 days   17-Jul-00    15-Aug-00
                   5 Obtain Asahi consent to NJKK        1 day     15-Aug-00    15-Aug-00
                   6 Sign Transition Agr                 0 days    15-Aug-00    15-Aug-00
                   7 Establish Natus K.K.                15 days   10-Jul-00    28-Jul-00
                   8 Japanese atty engage                10 days   10-Jul-00    21-Jul-00
                   9 Set up Natus Japan KK               10 days   17-Jul-00    28-Jul-00
                   10 Draft NJK.K.Founding Documents     10 days   17-Jul-00    28-Jul-00
                   11 Wakayama:NJKK B/D                  0 days    28-Jul-00    28-Jul-00
                   12 Kuroiwa NJKK B/D                   0 days    28-Jul-00    28-Jul-00
                   13 Tomita NJKK B/D                    0 days    28-Jul-00    28-Jul-00
                   14 Transition Business to NJ          236 days  15-Aug-00    10-Jul-01
                   15 Est NJKK Legal Office              1 day     10-Jan-01    10-Jan-01
                   16 Transition ALGO Sales to NJ        180 days  01-Nov-00    10-Jul-01
                   17 Initiate PR for NJ                 30 days   30-May-01    10-Jul-01
                   18 Write CA Program                   24 days   15-Aug-00    15-Sep-00
                   19 Transition Tech Support to NJ      88 days   09-Mar-01    10-Jul-01
                   20 Transfer Marketing to NJ           90 days   07-Mar-01    10-Jul-01
                   21 Transfer Selected NE Assets to NJ  60 days   13-Apr-01    10-Jul-01
                   22 Transition Shonin to NJ            137 days  01-Jan-01    10-Jul-01
                   23 Join ACCJ                          1 day     25-Aug-00    25-Aug-00
                   24 Hire NJKK Pres                     100 days  15-Aug-00    01-Jan-01
                   25 Get New Shonin?                    120 days  24-Jan-01    10-Jul-01
                   26 Natus-NE Contract End              0 days    10-Jul-01    10-Jul-01
                   27 Natus Japan Opening Party          0 days    10-Jul-01    10-Jul-01
</TABLE>

                                      -17-
<PAGE>

              Exhibit C  Natus Medical Incorporated 1991 Stock Plan

                         (See Exhibits 10.2 and 10.2.1)

                                      -18-
<PAGE>

                             Exhibit D  Major Areas

"Major Prefectures" means only the following Prefectures and areas:

Tokyo area:

1. Saitama Pref.   -    65,711
2. Chiba           -    54,006
3. Tokyo-to        -    97,958
4. Kanagawa        -    81,788  (Sub-total : 299,463 )

Nagoya area:

5. Nagano pref.    -    20,765
6. Gifu            -    20,151
7. Shizuoka        -    35,395
8. Aichi           -    73,737  (Sub-total: 150,043 )

Osaka area:

9. Shiga pref.     -    14,040
10. Kyoto-Fu       -    23,831
11. Osaka-Fu       -    88,386
12. Hyogo-ken      -    53,765
13. Nara-ken       -    13,158
(Sub-total : 193,180 )

Grand total of these three majors areas :  642,691 -  54.6%  of total of Japan.

Plus the following important areas:

14. Hokkaido
15. Ibaraki-ken

                                      -19-
<PAGE>

                                   Exhibit E

                    NATUS JAPAN K.K. NONDISCLOSURE AGREEMENT

Agreement made [date] _________, by and between Natus Japan K.K. ("NJKK"), and
[Name] ____________________ ("Director").  In consideration of Director's
continued service as a director of Natus Japan K.K., and the mutual promises
made and exchanged herein, Director and NJKK agree to the following terms and
conditions.

1.  Trade Secrets.  Director acknowledges that the following constitute NJKK
trade secrets ("Trade Secrets") in that, as used in NJKK's business, they are
secret, confidential, unique, and valuable, they were developed by NJKK at great
cost and over a long period, and in light of the fact that disclosure of any of
the items to anyone other than NJKK's officers, agents, or authorized Directors
will cause NJKK irreparable injury:

        a. Customer lists, supplier lists, call lists, marketing plans, sales
        channels, sales methods, customer specifications or requirements, NJKK's
        prices to customers, NJKK's or its customers' or suppliers' costs, and
        any other customer data which NJKK is obligated to keep secret;

        b.  Memoranda, notes, records, and other confidential technical data;

        c. Sketches, plans, drawings, blueprints, formulas, and other
        confidential research and development plans, information or data; or

        d. Manufacturing processes, including that pertaining to the
        development, production, reproduction or distribution of NJKK's
        software, its proprietary machinery or equipment specifications, as well
        as NJKK's (or that belonging to any subsidiary, parent or affiliate
        company) plant or production facility layout, any of its formulas, or
        the composition, design, internal method of working, source code,
        programming logic, and the like, of NJKK's products ("Products"), as
        well as the sources, prices, or nature of, materials, supplies or
        component for Products.

For purposes of this Agreement, the parties agree that items may constitute NJKK
Trade Secrets regardless of the form or medium in which such items may exist,
whether  tangible or intangible, whether visible to or readable by humans or
machines, whether stored in any format including written, hard-copy, liquid,
gas, or magnetic, and in whatever human or machine-cognizable language.  The
restrictions contained in this Agreement include confidential information and
trade secrets developed by Director while serving as a Director or employee of
NJKK.

