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                                                                    EXHIBIT 10.1

                          CONFIDENTIAL PORTIONS OMITTED

                                LICENSE AGREEMENT

         THIS LICENSE AGREEMENT ("Agreement") is made and entered into effective
as of June 19, 1998 (the "Effective Date") by and between CARDIOVASCULAR
DYNAMICS, INC., a Delaware corporation having a place of business at 13700 Alton
Parkway, Irvine, CA 92618 ("CVD"), and GUIDANT CORPORATION, an Indiana
corporation having a place of business at 3200 Lakeside Drive, Santa Clara, CA
95052-8167 and its Affiliates ("Guidant").

         RECITALS:

         A. CVD is engaged in the discovery, development, manufacture and sale
of medical devices for the treatment of vascular disease.

         B. CVD has developed or acquired and is the owner of all right, title
and interest in the CVD Patents, including the inventions covered thereby, as
well as CVD Know-How (each as defined below), relating to balloons with an
adjustable, larger center diameter and smaller, fixed distal and proximal
diameters for balloon catheters known as the Focus Technology balloon catheters,
including, without limitation, methods for constructing such balloon catheters
(the "CVD Technology").

         C. Guidant is and has been engaged in the discovery, development,
manufacture and sale of medical devices for the diagnosis and treatment of
vascular disease, and continues to be active in this area.

         D. Both parties desire that Guidant license from CVD the CVD
Technology, including certain exclusive distribution rights with respect to
Licensed Products as defined below, under the terms and conditions of this
Agreement.

                                    AGREEMENT

         The parties hereby agree as follows:

1.       DEFINITIONS

         (a) "Affiliate" means any company or entity which controls, is
controlled by, or is under common control with, an entity. For purposes of this
definition, "control" means: (a) in the case of corporate entities, direct or
indirect ownership of more than fifty percent (50%) of the stock or shares
entitled to vote for the election of directors; and (b) in the case of
non-corporate entities, direct or indirect ownership of more than fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities.

         (b) "Effective Date" means the date first written above.

         (c) "Foreign Counterparts" means all foreign patent applications and
issued foreign patents, which claim priority from, or share common priority
with, an identified United States patent or patent application, or which claim
and disclose substantially similar inventions that are the subject matter of
such identified U. S. patent or patent applications.

         (d) "Improvements" means modifications of or enhancements to CVD
Technology, including, but not limited to, each version of a balloon with an
adjustable, larger center diameter and
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smaller, fixed distal and proximal diameters for balloon catheters, made by or
for CVD during the term of this Agreement.

         (e) "CVD Know-How" means information regarding CVD Technology now
existing or hereafter developed which is either confidential or not known or
used by others who do not have licenses for such use, including, but not limited
to, devices, specifications, methods of use, technical, business, design,
manufacturing, bench, animal, clinical and the like information. CVD Know-How
shall include any and all unpatented Improvements.

         (f) "CVD Patents" means (i) the patent rights owned or controlled by
CVD in the patents and patent applications identified on Exhibit A attached
hereto and incorporated into this Agreement by reference, and the inventions
covered by those applications and patents, and Foreign Counterparts thereof,
(ii) any additional patent rights CVD now owns, controls or has access to, or
may own, control or have access to in the future which are continuations,
continuations-in-part, divisionals or substitutes of the original applications
upon which the aforementioned patent rights are based, and the inventions
covered thereby, or Foreign Counterparts thereof, and upon any reexaminations,
reissues, renewals or extensions thereof, and (iii) any patent rights which CVD,
either now or in the future, owns, controls or has access to necessary to
exploit the CVD Technology. CVD Patents shall include any and all patented
Improvements.

         (g) "Licensed Product" means a balloon catheter or other inflatable
Stent delivery system having a balloon with an adjustable, larger center
diameter and smaller, fixed distal and proximal diameters which: (i) if made,
used, or sold in the absence of the license under the CVD Patents would infringe
one or more Valid Claims included in the CVD Patents, or (ii) is made or sold in
a country where CVD has a pending patent application (which has not been
disallowed without possibility of appeal or abandoned) with respect to the CVD
Technology, if, had the manufacture or sale been effected in the United States,
such manufacture or sale would infringe one or more Valid Claims of a CVD Patent
issued in the United States; or (iii) incorporates, embodies, uses or is
designed or produced with CVD Know-How or CVD Technology.

         (h) "Licensed Product Bundle" or "Bundle" means a bundle, system or kit
that is marketed as a single product that either: (i) includes a Licensed
Product on which a Stent is mounted; or (ii) is shipped to hospital customers in
a single, end-user, sterile package that includes a Licensed Product together
with a Stent, and which package may also include other ancillary products
directly related to the Stent that is included in the package, such as a Stent
crimping tool.

         (i) "CVD Technology" has the meaning provided in the recitals of this
Agreement.

         (j) "Market Release" means Guidant's first sale of a Licensed Product
Bundle to a non-Affiliate; provided, however, that sales in connection with a
clinical trial or physician preference test will not constitute a "Market
Release" for purposes of this Agreement.

         (k) "Net Sales" means the gross amounts recorded by Guidant on the
accrual method for sales of Licensed Product Bundles by Guidant or its
Affiliates, as applicable, less all actual bad debt incurred in connection with
sales of Licensed Product Bundles and any discounts, rebates and credit for
returned goods and cancellations, to the extent related to the Licensed Product
Bundle, freight charges, insurance and other costs of shipping and handling,
sales or use taxes and duties.

         (l) "Region" means a region listed in Exhibit B of this Agreement.

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         (m) "Royalty Bearing Licensed Product" means a Licensed Product as
defined in Subsections (g)(i) or (g)(ii) above. Royalty Bearing Licensed Product
does not include a Licensed Product as defined in Subsection (g)(iii) above;
provided that neither of Subsections (g)(i) or (g)(ii) also applies to such
Licensed Product.

         (n) "Stent" means any coronary or vascular stent, without regard to the
material from which the stent is made, including, but not limited to, balloon
expandable stents, self-expanding stents, covered and uncovered stents, and
coated and uncoated stents.

         (o) "Successful Completion of Technology Transfer " means that Guidant
has acquired an understanding of the CVD Technology sufficient to enable Guidant
to carry out its licensed rights as set forth in Section 2 below as to Licensed
Products and Licensed Product Bundles and to market the same to its customers.
The Joint Committee, as defined in Section 3 of this Agreement, shall determine
when Successful Completion of Technology Transfer has occurred, in its
reasonable discretion, and in accordance with Exhibit D.

         (p) "Valid Claim" means a claim of an issued patent that has not been
held or declared invalid, unpatentable or unenforceable by the United States
Patent and Trademark Office, a foreign patent office, or a court of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal, and
which has not been admitted to be invalid or unenforceable.

2.       GRANT OF LICENSES TO GUIDANT

         (a) Exclusive License.

                  (i) Grant of Exclusive License. CVD hereby grants to Guidant
         an exclusive right and license under CVD Technology, CVD Know How and
         CVD Patents to use, sell, offer for sale, import and otherwise dispose
         of, Licensed Products solely as part of a Licensed Product Bundle in
         the United States and Canada and in each other Region (or part of a
         Region) that becomes subject to this exclusive license as set forth in
         subsection (ii) below.

                  (ii) Addition of Exclusive License in other Regions. As of the
         execution of this Agreement, CVD has appointed various distributors of
         products covered by the CVD Patents or which otherwise use or
         incorporate the CVD Technology in Regions other than in the United
         States and Canada (the "Grandfathered Distributors"). CVD represents
         and warrants to Guidant that no Grandfathered Distributor is also a
         manufacturer or developer of coronary and peripheral balloon expandable
         Stents or of inflatable Stent delivery systems (collectively, a "Stent
         Manufacturer"). Upon any expiration or termination of any such
         distributor agreement during the term of this Agreement, the Region (or
         any portion thereof) covered by such expired or terminated distributor
         agreement shall become "Available Territory" as set forth in this
         Subsection. Upon expiration of the Grandfathered Distributor Agreement
         for Mexico, which expiration CVD represents and warrants will occur on
         December 30, 1999, or any earlier termination of such Agreement, Mexico
         shall automatically become subject to the exclusive license granted
         under Subsection (i) above.

(A) Prior to such time as Guidant has obtained exclusive licenses for each of
the Key Countries in a Region, as identified on Exhibit B to this Agreement,
then as to such Region, if CVD proposes to enter into a distribution agreement,
sales representative agreement or similar license agreement that would give
either a third party or the Grandfathered Distributor rights in any Available
Territory within such Region to make, have made, use, sell, offer for sale,
import and otherwise dispose of Licensed Products as part of a Licensed Product
Bundle, prior to entering into discussion regarding such distribution, sales
representative or similar license agreement, CVD shall notify Guidant in writing
of such intention, including the material terms and provisions upon which CVD
would be

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willing to enter into such an agreement (the "CVD Notice"). At CVD's option CVD
may provide the CVD Notice at any time from six (6) months prior to the
termination or expiration of the Grandfathered Distributor agreement up to the
date of such termination or expiration. For a period of forty-five (45) days
after Guidant's receipt of CVD's Notice, CVD shall negotiate exclusively with
Guidant, and CVD and Guidant shall negotiate in good faith the expansion of
Guidant's exclusive license as set forth in Subsection (i) above to include the
Available Territory. If the parties agree, then Guidant's exclusive license
under Subsection (i) above shall be expanded to include the Available Territory.
If the parties do not agree, then CVD shall be free to enter into an agreement
with any third party who is not a Stent Manufacturer with respect to Licensed
Products as part of a Licensed Product Bundle in the Available Territory,
subject to Guidant's co-exclusive rights under Subsection 2(b) below. If upon
the addition of the Available Territory to the territories already subject to
Guidant's exclusive license all of the Key Countries identified in Exhibit B for
a particular Region becomes subject to the exclusive license granted pursuant to
Subsection (i) above, then Guidant shall become obligated to pay to CVD the
applicable amount specified in Section 6(a)(iv) below.

         (B) After such time as Guidant has obtained exclusive licenses for each
of the Key Countries in a Region, as identified on Exhibit B to this Agreement,
and Guidant has paid the applicable amount specified in Section 6(a)(iv) below,
each other country included in such Region shall become subject to the exclusive
license granted pursuant to Subsection (i) above. If there are Grandfathered
Distributors in any of the countries included in such Region, then upon
termination or expiration of the applicable Grandfathered Distributor agreement,
such country shall automatically become subject to the exclusive license granted
under Subsection (i) above.

         (b) Co-Exclusive License.

                  (i) World-Wide. CVD hereby grants to Guidant a co-exclusive,
         world-wide, right and license under the CVD Technology, CVD Know-How
         and CVD Patents to make and have made Licensed Products and to practice
         processes and methods under the CVD Technology to make and have made
         Licensed Products solely for inclusion in Licensed Product Bundles.

                  (ii) Where Guidant's License is Not Exclusive. In all areas of
         the world where Guidant's exclusive license, as set forth in Subsection
         (a)(i) above, does not apply, CVD hereby grants to Guidant a
         co-exclusive right and license under the CVD Technology, CVD Know-How
         and CVD Patents to use, sell, offer for sale and import or otherwise
         dispose of Licensed Products solely as part of a Licensed Product
         Bundle.

                  (iii) Meaning of Co-Exclusive. As used in this Agreement,
         "co-exclusive" means that only CVD and Guidant shall have the
         co-exclusive rights and that neither CVD nor Guidant may assign or
         sublicense such rights except that either party may assign such rights
         in connection with any transfer of substantially all the business to
         which this Agreement relates, or upon a sale of a majority of the
         voting stock or of all or substantially all of the assets of the
         assigning party; provided, that upon such permitted assignment the
         assignee agrees in writing to be subject to all of the terms and
         conditions of this Agreement. In addition, CVD's co-exclusive rights
         with respect to the license granted under Subsection (b)(ii) above,
         apply solely to the sale of such Licensed Product Bundles to
         "Grandfathered Distributors," as described in Subsection (a)(ii) above
         and to such additional parties as CVD is permitted to appoint in
         Available Territories solely in accordance with Subsection (a)(ii)
         above.

         (c) Covenant Not to Sell. Guidant agrees and covenants not to sell,
market, make or have made, directly or indirectly, any Licensed Products except
pursuant to the licenses granted in Section 2(a) and Section 2(b) above.

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         (d) Limitation on License. Nothing in this Agreement shall be construed
as CVD granting a license with respect to any of its technology that pertains
solely to Stents, as distinct from Stent delivery systems.

