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                                                                    Exhibit 10.2

SILICON VALLEY BANK

                           LOAN AND SECURITY AGREEMENT

BORROWER:  CAMBRIDGE HEART, INC,
ADDRESS:   ONE OAK PARK DRIVE
           BEDFORD, MASSACHUSETTS 01730
DATE:      SEPTEMBER 26, 2002

THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
SILICON VALLEY BANK, a California-chartered bank, with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at One Newton Executive Park, Suite 200, 2221
Washington Street, Newton, Massachusetts 02462 ("Silicon") and the borrower
named above (the "Borrower"), with offices located at the above address
("Borrower's Address"). The Schedule and Exhibits to this Agreement (the
"Schedule" and the "Exhibits," respectively) shall for all purposes be deemed to
be part of this Agreement, and the same are integral parts of this Agreement.
(Definitions of certain terms used in this Agreement are set forth in Section 8
below.)

1.   LOANS.

     1.1    LOANS. Silicon will make loans to Borrower (the "Loans"), in amounts
determined by Silicon in its sole discretion, up to the amounts (the "Credit
Limit") shown on the Schedule, provided no Default or Event of Default has
occurred and is continuing, and subject to deduction of any Reserves for accrued
interest and such other Reserves as Silicon deems proper from time to time.
Amounts borrowed may be repaid and reborrowed during the term of this Agreement.

     1.1A   ORIGINAL TERM LOAN. In accordance with the terms of the Original
Loan Agreement (as defined in Section 9.21), Silicon has made three (3) advances
to Borrower under the Committed Equipment Line (as defined in the Original Loan
Agreement), the aggregate amount outstanding of which is $141,925.55 (the
"Original Term Loan"). The Original Term Loan shall be repaid by a 2002 Term
Loan Advance (as defined in Section 1.1 B) on the date of the effectiveness of
this Agreement (the "Initial Advance").

     1.1B   2002 TERM LOAN. Subject to and upon the terms and conditions of this
Agreement, through December 31, 2002 (the "2002 Term Loan Availability End
Date"), Silicon may, in its sole discretion, make advances ("2002 Term Loan
Advance" and, collectively, "2002 Term Loan Advances") to Borrower not exceeding
(i) Three Hundred Thousand Dollars ($300,000.00) MINUS (ii) the outstanding
principal amount of the Initial Advance. Interest accrues from the date of each
2002 Term Loan Advance at the per annum rate set forth on the Schedule and is
payable monthly. In addition to monthly payments of interest, beginning on
January 31, 2003 and continuing on the last day of each month thereafter until
the Maturity Date set forth on the Schedule (when all 2002 Term Loan Advances
are due and payable in full, along with all accrued and unpaid interest
thereon), 2002 Term Loan Advances outstanding on the

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

2002 Term Loan Availability End Date are payable in equal monthly installments
of principal based upon the outstanding balance of the 2002 Term Loan at the
2002 Term Loan Availability End Date divided by twenty-four (24). 2002 Term Loan
Advances when repaid may not be reborrowed.

     1.2    INTEREST. All Loans, the 2002 Term Loan Advances and all other
monetary Obligations shall bear interest at the rate shown on the Schedule,
except where expressly set forth to the contrary in this Agreement. Interest
shall be payable monthly, on the last day of the month. Interest may, in
Silicon's discretion, be charged to Borrower's loan account, and the same shall
thereafter bear interest at the same rate as the other Loans. Silicon may, in
its discretion, charge interest to Borrower's Deposit Accounts maintained with
Silicon.

     1.3    OVERADVANCES. If at any time or for any reason the total of all
outstanding Loans and all other Obligations exceeds the Credit Limit (an
"Overadvance"), Borrower shall immediately pay the amount of the excess to
Silicon, without notice or demand. Without limiting Borrower's obligation to
repay to Silicon on demand the amount of any Overadvance, Borrower agrees to pay
Silicon interest on the outstanding amount of any Overadvance, on demand, at a
rate equal to the interest rate which would otherwise be applicable to the
Overadvance, plus an additional two percent (2%) per annum.

     1.4    FEES. Borrower shall pay Silicon the fees shown on the Schedule,
which are in addition to all interest and other sums payable to Silicon and are
not refundable.

     1.5    LETTERS OF CREDIT. At the request of Borrower, Silicon may, in its
sole discretion, issue or arrange for the issuance of letters of credit for the
account of Borrower, in each case in form and substance satisfactory to Silicon
in accordance with its usual practices (collectively, "Letters of Credit"). The
aggregate face amount of all outstanding Letters of Credit from time to time
(plus all Silicon exposure under any foreign exchange contracts) shall not
exceed the amount shown on the Schedule (the "Letter of Credit Sublimit"), and
shall be reserved against Loans which would otherwise be available hereunder.
Borrower shall pay all bank charges (including charges of Silicon) for the
issuance of Letters of Credit, together with such additional fee as Silicon's
letter of credit department charges in accordance with its usual practices. Any
payment by Silicon under or in connection with a Letter of Credit shall
constitute a Loan hereunder on the date such payment is made. Each Letter of
Credit shall have an expiry date no later than thirty days prior to the Maturity
Date. Borrower hereby agrees to indemnify, save, and hold Silicon harmless from
any loss, cost, expense, or liability, including payments made by Silicon,
expenses, and reasonable attorneys' fees incurred by Silicon arising out of or
in connection with any Letters of Credit. Borrower agrees to be bound by the
regulations and interpretations of the issuer of any Letters of Credit
guarantied by Silicon and opened for Borrower's account or by Silicon's
interpretations of any Letter of Credit issued by Silicon for Borrower's
account, and Borrower understands and agrees that, except for Silicon's gross
negligence or willful misconduct, Silicon shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrower's instructions or those contained in the Letters of Credit or any
modifications, amendments, or supplements thereto. Borrower understands that
Letters of Credit may require Silicon to indemnify the issuing bank for certain
costs or liabilities arising out of claims by Borrower against such issuing
bank. Borrower hereby agrees to indemnify and hold Silicon harmless with respect
to any loss, cost, expense, or liability

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

incurred by Silicon under any Letter of Credit as a result of Silicon's
indemnification of any such issuing bank. The provisions of this Loan Agreement,
as it pertains to Letters of Credit, and any other present or future documents
or agreements between Borrower and Silicon relating to Letters of Credit are
cumulative.

     1.6    CASH MANAGEMENT SERVICES SUBLIMIT. Borrower may use up to the amount
set forth on the Schedule for Cash Management Services. Such aggregate amounts
utilized under the Cash Management Services Sublimit shall at all times reduce
the amount otherwise available for Loans hereunder. Any amounts Silicon pays on
behalf of Borrower or any amounts that are not paid by Borrower for any Cash
Management Services will be treated as Loans hereunder and will accrue interest
at the interest rate applicable to Loans.

2.   SECURITY INTEREST.

     2.1    SECURITY INTEREST. To secure the payment and performance of all of
the Obligations when due, Borrower hereby grants to Silicon a continuing
security interest in all of Borrower's interest in the following, whether now
owned or hereafter acquired, and wherever located: All Inventory, Equipment,
Payment Intangibles, Letter-of-Credit Rights, Supporting Obligations,
Receivables, and General Intangibles, (but expressly excluding all of Borrower's
Intellectual Property as set forth below), all of Borrower's Deposit Accounts,
and all money, and all property now or at any time in the future in Silicon's
possession (including claims and credit balances), and all proceeds (including
proceeds of any insurance policies, proceeds of proceeds and claims against
third parties), all products and all books and records related to any of the
foregoing (all of the foregoing, together with all other property in which
Silicon may now or in the future be granted a lien or security interest, is
referred to herein, collectively, as the "Collateral"). The security interest
granted herein shall be a first priority security interest in the Collateral.
After the occurrence and during the continuance of a Default, Silicon may place
a "hold" on any Deposit Account pledged as collateral. If Borrower shall at any
time, acquire a commercial tort claim, Borrower shall promptly notify Silicon in
a writing signed by Borrower of the brief details thereof and grant to Silicon
in such writing a security interest therein and in the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and substance
satisfactory to Silicon. The Collateral does not include: any copyright rights,
copyright applications, copyright registrations and like protections in each
work of authorship and derivative work thereof, whether published or
unpublished, now owned or later acquired; any patents, trademarks, service marks
and applications therefor; any trade secret rights, including any rights to
unpatented inventions, and a certain License Agreement between the Massachusetts
Institute of Technology and Borrower dated September 28, 1993, as amended,
relating to the technology of Assessing Myocardial Electrical Stability, now
owned or hereafter acquired (the "Intellectual Property"). Notwithstanding the
foregoing, the Collateral shall include all accounts, license and royalty fees
and other revenues, proceeds, or income arising out of or relating to any of the
foregoing intellectual property. Notwithstanding the foregoing provisions of
this Section 2.1, the within grant of a security interest shall not extend to,
and the term "Collateral" shall not included Restricted Collateral, to the
extent that (i) such Restricted Collateral is not assignable or capable of being
encumbered as a matter of law or under the terms of the Restricted Collateral
(but solely to the extent that any such restriction shall be enforceable under
applicable law), without the consent of the non-Borrower parties to the
Restricted Collateral and (ii) such consent has not been obtained; provided,
however, that the foregoing

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

grant of security interest shall extend to, and the "Collateral" shall include,
(A) any and all proceeds of such agreement to the extent that the assignment or
encumbering of such proceeds is not so restricted as a matter of law or under
the terms of such agreement (but solely to the extent that any restrictions
shall be enforceable under applicable law) and (B) any agreement constituting
Restricted Collateral upon consent thereto being obtained from the non-Borrower
parties to such agreement (but Borrower shall have no obligations to obtain any
such consent). "Restricted Collateral" shall mean: licenses in which the
Borrower is the licensee which govern the use of any other party's Intellectual
Property.

3.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.

     In order to induce Silicon to enter into this Agreement and to make Loans
and the 2002 Term Loan Advances, Borrower represents and warrants to Silicon as
follows, and Borrower covenants that the following representations will continue
to be true, and that Borrower will at all times comply with all of the following
covenants until the payment of all outstanding obligations and termination of
this Agreement:

     3.1    CORPORATE EXISTENCE AND AUTHORITY. Borrower, if a corporation, is
and will continue to be, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. Borrower is and will
continue to be qualified and licensed to do business in all jurisdictions in
which any failure to do so would have a material adverse effect on Borrower. The
execution, delivery and performance by Borrower of this Agreement, and all other
documents contemplated hereby (i) have been duly and validly authorized, (ii)
are enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally), (iii) do not violate Borrower's articles or certificate of
incorporation, Borrower's by-laws, or any law or any material agreement or
instrument which is binding upon Borrower or its property, and (iv) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any material agreement or instrument which is binding upon Borrower or its
property.

     3.2    NAME; TRADE NAMES AND STYLES. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are all
prior names of Borrower and all of Borrower's present and prior trade names.
Borrower shall give Silicon 30 days' prior written notice before changing its
name or doing business under any other name. Borrower has complied, and will in
the future comply, with all laws relating to the conduct of business under a
fictitious business name.

     3.3    PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in
the heading to this Agreement is Borrower's chief executive office. In addition,
Borrower has places of business and Collateral is located only at the locations
set forth on the Schedule. Borrower will give Silicon at least 30 days prior
written notice before opening any additional place of business, changing its
chief executive office, changing its state of formation or moving any of the
Collateral to a location other than Borrower's Address or one of the locations
set forth on the Schedule.

