Exhibit 10.1 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. DISTRIBUTION AND LICENSE AGREEMENT Effective as of May 10, 2000 (the "Effective Date") SMI Medical, Inc., a...

Exhibit 10.1

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

DISTRIBUTION AND LICENSE AGREEMENT

Effective as of May 10, 2000 (the "Effective Date") SMI Medical, Inc., a
California corporation ("SMI") and Cambridge Heart Inc., a Delaware corporation
("CHI") hereby agree as follows.

BACKGROUND

A. CHI has developed certain proprietary products used in the non-invasive
diagnosis and measurement of T-wave alternans, which are defined below as
"Products".

B. SMI manufactures and distributes cardiac stress test products, in part
through its wholly owned subsidiary SMI ▇▇▇▇▇▇▇, and desires to distribute
Products that are compatible with such stress test products.

C. CHI desires to grant SMI the right to distribute Products in accordance with
the terms and conditions contained herein.

Agreement for SMI to have the non-exclusive right to distribute the Cambridge
Heart (CHI) OEM Alternans Product as part of its stress test systems and to
distribute CHI Alternans Sensors to customers who have purchased the OEM
Alternans Product.

DEFINITIONS

1. As used herein, the following terms shall have the following definitions:

1.1. ▇▇▇ ▇▇▇▇▇ shall mean the following CHI trademarks: Alternans Test,
Alternans Sensors, Analytic Spectral Method

1.2. CONTRACT YEAR shall mean a period of one year except for the first
Contract Year which shall end eighteen months from the successful completion of
the Beta Product Integration by CHI.

1.3. OBJECT CODE shall mean the machine readable computer software to
be delivered by CHI pursuant to Section 5.2 below.

1.4. PRODUCTS shall mean CHI's Alternans Patient Module, CHI's
Alternans Patient Cable and CHI's Alternans Sensors. The combination of CHI's
Object Code, Alternans Patient Module and CHI's Alternans Patient Cable shall be
referred to herein as an OEM ALTERNANS SYSTEM. The term Products shall also
include the software Object Code necessary for the operation of CHI Alternans
Sensors with the CHI Alternans Patient Module.

1.5. PRODUCT INTEGRATION shall mean the integration to be performed by
CHI pursuant to Article 5 below that will enable the Products to perform in
accordance with their Specifications when used in conjunction with SMI's stress
test products. The final stage of the Product Integration shall be the Beta
Product Integration.

1.6. SPECIFICATIONS shall mean the specifications associated with the
Products, as set forth in Appendix A and the applicable Product documentation.

1.7. TARGET GROUP shall mean hospitals, cardiologists and internal
medicine group practices.

1.8. TARGET GROUP SALES RATE means the percentage of Quest Systems sold
to Target Group customers during a given Contract Year that contained an OEM
Alternans System.

1.9. TERRITORY shall mean the world, excluding for the first two years
of the term of this Agreement only: Germany, France, Greece and Japan.

TERMS

2. GRANT OF RIGHTS. CHI hereby grants to SMI, the non-exclusive right
to market, distribute and service Products, to customers who have purchased
SMI's stress test systems, through the direct and distributor sales
organizations of SMI and its subsidiaries in the Territory. SMI may assign
subdistributors or sales agents on such terms and conditions, as it deems
appropriate. The foregoing grant shall include the right to use the ▇▇▇ ▇▇▇▇▇
in connection with SMI's marketing and distribution of the Products. SMI
shall appropriately credit CHI for any such use of the ▇▇▇ ▇▇▇▇▇. SMI shall
obtain CHI's prior written consent for each use of such ▇▇▇ ▇▇▇▇▇.

3. PURCHASE OF PRODUCTS.

3.1. SMI may purchase from CHI and CHI hereby agrees to sell Products
to SMI at prices discounted from CHI's then current list price in accordance
with the provisions of this Article 3. CHI shall ship purchased Products FOB
Bedford, Mass. CHI shall invoice SMI upon shipment and payment shall be due and
payable thirty (30) days from shipment by CHI.

3.2. SMI shall issue purchase orders to CHI from time to time as
needed, using SMI's then current standard purchase order terms. CHI shall use
its best efforts to ship Products in accordance with the shipments dates
specified in such purchase orders. In the event of any conflict between the
terms of such purchase order terms and the terms of this Agreement, the terms of
this Agreement shall prevail.

