SOFTWARE DEVELOPMENT, LICENSE AND DISTRIBUTION AGREEMENT

1.

Definitions

a.

“Affiliate” means any corporation, association or other entity which directly or indirectly controls, is controlled by or is under common control with the party in question. As used in this definition of “Affiliate”, the term “control” shall mean direct or indirect beneficial ownership of more than 50% of the voting or income interest in such corporation or other business entity.

b.

“Amplifier” means the component of the WorkMate System where the cable connections to the patient are made.

c.

“Biosense Module” means the software module(s) designed, developed and owned by Biosense, which will work with the software owned by Biosense and distributed by Biosense with its CARTO™ XP System, to help enable the interfacing of the WorkMate System with the CARTO™ XP System.

d.

“WorkMate System” means the product sold by EPMD as the EP-WorkMate Computerized Recording System version 3.1.8 version and later versions of this product.

e.

“CARTO™ XP System” means the product sold by Biosense as the CARTO™ XP System version 7.0, and all later versions of this platform.

f.

“End Users” are persons who purchase the Interface Kit for their own use in their business and not for resale, redistribution, or other commercial purposes.

g.

“EPMD Module” means the software module(s) designed, developed and owned by EPMD, which will work with the software owned by EPMD and distributed by EPMD with the WorkMate System, to help enable the interfacing of the WorkMate System with the CARTO™ XP System.

h.

“Interface” means, collectively, the Biosense Module, the EPMD Module, the Software Script, the Interface Hardware, the Connecting Cables, and the related documentation distributed to End Users that enables the interfacing of the WorkMate System with the CARTO™ XP System according to the specifications in Appendix A.

i.

“Interface Hardware” means the physical cabling system, not including the Connecting Cables, to be designed, developed and distributed by EPMD, that will be used by End Users to interface one WorkMate System to one CARTO™ XP System.

j.

“Interface Kit” means, collectively, the Interface Hardware, Connecting Cables, any enabling mechanisms and related documentation distributed to End Users necessary to enable the interfacing of the WorkMate System with the CARTO™ XP System.

k.

“Object Code” means code for the Software Script resulting from the translation of Source Code into machine-readable format.

l.

“Patient Interface Unit” means the component of the CARTO™ XP System where the cable connections to the patient are made.

m.

“Connecting Cables” mean the interface cables, to be designed and developed by EPMD, useful for connecting the Patient Interface Unit of the CARTO™ XP System to the Amplifier of the WorkMate System. The Connecting Cables may include, but are not limited to, the ECG connection, Intracardiac connection, and stimulator connection.

n.

“Software Script” means the software scripts designed and developed by Biosense, and owned by Biosense, that will be licensed by Biosense to EPMD and used by the EPMD Module to help enable the interfacing of the WorkMate System with the CARTO™ XP System.

o.

“Source Code” means the program listing for the Software Script in paper form and magnetic media written in the syntax of a well-known programming language.

p.

“Programming Interface Manual” means all related documentation that Biosense will supply to EPMD in order for EPMD to correctly understand and identify the software interface that so that EPMD can correctly design and develop the EPMD Module.

q.

“Competitor” means a third party that creates, develops, manufactures, markets, sells, distributes or otherwise is involved with 3D navigation and mapping systems, including but not limited to, Medtronic, St. Jude and Boston Scientific.

2.

Development Terms

a.

Biosense shall deliver the Software Script that complies according to the specifications and schedule set forth in Appendix A (“Development Work”) in Object Code. Biosense shall deliver to EPMD the Software Script in Object Code in electronic format, and all related documentation necessary to embed it in the EPMD Module, along with any necessary enabling mechanisms (such as key-stroke instructions to enable the Interface to operate in accordance with the specifications in Appendix A) which shall be subject to the license set forth in Section 3(a) below. Biosense shall use its commercially reasonable efforts to deliver the Software Script in Object Code, Programming Interface Manual and such enabling mechanisms in substantial accordance with the schedule set forth in Appendix A. The Development Work is NOT a work for hire and all right, title and interest in the Development Work shall belong to Biosense.

b.