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     3.4    TITLE TO COLLATERAL; PERMITTED LIENS. Borrower is now, and will at
all times in the future be, the sole owner of all the Collateral, except for
items of Equipment which are leased by Borrower. The Collateral now is and will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for Permitted Liens. Silicon now has,
and will continue to have, a first-priority perfected and enforceable security
interest in all of the Collateral, subject only to the Permitted Liens, and
Borrower will at all times defend Silicon and the Collateral against all claims
of others except Permitted Liens. None of the Collateral now is or will be
affixed to any real property in such a manner, or with such intent, as to become
a fixture. Except as may be set forth in Borrower's existing lease, Borrower is
not and will not become a lessee under any real property lease pursuant to which
the lessor may obtain any rights in any of the Collateral and no such lease now
prohibits, restrains, impairs or will prohibit, restrain or impair Borrower's
right to remove any Collateral from the leased premises. Whenever any Collateral
is located upon premises in which any third party has an interest (whether as
owner, mortgagee, beneficiary under a deed of trust, lien or otherwise),
Borrower shall, whenever requested by Silicon, use its best efforts to cause
such third party to execute and deliver to Silicon, in form reasonably
acceptable to Silicon, such waivers and subordinations as Silicon shall
reasonably specify, so as to ensure that Silicon's rights in the Collateral are,
and will continue to be, superior to the rights of any such third party.
Borrower will keep in full force and effect, and will comply in all material
respects with the terms of, any lease of real property where any of the
Collateral now or in the future may be located, as such lease may be amended or
replaced from time to time.

     3.5    MAINTENANCE OF COLLATERAL. Borrower will maintain the Collateral in
good working condition (wear and tear expected), and Borrower will not use the
Collateral for any unlawful purpose. Borrower will immediately advise Silicon in
writing of any material loss or damage to the Collateral.

     3.6    BOOKS AND RECORDS. Borrower has maintained and will maintain at
Borrower's Address materially complete and accurate books and records,
comprising an accounting system in accordance with generally accepted accounting
principles.

     3.7    FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial
statements now or in the future delivered to Silicon have been, and will be,
when delivered, prepared in conformity with generally accepted accounting
principles and now and in the future will accurately reflect in all material
respects the financial condition of Borrower, at the times and for the periods
therein stated. Between the last date covered by any such statement provided to
Silicon and the date hereof, there has been no material adverse change in the
financial condition or business of Borrower. Borrower is now and will continue
to be solvent.

     3.8    TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has timely
filed, and will timely file, all tax returns and reports required by foreign,
federal, state and local law, and Borrower has timely paid, and will timely pay,
all foreign, federal, state and local taxes, assessments, deposits and
contributions now or in the future owed by Borrower. Borrower may, however,
defer payment of any contested taxes, provided that Borrower (i) in good faith
contests Borrower's obligation to pay the taxes by appropriate proceedings
promptly and diligently instituted and conducted, (ii) notifies Silicon in
writing of the commencement of, and any material development in, the
proceedings, and (iii) posts bonds or takes any other steps required

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to keep the contested taxes from becoming a lien upon any of the Collateral.
Borrower is unaware of any claims or adjustments proposed for any of Borrower's
prior tax years which could result in additional taxes becoming due and payable
by Borrower. Borrower has paid, and shall continue to pay all amounts necessary
to fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not and will not withdraw
from participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any such plan which could result
in any material liability of Borrower, including any material liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental
agency. Borrower shall, at all times, utilize the services of an outside payroll
service providing for the automatic deposit of all payroll taxes payable by
Borrower.

     3.9    COMPLIANCE WITH LAW. Borrower has complied, and will comply, in all
material respects, with all provisions of all foreign, federal, state and local
laws and regulations relating to Borrower, including, but not limited to, those
relating to Borrower's ownership of real or personal property, the conduct and
licensing of Borrower's business, and all environmental matters, the failure of
which could cause a material adverse effect.

     3.10   LITIGATION. Except as disclosed in the Schedule, there is no claim,
suit, litigation, proceeding or investigation pending or (to best of Borrower's
knowledge) threatened by or against or affecting Borrower in any court or before
any governmental agency (or any basis therefor known to Borrower) which is
reasonably likely to result, either separately or in the aggregate, in any
material adverse change in the financial condition or business of Borrower, or
in any material impairment in the ability of Borrower to carry on its business
in substantially the same manner as it is now being conducted. Borrower will
promptly inform Silicon in writing of any claim, proceeding, litigation or
investigation in the future threatened in writing or instituted by or against
Borrower involving any single claim of $50,000 or more, or involving $100,000 or
more in the aggregate.

     3.11   USE OF PROCEEDS. All proceeds of all Loans and the 2002 Term Loan
Advances shall be used solely for working capital purposes. Borrower is not
purchasing or carrying any "margin stock" (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) and no part of the proceeds of
any Loan will be used to purchase or carry any "margin stock" or to extend
credit to others for the purpose of purchasing or carrying any "margin stock."

4.   RECEIVABLES.

     4.1    REPRESENTATIONS RELATING TO RECEIVABLES. Borrower represents and
warrants to Silicon as follows: Each Receivable with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made, (i)
represent an undisputed bona fide existing unconditional obligation of the
Account Debtor created by the sale, delivery, and acceptance of goods or the
rendition of services in the ordinary course of Borrower's business, and (ii)
meet the Minimum Eligibility Requirements set forth in Section 8 below.

     4.2    REPRESENTATIONS RELATING TO DOCUMENTS AND LEGAL COMPLIANCE. Borrower
represents and warrants to Silicon as follows: All statements made and all
unpaid balances appearing in all invoices, instruments and other documents
evidencing the Receivables are and

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

shall be true and correct in all material respects and all such invoices,
instruments and other documents and all of Borrower's books and records are and
shall be genuine and in all respects what they purport to be, and all
signatories and endorsers have the capacity to contract to the knowledge of
Borrower. All sales and other transactions underlying or giving rise to each
Receivable shall comply with all applicable laws and governmental rules and
regulations. All signatures and endorsements on all documents, instruments, and
agreements relating to all Receivables are and shall be genuine to the knowledge
of the Borrower, and all such documents, instruments and agreements are and
shall be legally enforceable in accordance with their terms to the knowledge of
the Borrower.

     4.3    SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. Borrower shall
deliver to Silicon transaction reports and loan requests and schedules of all
Receivables, and schedules of collections, all on Silicon's standard forms;
provided, however, that Borrower's failure to execute and deliver the same shall
not affect or limit Silicon's security interest and other rights in all of
Borrower's Receivables, nor shall Silicon's failure to advance or lend against a
specific Receivable affect or limit Silicon's security interest and other rights
therein. Loan requests received after 12:00 Noon will not be considered by
Silicon until the next Business Day. If requested by Silicon, Borrower shall
furnish Silicon with copies (or, at Silicon's request, originals) of all
contracts, orders, invoices, and other similar documents, and all original
shipping instructions, delivery receipts, bills of lading, and other evidence of
delivery, for any goods the sale or disposition of which gave rise to such
Receivables, and Borrower warrants the genuineness of all of the foregoing.
Borrower shall also furnish to Silicon an aged accounts receivable trial balance
in such form and at such intervals as Silicon shall reasonably request. In
addition, if requested by Silicon, Borrower shall deliver to Silicon the
originals of all instruments, chattel paper, security agreements, guarantees and
other documents and property evidencing or securing any Receivables, immediately
upon receipt thereof and in the same form as received, with all necessary
indorsements, all of which shall be with recourse and held by Silicon as
additional Collateral. Borrower shall also provide Silicon with copies of all
material credit memos within two days after the date issued.

     4.4    COLLECTION OF RECEIVABLES. Upon Silicon's request, Borrower shall
cause the Account Debtors to remit all Receivables to Silicon and Silicon shall
hold all payments on, and proceeds of, Receivables in a lockbox account, or such
other "blocked account" as Silicon may specify, pursuant to a blocked account
agreement in such form as Silicon may specify. All such payments on, and
proceeds of, Receivables shall be applied to any outstanding Obligations (other
than 2002 Term Loan Advances prior to the occurrence of an Event of Default) in
such order as Silicon shall determine, with any excess to be transferred to an
account of the Borrower maintained with Silicon. Silicon or its designee may, at
any time, notify Account Debtors that the Silicon has a security interest in the
Receivables.

     4.5    REMITTANCE OF PROCEEDS. All proceeds arising from the disposition of
any Collateral (which shall not be construed to include ordinary course sales or
leases of Inventory) shall be delivered, in kind, by Borrower to Silicon in the
original form in which received by Borrower not later than the following
Business Day after receipt by Borrower, to be applied to the Obligations in such
order as Silicon shall determine; provided that, if no Default or Event of
Default has occurred, Borrower shall not be obligated to remit to Silicon the
proceeds of the sale of worn out or obsolete equipment disposed of by Borrower
in good faith in an arm's length

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

transaction for an aggregate purchase price of $25,000 or less (for all such
transactions in any fiscal year). Borrower agrees that it will not commingle
proceeds of Collateral with any of Borrower's other funds or property, but will
hold such proceeds separate and apart from such other funds and property and in
an express trust for Silicon. Nothing in this Section 4.5 limits the
restrictions on disposition of Collateral set forth elsewhere in this Agreement.

     4.6    DISPUTES. Borrower shall notify Silicon promptly of all material
disputes or claims relating to Receivables. Borrower shall not forgive
(completely or partially), compromise or settle any Receivable for less than
payment in full, or agree to do any of the foregoing, except that Borrower may
do so, provided that: (i) Borrower does so in good faith, in a commercially
reasonable manner, in the ordinary course of business, and in arm's length
transactions, which are reported to Silicon on the regular reports provided to
Silicon; (ii) no Default or Event of Default has occurred and is continuing; and
(iii) taking into account all such discounts settlements and forgiveness, the
total outstanding Loans will not exceed the Credit Limit. Silicon may, at
anytime after the occurrence and during the continuance of an Event of Default,
settle or adjust disputes or claims directly with Account Debtors for amounts
and upon terms which Silicon considers advisable in its reasonable credit
judgment and, in all cases, Silicon shall credit Borrower's Loan account with
only the net amounts received by Silicon in payment of any Receivables.

     4.7    RETURNS. Provided no Event of Default has occurred and is
continuing, if any Account Debtor returns any Inventory to Borrower in the
ordinary course of its business, Borrower shall promptly determine the reason
for such return and promptly issue a credit memorandum in accordance with its
current practices to the Account Debtor in the appropriate amount (sending a
copy to Silicon). In the event any attempted return occurs after the occurrence
of any Event of Default, Borrower shall (i) hold the returned Inventory in trust
for Silicon, (ii) segregate all returned Inventory from all of Borrower's other
property, (iii) conspicuously label the returned Inventory as Silicon's
property, and (iv) immediately notify Silicon of the return of any Inventory,
specifying the reason for such return, the location and condition of the
returned Inventory, and on Silicon's request deliver such returned Inventory to
Silicon.

     4.8    VERIFICATION. Silicon may, from time to time, verify directly with
the respective Account Debtors the validity, amount and other matters relating
to the Receivables, by means of mail, telephone or otherwise.

     4.9    NO LIABILITY. Silicon shall not under any circumstances be
responsible or liable for any shortage or discrepancy in, damage to, or loss or
destruction of, any goods, the sale or other disposition of which gives rise to
a Receivable, or for any error, act, omission, or delay of any kind occurring in
the settlement, failure to settle, collection or failure to collect any
Receivable, or for settling any Receivable in good faith for less than the full
amount thereof, nor shall Silicon be deemed to be responsible for any of
Borrower's obligations under any contract or agreement giving rise to a
Receivable. Nothing herein shall, however, relieve Silicon from liability for
its own gross negligence or willful misconduct.

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

5.   ADDITIONAL DUTIES OF THE BORROWER.

     5.1    FINANCIAL AND OTHER COVENANTS. Borrower shall at all times comply
with the financial and other covenants set forth in the Schedule.

     5.2    INSURANCE. Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Silicon, in such form and amounts as Silicon
may reasonably require, and Borrower shall provide evidence of such insurance to
Silicon, so that Silicon is satisfied that such insurance is, at all times, in
full force and effect. All such insurance policies shall name Silicon as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Silicon. Upon receipt of the proceeds of any such
insurance, Silicon shall apply such proceeds in reduction of the Obligations as
Silicon shall determine in its sole discretion, except that, provided no Default
or Event of Default has occurred and is continuing, Silicon shall release to
Borrower insurance proceeds with respect to Equipment totaling less than
$100,000, which shall be utilized by Borrower for the replacement of the
Equipment with respect to which the insurance proceeds were paid. Silicon may
require reasonable assurance that the insurance proceeds so released will be so
used. If Borrower fails to provide or pay for any insurance, Silicon may, but is
not obligated to, obtain the same at Borrower's expense. Borrower shall promptly
deliver to Silicon copies of all reports regarding material claims made to
insurance companies.