3.3. At the beginning of each Contract Year during the term of this
Agreement, SMI will select its target level discount from the three discount
levels listed on Appendix B. Within 30 days after the completion of each
Contract Year, SMI shall provide CHI with a written report setting forth SMI's
actual Target Group Sales Rate based upon sales results for the prior Contract
Year. In the event the Target Group Sales Rate during such prior Contract Year
is below the required threshold for the discount level selected by SMI, SMI
shall pay to CHI a reconciliation payment equal to the difference between the
aggregate purchase price for Products paid by SMI during such Contract Year and
the aggregate purchase price for Products that would have been

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

payable by SMI during such Contract Year at the discount level corresponding
to actual Target Group Sales Rate achieved by SMI during such Contract Year.
CHI shall make a corresponding reconciliation payment to SMI in the event
SMI's actual Target Group Sales Rate met or exceeded the threshold for a
higher discount rate. Such payments shall be made within 60 days of the
completion of the Contract Year.

3.4. SMI shall, in SMI's discretion, have the option of allowing
SMI's customers to acquire Products through CHI's Alternans Acquisition
Program, as set forth in Appendix B during such period as such Alternans
Acquisition Program is offered by CHI. All Products purchased by SMI's Target
Group Customers shall be included in the calculation of the Target Group
Sales Rate.

3.5. CHI shall have the right to audit such books and records of SMI
as necessary to verify SMI's performance under Section 3.2 above, at CHI's
expense. If CHI's audit shows an SMI error with respect to any such
reconciliation payment, SMI or CHI as applicable shall make the payment
necessary to correct such error. In addition, if such audit shows an
underpayment to CHI in excess of THE GREATER OF: (a) $3,000 or (b) ten
percent of the aggregate purchase price for Products paid by SMI during such
Contract Year, SMI will, in addition to paying the actual amount of such
shortfall, pay CHI's reasonable audit expenses.

4. SALE PRICING. SMI shall have discretion in selecting the prices at
which it may sell Products; provided, however SMI shall not sell Alternans
Sensors in the United States for a price in excess of the Alternans Sensor
Maximum List Price set forth in Appendix B.

5. PRODUCT INTEGRATION.

5.1. SMI shall provide CHI with the temporary use of a stress test
system to enable CHI to perform the Product Integration. SMI shall provide CHI
with reasonable technical support to assist CHI in completion of the Product
Integration. Both parties will use good faith efforts to complete Product
Integration tasks and product introduction according to the schedule in Appendix
C.

5.2. Upon completion of the Beta Product Integration, CHI shall deliver
to SMI the computer software in machine readable format which, when incorporated
into SMI's stress test products, will enable the Products to perform in
accordance with their specifications when used in conjunction with SMI's stress
test products, referred to herein as the "Object Code".

5.3. Following confirmation by SMI of the successful completion of the
Beta Product Integration, SMI will be responsible for incorporation of the
Object Code into its future stress test systems and enhancements and updates of
its stress test systems. CHI will provide reasonable technical support to SMI
for its initial integration of such Object Code as well as efforts associated
with any future updates, upgrades or other modifications of the Products.

6. DEMO UNITS. SMI shall, within 60 days of the Effective Date or the
date that Beta Product Integration is complete, whichever is later, place a
purchase order for [***]more units of

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

the OEM Alternans System. It will thereafter maintain in working order a
minimum of [***] demo unit of the OEM Alternans System in the field for each
of its acute care salespersons selling diagnostic cardiology products. These
demo units may be purchased by SMI at the highest discount level for the OEM
Alternans Product set forth in Appendix B hereto.

7. MARKETING. SMI shall use good faith efforts to promote, advertise
and market the Products and to execute the specific Marketing Activities in
Appendix D.

8. FIELD SUPPORT. CHI district sales managers in the United States
shall provide support to SMI field personnel in sales of Products
substantially equivalent to the support which CHI routinely provides to CHI's
contracted Manufacturer's Representatives. Such support shall include without
limitation, assistance in training of existing and future SMI field personnel
and during initial training stages, providing qualified CHI personnel to
accompany such personnel on calls to customers. CHI shall provide its
district sales managers with commissions on sales of Products by SMI.

