-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PmTK0tdEaozZh2iAnCPfsCl3WYUzG+4xBbj1YNaB6s9HTGfUBqGmD/nZbOHSyPhf ZCCOP/qoGU14X5XdogM2iQ== 0000891836-03-000336.txt : 20030521 0000891836-03-000336.hdr.sgml : 20030521 20030521160830 ACCESSION NUMBER: 0000891836-03-000336 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20030521 GROUP MEMBERS: PHILIPS ELECTRONICS NORTH AMERICA CORPORATION GROUP MEMBERS: PHILIPS HOLDING USA INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIAMETRICS MEDICAL INC CENTRAL INDEX KEY: 0000895380 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 411663185 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42757 FILM NUMBER: 03714663 BUSINESS ADDRESS: STREET 1: 2658 PATTON RD CITY: ROSEVILLE STATE: MN ZIP: 55113 BUSINESS PHONE: 6516398035 MAIL ADDRESS: STREET 1: 2658 PATTON ROAD CITY: ROSEVILLE STATE: MN ZIP: 55113 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KONINKLIJKE PHILIPS ELECTRONICS NV CENTRAL INDEX KEY: 0000313216 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600] IRS NUMBER: 000000000 STATE OF INCORPORATION: P7 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: REMBRANDT TOWER AMSTELPLEIN 1 STREET 2: 1096 HA AMSTERDAM CITY: THE NETHERLANDS BUSINESS PHONE: 0113140791 MAIL ADDRESS: STREET 1: REMBRANDT TOWER AMSTELPLEIN 1 STREET 2: 1096 HA AMSTERDAM CITY: THE NETHERLANDS FORMER COMPANY: FORMER CONFORMED NAME: PHILIPS ELECTRONICS N V DATE OF NAME CHANGE: 19930727 FORMER COMPANY: FORMER CONFORMED NAME: PHILIPS NV DATE OF NAME CHANGE: 19910903 SC 13D/A 1 sc0155.txt AMENDMENT NO. 1 TO SCHEDULE 13D CONFORMED COPY OMB APPROVAL --------------------------- OMB Number: 3235-0145 Expires: December 31, 2005 Estimated average burden hours per response:......11 --------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A (AMENDMENT NO. 1) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(a). DIAMETRICS MEDICAL, INC. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.01 PER SHARE - -------------------------------------------------------------------------------- (Title of Class of Securities) 252532 10 6 - -------------------------------------------------------------------------------- (CUSIP Number) BELINDA W. CHEW PHILIPS ELECTRONICS NORTH AMERICA CORPORATION 1251 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10020 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 10, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). PERSONS WHO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. SEC 1746 (03-00) SCHEDULE 13D/A - -------------------------------------------------------------------------------- CUSIP No. 252532 10 6 Page 2 of 18 Pages - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS KONINKLIJKE PHILIPS ELECTRONICS N.V. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION THE NETHERLANDS - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,809,524 NUMBER OF -------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 0 EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 1,809,524 -------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,809,524 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.66% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO/HC - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION SCHEDULE 13D/A - -------------------------------------------------------------------------------- CUSIP No. 252532 10 6 Page 3 of 18 Pages - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS PHILIPS HOLDING USA INC. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,809,524 NUMBER OF -------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 0 EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 1,809,524 -------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,809,524 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.66% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO/HC - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION SCHEDULE 13D/A - -------------------------------------------------------------------------------- CUSIP No. 252532 10 6 Page 4 of 18 Pages - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS PHILIPS ELECTRONICS NORTH AMERICA CORPORATION - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARES - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,809,524 NUMBER OF -------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 0 EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 1,809,524 -------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,809,524 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.66% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO/HC - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION This Statement is hereby amended and restated in its entirety as follows: ITEM 1. SECURITY AND ISSUER. The class of equity securities to which this statement relates is the shares of Common Stock, $0.01 par value per share (the "Shares"), of Diametrics Medical, Inc., a Minnesota corporation ("Diametrics"). The principal executive office of Diametrics is located at 2658 Patton Road, Roseville, Minnesota 55113. ITEM 2. IDENTITY AND BACKGROUND. (a) This statement is being filed by Koninklijke Philips Electronics N.V. ("KPENV"), Philips Holding USA Inc. ("PHUSA") and Philips Electronics North America Corporation ("PENAC" and, collectively with KPENV and PHUSA, the "Reporting Persons"). PENAC is a wholly owned subsidiary of PHUSA, which, in turn, is a wholly owned subsidiary of KPENV. Certain information concerning each director and executive officer of (i) KPENV is set forth in Schedule I hereto and incorporated herein by reference, (ii) PHUSA is set forth in Schedule II hereto, and (iii) PENAC is set forth in Schedule III hereto and is, in each case, incorporated herein by reference. (b) The principal business address of KPENV is Breitner Centre, Amstelplein 2, 1096 BC Amsterdam, The Netherlands. The principal business address of PHUSA and PENAC is 1251 Avenue of the Americas, New York, New York 10020. (c) The primary business of each of the Reporting Persons is the manufacture and distribution of electronic and electrical products, systems and equipment, as well as information technology services. (d) None of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the individuals listed on Schedule I, II or III has, during the past five years, been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the individuals listed on Schedule I, II or III has, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) KPENV is a company incorporated under the laws of the Netherlands. PHUSA and PENAC are Delaware corporations. This Item 2 is qualified in its entirety by reference to Schedules I, II and III, which are incorporated herein by reference. Page 5 of 18 Pages ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to the Asset Purchase Agreement, dated as of November 17, 2000, between KPENV and Agilent Technologies, Inc., a Delaware corporation ("Agilent"), on August 1, 2001, PENAC acquired, as part of KPENV's acquisition of Agilent's healthcare solutions assets, 1,357,143 Shares and a warrant to purchase from Diametrics 452,381 Shares at a price per Share of $8.40 (the "Warrant"), which Warrant expires on August 4, 2003. KPENV paid Agilent approximately $1.7 billion for such healthcare solutions assets, and a separate price for the Shares and/or the Warrant was not specified or agreed. There have been no transactions by the Reporting Persons in securities of Diametrics in the last 60 days. None of the persons listed on Schedules I, II or III hereto has contributed any funds or other consideration towards the purchase of the Shares reported in this statement. ITEM 4. PURPOSE OF THE TRANSACTION. Other than as set forth herein, none of the Reporting Persons, or to the best knowledge and belief of the Reporting Persons, any of the individuals listed on Schedules I, II or III hereto has plans or proposals which relate to or would result in any of the events described by Items 4(a) through 4(j) of Schedule 13D. Each Reporting Person expects to evaluate on an ongoing basis Diametrics' financial condition, business operations and prospects, market price of the Shares, conditions in securities markets generally, general economic and industry conditions and other factors. Accordingly, each Reporting Person reserves the right to change its plans and intentions at any time, as it deems appropriate. In particular, each Reporting Person may at any time and from time to time acquire additional Shares or securities convertible or exchangeable for Shares; may dispose of Shares; and/or may enter into privately negotiated derivative transactions with institutional counterparties to hedge the market risk of some or all of its positions in such Shares. Any such transactions may be effected at any time and from time to time be subject to any applicable limitations of the Securities Act of 1933. To the knowledge of each Reporting Person, each of the persons listed on Schedules I, II or III hereto may make the same evaluation and reserves the same rights. On April 10, 2003, Diametrics and Philips Medical Systems North America Company ("Philips Medical Systems"), a division of PENAC, entered into an Amendment to Manufacturing and Distribution Agreement (the "New Distribution Agreement"), pursuant to which (i) Diametrics appointed Philips Medical Systems as a nonexclusive distributor of specified Diametrics products; (ii) Philips Medical Systems agreed to refer to Diametrics any orders for specified Diametrics products that Philips Medical Systems receives from its existing distributors of such products outside North America; and (iii) Diametrics has the nonexclusive right to purchase the Portal Product (as defined therein) from Philips Medical Systems, in each case on specified terms. Concurrently, Diametrics and Philips Medical Systems entered into a Portal Manufacturing Agreement, pursuant to which Diametrics agreed to manufacture certain Portal Products exclusively for Philips Medical Systems on specified terms. The foregoing paragraph is qualified in its entirety by reference to the New Distribution Agreement and to the Portal Manufacturing Agreement, each of which are incorporated herein by reference. Page 6 of 18 Pages ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) The percentage interest held by each Reporting Person presented below is based on the number of Shares reported in Diametrics' Definitive Proxy Statement on Schedule 14A, filed on April 25, 2003, to be outstanding as of March 31, 2003 (the "Outstanding Shares"). PENAC is the direct beneficial owner of 1,809,524 Shares, including Shares issuable upon full exercise of the Warrant, which figure represents approximately 6.66% of the Outstanding Shares. PHUSA may be deemed to beneficially own 1,809,524 Shares, including Shares issuable upon full exercise of the Warrant, which figure represents approximately 6.66% of the Outstanding Shares. KPENV may be deemed to beneficially own 1,809,524 Shares, including Shares issuable upon full exercise of the Warrant, which figure represents approximately 6.66% of the Outstanding Shares. None of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the persons listed on Schedules I, II or III hereto beneficially owns any Shares other than as set forth herein. (b) Each Reporting Person has the power to vote or direct the vote and dispose or direct the disposition of the Shares beneficially owned by such Reporting Persons as indicated in pages 2 through 4. (c) Not applicable. (d) No other person has the right to receive or the power to direct the receipt of dividends from or proceeds from the sale of Shares. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. There are no contracts, arrangements, understandings or relationships between the Reporting Persons (or their wholly owned subsidiaries), and to the best knowledge and belief of the Reporting Persons, none of the persons listed on Schedules I, II or III hereto, and other persons with respect to the Shares. Page 7 of 18 Pages ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit No. Exhibit Description - ----------- ------------------- 1. Joint Filing Agreement, dated as of March 21, 2003, among the Reporting Persons (incorporated herein by reference to Exhibit 1 of the Schedule 13D filed by the Reporting Persons on March 21, 2003). 2. Amendment to Manufacturing and Distribution Agreement, dated April 10, 2003, between Diametrics and Philips Medical Systems. 3. Portal Manufacturing Agreement, dated April 10, 2003, between Diametrics and Philips Medical Systems. Page 8 of 18 Pages SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Date: May 21, 2003 KONINKLIJKE PHILIPS ELECTRONICS N.V. ----------------- By: /s/ ARIE WESTERLAKEN -------------------------------------------- Name: Arie Westerlaken Title: General Secretary PHILIPS HOLDING USA INC. By: /s/ BELINDA W. CHEW -------------------------------------------- Name: Belinda W. Chew Title: Senior Vice President PHILIPS ELECTRONICS NORTH AMERICA CORPORATION By: /s/ BELINDA W. CHEW -------------------------------------------- Name: Belinda W. Chew Title: Senior Vice President Page 9 of 18 Pages SCHEDULE I Name, Business Address, Principal Occupation or Employment and Citizenship of: (A) Members Of The Supervisory Board Of Koninklijke Philips Electronics N.V. Unless otherwise indicated, each person listed below is not employed, other than as a member of the Supervisory Board, and thus no employer, employer's address or employer's principal business is listed. Name: L.C. van Wachem Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Chairman of the Committee of Managing Directors of the Royal Dutch/Shell Group. Citizenship: The Netherlands Name: W. de Kleuver Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Executive Vice-President of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: J.M. Hessels Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Chief Executive Officer of Royal Vendex KBB. Citizenship: The Netherlands Name: Sir Richard Greenbury Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Chairman and Chief Executive Officer of Marks & Spencer. Citizenship: United Kingdom Page 10 of 18 Pages Name: Prof. K.A.L.M. van Miert Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: President of Nyenrode University. Employer: Nyenrode University Employer's Address: Straatweg 25 3621 BG Breukelen The Netherlands Employer's Principal Business: Higher education Citizenship: Belgium Name: L. Schweitzer Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Chairman and Chief Executive Officer of la regie nationale des usines Renault. Employer: La regie nationale des usines Renault Employer's Address: 34 Quai du Point du Jour BP 103 92109 Boulogne Bilancourt Cedex, France Employer's Principal Business: Design, manufacture and sale of automobiles and related businesses Citizenship: France Name: J.M. Thompson Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Chairman of the Board, TD Bank Financial Group; Member of the Boards of Thomson Corporation and Robert Mondavi Corporation Citizenship: Canada Name: C.J.A. van Lede Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Chairman of the Supervisory Board of the Dutch Central Bank; Member of the Supervisory Boards of Sara Lee/DE and Heineken; non-executive board member of Sara Lee Corporation and Scania AB; Vice Chairman of the Board of Directors of INSEAD; Member of the European Round Table of Industrialists; Member of the Board of Trustees of The Conference Board; Member of the International Council of JP Morgan Chase. Citizenship: The Netherlands (B) Members Of Board Of Management And Group Management Committee Of Koninklijke Philips Electronics N.V. Unless otherwise indicated, each member of the Board of Management and Group Management Committee is employed by Koninklijke Philips Electronics N.V. at Breitner Centre, Amstelplein 2, 1096 BC Amsterdam, The Netherlands, whose principal business is set forth in this Statement, and thus no employer, employer's address or employer's principal business is listed. Name: Gerard J. Kleisterlee Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: President and Chief Executive Officer of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Page 11 of 18 Pages Name: Jan H.M. Hommen Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Vice-Chairman of the Board of Management and Chief Financial Officer of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Gottfried H. Dutine Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Executive Vice-President of Koninklijke Philips Electronics N.V. Citizenship: Germany Name: Ad Huijser Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Executive Vice-President and Chief Technology Officer of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Arthur P.M. van der Poel Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Executive Vice-President of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: David Hamill Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President, and President/CEO of the Philips Lighting Division, of Koninklijke Philips Electronics N.V. Citizenship: United Kingdom Page 12 of 18 Pages Name: Theo W.H.P. van Deursen Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Chief Executive Officer of BG Lightning Electronics (a.i.) Citizenship: The Netherlands Name: Tjerk Hooghiemstra Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Jouko A. Karvinen Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President, and President/CEO of the Medical Systems Division, of Koninklijke Philips Electronics N.V. Citizenship: Finland Name: Scott McGregor Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President, and President and CEO of the Semiconductors Division, of Koninklijke Philips Electronics N.V. Citizenship: United States Name: Jan P. Oosterveld Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Andrea Ragnetti Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President of Koninklijke Philips Electronics N.V. Citizenship: Italy Page 13 of 18 Pages Name: Arie Westerlaken Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President, General Secretary, Chief Legal Officer and Secretary to the Board of Management of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Page 14 of 18 Pages SCHEDULE II Name, Business Address, Principal Occupation or Employment and Citizenship of all Directors and Executive Officers of Philips Holding USA Inc. Unless otherwise indicated, each member of the board of directors and executive officer is employed by Philips Electronics North America Corporation at 1251 Avenue of the Americas, New York, New York 10020, whose principal business is set forth in this Statement, and thus no employer, employer's address or employer's principal business is listed. Name: Robert M. Westerhof Business Address: Philips Holding USA Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, President and Chief Executive Officer of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Belinda W. Chew Business Address: Philips Holding USA Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, Senior Vice President, General Counsel and Secretary of Philips Electronics North America Corporation. Citizenship: United States Name: Wilhelmus C.M. Groenhuysen Business Address: Philips Holding USA Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Senior Vice President, Chief Financial Officer and Treasurer of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Robert N. Smith Business Address: Philips Holding USA Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Vice President of Philips Electronics North America Corporation. Citizenship: United States Page 15 of 18 Pages Name: Warren T. Oates, Jr. Business Address: Philips Holding USA Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Assistant Secretary of Philips Electronics North America Corporation. Citizenship: United States Page 16 of 18 Pages SCHEDULE III Name, Business Address, Principal Occupation or Employment and Citizenship of all Directors and Executive Officers of Philips Electronics North America Corporation. Unless otherwise indicated, each member of the board of directors and executive officer is employed by Philips Electronics North America Corporation at 1251 Avenue of the Americas, New York, New York 10020, whose principal business is set forth in this Statement, and thus no employer, employer's address or employer's principal business is listed. Name: Robert M. Westerhof Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, President and Chief Executive Officer of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Belinda W. Chew Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, Senior Vice President, General Counsel and Secretary of Philips Electronics North America Corporation. Citizenship: United States Name: Kevin W. Doran Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Senior Vice President of Philips Electronics North America Corporation. Citizenship: United States Name: Wilhelmus C.M. Groenhuysen Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Senior Vice President, Chief Financial Officer and Treasurer of Philips Electronics North America Corporation. Citizenship: The Netherlands Page 17 of 18 Pages Name: Thomas B. Patton Business Address: Philips Electronics North America Corporation 1300 I Street N.W., Suite 1070-E Washington, D.C. 20005 Principal Occupation: Vice President of Philips Electronics North America Corporation. Citizenship: United States Name: Robert N. Smith Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Vice President of Philips Electronics North America Corporation. Citizenship: United States Name: Raymond C. Fleming Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Controller of Philips Electronics North America Corporation. Citizenship: United States Name: Warren T. Oates, Jr. Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Assistant Secretary of Philips Electronics North America Corporation. Citizenship: United States Page 18 of 18 Pages EX-99.2 3 ex_99-2.txt AMENDMENT TO MANUFACTURING AND DISTRIBUTION AGMT. AMENDMENT TO MANUFACTURING AND DISTRIBUTION AGREEMENT BETWEEN DIAMETRICS MEDICAL INCORPORATED AND PHILIPS MEDICAL SYSTEMS This Amendment, dated April 10, 2003 ("Effective Date"), is by and between DIAMETRICS Medical Incorporated, a Minnesota corporation having its principal place of business at 2658 Patton Road, St. Paul, Minnesota 55113 ("DIAMETRICS") and PHILIPS Medical Systems North America Company, a division of PHILIPS Electronics North America Corporation, a Delaware corporation with offices at 3000 Minuteman Road, Andover, Massachusetts 01810 ("PHILIPS"). DIAMETRICS and PHILIPS shall each be a "Party." RECITALS A. DIAMETRICS and PHILIPS' predecessor Hewlett-Packard Company entered into a distribution agreement effective June 6, 1999 for the development and distribution of blood analysis products (the "Agreement"). B. Although the Agreement expired effective as of October 31, 2002, the Parties desire to amend and clarify some of the surviving rights and obligations solely as set forth herein. All other surviving rights and obligations of the parties under the Agreement shall continue as set forth in the Agreement. 1. DEFINITIONS. 1.1. Accessories. Those accessories set forth on Exhibit 1.5. Accessories may be deleted by mutual agreement of the Parties and DIAMETRICS may, from time to time, add Accessories to such Exhibit. 1.2. Agreement. The agreement, originally entered into by DIAMETRICS and HP effective June 6, 1999. 1.3. Cartridges. The cartridges used with IRMA and Portal Products. 1.4. Confidential Information. Information of any kind and form, whether technical or business, which a Party hereto holds in confidence and regards as valuable, but only when treated by the disclosing Party as set forth in Article 9. 