     5.3    REPORTS. Borrower, at its expense, shall provide Silicon with the
written reports set forth in the Schedule, and such other written reports with
respect to Borrower (including budgets, sales projections, operating plans and
other financial documentation), as Silicon shall from time to time reasonably
specify.

     5.4    ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times, and on
one Business Day's notice, Silicon, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy Borrower's books and
records. The foregoing inspections and audits shall be at Borrower's expense and
the charge therefor shall be $700 per person per day (or such higher amount as
shall represent Silicon's then current standard charge for the same), plus
reasonable out of pocket expenses. Borrower will not enter into any agreement
with any accounting firm, service bureau or third party to store Borrower's
books or records at any location other than Borrower's Address, without first
obtaining Silicon's written consent, which may be conditioned upon such
accounting firm, service bureau or other third party agreeing to give Silicon
the same rights with respect to access to books and records and related rights
as Silicon has under this Loan Agreement.

     5.5    NEGATIVE COVENANTS. Except as may be permitted in the Schedule,
Borrower shall not, without Silicon's prior written consent, which shall not be
unreasonably withheld or delayed, do any of the following: (i) merge or
consolidate with another corporation or entity; (ii) acquire any assets, except
in the ordinary course of business; (iii) enter into any other transaction
outside the ordinary course of business; (iv) sell or transfer any Collateral,
except for the sale or lease of finished Inventory in the ordinary course of
Borrower's business, and except for the sale of obsolete or unneeded Equipment
in the ordinary course of business; (v) store any Inventory or other Collateral
with any warehouseman or other third party unless Borrower obtains a reasonably
satisfactory waiver from any such warehouseman or third party (except Borrower

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

may keep test/demonstration Equipment at sales locations or customer sites of a
value not greater than $20,000 per site; (vi) sell any Inventory on a
sale-or-return, guaranteed sale, consignment, or other contingent basis; (vii)
make any loans of any money or other assets; (viii) incur any debts outside the
ordinary course of business; (ix) guarantee or otherwise become liable with
respect to the obligations of another party or entity , other than customary
indemnity provisions in the ordinary course of Borrower's business: (x) pay or
declare any dividends on Borrower's stock (except for dividends payable solely
in stock of Borrower): (xi) redeem, retire, purchase or otherwise acquire,
directly or indirectly, any of Borrower's stock; or (xii) dissolve or elect to
dissolve. Transactions otherwise permitted by the foregoing provisions of this
Section 5.5 are only permitted if no Default or Event of Default would occur as
a result of such transaction.

     5.6    LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against Silicon with respect to any Collateral or in any manner
relating to Borrower. Borrower shall, without expense to Silicon, make
reasonably available Borrower and its officers, employees and agents and
Borrower's books and records, to the extent that Silicon may deem them
reasonably necessary in order to prosecute or defend any such suit or
proceeding.

     5.7    FURTHER ASSURANCES. Borrower agrees, at its expense, on request by
Silicon, to execute all documents and take all actions, as Silicon may deem
reasonably necessary or useful in order to perfect and maintain Silicon's
perfected security interest in the Collateral, and in order to fully consummate
the transactions contemplated by this Agreement.

6.   TERM.

     6.1    MATURITY DATE. This Agreement shall continue in effect until the
maturity date set forth on the Schedule (the "Maturity Date"); provided that the
Maturity Date may be extended upon written agreement of the parties hereto.

     6.2    PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such Obligations are otherwise then due and payable.
Without limiting the generality of the foregoing, if on the Maturity Date, or on
any earlier effective date of termination, there are any outstanding Letters of
Credit issued by Silicon or issued by another institution based upon an
application, guarantee, indemnity or similar agreement on the part of Silicon,
then on such date Borrower shall provide to Silicon cash collateral in an amount
equal to the face amount of all such Letters of Credit plus all interest, fees
and cost due or to become due in connection therewith, to secure all of the
Obligations relating to said Letters of Credit, pursuant to Silicon's then
standard form cash pledge agreement. Notwithstanding any termination of this
Agreement, all of Silicon's security interests in all of the Collateral and all
of the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided
that, without limiting the fact that Loans are subject to the discretion of
Silicon, Silicon may, in its sole discretion, refuse to make any further Loans
after termination. No termination shall in any way affect or impair any right or
remedy of Silicon, nor shall any such termination relieve Borrower of any
Obligation to Silicon, until all of the Obligations have been paid and performed
in full. Upon payment and performance in full of all the Obligations and written
termination of this Agreement, Silicon shall promptly deliver to Borrower
termination

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

statements, requests for reconveyances and such other documents as may be
required to fully terminate Silicon's security interests.

7.   EVENTS OF DEFAULT AND REMEDIES.

     7.1    EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement, and Borrower shall
give Silicon immediate written notice thereof: (a) Any warranty, representation,
statement, report or certificate made or delivered to Silicon by Borrower or any
of Borrower's officers, now or in the future, shall be untrue or misleading (in
light of all of the facts and circumstances then known to Silicon) in a material
respect; or (b) Borrower shall fail to pay when due any Loan or any interest
thereon or any other monetary Obligation; or (c) the total Loans and other
Obligations outstanding at any time shall exceed the Credit Limit; or (d)
Borrower shall fail to comply with any of the financial covenants set forth in
the Schedule or shall fail to perform any other non-monetary Obligation which by
its nature cannot be cured; or (e) Borrower shall fail to perform any other
non-monetary Obligation, which failure is not cured within 5 Business Days after
the date due; or (f) any levy, assessment, attachment, seizure, lien or
encumbrance (other than a Permitted Lien) is made on all or any part of the
Collateral with a value in excess of $50,000 which is not dissolved within 10
days after the occurrence of the same or adequately bonded within 10 days
thereof, or immediately upon the service of process upon Silicon seeking to
attach by trustee, mesne or other process, any of Borrower's funds in excess of
$25,000 on deposit with, or assets in excess of $25,000 of the Borrower in the
possession of, Silicon; or (g) any default or event of default occurs under any
obligation in excess of $50,000 secured by a Permitted Lien, which is not cured
within any applicable cure period or waived in writing by the holder of the
Permitted Lien such that the secured party may accelerate the obligations
secured thereby; or (h) Borrower breaches any material contract or obligation,
which has or may reasonably be expected to have a material adverse effect on
Borrower's business or financial condition taken as a whole; or (i) Dissolution,
termination of existence, insolvency or business failure of Borrower; or
appointment of a receiver, trustee or custodian, for all or any part of the
property of, assignment for the benefit of creditors by, or the commencement of
any proceeding by Borrower under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect; or (j) the commencement of any
proceeding against Borrower under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 30 days after the date commenced; or (k) revocation or
termination of, or limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset of any kind
pledged by any third party to secure any or all of the Obligations, or any
attempt to do any of the foregoing, or commencement of proceedings by or against
any such third party under any bankruptcy or insolvency law; or (1) Borrower
materially defaults under any agreement evidencing any indebtedness in excess of
$50,000 to any third party; or (m) Borrower makes any payment on account of any
indebtedness or obligation which has been subordinated to the Obligations other
than as permitted in the applicable subordination agreement, or if any Person
who has subordinated such indebtedness or obligations terminates or in any way
limits his subordination agreement; or (n) Borrower shall generally not pay its
debts as they become due, or Borrower shall conceal, remove or transfer any part
of its property, with intent to hinder, delay or defraud its creditors, or make
or suffer any transfer of any of its property which would be fraudulent

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

under any bankruptcy, fraudulent conveyance or similar law; or (o) there shall
be (i) a material impairment in the perfection or priority of Silicon's security
interest in the Collateral or in the value of such Collateral: (ii) a material
adverse change in the business, operations or condition (financial or otherwise)
of the Borrower taken as a whole; (iii) a material impairment of the prospect of
repayment of any portion of the Obligations; or (iv) Silicon determines, based
upon information available to it and in its reasonable judgment, that there is
reasonable likelihood that Borrower shall fail to comply with one or more of the
financial covenants in Section 5.1 during the next succeeding financial
reporting period; or (p) Silicon, acting in good faith and in a commercially
reasonable manner, deems itself insecure because of the occurrence of an event
prior to the effective date hereof of which Silicon had no knowledge on the
effective date or because of the occurrence of an event on or subsequent to the
effective date; or (q) Borrower shall materially breach any term of the Negative
Pledge Agreement or the Warrant granted by the Borrower to Silicon.

     7.2    REMEDIES. Upon the occurrence of any Event of Default, and at any
time during the continuance of an Event of Default thereafter, Silicon, at its
option, and without notice or demand of any kind (all of which are hereby
expressly waived by Borrower), may do any one or more of the following to the
extent permitted by applicable law: (a) Cease making Loans or otherwise
extending credit to Borrower under this Agreement or any other document or
agreement; (b) Accelerate and declare all or any part of the Obligations to be
immediately due, payable, and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any
Obligation; (c) Take possession of any or all of the Collateral wherever it may
be found, and for that purpose Borrower hereby authorizes Silicon without
judicial process to enter onto any of Borrower's premises without interference
to search for, take possession of, keep, store, or remove any of the Collateral,
and remain on the premises or cause a custodian to remain on the premises in
exclusive control thereof, without charge for so long as Silicon deems it
reasonably necessary in order to complete the enforcement of its rights under
this Agreement or any other agreement; provided, however, that should Silicon
seek to take possession of any of the Collateral by Court process, Borrower
hereby irrevocably waives: (i) any bond and any surety or security relating
thereto required by any statute, court rule or otherwise as an incident to such
possession; (ii) any demand for possession prior to the commencement of any suit
or action to recover possession thereof; and (iii) any requirement that Silicon
retain possession of, and not dispose of, any such Collateral until after trial
or final judgment; (d) Require Borrower to assemble any or all of the Collateral
and make it available to Silicon at places designated by Silicon which are
reasonably convenient to Silicon and Borrower, and to remove the Collateral to
such locations as Silicon may deem advisable; (e) Complete the processing,
manufacturing or repair of any Collateral prior to a disposition thereof and,
for such purpose and for the purpose of removal, Silicon shall have the right to
use Borrower's premises, vehicles, hoists, lifts, cranes, equipment and all
other property without charge; (f) Sell, lease or otherwise dispose of any of
the Collateral, in its condition at the time Silicon obtains possession of it or
after further manufacturing, processing or repair, at one or more public and/or
private sales, in lots or in bulk, for cash, exchange or other property, or on
credit, and to adjourn any such sale from time to time without notice other than
oral announcement at the time scheduled for sale in accordance with and as
required by the Code. Silicon shall have the right to conduct such disposition
on Borrower's premises without charge, for such time or times as Silicon deems
reasonable, or on Silicon's premises, or elsewhere and the Collateral need not
be located at the place of disposition. Silicon may directly or through any
affiliated company purchase or lease

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

any Collateral at any such public disposition, and if permissible under
applicable law, at any private disposition. Any sale or other disposition of
Collateral shall not relieve Borrower of any liability Borrower may have if any
Collateral is defective as to title or physical condition or otherwise at the
time of sale; (g) Demand payment of, and collect any Receivables and General
Intangibles comprising Collateral and, in connection therewith, Borrower
irrevocably authorizes Silicon to endorse or sign Borrower's name on all
collections, receipts, instruments and other documents, to take possession of
and open mail addressed to Borrower and remove therefrom payments made with
respect to any item of the Collateral or proceeds thereof, and, in Silicon's
sole discretion, to grant extensions of time to pay, compromise claims and
settle Receivables and the like for less than face value; (h) Offset against any
sums in any of Borrower's general, special or other Deposit Accounts with
Silicon; and (i) Demand and receive possession of copies of any of Borrower's
federal and state income tax returns and the books and records utilized in the
preparation thereof or referring thereto. All reasonable attorneys' fees,
expenses, costs, liabilities and obligations incurred by Silicon with respect to
the foregoing shall be added to and become part of the Obligations, shall be due
on demand, and shall bear interest at a rate equal to the highest interest rate
applicable to any of the Obligations. Without limiting any of Silicon's rights
and remedies, from and during the occurrence of any Event of Default, the
interest rate applicable to the Obligations shall be increased by an additional
four percent (4%) per annum.