9. TRAINING. CHI will provide information, training and materials to
insure that SMI's designated marketing staff is kept up to date on all
pertinent information regarding the Products and their markets, including,
without limitation, market trends, new applications and new product or
technology introductions. CHI will provide, at SMI's request, 4 days of
training on the functionality, installation, training, service and support of
the Products at SMI's facility. SMI shall use commercially reasonable efforts
to have all of its acute care salespersons at such initial training. CHI will
provide a training session at SMI's facility for each significant upgrade or
enhancement of the Products. The length and content of such training sessions
shall be determined in accordance with the nature of the upgrade, but shall
not exceed 2 days, unless otherwise agreed by CHI.

10. DOCUMENTATION. CHI will supply text files of operator's manuals in
English, German, French, Italian and Spanish for incorporation into SMI's
operator's manual.

11. WARRANTY. (a) CHI warrants, that the OEM Alternans System shall
conform to the Specifications and shall be free from defects in material and
workmanship under normal and proper use in accordance with CHI's instructions
for a period of (12) months from date of installation at the customer but not
more than sixteen (16) months from shipment by CHI ("Warranty Period"), that
the Products shall conform to CHI's standard specifications and shall be free
from defects in material and workmanship under normal and proper use in
accordance with any instructions and directions of CHI applicable thereto.
SMI agrees to provide the necessary labor to replace any defective parts at
SMI's expense and to provide a 12-month parts and labor warranty to its
customers of the Products.

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

(b) THE EXPRESS WARRANTIES SET FORTH IN PARAGRAPH (a) CONSTITUTES THE
ONLY WARRANTIES WITH RESPECT TO THE PRODUCTS. CHI MAKES NO REPRESENTATION OR
WARRANTY OF ANY OTHER KIND, EXPRESS OR IMPLIED (EITHER IN FACT OF BY OPERATION
OF LAW), WITH RESPECT TO THE PRODUCTS, WHETHER AS TO MERCHANTABILITY, FITNESS
FOR PARTICULAR PURPOSE, OR ANY OTHER MATTER.

(c) THE WARRANTIES SET FORTH HEREIN MAY BE ASSERTED BY SMI ONLY AND NOT
BY SMI's CUSTOMERS OR END USERS. SMI SOLE REMEDY FOR CHI LIABILITY OF ANY KIND,
INCLUDING NEGLIGENCE, WITH RESPECT TO ANY PRODUCT FURNISHED UNDER THIS
AGREEMENT, WHETHER THE CLAIMED LIABILITY IS BASED ON A DEFECT, WHETHER
DISCOVERABLE OR LATENT, IN ANY PRODUCT, SHALL BE LIMITED TO THE REMEDIES
PROVIDED IN PARAGRAPH (f) OF THIS AGREEMENT. Any other representations or
warranties made by any person, including employees or representative of CHI,
which are inconsistent herewith shall be disregarded by SMI and shall not be
binding upon CHI. If any Product model or sample was shown to SMI, such model or
sample was used merely to illustrate the general type and quality of the Product
and not to represent that the Product would necessarily conform to such model or
sample.

(d) CHI's warranties set forth in Paragraph (a) shall not apply in
circumstances that would be excluded by its standard end user warranty terms,
such as misuse or alteration of the Product or use of the Product for other than
the specific purpose for which it is designed.

(e) CHI's sole obligation under the hardware warranty set forth in
Paragraph (a) shall be to repair or replace, at CHI's option, the defective or
nonconforming hardware. CHI's sole obligation under the Software warranty set
forth in paragraph (a) shall be to: (i) accept, analyze and provide written
response to any reports from SMI of Software malfunction or error; and (ii) use
commercially reasonable efforts to provide responses to correct such errors when
they reflect significant deviations from CHI's design specifications for the
current release of the Software. The time required to repair or replace any
defective Product shall not extend the Warranty Period.

12. SERVICE AND SUPPORT. SMI shall be responsible for providing service
for OEM Alternans Systems for SMI's customers and shall purchase and maintain
sufficient spare parts to provide adequate service. CHI will provide
telephone support for SMI personnel during its normal business hours. During
the term of this Agreement and for [***] thereafter, CHI shall sell
applicable spare parts to SMI at prices in CHI's then current distributor
spare parts price list. A copy of CHI's current parts list is attached hereto
as Appendix H.

13. SOURCE CODE ESCROW. Upon request by SMI, the parties shall enter
into a Source Code Escrow Agreement substantially in the form attached hereto
as Appendix G. Thereafter, CHI shall deposit with Fort ▇▇▇▇ Escrow Services,
or other mutually acceptable software escrow agent the source code for the
Object Code and for the software contained in the Products and

related materials necessary to enable SMI to maintain the Products in the event
of the (i) bankruptcy, (ii) insolvency, (iii) dissolution, (iv) liquidation, (v)
cessation of business, or (vi) cessation of maintenance of the Software by CHI.