3.       TECHNOLOGY TRANSFER

         (a) Commencing upon execution of this Agreement, CVD shall transfer to
Guidant all CVD Technology, including but not limited to copies of all relevant
patent and patent applications, CVD Know-How, design, manufacturing and quality
assurance data, processes and the like. In this regard, every reasonable effort
will be made to accomplish Successful Completion of Technology Transfer within
six (6) months from the Effective Date of this Agreement. Such transfer shall be
accomplished by means that include, but are not limited to, completion of the
tasks outlined in Exhibit D to this Agreement, hands on support by CVD experts
in the field of Focus Technology, visits by Guidant personnel to CVD's
facilities; and meetings at which CVD shall present and explain detailed aspects
of CVD Technology and answer Guidant's questions about CVD Technology. In order
to facilitate such technology transfer, the parties shall form a joint committee
(the "Joint Committee"), comprised of two (2) executives of each of CVD and
Guidant (or Guidant's Vascular Intervention Group). The Joint Committee shall
meet, in person or by telephone or video conference, as needed, during the
transfer of such technology to review the progress of the tasks described in
Exhibit D to this Agreement. Such meetings shall be at such times and at such
places as the Joint Committee may agree. The Joint Committee shall monitor the
progress of the transfer of technology and disputes or disagreements regarding
such transfer shall be first referred to such committee prior to becoming
subject to Section 25 below.

         (b) Commencing after the Successful Completion of Technology Transfer
and continuing throughout the term of the Agreement, CVD will transfer promptly
to Guidant all CVD Technology that becomes known to CVD during the term of the
Agreement, including but not limited to CVD Know-How, design, manufacturing and
quality assurance data, process and the like.

4.       FUTURE DEVELOPMENT

         (a) As between the parties, inventions, know-how or other information
developed during the term of this Agreement solely by one party shall be owned
exclusively by that party, subject to all obligations of disclosure and
licensing set forth herein.

         (b) Inventions, know-how or other information relating to CVD
Technology developed during the term of this Agreement jointly by the parties
shall be jointly owned by the parties, and will be included in the CVD Patents
or CVD Know-How and licensed to Guidant without change in the royalty rate set
forth herein, and provided that such Invention constitutes an Improvement, at no
additional expense to Guidant.

5.       DISCLOSURE OF IMPROVEMENTS AND RIGHTS THERETO

         If CVD conceives, creates, reduces to practice, develops, acquires, or
otherwise obtains rights to any Improvements, CVD shall immediately notify
Guidant and disclose each such Improvement to Guidant in writing, including all
information relating to, or necessary to practice the Improvement. Any such
Improvements will be included in the licenses to Guidant under Section 2 at no
additional expense to Guidant and without change in the royalty rate set forth
herein.

6.       ROYALTIES AND OTHER PAYMENTS

         (a) Up Front and Milestone Payments. Subject to the terms and
conditions of this Agreement, Guidant shall make the following payments:

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                  (i) Up Front Payment. Within ten (10) business days of the
         execution and delivery of this Agreement by both parties, Guidant shall
         pay to CVD the amount of Two Million Dollars (U.S. $2,000,000).

                  (ii) Technology Transfer. Within ten (10) business days after
         the date of such Successful Completion of Technology Transfer, Guidant
         shall pay to CVD the amount of One Million Dollars ($1,000,000) (the
         "Initial Technology Transfer Fee") for the transfer of CVD Technology
         as provided herein. Notwithstanding the foregoing, if, for reasons
         other than CVD's acts or omissions, Successful Completion of Technology
         Transfer has not occurred by the date that is the later of (a) six (6)
         months after the Effective Date; or (b) December 31, 1998, then Guidant
         shall pay the Initial Technology Transfer Fee to CVD within ten (10)
         days of such date.

                  (iii) Quarterly Payments. On the first day of each of the
         succeeding two (2) calendar quarters following the date on which
         Successful Completion of Technology Transfer has occurred, Guidant
         shall pay to CVD the amount of One Million Dollars (U.S. $1,000,000).
         Notwithstanding the foregoing, if for reasons other than CVD's acts or
         omissions, Successful Completion of Technology Transfer has not
         occurred by the date that is the later of (a) six (6) months after the
         Effective Date; or (b) December 31, 1998, then the payment specified in
         the prior sentence shall be due within ten (10) days of such later
         date.

                  (iv) Exercise of Option to Add Regions to Exclusive License.
         If Guidant obtains exclusive licenses under Subsection 2(a)(ii) above
         to each of the Key Countries in the European /Middle East Region then
         Guidant shall pay to CVD the amount of [*]Dollars ($[*]) within ten
         (10) business days after the date on which Guidant's exclusive license
         to each of the Key Countries becomes effective. If Guidant obtains an
         exclusive license under Subsection 2(a)(ii) above to the Key Country
         for the Asia Pacific Region, then Guidant shall pay to CVD the amount
         of [*] Dollars ($[*]) within ten (10) business days after the date on
         which Guidant's exclusive license to such Key Country becomes
         effective.

         (b) Royalties.

                  (i) Royalty Rates for Licensed Products Sold Under an
         Exclusive License. Guidant shall pay a royalty of [*] percent ([*]%) of
         Net Sales from Licensed Product Bundles that include one or more
         Royalty Bearing Licensed Products and that are sold in Regions (or in
         specific parts of Regions added pursuant to Section 2(a)(ii)) where
         Guidant holds an exclusive license as set forth in Section 2(a)(i)
         above.

                  (ii) Royalty Rates for Licensed Products Sold Under a
         Co-Exclusive License. Guidant shall pay a royalty of [*] percent ([*]%)
         of Net Sales from Licensed Product Bundles that include one or more
         Royalty Bearing Licensed Products and that are sold in Regions (or in
         parts of Regions) where Guidant holds a co-exclusive license as set
         forth in Section 2(b)(ii) above.

                  (iii) Single Royalty. For each Licensed Product Bundle that
         includes one or more Royalty Bearing Licensed Products, Guidant shall
         be required to pay only one royalty, on the first sale of such Licensed
         Product Bundle calculated at the highest applicable rate, no matter how
         many CVD Patents cover such Royalty Bearing Licensed Product or
         Licensed Product Bundle.

                  (iv) Minimum Royalties. Notwithstanding the foregoing,
         commencing upon the date that is the earlier of Market Release or
         January 1, 1999, in order to maintain Guidant's exclusive license under
         Section 2(a) above, Guidant shall pay a minimum annual royalty of Two
         Hundred Fifty Thousand Dollars ($250,000) ("Minimum Royalty
         Commitment") to CVD each calendar year, for a period of one hundred
         eight (108) months during the term of this Agreement. Subject to
         subsection (v) below, if total royalties paid by Guidant for the
         applicable calendar year are less than the Minimum Royalty Commitment,
         then Guidant shall

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         pay to CVD the difference between actual royalties paid and the Minimum
         Royalty Commitment within one hundred (100) days after the end of each
         applicable calendar year during which such royalties accrue. Otherwise,
         any such payment shall be made pursuant to Section 7 of this Agreement.
         If Market Release occurs on or prior to December 31, 1998, then the
         Minimum Royalty Commitment shall be reduced proportionately for that
         year and for the last year of the 108 month period.

                  (v) Option to Terminate License. Guidant's obligations under
         the preceding paragraph shall be subject to the following: Commencing
         with the second calendar year in which the Minimum Royalty Commitment
         is in effect, CVD shall, by written notice within ten (10) days after
         receipt of the last royalty report applicable to such year, advise
         Guidant whether the total of Guidant's royalty payments during that
         year were less than the Minimum Royalty Commitment and request payment
         for the difference (the "Shortfall"). If Guidant does not elect to pay
         such Shortfall sixty (60) days from receipt of the Shortfall notice
         from CVD, then CVD may terminate this Agreement, and Guidant shall have
         no liability with respect to its nonpayment of the Shortfall.

                  (vi) Certain Transfers. No royalty shall be payable for
         transfers (by sale or otherwise) of Royalty Bearing Licensed Products
         by Guidant or any of its Affiliates, provided such transferred Royalty
         Bearing Licensed Products are subsequently resold in a royalty-bearing
         transaction or is used for clinical trials by Guidant or its Affiliates
         in an experimental or other like setting where no Net Sales are
         generated. If Guidant or any of its Affiliates transfers Royalty
         Bearing Licensed Products as part of a Licensed Product Bundle for
         consideration other than cash, such Licensed Product Bundle shall be
         deemed to have been sold for an amount equal to the Average Selling
         Price for such Licensed Product Bundle during the prior calendar
         quarter. The Average Selling Price shall be calculated by dividing
         total net revenues generated from worldwide sales of the Licensed
         Product Bundle by Guidant and its Affiliates during the prior calendar
         quarter, divided by the total number of such Licensed Products Bundle
         sold by Guidant and its Affiliates during such calendar quarter.

                  (vii) No Royalties. No royalties shall be due with respect to
         sales or other transfers of Licensed Products that are not Royalty
         Bearing Licensed Products or of Licensed Product Bundles that do not
         include any Royalty Bearing Licensed Products.

7.       PAYMENT TERMS

         (a) Royalty payments shall be made by check or wire transfer, at CVD's
election, to CVD within [*] ([*]) days after the end of each calendar quarter
during which royalties accrue. Each payment shall be accompanied by a report
that reflects at least (i) the quantity of Licensed Products subject to
reporting by virtue of activities of Guidant, and its Affiliates; (ii) Net Sales
amounts; (iii) the applicable royalty rate, and (iv) the royalties computed and
due to CVD. No report shall be required for any calendar quarter prior to a
quarter during which royalties first accrue. Thereafter, a report shall be
rendered for each calendar quarter during the remaining term of this Agreement.

         (b) All amounts stated in this Agreement, and all payments made by
Guidant shall be in United States dollars. Any payments owed to CVD under this
Agreement that are not paid when due shall bear interest at [*] percent ([*]%)
per annum, or the maximum amount permitted by law, whichever is lower,
calculated on the number of days such payment is delinquent. Royalties accruing
on sales outside the United States shall be converted to United States dollars,
with conversion of foreign currency where appropriate based on the exchange rate
on the last day of the calendar quarter to which such payment related as
published in the Wall Street Journal. CVD shall hold in confidence all
information reported with respect to royalty payments, and shall refrain from

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disclosing such information to others, except as may be required internally for
management purposes and except as may be required by Federal and State law or by
governmental agencies.

8.       RECORDS

         Guidant shall keep or cause the responsible Affiliate to keep true and
accurate books and records with respect to all sales of Royalty Bearing Licensed
Products under this Agreement in accordance with customary accounting principles
and in a manner consistent with the accounting methods employed throughout its
business. CVD shall have the right, at its own expense, through an established
and reputable independent representative selected by CVD and agreed to in
writing byGuidant, to examine the relevant books and records of Guidant, or the
responsible Affiliate, at any reasonable time during business hours within
thirty (30) days after notifying Guidant of its desire to do so. This
examination shall take place no more than once each year and shall cover no more
than the preceding two (2) calendar years. The examination shall be solely for
the purpose of determining the accuracy of the reports and payments required to
be made by Guidant and its Affiliates. The independent representative shall
report only on the accuracy of such records and shall not disclose specific
entries except to the extent otherwise disclosed in reports rendered as provided
hereunder. If such examination results in a determination of an underpayment of
royalties to CVD, such underpayment shall be promptly remitted to CVD with
interest, as provided in Section 7(b) above, on any amounts due with respect to
the twelve (12) month period prior to the audit date. In addition, if such
examination determines that Guidant's royalty payments based on Net Sales are
more than 105% of the royalties on Net Sales reported by Guidant for the period
under examination, Guidant shall pay all reasonable costs of such examination.
If such examination results in a determination of an overpayment of royalties to
CVD, CVD shall promptly remit such overpaid amount to Guidant. In addition,
Guidant may elect to deduct such overpaid amount from royalty payments otherwise
due under this Agreement.

9.       TAXES

         All taxes levied on account of payments made by Guidant to CVD and
royalties accruing under this Agreement (other than taxes with respect to
Guidant's net income) shall be paid by CVD. If laws or regulations require the
withholding of taxes, the taxes will be deducted by Guidant from remittable
royalty and shall be paid to the proper taxing authority. Proof of payment shall
be sent to CVD within sixty (60) days following payment.

10.      PROSECUTION OF PATENTS

         (a) CVD shall have control of the preparation, prosecution and
maintenance of CVD Patents. The cost of such preparation, prosecution and
maintenance of CVD Patents shall be paid by CVD. If CVD determines that it does
not wish to continue the cost of preparation, prosecution or maintenance of such
CVD Patents in any individual case, it shall notify Guidant at least ninety (90)
days prior to taking, or not taking, any action which would result in the
abandonment, withdrawal, or lapse of any CVD Patent. In such circumstance,
Guidant shall have the right to control the preparation, prosecution or
maintenance thereof, as the case may be, at its own expense, but any such change
in control shall not affect the ownership thereof or the license to CVD Patents
hereunder.

         (b) The provisions of Subsection 10(a) above will also apply to Foreign
Counterparts. The parties shall consult about the countries, if any, where
additional Foreign Counterparts will be filed, prosecuted and maintained. The
parties shall keep each other reasonably informed of the status of all CVD
Patents thereof for which they have responsibility as defined hereunder. If CVD
determines that it does not wish to prepare, prosecute or maintain certain
Foreign Counterparts, it shall notify Guidant of such decision, and, in any
event shall give Guidant at least ninety (90) days

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notice prior to taking, or not taking, any action which would result in the
abandonment, withdrawal, or lapse of any Foreign Counterpart. In such
circumstance, Guidant shall have the right to control the preparation,
prosecution or maintenance thereof, as the case may be, at its own expense, but
any such change in control shall not affect the ownership thereof or the license
to CVD Patents, including Foreign Counterparts, hereunder.