2.  Nondisclosure.  Except as necessary in the legitimate pursuit of NJKK
business, Director will not disclose to anyone, other than NJKK's officers,
agents, or authorized Directors (unless otherwise directed in writing by NJKK's
President) any of the items listed in Paragraph 3 or any of NJKK's other
confidential information or Trade Secrets, whether developed before or after the
date of this Agreement.

3.  Inventions.  In order to facilitate the implementation of this Agreement,
Director hereby agrees to:

    3.1   Regularly and promptly, and in any event at NJKK's request, advise
NJKK's management of each invention, discovery, idea, or improvement
(collectively, "Invention"), whether or not patentable, that is made or
conceived by Director, either alone or with others, during the term of
Director's service as Director or employee and directly or indirectly related to
Director's work and investigations, or resulting from or suggested by any work
Director might do for NJKK, and promptly to submit to management a written
disclosure of each Invention describing its nature, use, and operation;

    3.2  Maintain a notebook record from day to day of all work of an important
character that Director does, including each Invention, and deliver all such
notebooks and all other records relating to such work, in whatever format or
medium, whether human-readable or machine-readable, to NJKK, immediately upon
the termination of Director's service as Director or employee;

    3.3 Assign, without further consideration, to NJKK, or NJKK's nominee, all
of Director's right, title, and interest in each Invention (whether or not
patentable) which is made during business hours or otherwise and which relates
to NJKK's business, or is made using NJKK's equipment, facilities, materials,
time, money, or other resources. Director will, at all times during his/her
service as Director or employee and after its termination for any reason, assist
NJKK or NJKK's nominee in every proper way (but entirely at NJKK's or NJKK's
nominee's own expense) to obtain, for NJKK's or NJKK's nominee's own benefit,
patents or other forms of protection for each Invention in any and all
countries. From time to time on request, Director will execute all papers and do
all proper things that may reasonably be required to protect and maintain the
rights of NJKK or NJKK's nominee in an Invention;

    3.4  Understand and agree that all information relating to each Invention
shall be considered proprietary and shall be protected as a Trade Secret in
accordance with this agreement; and

                                      -20-
<PAGE>

    3.5  List on Schedule A to this Agreement, all inventions, whether or not
patented or patentable, including a brief description of each, made or conceived
by Director prior to signing this Agreement.  These inventions are excluded from
the operation of this Agreement, and NJKK has no rights in them.  If such
inventions are patented (or a patent is applied for or pending), Director has
listed all parties having an interest in such patent, a copy of such patent (or
pending application, if public), and Director warrants that this information is
true and accurate.

4.  Agreement Binding After Employment Ends.  The provisions of this agreement
obligating Director to protection of NJKK Trade Secrets shall not terminate upon
the termination of Director's service as Director or employee, and such terms
and conditions shall be binding upon Director following termination of
Director's service regardless of the reason for such termination. For twelve
months following termination of Director's service as a Director or employee of
NJKK, Director shall not, without prior written approval of NJKK, directly or
indirectly obtain employment (including serving on the Board of Directors, or as
a consultant, advisor, investor or partner) with any entity that is in the
business of making, compiling, sourcing, financing, marketing, selling, or
otherwise distributing, products or services similar to, or in competition with,
those products or services made, sold or otherwise distributed by NJKK.

5.  Return of Material Upon Termination.  Upon termination of Director's service
as Director or employment for any reason, unless Director's services as Director
or employee are transferred to a parent, subsidiary or affiliate of NJKK where
Director's retention of the same is required for the conduct of Director's job,
Director at once will return to NJKK all of NJKK's secret and confidential
material that is in Director's possession or control.

6.  Successors, Assigns, Affiliates, and Subsidiaries.  This Agreement shall
inure to the benefit of NJKK and NJKK's parent, subsidiaries, affiliates,
successors, and assigns.

7. Public Information. Director's obligation of confidentiality under this
Agreement shall not apply to information which:

        a. Is already known to Director or is publicly available at the time of
        disclosure, but only to the extent that such knowledge by Director is
        verifiable by NJKK;

        b. Is disclosed to Director by a third party who is not in breach of an
        obligation of confidentiality; or

        c. Becomes publicly available after disclosure through no act of
        Director.

8.  Enforcement of Agreement.  This Agreement can be enforced by NJKK and by
NJKK's parent, subsidiaries, affiliates, successors, and assigns in the
jurisdiction and venue determined by NJKK (or its parent, subsidiary, affiliate,
successor or assign) to be appropriate.  Either equitable relief or damages at
law or both, or the equivalent thereto in any jurisdiction in which such action
is commenced, may be sought for breaches or threatened breaches of this
Agreement. The prevailing party in any action brought to enforce these terms
shall be entitled to an award of attorney's fees and costs of suit.  This
Agreement shall be interpreted in accordance with the laws of the State of
California without regard to its choice of law rules.

IN WITNESS WHEREOF, NJKK, and Director, have each signed this Agreement on the
above date in Tokyo, Japan.

<TABLE>
<CAPTION>
<S>                                                                 <C>
Director:                                                           Natus Japan K.K.:

______________________________                                      ___________________
Print Name                                                          Print Name and Title

______________________________                                      ___________________
Signature                                                           Signature

Date: __________                                                    Date: __________

Schedule A: List of Director's Prior Inventions, Attached:        Applicable _____
[To be filled in by Director]
                                                                  Not Applicable____
</TABLE>

                                      -21-

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