14. MARKING. SMI shall prominently display the following statement in its
operator's manuals, brochures and advertising for its applicable stress test
system: "T-wave Alternans technology supplied by Cambridge Heart, Inc." This
requirement shall be effective upon the next printing, trade show or advertising
insertion. SMI shall also refer to applicable CHI patents on a rear panel label
or software start-up screen.

15. REGULATORY COMPLIANCE. SMI will be responsible for insuring that its stress
test system incorporating the OEM Alternans Product meets regulatory
requirements in any jurisdiction where it currently distributes. CHI will
maintain 510K clearance, CE marking and Japanese MOH approvals for the OEM
Alternans Product hardware and software when sold as part of its own stress test
system and for the Alternans Sensors. CHI will provide documentation and
assistance on a good faith efforts basis to SMI in support of any regulatory
submissions that SMI may chose to make.

16. QUALITY ASSURANCE. CHI will manufacture the Products in compliance with FDA
QSR, ISO 9001, the MDD and any other applicable laws and regulations in Japan,
Canada and Australia. CHI shall be responsible for obtaining and documenting all
necessary clearances and approvals in the United States, Europe and Canada for
the Products when sold as part of its own systems. CHI shall provide SMI with
cooperation and all data and other information necessary to enable SMI, at SMI
discretion to submit to regulatory bodies in those and other countries.

17. RECALLS. In the event of a voluntary or mandatory recall or field correction
of the Products occasioned by any defect or deficiency in the materials or
manufacture of the Product, CHI and SMI shall comply with all applicable FDA or
other applicable laws or regulations. SMI will cooperate with CHI in providing
notice to its customers and distribution of repaired or replacement parts. CHI
shall bear all costs, expenses and liabilities in connection therewith
including, without limitation, costs related to notifying customers of the
recall and transporting the recalled items from customers to a location as SMI
shall designate in writing and for the replacement of the Products. Costs in
this context shall mean costs directly incurred by SMI arising solely from such
recall.

18. SOFTWARE LICENSE.

18.1. CHI grants to SMI a nontransferable license to use the Object
Code included in the OEM Alternans System and, for each OEM Alternans System
that it purchases from CHI, to distribute one copy of such Object Code to end
users in the United States who have signed SMI's standard Software License
Agreement, with the addition of provisions substantially in the form set forth
in Appendix F (THE "CHI LICENSE TERMS") and to sublicense SMI's subsidiaries and
distributors outside the United States to distribute such Object Code to end
users in accordance with SMI's standard international software licensing
practices.

18.2. In connection with such international distribution by direct SMI
sales, SMI shall incorporate such foreign language translations of the CHI
License Terms as CHI from time to

time, in its discretion and at CHI's expense, elects to provide to SMI. SMI's
efforts to insure compliance with the CHI License Terms shall not be less than
it applies to insure compliance with its own licensing terms. In connection with
international distribution by SMI through its distributor network, SMI shall
incorporate the CHI License Terms into SMI's Distributor Agreements in those
countries in which SMI sells OEM Alternans Systems through its distributors.
These Agreements will require that the distributors only sublicense the Object
Code to end users according to agreements or purchasing terms which incorporate
the CHI License Terms. SMI's efforts to insure compliance with these Agreements
with respect to the CHI Licensing Terms shall not be less than it applies to
insure compliance with its own licensing terms.

18.3. SMI shall not distribute or enable the Object Code except in
accordance with this Article 18.

18.4. Upon CHI's request, SMI shall, at CHI's, expense provide
reasonable cooperation to CHI in CHI's efforts to ensure that all end users
comply with the terms under which the Object Code is licensed to such end users,
including without limitation the CHI License Terms and shall promptly notify CHI
of any breaches of such terms that become known to SMI.

18.5. CHI shall retain the right to enforce compliance with the CHI
License Terms by SMI's licensed end users, and in the event SMI, in SMI sole
discretion, decides to allow CHI to use SMI's name to prosecute an action
against SMI's licensed end users, CHI agrees to hold SMI and its distributors
harmless against any award of court costs or damages resulting from CHI's use of
SMI's name in such action.