         (c) Each party shall cooperate with the other party, as reasonably
requested, to execute all lawful papers and instruments and to make all rightful
oaths and declarations as may be necessary in the preparation, prosecution and
maintenance of any and all such patents and patent applications contained within
CVD Patents. The party that is controlling such preparation, prosecution and
maintenance shall also pay the reasonable out-of-pocket costs of such
cooperation by the other party.

11.      INFRINGEMENT BY THIRD PARTIES

         (a) Each party will promptly notify the other of any infringement,
misappropriation, or possible infringement or misappropriation, of the CVD
Patents and CVD Know-How by any third party.

                  (i) Infringement Where Guidant's License is Exclusive. If the
         infringement or misappropriation relates to a Stent delivery system and
         occurs in a Region or part of a Region where Guidant has an exclusive
         license under this Agreement, then Guidant shall have the sole right,
         but not the obligation, to enforce CVD Patents and CVD Know-How against
         such third parties at its own expense. CVD shall cooperate as
         reasonably requested in such enforcement, and Guidant shall bear the
         reasonable costs that Guidant incurs in providing such cooperation. If
         Guidant elects, in its sole discretion, not to enforce any such
         infringement or misappropriation, then Guidant shall so notify CVD
         within one hundred eighty (180) days after receiving written notice of
         such infringement, and CVD shall then have the right, but not the
         obligation, to enforce such infringement or misappropriation at its own
         expense. Guidant shall cooperate as reasonably requested in such
         enforcement, and CVD shall bear the reasonable costs that Guidant
         incurs in providing such cooperation.

                  (ii) Infringement Where Guidant's License is Co-Exclusive. If
         the infringement or misappropriation either does not relate to a Stent
         delivery system or relates to a Stent delivery system but occurs only
         in a Region or part of a Region where Guidant has a co-exclusive
         license under this Agreement, then CVD shall have the first right, but
         not the obligation, to enforce CVD Patents and CVD Know-How against
         such third parties at its own expense. Guidant shall cooperate as
         reasonably requested in such enforcement, and CVD shall bear the
         reasonable costs that Guidant incurs in providing such cooperation. If
         CVD fails to enforce any such infringement or misappropriation within
         one hundred eighty (180) days after receiving notice thereof, then
         Guidant shall then have the right, but not the obligation, to enforce
         such infringement or misappropriation at its own expense. CVD shall
         cooperate as reasonably requested in such enforcement, and Guidant
         shall bear the reasonable costs that CVD incurs in providing such
         cooperation.

         (b) Any net recovery obtained by the enforcing party as a result of
such enforcement as defined herein, by settlement or otherwise, shall be
retained exclusively by the enforcing party.

12.      CONFIDENTIALITY

         (a) The parties contemplate that information may be disclosed to one
another or generated under this Agreement which is confidential in nature. In
this regard, each party will maintain the confidential information of the other
party or generated under this Agreement in

                                       9
<PAGE>
confidence and shall not make use thereof, in whole or in part, except as
expressly authorized in this Agreement.

         (b) Except as specifically provided, and as may be necessary to develop
and sell Licensed Products and to enable Affiliates to make, have made, use,
sell, offer for sale and import Licensed Products and to practice processes and
methods as contemplated herein, each of the parties shall refrain from
communicating (for example, whether by disclosure or by providing access) any
portion of the confidential information of the other party to any third person,
firm, corporation or entity without first obtaining prior written permission
from the other party to this Agreement.

         (c) In recognition of the proprietary nature and value of the
confidential information and the likelihood of loss of business by the other
party in the event of unauthorized disclosure of its confidential information,
the parties agree that the obligations of this Section shall continue unabated
regardless of expiration or termination of this Agreement for any reason, for a
period of not less than five (5) years from the effective date of such
expiration or termination. Neither party shall be obligated or required to
maintain in confidence any information which it can demonstrate with written
records:

                  (i) is at the time in question in the public domain, or is
         known to the receiving party prior to disclosure by the disclosing
         party; or

                  (ii) is or has been furnished to the receiving party by a
         third party not under a duty of confidentiality to the disclosing
         party;

                  (iii) is required to be disclosed by Federal or State Law, by
         a court of competent jurisdiction or by a governmental agency; or

                  (iv) is independently developed without the use of
         confidential information disclosed by the other party or generated
         under this Agreement.

13.      NO DISCLOSURE WITHOUT CONSENT OR LEGAL REQUIREMENT

         (a) Neither party shall release any information to any third party with
respect to the terms or existence of this Agreement without the prior written
consent of the other party (which consent shall not be unreasonably withheld).
This prohibition includes, but is not limited to, press releases, educational
and scientific conferences, promotional materials, and disclosures to (or
discussions with) the media. It is understood, however that the parties shall
have the right to provide required information (but which, with respect to
patent applications and the information contained therein, shall only be
provided to legal counsel) concerning this Agreement to investors and potential
investors, and to Affiliates in order to enable them to carry out the activities
contemplated hereunder and as each may determine, in its reasonable judgment, to
be required by law. Each party agrees to notify the other party of its intention
to disclose such information to a third party (but not the identity of the third
party). Notwithstanding the foregoing, Guidant acknowledges that CVD may file a
copy of this Agreement as an exhibit to its public filings with the Securities
and Exchange Commission and describe this Agreement in such filings; provided,
however, that CVD shall use best efforts to redact the royalty rates and payment
terms from such copy of this Agreement before filing it. In addition, CVD agrees
that it will provide Guidant with an opportunity to review and comment upon the
proposed redacted version of this Agreement before it is filed with the
Securities and Exchange Commission.

         (b) Neither party shall use the name of the other party in any
publication or promotional material or in any form for public distribution
without the prior written consent of the other party Notwithstanding the
foregoing in Section 13(a), CVD may issue a press release describing the
substance of this transaction, substantially in the form of the press release
that is attached to this

                                       10
<PAGE>
Agreement as Exhibit C, which Exhibit is incorporated by reference. After the
dissemination of such press release, either party may, without the consent of
the other party, make additional public disclosures to the extent such
information already was disclosed by such press release.

14.      TERM

         This Agreement shall become effective on the Effective Date and shall
remain in effect, subject to earlier termination in accordance with other terms
of this Agreement, until it expires, on a country-by-country basis on the later
of the expiration of the last CVD Patent right to expire in such country or ten
(10) years from the Effective Date. Upon such expiration of this Agreement,
Guidant shall be deemed to have a fully paid-up license to the CVD Technology,
CVD Know-How and the CVD Patents

15.      TERMINATION

         (a) If either party breaches any of the material terms or conditions of
this Agreement, the other party may terminate this Agreement by giving at least
sixty (60) days advance written notice to the breaching party, specifying the
act or omission on which such termination is based. Should the breach be
remedied within sixty (60) days of such notice, this Agreement shall remain in
full force and effect, subject to continued compliance with all of the terms,
conditions and limitations of this Agreement. Otherwise, this Agreement shall
automatically terminate at the end of such notice period.

         (b) Guidant shall have the right to terminate this Agreement or its
licenses under this Agreement, with or without cause, by giving thirty (30) days
advance notice to CVD of its intent to so terminate; provided, however, that
Guidant shall not have the right to terminate this Agreement or the licenses
under this Agreement without cause until such time as it has paid to CVD an
aggregate of U.S. $[*] under Section 6 hereof.

         (c) Termination or expiration of any license granted under this
Agreement shall not deprive either party of any accrued rights it may have,
including CVD's right to collect royalties on sales made prior to such
termination or expiration. Upon termination of this Agreement, Guidant shall
have the right to sell Licensed Product Bundles for which it has binding orders,
or that are in the process of being manufactured or that are in inventory. Such
sales shall be subject to the obligations to pay royalty provided for hereunder.
All other rights and obligations of the parties shall terminate upon termination
of this Agreement, except for the rights and obligations set forth in Sections
12, 14, 15(c), 17, 24, and 25 hereof, which shall survive such termination.

16.      REPRESENTATIONS AND WARRANTIES

         CVD represents and warrants to Guidant that (i) it has the right to
grant the licenses and rights granted herein and has full right and title to the
CVD Patents, (ii) other than the Grandfathered Distributors identified in
Schedule 16.ii to this Agreement, CVD has not granted any other person or entity
any claim or right to any aspect or part of the CVD Patents, (iii) Exhibit A is
a complete list of all CVD patents owned or controlled by CVD and relating to
the CVD Technology; (iv) it has the unencumbered right to grant the licenses and
rights granted in this Agreement, and (v) no other license, assignment, sale,
agreement or encumbrance has, or will, be made or entered into which would
conflict with this Agreement. CVD further represents and warrants that (i) to
its current, actual knowledge the CVD Patents are valid and enforceable, and
(ii) to its current, actual knowledge, without investigation, no rights of any
third party related to balloon catheters and/or Focus Technology for Stent
delivery will be infringed by the manufacture, use or sale of the Licensed
Products; and (iii) it has not received written notice of any claims or
threatened claims by any third

                                       11
<PAGE>
party with respect to the manufacture, use or sale of Licensed Products, and to
its current, actual knowledge, is not aware of any such claims or threatened
claims.

17.      INDEMNITY

         (a) Except as set forth in Subsection 17(b), each of the parties shall
be responsible for its own errors and omissions and indemnifies, and agrees to
defend and hold harmless, the other party and its officers, directors,
professional staff, employees, and agents, and any of their respective
Affiliates, respective successors, heirs and assigns (the "Indemnitees"),
against any claim, demand, liability, damage, loss, judgment or expense
(including reasonable attorneys fees and expenses and out-of-pocket litigation
expense) incurred by or imposed upon the Indemnitees arising out of the
indemnifying party's own activities hereunder (including actions in tort,
warranty or strict liability), except to the extent due to negligence, willful
misconduct or omissions or recklessness of the other party. Each party shall
notify the other promptly of any claim, demand, suit or action arising out of
any activity hereunder, whether or not the subject of the indemnity herein, and
each shall cooperate as reasonably required in the defense of the matter, and
the other shall bear the reasonable out-of-pocket cost of such cooperation. The
indemnifying party shall have sole control over any litigation or settlement
thereof for which it is responsible under this paragraph, and it shall not be
required to pay any amount of any settlement to which it has not given its prior
written consent.

         (b) CVD shall defend, indemnify, and hold Guidant harmless from and CVD
shall defend or settle, any claim, demand, action, proceeding or suit ("Claim")
against Guidant or its customers arising out of any breach of CVD's
representations and warranties under Section 16 above. CVD shall have sole right
to control any action or settlement, and shall pay any final judgment entered
against Guidant or its customers on such issue in any Claim defended by CVD.
Guidant shall provide CVD full information and assistance to defend or settle
such Claim at CVD's expense.

         (c) NEITHER PARTY SHALL BE LIABLE TO THE OTHER WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER THEORY FOR ANY LOST PROFITS, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
THE PARTIES AGREE, HOWEVER, THAT THE FOREGOING LIMITATION DOES NOT APPLY TO ANY
AMOUNTS PAID OR PAYABLE TO A THIRD PARTY RELATED TO ANY CLAIM, DEMAND,
PROCEEDING, SUIT OR ACTION FOR WHICH A PARTY IS OBLIGATED TO INDEMNIFY THE OTHER
PARTY PURSUANT TO SUBSECTIONS 17(a) AND/OR 17(b) ABOVE; AND ANY SUCH AMOUNTS
WILL BE CONSIDERED COMPENSATORY OR DIRECT DAMAGES.

18.      RELATIONSHIP OF THE PARTIES

         It is understood that the parties hereto are independent contractors
engaged in the conduct of their own respective endeavors. Neither Guidant nor
CVD are to be considered the agent or employee of the other for any purpose, and
neither party has the right or authority to enter into any contract or assume
any obligation for the other or give any warranty or make any representation on
behalf of the other party except where and to the extent specifically authorized
in writing to do so.

19.      ASSIGNMENT

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their permitted successors and assigns. Neither party may
assign this Agreement without the prior written consent of the other party,
except in connection with the transfer of substantially all of the business to

                                       12
<PAGE>
which this Agreement relates or to a purchaser of all or substantially all of
the assigning party's assets, provided that prior to the effective date of such
assignment the assignee delivers to the non-assigning party a written
undertaking by which the assignee agrees to be bound by all of the terms and
conditions of this Agreement. Any attempted assignment that fails to comply with
the requirements of this Section 19 shall be deemed to be null and void.

20.      FORCE MAJEURE

         In the event any party hereto is prevented or is otherwise unable to
perform any of its obligations under this Agreement due to fire, flood,
earthquake, war, strikes, lockouts, labor troubles, failure of public utilities,
injunctions, or other events beyond the reasonable control of the party
affected, the affected party shall give notice promptly to the other party in
writing and, thereupon, the affected party's nonperformance shall be excused and
the time for performance of this Agreement shall be extended for the period of
delay or inability due to such Force Majeure.