     7.3    STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. Borrower and
Silicon agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to
Borrower at least seven days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least seven days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m.; (v) Payment of the purchase price
in cash or by cashier's check or wire transfer is required; (vi) With respect to
any sale of any of the Collateral, Silicon may (but is not obligated to) direct
any prospective purchaser to ascertain directly from Borrower any and all
information concerning the same. Silicon shall be free to employ other methods
of noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.

     7.4    POWER OF ATTORNEY. Upon the occurrence and during the continuance of
any Event of Default, without limiting Silicon's other rights and remedies,
Borrower grants to Silicon an irrevocable power of attorney coupled with an
interest, authorizing and permitting Silicon (acting through any of its
employees, attorneys or agents) at any time, at its option, but without
obligation, with or without notice to Borrower, and at Borrower's expense, to do
any or all of the following, in Borrower's name or otherwise, but Silicon agrees
to exercise the following powers in a commercially reasonable manner and to the
extent permitted by applicable law: (a) Execute on behalf of Borrower any
documents that Silicon may, in its sole discretion, deem advisable in order to
perfect and maintain Silicon's security interest in the Collateral, or in order
to exercise a right of Borrower or Silicon, or in order to fully consummate all
the transactions contemplated under this Agreement, and all other present and
future agreements in connection herewith; (b) Execute on behalf of Borrower any
document exercising, transferring or assigning any option to purchase, sell or
otherwise dispose of or to lease (as lessor or lessee) any real or personal
property which is part of Silicon's Collateral or in which Silicon has an
interest; (c) Execute on

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

behalf of Borrower, any invoices relating to any Receivable, any draft against
any Account Debtor and any notice to any Account Debtor, any proof of claim in
bankruptcy, any Notice of Lien, claim of mechanic's, materialman's or other
lien, or assignment or satisfaction of mechanic's, materialman's or other lien;
(d) Take control in any manner of any cash or non-cash items of payment or
proceeds of Collateral; endorse the name of Borrower upon any instruments, or
documents, evidence of payment or Collateral that may come into Silicon's
possession; (e) Endorse all checks and other forms of remittances received by
Silicon; (f) Pay, contest or settle any lien, charge, encumbrance, security
interest and adverse claim in or to any of the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; (g)
Grant extensions of time to pay, compromise claims and settle Receivables and
General Intangibles for less than face value and execute all releases and other
documents in connection therewith; (h) Pay any sums required on account of
Borrower's taxes or to secure the release of any liens therefor, or both; (i)
Settle and adjust, and give releases of, any insurance claim that relates to any
of the Collateral and obtain payment therefor; (j) Instruct any third party
having custody or control of any books or records belonging to, or relating to,
Borrower to give Silicon the same rights of access and other rights with respect
thereto as Silicon has under this Agreement; and (k) Take any action or pay any
sum required of Borrower pursuant to this Agreement and any other present or
future agreements in connection herewith. Any and all reasonable sums paid and
any and all reasonable costs, expenses, liabilities, obligations and attorneys'
fees incurred by Silicon with respect to the foregoing shall be added to and
become part of the Obligations, shall be payable on demand, and shall bear
interest at a rate equal to the highest interest rate applicable to any of the
Obligations. In no event shall Silicon's rights under the foregoing power of
attorney or any of Silicon's other rights under this Agreement be deemed to
indicate that Silicon is in control of the business, management or properties of
Borrower.

     7.5    APPLICATION OF PROCEEDS. All proceeds realized as the result of any
sale of the Collateral upon Silicon's exercising of remedies as a secured party
shall be applied by Silicon first to the reasonable costs, expenses,
liabilities, obligations and attorneys' fees incurred by Silicon in the exercise
of its rights under this Agreement, second to the interest due upon any of the
Obligations, and third to the principal of the Obligations, in such order as
Silicon shall determine in its sole discretion. Any surplus shall be paid to
Borrower or other persons legally entitled thereto; Borrower shall remain liable
to Silicon for any deficiency. If, Silicon, in its sole discretion, directly or
indirectly enters into a deferred payment or other credit transaction with any
purchaser at any sale of Collateral, Silicon shall have the option, exercisable
at any time, in its sole discretion, of either reducing the Obligations by the
principal amount of purchase price or deferring the reduction of the Obligations
until the actual receipt by Silicon of the cash therefor.

     7.6    REMEDIES CUMULATIVE. In addition to the rights and remedies set
forth in this Agreement, Silicon shall have all the other rights and remedies
accorded a secured party under the Massachusetts Uniform Commercial Code and
under all other applicable laws, and under any other instrument or agreement now
or in the future entered into between Silicon and Borrower, and all of such
rights and remedies are cumulative and none is exclusive. Exercise or partial
exercise by Silicon of one or more of its rights or remedies shall not be deemed
an election, nor bar Silicon from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Silicon to exercise any rights
or remedies shall not operate as a waiver thereof, but all rights and remedies
shall continue in full force and effect until all of the Obligations have been
fully paid and performed.

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

8.   DEFINITIONS.

     As used in this Agreement, the following terms have the following meanings:

     "ACCOUNT DEBTOR" means the obligor on a Receivable.

     "AFFILIATE" means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.

     "BUSINESS DAY" means a day on which Silicon is open for business.

     "CASH MANAGEMENT SERVICES" means Silicon's cash management services, direct
deposit of payroll, business credit card, and check cashing services as may be
further identified in the various cash management services agreements related to
such Cash Management Services.

     "CODE" means the Uniform Commercial Code as adopted and in effect in the
Commonwealth of Massachusetts from time to time.

     "COLLATERAL" has the meaning set forth in Section 2.1 above.

     "DEFAULT" means any event which with notice or passage of time or both,
would constitute an Event of Default.

     "DEPOSIT ACCOUNT" has the meaning set forth in Section 9-102 of the Code.

     "ELIGIBLE RECEIVABLES" means Receivables arising in the ordinary course of
Borrower's business from the sale of goods or rendition of services, which
Silicon, in its sole judgment, shall deem eligible for borrowing, based on such
considerations as Silicon may from time to time deem appropriate. Without
limiting the fact that the determination of which Receivables are eligible for
borrowing is a matter of Silicon's discretion, the following (the "MINIMUM
ELIGIBILITY REQUIREMENTS") are the minimum requirements for a Receivable to be
an Eligible Receivable: (i) the Receivable must not be outstanding for more than
90 days from its invoice date, (ii) the Receivable must not represent progress
billings, or be due under a fulfillment or requirements contract with the
Account Debtor, (iii) the Receivable must not be subject to any contingencies
(including Receivables arising from sales on consignment, guaranteed sale or
other terms pursuant to which payment by the Account Debtor may be conditional,
except as may otherwise be acceptable to Silicon in its discretion), (iv) the
Receivable must not be subject of a dispute, (v) the Receivable must not be
owing from an Affiliate of Borrower, (vi) the Receivable must not be owing from
an Account Debtor which is subject to any insolvency or bankruptcy proceeding,
or whose financial condition is not acceptable to Silicon, or which, fails or
goes out of a material portion of its business, (vii) the Receivable must not be
owing from the United States or any department, agency or instrumentality
thereof (unless there has been compliance, to Silicon's satisfaction, with the
United States Assignment of Claims Act), (viii) other than with respect to (i)
Receivables owing from Fukuda Denshi not to exceed $ 100,000 in the aggregate at
any time outstanding and (ii) Receivables owing from Fukuda Denshi, or other
foreign Account Debtors acceptable to Silicon, not to exceed $100,000 in the
aggregate at any time outstanding (Fukuda Denshi, together with all other
acceptable foreign Account Debtors are hereinafter collectively

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

referred to as, "Acceptable Foreign Account Debtors"), the Receivable must not
be owing from an Account Debtor located outside the United States (unless
preapproved by Silicon in its discretion in writing, or backed by a letter of
credit satisfactory to Silicon, or FCIA insured satisfactory to Silicon), and
(ix) the Receivable must not be owing from an Account Debtor to whom Borrower is
or may be liable for goods purchased from such Account Debtor or otherwise.
Receivables owing from one Account Debtor will not be deemed Eligible
Receivables to the extent they exceed 25% of the total Receivables outstanding.
In addition, if more than 50% of the Receivables owing from an Account Debtor
are outstanding more than 90 days from their invoice date (without regard to
unapplied credits) or are otherwise not eligible Receivables, then all
Receivables owing from that Account Debtor will be deemed ineligible for
borrowing. Silicon may, from time to time, in its discretion, revise the Minimum
Eligibility Requirements, upon written notice to the Borrower.

     "EQUIPMENT" means all of Borrower's present and hereafter acquired
machinery, molds, machine tools, motors, furniture, equipment, furnishings,
fixtures, trade fixtures, motor vehicles, tools, parts, dyes, jigs, goods and
other tangible personal property (other than Inventory) of every kind and
description used in Borrower's operations or owned by Borrower and any interest
in any of the foregoing, and all attachments, accessories, accessions,
replacements, substitutions, additions or improvements to any of the foregoing,
wherever located.

     "EVENT OF DEFAULT" means any of the events set forth in Section 7.1 of this
Agreement.

     "GENERAL INTANGIBLES" means all general intangibles of Borrower, whether
now owned or hereafter created or acquired by Borrower as defined in the Code.

     "INVENTORY" means all of Borrower's now owned and hereafter acquired goods,
merchandise or other personal property, wherever located, to be furnished under
any contract of service or held for sale or lease (including without limitation
all raw materials, work in process, finished goods and goods in transit), and
all materials and supplies of every kind, nature and description which are or
might be used or consumed in Borrower's business or used in connection with the
manufacture, packing, shipping, advertising, selling or finishing of such goods,
merchandise or other personal property, and all warehouse receipts, documents of
title and other documents representing any of the foregoing.

     "LETTER-OF-CREDIT RIGHTS" means all letter-of-credit rights including,
without limitation, "letter-of-credit rights" as defined in the Code and also
any right to payment or performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to demand payment or
performance.

     "OBLIGATIONS" means all present and future Loans, all 2002 Term Loan
Advances, the Initial Advance, advances, debts, liabilities, obligations,
guaranties, covenants, duties and indebtedness at any time owing by Borrower to
Silicon, whether evidenced by this Agreement, the Original Loan Agreement or any
note or other instrument or document, whether arising from an extension of
credit, opening of a letter of credit, banker's acceptance, foreign exchange
contracts, loan, Cash Management Services, guaranty, indemnification or
otherwise, whether direct or indirect (including, without limitation, those
acquired by assignment and any participation by Silicon in Borrower's debts
owing to others), absolute or contingent, due or to

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

become due, including, without limitation, all interest, charges, expenses,
fees, attorney's fees, expert witness fees, audit fees, letter of credit fees,
collateral monitoring fees, closing fees, facility fees, termination fees,
minimum interest charges and any other sums chargeable to Borrower under this
Agreement or under any other present or future instrument or agreement between
Borrower and Silicon (but in any event excluding any continuing obligations
after the termination of this Agreement under the Warrant or any other equity
related documents).

     "PAYMENT INTANGIBLES" means all payment intangibles including, without
limitation, "payment intangibles" as defined in the Code and also any general
intangible under which the Account Debtor's primary obligation is a monetary
obligation.