1.5. Consumables. Collectively, Cartridges, Sensors, and Accessories. The specifications for the Cartridges and Sensors as of the Effective Date are set forth on Exhibit 1.5 as may be amended by DIAMETRICS. 1.6. idms. Information Data Management System for use with IRMA and Portal Products (DIAMETRICS Part Numbers 464100 and 463000). 1.7. Intellectual Property. On a world-wide basis, any and all now known or hereafter known tangible and intangible (a) patents and patent applications; (b) rights associated with works of authorship including, without limitation, copyrights, moral rights and mask-works; (c) trade secret rights; (d) all other intellectual property rights of every kind and nature and however designated, whether arising by operation of law, contract, license or otherwise; and (e) all registrations, initial applications, renewals, extensions, continuations, divisions or reissues hereof now or hereafter in force (including any rights in any of the foregoing). 1.8. Interface Module. A product or component of a product whose function includes the ability to acquire the output of any Product and make it available to a PHILIPS patient monitor at the patient's bedside, by any means of transmission including physical connection, cable, radio frequency and/or infrared. 1.9. IRMA Product. The IRMA(R)SL Blood Analysis System for in-vitro analysis of whole blood in humans, utilizing the Cartridges as described in Exhibit 1.5. 1.10. PHILIPS Existing Customers. Will have the meaning set forth in Section 2.1. 1.11. PHILIPS Product Inventory. Those IRMA and Trendcare Products and their components and associated products and supplies (excluding Cartridges, Sensors and software) which are owned by PHILIPS and set forth on the inventory list to be provided by PHILIPS. 1.12. Portal Product. The in-vitro intermittent monitoring product consisting of a Portal Measurement Module, custom connector, DeviceSet software, interface software, custom cable, and a custom power Interface Module that interfaces with a PHILIPS patient monitor, currently marketed as M3560A Portal Blood Analysis System. 1.13. Portal Measurement Module. The Portal Cartridge reader M3561A (M3561-60001), as more particularly described in the specifications attached to the Portal Manufacturing Agreement. 1.14. Portal Measurement Products. Means the Portal Measurement Modules, the Portal Measurement Accessories and the DeviceSet/DeviceCom Software (as such latter two terms are defined in Exhibit 3.4). 1.15. Product. An IRMA, Trendcare, idms, Consumables or Portal Product. 1.16. Sensors. The disposable sensor used with the Trendcare Product. 1.17. Support. Consists of (a) help desk telephone service for customers; (b) spare parts, on-site service and repair depot service (warranty and out-of-warranty); (c) on-going training; (d) software upgrades and updates, and (e) such other support activities of DIAMETRICS and/or PHILIPS described on Exhibit 2.2. 1.18. Trendcare Product. A continuous in-vivo blood gas monitoring system utilizing the Sensors described in Exhibit 1.5 as may be amended by DIAMETRICS. 2 1.19. Exhibit References. All Exhibit references shall mean the Exhibits to this Amendment. 2. TRANSITION FOR CONSUMABLES, IRMA, TRENDCARE AND IDMS PRODUCTS. 2.1. Sales and Support of Consumables. Subject to the terms and conditions set forth herein, DIAMETRICS hereby appoints PHILIPS as a non-exclusive distributor of Consumables in the Field (as defined in the Agreement) through October 31, 2004, to customers who purchased a Product from PHILIPS prior to November 1, 2002 ("PHILIPS Existing Customers"). This appointment may not be assigned to any third party, other than regional distributors in the normal course of business, without the prior written consent of DIAMETRICS. PHILIPS shall be entitled to purchase Consumables from DIAMETRICS (or its third party manufacturer, if any) for resale to PHILIPS Existing Customers, through October 31, 2004, at the prices set forth on Exhibit 2.1, which shall be non-discriminatory prices for non-exclusive distributors in the territories in which PHILIPS is selling the Consumables. If PHILIPS becomes aware that it is selling Consumables to customers other than PHILIPS Existing Customers, PHILIPS shall so notify DIAMETRICS, and DIAMETRICS (or its distributor) shall have the opportunity to sell Consumables to such customer, and PHILIPS will use reasonable efforts to assign to DIAMETRICS or its designee any long-term supply contract for Consumables, with such a customer. PHILIPS shall inform its sales channel of its intention not to sell Consumables to customers who are not PHILIPS Existing Customers. 2.2. Support of IRMA, Trendcare and idms Products. Subject to the terms and conditions set forth herein, PHILIPS, its distributors and subcontractors shall have the non-exclusive right to provide Support for IRMA, Trendcare and idms Products through October 31, 2004, to PHILIPS Existing Customers who have not transitioned to DIAMETRICS pursuant to an executed Country Transition Letter as set forth in Section 2.6. 2.3. Service and Support Agreement. DIAMETRICS agrees to provide to PHILIPS Support (including but not limited to warranty and out-of-warranty Support) for the Consumables and the IRMA, Trendcare and idms Products on the terms set forth in the Service and Support Agreement attached as Exhibit 2.2. 2.4. Inventory. The Parties have agreed to the purchase of PHILIPS Product Inventory by DIAMETRICS as set forth in Exhibit 2.4. 2.5. PHILIPS Distributors. (a) The Parties acknowledge that PHILIPS has existing distributors of IRMA, Trendcare, and idms Products outside North America (the "PHILIPS Distributors"). PHILIPS has taken reasonable action, at its sole expense, to amend its agreements or understandings with the PHILIPS Distributors to delete IRMA, Trendcare and idms Products from the list of products PHILIPS sells to such Distributors. PHILIPS agrees to refer to DIAMETRICS any orders for IRMA, Trendcare and idms Products that PHILIPS may receive from such Distributors; provided however, that the Parties may agree, on a case-by-case basis, to exceptions to permit PHILIPS to sell IRMA, Trendcare and idms Products to such PHILIPS Distributors, with reasonable compensation to both Parties. 3 (b) In connection with the transition of sales and Support contemplated in Section 2.6, on a country by country basis, PHILIPS shall provide DIAMETRICS with contact information regarding PHILIPS Distributors who sold IRMA, Trendcare, idms and Consumable Products and shall use commercially reasonable efforts to introduce DIAMETRICS to such PHILIPS Distributors, and DIAMETRICS shall be free to enter into distribution arrangements with such Distributors for such Products on such terms as DIAMETRICS and such Distributors may deem appropriate. To the extent feasible, PHILIPS will use reasonable efforts to transfer and assign to DIAMETRICS its agreements with certain PHILIPS Distributors for the distribution of the Products (excluding Portal Products), subject to the prior approval of DIAMETRICS and consent of the applicable PHILIPS Distributors, and provided that such transfer and assignment shall not extend to any liabilities or claims arising prior to the date of the transfer or assignment, or arising from an alleged improper assignment unless DIAMETRICS expressly agrees in writing or except for the obligations expressly assumed by DIAMETRICS under this Amendment (including all Exhibits hereto) and under executed Country Transition Letters. 2.6. Transition. In order to transition responsibility for sales and Support of Consumable Products and Support of IRMA, Trendcare and idms Products on a country by country (or group of countries) basis, PHILIPS and DIAMETRICS shall enter into a Country Transition Letter (a copy of which is attached hereto as Exhibit 2.6) according to a mutually agreed timetable defined in the transition process, provided that PHILIPS has provided DIAMETRICS with: (a) a list of research/ reference sites with PHILIPS owned IRMA, Trendcare and idms Products; (b) a list of unique follow-on customer support/complaint activities to be completed by DIAMETRICS with respect to the Products (excluding Portal Products), to be defined during the transition process; (c) installed base and/or distributor information (institution name, address, contact) with respect to the Products (excluding Portal Products). The installed base information contains contact information for the customers to whom PHILIPS' shipped Products (other than Portal Products), and to the best of PHILIPS' knowledge, for customers of the Products (other than Portal Products) who have not ordered such a Product from PHILIPS; (d) funnel information (leads, demo, evaluation) for the Products (excluding Portal Products). As part of the transition process, outside North America, contracts between PHILIPS and PHILIPS Existing Customers for sales and Support of Consumables and Support of IRMA, Trendcare and idms Products will be either (a) assigned to and assumed by DIAMETRICS in writing or (b) canceled by PHILIPS and the applicable customer and superceded by new customer service agreements between DIAMETRICS and the customer. If an Existing PHILIPS Customer refuses to assign such existing contract, PHILIPS may continue to sell Consumables to and Support Consumables, IRMA, Trendcare and idms Products for that customer until the 4 earlier of the date on which the contract is assigned to DIAMETRICS or through October 31, 2004 pursuant to Section 2.1. Pursuant to the terms of the Country Transition Letter and as of the date of execution of the Country Transition Letter, DIAMETRICS shall assume responsibility for sales and Support of Consumables and Support (including customer support and complaint activities) of the IRMA, Trendcare and idms Products in the country, whether such Products were shipped or serviced by PHILIPS or DIAMETRICS. Such responsibility shall not include any obligations of PHILIPS accruing prior to the date of execution of such Country Transition Letter, except for the obligations expressly assumed by DIAMETRICS under this Amendment (including all Exhibits hereto) and under executed Country Transition Letters. 2.7. Reversion of Rights. (a) Except as expressly set forth herein, all rights with respect to sales, support and distribution of the Consumables revert to DIAMETRICS, including, without limitation, the right to sell and Support Consumables itself or through a third party in the Field (as defined in the Agreement) for use with any of the Products. (b) Except as expressly set forth herein, all rights with respect to IRMA, Trendcare, and idms Products revert to DIAMETRICS, including, without limitation, the right to sell and Support IRMA ,Trendcare, and idms Products itself or through a third party; provided however, that the Parties may agree, on a case-by-case basis, to exceptions to permit PHILIPS to sell IRMA, Trendcare and idms Products to customers, with reasonable compensation to both Parties. 2.8. Superceding Provisions. The Parties acknowledge and agree that the rights and obligations with respect to Consumables set forth in this Amendment supersede Section 11.4(a) of the Agreement. 3. PORTAL PRODUCT AND PRODUCT CONNECTIVITY. 3.1. Connectivity. PHILIPS shall enable connectivity and ensure on-going compatibility of (a) the IRMA and Trendcare Products into and with PHILIPS' CMS and IntelliVue products using a VueLink type or other method of connectivity, and (b) the Portal Products with PHILIPS' CMS products, in each case through October 31, 2004; provided that DIAMETRICS supplies the necessary information for PHILIPS to maintain such connectivity and compatibility, and that PHILIPS shall be obligated to so modify or change its products only if the changes are not major, or if PHILIPS desires to make changes that are major. 3.2. Access to Hardware and Software Upgrades and Support. PHILIPS agrees to provide customers who purchase Portal Products from DIAMETRICS with access to existing hardware and software upgrades for CMS and support for CMS on a non-discriminatory basis from other customers who purchase Portal Products from PHILIPS. PHILIPS shall provide its customary warranty and out-of-warranty coverage for CMS. 3.3. License to DIAMETRICS' Technology. The Parties acknowledge that PHILIPS' license to DIAMETRICS' Technology as set forth in Section 7.6 of the Agreement shall survive 5 for the term of this Amendment, provided that PHILIPS complies with the terms of Section 7.6 of the Agreement. 3.4. Manufacture of Portal Measurement Module. DIAMETRICS shall manufacture the Portal Measurement Module solely for PHILIPS under the Portal Manufacturing Agreement attached hereto as Exhibit 3.4. Nothing contained herein shall restrict either Party's use of its solely and jointly owned Intellectual Property. 3.5. Portal Product Purchases. (a) DIAMETRICS shall have the non-exclusive right to purchase Portal Product from PHILIPS for the term of this Amendment at prices set forth on Exhibit 4.5 and to resell such Portal Products itself or through distributors. (b) DIAMETRICS shall only distribute the Portal Product directly to end-users or through DIAMETRICS' distributors to end-users which accept software license terms that are substantially the same as PHILIPS' standard end-user license agreement for the Portal Product. PHILIPS standard end-user license agreement for the Portal Product provides, inter alia, that only a personal, nontransferable right to use any software incorporated in the Portal Product (the "Software") is granted to such end user; that no title to the Software is transferred to such end user; that such end user will not copy the Software except as necessary to use such Software on a single CPU; that such end user will not transfer the Software, except as authorized by the entity furnishing the Software; that such end user will not in any form export, reexport, resell, ship or divert or cause to be exported, reexported, resold, shipped or diverted, directly or indirectly, the Software or a direct product thereof to any country for which the United States Government or any agency thereof at the time or export or reexport requires an export license or other governmental approval without first obtaining such license or approval; and that such end user will not reverse compile or disassemble the Software. (c) PHILIPS hereby grants permission to DIAMETRICS to use any PHILIPS trademark or trade name associated with the Portal Products if that use is solely for the advertisement and promotion of the Portal Products during the term of this Amendment. DIAMETRICS agrees to follow the guidelines at www.philips.com\brandbook, for distributors of PHILIPS products. These guidelines may be changed by PHILIPS at any time, in its sole discretion. PHILIPS shall have sole ownership of the following trademarks: (a) the word mark "PHILIPS" and Philips Shield Emblem and (b) such other trademarks owned or licensed to PHILIPS or its affiliates as may be designated by PHILIPS for use in the course of performance under the terms of this Agreement (the "Trademarks".) DIAMETRICS acknowledges all rights of PHILIPS in and to the Trademarks and further agrees that use of the Trademarks for the purposes of this Agreement shall not be construed as a grant of any rights in such Trademarks by or for the benefit of DIAMETRICS. DIAMETRICS has no license to or right in the Trademarks and shall not use them in its marketing or sales literature or in any other way, except as provided in this section, without the prior, written consent of PHILIPS. 6 4. SUPPLY OF CONSUMABLES, PORTAL MEASUREMENT PRODUCTS AND PORTAL PRODUCTS. 4.1. Purchase Orders. (a) PHILIPS shall issue to DIAMETRICS a monthly written, rolling, non-binding three (3) month forecast of its purchase of Consumables. Such forecasts shall be updated monthly. PHILIPS shall issue binding written purchase orders for Consumables at least sixty (60) days prior to the proposed shipping date for such items. All purchase orders in excess of PHILIPS' forecast shall be subject to written acceptance by DIAMETRICS. DIAMETRICS will use reasonable efforts to supply such items in a timely fashion, subject to DIAMETRICS' reasonable production capabilities and provided that such purchase orders are consistent with PHILIPS' forecasts. (b) PHILIPS may purchase Portal Measurement Products from DIAMETRICS in accordance with the Portal Manufacturing Agreement attached as Exhibit 3.4. (c) The Parties acknowledge that in order to provide the pricing set forth herein for the Portal Measurement Products and Consumables, DIAMETRICS may be required to purchase components and materials in reliance on PHILIPS' non-binding forecasts. As a result, if PHILIPS fails to purchase the quantities set forth in such non-binding forecasts and DIAMETRICS is unable, after using commercially reasonable efforts, to cancel or delay the purchase of such components and materials or to reallocate or reuse such components and materials within ninety days of such forecast, PHILIPS shall reimburse DIAMETRICS for any payments incurred by DIAMETRICS for any unusable inventory or non-cancelable purchase commitments made in good faith reliance on the forecast for Portal Measurement Products and Consumables, plus any actual out-of-pocket costs of disposing of such components and materials. PHILIPS may take delivery of any components and materials, for which it has reimbursed DIAMETRICS hereunder. (d) To the extent that DIAMETRICS desires to purchase Portal Products from PHILIPS, DIAMETRICS shall issue to PHILIPS a monthly written, rolling, non-binding six (6) month forecast for such Portal Product. Such forecasts shall be updated monthly. DIAMETRICS shall issue binding written purchase orders for such Portal Product at least sixty (60) days prior to the proposed shipping date. All purchase orders in excess of DIAMETRICS' forecast shall be subject to written acceptance by PHILIPS. PHILIPS will use reasonable efforts to supply such Portal Product in a timely fashion, subject to PHILIPS' reasonable production capabilities and provided that such purchase orders are consistent with DIAMETRICS' forecasts. (e) The Parties acknowledge that in order to provide the pricing set forth herein for the Portal Product, PHILIPS may be required to purchase subcomponents and materials in reliance on DIAMETRICS non-binding forecasts. As a result, if DIAMETRICS fails to purchase the quantities set forth in such non-binding forecasts and PHILIPS is unable, after using commercially reasonable efforts, to cancel or delay the purchase of such components and materials or to reallocate or reuse such subcomponents and materials within ninety days of such forecast, DIAMETRICS shall reimburse PHILIPS for any payments incurred by PHILIPS for any unusable inventory or non-cancelable purchase commitments made in good faith reliance 7 on the forecast for such components, plus any actual out-of-pocket costs of disposing of such subcomponents and materials. DIAMETRICS may take delivery of any subcomponents and materials, for which it has reimbursed PHILIPS hereunder. 4.2. Purchase Order Forms. Each Party shall be entitled to use its then current standard purchase order for its purchases hereunder. In the event of a conflict between the terms of any such purchase order and the terms of this Amendment, the terms of this Amendment shall take precedence. Additional terms included in the purchase order that are not terms of this Amendment will be subject to prior mutual written agreement. 4.3. Delivery. All deliveries of Portal Products and Consumables shall be made by the selling Party F.O.B. such selling Party's U.S. or European facility. Title and risk of loss shall pass to the purchasing Party at the time of tender at the selling Party's facility to the carrier designated by the purchasing Party. Upon delivery to the purchasing Party's designated carrier, the purchasing Party will assume title and risk of loss, and will be responsible for transportation, and, if applicable, export of such products from the country of manufacture and shall be entitled to any duty drawback for which the products qualify. The selling Party shall provide the purchasing Party, upon the purchasing Party's reasonable request and at the purchasing Party's expense, reasonable substantiation and assistance with respect to such duty drawbacks. The pricing for products excludes, and the purchasing Party shall pay, all shipping, handling and insurance costs for and other costs of transporting such products after delivery to the F.O.B. point. 4.4. Payment. All payments for Products shall be due and payable within thirty-five (35) days of the date of the applicable invoice. The purchasing Party shall make all payments in immediately available funds to the location and in the manner reasonably designated by the selling Party from time to time. A late fee shall be paid by the purchasing Party on any amount not received by the selling Party when due at a rate of 1.5% per month on all unpaid amounts, or the maximum rate permitted by law, whichever is less. As between the Parties, the purchasing Party shall be responsible for all taxes relating to Products so purchased (except for taxes on the selling Party's net income). 8 5. PRODUCT WARRANTY 5.1. Warranty for Consumables. DIAMETRICS warrants to PHILIPS that the Consumables at the time of their delivery by DIAMETRICS to PHILIPS (a) shall meet the agreed specifications as set forth on Exhibit 1.5; (b) shall have been manufactured in accordance with all laws and regulations applicable to their manufacture in those jurisdictions in which PHILIPS is distributing the Consumables (provided that PHILIPS gives DIAMETRICS at least ninety (90) days written notice of any jurisdictions in addition to those in effect as of the Effective Date of this Amendment); (c) shall be new or newly manufactured; and (d) shall be of good and merchantable title, free of liens and encumbrances. DIAMETRICS shall, promptly, at DIAMETRICS' sole option, replace, repair or make a purchase price (in the amount paid by PHILIPS to DIAMETRICS) refund for any of such Consumables proved to be non-conforming, provided that written notice and reasonable documented evidence of each warranty claim and the fact that the failure occurred during the warranty period is received by DIAMETRICS within thirty (30) days after the expiration thereof. DIAMETRICS shall have the sole right to verify such non-conformance. Such replacement, repair or refund shall be PHILIPS' sole remedy hereunder. Unless otherwise agreed by the Parties, the warranty period under this Section 5.1 for (1) any Sensor shall be the stated shelf life as set forth on the label for such Sensor, not to be less than ten (10) months from the date of shipment to PHILIPS; (2) any Cartridge shall be the stated shelf life as set forth on the label for such Cartridge, not less than three (3) months from the date of shipment to PHILIPS, except that the shelf life of the GL & H4 (M3587A & M3617A)) Cartridge shall be not less than nine (9) weeks and the shelf life of H4E (M3617B) Cartridge shall be not less than eleven (11) weeks; and (3) any Accessory shall be ninety (90) days from the date of shipment to PHILIPS. If requested by DIAMETRICS, PHILIPS shall return the non-conforming Consumable to DIAMETRICS at the time of submission of the warranty claim therefore. PHILIPS agrees to provide DIAMETRICS sufficient notice of additional countries in which it intends to distribute the Consumables to permit DIAMETRICS to meet its obligations under subsection (b) of this Section 5.1. 