21.      AMENDMENT

         Except as otherwise provided herein, this Agreement may not be amended,
supplemented, or otherwise modified except by an instrument in writing signed by
authorized representatives of CVD and Guidant.

22.      NO WAIVER

         No waiver of any term, provision, or condition of this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be construed as a further or continuing waiver of such term, provision or
condition of this Agreement.

23.      COUNTERPARTS

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

24.      GOVERNING LAW, VENUE AND JURISDICTION

         This Agreement shall be construed in accordance with the laws of the
State of California without reference to choice of law principles, as to all
matters, including, but not limited to, matters of validity, construction,
effect or performance. The exclusive venue and jurisdiction for resolution of
all matters arising out of or relating to this Agreement shall be as follows:
(a) If Guidant commences the action, then the exclusive venue and jurisdiction
shall be the courts located in Orange County, California, or, if applicable, the
Federal Courts in the Central District of California; and (b) if CVD commences
the action, then the exclusive venue and jurisdiction shall be the courts
located in Santa Clara County, California, or, if applicable, the Federal Courts
in the Northern District of California.

25.      INFORMAL DISPUTE RESOLUTION.

         In an effort to resolve informally and amicably any claim, controversy,
or dispute arising out of or related to the interpretation, performance, or
breach of this Agreement (a "Dispute") without resorting to litigation, each
party shall notify the other party to the Dispute in writing of any Dispute
hereunder that requires resolution. Such notice shall set forth the nature of
the Dispute, the amount involved, if any, and the remedy sought. Each party
shall promptly designate an executive-level employee to investigate, discuss and
seek to settle the matter between them. If the two designated representatives
are unable to settle the matter within thirty (30) days after such notification,
the matter shall be submitted to CVD's Chief Executive Officer and to the
President of Guidant's Vascular Intervention Group for consideration. If
settlement cannot be reached through their efforts

                                       13
<PAGE>
within an additional thirty (30) days (or such longer time period as they shall
agree on in writing), then either party may commence litigation in accordance
with Section 24 above

26.      ATTORNEYS FEES.

         Except as otherwise provided herein, each party shall bear its own
legal fees incurred in connection with the transactions contemplated hereby,
provided, however, that if any party to this Agreement seeks to enforce its
rights under this Agreement by legal proceedings or otherwise, subject to
Section 25 above, the non-prevailing party shall pay all costs and expenses
incurred by the prevailing party, including, without limitation, all reasonable
attorneys' fees.

27.      NOTICE

         (a) Any notice, report or statement to either party required or
permitted under this Agreement shall be in writing and shall be sent by
certified mail, return receipt requested, postage prepaid, or facsimile
transmission with confirmation sent by certified mail as above, or by courier,
such as Federal Express, DHL, or the like, with confirmation of receipt by
signature requested, directed to the other party at its mailing address first
set forth above or facsimile number set forth below and to the attention of the
individual indicated below, or to such other mailing address as the respective
parties may from time to time designate by prior notice in compliance with this
Section.

         Guidant:  Guidant, Vascular Intervention
                   Fax:  (408) 235-3987
                   Attn.:  General Counsel

         CVD:      CVD
                   Fax:  (949) 457-9561
                   Attn.:  President and Chief Executive Officer

         (b) Any such notice, report or statement sent in accordance with the
requirements of Subsection 27(a) above shall be deemed to be fully given upon
dispatch, subject to proof of receipt.

28.      SEVERABILITY

         If any term or provision of this Agreement, or the application thereof
to any person or circumstance, shall to any extent be held invalid or
unenforceable under any controlling law, that provision shall be considered
severable and its invalidity shall not affect the remainder of this Agreement,
which shall continue in full force and effect.

29.      CAPTIONS

         Captions are inserted herein only as a matter of convenience and for
reference, and in no way define, limit, or describe the scope of this Agreement
or the intent of any provision herein.

30.      SOLE UNDERSTANDING

         This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof, and supersedes, integrates
and merges all prior discussions, correspondence, negotiations, understandings
or agreements. The parties each represent and warrant that there are no
conditions, definitions, warranties, promises, agreements, understandings or
representations, or remaining obligations, written or oral, with respect to the
subject matter of this Agreement, other than as expressly provided in this
Agreement.

                                       14
<PAGE>
31.      JOINT PREPARATION OF AGREEMENT

         This Agreement has been prepared jointly by the parties and shall not
be strictly construed against either party, it being agreed that each party has
had an opportunity to consult with counsel of its on choosing regarding the
terms and conditions of this Agreement.

         IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in duplicate originals effective as of the day and year first written
above.

<TABLE>
<S>                                                  <C>
CARDIOVASCULAR                                       GUIDANT CORPORATION
DYNAMICS, INC.

By:                                                  By:
    ----------------------------------------             ----------------------------------------

Print Name:                                          Print Name:
            --------------------------------                     --------------------------------

Title:                                               Title:
       -------------------------------------                 ------------------------------------
</TABLE>

                                       15
<PAGE>
                                    EXHIBIT A
                            LICENSE AGREEMENT BETWEEN
                          CARDIOVASCULAR DYNAMICS, INC.
                                       AND
                               GUIDANT CORPORATION

RELEVANT CVD PATENTS AND APPLICATIONS

<TABLE>
<CAPTION>
                                                                                Issued
         Patent No.                                                             Title
         ----------                                                             ------
<S>                            <C>
          5,470,313            Variable Diameter Balloon Dilatation Catheter
          5,645,560            Fixed Focal Balloon for Interactive Angioplasty and Stent Implantation
</TABLE>

<TABLE>
<CAPTION>
                                                      U.S. Allowed
         Serial No.                                     Title
         ----------                                   ------------
<S>                            <C>
         08/742,437            Focalized Intraluminal Balloons
</TABLE>

<TABLE>
<CAPTION>
                                                                             U.S. Pending
         Serial No.                                                             Title
         ----------                                                          ------------
<S>                            <C>
         08/670,683            Interactive Angioplasty
          5,645,560            Stent Implantation Catheter with Focalized Balloon
</TABLE>

<TABLE>
<CAPTION>
                                                                  Foreign Pending
       Application No.                                                 Title                              County
       ---------------                                            ----------------                        ------
<S>                            <C>                                                                        <C>
         94119841.8            Variable Diameter Balloon Dilatation Catheter                              Europe
          5575.1995            Balloon Catheter, Multiple Zone Balloon Catheter, and Method of Use        Japan
                               Thereof
        PCTUS97/07422          Focalized Intraluminal Balloons                                             PCT
</TABLE>

                                       16
<PAGE>
                                                   CONFIDENTIAL - EXECUTION COPY

                                    EXHIBIT B
                            LICENSE AGREEMENT BETWEEN
                          CARDIOVASCULAR DYNAMICS, INC.
                                       AND
                               GUIDANT CORPORATION
                                     REGIONS

1.       NORTH AMERICA REGION:

                  Canada
                  United States
                  Mexico

2.       EUROPEAN / MIDDLE EAST REGION:
                  KEY COUNTRIES:
                           -    France
                           -    Germany
                           -    UK
                           -    Spain
                           -    Italy

         Other countries: All countries in Europe, the Mediterranean and the
Middle East, including, but not limited to the following:

<TABLE>
<CAPTION>
REGION                          COUNTRY
<S>                             <C>
Europe                          AUSTRIA
Europe                          BELGIUM
Europe                          CZECHREP
Europe                          DENMARK
Europe                          FINLAND
Europe                          ICELAND
Europe                          IRELAND
Europe                          NEDERLAND
Europe                          NORWAY
Europe                          POLAND
Europe                          PORTUGAL
Europe                          RUSSIA
Europe                          SLOVENIA
Europe                          SWEDEN
Europe                          SWITZERLAND
Europe                          YUGOSLAVIA
Europe                          SLOVAK
Europe                          HUNGARY
M/EAST                          CYPRUS
M/EAST                          EGYPT
M/EAST                          JORDAN
M/EAST                          KUWAIT
M/EAST                          LEBANON
</TABLE>
<PAGE>
                                                   CONFIDENTIAL - EXECUTION COPY

<TABLE>
<S>                             <C>
M/EAST                          MALTA
M/EAST                          OMAN
M/EAST                          S/ARABIA
M/EAST                          SYRIA
M/EAST                          UNITED ARAB EMIRATES

MEDITER                         GREECE
MEDITER                         ISRAEL
MEDITER                         TURKEY
</TABLE>

3.       ASIA PACIFIC REGION:
                  KEY COUNTRY:
                           -    Japan

         Other countries: All countries in Asia, the Pacific Islands, Oceana and
South America, including, but not limited to the following:

<TABLE>
<CAPTION>
REGION                          COUNTRY
<S>                             <C>
NEASIA                          CHINA
NEASIA                          HONGKONG
NEASIA                          KOREA
NEASIA                          JAPAN
NEASIA                          INDONESIA
NEASIA                          MALAYSIA
NEASIA                          PHILIPPINES
NEASIA                          SINGAPORE
NEASIA                          TAIWAN
NEASIA                          THAILAND
NEASIA                          AUSTRALIA
NEASIA                          N/ZEALAND
</TABLE>
<PAGE>
                                                   CONFIDENTIAL - EXECUTION COPY

                                    EXHIBIT C
                            LICENSE AGREEMENT BETWEEN
                          CARDIOVASCULAR DYNAMICS, INC.
                                       AND
                               GUIDANT CORPORATION
                              FORM OF PRESS RELEASE

June 22, 1998--CardioVascular Dynamics Inc. (Nasdaq: CCVD) Monday announced that
they have signed an agreement with Guidant Corp.'s (NYSE:GDT) Vascular
Intervention Group to develop and market CVD's patented Focus Technology in
products designed to deliver Guidant coronary and peripheral vascular stents. In
the United States and Canada, Guidant has exclusive rights to use Focus
Technology for stent delivery. In the remainder of the world, Guidant's rights
to use Focus Technology for stent delivery are co-exclusive with CVD. CVD will
continue to sell Focus Technology for balloon dilatation procedures in the
United States and for all applications in overseas markets. In return for
granting Guidant these license rights, Guidant will pay CVD a series of payments
linked to CVD's transfer of manufacturing technology and know-how to Guidant.
CVD will also receive royalties on the sales by Guidant of products combining
Focus Technology with Guidant's stent. Internationally, CVD's Focus Technology
provides a unique method of performing coronary stent delivery using both low
and high balloon inflation pressures on a single catheter. During conventional
stent delivery, the dilatation force required to deliver the stent is
distributed over the entire length of the stent, directing the dilatation force
not only at the diseased site but also upon the adjacent vessel wall. In
contrast, CVD's Focus Technology is designed to "focalize" the majority of the
dilatation force required to deliver the stent more directly to the lesion site
so as to spare the surrounding arterial wall from potentially damaging balloon
dilatation force. Jeffrey O'Donnell, CVD chief executive officer and president
commented: "Guidant is the worldwide leader in coronary stenting. CVD's
partnership with Guidant will significantly broaden the utilization of Focus
Technology for stent delivery. In addition, this Agreement maintains CVD's
ability to continue selling Focus Technology products for current clinical
applications in both the United States and international markets. We look
forward to a long and prosperous relationship." CVD develops peripheral and
coronary stents, coronary stent delivery systems, balloon dilatation catheters
for coronary and peripheral vascular use, site-specific drug delivery catheters,
and vascular access products.

Except for historical information contained herein, this news release contains
forward looking statements, the accuracy of which are necessarily subject to
risks and uncertainties. Actual results may be affected by, among other things,
risks and uncertainties related to new product development and introduction
cycles, research and development activities, including failure to demonstrate
clinical efficacy, delays by regulatory authorities, scientific and technical
advances by CVD or third parties, introduction of competitive products, third
party reimbursement and physician training, and other risk factors and matters
set forth in the company's Form 10-K for the year ended Dec. 31, 1997 and the
company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.

CONTACT: CardioVascular Dynamics, Irvine

Stephen R. Kroll, 949/457-9546
<PAGE>

                                    EXHIBIT D
                            LICENSE AGREEMENT BETWEEN
                          CARDIOVASCULAR DYNAMICS, INC.
                                       AND
                               GUIDANT CORPORATION
                            TECHNOLOGY TRANSFER PLAN

         In order to accomplish the "Successful Completion of Technology
Transfer" each party will be responsible for completing the tasks and milestones
identified below:

<TABLE>
<CAPTION>
                  TASK                              RESPONSIBLE PARTY                      COMPLETION DATE
                  ----                              -----------------                      ---------------
<S>                                                 <C>                         <C>
1.   Identify the materials currently                      CVD                  3 weeks after the Effective Date
used to manufacture Focus Technology
balloon catheters.

2.   Identify current suppliers for each                   CVD                  3 weeks after the Effective Date
of the materials identified in Item 1
above.

3.   Identify any known limitations on                     CVD                  3 weeks after the Effective Date
access to the materials identified in
response to Item 1 above and other known
special access requirements that Guidant
will need assistance with.

4.   Identify all materials (other than                    CVD                  4 weeks after the Effective Date
those listed in response to Item 1
above) that, CVD and, to CVD's
knowledge, its suppliers tried to use in
connection with the manufacture of Focus
Technology balloon catheters.