     "PERMITTED LIENS" means the following: (i) purchase money security
interests in specific items of Equipment in an amount not to exceed $100,000 in
the aggregate outstanding at any time during the term of this Agreement; (ii)
leases of specific items of Equipment in an amount not to exceed $100,000 in the
aggregate outstanding at any time during the term of this Agreement; (iii) liens
for taxes not yet payable; (iv) additional security interests and liens
consented to in writing by Silicon, which consent shall not be unreasonably
withheld; (v) security interests being terminated substantially concurrently
with this Agreement; (vi) liens of materialmen, mechanics, warehousemen,
carriers, or other similar liens arising in the ordinary course of business and
securing obligations which are not delinquent and pledges or deposits under
worker's compensation, unemployment, retirement or similar legislation; (vii)
liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by liens of the type described above in clauses (i) or (ii)
above, provided that any extension, renewal or replacement lien is limited to
the property encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase; and (viii)
Liens in favor of customs and revenue authorities which secure payment of
customs duties in connection with the importation of goods. Silicon will have
the right to require, as a condition to its consent under subsection (iv) above,
that the holder of the additional security interest or lien sign an
intercreditor agreement on Silicon's then standard form, acknowledge that the
security interest is subordinate to the security interest in favor of Silicon,
and agree not to take any action to enforce its subordinate security interest so
long as any Obligations remain outstanding, and that Borrower agree that any
uncured default in any obligation secured by the subordinate security interest
shall also constitute an Event of Default under this Agreement.

     "PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.

     "RECEIVABLES" means all of Borrower's now owned and hereafter acquired
accounts (whether or not earned by performance), accounts receivable,
health-care insurance receivables, rights to payment, letters of credit,
contract rights, chattel paper, instruments, securities, securities accounts,
investment property, documents and all other forms of obligations at any time
owing to Borrower, all guaranties and other security therefor, all merchandise
returned to or repossessed by Borrower, and all rights of stoppage in transit
and all other rights or remedies of an unpaid vendor, lienor or secured party.

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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

     "RESERVES" means, as of any date of determination, such amounts as Silicon
may from time to time reasonably establish and revise in good faith reducing the
amount of Loans, Letters of Credit and other financial accommodations which
would otherwise be available to Borrower under the lending formula(s) provided
in the Schedule: (a) to reflect events, conditions, contingencies or risks
which, as determined by Silicon in good faith, do or are reasonably likely to
materially and adversely affect (i) the Collateral or any other property which
is security for the Obligations or its value (including without limitation any
increase in delinquencies of Receivables) taken as a whole, (ii) the assets,
business or prospects of Borrower or any Guarantor taken as a whole, or (iii)
the security interests and other rights of Silicon in the Collateral (including
the enforceability, perfection and priority thereof); or (b) to reflect
Silicon's good faith belief that any collateral report or financial information
furnished by or on behalf of Borrower or any guarantor to Silicon is or may have
been incomplete, inaccurate or misleading in any material respect; or (c) in
respect of any state of facts which Silicon determines in good faith constitutes
an Event of Default or may, with notice or passage of time or both, constitute
an Event of Default.

     "SUPPORTING OBLIGATIONS " means all supporting obligations including,
without limitation, "supporting obligations" as defined in the Code and also any
letter-of-credit right or secondary obligation which supports the payment or
performance of an account, chattel paper, a document, a general intangible, an
instrument, or investment property.

     "2002 TERM LOAN" means the 2002 Term Loan Advances made pursuant to
Section 1.1B.

     OTHER TERMS. All accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with
generally accepted accounting principles, consistently applied. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meanings
provided by the Code, to the extent such terms are defined therein.

9.   GENERAL PROVISIONS.

     9.1    INTEREST COMPUTATION. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Silicon (including
proceeds of Receivables and payment of the Obligations in full) shall be deemed
applied by Silicon on account of the Obligations three Business Days after
receipt by Silicon of immediately available funds, and, for purposes of the
foregoing, any such funds received after 12:00 Noon on any day shall be deemed
received on the next Business Day. Silicon shall not, however, be required to
credit Borrower's account for the amount of any item of payment which is
unsatisfactory to Silicon in its sole discretion, and Silicon may charge
Borrower's loan account for the amount of any item of payment which is returned
to Silicon unpaid.

     9.2    APPLICATION OF PAYMENTS. Subject to the other terms of this
Agreement, all payments with respect to the Obligations may be applied, and in
Silicon's sole discretion reversed and re-applied, to the Obligations, in such
order and manner as Silicon shall determine in its sole discretion.

                                       18
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               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

     9.3    CHARGES TO ACCOUNTS. Silicon may, in its discretion, require that
Borrower pay monetary Obligations in cash to Silicon, or charge them to
Borrower's Loan account, in which event they will bear interest at the same rate
applicable to the Loans. Silicon may also, in its discretion, charge any
monetary Obligations to Borrower's Deposit Accounts maintained with Silicon.

     9.4    MONTHLY ACCOUNTINGS. Silicon shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Silicon or Borrower),
unless Borrower notifies Silicon in writing to the contrary within thirty days
after each account is rendered, describing the nature of any alleged errors or
admissions.

     9.5    NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, or certified mail return receipt
requested, addressed to Silicon or Borrower at the addresses shown in the
heading to this Agreement with a copy to Hale and Dorr LLP at 60 State Street,
Boston, Massachusetts 02109, Attention: Kenneth Lapage, Esquire, or at any other
address designated in writing by one party to the other party. Notices to
Silicon shall be directed to the Commercial Finance Division, to the attention
of the Division Manager or the Division Credit Manager. All notices shall be
deemed to have been given upon delivery in the case of notices personally
delivered, or at the expiration of one Business Day following delivery to the
private delivery service, or two Business Days following the deposit thereof in
the United States mail, with postage prepaid.

     9.6    SEVERABILITY. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.

     9.7    INTEGRATION. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between Borrower and Silicon regarding the
subject matters thereof and supersede all prior and contemporaneous negotiations
and oral representations and agreements regarding the subject matters thereof,
all of which are merged and integrated in this Agreement and such other
agreements. There are no oral understandings, representations or agreements
between the parties regarding the subject matters thereof which are not set
forth in this Agreement or in other written agreements signed by the parties in
connection herewith.

     9.8    WAIVERS. The failure of Silicon at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and Silicon shall not waive
or diminish any right of Silicon later to demand and receive strict compliance
therewith. Any waiver of any default shall not waive or affect any other
default, whether prior or subsequent, and whether or not similar. None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Silicon shall be deemed to have been
waived by any act or knowledge of Silicon or its agents or employees, but only
by a specific written waiver signed by an authorized officer of Silicon and
delivered to Borrower. Borrower waives demand, protest, notice of protest and

                                       19
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

notice of default or dishonor, notice of payment and nonpayment, release,
compromise, settlement, extension or renewal of any commercial paper,
instrument, account, General Intangible, document or guaranty at any time held
by Silicon on which Borrower is or may in any way be liable, and notice of any
action taken by Silicon, unless expressly required by this Agreement.

     9.9    NO LIABILITY FOR ORDINARY NEGLIGENCE. Neither Silicon, nor any of
its directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Silicon shall be liable for any claims, demands,
losses or damages, of any kind whatsoever, made, claimed, incurred or suffered
by Borrower or any other party through the ordinary negligence of Silicon, or
any of its directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Silicon, but nothing herein shall relieve
Silicon and such other parties from liability for its own gross negligence or
willful misconduct.

     9.10   AMENDMENT. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of Silicon.

     9.11   TIME OF ESSENCE. Time is of the essence in the performance by
Borrower of each and every obligation under this Agreement.

     9.12   ATTORNEYS FEES AND COSTS. Borrower shall reimburse Silicon for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Silicon, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys' fees and
costs Silicon incurs in order to do the following: prepare and negotiate this
Agreement and the documents relating to this Agreement; obtain legal advice in
connection with this Agreement or Borrower; enforce, or seek to enforce, any of
its rights; prosecute actions against, or defend actions by, Account Debtors;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or prosecute
any probate claim, bankruptcy claim, third-party claim, or other claim; examine,
audit, copy, and inspect any of the Collateral or any of Borrower's books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce
Silicon's security interest in, the Collateral; and otherwise represent Silicon
in any litigation relating to Borrower. In satisfying Borrower's obligation
hereunder to reimburse Silicon for attorneys fees, Borrower may, for
convenience, issue checks directly to Silicon's attorneys, Riemer & Braunstein,
LLP, but Borrower acknowledges and agrees that Riemer & Braunstein, LLP is
representing only Silicon and not Borrower in connection with this Agreement. If
either Silicon or Borrower files any lawsuit against the other predicated on a
breach of this Agreement, Silicon shall be entitled to recover its reasonable
costs and attorneys' fees, including (but not LIMITED to) reasonable attorneys'
fees and costs incurred in the enforcement of, execution upon or defense of any
order, decree, award or judgment if it is the prevailing party. All attorneys'
fees and costs to which Silicon may be entitled pursuant to this Section 9.12
shall immediately become part of Borrower's Obligations, shall be due on demand,
and shall bear interest at a rate equal to the highest interest rate applicable
to any of the Obligations.

     9.13   BENEFIT OF AGREEMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and

                                       20
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

representatives of Borrower and Silicon; provided, however, that Borrower may
not assign or transfer any of its rights under this Agreement without the prior
written consent of Silicon, and any prohibited assignment shall be void. No
consent by Silicon to any assignment shall release Borrower from its liability
for the Obligations.

     9.14   JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
Person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.

     9.15   LIMITATION OF ACTIONS. Any claim or cause of action by Borrower
against Silicon, its directors, officers, employees, agents, accountants or
attorneys, based upon, arising from, or relating to this Loan Agreement shall be
barred unless asserted by Borrower by the commencement of an action or
proceeding in a court of competent jurisdiction by the filing of a complaint
within the earlier to occur of (i) one year after the discovery of the act,
occurrence or omission upon which such claim or cause of action is based, and
the service of a summons and complaint on an officer of Silicon, or on any other
person authorized to accept service on behalf of Silicon, within thirty (30)
days thereafter, or (ii) two years from the date of this Agreement, or if later,
two years from the date of any amendment or modification of this Agreement which
extends the Maturity Date. Borrower agrees that such period is a reasonable and
sufficient time for Borrower to investigate and act upon any such claim or cause
of action. The period provided herein shall not be waived, tolled, or extended
except by the written consent of Silicon in its sole discretion. This provision
shall survive any termination of this Loan Agreement or any other present or
future agreement.

     9.16   RIGHT OF SET-OFF. Borrower and any guarantor hereby grant to Silicon
a lien, security interest, and right of setoff as security for all Obligations
to Silicon, whether now existing or hereafter arising upon and against all
deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping, or control of Silicon or any entity under the control of
Silicon Valley Bank or in transit to any of them. At any time after the
occurrence and during the continuance of an Event of Default, without demand or
notice, Silicon may set off the same or any part thereof and apply the same to
any liability or obligation of Borrower and any guarantor then due and
regardless of the adequacy of any other collateral securing the loan. ANY AND
ALL RIGHTS TO REQUIRE SILICON TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS, OR OTHER PROPERTY OF THE BORROWER
OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVED.

     9.17   SECTION HEADINGS; CONSTRUCTION. Section headings are only used in
this Agreement for convenience. Borrower and Silicon acknowledge that the
headings may not describe completely the subject matter of the applicable
section, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. The term
"including", whenever used in this Agreement, shall mean "including (but not
limited to)". This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Silicon or Borrower under any rule
of construction or otherwise.

                                       21
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

     9.18   GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of Silicon and Borrower
shall be governed by the laws of the Commonwealth of Massachusetts. As a
material part of the consideration to Silicon to enter into this Agreement,
Borrower (i) agrees that all actions and proceedings relating directly or
indirectly to this Agreement shall, at Silicon's option, be litigated in state
or federal courts located within Massachusetts; (ii) consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method permitted
by law; and (iii) waives any and all rights Borrower may have to object to the
jurisdiction of any such court, or to transfer or change the venue of any such
action or proceeding, provided, however, that if for any reason Silicon cannot
avail itself of such courts in the Commonwealth of Massachusetts, Borrower
accepts jurisdiction of the courts and venue in Santa Clara, California.