5.2. Customer Complaints, Warranty Repair for Consumables. PHILIPS will be responsible for handling customer complaints regarding the Consumables and DIAMETRICS will provide reasonable assistance to PHILIPS in resolving such customer complaints unless such country is transitioned pursuant to Section 2.6. Upon transition in a particular country pursuant to Section 2.6, DIAMETRICS will assume PHILIPS' obligations under this Section 5.2 and under any Consumables warranties provided by PHILIPS' to its customers to the extent that such warranties do not exceed the warranties provided by DIAMETRICS under Section 5.1. DIAMETRICS will accept the return of any Consumables that do not conform to the warranties set forth in Section 5.1, and will repair or replace any such defective Consumable (or refund PHILIPS' purchase price) as provided in Section 5.1. 5.3. Supply of Consumables to Customers. DIAMETRICS will continue to make Consumables available to customers for a period of five (5) years from the last production run of the IRMA, Trendcare and Portal Products; this obligation shall survive the termination or expiration of this Amendment. 5.4. Warranty for Portal Products. PHILIPS shall warrant the Portal Products to DIAMETRICS in accordance with the terms of the warranty attached hereto as Exhibit 5.4. 9 5.5. Warranty for Products Purchased Prior to Effective Date. Sections 8.2 through 8.4 of the Agreement survive expiration of the Agreement with respect to Products (other than Portal Measurement Products) purchased by PHILIPS from DIAMETRICS prior to the Effective Date of this Amendment; provided however, that upon transition in a particular country pursuant Section 2.6, DIAMETRICS will assume PHILIPS' obligations under Sections 8.2 through 8.4 of the Agreement for such Products in such country. Portal Measurement Products will be warranted in accordance with the Portal Manufacturing Agreement, attached hereto as Exhibit 3.4. 5.6. Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 5.1, 5.4 and 5.5, THE SELLING PARTY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 5.7. Customer Warranties. The purchasing Party shall be entitled to warrant the applicable Products to its customers on terms it deems appropriate; provided that the purchasing Party shall bear any expenses it may incur with respect to such warranties, to the extent that such warranties exceed the scope or term of the express warranties made by the selling Party hereunder. 6. INTELLECTUAL PROPERTY. 6.1. Intellectual Property from Agreement. Ownership of Intellectual Property of the Products under the Agreement remains unchanged. Under the terms of the Agreement, the Parties acknowledge and agree that the ownership of the Intellectual Property in certain Products and the Portal Measurement Products shall be as set forth on Exhibit 6.1. Nothing in Exhibit 6.1 shall imply any further commitment by either party under this Amendment to develop the C-BAM or X-BAM. 6.2. Software Licenses. To the extent that a Party (each, a "distributing Party") receives one or more copies of any software of the other Party hereunder, it shall have the right to use that software internally in order to exercise its rights hereunder. The foregoing use right shall not include the right to copy and distribute such software, copies of which must be purchased from the other Party. In addition and subject to Section 3.5(b), the Parties acknowledge that any software or other proprietary portion of the applicable Products is licensed, not sold, to the distributing Party and its end user customers, and that such license shall be pursuant to the distributing Party's customary license terms used for the distributing Party's customary license terms used for the distributing Party's software or proprietary products as are in effect from time to time. 7. REGULATORY MATTERS. 7.1. Regulatory Approvals. DIAMETRICS will retain all rights to and ownership of all regulatory approvals for the Products (excluding Portal Products), and will grant to PHILIPS a right of reference to its regulatory submissions and technical files for all Products, including, without limitation, those regulatory approvals as necessary to fulfill its obligations hereunder. DIAMETRICS will maintain FDA and EU regulatory approvals for the Products (excluding 10 Portal Products). PHILIPS will retain all rights to and ownership of all regulatory approvals for Portal Products, and will grant to DIAMETRICS a right of reference to its regulatory submissions and technical files, including, without limitation, those regulatory approvals as necessary to fulfill its obligations hereunder. PHILIPS will maintain FDA and EU regulatory approvals for Portal Products. Prior to the transition contemplated in Section 2.6, PHILIPS will use commercially reasonable efforts to transfer and assign to DIAMETRICS such regulatory approvals in the applicable country that are held by PHILIPS (or its distributors) and that apply specifically to the Consumables and IRMA, Trendcare and idms Products (including approvals to import and sell the Consumables and IRMA, Trendcare and idms Products), to the extent that such approvals may be transferred and assigned lawfully. 7.2. Product Inserts and Labeling. DIAMETRICS shall be responsible for the text and regulatory compliance of all package labels and Product inserts used in connection with the Products (except Portal Products). PHILIPS shall be responsible for the text and regulatory compliance of all package labels and product inserts used in connection with Portal Products. All Portal Product labels and labeling shall be as set forth in the current specifications for the Portal Product. For purposes of this Agreement, the terms "label" and "labeling" shall have the meanings set forth in Sections 201(k) and 201(m) respectively of the U.S. Federal Food, Drug and Cosmetics Act. 7.3. Product Reporting. (a) DIAMETRICS will maintain MDR and other product performance monitoring systems for the Products (excluding Portal Products), and PHILIPS will maintain MDR and other product performance monitoring systems for Portal Products. The Distributing Party shall cooperate with the Manufacturing Party in connection with the Manufacturing Party's obligations under this Section 7.3. The Distributing Party shall provide to the Manufacturing Party, the necessary reports relating to complaints and product performance issues relating to the Products on a timely basis to permit the reporting party to fulfill its regulatory obligations. Notwithstanding the foregoing, upon the execution of a Country Transition Letter, DIAMETRICS shall become responsible for complaint handling in that country, as set forth in the Service and Support Agreement attached hereto as Exhibit 2.2. Upon reasonable request by the Manufacturing Party, the Distributing Party shall promptly make such reports (on behalf of the Manufacturing Party, if appropriate) directly to the appropriate regulatory authorities. (b) For the purposes of this Section 7.3(b), DIAMETRICS shall be the Manufacturing Party for the Products, except for the Portal Product for which PHILIPS shall be the Manufacturing Party. PHILIPS shall be the Distributing Party for the Products, except for the Portal Product for which DIAMETRICS shall be the Distributing Party. The Distributing Party shall maintain sales and service records to assist it in locating the applicable Products for the purpose of implementing recalls and other corrective actions. If the Manufacturing Party implements a recall or corrective action in accordance with Section 7.5 of this Amendment, the Distributing Party shall provide such location information to the Manufacturing Party unless the Distributing Party implements such recall or corrective action itself. Each Party shall be responsible for bearing its own costs associated with all product tracking, complaint analyses and related evaluations. 11 7.4. Regulatory Audits. Each Party shall permit the other Party reasonable access to its regulatory records, no more than once in any twelve (12) month period, to permit the auditing Party to determine that regulatory obligations are being met. The auditing Party shall provide ten (10) days prior written notice of such an audit. 7.5. Product Recall (a) If either Party believes that a recall of any Product distributed under this Amendment is desirable or required by law, it shall promptly notify the other Party. The Parties shall then discuss reasonably and in good faith whether such recall is appropriate or required and the manner in which any mutually agreed recall shall be handled. This Section 7.5 shall not limit the obligations of either Party under law with respect to recall of Products required by law or properly mandated by governmental authority. Voluntary recalls shall be conducted by mutual agreement (with such agreement not to be unreasonably withheld) provided that if mutual agreement is not reached, either Party may individually conduct the voluntary recall in question in a manner consistent with its own regulatory guidelines and criteria. The "Recalling Party" shall bear all costs and expenses of any voluntary recall of any Products and shall reimburse the "Other Party" for the reasonable, out-of-pocket costs incurred by the Other Party as a result of such recall, including the replacement cost of any Products affected thereby, unless the cause or basis of such recall is attributable to a condition, fact or action that constitutes (i) a breach by the Other Party of any of its obligations hereunder or (ii) negligence or willful misconduct of the Other Party in which case the Other Party will be liable for the costs and expenses of such recall, and shall reimburse the Recalling Party for the reasonable, out-of-pocket costs incurred by Recalling Party as a result of such recall, including the replacement cost of any Product affected thereby. The Parties shall cooperate fully with each other in effecting any recall of the Products pursuant to this Section 7.5, including communications with any customers or to the public. (b) For the purposes of this Section 7.5(b) for the Products purchased under this Amendment, DIAMETRICS shall be the Manufacturing Party for the Products, except for the Portal Product for which PHILIPS shall be the Manufacturing Party. PHILIPS shall be the Distributing Party for the Products, except for the Portal Product for which DIAMETRICS shall be the Distributing Party. If any governmental agency having jurisdiction (including without limitation the FDA) shall request or order any corrective action with respect to Products supplied hereunder, including any Product recall, customer notice, restriction, corrective action or market action or any Product change, the Manufacturing Party shall bear the costs and expenses of such corrective action and shall reimburse the Distributing Party for the reasonable, out-of-pocket costs incurred by the Distributing Party as a result of such corrective action, including the replacement cost of any Products affected thereby, unless the cause or basis of such corrective action is attributable to a condition, fact or action that constitutes (A) a breach by the Distributing Party of any of its obligations hereunder or (B) negligence or willful misconduct of the Other Party, in which case, the Distributing Party shall bear the costs and expenses of such corrective action, and shall reimburse the Manufacturing Party for the reasonable out-of-pocket costs incurred by the Manufacturing Party as a result of such action, including the replacement cost of any Product affected thereby. Recalls of the Portal Measurement Products are excluded from this Section 7.5 and covered by Section 18 of the Portal Manufacturing Agreement. 12 7.6. Products for Products Purchased Prior to Effective Date. Article 6 (Regulatory) of the Agreement survives expiration of the Agreement with respect to Products (other than Portal Measurement Products) purchased by PHILIPS from DIAMETRICS prior to the Effective Date of this Amendment; provided however, that upon transition in a particular country pursuant Section 2.6, for that country DIAMETRICS shall assume PHILIPS' obligations under Section 6.4 (Product Reporting) and 6.5 (Product Recalls) in the Agreement for those transitioned Products and as set forth in the Service and Support Agreement attached hereto as Exhibit 2.2. 8. TERM AND TERMINATION 8.1. Term. This Amendment shall become effective upon the Effective Date hereof and shall expire on October 31, 2004 or terminate as set forth in this Article 8. 8.2. Termination for Material Breaches. In the event of a material default by a Party of a material obligation hereunder, including, but not limited to, failure to pay any material moneys due excepting amounts as to which there is a legitimate dispute, the other Party may provide written notice to the defaulting Party. If the defaulting Party fails to cure such default within ninety (90) days (or ten (10) days in the case of amounts owing that are not subject to a good faith dispute) of such notice, this Amendment shall terminate in its entirety (except for such rights and obligations that expressly survive pursuant to Section 8.4) effective upon the expiration of such cure period. In the case of bankruptcy or insolvency of a Party, to the extent permitted by U.S. bankruptcy law, the other Party may terminate this Agreement in its entirety (except for such rights and obligations that expressly survive pursuant to Section 8.4) effective immediately upon written notice to such Party. 8.3. No Prejudice. Termination of this Agreement for any reason shall be without prejudice to either Party's right to receive all payments accrued and unpaid on the effective date of termination and shall not release either party hereto from any liability which at such time has already accrued or which thereafter accrues from a breach or default prior to such expiration or termination. Except as expressly provided herein, all of the parties' rights and remedies hereunder are cumulative and non-exclusive. 8.4. Surviving Obligations of the Amendment. No termination or expiration of this Amendment shall affect or discharge any obligations, rights, disclaimers, conditions or limitations of either Party which arose prior to the effective date of such termination. The following Sections of this Amendment shall survive termination or expiration of the Amendment: Articles 5 (Product Warranty), 6 (Intellectual Property), 7 (Regulatory Matters), 8 (Term and Termination), 9 (Confidentiality) and 10 (Miscellaneous) and any Sections necessary to give effect to this Section 8.4 shall survive any termination or expiration of this Amendment. 9. CONFIDENTIALITY 9.1. Non-Use and Non-Disclosure. Each Party acknowledges and agrees that all the other Party's Confidential Information is confidential to the disclosing Party. Each Party shall take the same reasonable measures as it uses to protect its own confidential information from the unauthorized disclosure or misuse to protect the other Party's Confidential Information from unauthorized disclosure or misuse, including without limitation, any disclosure by its employees, 13 agents, contractors, permitted sublicensees, or consultants of the other Party's Confidential Information. As used herein, the term reasonable measures shall mean at least those measures a Party applies to the protection of its own Confidential Information and the term misuse shall mean use for any purpose other than as permitted or required hereunder. 9.2. Marking. To be entitled to protection as Confidential Information, all DIAMETRICS or PHILIPS documents containing that Party's Confidential Information shall be appropriately and clearly marked as "Proprietary," "Secret," "Confidential," or other words to similar effect. If a disclosure of Confidential Information is made orally, as in a meeting, the disclosing Party shall indicate the nature of that information at the time of its disclosure and shall confirm such designation in writing within ten (10) days of the date of such disclosure to the receiving Party. 9.3. Exclusions. Information shall not be considered Confidential Information hereunder if it: (a) was already in the possession of the receiving Party prior to its receipt from the disclosing Party; (b) is, or becomes, part of the public knowledge or literature through no fault, act or omission of the receiving Party, provided, Confidential Information shall not be deemed to have entered the public domain by reason of its having been filed with any regulatory authority; provided the disclosing Party has taken advantage of any procedures available to protect confidentiality, including FOIA marking and protective orders; (c) is, or becomes, available to the receiving Party from a source other than the disclosing Party, which source has rightfully obtained the same information and has no obligation of confidentiality to the disclosing Party with respect to it; (d) is made available on an unrestricted basis by the disclosing Party to a third party unaffiliated with the disclosing Party; or (e) is required to be revealed pursuant to law or requirements of any securities exchange on which a Party's shares are listed and traded, provided, however, the receiving Party which is under any such requirement of law shall give reasonable notice to the disclosing Party of such requirement and shall cooperate with the disclosing Party, at the disclosing Party's expense in reasonable legal efforts to limit or mitigate any such revelation so as to preserve the proprietary nature of any Confidential Information contained therein. 9.4. Duration; Surviving Obligation. This Article 9 shall be deemed to cover and include any non-public information disclosed by a Party to the other during the course of their negotiations of this Amendment, whether or not marked or indicated as provided in Section 9.2. Each Party's obligations of non-use and non-disclosure of the other Party's Confidential Information shall apply during the term of this Amendment and shall also survive for a period of three (3) years after its termination for any reason. 9.5. Confidentiality of this Agreement. The terms of this Amendment itself and the Exhibits hereto shall be deemed to be Confidential Information hereunder. In the event that a 14 Party is required to disclose the content of this Amendment pursuant SEC requirements or requirements of any securities exchange on which a Party's share are listed and traded, such Party shall use its reasonable efforts to obtain confidential treatment of at least the terms of Exhibits 2.1, 2.4 , 3.5, and 6.1. 10. MISCELLANEOUS 10.1. Effect of this Amendment, Entire Agreement. Except as expressly amended hereby, the surviving terms of the Agreement shall continue in full force and effect, in accordance with its terms. In the event of any conflict between this Amendment and the surviving terms of the Agreement, this Amendment shall prevail. The Agreement and this Amendment, including all Exhibits thereto and hereto, set forth the entire agreement between Parties with respect to the subject matter hereof and as such, supersede all prior and contemporaneous negotiations, agreements, representations, understandings and commitments with respect thereto and shall take precedence over all terms, conditions and provisions on any purchase order form, or order acknowledgment, or order release purporting to address the same subject matter. Neither the Agreement nor this Amendment shall be released, discharged, changed or modified in any manner except by a writing signed by the duly authorized officers or agents of each Party hereto, which writing shall make specific reference to the Agreement or Amendment and shall express the plan or intention to modify same. 10.2. Surviving Provisions of the Agreement. Sections 3.7 (Trademarks), 3.11 (License of Product Software), 10 (Indemnification) and 13 (Miscellaneous) (excluding Sections 13.2, 13.5, 13.6, 13.13 and 13.15) of the Agreement are incorporated by reference and made a part of this Amendment. Sections 6.4, 6.5, 10 and 13 (excluding Sections 13.2, 13.5, 13.6, 13.13 and 13.15) of the Agreement shall survive termination or expiration of this Amendment. 10.3. Binding Effect and Assignment. During the term of this Amendment, the rights of either Party under this Amendment and the surviving rights under the Agreement shall not be assigned nor shall the performance of either Party's duties hereunder be delegated, without the other Party's written consent (which shall not be unreasonably withheld) except that, without the other Party's prior consent, either Party may assign this Amendment and the Agreement (i) to an Affiliate that is an affiliate as of the date of execution of this Amendment or (ii) to an Affiliate whose assets consist entirely of the assets of an Affiliate or Affiliates that were Affiliates as of the date of execution of this Amendment or (iii) in connection with a merger, consolidation, reorganization or sale of substantially all of its assets. No sale, assignment or other transfer of any rights of a Party hereunder shall be effective unless the purchaser, assignee or transferee assumes such Party's obligations under this Amendment and the Agreement. Any assignment shall not relieve the assigning Party of its responsibility for its obligations hereunder. Nothing in this Section 10.3 shall restrict a Party from appointing sales agents and distributors in the normal course of business. 10.4. Communications. Within ten (10) days of the Effective Date, the Parties will confer with each other on each Party's written communications describing the Parties' agreement with respect to distribution and Support of the Products; provided that each Party retains the right to communicate with such customers in a manner that it deems appropriate. 15 10.5. Publicity. Neither Party hereto shall originate any joint publicity, joint news release, or other joint announcement, written or oral, whether to the public press, the trade, PHILIPS' or DIAMETRICS' customers or otherwise, relating to this Amendment, or to performance hereunder or the existence of an arrangement between the Parties. 10.6. Limitation on Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY UNDER THIS AMENDMENT FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGE. IN WITNESS WHEREOF, PHILIPS and DIAMETRICS have executed this Amendment by their respective duly authorized officers or representatives as of the day first above written. DIAMETRICS MEDICAL PHILIPS MEDICAL SYSTEMS INCORPORATED By: By: -------------------------------- ---------------------------------- Schedule of Exhibits: - --------------------- Exhibit: - -------- Exhibit 1.5 Accessories, Cartridges and Sensors Exhibit 2.1 Prices for Consumables and Portal Measurement Modules Exhibit 2.2 Service and Support Agreement Exhibit 2.4 PHILIPS Product Inventory Exhibit 2.6 Country Transition Letter Exhibit 3.4 Portal Manufacturing Agreement Exhibit 3.5 Prices for Portal Products supplied by PHILIPS Exhibit 5.4 PHILIPS Warranty on Portal Products Exhibit 6.1 IP Ownership Exhibit 1.5 Cartridges and Sensors (SPECIFICATIONS ARE SUBJECT TO CHANGE DURING THE TERM OF THE AGREEMENT) 1. NEOTREND The Neotrend system (Neotrend sensor and TrendCare hardware) is intended for continuous monitoring of pO2, pCO2, pH and temperature in neonatal arterial blood. An Umbilical Artery Catheter is used as an access device. 1.1 NEOTREND SENSOR The sensor incorporates optical sensors for the measurement of pO2, pCO2 and pH, and a thermocouple for temperature measurement. The sensor is calibrated in the TrendCare Calibrator. It is a sterile, disposable single-use device and is used in conjunction with an Umbilical Artery Catheter as an access device. 1.2 NEOTREND SENSOR SPECIFICATIONS Measured Parameters pO2, pCO2, pH and temperature Range pO2 20 to 500mmHg pCO2 10 to 160mmHg pH 6.80 to 7.80 Temp 10(Degree) to 42(Degree)C Performance specifications meet 95% confidence limits based on in vitro evaluations using tonometered solution In vitro Accuracy pO2 +/-5% or +/-3mmHg <120mmHg (whichever is greater +/-10% (120 - 430mmHg) pCO2 +/-3mmHg (10 - 80mmHg) pH +/-0.03 Temp +/-0.3(Degree)C Drift pO2 < 0.5%/hour pCO2 <0.5%/hour pH <0.005/hour Time to Respond Typically less than 15 seconds @ 37(Degree)C Outside Diameter Less than 0.5 mm (average) Material (in contact with blood) Polyethylene with covalently-bonded bioactive surface treatment[1] Sterilization Gamma irradiation. For single use only. - -------------------- [1] Carmeda Bioactive Surface - heparin Shelf Life 18 months, indicated by expiry date on the package. Package Sterile product within sealed thermoformed tray. Storage 0(Degree)C to 40(Degree)C. Do not freeze. 2. PARATREND 7 The Paratrend 7 system (Paratrend 7 sensor and TrendCare hardware) is intended for continuous monitoring of pO2, pCO2, pH and temperature in an adult or paediatric peripheral artery. Usually a radial or femoral arterial catheter is used as an access device. 2.1 PARATREND 7 SENSOR The sensor incorporates optical sensors for the measurement of pO2, pCO2 and pH, and a thermocouple for temperature measurement. The sensor is calibrated in the TrendCare Calibrator and then connected to the TrendCare monitor. It is a sterile, disposable, single use device and is used in conjunction with an arterial catheter. The sensor has two introducer versions: a telescopic introducer for the Paratrend 7FL and a dial-in introducer for the Paratrend 7+. 2.2 PARATREND 7+ SENSOR SPECIFICATIONS Measured Parameters pO2, pCO2, pH and temperature Range pO2 20 to 500mmHg pCO2 10 to 160mmHg pH 6.80 to 7.80 Temp 10(Degree) to 42(Degree)C Performance specifications meet 95% confidence limits based on in vitro evaluations using tonometered solution In vitro Accuracy pO2 +/-5% or+/-3mmHg <120mmHg (whichever is greater)) +/-10% (120 - 430mmHg) pCO2 +/-3mmHg (10 - 80mmHg) pH +/-0.03 Temp +/-0.3(Degree)C Drift pO2 < 0.5%/hour pCO2 <0.5%/hour pH <0.005/hour Time to Respond Typically less than 15 seconds @ 37(Degree)C Outside Diameter Less than 0.5mm (average) Material (in contact with blood) Polyethylene with covalently-bonded bioactive surface treatment[2] Sterilisation Gamma irradiation. For single use only. Shelf Life 18 months, indicated by expiry date on the package. Package Sterile product within sealed thermoformed tray. Storage 0(Degree)C to 40(Degree)C. Do not freeze. 3. INTERMITTENT CARTRIDGE The Cartridges are compatible with the IRMA SL Blood Analysis System & a subset are also compatible with the Portal Product. CARTRIDGE SPECIFICATIONS (IRMA & PORTAL): CATEGORY SPECIFICATION - -------------------------------------------------------------------------------- OPERATING TEMPERATURE: 12-30C (54-86F) CARTRIDGE STORAGE TEMPERATURE: 15-30C (59-86F) MEASUREMENT TEMPERATURE: 37C - -------------------- [2] Carmeda, Bioactive Surface - Heparin OPERATING RELATIVE HUMIDITY: 0-80% OPERATING BAROMETRIC PRESSURE: 350-900 mmHg (measured by on-board barometer) SAMPLE SIZE: 0.125-5.0 mL ANALYSIS TIME: Less than 90 seconds after sample injection (depends on parameter) SIZE (LXWXH) AND WEIGHT: Cartridge Temp Card: 2.6" x 1.3" x 0.6; 1oz. 66 x 33 x 15.24mm; 28g. CARTRIDGE/ANALYTE CONFIGURATIONS: Cartridges are available in the following configurations:
- -------------------- ------------------------------------------- ----------------------------------- CARTRIDGE MEASURED CALCULATED ==================== =========================================== =================================== BG pH, pCO2, pO2 HCO3-, TCO2, Beb, BEecf, O2Sat - -------------------- ------------------------------------------- ----------------------------------- CC pH, pCO2, pO2, HCT, Na+, K+, iCa HCO3-, TCO2, Beb, BEecf, O2Sat, tHb, iCa(N) - -------------------- ------------------------------------------- ----------------------------------- H3 HCT, Na+, K+, iCa tHb, iCa(N) - -------------------- ------------------------------------------- ----------------------------------- H4 HCT, Na+, K+, Cl-, BUN/Urea tHb - -------------------- ------------------------------------------- ----------------------------------- GL[3] Glu, Na+, K+ , Cl- - -------------------- ------------------------------------------- -----------------------------------
CARTRIDGE EQUILIBRATION TIMES: Following removal from their shiping container, IRMA cartridges must equilibrate to room temperature prior to use. Equilibration time depends on the product type as follows: - --------------------- ------------------------------------- CARTRIDGE EQUILIBRATION TIME (HOURS) ===================== ===================================== BG 72 - --------------------- ------------------------------------- CC 72 - --------------------- ------------------------------------- H3 1 - --------------------- ------------------------------------- H4 1 - --------------------- ------------------------------------- GL1 1 - --------------------- ------------------------------------- - --------------------- [3] Available only on IRMA REPORTABLE RANGES : The default reportable ranges for each parameter are as follows: - -------------------------------------------------------------------------------- MEASURED - -------------------------------------------------------------------------------- pH 6.000 - 8.000 pH units - ------------------- ------------------------------------------------------------ pCO2 4.0 - 200.0 mmHg (0.53 - 26.6 kPa) - ------------------- ------------------------------------------------------------ pO2 20.0 - 700.0 mmHg (2.67 - 93.33 kPa) - ------------------- ------------------------------------------------------------ Hct 10.0 - 80.0 % (.100 -.800 SI) - ------------------- ------------------------------------------------------------ Na+ 80.0 - 200.0 (mM, mEq/L) - ------------------- ------------------------------------------------------------ K+ 1.00 - 20.0 (mM, mEq/L) - ------------------- ------------------------------------------------------------ iCa 0.20 - 5.00 mM (0.80 - 20.4 mg/dL; 0.40 - 10.00 mEq/L) - ------------------- ------------------------------------------------------------ Cl- 30.0 - 150.0 (mM, mEq/L) - ------------------- ------------------------------------------------------------ BUN/urea (H4 P/N 055700) - ------------------- ------------------------------------------------------------ BUN 3 - 100 mg/dL (1.1 - 3.57 mM) - ------------------- ------------------------------------------------------------ Urea 6 - 321 mg/dL (1.1 - 35.6 mM) - ------------------- ------------------------------------------------------------ BUN/urea (H4 P/N 055703) - ------------------- ------------------------------------------------------------ BUN 3 - 150 mg/dL (1.1 - 53.5 mM) - ------------------- ------------------------------------------------------------ Urea 6 - 321 mg/dL (1.1 - 53.4 mM) - ------------------- ------------------------------------------------------------ Glu[1] 20 - 500 mg/dL (1.1 - 27.8) - -------------------------------------------------------------------------------- CALCULATED - -------------------------------------------------------------------------------- HCO3- 0 - 99.9 mM - ------------------- ------------------------------------------------------------ TCO2 0 - 99.9 mM - ------------------- ------------------------------------------------------------ Beb +/- 99.9 mM - ------------------- ------------------------------------------------------------ BEecf +/- 99.9 mM - ------------------- ------------------------------------------------------------ O2Sat 0 - 100% - ------------------- ------------------------------------------------------------ tHb 3.4 - 27.2 g/dL (2.1 - 16.9 mM) - ------------------- ------------------------------------------------------------ iCa(N) 0.20 - 5.00 mM (0.80 - 20.04 mg/dL; 0.40 - 10.00 mEq/L - ------------------- ------------------------------------------------------------ DISPLAY RESOLUTION: The display resolution for each parameter is as follows: - -------------------------------------------------------------------------------- MEASURED - -------------------------------------------------------------------------------- pH 0.001 pH units - ------------------- ------------------------------------------------------------ pCO2 0.1 mmHg (0.01 kPa) - ------------------- ------------------------------------------------------------ pO2 0.1 mmHg (0.01 kPa) - ------------------- ------------------------------------------------------------ Hct 0.1% (.001 SI) - ------------------- ------------------------------------------------------------ Na+ 0.1 (mM, mEq/L) - ------------------- ------------------------------------------------------------ K+ 0.01 (mM, mEq/L) - ------------------- ------------------------------------------------------------ iCa 0.01 (mM, mEq/L, mg/dL) - ------------------- ------------------------------------------------------------ Cl- 0.1 (mM, mEq/L) - ------------------- ------------------------------------------------------------ BUN/Urea 1 mg/dL (0.1 mM) - ------------------- ------------------------------------------------------------ Glu 1 mg/dL (0.1 mM) - ------------------- ------------------------------------------------------------ - --------------------- [1] Available only on IRMA EXHIBIT 2.1 PRODUCT PRICES 1. Cartridges Philips P/N DMI P/N Transfer Price (ea box of 25) - ------------------------ ------------------ -------------------- -------------- M3614A 048100 BG * M3615A 048400 H3 * M3616A 039900 CC * M3680A 048102 BG * M3681A 048400 H3 * M3682A 039902 CC * M3584A 048103 BG * M3585A 048400 H3 * M3586A 039903 CC * M3617A 055700 H4 (original) * M3617B 055703 H4 (new) * M3587A 065200 GL * 2. IRMA Products and accessories (used for support)
Philips P/N DMI P/N Transfer price ea - ------------------------ ------------------ ---------------------------------------- --------------- M3664A 448700 NiMH Battery for IRMA * M3628A 442900 NiMH 15 Vdc Battery Charger, * M3629A 573400 15 V power supply * M3669A 438000 IRMA Carrying Bag * (will get 5x5 number for support use) M3670A 440100 AC Adapter assembly * M3666A 432001 IRMA Temp Card * M3671A 403800 IRMA print paper 5 rolls * M3624A 443800 Pole mount for IRMA (will get 5x5 * number for support use) M3627A J&J Lifescan SureStep Pro glucose * module-- 5x5 number M3627-60101 for support use M3674A 040500 Capillary Collection device * M3679A 428400 IRMA edge connector * M3672A 450000 IRMA edge connector cleaner * M3677A 463120 Barcode scanner and mount (will get * 5x5 part number) M3678A 463130 Barcode scanner mount kit (will get * 5x5 part number) M3622-68701 443900 DMI-443900 IRMA, Modem (Glucose ready) * M3622-60701 443900 DMI-443900 IRMA, Modem (Glucose ready) * (for support only) M3623-68701 443901 DMI-443901 IRMA, w/out Modem (Glucose ready) *
* Confidential treatment requested M3623-60701 443901 DMI-443901 IRMA, w/out Modem (Glucose * ready) (for support only) M3622-40301 402000 IRMA printer cover * 453563339101 M3622-42501 420400 IRMA printer spindle * 453563339111 M3622-61610 552700 Cable RJ45 * 453563339141 M3622-61620 552702 Cable - RJ45/modRJ45 * 453563339151 M3622-63901 428400 Edge connector kit * 453563339161 M3622-67610 552900 Adapter-RJ45/DB9 Female * 453563339171 M3622-67611 552800 Adapter-RJ45 to DB9 male * 453563339181 M3622-67620 514000 Adapter-RJ45 to DB25 * 453563339191 M3622-67621 516000 Adapter RJ45/DB25 * 453563339201
Note 1: Pricing for repair and reconditioning as follows: IRMA SL in Warranty requiring repair only * IRMA SL in warranty requiring repair and reconditioning * IRMA SL out of Warranty requiring repair only * IRMA SL out of warranty requiring repair and reconditioning * 3. idms Products (used for support)
Philips P/N DMI P/N Transfer price each - ------------------------ ------------------ ----------------------------------------- -------------- M3667-10802 464100 IRMA idms SW 6.0 Disk set, Data * management M3667-10803 463000 IRMA idms SW 4.0.7 Disk set, Data * management M3667-20002 468600 idms v5 Assembled Binder 1.5" * M3667-9001C 464000 idms Manual Contents *
* Confidential treatment requested 4. Trendcare Products (used for support)
Transfer Price each - ------------------------ ----------------------------- -------------------------------------- M3651-60110 Trendcare Satellite * TCM 6000 M3651-60111 Trendcare Satellite * TCM 6000/Nordic M3650-60101 Senior monitor (115V) * M3650-60102 Senior monitor (230V) * M3652-60101 calibrator * M3653-60101 PDM * M3651-68101 Exchange satellite * M3652-68101 Exchange calibrator * M3653-68101 Exchange PDM *
5. Trendcare Sensors and accessories
Philips P/N DMI P/N Transfer price - ------------------------ ------------------ ----------------------------------------- ---------------- XXXXX XXXXXXX Trendcare software (new features only) * M3643A MPS7004P Paratrend sensor, 5/pack, 7+ * M3673A N7004L Neotrend sensor, 5/pack L N7004L * M3654A MPP7005 Thermal printer paper MPP 7005 * M3655A MCG7010 Gas packs, 3 cylinders, F1 * MCG 7010 M3644A AST015 Fixation strap, 15 pack *
* Confidential treatment requested Exhibit 2.2 SUPPORT AND SERVICES AGREEMENT BETWEEN PHILIPS MEDICAL SYSTEMS AND DIAMETRICS MEDICAL, INC. 1 TABLE OF CONTENTS SECTIONS 1.0 Introduction 2.0 Roles and Responsibilities 3.0 Repair Strategy 4.0 WW Call Flow with Distributors 5.0 Call flow for Europe/Asia Pacific 6.0 Call flow for US and Canada 7.0 Resource Definition 8.0 Training Definition 9.0 Diametrics Warranty 10.0 Service Call Coding Requirement 11.0 Service/Repair for End of Support 12.0 Repair and Return of IRMA's 13.0 Repair and Return of Trendcare 14.0 IDMS Support 15.0 Service Repair Pricing 16.0 After Hours Support Consumables 17.0 Customer Training 18.0 Customer Training Materials 19.0 Additional Customer Needs 20.0 Escalation 2 1.0 Introduction This document is an exhibit to the Amendment to the Manufacturing and Distribution Agreement, dated April 10, 2003. All capitalized terms not defined in this Agreement will have the meanings set forth in the Amendment. In case of any conflict between this exhibit and the Amendment, the Amendment will control. The purpose of this document is to define the roles and responsibilities of Philips Medical Systems ("Philips") and Diametrics Medical, Inc. ("Diametrics") in support of M3622A and M3623A IRMA, the M3667A idms, the M3650A Senior Trendcare Monitor, M3651A Trendcare Satellite Monitor, the M3652A Trendcare Calibrator, and the M3653A Trendcare PDM. It also includes all supporting options as well as sensors and cartridges utilized with these products sold by Philips. A complete list of all products is included at the end of this document Addendum F. The roles and responsibilities of Philips and Diametrics with respect to the M3650A Portal Blood Analysis System and its components is defined in the Amendment, including the Portal Manufacturing Agreement for Portal (Exhibit 3.4). Both parties agree that the ultimate responsibility for customer support could be for 5 years or as defined by local custom or law (i.e. local law or sales and support contracts protected by local law). Pursuant to the Amendment, Philips has the non-exclusive right to provide Support to the Philips Existing Customers for Products through October 31, 2004. Diametrics may also provide Support to such Philips Existing Customers, on terms to be mutually agreed between such Customers and Diametrics. For Products, this document applies to those Philips Existing Customers who continue to use Philips for Support. It is acknowledged by both parties that a single customer may have a "mixed" installation if additional IRMA/Trendcare/idms products are sold by Diametrics into any Philips existing accounts after October 31st, 2002. This may require the customer to utilize two support services, Philips and Diametrics. 3 2.0 ROLES AND RESPONSIBILITIES - -------------------------------------------------------------------------------- Function By Whom - -------------------------------------------------------------------------------- Performs call screening, to determine if Local Philips Response product is a Diametrics product Centers - -------------------------------------------------------------------------------- 1st level application support Distributor Controlled Distributor who sold the Countries (Worldwide) Diametrics product to the customer Europe Local Philips Response Centers USA, Canada and Latin America Field Philips Medical Systems Organization (LAFO) Medical Response Center Alpharetta, GA 1-800-548-8833 Asia-Pacific (AP) Appropriate Philips Response Centers (China, Japan, Singapore, Australia, India) - -------------------------------------------------------------------------------- Order /send exchange unit (Via mail or Local Philips Response Courier) to customer when problem Centers Worldwide determined to be Diametrics hardware - -------------------------------------------------------------------------------- Verify customer has sent their broken unit Local Philips Response Center to Philips SLI (System Logistics Admin Worldwide International) - -------------------------------------------------------------------------------- Performs complaint investigation and 1st level investigation: Philips escalations for Diametrics products Technical Marketing 2nd level investigation Diametrics - -------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- Function By Whom - -------------------------------------------------------------------------------- Reporting of all Diametrics product Distributor who sold the complaints and feedback to Diametrics Diametrics product to the per Section 7.3 of the amendment, dated customers April 10, 2003 as follows: Diametrics will maintain MDR and other product performance monitoring systems for the Local Philips Response Consumables and the IRMA, Trendcare Centers and idms products. Philips shall cooperate with Diametrics in connection Philips Medical Systems with Diametrics' obligations under Medical Response Center Section 7.3 of the amendment (Philips Alpharetta, GA 1-800-548- Service Call Coding Process (A-Q2925- 8833 00134)). Philips will provide to Diametrics the necessary reports relating Appropriate Philips Response to complaints and product performance Centers (China, Japan, issues relating to the Consumables, and Singapore, Australia, India) the IRMA, Trendcare and idms products on a timely basis to permit the reporting party to fulfill its regulatory obligations. Upon reasonable request by Diametrics, Philips shall promptly make such reports (on behalf of Diametrics, if appropriate) directly to the appropriate regulatory authorities. - -------------------------------------------------------------------------------- 5 3.0 REPAIR STRATEGY Diametrics Products Repair Strategy is unit exchange for IRMA/idms. For the Trendcare products the repair strategy for Philips is spare parts repair on-site, if possible, and unit exchange if not possible. For the US only the repair strategy will be unit exchange and/or repair via Medical Repair Depot (MRD) in Dallas, TX to Diametrics repair bench in Malvern/Roseville or other location designated by Diametrics. PHILIPS MAY INITIATE EXTENDED WARRANTY TERMS TO ITS IRMA/TRENDCARE/IDMS CUSTOMERS FOR A PERIOD NOT TO EXCEED OCTOBER 31, 2004. Note: After a country transitions from Philips to Diametrics, the Diametrics TrendCare exchange policy will be unit exchange only for Out of Box Failures. All other repairs will be covered with loaner units from Diametrics until the repaired customer unit can be returned. - -------------------------------------------------------------------------------- 4.0 WW CALL FLOW WHEN COUNTRY USES DISTRIBUTORS DIAMETRICS PRODUCTS WORLDWIDE CALL FLOW FOR COUNTRIES, WHICH UTILIZE DISTRIBUTORS FOR THE SALE OF THE UNITS. [GRAPHIC] o Customer should call Philips local Distributor directly, when transfer to Diametrics is not completed. o After transfer of customers to Diametrics, customer will be informed of the changes to call Diametrics support line instead of Philips Distributor, if not the same. o This communication is a Philips/Diametrics/Distributor responsibility as agreed by the regional transition plans. o Distributor will file questions regarding Diametrics products to the appropriate support channel (Philips before/Diametrics after transfer) o If it is determined the hardware/software has failed, the distributor/dealer orders / sends (via mail or courier an exchange unit to the customer using the responsible supply channel (Philips before/ Diametrics after transfer) o Philips Technical Marketing/Diametrics technical resources handle application and technical questions / issues as appropriate to the transfer situation. If Philips Technical Marketing is unable to resolve situation, they will contact Diametrics for additional assistance. o If it is determined the hardware / software has failed the responsible supply channel will send exchange part to customer. 6 5.0 CALL FLOW FOR EMEA/ASIA PACIFIC DIAMETRICS PRODUCTS CALL FLOW FOR EMEA AND ASIA PACIFIC COUNTRIES, WHICH DO NOT UTILIZE DISTRIBUTORS FOR THE SALE OF THE UNITS. [GRAPHIC] o Customer should call Philips local Response Center directly, when transfer to Diametrics is not completed. o After transfer of Philips customers to Diametrics, customer will be informed of the changes to call Diametrics support line instead of Philips Response Center. o This communication is a Philips/Diametrics/Distributor responsibility as agreed by the regional transition plans. o Philips Response Center Engineer will file questions regarding Diametrics products to the appropriate support channel (Philips Technical Marketing) o After transfer of the Diametrics support channel will take over appropriately o If it is determined the hardware/software has failed, the Philips Response Center Engineer/Diametrics support orders / sends (via mail or courier an exchange unit to the customer using the responsible supply channel (Philips before/Diametrics after transfer) o Philips/Diametrics technical resources handle application and technical questions /issues as appropriate to the transfer situation. If Philips Technical Marketing is unable to resolve situation, they will contact Diametrics for additional assistance. o If it is determined the hardware / software has failed the responsible supply chanel will send exchange part to customer. Philips may initiate extended warranty terms to its IRMA customers for a period not to exceed October 31, 2004. 7 6.0 CALL FLOW FOR US AND CANADA DIAMETRICS PRODUCTS CALL FLOW FOR US AND CANADA, WHICH DO NOT UTILIZE DISTRIBUTORS FOR THE SALE OF THE UNITS. [GRAPHIC] The customer should call the Philips Response Center at 1-800-548-8833 o After transfer of Philips customers to Diametrics, customer will be informed of the changes to call Diametrics support line instead of Philips Response Center. o This communication is the responsbility of Philips/Diametrics regional transition managers. o No Philips customer should call Diametrics directly, unless support has been transferred to Diametrics o When call has been determined to be for Diametrics products, the call is forwarded to the appropriate Philips Response Center Engineer. o If it is determined to be a hardware/software problem, an exchange unit is ordered / sent to customer. o If that Philips Response Center Engineer needs additional assistance to resolve the customer issue they will contact the appropriate Philips Technical Marketing Engineer. o If PHilips Technical Marketing Engineer is unable to resolve issue, they will contact Diametrics technical support for additional assistance. o Diametrics technical resource handles application questions / issues as appropriate and responds to Philips Technical Marketing Engineer.. 8 - -------------------------------------------------------------------------------- 7.0 RESOURCE DEFINITION The following list provides the suggested resource to perform the service function.