18.6. SMI shall maintain copies of all license agreements entered into
with customers of the OEM Alternans System in the United States and in other
countries and CHI shall have reasonable rights, not more than one time per year
and at CHI's expense, to audit those records of SMI necessary to insure
adherence to this Article 18 and shall not use any information learned in such
audit for any other purpose.

19. PATENTS AND TRADEMARKS.

19.1. CHI hereby represents and warrants that: (i) CHI is the exclusive
owner of the Object Code, the Product documentation, and, to the best of CHI's
information and belief, the ▇▇▇ ▇▇▇▇▇; (ii) CHI has all rights necessary for the
grant of the rights and licenses in this Agreement and such grant will not
constitute a breach of any other binding obligation to which CHI is subject;
(iii) neither the Object Code nor the Products infringe any trade secret rights,
copyrights or U.S. patent rights of any third party; provided, however, that CHI
shall not be deemed to be in breach of this part (iii) if CHI was not aware of
such infringement as of the execution date of this Agreement and if CHI
indemnifies SMI against such claim in accordance with Section 21 below; and (iv)
Other than described in Appendix E, CHI has no knowledge of any facts or alleged
claims that should reasonably lead it to believe that the Object Code or
Products infringe any other intellectual property rights of any third party. If
the Object Code or Products become, or in CHI's opinion are likely to become,
the subject of such claim of infringement, CHI will, in addition to its
indemnification obligations hereunder, at its expense, either (A) procure rights
for SMI or its customers who have executed a software sublicense to

continue using the Object Code and the Products, or (B) replace or modify the
Object Code or the Products, as the case may be, to prevent infringement with
performance substantially similar to the original performance; provided however
that if neither A nor B is practicable, CHI may, in its sole discretion,
terminate this agreement on 60 day prior written notice to SMI.

19.2. All patents and patent rights, trademarks, copyrights, trade
names and other property rights in and with respect to the Products are and will
remain exclusively the property of CHI.

20. MUTUAL INDEMNIFICATION. Each party agrees to defend, indemnify and hold the
other harmless for any and all claims, demands, actions, suits, losses,
liabilities, damages, injuries, fines, penalties, costs and expenses, including
without limitation reasonable attorney fees (collectively "Claims") arising out
of any breach in performance or warranties under this Agreement by the
Indemnitor except to the extent such Claims arise out of the negligence or
willful misconduct of the Indemnitee. The Indemnitee shall provide the
Indemnitor with prompt written notice of and such Claim and grant the Indemnitor
control of the defense, compromise and settlement of such Claim, and shall
reasonably cooperate with the Indemnitor with the defense and settlement of such
Claim.

21. THIRD PARTY INDEMNIFICATION.

21.1. CHI shall defend, indemnify and hold harmless SMI from any Claim
arising out of, or resulting from (a) bodily injury (including death) or
property damages incurred by a third party, to the extent such claims are caused
by (i) any negligent or willful act or omission of CHI in connection with the
development, manufacture, sale or distribution of the Products or (ii) the
failure of the Products to perform according to their specifications or (b) any
claim that the use, reproduction or distribution of the Products infringes
intellectual property rights of a third party. In the event of such claim, SMI
agrees promptly to notify CHI of the claim and to permit CHI, at CHI's expense,
to control of the defense, compromise and settlement of such Claim, and shall
reasonably cooperate with CHI with the defense and settlement of such Claim.

21.2. SMI shall defend, indemnify and hold harmless CHI from any Claim
arising out of, or resulting from (a) bodily injury (including death) or
property damages incurred by a third party, to the extent such Claim is caused
by (i) any negligent or willful act or omission of SMI in connection with the
development, manufacture, sale or distribution of its stress test systems or
(ii) the failure of such stress test systems to perform according to their
specifications or (b) any Claim that the use, reproduction or distribution of
the stress test systems infringes intellectual property rights of a third party.
In the event of such a Claim, CHI agrees promptly to notify SMI of the Claim and
to permit SMI, at SMI's expense, to control the defense, compromise and
settlement of such Claim, and shall reasonably cooperate with SMI with the
defense and settlement of such Claim.

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

21.3. In the event a Claim is based partially on an indemnified claim
described in Sections 21.1 or 21.2 above and partially on a non-indemnified
claim, or is based partially on a claim indemnified by CHI pursuant to Section
21.1 above and partially on a claim indemnified by SMI pursuant to Section 21.2
above, any payments and reasonable attorney fees incurred in connection with
such Claim are to be apportioned between CHI and SMI in accordance with the
degree of cause attributable to each party.