EPMD shall be responsible for the development of the WorkMate System and related software, EPMD Module, and the Interface Kit, including all costs of development, to enable the interfacing of the WorkMate System with the CARTO™ XP System in accordance with the Specifications set forth in Appendix A.

c.

Biosense warrants that it will perform the Development Work in a professional and workmanlike manner and that the Software Script when delivered will reasonably conform to the specifications of Appendix A. Biosense shall be responsible for developing the Biosense Module, Software Script and the CARTO™ XP System and related software, including all costs of development, to enable the interfacing of the WorkMate System with the CARTO™ XP System. BIOSENSE DISCLAIMS ANY AND ALL OTHER WARRANTIES, IMPLIED OR EXPRESS, WITH RESPECT TO THIS DEVELOPMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT WILL BIOSENSE’S LIABILITY INCLUDE ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, EVEN IF BIOSENSE HAS KNOWLEDGE OF THE POTENTIAL LOSS OR DAMAGE.

d.

EPMD shall maintain the specifications of their respective components of the Interface Kit in accordance with Appendix A, and continue to make such functioning Interface Kit components commercially available, for all future versions of the WorkMate System and the CARTO™ XP System while this Agreement is valid. EPMD shall maintain the specifications of the port in its WorkMate System to which the Interface Hardware connects. Biosense shall maintain the specifications of the port in its CARTO™ XP System to which the Interface Hardware connects

e.

EPMD and Biosense shall not be obligated to implement the Interface for products prior to the Current System Version 3.1.8

f.

EPMD and Biosense shall provide to each other, free of charge, two WorkMate Systems and CARTO™ XP Systems, respectively, with appropriate cabling and simulators exclusively for development with respect to the Interface, demonstration, trade shows and training purposes. EPMD and Biosense each agree not to use the Systems of the other provided pursuant to this provision for any other purpose.

g.

Each Party will be responsible for providing the latest software for their respective systems throughout the term of the definitive agreement.

3.

Distribution Terms

a.

EPMD shall have, and Biosense hereby grants to EPMD, the right to distribute (and to perform any required installation of) the Interface Kit throughout the world. EPMD shall have the sole and exclusive right to determine the price charged for the Interface Kit. EPMD shall have the right to distribute the Interface Kit through distributors and sub-distributors, provided, with respect to any country, such distributors or sub-distributors shall not include third parties that sell in such country mapping systems competitive with Biosense mapping systems such as Medtronic (LocaLisa) and St. Jude (EnSite and NavX). Distributors or sub-distributors that distribute the Boston Scientific (RPM) system are acceptable. The terms of any agreement concerning the distribution of the Interface Kit will be between the End User and EPMD or its distributor or sub-distributor and shall not create any contractual obligations between Biosense and the End User. EPMD shall have the sole right to set the terms of the agreement it reaches with End Users. EPMD may distribute the Interface Kit to End Users, subsidiaries, and distributors only and may not delegate, sublicense, assign or

b.

The parties understand that this Agreement affects only the distribution of the Interface Kit and the components thereof and does not create or bestow any distribution or other rights with respect to the WorkMate System, Biosense Module or the CARTO™ XP System. EPMD will be the party responsible for the distribution of its WorkMate System, including any related software, and Biosense will be the party responsible for the distribution its Biosense Module and CARTO™ XP System, including any related software. This Agreement in no way affects each Party’s right to determine the price and other terms reached with their respective customers concerning the distribution of their respective systems and modules.

c.

Biosense will provide to EPMD the Software Script in Object Code, including any revisions, upgrades or updates, under the license described in Section 3.a. below, for distribution with the EPMD Module. Biosense warrants to EPMD the reasonable, commercial performance of the Software Script in accordance with the specifications set forth in Appendix A for twelve months from the first commercial sale of the EMPD Module by EPMD or a distributor or sub-distributor to an End User with the exclusive remedy for any breach of the warranty being repair or replacement of the Software Script at Biosense’s discretion. BIOSENSE DISCLAIMS ANY AND ALL OTHER WARRANTIES, IMPLIED OR EXPRESS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT WILL BIOSENSE’S LIABILITY INCLUDE ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, EVEN IF BIOSENSE HAS KNOWLEDGE OF THE POTENTIAL LOSS OR DAMAGE.

d.