5.   Identify all known limitations of                     CVD                  4 weeks after the Effective Date
the manufacturing process with respect
to the materials identified in response
to Items 1 and 4 above.
</TABLE>
<PAGE>
<TABLE>
<S>                                                        <C>                  <C>
6.   Identify all equipment that CVD                       CVD                  6 weeks after the Effective Date
and, to CVD's knowledge, its suppliers
use in the manufacturing process for
Focus Technology balloon catheters.

7.   Identify the suppliers of the                         CVD                  6 weeks after the Effective Date
equipment identified in response to Item
6 above known by CVD.

8.   Identify all equipment (and terms                     CVD                  6 weeks after the Effective Date
of use or sale) that CVD has available
to loan or sell to Guidant that would be
useful or necessary to manufacture Focus
Technology balloon catheters.

9.   Provide a full description of the                     CVD                  8 weeks after the Effective Date
manufacturing process for Focus
Technology balloons used by CVD,
including all pre-processing such as
extrusions or cross linking.  Give
Guidant access to process qualifications
and validations for all Focus Technology
balloon catheters manufactured by or for
CVD.

10.  Make available to Guidant the                         CVD                  8 weeks after the Effective Date
design-of-experiments ("DOEs") and other
experiments that describe limitations or
issues with the processes used and
attempted for use in the manufacture of
Focus Technology balloon catheters by CVD

11.  Provide Guidant with access to CVD                    CVD                  On-going, throughout technology
engineers and technicians who are                                               transfer (6 months)
familiar with the Focus Technology and
related manufacturing processes to
answer Guidant's questions.
</TABLE>
<PAGE>
<TABLE>
<S>                                                        <C>                  <C>
12.  Knowledgeable CVD engineers and                       CVD                  On-going, throughout technology
technicians to meet with Guidant in                                             transfer (6 months)
California to transfer know-how and
plans relating to improvements to the
manufacturing process and/or technology
for Focus Technology catheter balloons.

13.  Deliver all available technical                       CVD                  12 weeks after the Effective Date
information to Guidant (by means of
documentation and meetings with
knowledgeable CVD engineers and
technicians) pertaining to performance
capability, design limitations, and
design tradeoffs associated with the
Focus Technology.

14.  Guidant to notify CVD in writing                    Guidant                30 days after completion of all
whether CVD manufacturing processes for                                         tasks (other than "on-going")
Focus Technology balloon catheters are                                          described above.
suitable for Guidant products.
</TABLE>

If, under item 14 above, Guidant determines that CVD's manufacturing processes
for Focus Technology balloon catheters would be unsuitable for Guidant products,
then Successful Completion of Technology Transfer will be deemed to have
occurred on the earlier of the date (a) when Guidant delivers written notice of
such determination to CVD; or (b) that is thirty (30) days after completion of
all tasks (other than on-going tasks) described in Items 1-13 above.

If, under item 14 above, Guidant determines that CVD's manufacturing processes
for Focus Technology balloon catheters would be suitable for Guidant products,
then the technology transfer also will include the following tasks, and
Successful Completion of Technology Transfer will be deemed to have occurred on
the date when Guidant completes its validation and testing of the manufacturing
process, as determined by the date on which Guidant has made ten clinical uses
of a Focus Technology balloon catheter.
<PAGE>
<TABLE>
<CAPTION>
                              TASK                                                RESPONSIBLE PARTY              COMPLETION DATE
                              ----                                                -----------------              ---------------
<S>                                                                               <C>                            <C>
15. Guidant to manufacture Focus Technology balloon catheter using                Guidant and CVD
manufacturing processes provided by CVD under Items 1 through 13 above.
CVD to assist with validation and testing as requested by Guidant.
</TABLE>Employment Agreement - Jose Ferreira

	

EMPLOYMENT AGREEMENT 

        EMPLOYMENT
AGREEMENT (this “Agreement”), dated as of September 24, 2003, by and
between Eos International, Inc., a Delaware corporation, with its office located at
888 Seventh Avenue, 13th Floor, New York, New York 10106 (the
“Company”), and Jose Ferreira, Jr. with an address at 73 Turning
Mill Lane, New Canaan, Connecticut 06840 (“Executive”). 

R E  C  I  T  A  L  S: 

        WHEREAS,
the Company desires to employ Executive as its President and Chief Executive Officer, and
Executive desires to serve the Company in such capacities on the terms and conditions
hereinafter set forth. 

        NOW,
THEREFORE, it is agreed as follows: 

1.          DEFINITIONS  

               
As used in this Agreement, the following terms shall have the meanings set forth below:  

               
1.1     “2003 Plan” shall mean the Eos International, Inc. 2003 Deferred Compensation Plan.  

               
1.2     “Affiliate”shall mean a corporation which, directly or indirectly, controls, is controlled by or is under
common control with the Company, and for purposes hereof, “control” shall
mean the ownership of 20% or more of the Voting Stock of the corporation in question.  

               
1.3     “Agreement” shall
have the meaning assigned to such term in the Preamble to this Agreement.  

               
1.4     “Approved Activities” shall have the meaning assigned to such term in Section 2.2 of
this Agreement.  

               
1.5     “Basic Salary” shall have the meaning assigned to such term in Section 5.1 of
this Agreement.  

               
1.6     “Board” shall mean the Board of Directors of the Company as duly constituted from time to time. Any
action of the Board hereunder with respect to this Agreement shall require the approval
of a majority of the whole Board.  

               
1.7     “Bonus” shall have the meaning assigned to such term in Section 5.2 of this Agreement.  

               
1.8     “Business” shall mean the  business  conducted  by the  Company or any  Subsidiary,  directly or
indirectly.  

	

               
1.9     “Cause”shall
mean any of the following:  

                         
(a)     The conviction of Executive for a felony under federal law or a felony under the
          law of the State of Connecticut or an equivalent violation under the law of any
          other jurisdiction within the United States, or the willful commission by
          Executive of a criminal act or other act not in the course of the conduct by
          Executive of the Duties that in the reasonable judgment of the Board causes or
          will likely cause substantial economic damage to the Company or substantial
          injury to the business reputation of the Company;  

                         
(b)      The commission by Executive of an act of fraud in the conduct of Executive’s duties on behalf of the Company;  

                         
(c)      The continuing willful failure of Executive to conduct the substantive duties of
          Executive to the Company (other than any such failure resulting from
          Executive’s incapacity due to physical or mental illness) after written
          notice thereof (specifying the particulars thereof in reasonable detail) and a
          reasonable opportunity to be heard and cure such failure are given to Executive
          by the Compensation Committee of the Board;  

                         
(d)      The order of a federal or state regulatory agency or a court of competent
jurisdiction requiring the termination of Executive’s employment
hereunder; or  

                         
(e)      The commission by the Executive of an action involving moral turpitude which the
          Board determines in good faith will have a material adverse effect on the
          Company.  

                         
For purposes of this Section 1.9, no act, or
failure to act, on Executive’s part shall be considered “willful” unless
done, or omitted to be done, by him not in good faith and without reasonable belief that
his action or omission was in the best interests of the Company or a Subsidiary.  

               
1.10      “Change of Control” shall mean:  

                         
(a)      any “person” (as such term is used in Sections 13(d) and 14(d)           of
the Securities Exchange Act of 1934, as amended (the           “Act”)),
other than a trustee or other fiduciary holding           securities under an employee
benefit plan of the Company, any person or           “group” (as such
term is used in Regulation D-G of the           Securities and Exchange Commission under
the Act) who on the date of this           Agreement is the beneficially owner (as
defined herein) of 5% or more of any           class of equity securities of the Company,
or a person engaging in a transaction           of the type described in clause (c) of
this subsection but which does not           constitute a change in control under such
clause, is or becomes the           “beneficial owner” (as defined in
Rule 13d-3 under the Act),           directly or indirectly, of securities of the Company
representing 45% or more of           the combined voting power of the Company’s
then outstanding securities;  

                         
(b)      during any period of two consecutive years during the term of this Agreement,
          individuals who at the beginning of such period constitute the Board and any
new           director (other than a director designated by a person who has entered into
as           agreement with the Company to effect a transaction described in clauses (a),
(c) or (d) of this subsection) whose election by the Board or nomination for
          election by the Company shareholders was approved by a vote of at least
          two-thirds of the directors then still in office who either were directors at
          the beginning of the period or whose election or nomination for election was
          previously so approved, cease for any reason to constitute a majority thereof;  

2 

	

                         
(c)      the shareholders of the Company approve, or if no shareholder approval is           required
or obtained, the Company or a subsidiary of the Company completes a           merger,
consolidation or similar transaction of the Company or a subsidiary of           the
Company with or into any other corporation, or a binding share exchange
          involving the Company’s securities occurs, other than any such transaction
          which would result in the voting securities of the Company outstanding
          immediately prior thereto continuing to represent (either by remaining
          outstanding or by being converted into voting securities of the surviving
          entity) at least 51% of the combined voting power of the Voting Stock of the
          Company or such surviving entity outstanding immediately after such
transaction;           or  

                         
(d)      the shareholders of the Company approve a plan of complete liquidation of the
          Company or an agreement for the sale or disposition by the Company of all or
          substantially all the Company’s assets.  

               
1.11     “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules, regulations and
interpretations issued thereunder.  

               
1.12     “Commencement Date” shall be September 29, 2003. 

               
1.13     “Committee” shall have the meaning given such term in Section 5.1of this Agreement.  

               
1.14     “Company” shall
have the meaning given such term in the Preamble of this Agreement.  

               
1.15     “Competes” shall
mean the direct competition by a person or entity with the Company, which shall be
determined by the Board, in good faith, based upon the one or more of the following
factors: (a) whether the person or entity is engaged in the sale of children’s
educational products through a party plan sales model in the United States, (b) whether
the person or entity is engaged in for-profit fund raising activities in the United
States, (c) whether the person or entity is engaged in the sale of general merchandise,
i.e. greeting cards, gift-wrap and giftware items, utilizing an independent
representative assisted mail order sales model in Canada or the United States, and (d)
any activity of the Company added to this list by action of the Board, in good faith; provided,
that, no activity added to this list by action of the Board shall prohibit
Executive from engaging in any then current activity of Executive.  

               
1.16      “Confidential
Information” shall include, without limitation by reason of specification, any
information, including, without limitation, trade secrets, operational methods, methods
of doing business, technical processes, formulae, designs and design projects,
inventions, research projects, strategic plans, possible acquisition information and
other business affairs of the Company or its Affiliates in that it is not generally known
or available to the public, except as the result of unauthorized disclosure by or
information supplied by Executive or employees or agents of Woodclyffe, which (i) is or
are designed to be used in, or are or may be useful in connection with, the Business of
the Company, any Subsidiary or any Affiliate of any thereof, or which, in the case of any
of these entities, results from any of the research or development activities of any such
entity, or (ii) gives the Company or a Subsidiary or any Affiliate an opportunity or the
possibility of obtaining an advantage over competitors who may not know or use such
information or who are not lawfully permitted to use the same.  

3 

	

               
1.17     “Date of Termination” shall mean the Term Date, or any date upon which this Agreement
shall terminate pursuant to Section 7 of this Agreement.  

               
1.18      “Disability” shall
mean the inability of Executive to perform the Duties, if performing the Duties for the
Company or a Subsidiary, pursuant to the terms of this Agreement and by-laws of the
Company as hereinafter provided, because of physical or mental disability, where such
disability shall have existed for a period of more than 90 consecutive days or an
aggregate of 120 days in any 365 day period. The existence of a Disability means that
Executive’s mental and/or physical condition substantially interferes with Executive’s
performance of his substantive duties for the Company and/or its Subsidiaries as
specified in this Agreement. The fact of whether or not a Disability exists hereunder
shall be determined by professionally qualified medical experts selected by the Board and
reasonably acceptable to Executive or his agent.  

               
1.19     “Duties” shall
have the meaning assigned to such term in Section 2.1 of this Agreement.  

               
1.20     “Executive” shall
have the meaning assigned to such term in the Preamble of this Agreement.  

               
1.21     “Fair Market Value” shall mean the fair market value of stock, including the
Restricted Stock Award, or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined by the Committee, in
good faith, the Fair Market Value of stock as of any given date shall be determined as
follows: (i) if the stock is traded over-the-counter on the date in question, but is not
classified as a national market issue, and the stock is regularly traded in this manner,
then the Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the Nasdaq system for such date; or (ii) if
the stock is traded over-the-counter on the date in question and is classified as a
national market issue, and is regularly traded in this manner, then the Fair Market Value
shall be equal to the last-transaction price quoted by the Nasdaq system for such date;
or (iii) if the stock is traded on a stock exchange on the date in question, and is
regularly traded in this manner, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite transactions report for such date; or (iv) if
(i), (ii) or (iii) shall not apply, as the Committee shall, in good faith, determine.  

4 

	

               
1.22     “Goals” shall
mean the goals, the completion of which is a condition of the payment of the Bonus for a
fiscal year of the Company, which are to be initially proposed by Executive and approved
by the Committee as goals with respect to a specific fiscal year of the Company.  