     9.19   MUTUAL WAIVER OF JURY TRIAL. BORROWER AND SILICON EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN SILICON AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF SILICON OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH SILICON OR BORROWER, IN
ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

     9.20   CONFIDENTIALITY. In handling any confidential information Silicon
shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Agreement
except that disclosure of such information may be made (i) to the subsidiaries
or affiliates of Silicon in connection with their present or prospective
business relations with Borrower provided that in handling any confidential
information Silicon shall exercise the same degree of care that it exercises
with respect to its own proprietary information of the same types to maintain
the confidentiality of any non-public information thereby received, (ii) to
prospective transferees or purchasers of any interest in the Loans, provided
that they have entered into a comparable confidentiality agreement in favor of
Borrower and have delivered a copy to Borrower, (iii) as required by law,
regulations, rule or order, subpoena, judicial order or similar order, (iv) as
may be required in connection with the examination, audit or similar
investigations of Silicon, and (v) as Silicon may deem appropriate in connection
with the exercise of any remedies hereunder. Confidential information hereunder
shall not include information that either: (a) is in the public domain or in the
knowledge or possession of Silicon when disclosed to Silicon, or becomes part of
the public domain after disclosure to Silicon through no fault of Silicon; or
(b) is disclosed to Silicon by a third party, provided Silicon does not have
actual knowledge that such third party is prohibited from disclosing such
information.

     9.21   ORIGINAL LOAN AGREEMENT. Borrower and Silicon are party to a certain
Loan and Security Agreement dated as of March 31, 1999, as amended by a certain
First Loan Modification Agreement dated April 23, 2000, as further amended by a
certain Second Loan Modification Agreement dated June 22, 2001, as further
amended by a certain Third Loan Modification Agreement dated June 12, 2002 (the
"Original Loan Agreement"). Borrower

                                       22
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

acknowledges that the Committed Revolving Line (as defined in the Original Loan
Agreement) has expired and Borrower has no ability to request advances
thereunder. Upon (i) repayment of the Original Term Loan and (ii) the
effectiveness of this Agreement, the Original Loan Agreement shall be of no
further force or effect.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first above written.

BORROWER:

CAMBRIDGE HEART, INC.

BY      /s/ Robert B. Palardy
   ----------------------------
      VICE PRESIDENT/CHIEF FINANCIAL OFFICER

SILICON:

SILICON VALLEY BANK, d/b/a
SILICON VALLEY EAST

BY   /s/ John V. Atanasoff
   --------------------------
TITLE    REGIONAL MARKET MANAGER

                                       23
<Page>

SILICON VALLEY BANK

                                   SCHEDULE TO
                           LOAN AND SECURITY AGREEMENT

BORROWER:  CAMBRIDGE HEART, INC.

ADDRESS:   ONE OAK PARK DRIVE
           BEDFORD, MASSACHUSETTS 01730

DATE:      SEPTEMBER 26, 2002

This Schedule forms an integral part of the Loan and Security Agreement between
Silicon Valley Bank and the above-borrower of even date.

1.   CREDIT LIMIT

          (Section 1.1):  An amount not to exceed the lesser of (A) or (B),
                          below:

            (A)

                  (i)     $1,200,000.00 (the "Maximum Credit Limit"); MINUS

                  (ii)    the outstanding principal balance of the 2002 Term
                          Loan (including, without limitation, the Initial
                          Advance); MINUS

                  (iii)   the aggregate amounts then undrawn on all outstanding
                          letters of credit, foreign exchange contracts, or any
                          other accommodations issued or incurred, or caused to
                          be issued or incurred by Silicon for the account
                          and/or benefit of the Borrower.

            (B)

                  (i)     80% of the amount of the Borrower's Eligible
                          Receivables (as defined in Section 8 above) (the
                          "Receivables Loans"); MINUS

                  (ii)    the outstanding principal balance of the 2002 Term
                          Loan (including, without limitation, the Initial
                          Advance); MINUS

                  (iii)   the aggregate amounts then undrawn on all outstanding
                          letters of credit, foreign exchange contracts, or any
                          other accommodations issued or incurred, or caused to
                          be issued or incurred by Silicon for the account
                          and/or benefit of the Borrower.

                                        1
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

               Notwithstanding the foregoing, the Receivables Loans based on
          Eligible Receivables generated by Acceptable Foreign Account Debtors
          shall not exceed twenty percent (20.0%) of all Receivables Loans.

Silicon may, from time to time, modify the advance rate(s) set forth herein in
its good faith business judgment upon notice to Borrower based on changes in
collection experience with respect to the Receivables or other issues or factors
relating to the Receivables or the Collateral.

          LETTER OF CREDIT/FOREIGN EXCHANGE CONTRACT/CASH MANAGEMENT SERVICES
          SUBLIMIT (Section 1.5 and 1.6):   $300,000.00

2.   INTEREST.

          INTEREST RATE (Section 1.2):

          A rate equal to the "Prime Rate" in effect from time to time, plus 2%
          per annum. Interest shall be calculated on the basis of a 360-day year
          for the actual number of days elapsed. "Prime Rate" means the rate
          announced from time to time by Silicon as its "prime rate;" it is a
          base rate upon which other rates charged by Silicon are based, and it
          is not necessarily the best rate available at Silicon. The interest
          rate applicable to the Obligations shall change on each date there is
          a change in the Prime Rate.

          MINIMUM MONTHLY
          INTEREST (Section 1.2): Not applicable.

3.   FEES (SECTION 1.4):

     Loan Fee: $9,000.00, which Silicon acknowledges has already been paid by
Borrower prior to the date hereof.

     Collateral Handling Fee: $800.00 per month, payable in arrears (no fee if
no borrowings or other exposure (other than term debt) is outstanding for more
than five days during the prior month).

     Unused Line Fee: In the event, in any calendar month (or portion thereof at
the beginning and end of the term hereof), the average daily principal balance
of the Loans outstanding during the month is less than the amount of the Maximum
Credit Limit, Borrower shall pay Silicon an unused line fee in an amount equal
to .25% per annum on the difference between the amount of the Maximum Credit
Limit and the average daily principal balance of the Loans outstanding during
the month, which unused line fee shall be computed and paid monthly, in arrears,
on the first day of the following month.

     Cancellation Fee: If the Obligations are voluntarily or involuntarily (in
the event of bankruptcy) prepaid or if this Agreement is otherwise terminated
prior to its maturity, the

                                        2
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

Borrower shall pay to Silicon a termination fee in the amount equal to 1% of the
Maximum Credit Limit, provided that no such termination fee shall be charged if
the credit facility hereunder is replaced or transferred to another division of
Silicon. The termination fee shall be due and payable upon prepayment by the
Borrower in the case of voluntary prepayments or upon demand by Silicon in the
event of involuntary prepayment, and if not paid immediately shall bear interest
at a rate equal to the highest rate applicable to any of the Obligations.
Subject to payment of the foregoing fee, Borrower may prepay without premium or
penalty, any of the Obligations.

4.   MATURITY DATE

     (Section 6.1, Section 1.1A, Section 1.1B): 364 days from the date of this
Agreement.

5.   FINANCIAL COVENANTS

     (Section 5.1): Borrower shall comply with each of the following
covenant(s). Compliance shall be determined as of the end of each month, except
as otherwise specifically provided below:

     a.     MINIMUM TANGIBLE NET WORTH:

     Borrower shall maintain a Tangible Net Worth of not less than the sum of
     (i) plus (ii) below:

                  (i)     $4,500,000.00, at September 30, 2002;
                          $3,000,000.00, at October 31, 2002 through and
                          including December 31, 2002;
                          $2,500,000.00, at January 31, 2002 and thereafter;

                  (ii)    80% of all consideration received after the date
                          hereof from proceeds from the issuance of any equity
                          securities of the Borrower and/or subordinated debt
                          incurred by the Borrower.

In no event shall the amount of this Minimum Tangible Net Worth covenant be
decreased.

     b.     MINIMUM CASH OR EXCESS AVAILABILITY:

     The Borrower shall at all times maintain $300,000.00 in (i) cash deposits
     maintained at Silicon, and/or (ii) excess "availability" under this
     Agreement (net of Loans, the 2002 Term Loan Advances (including, without
     limitation, the Initial Advance), Letters of Credit or other indebtedness
     under this Agreement), as determined by Silicon based upon the Credit Limit
     restrictions set forth in Section 1 above).

                                        3
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

     DEFINITIONS. For purposes of the foregoing financial covenants, the
following term shall have the following meaning:

     "Liabilities" shall have the meaning ascribed thereto by generally accepted
accounting principles.

     "Tangible Net Worth" shall mean the excess of total assets over total
liabilities, determined in accordance with generally accepted accounting
principles, with the following adjustments:

     (A)    there shall be excluded from assets: (i) notes, accounts receivable
and other obligations owing to the Borrower from its officers or other
Affiliates, and (ii) all assets which would be classified as intangible assets
under generally accepted accounting principles, including without limitation
goodwill, licenses, patents, trademarks, trade names, copyrights, capitalized
software and organizational costs, licenses and franchises

     (B)    there shall be excluded from liabilities: all indebtedness which is
subordinated to the Obligations under a subordination agreement in form
specified by Silicon or by language in the instrument evidencing the
indebtedness which is acceptable to Silicon in its discretion.

6.   REPORTING.

     (Section 5.3):

            Borrower shall provide Silicon with the following:

     1.     Semi-monthly, and upon each loan request, borrowing base
certificates and transaction reports.

     2.     Monthly accounts payable agings, aged by invoice date, and
outstanding or held check registers, if any, within fifteen days after the end
of each month.

     3.     Monthly Receivable agings, aged by invoice date, and receivable
reconciliations, within fifteen days after the end of each month.

     4.     Monthly unaudited financial statements, as soon as available, and in
any event within thirty days after the end of each month.

     5.     Monthly Compliance Certificates, within thirty days after the end of
each month, in such form as Silicon shall reasonably specify, signed by the
Chief Financial Officer of Borrower, certifying that as of the end of such month
Borrower was in full compliance with all of the terms and conditions of this
Agreement, and setting forth calculations showing compliance with the financial
covenants set forth in this Agreement and such other information as Silicon
shall reasonably request, including, without limitation, a statement that at the
end of such month there were no held checks.

                                        4
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

     6.     Quarterly unaudited financial statements, as soon as available, and
in any event within forty-five days after the end of each fiscal quarter of
Borrower.

     7.     Annual operating budgets (including income statements, balance
sheets and cash flow statements, by month) for the upcoming fiscal year of
Borrower within thirty days prior to the end of each fiscal year of Borrower.

     8.     Annual financial statements, as soon as available, and in any event
within 120 days following the end of Borrower's fiscal year, certified by
independent certified public accountants acceptable to Silicon.

     9.     Such additional reports and information as Silicon may from time to
time specify.

7.   COMPENSATION [INTENTIONALLY OMITTED].

8.   BORROWER INFORMATION:

            PRIOR NAMES OF
            BORROWER

            (Section 3.2):               See Perfection Certificate of even date
                                         herewith

            PRIOR TRADE
            NAMES OF BORROWER
            (Section 3.2):               See Perfection Certificate of even date
                                         herewith

            EXISTING TRADE
            NAMES OF BORROWER
            (Section 3.2):               See Perfection Certificate of even date
                                         herewith

            OTHER LOCATIONS AND
            ADDRESSES (Section 3.3):     See Perfection Certificate of even date
                                         herewith

            MATERIAL ADVERSE
            LITIGATION (Section 3.10):   None

9.   OTHER COVENANTS

     (Section 5.1): Borrower shall at all times comply with all of the following
additional covenants:

     (1) BANKING RELATIONSHIP. In order for Silicon to properly monitor its loan
arrangement with the Borrower, Borrower shall at all times maintain its primary
banking relationship with Silicon, with all significant deposits and all
investment accounts to be maintained at Silicon,

                                        5
<Page>

               SILICON VALLEY BANK             LOAN AND SECURITY AGREEMENT

provided, however, Borrower may maintain its investment account with Solomon,
Smith Barney until no later than October 31, 2002, at or before which time such
account shall be transferred to Silicon.

     (2) SUBORDINATION OF INSIDE DEBT. All present and future indebtedness of
the Borrower to its officers, directors and shareholders ("Inside Debt") shall,
at all times, be subordinated to the Obligations pursuant to a subordination
agreement on Silicon's standard form. Borrower represents and warrants that
there is no Inside Debt presently outstanding, except for the following: NONE.
Prior to incurring any Inside Debt in the future, Borrower shall cause the
person to whom such Inside Debt will be owed to execute and deliver to Silicon a
subordination agreement on Silicon's standard form.