Function Resource - -------------------------------------------------------------------------------------------- 1st level application support contacts Distributor Controlled Distributor who sold the Diametrics products to the Countries (Worldwide) customer Europe Local country Philips Response Centers US, Canada and LAFO Philips Medical Response Center Alpharetta, GA 1-800-548-8833 AP In country dealer Diametrics or their representatives once support transfer has occurred. - -------------------------------------------------------------------------------------------- Local Customer Feedback Analyst Local Philips person who processes the Customer Feedback Forms for the local Response Center - -------------------------------------------------------------------------------------------- Diametrics products Technical Philips Technical Marketing Engineer AND/BBN Resource After transfer to Diametrics then Diametrics support - -------------------------------------------------------------------------------------------- Customer Feedback Contacts for For complaints: Philips Complaint coordinator Diametrics Thomas Bauer; For non-complaints: Philips Technical Marketing Engineer AND/BBN - -------------------------------------------------------------------------------------------- Philips Field Service Engineer Philips Customer Service Engineer - -------------------------------------------------------------------------------------------- Philips QSP Philips Quality Service Provider - -------------------------------------------------------------------------------------------- Philips CAS Philips Clinical Application Specialist - --------------------------------------------------------------------------------------------
9 - -------------------------------------------------------------------------------- 8.0 TRAINING DEFINITION The following list provides the resources that need to be trained to perform the service/training /CFA function for the Diametrics products. It will be the responsibility of Diametrics to provide training to the appropriate Philips personnel for software upgrades, work around solutions for hardware or software problems, troubleshooting for all new consumable and software releases. In addition, with the release of new software, a compatibility matrix defining the performance of that revision of software with previous revisions of complimentary products will be provided to Philips as will customer training materials, instructions, etc. This will be provided to Philips at no charge; however, any travel related expenses for requested on-site training will be at the expense of Philips.
- -------------------------------------------------------------------------------------------- Resource Pre-requisites - -------------------------------------------------------------------------------------------- Distributor Countries (Worldwide) Existing Distributors on-going - -------------------------------------------------------------------------------------------- For transfer: transition criteria must be met (Addendum A) - -------------------------------------------------------------------------------------------- Local Philips Response Center Call According to Philips TEDS ( Training and Education Coordinator System) training profile - -------------------------------------------------------------------------------------------- Local Philips Response Center Engineer According to Philips TEDS training profile - -------------------------------------------------------------------------------------------- Philips CAS According to Philips TEDS training profile. In addition, the following pre-requisites are required/desirable: o Hospital experience in the laboratory for at least 2 years o Biochemical qualification o Understanding of the stages of biochemical analysis, especially blood gas analysis. o Understanding of the role of the nurses and doctors in the stages of biochemical analysis. o Appreciate the concept of Point of Care (POC) and be able to discuss o Be able to work as part of a team both locally and across the geography o Speak and write English well o Be willing to travel o Experience with comparison studies would be an advantage, but not necessary. - --------------------------------------------------------------------------------------------
10 - -------------------------------------------------------------------------------------------- Philips Customer Engineer According to Philips TEDS training profile (for US only: No training for on- site support for US Philips CEs, because Philips utilizes Philips Dallas Repair Depot) - -------------------------------------------------------------------------------------------- Philips QSP According to Philips TEDS training profile - -------------------------------------------------------------------------------------------- Philips Customer Feedback Analyst According to Philips TEDS training profile - --------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- 9.0 DIAMETRICS WARRANTY - -------------------------------------------------------------------------------- Diametrics on-going obligations to provide products warranty and out of warranty support to Philips and to Philips Existing customers who have transitioned to Diametrics are set forth in the Amendment. This is a summary of the warranty from Diametrics to Philips for the Standalone Products: - -------------------------------------------------------------------------------- Warranty period for hardware products 18 month period defined from date of Diametrics shipment to Philips - -------------------------------------------------------------------------------- Service location Unit replacement via Philips RCs - -------------------------------------------------------------------------------- Support level Next business day - -------------------------------------------------------------------------------- Consumables: Cartridges Cartridges - Stated Shelf life, but not to be less than 3 months from the date of shipment to Philips for Combo product. Minimum shelf life is 9 weeks for GL & H4 (M3587A & M3617A)) and 11 weeks for H4E (M3617B). - -------------------------------------------------------------------------------- Sensors Sensors - Stated Shelf life, but not to be less than 10 months from the date of shipment to Philips - -------------------------------------------------------------------------------- Accessories (e.g. Catheters, Gas, No warranty - customer dissatisfaction Printer paper etc.) issues will be dealt with via Supplier Action Request process (Addendum B - SAR process, A-Q2920-00224) - -------------------------------------------------------------------------------- idms, DeviceSet, DeviceCom software 45 days after date of delivery to Philips customer - -------------------------------------------------------------------------------- 11 10.0 SERVICE CALL CODING REQUIREMENTS - -------------------------------------------------------------------------------- Service Call Coding Requirement when taking calls for Diametrics products. - -------------------------------------------------------------------------------- o Coding according to process A-Q2925-00134 (Addendum C) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 11.0 SERVICE / REPAIR FOR END OF SUPPORT REQUIREMENTS Diametrics will also provide out-of-warranty repair service on all hardware components of the products for a period of not less than seven (7) years after last shipment to Philips or such longer period as may required by local laws. When applicable Philips and Diametrics will consider having an exchange program to newer product(s) of a supported but obsolete product to guarantee at least the functionality of the old product or will have an extended functionality within the newer product. When applicable, Philips and Diametrics will have an exchange program to newer product(s) of a supported but obsolete product to provide at least the functionality of the old product or an extended functionality within the newer product. The support of the M3650A Senior monitor is such a case. If and when within this support period, Diametrics may deplete its supply of spare parts to repair the obsolete Senior monitor M3650A, Diametrics may at that time offer an exchange/replacement of the M3650A Senior monitor with a M3651A Satellite and M3652A calibrator. Standard repair/exchange is via SLI (System Logistics International) to Diametrics (exceptions are described below in section 12.0 through section 15.0). Diametrics will repair and return unit within 30 days after receipt from SLI. 11.1 ACTIVE UPGRADES The following describes the status of active Trendcare product upgrades and the agreement between Diametrics and Philips as to the completion of these upgrades. 11.1.1 STATUS: UPGRADE A Low Modulation SW upgrade and Calibrator "new bracket" HW upgrade ("Upgrade A") will be transitioned and done by Diametrics according to the following agreed upgrade planning- o Missing Upgrades as agreed between Philips and Diametrics to be done by Diametrics as part of their support responsibility as countries are transitioned. o Diametrics will provide traceability of the upgrade records to complete Philips files. 11.1.2 STATUS: UPGRADE B o Senior Spike Upgrade ("Upgrade B") NOT A REQUIRED UPGRADE. o Trained POCD CS completed the US Seniors upgrade. 12 o Diametrics will complete the upgrade as part of their support responsibility as countries are transitioned Impact: - ------- o Diametrics (DML) will provide upgrade records to Philips as available. 11.1.3 STATUS: CALIBRATOR EXCHANGE o Calibrator exchange from "old gas system" to "copper-and-brass fittings" at customer site o Maintain exchange program for customer calibrators through Diametrics for all remaining calibrators 11.1.4 STATUS: FUTURE UPGRADES o Future Upgrades for Products may consist of hardware, software, as well as Installation and Verification procedures in a quality controlled format for upgrades to be performed as corrective action as well as for upgrades for new features To-Do: - ------ o Corrective actions and new features upgrades can only be performed by trained individuals for support (either trained CEs and RCEs from Philips or Diametrics engineers on mutual agreement will do upgrades) o Diametrics will provide the tools and spare parts to Philips for upgrades of instruments still under support of Philips or Philips and Diametrics will mutually agree to have Diametrics engineers do upgrades. Status of Trendcare Upgrades as of the effective date of the Amendment. % Done US & Canada EMEA LAFO Asia Pacific (AP) - ------------------- ------------ ------------ ----------- ----------------- Upgrade A 100 % 95 % 20 % 0 % Upgrade B 100 % 15 % 0 % 0 % Calibrator New 95 % 33 % 0 % 0 % fittings 12.0 REPAIR/RETURN OF IRMA'S TO THE CUSTOMER (US ONLY) This process only applies to Philips Existing Customers requesting this service (i.e., request the same serial number unit returned). The standard repair for warranty, service contract, and T & M customers is unit exchange. 1. The customer should contact the Philips Medical Response Center at 1-800-548-8833. The RCE will log the call, do troubleshooting and request the repair and return of their same serial number IRMA. The Response Center Engineer ("RCE") will note if the repair is under warranty, service contract or T & M (time and materials). For T & M repairs, the RCE will obtain a PO number from the customer. The RCE will inform the customer that the total Turn Around Time (TAT) for the repair will be 10-14 business days, from the date of shipment to Philips of the product. The RCE will determine if the customer utilizes other complimentary products (i.e. IRMA and idms) to determine 13 compatibility if the product to be repaired is compatible with the s/w revision of the complimentary product. If there is a compatibility issue, the RCE will notify Diametrics that the product being returned is not to be upgraded to the current revision of software. 2. The customers will be instructed to ship the unit to the Philips Dallas repair depot after removing the temp card and batteries (if applicable). If an appropriate shipping container is required, the Philips Dallas repair depot will ship the container to the customer. 3. The Philips Dallas repair depot will perform the system decontamination and forward it to Diametrics in Roseville, MN. 4. After the repair, Diametrics will return the unit to the Philips Dallas repair depot. The Philips Dallas repair depot will close out the Philips Service Call and return the unit to the customer. 5. Diametrics agrees to a 10 business day TAT (turn around time) for repair upon arrival at the Diametrics facility. Customer units to be repaired and returned will be treated as P-1 (Priority 1) status. 6. If Diametrics determines the repair time will exceed 10- business days, they will notify the PMD RCE. Diametrics will provide an expected date for the product to be returned to the customer. The Philips RCE will contact the customer to reset expectations. All communication with Diametrics and customer will be documented and tracked in the relevant Service Call database. 13.0 REPAIR/RETURN OF TRENDCARE TO THE CUSTOMER (WORLDWIDE) For those Philips Existing Customers requesting a repair and return of their Trendcare unit the following will apply (i.e., request the same serial number unit returned). The standard repair for warranty, service contract, and T & M customers is unit exchange or repair on-site where applicable. 1. The customer should contact the local Philips Medical Response Center. The RCE will log the call, do troubleshooting and request the repair if needed (e.g. Senior monitor M3650A). The RCE will note if the repair is under warranty, service contract or T & M. For T & M repairs, the RCE will obtain a PO number from the customer. The customer will be informed that the TAT will be 14- 21 business days from the date of shipment by the customer of the product. This TAT includes the assumption that Philips return process takes no longer than 5 day TAT from customer to Diametrics. The equipment must also be shipped as repairs are needed (no retention of units allowed to enable one large shipment of product). The RCE will determine if the customer can utilize other complimentary products (i.e. Satellite monitor M3651A and Calibrator M3652A) to determine replacement if the product is not to be repaired anymore. If not, the RCE will be notified by Diametrics that the product being returned is not to be repaired anymore and offer the customer replacement. 2. For US only: The customers will be instructed to ship the unit to the Philips repair depot in Dallas. If an appropriate shipping container is required, the Philips Dallas repair depot will ship the container to the customer. 14 For ROW: The customer will be informed where to ship the unit on a case by case basis (if to High Wycombe, UK or Malvern, PA) or other location specified by Diametrics. 3. The Philips Dallas repair depot will perform the system decontamination and forward it to Diametrics in Malvern/Roseville or other designated location. In all other cases (ROW) Philips/Diametrics will perform the decontamination according to their policies. 4. After the repair Diametrics will return the unit to the Philips Dallas repair depot (US) or to the customer directly (ROW). For the ROW, Diametrics needs to inform the local Philips Response Center that the RCE can close out the Service Call. For the US: The Philips Dallas repair depot will close out the Philips Service Call and return the unit to the customer. 5. Diametrics agrees to a 10-15 business day TAT for repair upon arrival at the Diametrics facility. Customer units to be repaired and returned will be treated as P-1 status. 6. If Diametrics determines the repair time will exceed the announced TAT, they will notify the PMD RCE. Diametrics will provide a new expected date for the product to be returned to the customer. The Philips RCE will contact the customer to reset expectations. All communication with Diametrics and customer will be documented and tracked in the relevant Service Call database. 14.0 idms SUPPORT For all idms systems installed prior to 31 October 2002, Philips will continue to provide first level support to Philips Existing Customers for the product including contacting the appropriate third party vendor if the problem involves an LIS interface. If the RCE exhausts their ability to resolve the issue, they will escalate the issue to Philips Technical Marketing for further assistance. For all idms systems sold into Philips accounts as part of a Portal/CMS solution after 31 October 2002, Diametrics will be responsible for providing system training, installation, troubleshooting, repair and support. Any s/w upgrades to provide for bug fixes or product enhancement that are being offered to Diametrics customers free of charge will also be supplied to Philips to give to their customers free of charge. If any additional classroom training is needed on these upgrades for the Philips technical support staff, the required training program will be provided to Philips free of charge. Any Diametrics travel related expenses for requested on-site training will be at the expense of Philips. 15.0 SERVICE REPAIR PRICING Philips has requested Diametrics to provide reconditioning (including software upgrades) on units returned for repair per reconditioning guidelines defined by Philips. As a result of the additional services to be provided, the following agreement has been reached. 15 o Philips and Diametrics have established the following p/n's to reflect refurbished IRMA Analyzers:
Philips New P/N Philips (Exchange) Diametrics P/N Product Description Reconditioning P/N - --------------------------------------------------------------------------------------------------------------------------- M3622-60701 M3622-68701 443900 IRMA, Modem (Glucose Ready) - --------------------------------------------------------------------------------------------------------------------------- M3623-60701 M3623-68701 443901 IRMA, w/out Modem (Glucose Ready) - --------------------------------------------------------------------------------------------------------------------------- M3623-68701 443902 IRMA, w/out Modem(Glucose Ready)Refurbished - --------------------------------------------------------------------------------------------------------------------------- M3622-60721* M3622-68721 436300 IRMA, Modem(Non-Glucose Ready) - --------------------------------------------------------------------------------------------------------------------------- M3623-60721* M3623-68721 436301 IRMA, w/out Modem (Non-Glucose Ready) - --------------------------------------------------------------------------------------------------------------------------- M3623-68721 436303 IRMA, w/out Modem(Non-Glucose Ready) Refurbished - ---------------------------------------------------------------------------------------------------------------------------