               
1.23      “Good Reason”shall have the meaning given such term in Section 7.6 of
this Agreement.  

               
1.24     “Grant” shall
have the meaning assigned to such term in Section 5.3 of this Agreement.  

               
1.25      “Guaranteed
Amount” shall have the meaning assigned to such term in Section 5.4 of
this Agreement.  

               
1.26     “Panel” shall
have the meaning given such term in Section 8 of this Agreement.  

               
1.27     “Person” shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company,
institution, public benefit corporation, entity or government (whether federal, state,
county, city, municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).  

               
1.28     “Private Investors” shall mean the purchasers of common stock of the Company in the
Company’s $7.5 million private equity offering consummated on January 14, 2003.  

               
1.29     “Registration Rights Agreement” shall have the meaning assigned to such term in Section 5.3 of
this Agreement.  

               
1.30     “Registration Statement” shall have the meaning assigned to such term in Section 5.3 of
this Agreement.  

               
1.31     “Restricted Stock Award” shall have the meaning assigned to such term in Section 5.3 of
this Agreement.  

               
1.32     “Service
Year” shall mean each twelve-month period, or part thereof, during which
Executive is providing services to the Company hereunder, commencing on the Commencement
Date and on the same day of the subsequent calendar year and each consecutive 12 month
period thereafter.  

               
1.33     “Subsidiary” shall
mean a corporation of which more than 50% of the Voting Stock is owned, directly or
indirectly, by the Company.  

               
1.34     “Term”shall
mean the term of employment of Executive under this Agreement.  

               
1.35     “Term Date” shall have the
meaning assigned to such term in Section 3 of this Agreement.  

5 

	

               
1.36     “Trust
Agreement” shall mean the Trust Agreement to be entered into by and between the
Company and a financial institution, as trustee, the corpus of which shall be the Grant.  

               
1.37     “Voting
Stock” shall mean capital stock of a corporation which gives the holder the
right to vote in the election of directors for such corporation in the ordinary course of
business and not as the result of, or contingent upon, the happening of any event.  

               
1.38     “Woodclyffe”shall
mean Woodclyffe Group, L.L.C., a Connecticut limited liability company.  

               
Wherever from the context it appears appropriate, each
word or phrase stated in either the singular or the plural shall include the singular and
the plural, and each pronoun stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter.  

2.     SERVICES AND DUTIES OF EXECUTIVE  

               
2.1     Services; Title; Duties.   The Company hereby employs Executive, and Executive hereby accepts
employment, as President and Chief Executive Officer of the Company. The duties of
Executive (the “Duties”) shall be (i) to have general and active
management and control over the business and affairs of the Company and its Subsidiaries,
(ii) as are provided in the bylaws of the Company, (iii) those responsibilities assigned
to him by the Board consistent with the foregoing, (iv) to propose the Goals for each
fiscal year, commencing the fiscal year beginning October 1, 2003, such proposed Goals to
be submitted to the Committee no later than October 30, 2003 and 30 days prior to the
beginning of each fiscal year thereafter, and (v) services as are necessary and desirable
to protect and to advance the best interests of the Company and its Subsidiaries, acting,
in all instances, under the supervision of and in accordance with the policies set by the
Board.  

               
2.2     Performance of Duties.   Executive is engaged in other business activities which as of the date
hereof have been disclosed by Executive to the Board in writing. These activities
together with any other business activities for which Executive receives compensation
which are hereafter approved by the Board are referred to as the “Approved
Activities.” Executive agrees to disclose to the Chairman of the Board and the
General Counsel of the Company a list of Approved Activities and proposed Approved
Activities, in writing, every 90 days, commencing 90 days after the Commencement Date.
Executive shall not engage in business activities for compensation other than Approved
Activities. Executive shall devote such amount of Executive’s working time as is
necessary and appropriate (60% of Executive’s working hours are committed to
Executive’s employment hereunder) to conduct diligently the Duties as an executive
of the Company and to conduct such other executive duties as are assigned to him from
time to time by the Board. Executive agrees that the Approved Activities will be
subservient to the Duties and will not interfere with Executive’s obligations
hereunder in any material way. During the Term, except for the Approved Activities,
Executive: (i) shall comply with all laws, statutes, ordinances, rules and regulations
relating to the Business, and (ii) except for Approved Activities, shall not engage in or
become employed or otherwise retained, directly or indirectly, in a business which
Competes with the Business of the Company and its Subsidiaries, without the prior written
consent of the Board, nor shall Executive act as a consultant to or provide any services
to, whether on a remunerative basis or otherwise, the commercial or professional business
of any other Person which Competes with the Business of the Company and its Subsidiaries,
without such written consent, which, in both instances, may be given or withheld by the
Board in its absolute discretion. Activities of Woodclyffe shall not be deemed activities
of Executive unless Executive is directly engaged in such activities.  

6 

	

3.     TERM OF SERVICES  

               
The employment of Executive pursuant to this Agreement commenced as of the Commencement Date
and shall end on September 30, 2005, unless sooner terminated pursuant to Section 7of
this Agreement or unless extended for one additional year to September 30, 2006 at the
option of Executive (the “Term Date”). To exercise the foregoing option,
Executive shall give written notice to the Company of the exercise of such option no
later than August 11, 2005. Executive may not exercise such option after the earlier of
such time as (i) the Board notifies Executive that Executive’s employment hereunder
is being terminated for Cause, and (ii) Executive gives to the Company notice of
termination of Executive’s employment hereunder for any reason.  

4.     FEES,
PAYMENTS, AND BENEFITS  

               
The Company shall pay Executive as provided herein, for all of the services to be rendered by
Executive hereunder during the Term, and in consideration of the various restrictions
imposed upon Executive during the Term and the Restricted Period, and otherwise under
this Agreement, the Basic Salary and other benefits as provided for and determined
pursuant to Sections 5 and 6, inclusive, of this Agreement; provided,
however, that no amounts shall be paid to Executive under this Agreement for any
period subsequent to the termination of employment of Executive for any reason
whatsoever, except as provided in subparagraph (c) of Section 5.2 of this
Agreement, Section 5.4 of this Agreement, or Section 7 of this Agreement.  

5.     BASIC SALARY
/ BONUS  

               
5.1      Basic Salary.   The Company shall pay Executive, for all of the services to be rendered by
Executive hereunder during the Term, a fee of $50,000 per month (as adjusted upward by
the Board from time to time) (the “Basic Salary”), payable monthly (in
advance at the beginning of each month), less such deductions or amounts as are required
to be deducted or withheld by applicable laws or regulations, deductions for Executive’s
contributions to welfare benefits provided by the Company to Executive and such other
deductions or amounts, if any, as are authorized by Executive. The Basic Salary shall be
prorated for the month in which Executive’s employment pursuant to this Agreement
commences or terminates. The Basic Salary may be increased from time to time by the Board
and, once increased, shall not thereafter be reduced. The Basic Salary shall be reviewed
at least once in every Service Year by a committee of the Board responsible for
determining compensation of senior management of the Company, each of the members of
which is a “non-employee-director” as defined in Rule 16b-3 of the Securities
and Exchange Commission under the Act (the “Committee”). Any increase in
the Basic Salary shall not serve to offset or reduce any other obligation to Executive
under this Agreement.  

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5.2     Bonus.  Executive shall be eligible to receive an annual Bonus (the “Bonus”) as
follows: (a) $150,000 on December 31, 2003, (b) 75% of the Basic Salary for the fiscal
year commencing October 1, 2003, subject to achievement of the Goals for such fiscal
year, payable on November 15, 2004, and (c) 75% of the Basic Salary for the fiscal year
commencing October 1, 2004, subject to achievement of the Goals for such fiscal year,
payable on November 15, 2005 if, in connection with this clause (c), Executive is
employed by the Company as Chief Executive Officer of the Company on September 30, 2005.  

               
5.3     Restricted Stock Award. 

                         
(a)     The Grant.   On the date that the Registration Statement becomes effective,           the
Company hereby grants to the trustee under the Trust Agreement for the           benefit
of Executive 10,000,000 shares of common stock of the Company (the           “Grant”),
which shall vest as follows:  

                              
(i)      On the date that the Registration Statement becomes effective, 2,000,000 shares of
common stock of the Company of the Grant shall be fully vested and receipt of
          which shall be deferred pursuant to the terms of the 2003 Plan, subject to the
          provisions of Section 7 of this Agreement.  

                              
(ii)      On September 30, 2004, 4,000,000 shares of common stock of the Company of the
          Grant shall be fully vested, subject to (A) the right of Executive to defer
          receipt of the such shares pursuant to the terms of the 2003 Plan, and (B) the
          provisions of Section 7 of this Agreement.  

                              
(iii)      On September 30, 2005, 4,000,000 shares of common stock of the Company of the
          Grant shall be fully vested, subject to (A) the right of Executive to defer
          receipt of the such shares pursuant to the terms of the 2003 Plan, and (B) the
          provisions of Section 7 of this Agreement.  

                    
(b)       Definition.  The foregoing award of equity of the Company to Executive is           referred to as the
“Restricted Stock Award” so long as the           shares subject to the
award are not vested.  

                    
(c)      Registration.  

                              
(i)      The securities subject to the Grant will not be registered for resale under the
          Securities Act of 1933, as amended, on the date of grant.  

                              
(ii)      As soon as reasonably practicable after the date of this Agreement, the Company
          shall file with the Securities and Exchange Commission a registration statement
          on Form S-8 (the “Registration Statement”) registering the
          grant by the Company of the Grant.  

8 

	

                              
(iii)      As soon as reasonably practicable after the date of this Agreement, the Company
          and Executive shall enter into a Registration Rights Agreement (the
          “Registration Rights Agreement”), which shall provide that the
          Company shall register for resale the shares of common stock of the Company
          subject to the Grant as follows: (A) with respect to such shares notdeferred in
accordance with this Agreement and the 2003 Plan, as soon as           reasonably
practicable following vesting, and (B) with respect to such shares deferred in
accordance with this Agreement and the 2003 Plan, as soon as           reasonably
practicable following expiration of such deferral. No registration           rights
granted under the Registration Rights Agreement shall be more favorable           than
registration rights granted to the Private Investors.  

                    
(d)      Certificates for Stock.   The Restricted Stock Award may be evidenced in           such manner as
the Committee shall determine. If certificates representing such           shares are
registered in the name of Executive, the Committee may require that           such
certificates bear an appropriate legend referring to the terms, conditions,           and
restrictions applicable to the Restricted Stock Award.  

                    
(e)      Trust.  The certificates representing shares of common stock of the           Company subject to
the Grant shall be held in trust pursuant to the terms and           conditions of the
Trust Agreement, pending distribution of the shares to           Executive (or Executive’s
beneficiaries or estate in the event of the death           of Executive) or the Company
in accordance with the Trust Agreement.  

                    
(f)      Rights Upon Deferral.   To the extent that any portion of the Restricted           Stock Award
is deferred under the 2003 Plan pursuant to Section 5.3 of           this
Agreement, Executive’s rights with respect to such deferred shares,           once
deferred, shall be determined in accordance with the provisions of the 2003
          Plan, except as otherwise specifically provided in this Agreement.  

                    
(g)      Voting Rights.   The Compensation Committee of the Board of Directors of           the Company
may direct the trustee under the Trust Agreement as to the voting of           the shares
so held in trust and the Compensation Committee’s instructions           shall be
subject to the fiduciary duties of the trustee. Any dividends on shares           held in
trust pursuant to the Trust Agreement shall be held in trust until such           time as
the shares upon which such dividends were paid are distributed in           accordance
with the Trust Agreement.  

                    
(h)      Restrictions on Transfer.   Executive may not offer, sell, transfer, or           otherwise dispose
of any shares granted pursuant to the Restricted Stock Award           prior to the
vesting thereof. Executive understands and acknowledges that shares           granted to
Executive under this Agreement, whether Restricted Stock or           otherwise, may not
be offered, sold, transferred, or otherwise disposed of           (“Transferred”)
except in accordance with the Securities Act of           1933, as amended, the rules and
regulations thereunder, and all applicable state           securities laws, and may not
be Transferred during any Company imposed blackout           periods.  

                    
(i)      Withholding Taxes.   It shall be a condition to delivery of a vested           portion of the
Restricted Stock Award (whether a distribution under the 2003           Plan or
otherwise) that Executive must satisfy all applicable federal, state and           local
income tax, employment tax, and withholding requirements by payment of           cash of
such amounts to the Company. It shall also be a condition of any           deferral under
the 2003 Plan that Executive shall satisfy all applicable           employment tax
withholding requirements attributable to such deferral by payment           of cash of
such amounts to the Company. Failure to pay such amounts in full           within 30 days
after the date due shall result in forfeiture of the Restricted           Stock Award
with respect to which such payment is due.  

                    
(j)      Beneficiaries.  Executive may designate a beneficiary to be assigned the           portion of the
Restricted Stock Award granted but unvested at the time of           Executive’s
death to which Executive’s estate or legatees are entitled           pursuant to Section
7 of this Agreement. If no beneficiary has been named           by Executive at the
time of death, any unvested portion of the Restricted Stock           Award shall be
transferred to Executive’s estate to the extent provided in Section 7 of this
Agreement.  