22. LIMITATIONS OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
SPECIAL, INCIDENTAL, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES OF THE OTHER
PARTY OR ANYONE CLAIMING THROUGH OR ON BEHALF OF SUCH OTHER PARTY, INCLUDING
LOSS OF USE, REVENUE, OR PROFITS, IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT OR ANY BREACH OF THIS AGREEMENT BY A PARTY HERETO OR THE EXISTENCE,
FURNISHING, FUNCTIONING, OR THE OTHER PARTY'S OR ANY THIRD PARTY'S USE OF ANY
PRODUCTS OR SERVICES PROVIDED FOR IN THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

23. CONFIDENTIALITY.

23.1. CONFIDENTIAL INFORMATION. Both SMI and CHI acknowledge that the
technical, financial, marketing or sales information, (including, without
limitation, the Object Code) (1) disclosed by the other party, or (2) obtained
by inspection, examination, use or servicing from time to time of the Products
is confidential and proprietary information of such disclosing party and shall
remain the property of such disclosing party ("Confidential Information").
Except as otherwise expressly provided in this Agreement, neither SMI nor CHI
shall use or disclose to a third party the other's Confidential Information for
any purpose, other than in the performance of this Agreement, without the prior
written consent of the disclosing party. Each party's obligations under this
Section 23 shall terminate [***] after termination of this Agreement (including
any extension thereof).

23.2. EXCLUSIONS. Confidential Information shall not include
information which: (i) at the time of disclosure is in the public domain; (ii)
after disclosure becomes part of the public domain by publication or otherwise,
except by breach of this Agreement; (iii) is received from a third party;
provided, however, that the recipient has no reason to know such information was
obtained by such third party, directly or indirectly, from the other party; (iv)
is independently developed by or for the recipient without reference to
Confidential Information; and (v) disclosure of which is required by applicable
law.

24. ANNOUNCEMENTS. The parties intend to jointly announce this Agreement. All
announcements pertaining to this Agreement must be approved in writing by both
parties.

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

25. TERM AND RENEWAL. The initial term of this Agreement shall be from the
Effective Date through June 30, 2002. Upon the expiration of the initial term,
the term shall renew automatically for subsequent one-year terms unless either
party has notified the other in writing of its intent not to renew not less than
one hundred and eighty (180) days prior to the end of each term.

26. TERMINATION.

26.1. Either party may terminate this Agreement in the event of a
Default, as defined in Section 26.2 below, by the other party, upon thirty (30)
days prior written notice to the defaulting party or if either party is bought
or merged into another company and does not own more than 50% of the surviving
company's shares. Any notice given pursuant to this Section shall be of no
effect and this Agreement shall not terminate if the defaulting party has cured
the Default described in the notice and is not otherwise in Default at the end
of the thirty (30) days following written notice of Default. Termination of this
Agreement for Default shall not impair the terminating party's other rights and
remedies for such Default.

26.2. DEFAULT. A party shall be in "Default" if: (1) It voluntarily
files a petition under the federal Bankruptcy Act or any similar or successor
law relating to bankruptcy, insolvency, arrangement, or reorganization, or under
any state bankruptcy or insolvency act, or admits its insolvency or the
inability to pay its debts, or fails within sixty (60) days, to gain a discharge
or stay of involuntary proceedings brought for its reorganization, dissolution,
or liquidation, or is adjudged as bankrupt, or has a trustee or receiver
appointed, or makes an assignment for the benefit of its creditors, or if there
is an attachment, execution, or other judicial seizure of any material portion
of its assets which is not discharged within sixty (60) days; (2) It is involved
in a merger in which it is not the surviving entity or is otherwise dissolved or
ceases to be in existence; or (3) It breaches any material term of this
Agreement.

27. EFFECT OF TERMINATION. Upon termination or expiration of this Agreement, SMI
may continue to sell Products in its inventory or, at CHI's option, CHI may
purchase Products in SMI's inventory at the original purchase price paid by SMI.
Thereafter, the licenses granted to SMI under Section 2 shall expire, except to
the extent necessary to enable SMI to service the Products sold by SMI
hereunder. Except in the event of termination of this Agreement due to Default
by SMI, SMI shall have the right to purchase Alternans Sensors from CHI for
resale to SMI's customers for a period of seven years following termination at
the discount level in effect at termination provided that SMI purchases at least
[***] sensor sets per month during such period.