* M3622-60721 and M3623-60721 are not available as new product. These parts are obsolete and are only repaired at DMI for the installed base. PRICING FOR REPAIR AND RECONDITIONING AS FOLLOWS: IRMA SL in Warranty requiring repair only * IRMA SL in Warranty requiring repair and reconditioning * IRMA SL out of Warranty requiring repair only * IRMA SL out of Warranty requiring repair and reconditioning * o Pricing will be subject to change upon 90 days written notice by Diametrics or upon change in reconditioning requirements by Philips Medical. o Philips Medical will issue purchase orders to Diametrics prior to authorization of return of instruments to Diametrics. o This agreement to provide reconditioning service may be terminated by either party upon 90 days written notice. o Repair pricing is subject to 90 day notice of change. o Repair and reconditioning will be to current built standards unless specified otherwise. o Out of warranty repair excludes customer abused or damaged equipment. OUT OF WARRANTY REPAIR FOR TRENDCARE: Senior repair USD * Satellite repair USD * PDM repair USD * Calibrator repair USD * ($1000 if calibrator needs copper and brass fittings => new hard piped gas system upgrade) o Repair pricing is subject to 90 day notice of change. o Out of warranty repair excludes customer abused or damaged equipment. FOR US ONLY: Senior validation USD * * Confidential treatment requested 16 Satellite validation USD * PDM validation USD * Calibrator validation USD * 16.0 AFTER HOURS SUPPORT FOR CONSUMABLES AND/OR HARDWARE: (US ONLY) Since cartridges and sensors are not able to be obtained through Philips SLI (System Logistics International) for after hours needs (including weekends, holidays, etc.), Philips will continue to utilize the services established by Diametrics at Network Courier. Diametrics will maintain the inventory at Network Courier including monitoring expirations dates of time sensitive materials. In the event that Philips utilizes this service for consumables or hardware shipments, the cost as well as the additional charges for next flight out and delivery to site (if requested) will be billed to the Philips Blanket Service Order (BPO) designated for Diametrics support/repairs. 17.0 CUSTOMER TRAINING FOR ALL CUSTOMERS WHO PURCHASED EQUIPMENT PRIOR TO 31 OCTOBER 2002: The Philips Clinical Application Specialist or their designee will do installation and follow up training. FOR ALL CURRENT IRMA AND TRENDCARE CUSTOMERS WHO PURCHASE INCREMENTAL UNITS FROM DIAMETRICS AFTER 31 OCTOBER 2002 AND REQUIRE ADDITIONAL TRAINING: The Diametrics Clinical Application Specialist or their designee will do installation and follow up training. The Diametrics Clinical Application Specialist or their designee will do installation and follow up training of the IRMA and idms(including method validation, install appropriate clinical data server description file, and LIS connectivity). FOR ALL CUSTOMERS WHO PURCHASE PMS PORTAL MODULES AND DIAMETRICS IDMS AND/OR IRMA AFTER 31 OCTOBER 2002: It is understood that this system sale will include the coordination of both Philips and Diametrics representatives to meet the customer needs. Portal modules can be sold by either Philips or Diametrics non-exclusively. IRMA and idms are sold by Diametrics. The Philips Clinical Application Specialist or their designee will do installation and training on the Portal Module if sold by Philips. The Diametrics Clinical Application Specialist or their designee will do installation and follow up training of the IRMA and idms (including method validation, install appropriate clinical data server description file, and LIS connectivity). * Confidential treatment requested 17 While every effort will be made to coordinate the delivery of services needed for the connectivity of the Portal/idms solution, each vendor should define their own project management plan that defines scope, Work Break Down Structure (WBS), deliverables, and billing milestones separately with the customer. 18.0 CUSTOMER TRAINING MATERIALS All customer training material developed by Diametrics after 31 Oct. 2002, that would be appropriate for IRMA, idms, and Trendcare units, will be made available to Philips through October 31, 2004 at Diametrics' media cost, to provide to their customers. 19.0 ADDITIONAL CUSTOMER SUPPORT NEEDS Diametrics agrees to the continued responsibility of establishing and publishing the reportable ranges for each lot of RNA controls for IRMA. Philips will reimburse Diametrics for establishing the reportable ranges for each lot of controls for Portal. This is done an average of 4 times per year (4 controls) with and average estimated cost of $8000 (includes cartridges, controls and labor) per year billable at the end of the year. This information will be made available to the Philips RC as well as all Diametrics IRMA and Philips Portal module customers via a posting on the Diametrics web site. In addition, Philips will continue to share in the financial responsibility for completing the CAP (College of American Pathologists) surveys applicable to IRMA. Surveys are performed 3 times per year and the kits are ordered on an annual basis (approximately $5000 for 10 kits to be paid for by Philips). Diametrics' share of the expense will be to supply cartridges and labor costs to facilitate the required testing and report the results to CAP to allow IRMA to be listed in a peer group (minimum of 10 instruments) ensuring that results for these instruments will only be compared to other results for this same instrument (method). In addition, any issues identified with cartridges, sensors or accessories that may cause customer dissatisfaction and/or necessitate a recall will be communicated to the appropriate regulatory person(s) within the Philips organization. Product recalls are addressed per Section 6.5 of the Distribution Agreement dated 06 June 1999 between the Companies. It is recommended that a monthly conference call be established between the Philips RC and field clinical specialists, a Philips technical marketing engineer and the Diametrics technical support team and field clinical specialists to discuss issues related to customer calls, product issues, etc. If additional clinical support is needed for customer training, installations, hot sites, etc., both parties agree that the other organization's clinical specialists may be used and paid for by the agreed upon schedule (See Addendum D). These requests for additional assistance should be considered only as a one-time request for support. It does not imply that support of the customer is being turned over to the other company unless all other agreed upon transition parameters are met and if agreement between Philips and Diametrics Transition Managers has been achieved. 18 20.0 ESCALATION PROCESS. Philips will escalate issues/non-compliance arising under this Exhibit through its SAR (Supplier Action Request) process, and Diametrics will escalate issues arising under this Exhibit through its DAR (Distributor Action Request) process. If a formal response is not received in a reasonable timeframe as requested on the DAR or SAR, the issue will then be escalated to the Philips and Diametrics Relationship Managers (currently Joe Harrington and Diane Norton). 19 ADDENDUM A: READ ME: The following Form shall be used regarding the transition of Philips Customers to Diametrics. It is the responsibility of the regional transition managers to complete the form as changes occur and to submit the records to Joe Harrington and Herbert van Dyk Instruction: The following table will be used to show conditions to be met prior to initiation of transition activities. Please use the relevant color and indicate an appropriate reference in the cell, which will demonstrate the evidence Boblingen November 25, 2002 _ Herbert van Dyk (revised 28 Jan 03 by Joe Harrington) - -------------------------------------------------------------------------------- Diametrics Transition Criteria for A-P, EMEA, NA-LA - -------------------------------------------------------------------------------- Last Update: January 28, 2002 - -------------------------------------------------------------------------------- Owner: name - -------------------------------------------------------------------------------- Instruction: The following table will be used to show conditions to be met prior to initiation of transition activities. Items marked with an asterisk (*) are those which must be completed. Other items are for Philips /Diametrics internal purposes only. Please use the relevant color and indicate an appropriate reference in the cell ___, which will demonstrate the evidence - --------------------------------------------------------------------------------
Legend: NOT READY IN PROGRESS READY COMPLETE COUNTRY: Country Country Country Country Country Country Country Country Country - -------- ------- ------- ------- ------- ------- ------- ------- ------- ------- REGULATORY Regulatory process clearly defined and requirements fulfilled. This will include all legal vigilance requirements, e.g. Complaint handling, traceability.* DEALER (IF APPLICABLE) Appropriate Dealer appointed
20
Pricing negotiated and agreed Terms of sale agreed Export conditions met e.g., Types of invoice, customs requirements etc.* All PMS/Dealer contract/credit issues resolved SALES/SUPPORT/SERVICE Technical support resources* Clinical and sales support clearly defined and in place* Clearly defined warranty delineation agreed (including End of Life Support terms)* Escalation management defined* Research/reference site(s) transfer agreed to and documented, as appropriate* Post- transition follow-on customer support/complaint activities (by Diametrics) documented (i.e. add'l sensors provided at no charge) * Transition of Service Agreement (s) Documented & in place (as appropriate) Customer/Distributor information provided - name,address,contact* Country demo units/consignment inventory returned to factory TRANSITION TIMELINES Start of transition* Estimated end of transition/complete date*
21 ADDENDUM B: Philips SAR Process (A-Q2920-00224); excerpt of process as needed from Diametrics can be obtained from Philips Q&R responsible personnel. ADDENDUM C: Philips Service Call Coding Process (A-Q2925-00134); excerpt of process as needed from Diametrics can be obtained from Philips Q&R responsible personnel. 22 ADDENDUM D: New Options and Pricing Standard Hours (consecutive 8 hour period between 7:00AM-7:00PM M-F) o H1027B o A01 - 1 Day Clinical Configuration and Implementation Services - $1700.00 o A02 - 2 Days Clinical Configuration and Implementation Services - $3200.00 o A03 - 3 Days Clinical Configuration and Implementation Services - $4500.00 o A04 - 4 Days Clinical Configuration and Implementation Services - $5800.00 o A05 - 5 Days Clinical Configuration and Implementation Services - $7100.00 Other New Options o H1027B o IV2 - IntelliVue Screen Creation - $1900.00 per day. o CTS - Custom Clinical Configuration and Implementation Services - Requires AEO DM Approval. 23 ADDENDUM E: Diametrics DAR Form No. 391 24 ADDENDUM F: AVAILABLE PRODUCT LIST 1. Cartridges Type - ------------------------ ----------------------------- M3614A BG M3615A H3 M3616A CC M3680A BG M3682A CC M3584A BG M3585A H3 M3586A CC M3617A H4 (original) M3617B H4 (new) M3681A H3 M3587A GL 2. IRMA Products and accessories (used for support) M3664A NiMH Battery for IRMA M3628A NiMH 15 Vdc Battery Charger, Power Supply M3629A 15 V power supply M3669A IRMA Carrying Bag Will get 5x5 number for support use M3670A AC Adapter assembly M3666A IRMA Temp Card M3671A IRMA print paper 5 rolls M3624A Pole mount for IRMA Will get 5x5 number for support use 25 M3627A J&J Lifescan SureStep Pro glucose module 5x5 number M3627-60101 for support use M3674A Capillary Collection device M3679A IRMA edge connector M3672A IRMA edge connector cleaner M3677A Barcode scanner and mount Will get 5x5 number for support use M3678A Barcode scanner mount kit Will get 5x5 number for support use M3622-68701 DMI-443900 IRMA, Modem (Glucose ready) M3623-68701 DMI-443901 IRMA, w/out Modem (Glucose ready) M3622-40301 IRMA printer cover 453563339101 M3622-42501 IRMA printer spindle 453563339111 M3622-61610 Cable RJ45 453563339141 M3622-61620 Cable - RJ45/modRJ45 453563339151 M3622-63901 Edge connector kit 453563339161 M3622-67610 Adapter-RJ45/DB9 Female 453563339171 M3622-67611 Adapter-RJ45 to DB9 male 453563339181 M3622-67620 Adapter-RJ45 to DB25 453563339191 26 M3622-67621 Adapter RJ45/DB25 453563339201 3. IDMS Products (used for support) M3667-10802 IRMA IDMS SW 6.0 Disk set, Data management M3667-10803 IRMA IDMS SW 4.0.7 Disk set, Data management M3667-20002 IDMS v5 Assembled Binder 1.5" M3667-9001C IDMS Manual 4. Trendcare Products (used for support) M3561 60110 Trendcare Satellite TCM 6000 M3651 60111 Trendcare Satellite TCM 6000/Nordic M3652-60101 Calibrator M3653-60101 PDM M3650-68101 Repair/Exchange Senior monitor (115V) M3650-68102 Repair/Exchange Senior monitor (230V) M3651-68101 Repair/Exchange satellite M3652-68101 Repair/Exchange calibrator M3653-68101 Repair/Exchange PDM 27 5. Trendcare Sensors and Accessories M3643A Paratrend 7+ sensor, 5/pack Neotrend L sensor M3673A 5/pack L N7004L M3654A Thermal printer paper MPP 7005 M3655A Gas packs, 3 cylinders, F1 MCG 7010 M3644A Fixation strap Confidential treatment EXHIBIT 2.4 INVENTORY BUY-BACK PROCESS * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested EXHIBIT 2.6 COUNTRY TRANSITION LETTER [PHILIPS MEDICAL LETTERHEAD] [DATE] Diametrics Medical Incorporated 2658 Patton Road St. Paul, MN 55113 Re: Transfer of Support of Consumables and IRMA, TrendCare, and idms Products from Philips to Diametrics Dear ____________: This letter constitutes a letter agreement between Philips and Diametrics with respect to the transfer of sales and support for Consumables and support for installed IRMA, TrendCare and idms products (the "Transitioned Products") in [COUNTRY] as follows: 1. The parties confirm that to the best of each party's knowledge, the criteria (as set forth in Addendum A to the Service and Support Agreement between the Parties) for transitioning, from Philips to Diametrics, the sales and support of Consumables and support for IRMA, TrendCare and idms products installed at Philips' customer sites have been completed in [COUNTRY]. Effective as of [DATE], Diametrics shall be responsible for sales and support for Consumables and support for IRMA, TrendCare and idms products in [COUNTRY], whether previously shipped or serviced by Philips or Diametrics, as defined in the Amendment and the Service and Support Agreement. In addition, Diametrics will resume all legal and regulatory obligations for all Transitioned Products in [COUNTRY] shipped by Diametrics prior to June 6, 1999. The attached customer list contains contact information for the customers to whom Philips shipped Transitioned Products, and to the best of Philips' knowledge, customers of the Transitioned Products who did not order such Transitioned Products from Philips. 2. With respect to the Transitioned Products in [COUNTRY] as of the date of this letter agreement, the warranty, support and regulatory provisions set forth in the Amendment and the Service and Support Agreement shall apply. 3. Attached is a mutually agreed list of unique follow-on customer support/complaint activities to be completed by Diametrics. 4. The parties confirm that for this country, Philips has provided Diametrics: a. installed base and/or distributor information (institution name, address, contact) and b. funnel information (leads, demo, evaluation). 5. In this country, Philips customer service agreements for the Transitioned Products have been either (a) assigned to and assumed by Diametrics in writing or (b) canceled by Philips and the applicable customer and superceded by new customer service agreements between Diametrics and the customer. 6. Diametrics has provided Philips contact information (name, address, telephone number, email address) of the Diametrics person to contact in case a customer, government agency, or third party contacts Philips about the Transitioned Products. Furthermore, Philips and Diametrics agree to separately communicate to customers and distributors that the country transition has been completed and include the new Diametrics' contact information for support to customers/distributors. If this letter agreement is acceptable to you, please sign below. PHILIPS MEDICAL SYSTEMS By: ------------------------------ Title: --------------------------- Accepted and Agreed: Diametrics Medical Incorporated By: - --------------------------------- Title: - --------------------------------- Exhibit 3.5 Portal Products purchased from Philips Transfer Price - -------------------------------------------------------------------------------- M3562A Interface module (for * support use only) M3561A Portal measurement module * (for support use only) Users guide * M3560A Portal Analysis Module * ( solution totally boxed but without cable and without mount) (for product sale) M3561-6160x Interface Cable 2m * Interface cable 4m * M3570A Mount * M3571A Mount * M3572A Mount * M3573A Mount * M3574A Mount * * Mount price based on purchase minimum of * each. Prices will be subject to change upon 90 days written notice by Philips. EXHIBIT 5.1 IP OWNERSHIP * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested ATTACHMENT A IP REVIEW PROCESS * - ---------- * Confidential treatment requested * - ---------- * Confidential treatment requested ATTACHMENT B PHILIPS/DIAMETRICS DISTRIBUTION AGREEMENT DATED 6 JUNE 99 CONTRACTUAL PROVISIONS * - ---------- * Confidential treatment requested Exhibit 5.4 Portal Products WARRANTY STATEMENT a) Portal Products purchased by Diametrics from Philips will receive the standard warranty of: 18 months from date of receipt (90 days for parts) or 12 months from date of installation by Diametrics whichever comes first. b) Philips warrants Philips hardware Products against defects in materials and workmanship. Philips further warrants that Philips hardware Products conform to Specifications. These warranties do not include periodic recalibration (recommended for some Philips Products). c) Philips warrants that Software will not fail to execute its programming instructions due to defects in materials and workmanship when properly installed and used on the Device designated by Philips. Philips further warrants that Philips owned standard Software will substantially conform to Specifications. Philips does not warrant that Software will operate in hardware and software combinations selected by Customer, or meet requirements specified by Customer. d) Philips does not warrant that the operation of Products will be uninterrupted or error free. e) If Philips receives notice of defects or non-conformance to hardware Specifications, or substantial non-conformance to Philips owned standard Software Specifications during the warranty period, Philips will, at its option, repair (and recalibrate only as necessitated by repairs), or replace the affected Products. If Philips is unable, within a reasonable time, to repair, replace or correct a defect or non-conformance in a Product to a condition as warranted, Diametrics will be entitled to a refund of the purchase price upon prompt return of the Product to Philips. Diametrics will pay expenses for return of such Products to Philips. Philips will pay expenses for shipment of repaired or replacement Products. f) Philips warrants that Philips Support will be provided in a professional and workmanlike manner. Philips will replace, at no charge, parts which are defective and returned to Philips within 90 days of delivery. g) Some newly manufactured Philips Products may contain and warranty service may use remanufactured parts, which are equivalent to new in performance. h) The above warranties do not apply to defects resulting from improper or inadequate maintenance or calibration by Customer; Customer or third party supplied software, interfacing or supplies; unauthorized modification; improper use or operation outside of the Specifications for the Product; abuse, negligence, accident, loss or damage in transit; improper site preparation; or unauthorized maintenance or repair. i) THE ABOVE WARRANTIES ARE EXCLUSIVE AND NO OTHER WARRANTY, WHETHER WRITTEN OR ORAL, IS EXPRESSED OR IMPLIED. PHILIPS SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. EX-99.3 4 ex_99-3.txt PORTAL MANUFACTURING AGREEMENT (REDACTED) PORTAL MANUFACTURING AGREEMENT By and between DIAMETRICS MEDICAL, INC. 2658 PATTON ROAD ST. PAUL, MN 55113, USA (hereinafter referred to as "DIAMETRICS") and PHILIPS MEDICAL SYSTEMS (hereinafter referred to as "PHILIPS") on the supply of Portal cartridge reader M3561A (M3561-60001); exchange repair unit M3561-68000 plus accessories edge connector cleaning kit M3672A (DMI 450000); temp card M3565A (DMI 467900); edge connector M3561-66403 (DMI 516300); and DeviceSet with DeviceCom on a CD M3564A (DMI464218) PORTAL MANUFACTURING AGREEMENT THIS PORTAL MANUFACTURING AGREEMENT (the "Manufacturing Agreement"), made as of this 10th day of April, 2003 (the "Effective Date"), by and among Diametrics Medical Incorporated, a Minnesota corporation having its principal place of business at 2658 Patton Road, St. Paul, Minnesota 55113 ("Diametrics") and Philips Medical Systems North America Company, a division of Philips Electronics North America Corporation, a Delaware corporation with offices at 3000 Minuteman Road, Andover, Massachusetts ("Philips"). Diametrics and Philips shall each be a "Party." RECITALS A. Philips and Diametrics previously entered into a distribution agreement dated June 6, 1999 (the "Distribution Agreement") the term of which expired on October 31, 2002, and the parties are entering into an amendment to the Distribution Agreement, dated as of the date of this Manufacturing Agreement (the "Amendment") in order to clarify some of the surviving rights and obligations under the Distribution Agreement. All capitalized terms shall have the meanings set forth in this Manufacturing Agreement. B. Whereas as governed by the Distribution Agreement, Philips and Diametrics have jointly developed the M3650A Blood Analysis Portal System consisting of the M3561A Portal Reader and the M3562A Interface Module. C. Under the terms of the Distribution Agreement, Philips has surviving rights to distribute the Portal Measurement Module as a part of the Portal Product in a specific field of use until October 31, 2004, and Diametrics will manufacture the Portal Measurement Products in accordance with the Amendment and this Manufacturing Agreement and provide Portal Measurement Products to Philips to allow for the completing of the postponement step by Philips of the Portal Products. C. The Parties desire to enter into this Manufacturing Agreement for the purposes of Diametrics' manufacture of the Portal Measurement Products solely for Philips on the terms of this Manufacturing Agreement. NOW THEREFORE, in consideration of the foregoing premises and of the mutual covenants and subject to the terms and conditions set forth herein below, Philips and Diametrics agree as follows: 1. Definitions 1.1 DeviceSet/DeviceCom Software. Means DeviceSet software with DeviceCom software on a CD M3564A (DMI 464218), as more particularly described in the Specifications. 1.2 Portal Measurement Accessories. Means the following (a) accessories edge connector cleaning kit M3672A (DMI 450000); (b) temp card M3565A (DMI 467900); (c) edge connector M3561-66403 (DMI 516300), and (d) M3561-40003 1 edge connector cover (DMI 466400), as more particularly described in the Specifications. 1.3 Portal Measurement Module. Means the Portal cartridge reader M3561A (M3561-60001), as more particularly described in the Specifications. 1.4 Portal Measurement Products. Means the Portal Measurement Module, the exchange repair unit M3561-68000, Portal Measurement Accessories and DeviceSet/DeviceCom Software, collectively. 1.5 Portal Products. Has the meaning set forth in Section 1.14 of the Amendment. 1.6 Required Quality Data. Means the data and information described on Schedule 1. 1.7 Specifications. Means the specifications set forth in Schedule 2. 1.8 Term. Means the period from the Effective Date through October 31, 2004. 1.9 Schedule References. All Schedule references shall mean the Schedules to this Amendment. 