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5.4      Guaranteed Amount.   If Executive is the Chief Executive Officer of the Company on September 30,
2005, the Company shall pay Executive on November 15, 2005 the amount by which the
aggregate of the Basic Salary paid through September 30, 2005, plus the Bonus paid
through November 15, 2005, is less than $2,000,000 (the “Guaranteed Amount”).
The Guaranteed Amount shall be paid in cash unless the Committee determines in good faith
that the payment of the Guaranteed Amount in cash (i) would render the Company insolvent,
or (ii) leave the Company unable to meet its obligation as they accrue, or (iii) would
violate the provisions of an agreement to which the Company is a party which had been
approved by Executive, in which event the Guaranteed Amount shall be paid in the form of
shares of common stock of the Company valued at Fair Market Value by the Committee, or in
the event such form of payment is deemed by the Committee, in good faith, to be
unavailable or not desirable, then in the form of five year subordinated notes with an
interest rate equal to the prime or base rate of interest charged by banks with their
main offices located in the City of New York, as reported in the Wall Street Journal or a
similar publication, such notes to provide that all principal and interest thereon shall
be paid at maturity.  

          
5.5      Change of Control.   Upon a Change of Control that occurs prior to the Date of Termination,
(i) Executive shall receive the same payments and benefits as Executive would have
received if Executive’s employment was terminated without Cause pursuant to Section
7.5 of this Agreement, except with respect to the vesting of unvested portions of the
Grant, and (ii) to the extent to which such Change of Control occurs prior to the vesting
of any portion of the Grant, any unvested portion of the Grant shall immediately
accelerate and vest as of the date of such Change of Control.  

          
5.6.      Withholding Taxes.   As an employee of the Company, Executive’s Basic           Salary and
Bonus shall be subject to all applicable federal, state, and local           income tax,
employment tax, and withholding requirements.  

10 

	

6.     ADDITIONAL BENEFITS AND REIMBURSEMENT FOR EXPENSES

          
6.1      Additional Benefits.    The Company shall provide the following  additional  benefits to Executive
during the Term:  

                    
(a)      provision of a comprehensive medical indemnity policy for Executive and his           family having
terms no less favorable than the coverage made available to other           executives of
the Company;  

                    
(b)      a comprehensive disability policy for Executive having terms no less favorable
          than coverage made available to other executives of the Company;  

                    
(c)      such other benefits as the Board shall lawfully adopt and approve for Executive.  

          
6.2      Reimbursement for Expenses.   The Company shall pay or reimburse Executive for all reasonable
expenses actually incurred or paid by Executive during the Term in the provision of his
services hereunder upon presentation of such bills, expense statements, vouchers or such
other supporting information as the Board may reasonably require. In the event the
Company requires Executive to travel on business during the Term, Executive shall be
entitled to first class air travel and shall be reimbursed for any travel expenses in
accordance with this Section 6.2.  

7.     TERMINATION OF SERVICES  

          
7.1      Death.   If
Executive dies during the Term, this Agreement shall terminate upon the date of death of
Executive. Except as set forth in this Section 7.1, upon the death of Executive,
Executive shall receive no further payments hereunder. Upon the death of Executive:  

                    
(a)      the designated beneficiaries of Executive, or if none are designated,           Executive’s
estate, shall receive at the end of the fiscal year in which           Executive dies
only the pro rata portion of the Bonus, if any, earned during the           period
commencing at the beginning of the fiscal year (as described in Section 5.2 of
this Agreement) in which Executive’s death occurred           and ending on the date
of the death of Executive, subject to achievement of the           Goals for such fiscal
year.  

                    
(b)      in the event that Executive’s death occurs prior to September 30, 2004,           then
the portion of the Restricted Stock Award scheduled to vest on September           30,
2004 pursuant to Section 5.3(a)(ii) of this Agreement equal to the
          product of 10,928.96174 multiplied by the number of days elapsed during the
          period beginning on October 1, 2003 and ending on the date of death, inclusive,
          rounded up to the nearest whole share, shall immediately vest and be
distributed           to the designated beneficiaries of Executive hereunder, or if none
are           designated, to the Executive’s estate.  

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(c)      in the event that Executive’s death occurs after September 30, 2004 but
          before September 30, 2005, then the portion of the Restricted Stock Award
          scheduled to vest on September 30, 2005 pursuant to Section 5.3(a)(iii)          of
this Agreement equal to the product of 10,958.9041 multiplied by the number           of
days elapsed during the period beginning on October 1, 2004 and ending on the
          date of death, inclusive, rounded up to the nearest whole share, shall
          immediately vest and be distributed to the designated beneficiaries of
Executive           hereunder, or if none are designated, to the Executive’s estate.  

                    
(d)      except as indicated in Section 7.1(b) or Section 7.1(c) above, any           other
portion of the Restricted Stock Award that is unvested on the date of           death
shall terminate and be null and void as of such date.  

                    
(e)      notwithstanding the foregoing, any portion of the Restricted Stock Award, the           vesting date of
which had occurred, but the receipt of which was deferred by           Executive pursuant
to Section 5.3 of this Agreement and the 2003 Plan,           shall be disposed of
in accordance with the provisions of the 2003 Plan.  

                    
(f)      the Company shall reimburse Executive’s estate for any unreimbursed           expenses
incurred by Executive prior to the date of death and which the Company           is
required to reimburse pursuant to Section 6.2 of this Agreement.  

          
7.2      Disability.   If, during the Term, Executive has a Disability, the Company may, at any time after Executive
has a Disability, terminate this Agreement by written notice to Executive. Except as set
forth in this Section 7.2, upon termination of Executive due to Disability,
Executive shall receive no further payments hereunder. Upon termination by the Company
due to Executive’s Disability:  

                    
(a)      Executive shall receive at the end of the fiscal year in which Executive is           terminated
due to Disability only the pro rata portion of the Bonus, if any,           earned during
the period commencing at the beginning of the fiscal year (as           described in Section
5.2 of this Agreement) in which the termination for           Disability occurred and
ending on the Date of Termination due to Disability,           subject to achievement of
the Goals for such fiscal year.  

                    
(b)      in the event that such termination occurs prior to September 30, 2004, then the
          portion of the Restricted Stock Award scheduled to vest on September 30, 2004
          pursuant to Section 5.3(a)(ii) of this Agreement equal to the product of
          10,928.96174 multiplied by the number of days elapsed during the period
          beginning on October 1, 2003 and ending on the Date of Termination due to
          Disability, inclusive, rounded up to the nearest whole share, shall immediately
          vest and be distributed to Executive.  

                    
(c)      in the event that such termination occurs after September 30, 2004 but before
          September 30, 2005, then the portion of the Restricted Stock Award scheduled to
          vest on September 30, 2005 pursuant to Section 5.3(a)(iii) of this
          Agreement equal to the product of 10,958.9041 multiplied by the number of days
          elapsed during the period beginning on October 1, 2004 and ending on the Date
of           Termination due to Disability, inclusive, rounded up to the nearest whole
share,           shall immediately vest and be distributed to Executive.  

12 

	

                    
(d)      except as indicated in Section 7.2(b) or Section 7.2(c) above, any           other
portion of the Restricted Stock Award that is unvested on the Date of
          Termination due to Disability shall terminate and be null and void as of such
          date.  

                    
(e)      notwithstanding the foregoing, any portion of the Restricted Stock Award, the           vesting date of
which had occurred, but the receipt of which was deferred by           Executive pursuant
to Section 5.3 of this Agreement and the 2003 Plan,           shall be disposed of
in accordance with the provisions of the 2003 Plan.  

                    
(f)      the Company shall reimburse Executive for any unreimbursed expenses incurred by
          Executive prior to the Date of Termination due to Disability and which the
          Company is required to reimburse pursuant to Section 6.2 of this
          Agreement.  

          
7.3      Voluntary Termination.   This Agreement may be terminated by Executive at any time with or
without cause upon 60 days prior written notice to the Company. After such sixty day
period, the Company shall have no further liability to make payments hereunder except
those required by law or which were accrued and unpaid at the Date of Termination and
Executive shall forfeit all unvested portions of the Restricted Stock Award.  

          
7.4      Termination for Cause.   The Company may terminate Executive’s employment hereunder for Cause
at any time by written notice given to Executive by the Board. Upon such termination
Executive shall not have any right to receive any further payments hereunder, except for
cash amounts accrued and unpaid hereunder prior thereto and provide welfare benefits as
required by law and except as provided in Section 7.8 of this Agreement, and
Executive shall forfeit all unvested portions of the Restricted Stock Award.  

          
7.5      Termination  Without Cause.   In the event that Executive's  employment  hereunder is terminated by the
Company without Cause:  

                    
(a)      Executive shall continue to receive the Basic Salary for a period beginning on           the Date
of Termination and ending on the earlier to occur of (i) the 12 month
          anniversary of the Date of Termination, and (ii) the Term Date. Executive shall
          also receive, at the end of the fiscal year in which the Date of Termination
          occurs, the pro rata portion of the Bonus, if any, earned during the period
          commencing at the beginning of the fiscal year (as described in Section
          5.2 of this Agreement) in which such termination occurred and ending on the
          Date of Termination, subject to achievement of the Goals for such fiscal year.  

                    
(b)      Executive shall be entitled to the Guaranteed Amount and:  

                              
(i)      in the event that such termination occurs prior to September 30, 2004, then the
          portion of the Restricted Stock Award scheduled to vest on September 30, 2004
          pursuant to Section 5.3(a)(ii) of this Agreement equal to the product of
          10,928.96174 multiplied by the number of days elapsed during the period
          beginning on October 1, 2003 and ending on the Date of Termination, inclusive,
          rounded up to the nearest whole share, shall immediately vest and be
distributed           to Executive.  

13 

	

                              
(ii)      in the event that such termination occurs after September 30, 2004 but before
          September 30, 2005, then the portion of the Restricted Stock Award scheduled to
          vest on September 30, 2005 pursuant to Section 5.3(a)(iii) of this
          Agreement equal to the product of 10,958.9041 multiplied by the number of days
          elapsed during the period beginning on October 1, 2004 and ending on the Date
of           Termination, inclusive, rounded up to the nearest whole share, shall
immediately           vest and be distributed to Executive.  

                              
(iii)      as indicated in Section 7.5(b)(i) or Section 7.5(b)(ii)          above, any
other portion of the Restricted Stock Award that is unvested on the           Date of
Termination shall terminate and be null and void as of such date.  

                              
(iv)      notwithstanding the foregoing, any portion of the Restricted Stock Award, the           vesting date of
which had occurred, but the receipt of which was deferred by           Executive pursuant
to Section 5.3 of this Agreement and the 2003 Plan,           shall be disposed of
in accordance with the provisions of the 2003 Plan.  

                              
(v)      the Company shall reimburse Executive for any unreimbursed expenses incurred by
          Executive prior to the Date of Termination which the Company is required to
          reimburse pursuant to Section 6.2 of this Agreement.  

                    
(c)      The Company shall have no further obligation to make any payment of the Basic
          Salary or the Bonus, except as set forth in Section 7.5 of this
          Agreement.  

          
7.6.      Termination for Good Reason.   In the event Executive terminates           Executive’s
employment hereunder for Good Reason, Executive shall receive           the same payments
and benefits as Executive would have received if           Executive’s employment
hereunder was terminated without Cause pursuant to Section 7.5 of this Agreement;
provided, that, in the event           of a termination of Executive’s
employment hereunder for Good Reason as a           result of Section 7.6(h) of
this Agreement, then Section 5.5 of           this Agreement shall govern with
respect to the vesting of the Grant.           “Good Reason” for
purposes of this Agreement means:  

                    
(a)      the assignment by the Company to Executive of duties which are materially           different
than those as described in this Agreement;  

                    
(b)      the removal of Executive from, or any failure to reappoint or reelect Executive           to,
the highest title held by Executive, except in connection with a termination           of
Executive’s employment hereunder for Cause, or by reason of           Executive’s
death or Disability;  

                    
(c)      a reduction or non-payment of the Basic Salary or failure to review the Basic
          Salary as required by this Agreement or failure to pay the Bonus, as required
by           this Agreement;  

                    
(d)      a material breach by the Company of this Agreement which is not cured within 30
          days after written notice thereof to the Board by Executive;  

14 

	

                    
(e)      requiring Executive to be based anywhere other than New Canaan, Connecticut,           except for
required travel on the Company’s business;  

                    
(f)      the failure to deliver the Restricted Stock Award as provided by this Agreement           or
the 2003 Plan or the failure to pay the Guaranteed Amount in accordance with
          this Agreement;  

                    
(g)      the failure of the Company to obtain the express written assumption of and
          agreement to perform this Agreement by any successor as contemplated in Section
13 of this Agreement; or  

                    
(h)      a Change of Control shall occur.  