If the CARTO™ XP System of an End User lacks necessary hardware (i.e. Ethernet card in the CARTO™ XP computer) beyond the Interface Kit, Biosense, at its own expense, shall provide and install the hardware in the End User’s CARTO ^™ XP System.

e.

Biosense shall have the right to sell the Interface Hardware and the Connecting Cables to End Users during post sales service calls. EPMD shall use commercially reasonable efforts to sell such cables to Biosense at its cost + 30%, or to arrange for Biosense to purchase such cables directly from EPMD’ supplier of such cables at EPMD’ negotiated price.

4.

License Terms

a.

Biosense grants EPMD for the term of this Agreement, subject to the payment of the royalty fees as set forth in Section 4(b), a non-exclusive, non-transferable, worldwide license to copy, distribute to End Users and to sublicense End Users to use the Software Script provided by Biosense in Object Code solely as part of the EPMD Module. EPMD shall have the right to sublicense its distributors and sub-distributors its license to copy, distribute to End Users and to sublicense End Users to use the Software Script provided by Biosense to EPMD in Object Code solely as part of the EPMD Module; provided however, that such distributors or sub-distributors shall not include third parties that sell mapping systems of a Competitor. The terms of any such sub-license shall not create any contractual obligations between Biosense and any other party. Biosense also grants EPMD the nonexclusive, non-transferable right throughout the world to distribute the Interface Kit for use with the CARTO™ XP System and to sublicense its distributors and sub-distributors the rights to do the same; provided however, that such distributors or sub-distributors shall not include third parties that sell mapping systems to a Competitor. The terms of any such sub-license shall not create any contractual obligations between Biosense and any other party. EPMD and/or its distributors or sub-distributors, shall enter into with each End User an appropriate end user license agreement that protects Biosense’s ownership in the intellectual property of the Software Script.

b.

For each Interface Kit sold or distributed by EPMD (whether directly to an End User or to a distributor or sub-distributor), EPMD shall pay to Biosense a license fee of $[            ]. A report will be generated indicating the average selling price (ASP) for kits sold and payments shall be due within forty five days (45) after the end of each calendar quarter for Interface Kits delivered by EPMD to End Users, distributors or sub-distributors during such quarter. Interface kits that are placed at up to 5 beta and reference sites will not be included in ASP calculation.

c.

On a quarterly basis EPMD and Biosense will review ASP for all new system Interface kits sold by EPMD in the previous quarter. If the ASP for the interface kit is below $[            ] then the license fee will be increased by the difference between $[            ] and the ASP, up to a maximum of $[            ]. If the ASP for the interface kit is above $[            ] then the license fee will be decreased by the difference between the ASP and $[            ], down to a minimum of $[            ]

d.

If EPMD fails to make any payment (other than payments reasonably disputed by EPMD) in the manner described in this Section 4, within forty five (45) days after the end of the calendar quarter, then an interest rate of 10% (ten percent) per year shall be paid by EPMD on such payment. If EPMD fails to make such payment within ninety (90) days of EPMD’s receipt of a notice from Biosense that a payment has not been made within forty five (45) days after the end of the calendar quarter, then such failure may, at Biosense’s discretion, be deemed a material breach of a material term of this Agreement by EPMD for which Biosense may terminate this Agreement in accordance with Section 8(b)

e.

EPMD shall keep records of all Interface Kits sold or distributed by EPMD for the Term of this Agreement and for a period of two years thereafter. Biosense shall have the right, through its own representative or shall have the right to appoint an independent certified public accounting firm, to audit such EPMD’s records, as well as other documents as may be reasonably required solely for