     (3) SUBORDINATION AGREEMENTS. Borrower warrants and represents that is it
not presently indebted to any third party for borrowed money. Prior to incurring
any additional indebtedness for borrowed money (which shall not be construed to
include any leases), Borrower shall cause each creditor to execute and deliver
to Silicon a subordination agreement on Silicon's standard form subordinating to
the Obligations the indebtedness of Borrower to any such creditor.

     (4) NEGATIVE PLEDGE RE: INTELLECTUAL PROPERTY. As a condition precedent to
the effectiveness of this Agreement, Borrower shall have executed and delivered
to Silicon a Negative Pledge Agreement regarding the Borrower's Intellectual
Property (the "Negative Pledge Agreement"), substantially in the form attached
hereto as Exhibit B.

BORROWER:                                        SILICON:

CAMBRIDGE HEART, INC.                            SILICON VALLEY BANK, d/b/a
                                                 SILICON VALLEY EAST

By     /s/ Robert B. Palardy                     By  /s/ John V. Atanasoff
  ---------------------------                       -----------------------

Title Vice President/Chief Financial Officer     Title  Regional Market Manager

                                       6<PAGE>

                                                                    Exhibit 10.3

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

CONFIDENTIAL

COPY ONE OF TWO

September 10, 2002

Cambridge Heart, Inc.
One Oak Park Drive
Bedford, MA 01730

Attention: Mr. David Chazanovitz
           President and Chief Executive Officer

Ladies & Gentlemen:

This letter agreement (the "Agreement") will confirm our understanding of the
terms and conditions under which Adams, Harkness & Hill, Inc. (together with its
affiliates, control persons, directors, officers, employees and agents, "AH&H")
is engaged by Cambridge Heart, Inc. ("Cambridge Heart") to provide certain
investment banking and financial advisory services to Cambridge Heart with
respect to consummating one or several possible business combinations, through
purchase, sale, merger, joint venture or otherwise and whether in one or more
transactions through the purchase of an organization's equity, debt securities
or assets, or by means of a merger, consolidation, reorganization, spin-off,
joint venture, partnership, tender offer, exchange offer, purchase, lease,
licensing, arrangement, strategic alliance, or any other transaction of a like
nature, regardless of form (a "Transaction") with another organization
(individually, together with each such organization's respective subsidiaries
and affiliates, the "Target").

1.       SERVICES. Cambridge Heart hereby engages AH&H to act as its financial
         advisor and participate and assist in negotiations with respect to
         exploring, negotiating and consummating a Transaction. As financial
         advisor, AH&H shall perform such financial advisory and investment
         banking services as Cambridge Heart may reasonably request and that
         AH&H deems necessary or appropriate in connection with the Transaction.

         In conjunction with this role, if so requested by the Cambridge Heart
         Board of Directors (the "Board"), AH&H will deliver a written opinion
         (the "Opinion") to the Board as to the fairness, from a financial point
         of view, to the shareholders of Cambridge Heart of the consideration to
         be paid or the exchange ratio to be employed, as the case may be, in
         connection with a Transaction. The Opinion

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CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 2

          shall be in such form, have such scope and substance and contain such
          assumptions (financial or otherwise), detail, information,
          limitations, qualifications and provisions as AH&H shall determine in
          its sole discretion. The nature and scope of the investigation AH&H
          would conduct to be able to render the Opinion will be such as AH&H
          considers appropriate and consistent with the generally accepted
          standards of practice in the investment banking industry for such
          opinions. The Opinion may be included in any disclosure document filed
          by Cambridge Heart with the Securities and Exchange Commission with
          respect to a proposed Transaction, provided that it is reproduced in
          full, and that any description of or reference to AH&H or summary of
          the Opinion in the disclosure document is in a form reasonably
          acceptable to AH&H and its counsel. It is understood and agreed that
          the Opinion will be addressed to, and be prepared solely for the use
          and benefit of the Board, or a committee thereof, if applicable, and
          may not be relied upon by any other person, and, except as provided
          herein, the Opinion will not be reproduced, summarized or referred to
          in any public document or given to any other person without the prior
          written consent of AH&H.

          Cambridge Heart will furnish and will request the Target to furnish
          AH&H such information as AH&H reasonably requests in connection with
          the performance of its services hereunder (all such information so
          furnished is referred to herein as the "Information"). Cambridge Heart
          understands and agrees that AH&H, in performing its services
          hereunder, will use and rely upon the Information as well as publicly
          available information regarding Cambridge Heart and the Target and
          that AH&H does not assume responsibility for independent verification
          of any information, whether publicly available or otherwise furnished
          to it, including without limitation any financial information,
          forecasts or projections considered by AH&H in connection with the
          rendering of its services. Accordingly, AH&H shall be entitled to
          assume and rely upon the accuracy and completeness of all such
          information and is not required to conduct a physical inspection of
          any of the properties or assets, or to prepare or obtain any
          independent evaluation or appraisal of any of the assets or
          liabilities of Cambridge Heart or the Target. With respect to any
          financial forecasts and projections made available to AH&H by
          Cambridge Heart or the Target and used by AH&H in its analysis, AH&H
          shall be entitled to assume that such forecasts and projections have
          been reasonably prepared on bases reflecting the best currently
          available estimates and judgments of the management of Cambridge Heart
          or the Target, as the case may be, as to the matters covered thereby.

          AH&H agrees that any non-public information relating to Cambridge
          Heart or the Target received by AH&H from or at the direction of
          Cambridge Heart will be used by AH&H solely for the purpose of
          performing its Services and that AH&H

<PAGE>

CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 3

          will maintain the confidentiality thereof except to the extent (a)
          such information is or becomes otherwise publicly available; (b)
          disclosure thereof is required by law or requested by any governmental
          agency or body (including through a subpoena or other valid legal
          process); or (c) AH&H discloses such information to a party that is
          bound by a confidentiality agreement acceptable to Cambridge Heart.

2.        FEES. In consideration for its services hereunder, Cambridge Heart
          shall pay AH&H, by wire transfer of immediately available funds at the
          time due, the following fees:

          (a)  $[**] payable on October 1, 2002

          (b)  $[**] payable upon delivery to the Board of the Opinion (for a
               specific Transaction involving a specific Target) and $[**]upon
               delivery of each formal affirmation of such Opinion thereof as
               requested by Cambridge Heart;

          (c)  in the event the Board requests, subsequent to the delivery of
               the Opinion described immediately above in subsection (b), an
               opinion associated with a different Transaction involving a
               different Target (the "New Opinion"), $[**] payable upon delivery
               to the Board of the New Opinion and $[**] upon delivery of each
               formal affirmation of the New Opinion thereof as requested by
               Cambridge Heart;

          (d)  upon the Closing of a Transaction, a "Success Fee", which shall
               be payable by wire transfer of immediately available funds equal
               to:

               [**]% of Aggregate Consideration in the case that Aggregate
               Consideration is, when calculated on a per-share basis, less than
               or equal to [**]% of the average closing bid price for Cambridge
               Heart stock for the ten trading days prior to the public
               announcement of a Transaction, or

               [**]% of Aggregate Consideration in the case that Aggregate
               Consideration is, when calculated on a per-share basis, greater
               than [**]% of the average closing market price for Cambridge
               Heart stock for the 15 trading days prior to the public
               announcement of a Transaction; less any amounts previously paid
               specific to that transaction under 2(a), 2(b), and 2(c) above.

          (e)  in the event that funds, identified through Adams Harkness & Hill
               Inc. and derived from investors others than company directors,
               are raised through a debt or equity financing with or without a
               concomitant Transaction, a

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CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 4

               "Financing Fee" of [**]% of the total gross amount of such debt
               or equity financing.

          Under no circumstances will the Success Fee be less than $[**].

          For purposes of this Agreement, "Closing" shall refer to that date at
          which the final legal transfer of ownership, as set forth in the
          executed definitive asset purchase, stock purchase, merger agreement,
          joint venture, partnership or similar definitive agreement associated
          with the Transaction (the "Definitive Agreement") occurs.

          For purposes of this Agreement, "Aggregate Consideration" shall mean
          the cumulative value of the Transaction, representing the total value
          of Cambridge Heart or the Target, as the case may be, implied by the
          sum of all cash paid or payable and the fair market value of all
          property or securities transferred or transferable directly or
          indirectly, in connection with a Transaction, including (i) cash
          amounts paid or securities issued (or otherwise exchanged or
          transferred) to holders of any warrants, options or stock appreciation
          rights, whether or not vested, or other securities convertible or
          exchangeable for any shares of capital stock; (ii) the total amount of
          indebtedness for borrowed money or similar non-trade liabilities or
          obligations (including pension liabilities, guarantees, capitalized
          leases and the like) repaid, retired, extinguished or assumed in
          connection with a Transaction; and (iii) the fair market value of any
          assets distributed to stockholders or affiliates, at any time after
          the execution of the Definitive Agreement; provided, however, that
          this clause (iii) shall not include or apply to any distribution of
          assets made to stockholders to satisfy tax obligations or liabilities.
          Aggregate Consideration also shall include, in the case of a joint
          venture or similar collaborative undertaking, the total amount of cash
          and fair market value (on the date of Closing) of all property
          contributed by third parties to the joint venture.

          For purposes of calculating Aggregate Consideration: (i) all shares
          will be deemed transferred when a Transaction is effected at Closing
          by the transfer of shares, (A) constituting [**]% or more of the then
          outstanding equity securities of, or equity interest in, the Target or
          Cambridge Heart, as the case may be, or (B) possessing [**]% or more
          of the then outstanding voting power of the outstanding equity
          securities of or equity interest in the Target or Cambridge Heart, as
          the case may be; (ii) the value of any security (as that term is
          defined in the Securities Act of 1933, as amended) issuable in
          connection with a Transaction will be determined, if a publicly-traded
          security, on the basis of the average of the closing prices for the 20
          trading days prior to the Closing, or, if the security is not freely
          tradable (or having no established public market) on the basis of the
          fair market value of such security at Closing as determined in good
          faith by AH&H; and (iii)

<PAGE>

CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 5

          the value of any property transferred in connection with a Transaction
          will be determined on the basis of the fair market value of such
          property at Closing as determined in good faith by AH&H.

          In the event the terms of a Transaction provide for escrowed,
          contingent or installment payments, AH&H and Cambridge Heart shall
          determine the present value of such payments (discounted at a discount
          rate acceptable to both AH&H and Cambridge Heart) based upon financial
          projections developed in connection with the proposed Transaction, and
          that portion of AH&H's fees payable in respect of such escrowed,
          contingent or installment payments shall be calculated based upon this
          calculated present value of such future payments and shall be paid at
          the Closing. Under no circumstances will any portion of the Success
          Fee be deferred or otherwise not paid in its entirety at Closing.

          While during the course of the engagement contemplated herein, AH&H
          may estimate, for whatever reason, including development of financial
          models for use in negotiations with Target, the amount of the Success
          Fee, the actual amount of the Success Fee will be calculated only at
          Closing and only using the methodology set forth in this Section 2.

          If, in connection with a Transaction that is not completed, Cambridge
          Heart receives a break-up fee, topping fee or other termination fee
          (collectively, a "Termination Fee"), Cambridge Heart will pay AH&H a
          fee equal to [**]% of such Termination Fee at the time such
          Termination Fee is received by Cambridge Heart.

3.        EXPENSES. In addition to any fees that may be payable to AH&H
          hereunder and regardless of whether any Transaction is proposed or
          closed, Cambridge Heart hereby agrees, from time to time upon request,
          to reimburse AH&H for: (a) all reasonable fees and disbursements of
          independent counsel retained by AH&H up to $[**]. Fees greater than
          $[**] may be incurred after prior approval by Cambridge Heart; (b) all
          of AH&H's reasonable travel and related expenses arising out of AH&H's
          engagement hereunder; and (c) all of AH&H's reasonable out-of-pocket
          expenses incurred in connection with any actual or proposed
          Transaction or otherwise arising out of AH&H's engagement hereunder.
          Such expenses are to be paid on a current basis within 30 days of
          receipt of a statement therefore from AH&H.