2. EFFECT OF AGREEMENT 2.1 Portal Manufacturing Agreement. This Manufacturing Agreement stipulates the additional terms and conditions for the supply of Portal Measurement Products to Philips by Diametrics, including any Portal Measurement Products supplied by Diametrics prior to or during the Term hereof. The Portal Measurement Products will be manufactured and supported by Diametrics as provided herein and the Amendment. 2.2 Supplementary Agreement. The Parties are executing this Manufacturing Agreement as a supplement to the Amendment in order to provide for certain additional terms and conditions relating to the manufacture of the Portal Measurement Products. This Manufacturing Agreement does not supercede the Amendment, and the terms of the Amendment shall apply to the Portal Measurement Products, except as expressly set forth herein. 3. EXAMINATION AND DELIVERY OF THE DIAMETRICS PRODUCTION UNITS PRIOR TO SHIPMENT TO PHILIPS. 3.1 Supplier Evaluation. Diametrics shall manufacture the Portal Measurement Products with material purchased directly by Diametrics. A list of suppliers and contacts have been provided by Philips to Diametrics. Philips agrees to provide initially the "Supplier Evaluation". Diametrics' and Philips' engineering contacts (listed on Schedule 5) will jointly agree as to which supplied components of the Portal Measurement Module are required to be periodically audited by the Diametrics quality personnel. 2 3.2 Certificate of Compliance. Each serialized Portal Measurement Module will be provided with a completed Diametrics "Certificate of Compliance" certifying that said product was inspected and tested per controlled manufacturing procedures. 3.3 Production Units. Diametrics shall produce units of Portal Measurement Modules and other Portal Measurement Products in accordance with the terms and provisions hereof. The scope of delivery and supply shall be as set forth in this Manufacturing Agreement and the Amendment. 3.4 Audit by Philips. Philips may periodically audit via a functional test a sample of the delivered Portal Measurement Module. Should Philips detect deviations from the Specifications or defects during the course of the functional check of the full production Portal Measurement Modules, Philips shall inform Diametrics thereof forthwith in writing via an SAR ( Supplier Action Request) per the Supplier Action Request Process Q2920-00224. In this event, Diametrics shall provide Philips with repaired or newly manufactured units of Portal Measurement Modules which are free of the defect(s) in question and shall provide a written corrective action plan within a reasonable period of time to be defined and agreed to by the Parties. Diametrics shall ensure that defects are remedied and rectified by certified employees. Subject to mutual agreement between the Parties, such rectification of defects may be carried out by Philips. 3.5 Functional Checks after Delivery. Following delivery of the repaired / newly manufactured units, Philips shall conduct another functional check in accordance with Section 3.4 above. If deviations from the Specifications or defects are still detected in the repaired/newly manufactured Portal Measurement Modules and these are not remedied and rectified within mutually agreed upon date negotiated within the SAR process, subject to mutual agreement of the Parties, such rectification of defects may be carried out by Philips or a third party named by Diametrics and agreed by Philips prior to the implementation at Diametrics expense. 3.6 Ship to Stock. The quality of the Portal Measurement Modules will allow ship-to-stock, without need of incoming inspection/test. Philips may periodically audit via a functional test a sample of the delivered Portal Measurement Module with a goal of acceptable failure rate of 1 per 100 units. 4. SCOPE OF DELIVERY. 4.1 Forecasting and Ordering. Philips shall issue to Diametrics a monthly written, rolling, non-binding six (6) month forecast of its purchase of Portal Measurement Products. Such forecasts shall be updated monthly. Philips shall issue binding written purchase orders for Portal Measurement Products at least sixty (60) days prior to the proposed shipping date for such items. All purchase orders in excess of Philips' forecast shall be subject to written acceptance by Diametrics. Diametrics will use reasonable efforts to supply such items in a timely fashion, 3 subject to Diametrics' reasonable production capabilities and provided that such purchase orders are consistent with Philips' forecasts. 4.2 Fluctuations in Orders. The parties shall address purchasing of components and materials as provided in Section 4.1(c) of the Amendment. In addition, Diametrics will diligently monitor its supply chain and its production processes and will promptly inform Philips of any anticipated interruption or inability to supply Portal Measurement Products to Philips to meet its forecasts or its firm, binding purchase orders, in order to permit Philips to assess the manufacturing situation, to inform its sales and planning personnel to attempt to adjust for such shortfall, and to advise and assist Diametrics, at Diametrics' expense in its efforts to minimize or avert such interruption in or inability to supply Portal Measurement Products. 5. DELIVERY. 5.1 Purchase Orders for Portal Measurement Products. Philips shall be entitled to use its then current standard purchase order for its purchases hereunder. In the event of a conflict between the terms of any such purchase order and the terms of this Manufacturing Agreement, the terms of this Manufacturing Agreement shall take precedence. Additional terms included in the purchase order that are not terms of this Manufacturing Agreement will be subject to prior mutual written agreement. 5.2 Terms for Delivery. All deliveries of Portal Measurement Products and Consumables shall be made by Diametrics F.O.B. Diametrics U.S. or European facility. Title and risk of loss shall pass to Philips at the time of tender at Diametrics' facility to the carrier designated by Philips. Upon delivery to Philips' designated carrier, Philips will assume title and risk of loss, and will be responsible for transportation, and, if applicable, export of such products from the country of manufacture and shall be entitled to any duty drawback for which the products qualify. Diametrics shall provide Philips, upon Philips' reasonable request and at Philips' expense, reasonable substantiation and assistance with respect to such duty drawbacks. The pricing for products excludes, and Philips shall pay, all shipping, handling and insurance costs for and other costs of transporting such products after delivery to the F.O.B. point. 5.3 Diametrics Supply Obligation. Diametrics shall manufacture the Portal Measurement Products in accordance with the applicable specifications and in accordance with the FDA, EU and all applicable regulations. 6. PRICES. 6.1 Prices. Portal Measurement Products shall be supplied at the prices set forth in Schedule 4. All prices are F.O.B. Diametrics manufacturing facility. 4 6.2 Price Changes. Prices may be changed upon ninety (90) days written notice by Diametrics. Any changes will not impact orders received prior to the date of such change. 6.3 Terms of Payment. All payments for Portal Measurement Products shall be due and payable within thirty-five (35) days of the date of the applicable invoice. Philips shall make all payments in immediately available funds to the location and in the manner reasonably designated by Diametrics from time to time. A late fee shall be paid by Philips on any amount not received by Diametrics when due at a rate of 1.5% per month on all unpaid amounts, or the maximum rate permitted by law, whichever is less. As between the Parties, Philips shall be responsible for all taxes relating to the Portal Measurement Products so purchased (except for taxes on Diametrics' net income). 7. INVOICE ADDRESS. All of Diametrics' invoices are the addressed to: Philips Medizin Systeme Boeblingen Gmbh Financial Service Center Postfach 1471 71034 Boeblingen/ Germany 8. CONTACT PERSONS. Diametrics and Philips shall each designate a Contact Person who will meet (by phone or in person) as required to discuss and monitor any manufacturing and manufacturing capacity issues for the Portal Measurement Products. Both Parties shall appoint additional contact persons in Schedule 5 to facilitate communication regarding specific aspects of the manufacture and supply of the Portal Measurement Products hereunder. 9. TERM AND TERMINATION OF THIS MANUFACTURING AGREEMENT. 9.1 Term. This Manufacturing Agreement shall become effective on the Effective Date and shall terminate on October 31, 2004, unless terminated as provided herein. 9.2 Termination for Material Breach. Either party may terminate this Manufacturing Agreement if the other party materially breaches this Manufacturing Agreement and fails to remedy such breach within ninety (90) days written notice from the non-breaching party. Material breaches shall include failure by Diametrics to meet the agreed quality standards for the Portal Measurement Products as set forth in Schedule 2. 9.3 Effect of Termination. No termination or expiration of this Manufacturing Agreement shall affect or discharge any obligations, rights, disclaimers, conditions or limitations of either Party which arose prior to the effective date of 5 such termination. In addition, Articles 15 (Confidentiality) and 21 (Miscellaneous) and any Sections necessary to give effect to this Article 9 shall survive any termination or expiration of this Manufacturing Agreement. 10. TECHNICAL ALTERATION. Diametrics agrees and undertakes to effect technical alterations (i.e., any required technical changes due to third party supplier changes, such as part obsolescence, revision changes and the like) to the Portal Measurement Modules only after written consent of Philips. 11. Product Change Notification. No process changes, design changes, geographical relocation of manufacturing processes, or process step discontinuances affecting the electrical performance (whether specified or not), the mechanical form or fit, the environmental compatibility or material chemical characteristics, or the life reliability of Portal Measurement Products, but excluding any changes that do not affect the fit, form or function of the Portal Measurement Products (hereinafter collectively called "Changes") shall be made or incorporated in Portal Measurement Products without following the change notification process established herein. Diametrics shall give Philips written notice of any proposed change via the established Philips/Diametrics change order process and provide evaluation samples and other appropriate information as specified by Philips. For planned/scheduled changes that require re-qualification by Philips, Diametrics notice must be received by Philips at least three (3) months prior to the first proposed shipment of any such Products. For changes not requiring re-qualification by Philips, Diametrics notice must be received by Philips at least one (1) month prior to the first proposed shipment unless mutually agreed by the Parties. The Supplier Change Notification Agreement process Q2920-00094 will be followed. All product changes will be reflected in the 10 digit serial number by an appropriate change of the year (digit 3) and/or week of the change (digit 4-5) as appropriate. 12. REPLACEMENT REQUIREMENTS/EXCHANGE PRODUCTS. Diametrics guarantees to Philips that replacement and or exchange Portal Measurement Modules will be supplied for a further seven (7) years following delivery of the last series/batch. After expiration of this seven (7) year period, Diametrics shall make available replacements (backward compatible or equivalent) in accordance with the respective technical possibilities or give Philips the possibility of placing a final order of a reasonable quantity, thus guaranteeing Philips a supply up until the end of the service period. The prices, terms and conditions as well as the technical feasibility of these two cases will form the subject of a separate agreement at the time of delivery of the last series/batch. 13. REPAIRED / EXCHANGED PRODUCTS. Diametrics will provide a test and repair service for Portal Measurement Modules returned from the customers (internal or external) as faulty whether still in warranty or out of warranty. Philips will provide Diametrics' field failure information. Philips will pay Diametrics the exchange repair cost per Schedule 4. Diametrics shall perform root cause analysis (sub-assembly level) on any failed unit in order to determine failure mode. 6 Diametrics will provide a pareto trend analysis of failure data for all failed units to Philips on a monthly basis. 14. DOCUMENTATION 14.1 Rights of Access. Philips shall have the right to access and use Diametrics' manufacturing documentation for the Portal Measurement Products to comply with regulatory requirements. 14.2 Record Retention. Diametrics shall retain records of any safety, quality and reliability related data relating to the Portal Measurement Products as well as any data necessary for "Current Good Manufacturing Practices" (CGMP, as required by FDA), the "In Vitro Diagnostics Directive" (the IVDD, as required by the European Union) and the "Medical Device Directive" (MDD, as required by the European Union), to the extent provided under Schedule 1, Required Quality Data. 14.3 Access to Filings. Diametrics assures the access of DHR (Device History Record), DHT (Device History Traveler), and DMR (Device Master Record) in support of Philip's timely answering of Portal Measurement Product questions from the FDA. Diametrics shall cooperate with Philips in connection with its regulatory obligations to provide to Philips, on a timely basis, the necessary reports relating to complaints and product performance issues regarding the Portal Measurement Products. Upon reasonable request, Diametrics shall promptly make such reports (on behalf of Philips) directly to the appropriate regulatory authorities. 15. CONFIDENTIALITY. 15.1 Non-Use and Non-Disclosure. Each Party acknowledges and agrees that all the other Party's Confidential Information is confidential to the disclosing Party. Each Party shall take the same reasonable measures as it uses to protect its own confidential information from the unauthorized disclosure or misuse to protect the other Party's Confidential Information from unauthorized disclosure or misuse, including without limitation, any disclosure by its employees, agents, contractors, permitted sublicensees, or consultants of the other Party's Confidential Information. As used herein, the term reasonable measures shall mean at least those measures a Party applies to the protection of its own Confidential Information and the term misuse shall mean use for any purpose other than as permitted or required hereunder. 15.2 Marking. To be entitled to protection as Confidential Information, all Diametrics or Philips documents containing that Party's Confidential Information shall be appropriately and clearly marked as "Proprietary," "Secret," "Confidential," or other words to similar effect. If a disclosure of Confidential Information is made orally, as in a meeting, the disclosing Party shall indicate the nature of that 7 information at the time of its disclosure and shall confirm such designation in writing within ten (10) days of the date of such disclosure to the receiving Party. 15.3 Exclusions. Information shall not be considered Confidential Information hereunder if it: (a) was already in the possession of the receiving Party prior to its receipt from the disclosing Party; (b) is, or becomes, part of the public knowledge or literature through no fault, act or omission of the receiving Party, provided, Confidential Information shall not be deemed to have entered the public domain by reason of its having been filed with any regulatory authority; provided the disclosing Party has taken advantage of any procedures available to protect confidentiality, including FOIA marking and protective orders; (c) is, or becomes, available to the receiving Party from a source other than the disclosing Party, which source has rightfully obtained the same information and has no obligation of confidentiality to the disclosing Party with respect to it; (d) is made available on an unrestricted basis by the disclosing Party to a third party unaffiliated with the disclosing Party; or (e) is required to be revealed pursuant to law or requirements of any securities exchange on which a Party's shares are listed and traded, provided, however, the receiving Party which is under any such requirement of law shall give reasonable notice to the disclosing Party of such requirement and shall cooperate with the disclosing Party, at the disclosing Party's expense in reasonable legal efforts to limit or mitigate any such revelation so as to preserve the proprietary nature of any Confidential Information contained therein. 15.4 Duration; Surviving Obligation. This Article 15 shall be deemed to cover and include any non-public information disclosed by a Party to the other during the course of their negotiations of this Manufacturing Agreement, whether or not marked or indicated as provided in Section 15.2. Each Party's obligations of non-use and non-disclosure of the other Party's Confidential Information shall apply during the term of this Manufacturing Agreement and shall also survive for a period of three (3) years after its termination for any reason. 15.5 Confidentiality of this Agreement. The terms of this Manufacturing Agreement itself and the Schedules hereto shall be deemed to be Confidential Information hereunder. In the event that a Party is required to disclose the content of this Manufacturing Agreement pursuant SEC requirements or requirements of any securities exchange on which a Party's share are listed and traded, such Party 8 shall use its reasonable efforts to obtain confidential treatment of at least the terms of Schedules 1, 2, 4, 6 and 7. 16. WARRANTY. 16.1 Warranty Terms. Diametrics warrants to Philips that the Portal Measurement Products at the time of their delivery by Diametrics to Philips (a) shall meet the Specifications as set forth on Schedule 2; (b) shall have been manufactured in accordance with all laws and regulations applicable to their manufacture in those jurisdictions in which Philips is distributing the Portal Measurement Products (provided that Philips gives Diametrics at least ninety (90) days written notice of any jurisdictions in addition to those in effect as of the Effective Date of this Amendment); (c) shall be new or newly manufactured; and (d) shall be of good and merchantable title, free of liens and encumbrances. Diametrics shall, promptly, at Diametrics' sole option, replace, repair or make a purchase price (in the amount paid by Philips to Diametrics) refund for any of such Portal Measurement Products proved to be non-conforming, provided that written notice and reasonable documented evidence of each warranty claim and the fact that the failure occurred during the warranty period is received by Diametrics within thirty (30) days after the expiration thereof. Diametrics shall have the sole right to verify such non-conformance. Such replacement, repair or refund shall be Philips' sole remedy hereunder. Unless otherwise agreed by the Parties, the warranty period under this Section 16.1 for (1) the Portal Measurement Modules shall be eighteen (18) months from the date of shipment to Philips; (2) any DeviceSet/DeviceCom Software shall be forty-five (45) days from the date of delivery of such software to Philips' customer; and (3) any Portal Measurement Accessory shall be ninety (90) days from the date of shipment to Philips. If requested by Diametrics, Philips shall return the non-conforming Portal Measurement Products to Diametrics at the time of submission of the warranty claim therefore. Philips agrees to provide Diametrics sufficient notice of additional countries in which it intends to distribute the Portal Measurement Products to permit Diametrics to meet its obligations under subsection (b) of this Section 16.1. 16.2 Exclusions. This warranty does not apply to Portal Measurement Modules or Portal Measurement Accessories that have been repaired, modified or tampered with by anyone other than Diametrics qualified technical personnel, nor to Portal Measurement Modules or Portal Measurement Accessories that have been exposed (by customer negligence) to adverse conditions through improper installation, application or maintenance. 16.3 NFF Procedures. Any Portal Measurement Modules returned to Diametrics with no fault found (NFF) shall undergo twenty four (24) hour "burn-in" (i.e. 4 cycles of Treadmill test) upon no fault determination. Following completion of burn-in, the Portal Measurement Modules shall be subjected to a full functional test. Provided no fault is found, the Portal Measurement Modules shall be labeled (i.e. 9 DHR annotated) prior to return to Philips in order to identify the Portal Measurement Modules, should they every be returned again. If the same Portal Measurement Modules should be returned to Diametrics' facility for a second time, and NFF, the Portal Measurement Modules shall be analyzed and replaced. For Portal Measurement Module's second NFF, the pc boards will be replaced and product fully tested before returned to Philips. If same Portal Measurement Module is returned a third time and NFF, the entire Portal Measurement Module will be removed from use and replaced at Diametrics' expense. The foregoing obligations apply only if the Portal Measurement Module is under warranty. 16.4 Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 16 OF THIS AGREEMENT, DIAMETRICS MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 16.5 Customer Warranties. Philips shall be entitled to warrant the Portal Measurement Products to its customers on terms it deems appropriate; provided that Philips shall bear any expenses it may incur with respect to such warranties, to the extent that such warranties exceed the scope or term of the express warranties made by Diametrics hereunder. 