28. GOVERNING LAW. This Agreement shall be governed by and interpreted under the
laws of the Commonwealth of Massachusetts.

29. MISCELLANEOUS.

29.1. INSURANCE. Throughout the term of this Agreement, CHI and SM
shall each maintain one or more commercial general liability insurance policies
that, in the aggregate, shall provide coverage, including products liability
coverage, of not less than One Million Dollars (U.S. $1,000,000) per occurrence
and Two Million Dollars (U.S. $2,000'000) aggregate. The policies shall be
issued by an insurance company with a minimum Best's rating of A-XII. Each
policy shall provide coverage for claims arising both within the United States
and in foreign countries. CHI and SMI shall annually exchange certificates of
insurance. In addition, CHI and SMI shall each maintain an excess liability
policy of no less than Three Million Dollars ($3,000,000).

29.2. NOTICE. Any notice permitted or required to be given under this
Agreement shall be effective upon personal delivery (including delivery by
commercial courier service or facsimile with confirmed transmission), or five
(5) days after such notice is mailed by registered or certified mail, return
receipt requested, properly directed to the recipient at the address set forth
below the party's signature on this Agreement. Either party may change its
address by giving written notice of the change in the manner provided above for
giving notice.

29.3. INTEGRATION; AMENDMENT; NONWAIVER. This Agreement, including all
Attachments, constitutes the entire agreement of the parties with respect to its
subject matter and supersedes and cancels all other prior and contemporaneous
agreements, discussions or representations, whether written or oral. No
modification of this Agreement shall be enforceable unless reduced to writing
and signed by duly authorized representatives of both parties. Failure of either
party at any time to enforce any provision of this Agreement shall not preclude
any other or further enforcement of such provisions or the exercise of any other
rights. No waiver of a breach of this Agreement shall be valid unless in
writing.

29.4. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision. If any provision is deemed invalid or unenforceable, the remainder
shall be construed to give effect to the parties', intent to the extent
permitted by applicable law.

29.5. SUCCESSORS AND ASSIGNS. No portion of this Agreement may be
transferred or assigned by CHI or SMI without the prior written consent of the
other party which consent shall not be unreasonably withheld, provided, however,
either party may assign this Agreement to any subsidiary of that party or of its
parent company. Subject to the foregoing, this Agreement shall be binding upon
the respective successors and assigns of the parties.

29.6. FORCE MAJEURE. Each party shall be excused from any delays or
failure in performance (other than payment obligations) hereunder caused by
reason of any occurrence of an event of Force Majeure, namely, an act of God,
war, fire, flood, earthquake, riots, unforeseen changes in government laws or
regulations and government embargo. If any Force Majeure condition occurs, the
party delayed or unable to perform shall give reasonably prompt notice to the
other party, and this Agreement shall be suspended for the duration of the Force
Majeure condition; PROVIDED, HOWEVER, that if the suspension of this Agreement
under this Section has

continued for a period of sixty (60) or more days, either party may immediately
terminate this Agreement upon notice to the other party.

29.7. INDEPENDENT CONTRACTOR. The relationship between the parties will
be that of independent contractors. Neither party will be or hold itself out as
an employee, agent or franchisee of the other, and neither party will create or
assume any obligation, expressed or implied, on behalf of the other. This
Agreement shall not be interpreted or construed as creating or evidencing any
association, joint venture or partnership between the parties or as imposing any
partnership obligations or partnership liability on any party.

29.8. SURVIVAL. Sections 3.5, 4, 11 12, 17, 18, 19.1 (last sentence
only), 20, 21, 23, 24, 27, 28, 29.2-29.8 of this Agreement shall survive its
expiration or termination for any reason. Expiration or termination of this
Agreement for any reason shall not affect any end user licenses which may have
been granted prior to expiration or termination.

SPACELABS MEDICAL, INC. CAMBRIDGE HEART, INC.

By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Business Chairman, President and CEO
Development

ADDRESS: ADDRESS:

▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Heart, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

With a facsimile copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and General Counsel
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇

APPENDEX A: SPECIFICATIONS

----------------------------------------------------------------------------------------------------------------------
CAMBRIDGE HEART
--------------------- ------------------------------------------------------------------------------------------------

TITLE: OEM ALTERNANS PRODUCT SPECIFICATIONS

--------------------- ------------------------------------------------------------------------------------------------
SUBJECT:. THIS DOCUMENT PROVIDES THE TECHNICAL SPECIFICATIONS FOR THE OEM ALTERNANS
PRODUCT AS USED IN THE SPACELABS QUEST STRESS TEST SYSTEM.