          
7.7      Notice of Termination.   Any purported termination of Executive’s employment hereunder by
reason of Executive’s Disability or for Cause, or by Executive for Good Reason shall
be communicated by written Notice of Termination to the other party hereto. For purposes
of this Agreement, a “Notice of Termination” shall mean a notice given
by Executive or the Company, which shall indicate the specific basis for termination of
Executive’s employment hereunder and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for determination of any payments under this
Agreement.  

          
7.8      Date of Termination.   For purposes of this Agreement, “Date of Termination” shall
mean the date of termination of Executive’s employment specified in the Notice of
Termination, which shall not be more than 90 days after such Notice of Termination is
given, as such date may be modified pursuant to the following two sentences. If within 30
days after any Notice of Termination is given, the party who receives such Notice of
Termination notifies the other party that a dispute regarding the basis for termination
of employment of Executive hereunder or the determination of any payments to Executive
under this Agreement (a “Dispute”) exists (a “Notice of Dispute”),
the Date of Termination shall be the date on which the Dispute is finally determined,
either by mutual written agreement of the parties, by the Panel, or by a final judgment,
order or decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected); provided, that, the
Date of Termination shall be extended by a Notice of Dispute only if such notice is given
in good faith and the party giving such notice pursues the resolution of such Dispute
with reasonable diligence, and provided further that pending the resolution of any such
Dispute, the Company shall continue to pay the Basic Salary and to provide Executive with
the same or substantially comparable welfare benefits and prerequisites, to the extent
then so available at the date of such determination, but in no event beyond the Term
Date. Should a Dispute ultimately be determined in favor of the Company, then all sums
(net of tax withholdings by the Company from such sums) paid by the Company from the Date
of Termination specified in the Notice of Termination until final resolution of the
Dispute pursuant to this paragraph shall be repaid promptly by Executive to the Company.
Executive shall not be obligated to pay to the Company the cost of providing Executive
with welfare benefits and prerequisites for such period, unless the final judgment, order
or decree of a court arbitration panel or other body resolving the Dispute determines
that Executive acted in bad faith in giving a Notice of Dispute. Should a Dispute
ultimately be determined in favor of Executive, then Executive shall be entitled to
retain all sums paid and receive the Bonus and such portion of the Restricted Stock Award
which would have been received but for the Dispute and the Guaranteed Amount (if any) if
then due to Executive pursuant to Section 5.4 of this Agreement, and Executive
shall be entitled to receive, in addition, the payments and other benefits provided for
in this Section 7 to the extent not previously paid hereunder and the payment of
Executive’s reasonable legal fees incurred as a result of such Dispute upon
submission to the Company of a detailed statement of fees from Executive’s
attorneys.  

15 

	

8.     ARBITRATION  

          
8.1      Except as otherwise provided herein, the parties hereby agree that any Dispute or any dispute
regarding the rights and obligations of any party under this Agreement or under any law
governing the relationship created by this Agreement, including without limitation
Executive’s challenge of a purported termination for Cause or Disability, must be
resolved pursuant to this Section 8. Within seven days after either party’s
written notice to the other of his or its desire to submit any Dispute or arbitrable
matter as set forth herein to arbitration, the parties will meet to attempt to amicably
resolve their differences and, failing such resolution, either or both of the parties may
submit the matter to mandatory and binding arbitration with the Center for Public
Resources (“CPR”). The issue(s) in dispute shall be settled by
arbitration in accordance with the Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes, by a panel of three arbitrators (the “Panel”).
The only issue(s) to be determined by the Panel will be those issues specifically
submitted to the Panel. The Panel will not extend, modify or suspend any of the terms of
this Agreement. The arbitration shall be governed by the United States Arbitration Act, 9
U.S.C. §1-16, and judgment upon the award rendered by the Panel may be entered by
any court having jurisdiction thereof. A determination of the Panel shall be by majority
vote.  

          
8.2      Promptly following receipt of the request for arbitration, CPR shall convene the parties in person
or by telephone to attempt to select the arbitrators by agreement of the parties. If
agreement is not reached, the Company shall select one arbitrator and Executive shall
select one other arbitrator. These two arbitrators shall select a third arbitrator. If
these two arbitrators are unable to select the third arbitrator by mutual agreement, CPR
shall submit to the parties a list of not less than 11 candidates. Such list shall
include a brief statement of each candidate’s qualifications. Each party shall
number the candidates in order of preference, shall note any objection they may have to
any candidate, and shall deliver the list so marked back to CPR. Any party failing
without good cause to return the candidate list so marked within 10 days after receipt
shall be deemed to have assented to all candidates listed thereon. CPR shall designate
the arbitrator willing to serve for whom the parties collectively have indicated the
highest preference and who does not appear to have a conflict of interest. If a tie
should result between two candidates, CPR may designate either candidate.  

          
8.3      This agreement to arbitrate is specifically enforceable. Judgment upon any award rendered by
the Panel may be entered in any court having jurisdiction. The decision of the Panel
within the scope of the submission is final and binding on all parties, and any right to
judicial action on any matter subject to arbitration hereunder hereby is waived (unless
otherwise provided by applicable law), except suit to enforce this arbitration award or
in the event arbitration is not available for any reason or in the event the Company
shall seek equitable relief to enforce Section 9 of this Agreement. If the rules
of the CPR differ from those of this Section 8, the provisions of this Section 8will
control. The Company shall pay all the costs of arbitration including the fees of the
arbitrators, and the arbitrators shall award reasonable legal fees to Executive, unless
the arbitrators or a judicial forum shall finally determine that Executive acted in bad
faith.  

16 

	

9.     CONFIDENTIAL INFORMATION AND PROPRIETARY INTERESTS  

          
9.1      Acknowledgment of Confidentiality. 

                    
(a)      Executive understands and acknowledges that Executive may obtain Confidential           Information
during the course of Executive’s employment hereunder.           Accordingly,
Executive agrees that Executive shall not, either during the Term           or at any
time within one year after the Date of Termination (the           “Restricted
Period”), (i) use or disclose any such Confidential           Information
outside the Company, its Subsidiaries and Affiliates; or (ii) except           as
required in the proper conduct of Executive’s duties hereunder, remove           or
aid in the removal of any Confidential Information or any property or           material
relating thereto from the premises of the Company or any Subsidiary or
          Affiliate.  

                    
(b)      The foregoing confidentiality provisions shall cease to be applicable to any
          Confidential Information which becomes generally available to the public
(except           by reason of or as a consequence of a breach by Executive of his
obligations           under this Section 9).  

                    
(c)      In the event Executive is required by law or a court order to disclose any such
          Confidential Information, Executive shall promptly notify the Company of such
          requirement and provide the Company with a copy of any court order or of any
law           which in his opinion requires such disclosure and, if the Company so
elects, to           the extent that Executive is legally able, permit the Company an
adequate           opportunity, at its own expense, to contest such law or court order.  

                    
(d)      This Agreement shall constitute an agreement to maintain disclosed information           in
confidence for purposes of Rule 100(b)(ii) of Regulation FD promulgated
          pursuant to the Act. All obligations as to non-disclosure shall cease as to any
          part of such information to the extent that such information is or becomes
          public other than as a result of a breach of this provision.  

          
9.2      Delivery of Material.   Executive shall promptly, and without charge, deliver to the Company on
the termination of Executive’s employment hereunder, or at any other time the
Company may so request, all memoranda, notes, records, reports, manuals, computer disks,
videotapes, drawings, blueprints and other documents (and all copies thereof) relating to
the Business of the Company, its Subsidiaries and its Affiliates, and all property
associated therewith, which Executive may then possess or have under his control.  

17 

	

10.     SURVIVAL  

                  
The provisions of Sections5.2, 7, 8, 9, and 10shall survive
termination of this Agreement and remain enforceable according to their terms.  

11.     SEVERABILITY  

                 
The invalidity or unenforceability of any provision of this Agreement shall in no way affect the
validity or enforceability of any other provisions hereof.  

12.     NOTICES  

                 
All  notices, demands and requests required or permitted to be given under the provisions of this
Agreement shall be deemed duly given if made in writing and delivered personally or
mailed by postage prepaid certified or registered mail, return receipt requested,
accompanied by a second copy sent by ordinary mail, which notices shall be addressed as
follows:  

		
		If to the Company:	
	 	 	 
		Eos International, Inc.

888 Seventh Avenue, 13th Floor,
New York, New York 10106
Attn:  Peter A. Lund	 
	 	 	 
		with a copy to:	 
	 	 	  
		Pitney, Hardin, Kipp & Szuch LLP

200 Campus Drive
Florham Park, New Jersey 07932
Attn:  Frank E. Lawatsch, Jr., Esq.	 
	 	 	  
		If to Executive:	 
	 	 	  
		Jose Ferreira, Jr.
73 Turning Mill Lane
New Canaan, Connecticut 06840	 

	

                
 By notifying the other parties in writing, given as aforesaid, any party may from time to time change
its address or the name of any person to whose attention notice is to be given, or may
add another person to whose attention notice is to be given, in connection with notice to
any party.  

18 

	

13.     ASSIGNMENT AND SUCCESSORS  

              
   Neither this Agreement nor any of his rights or duties hereunder may be assigned or delegated by
Executive. This Agreement is not assignable by the Company, including, without
limitation, to any successor in interest which takes over all or substantially all of the
business of the Company, as it is conducted at the time of such assignment, without the
written consent of Executive. Any corporation into or with which the Company is merged or
consolidated or which takes over all or substantially all of the business of the Company
shall be deemed to be a successor of the Company for purposes hereof and the Company
shall require as a condition thereof that such corporation assume this Agreement in form
and substance satisfactory to Executive. This Agreement shall be binding upon and, except
as aforesaid, shall inure to the benefit of the parties and their respective successors
and permitted assigns.  

14.     ENTIRE AGREEMENT, WAIVER AND OTHER  

          
14.1.      Integration.   This Agreement, together with the Engagement
Agreement by and between the Company and Woodclyffe dated September 24, 2003, the Trust Agreement, the 2003           Plan, and any deferral
election made by Executive under the 2003 Plan, contains           the entire agreement
of the parties hereto on its subject matter and supersedes           all previous
agreements between the parties hereto, written or oral, express or           implied,
covering the subject matter hereof. No representations, inducements,           promises
or agreements, oral or otherwise, not embodied herein, shall be of any           force or
effect.  

          
14.2.      No Waiver.  

                    
(a)      No waiver or modification of any of the provisions of this Agreement shall be
          valid unless in writing and signed by or on behalf of the party granting such
          waiver or modification. No waiver by any party of any breach or default
          hereunder shall be deemed a waiver of any repetition of such breach or default
          or shall be deemed a waiver of any other breach or default, nor shall it in any
          way affect any of the other terms or conditions of this Agreement or the
          enforceability thereof. No failure of the Company to exercise any power given
it           hereunder or to insist upon strict compliance by Executive with any
obligation           hereunder, and no custom or practice at variance with the terms
hereof, shall           constitute a waiver of the right of the Company to demand strict
compliance with           the terms hereof.  

                    
(b)      Executive shall not have the right to sign any waiver or modification of any           provisions
of this Agreement on behalf of the Company, nor shall any action           taken by
Executive reduce his obligations under this Agreement.  

                    
(c)      This Agreement may not be supplemented or rescinded except by instrument in           writing
signed by all of the parties hereto after the date hereof. Neither this
          Agreement nor any of the rights of any of the parties hereunder may be
          terminated except as provided herein. Executive may not sign any document on
          behalf of the Company which amends this Agreement.  

19 

	

15.     MISCELLANEOUS  

          
15.1      Governing  Law.  This  Agreement  shall  be  governed  by  and  construed,  and  the  rights  and
obligations of the parties hereto enforced, in accordance with the laws of the State of
Connecticut.  

          
15.2      Headings.   The section and subsection headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.  

          
15.3      Severability.   The invalidity or  unenforceability  of any provision of this  Agreement  shall in no
way affect the validity or enforceability of any other provisions hereof.  

          
15.4      Obligations of Company.  The Company’s obligation to pay for the services provided by
Executive hereunder and to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right which the
Company may have against Executive or anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand. Except as expressly provided herein,
the Company waives all rights which it may now have or may hereafter have conferred upon
it, by statute or otherwise, to terminate, cancel or rescind this Agreement in whole or
in part. Except as provided in Section 7.8 of this Agreement, each and every
payment made hereunder by the Company shall be final and the Company will not seek to
recover for any reason all or any part of such payment from Executive or any person
entitled thereto. Executive shall not be required to mitigate the amount of any payment
or other benefit provided for in this Agreement by seeking other employment or otherwise.  

          
15.5      Rights of Beneficiaries of Executive.   In the event of Executive’s death only, this
Agreement shall inure to the benefit of, and be enforceable by, Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts would still be payable
to Executive pursuant to Section 7.1 of this Agreement, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement
to Executive’s beneficiary (if one is designated pursuant to this Agreement) or, if
there be no such beneficiary designated, to Executive’s estate.  

20 

	

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above, to be effective as of the Commencement Date. 

	 		

JOSE FERREIRA, JR.

——————————————

Jose Ferreira, Jr., Individually

			EOS INTERNATIONAL, INC.

By:  PETER A. LUND
——————————————

Name:     Peter A. Lund

Title:       Chairman of the Board

	

21

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