16.6 Customer Complaints, Warranty and Out-of Warranty Repair. Philips will be responsible for handling customer complaints regarding the Portal Measurement Products. Diametrics will provide reasonable assistance to Philips in resolving such customer complaints. Diametrics will accept the return of any Portal Measurement Products that do not conform to the warranties set forth in Section 16.1, and will repair or replace any such defective Portal Measurement Product (or refund Philips' purchase price) as provided in Section 16.1. Philips agrees to maintain an inventory of Portal Measurement Products to meet its on-going repair obligations; provided that Diametrics agrees to maintain a reasonable inventory of Portal Measurement Products to support significant Product warranty issues. As between Diametrics and Philips, Philips will be responsible for providing its customers with such replacement Portal Measurement Products for use while such defective Products are being repaired or replaced. Diametrics will also provide out-of-warranty repair service on the Portal Measurement Modules, on the terms set forth on Schedule 4 for a period of not less than seven (7) years after last production run of the Portal Measurement Module (or such longer period as may be required by local laws). 16.7 Return Procedures. Reasonable attempts by Philips 1st Level Application Support (Response Centers) to determine failure mode(s) of the Portal Measurement Products is assumed. This information will be transferred to Diametrics prior to any Portal Measurement Products being returned from the field. This will provide initial information to assist in the investigation of the failed Portal Measurement Product. Upon receipt of a failed Portal Measurement 10 Module, the unit will go through the standard repair process, which includes the known repair (if applicable) and then 1 cycle of Treadmill testing (roughly equivalent to 6 hour "burn-in"), and the subsequent quality tests. If the failure mechanism cannot be identified the unit will undergo the quality (diagnostic) tests, the repair pursued and then a full retest of the Portal Measurement Module (including Treadmill and the quality tests). If the fault cannot be re-created internally, and it passes all testing requirements the unit will be sent back out as acceptable (and documented as no fault found ("NFF") on the DHR). Diametrics will follow the Supplier Corrective Action Report ("SCAR") process or Distributor Action Request ("DAR") process to notify Philips if there is are multiple failures of any one component of any of the Philips engineered components. Diametrics, likewise will also pursue a Corrective Action Report ("CAR") if there are multiple failures of any one component of any Diametrics engineered components. Philips will be notified at the time of the CAR initiation. 16.8 Repair Period. Diametrics agrees to use commercially reasonable efforts to repair or replace the non-conforming Portal Measurement Products and return conforming Portal Measurement Products to Philips within four (4) weeks of receipt of Diametrics. Failed units returned from the field that are out-of-warranty will be repaired within 10 working days for customer units and within 30 days for Service Logistics International ("SLI") exchange units. 17. QUALITY PERFORMANCE. If the failure rate of the Portal Measurement Module exceeds specified limits, (e.g. as per Section 3.5) and/or the Philips field failure rate is higher than the expectation (i.e. for Portal Measurement Module less than 4% the first year with a decrease to 1% the second year), Diametrics commits to initiate an SCAR, DAR or CAR driven corrective action project for quality / reliability improvements on Portal Measurement Modules (material, processes, subassemblies) effective per the SCAR or CAR. The goal for the Portal Measurement Module is not to exceed an annual failure rate (AFR) of 4% the first year with a decrease to 1% the second year for the Portal Measurement Module within a one year rolling period starting when the contract becomes effective: AFR = # units failed/ #units shipped by Philips (annualized) Diametrics and Philips will do a monthly failure clearance on a common basis before entering the numbers into the calculation. 18. PRODUCT RECALL. 18.1 If either Party believes that a recall of any Portal Measurement Product manufactured under this Manufacturing Agreement is desirable or required by law, it shall promptly notify the other Party. The Parties shall then discuss reasonably and in good faith whether such recall is appropriate or required and the 11 manner in which any mutually agreed recall shall be handled. This Section 18 shall not limit the obligations of either Party under law with respect to recall of Portal Measurement Products required by law or properly mandated by governmental authority. Voluntary recalls shall be conducted by mutual agreement (with such agreement not to be unreasonably withheld) provided that if mutual agreement is not reached, either Party may individually conduct the voluntary recall in question in a manner consistent with its own regulatory guidelines and criteria. The "Recalling Party" shall bear all costs and expenses of any voluntary recall of any Portal Measurement Products and shall reimburse the "Other Party" for the reasonable, out-of-pocket costs incurred by the Other Party as a result of such recall, including the replacement cost of any Portal Measurement Products affected thereby, unless (i) such recall is unjustified and neither requested nor classified as a recall by a governmental agency or delegee or (ii) the cause or basis of such recall is attributable to a condition, fact or action that constitutes (A) a breach by the Other Party of any of its obligations hereunder or (B) negligence or willful misconduct of the Other Party in which case the Other Party will be liable for the costs and expenses of such recall, and shall reimburse the Recalling Party for the reasonable, out-of-pocket costs incurred by Recalling Party as a result of such recall, including the replacement cost of any Product affected thereby. The Parties shall cooperate fully with each other in effecting any recall of the Products pursuant to this Section 18, including communications with any customers or to the public. 18.2 If any governmental agency having jurisdiction (including without limitation the FDA) shall request or order any corrective action with respect to Portal Measurement Products supplied hereunder, including any Portal Measurement Product recall, customer notice, restriction, corrective action or market action or any Product change, Diametrics shall bear the costs and expenses of such corrective action and shall reimburse Philips for the reasonable, out-of-pocket costs incurred by Philips as a result of such corrective action, including the replacement cost of any Products affected thereby, to the extent that the cause or basis of such corrective action is attributable to a condition, fact or action that constitutes (A) a breach by Diametrics of any of its obligations hereunder or (B) negligence or willful misconduct of Diametrics. Philips shall bear all other costs and expenses of such corrective action, and shall reimburse Diametrics for the reasonable out-of-pocket costs incurred by Diametrics as a result of such action, including the replacement cost of any Portal Measurement Product affected thereby. 12 19. ENVIRONMENTAL CONSIDERATIONS. Diametrics agrees to provide commercially reasonable support to Philips, at Philips' written request and at Philip's expense, as required to meet United States and international environmental laws, regulations and standards applicable to the manufacture of the Portal Measurement Products. 20. PRODUCT DISCONTINUANCES. Diametrics acknowledges its obligation to manufacture the Portal Measurement Products during the term of this Manufacturing Agreement; however, if the Portal Measurement Products will not be available from Diametrics prior to the conclusion of the term, Diametrics shall give written notice to Philips. Diametrics notice shall be given immediately upon Diametrics knowing about the unavailability, but in any event no less than six (6) months in advance of the last order date of the Products. In any event of termination of this Manufacturing Agreement and subject to Diametrics' manufacturing capacity, and in addition to any other remedies that Philips may have at law or in equity, Philips shall be entitled to determine its lifetime-buy quantities and to purchase such quantities in accordance with this Manufacturing Agreement for purchase and shipment by the end of the Term. 21. MISCELLANEOUS PROVISIONS 21.1 Entire Agreement. This Manufacturing Agreement, together with any Schedules or other Attachments hereto and the Amendment, constitutes the entire agreement between the parties in relation to this subject matter and as such, supersedes all prior and contemporaneous negotiations, agreements, representations, understandings and commitments with respect thereto and shall take precedence over all terms, conditions and provisions on any purchase order form, or order acknowledgment, or order release purporting to address the same subject matter. 21.2 Modification. This Manufacturing Agreement shall not be released, discharged, changed or modified in any manner except by a writing signed by the duly authorized officers or agents of each Party hereto, which writing shall make specific reference to this Manufacturing Agreement and shall express the plan or intention to modify same. 21.3 Severability. If any provision or provisions of this Manufacturing Agreement shall be determined to be unenforceable, then the Parties shall in good faith negotiate for a substitute provision addressing the same subject matter as the unenforceable provision(s) as may then be considered to be enforceable, provided, however, if no substitute provision can be formulated which shall be accepted by the Parties as enforceable, this Manufacturing Agreement shall nonetheless continue in full force and effect with the unenforceable provision(s) stricken here from. In such case the applicable law shall apply with regard to unenforceable and / or void provisions. 13 21.4 Governing Law. This Manufacturing Agreement shall be governed by and construed in accordance with the laws of the United States and the State of Delaware, excluding its choice of law rules. The Parties consent to the jurisdiction of the state and federal courts of Delaware. 22. SCHEDULES. Should conflicts occur between this Manufacturing Agreement and any part of the following Schedules, the requirements of this Manufacturing Agreement shall govern. The following Schedules form an integral part of this Manufacturing Agreement: Schedule 1: Required Quality Data Schedule 2: Portal Measurement Products and Specifications Schedule 3: Philips Terms of Delivery Schedule 4: Prices/Quantities Schedule 5: Contact Persons Schedule 6: Cosmetic Defect Guideline Schedule 7: Cosmetic Inspection Guideline DIAMETRICS MEDICAL, INC. PHILIPS MEDICAL SYSTEMS NORTH AMERICA COMPANY, A DIVISION OF PHILIPS ELECTRONICS NORTH AMERICA CORPORATION By: By: --------------------------------- ------------------------------------- David Kaysen, Chairman of the Jay Mazelsky Board and Chief Executive Officer Vice-President & General Manager - POCD 14 SCHEDULE 1 REQUIRED QUALITY DATA Diametrics assures 5 years of record retention of all the following quality and reliability related data: Starting on the Effective Date, Diametrics shall provide the following data to Philips Procurement once every quarter: 1. Outgoing data (Also known as F2 data) on each Portal Measurement Module: 100% outgoing inspection means N = total (100%) each products tested. 2. YIELD (overall - from incoming through outgoing - Philips expects a yield > 92%, per test station @ manufacturing, 1st cycle) 2.1) and a pareto analysis of all materials failures,1st cycle. 2.2) and a pareto analysis of all process failures, 1st cycle. 3. A pareto analysis of all root cause failures (sub-assembly level) for returned products. 1 SCHEDULE 2 PORTAL MEASUREMENT PRODUCTS & SPECIFICATIONS Item Part Number Respective Date of Description Specification Specification 1. M3561A Portal Reader B-M3561-60000-1* 09/12/03 (M3561-6001) 2. M3561-68001 B-M3561-60000-1 09/12/03 Exchange repair Portal 3. M3565A temp card B-M3561-60000-1 09/12/03 (DMI 467900) 4. M3561-66403 edge connector (DMI 516300) B-M3561-60000-1 09/12/03 5. M3564A DeviceSet w/DeviceCom (DMI 464218) B-M3561-60000-1 09/12/03 6. M3672A edge connector Cleaning kit (DMI 450000) N/A N/A 7. Cosmetic Defect Guideline see schedule 6 8. Cosmetic inspection see schedule 7 *B-M3561-60000-1 is the M3561A Portal Product Specification. Rev. A of such specification applied prior to 9/12/03. To the extent of any conflict between Rev. A or B of the M3561A Portal Product Specification and Diametrics' manufacturing process document MP46000 Rev. X., MP46000 shall apply. 1 SCHEDULE 3 TERMS OF DELIVERY - - Delivery and Packaging Standard of Philips HP Dwg. A-5961-3658-1, Rev. D - - EDI - capabilities for order receiving and acknowledgment - - Shipping date as specified on Philips-Purchase Order - - Date of dispatch: Philips Delivery Date minus 7 days - - Mode of transport: Airfreight - - Each shipment must indicate the exact address of the addressee on the outside of the packaging. - - Products are shipped F.O.B. point of origin. FOR SHIPPING AND PRODUCTION AND FAILURE ANALYSIS: PHILIPS MEDIZIN SYSTEME BOEBLINGEN GMBH HEWLETT PACKARD STR. 2 71034 BOEBLINGEN /GERMANY POCD PRODUCTION ENGINEER GEBAEUDE 5/ EBENE 3 2 F15 - - The minimum order and ship quantity is 10 pieces. - - Dangerous goods must be packed and labeled in accordance with the relevant regulations (Postal regulations, Regulation on the transport of dangerous goods, etc.). - - Each shipment must contain a delivery voucher indicating the Philips order number and the Philips part number. - - The total number of Portal Measurement Modules shipped shall be exactly as specified on the Philips purchase order. 2 SCHEDULE 4 DIAMETRICS/PHILIPS TRANSFER PRICES 1. M3561A Portal Reader * (M3561-60001) 2. M3561-68000 Exchange repair Portal The first two rates assume the unit is part of the exchange program, whereas the third rate assumes the unit is not part of the exchange program. - - Combined repair/recondition rate (if outside warranty): * (assumes part of exchange program, and covers reconditioning and functional repairs while outside of the standard warranty period) - - Recondition only rate (would apply if within warranty): * (assumes part of exchange program, and covers reconditioning and functional repairs while within the standard warranty period, e.g., reconditioning is not covered by warranty) - - Repair only rate (no recondition occurs): * (assumes not part of exchange program) 3. M3565A temp card * (DMI 467900) 4. M3561-66403 edge connector * (DMI 516300) 5. M3564A DeviceSet w/DeviceCom * (DMI 464218) 6. M3672A edge connector * Cleaning kit (DMI 450000) 7. M3561-40003 edge connector cover * (DMI 466400)
* Confidential treatment requested 3 SCHEDULE 5 CONTACT PERSONS FOR PHILIPS: MANUFACTURING E-MAIL: GUIDO.SARNOWSKI@PHILIPS.COM TELEPHONE:+49 (07031) 463-1218 FAX:+49(7031)463-1660 PURCHASING DEPT. E-MAIL: GABRIELE.SOUTHWOOD@PHILIPS.COM TELEPHONE:+49(07031)464-1770 FAX:+49 (07031)464-1881 MATERIALS ENGINEERING E-MAIL: JOCHEN.SPONHOLZ@PHILIPS.COM TELEPHONE:+49(07031)463-1932 FAX:+49(7031)463-1660 ORDER PROCESSING E-MAIL:GABRIELE.SOUTHWOOD@PHILIPS.COM TELEPHONE:+49(07031)464-1770 FAX:+49(07031)464-1881 - -------------------------------------------------------------------------------- FOR DIAMETRICS: OPERATIONS E-MAIL:dnorton@diametrics.com Diane Norton TELEPHONE: 651-638-1153 FAX: 651-638-1060 PURCHASING DEPT. E-MAIL: vjereczek@diametrics.com Vern Jereczek TELEPHONE: 651-638-1162 FAX: 651-638-1060 MATERIALS ENGINEERING/MANUFACTURING E-MAIL: jkurkowski@diametrics.com Jim Kurkowski TELEPHONE: 651-638-1112 FAX: 651-638-1060 ORDER PROCESSING E-MAIL: acottrell@diametrics.com Amy Cottrell TELEPHONE: 651-638-1191 FAX: 651-638-1060 4 SCHEDULE 6 COSMETIC DEFECT GUIDELINE Exchange Portal Cosmetic Defect Guideline PURPOSE This document provides guidelines for inspecting used (also called exchange) Portal Measurement Modules during the repair process. The overall purpose of this guideline is to ensure that exchange products which are shipped to customers are in a condition which will lead to consistent customer satisfaction. SCOPE This document does not cover cosmetic specifications for individual recovered parts of assemblies, nor cosmetic specifications for new whole units. This guideline only applies to the Portal Measurement Module and its related exchange parts. Because this guide applies to refurbished product only, inspectors should be examining the product for end-user and shipping induced damage, or wear, not defects caused during manufacturing. Only cosmetic defects that could be caused by end-user or shipment can fail the product since any manufacturing-induced defects have already passed manufacturing inspection. For that reason, manufacturing-caused cosmetic defects such as blush, flash, flow marks, haze, sinks, and weld lines should not be considered as defects when examining refurbished units. GENERAL GUIDELINES Cosmetics, in this context refer to superficial, visual appearance of the product and as such do not affect the functioning of the product. Any defect that interferes with the normal operation of the product, should be considered a non-cosmetic defect. In the strictest sense, missing parts are not considered a cosmetic defect, even if they are not needed for the operation of the product (example: missing label). Note, however, that a missing part would be considered a defect, and would necessitate some form of repair or action. Also, it is very important to realize that cosmetics are largely subjective, so inspectors should apply their best judgment in all cases. The guiding principal when applying this judgment should be that this product is not a new product and should not be considered as such. A balance needs to take place between attempting to achieve near perfect cosmetic appearances which would result in a large financial liability to the company versus the possibility of having a high customer dissatisfaction rate if we were to ship exchange product which looks shabby. EVALUATION CRITERIA Cosmetic defects will be evaluated using a weighted criteria basis based on the location of the defect and the severity of the defect. Guidance is provided in Table 1. 5 CUSTOMER ADDED LABELS Any labels or marking put on a system by customers must be removed . This includes such items as inventory tags and safety stickers. All glues used to attach these labels must also be removed.
(a) Type of Cosmetic Defect SURFACE AREA -------------------------------------------------------------------------------------- LOCATION PAINT HEAT SMALL DEEP - ----------------- DISCOLOR- ABRASION DISCOLOR- PITS, SCRATCHES SCRATCHES ATION OR ATION NICKS (MINIMAL- (VERY OR WEAR GOUGES- LY VISIBLE) VISIBLE (NOTE 2 NOTE 2) ------------- --------------- ------------ ------------ -------------- --------------- PRODUCT Minor OK- Minor OK- Minor OK- Minor OK Minor OK OK SERIAL # LABEL Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 LOGO "PORTAL" Very minor; Very minor; Very minor; None Very minor; None (TOP) Still Still clearly Still Still clearly read name clearly clearly read read name read name name DISPLAY SCREEN (GLASS AREA) N/A None N/A None None None CASE TOP Minor OK Minor OK Minor OK None Minor OK None CASE BOTTOM Minor OK Minor OK Minor OK Minor OK Minor OK Minor OK - ----------------- ------------- --------------- ------------ ------------ -------------- ---------------
NOTE 1: Damage to the label that makes the reading of the serial number, product number, impossible or difficult to read are not acceptable. NOTE 2: Judgment needed here. A scratch, gouge, or nick, could be deep but small in size (width and length). If this defect is small in size it may be acceptable if in a location where seldom seen). 6 SCHEDULE 7 COSMETIC INSPECTION GUIDELINE
ACCEPTANCE CRITERIA Checking Contents Packaging / box labeling Portal Edge connector cleaning kit Certification sheet Checking Portal Confirm Correct Label, Placement & Affixment for the Unit Ensure that there are 4 Rubber Feet and no abnormal scuffing or damage, other than normal production scuffs Check for 4 torque screws on the bottom of Portal Check for serial port cover and 2 torque screws Check for light pipe No scratches or fingerprints on screen No dust between the touchscreen and display No residues on portal Sensor/IR probe flush or less Discoloration, Flow marks, and Haze: Two per surface; max dimension; 0.5 mm (.02") Weld Line Exceptions: Weld lines of up to 9.5mm (.375") long shall be allowed next to the IR Probe hole and the Light Pipe hole in the M3561- 40000 Top Housing Pits and Specks: Two per surface; max dimension; 0.5 mm (.02) Scratches: Two per surface; max dimension: 0.3 mm x 0.8 mm (.01" x .03") Sinks: Two per surface; max dimension: 0.8mm (.03") Weld Lines per surface: Two; max dimension: 3 mm (.125") No visual gasket btw. Touchscreen and top housing Checking portal box Edge connector cleaning kit in Box Certificate of Conformance No crumb or dirt in the box No bent connector pins Confirm Correct Label, Placement & Affixment / for the BOX
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