4.        SCOPE OF RESPONSIBILITY. AH&H shall not be liable to Cambridge Heart
          or to any other person claiming through Cambridge Heart for any claim,
          loss, damage, liability, cost or expense suffered by Cambridge Heart
          or any such other person arising out of or related to AH&H's
          engagement hereunder except for any claim, loss or expense that arises
          primarily out of, or is based primarily upon, any action

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CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 6

          or failure to act by AH&H that constitutes bad faith, willful
          misconduct or gross negligence on the part of AH&H, other than any
          action or failure to act undertaken at the request, or with the
          consent, of Cambridge Heart. Under no circumstances shall this
          paragraph be modified or amended.

5.        INDEMNIFICATION; CONTRIBUTION. Cambridge Heart agrees to indemnify and
          hold harmless AH&H (together with its affiliates and their respective
          control persons, directors, officers, employees and agents,
          "Indemnified Persons") to the full extent lawful against any and all
          claims, losses, damages, liabilities, costs and expenses as incurred
          (including all reasonable fees and disbursements of counsel and all
          reasonable travel and other out-of-pocket expenses reasonably incurred
          in connection with the investigation of, preparation for and defense
          of any pending or threatened claim, action, proceeding or
          investigation and any litigation or other proceeding arising
          therefrom, to which an Indemnified Person may become subject)
          (collectively, "Damages") arising out of or related to any actual or
          proposed Transaction or AH&H's engagement hereunder; provided,
          however, that there shall be excluded from such indemnification any
          such portion of such Damages as are found in a final judgment by a
          court of competent jurisdiction to have resulted from the willful
          misconduct or gross negligence on the part of the Indemnified Person,
          other than any action undertaken at the request or with the consent of
          Cambridge Heart. The foregoing indemnification obligation is in
          addition to, and not in limitation of, any other rights AH&H may have,
          including but not limited to any right of contribution. In the event
          that the foregoing indemnity is unavailable or insufficient to hold
          harmless an Indemnified Person, then Cambridge Heart shall contribute
          to amounts paid or payable by an Indemnified Person in respect of such
          Damages in such proportion as appropriately reflects the relative
          benefits received by it on the one hand and AH&H on the other. If
          applicable law does not permit allocation solely on the basis of
          benefits, then such contribution shall be made in such proportion as
          appropriately reflects both the relative benefits and relative fault
          of the parties and other relevant equitable considerations. The
          foregoing is subject to the limitation that in no event shall AH&H's
          aggregate contributions in respect of Damages exceed the amount of
          fees actually received by AH&H pursuant to this Agreement. For
          purposes hereof, relative benefits to Cambridge Heart and AH&H of the
          Transaction or other similar transaction shall be deemed to be in the
          same proportion that the total value paid or received or contemplated
          to be paid or received by Cambridge Heart and/or its security holders
          in connection with the Transaction or other similar transaction bears
          to the fees paid to AH&H pursuant to its engagement in respect of such
          Transaction. AH&H shall promptly notify Cambridge Heart of any claim
          or threatened claim being asserted against AH&H which would give rise
          to an indemnification hereunder, and agrees that Cambridge Heart shall
          have the right to participate in the defense of any such

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CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 7

          claim and, to the extent that Cambridge Heart shall wish, to assume
          the defense thereof and shall pay as incurred the fees and
          disbursements of such counsel related to such proceeding. In any such
          proceeding, AH&H shall have the right to retain its own counsel at
          Cambridge Heart's expense. Cambridge Heart will not enter into any
          waiver, release or settlement with respect to any threatened or
          pending claim, action, proceeding or investigation or settle any
          litigation arising therefrom in respect of which indemnification
          hereunder may be sought (whether or not Indemnified Persons are a
          formal party thereto) without the prior written consent of AH&H (which
          consent shall not be unreasonably withheld or delayed), unless such
          waiver, release or settlement includes an unconditional release of
          AH&H from any and all liability arising out of such threatened or
          pending claim, action, proceeding, investigation or litigation. Under
          no circumstances shall this paragraph be modified or amended.

6.        TERM; TERMINATION OF ENGAGEMENT. The term of this engagement shall be
          for a period of 12 months from the date of this letter, but if at the
          end of such period negotiations or discussions are in progress
          regarding a Transaction, then this engagement shall be automatically
          extended until such time as all negotiations or discussions cease.
          Notwithstanding the foregoing, AH&H's engagement hereunder may be
          terminated by either Cambridge Heart or AH&H at any time, with or
          without cause, upon written notice to that effect to the other party;
          provided, however, that if terminated without Cause:

          (a)  AH&H will be entitled to its full fee under Section 2 hereof in
               the event that (i) at any time prior to the expiration of 12
               months after such termination by Cambridge Heart, a Transaction
               is consummated with a third party identified by AH&H during the
               term of this agreement; or (ii) Cambridge Heart enters into an
               agreement during the term of this Agreement or during such
               subsequent 12 month period contemplating a Transaction with a
               third party identified by AH&H during the term of this agreement
               and such Transaction is ultimately consummated; and

          (b)  the provisions of this Section 6 and of Sections 3, 4 and 5
               hereof shall survive such termination.

          "Cause" shall mean a material breach of this Agreement on the part of
          AH&H, which breach shall not have been cured within a reasonable
          period following written notice to AH&H thereof by Cambridge Heart.

7.        RIGHT OF FIRST REFUSAL. In consideration of AH&H's entering into this
          agreement, Cambridge Heart hereby grants AH&H a right of first refusal
          under which AH&H shall have right of first refusal to provide all
          financial advisory and investment banking services to Cambridge Heart
          during the term of this Agreement and,

<PAGE>

CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 8

          provided that the agreement has not been terminated by either AH&H or
          Cambridge Heart pursuant to Section 6, for an eight month period
          hereafter, which services shall include but not be limited to: (i)
          acting as financial advisor in connection with any mergers,
          acquisitions, divestitures, spin-offs, and other transactions commonly
          known as mergers and acquisitions transactions; (ii) acting as lead
          underwriter of any public offerings of any form of security relating
          to Cambridge Heart alone and acting as co-lead or co-managing
          underwriter of any public offerings of any form of security relating
          to a successor or merged entity which includes Cambridge Heart Inc.,
          resulting from a Transaction, under economic terms no less favorable
          than any other co-lead or managing underwriter; (iii) acting as
          financial advisor for any private placements of any form of security;
          (iv) delivering fairness opinions and valuations; (v) acting as
          financial advisor for any other extraordinary corporate transactions
          for which Cambridge Heart may engage a financial advisor, such as
          licensing agreements or joint ventures; and (vi) providing other
          general financial advisory and investment banking services as may be
          required by Cambridge Heart during such period. As used herein, a
          right of first refusal shall mean, prior to offering any party other
          than AH&H the right to provide financial advisory and investment
          banking services to Cambridge Heart during the period provided above,
          Cambridge Heart shall be obligated to make an offer to AH&H under
          which AH&H would provide such services, which offer shall clearly
          identify its terms and conditions, and AH&H shall have ten (10)
          business days to accept such offer. If AH&H does not accept such
          offer, then Cambridge Heart shall be free to negotiate and contract
          with any other party with respect to such rights on any terms and
          conditions that are no less favorable to Cambridge Heart than those
          offered to and rejected by AH&H. If Cambridge Heart does not
          consummate an agreement on such terms and conditions as were
          previously offered to AH&H or terms and conditions that are more
          favorable to Cambridge Heart, then the preceding sentence shall again
          apply to any subsequent offer. Any engagement of AH&H to provide
          financial advisory or investment banking services arising from any
          such circumstances is subject to the negotiation and execution by AH&H
          and Cambridge Heart of a separate letter agreement setting forth the
          terms and conditions with respect to AH&H's engagement for that
          transaction. However, unless specifically covered by a separate
          agreement setting forth such arrangement, the
          Indemnification/Assignment Provisions shall apply to each such
          engagement.

8.        GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
          construed in accordance with the laws of the Commonwealth of
          Massachusetts without regard to the conflicts of law provisions
          thereof. Any right to trial by jury with respect to any claim, action,
          suit or proceeding arising out of this Agreement or any of the matters
          contemplated hereby is waived by Cambridge Heart and AH&H. Cambridge
          Heart hereby submits to the non-exclusive jurisdiction of the

<PAGE>

CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                          Page 9

          Federal and State courts located in Boston, Massachusetts, in
          connection with any dispute related to this Agreement or any of the
          matters contemplated hereby.

9.        RELIANCE ON OTHERS. Cambridge Heart confirms that it will rely on its
          own independent counsel and independent accountants for legal, tax and
          accounting advice.

10.       NO RIGHTS IN SHAREHOLDERS, ETC. Cambridge Heart recognizes that AH&H
          has been engaged only by Cambridge Heart, and that this engagement of
          AH&H is not deemed to be on behalf of and is not intended to confer
          rights upon any shareholder, partner or other owner of Cambridge Heart
          or any other person not a party hereto as against AH&H. Unless
          otherwise expressly agreed, no one other than Cambridge Heart is
          authorized to rely upon this engagement of AH&H or to rely upon any
          statements, advice, opinions or conduct by AH&H. Without limiting the
          foregoing, any opinions or advice rendered to the Board or Cambridge
          Heart's management in the course of this engagement of AH&H hereunder
          are for the purpose of assisting the Board or Cambridge Heart's
          management, as the case may be, in evaluating the Transaction
          contemplated hereby and such opinions or advice do not constitute a
          recommendation to any shareholder of Cambridge Heart concerning action
          that such shareholder might or should take in connection with the
          Transaction contemplated hereby. AH&H's role herein is that of an
          independent contractor and nothing contained herein is intended to
          create or shall be construed as creating a fiduciary relationship
          between Cambridge Heart and AH&H.

11.       ATTORNEY FEES. In the event of any dispute or litigation or other
          proceeding between the parties with respect to any provision of this
          Agreement or arising from the engagement contemplated under this
          Agreement, the prevailing party shall be entitled to recover from the
          non-prevailing party any and all of the reasonable fees and
          disbursements of the prevailing party's attorney to the extent that
          they relate to such dispute, litigation, or other proceeding.

12.       MISCELLANEOUS. Nothing in this Agreement is intended to obligate or
          commit AH&H to provide any services other than as set forth above.
          This Agreement may be executed in counterparts, each of which shall be
          deemed an original, but which together shall be considered a single
          instrument. This Agreement constitutes the entire agreement between
          the parties hereto, and supersedes all prior agreements and
          understandings (both written and oral) of the parties hereto with
          respect to the subject matter hereof, and cannot be amended or
          otherwise modified except in writing executed by the parties hereto.
          The provisions hereof shall inure to the benefit of and be binding
          upon the successors and assigns of Cambridge Heart and AH&H. AH&H may
          refer to the Transaction, after it is public knowledge, in traditional
          "tombstone" announcements or any of its other

<PAGE>

CONFIDENTIAL                                                     COPY ONE OF TWO

                                                           Cambridge Heart, Inc.
                                                               September 5, 2002
                                                                         Page 10

          professional promotional materials. If requested by AH&H, Cambridge
          Heart shall include a mutually acceptable reference to AH&H in any
          press release or other public announcement made by Cambridge Heart
          regarding the Transaction.

If you are in agreement with the foregoing, please sign both copies, retain Copy
One for your records and return Copy Two, whereupon the Agreement shall become
effective as of the date hereof.

Sincerely,

ADAMS, HARKNESS & HILL, INC.

By:  /s/ Jonathan P. Gertler
   -------------------------------------
Jonathan P. Gertler, M.D.
Principal, Group Head - Biomedical Devices and Technology

ACCEPTED AND AGREED:

CAMBRIDGE HEART, INC.

By:    /s/ David Chazanovitz
   -------------------------------------
Mr. David Chazanovitz
President, Chief Executive Officer and Chief Operating Officer

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