--------------------- ------------------------------------------------------------------------------------------------
DOC. NO.: ▇▇-▇▇▇▇-▇▇▇
----------------------------------------------------------------------------------------------------------------------
REVISION CONTROL SHEET

-------------- ---------- ------------- ------------------------------------------------------- ----------------------
DCN Rev. Date Description of Change Author
-------------- ---------- ------------- ------------------------------------------------------- ----------------------

N/A A 02/15/00 Baseline release ▇. ▇▇▇▇▇▇▇
-------------- ---------- ------------- ------------------------------------------------------- ----------------------
B 02/21/00 UI on QUEST ▇. ▇▇▇▇▇▇▇
-------------- ---------- ------------- ------------------------------------------------------- ----------------------
C 4/7/00 Reference for section 6.0, added 7.0, 8.0, updates to ▇. ▇▇▇▇▇▇▇
6.0 data, Communication requirement for report, and
Purchase order information, CTICK, CE markings,
storage/operating conditions
-------------- ---------- ------------- ------------------------------------------------------- ----------------------
D 4/15/00 Effective Date, clarification of accessories P/N, ▇. ▇▇▇▇▇▇▇
data cable removed from description
-------------- ---------- ------------- ------------------------------------------------------- ----------------------
E 4/20/00 Added CH part numbers and updated "replaceable ▇. ▇▇▇▇▇▇▇
leadset" description in Sections 8.0 & 9.0.
-------------- ---------- ------------- ------------------------------------------------------- ----------------------
F 5/1/00 Corrected several part descriptions in sections 8.0 ▇. ▇▇▇▇▇▇▇
and 9.0; Deleted single pouch of Sensors from section
8.0; Changed group of 5 pouches to group
of 10 pouches in Section 8.0.
-------------- ---------- ------------- ------------------------------------------------------- ----------------------
G 5/9/00 Added lead length descriptions for patient cables. ▇. ▇▇▇▇▇▇▇
Belt LxW. Added SLB P/N for IEC 10 lead cable.
Figure 5.1 indicates PM-3 nomenclature.
----------------------------------------------------------------------------------------------------------------------
CAMBRIDGE HEART, INC. PROPRIETARY INFORMATION

This document was developed by Cambridge Heart at our expense.
The information contained herein is the property of Cambridge Heart, Inc. and is
NOT to be released without written permission of a Cambridge Heart official.
----------------------------------------------------------------------------------------------------------------------

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

APPENDIX B: PRICES AND DISCOUNTS

OEM ALTERNANS PRODUCT:

Suggested List Price: $[***]

▇▇▇▇▇ ▇ Discount: [***]%

Level 3 Discount: [***]%

ALTERNANS SENSORS:

Maximum U.S. List Price: $ [***] Per set

▇▇▇▇▇ ▇ Discount [***]%

DISCOUNT LEVELS:

SMI shall be entitled to ▇▇▇▇▇ ▇ Discounts if the Target Group Sales Rates is at
least [***]%.

Level 2 Discounts shall apply if the Target Group Sales Rate is from [***]% to
[***]%.

Level 3 Discounts shall apply if the Target Group Sales Rates is less than
[***]%.

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

ALTERNANS ACQUISITION PROGRAM

SMI may sell Products under CHI's Alternans Acquisition Program, the terms of
which include the following:

Option A: The customer commits to purchase[***] sensors sets per month for three
years at a price of $[***] per sensor set. The contract is assigned to the
leasing company selected by CHI. The leasing company purchases the OEM Alternans
System from CHI. CHI supplies SMI with the OEM Alternans Product and a
commission of $[***]. The leasing company using CHI as its agent, will ship and
▇▇▇▇ the customer for [***] sensor sets per month.

Option B: The customer commits to purchase [***] sensor sets per month for three
years. The contract is assigned to the leasing company selected by CHI. The
leasing company purchases the OEM Alternans System from CHI and a stress test
system from SMI at a price of $[***] CHI supplies SMI with the OEM Alternans
System and a commission of $[***]. The leasing company, using CHI as its agent,
will ship and ▇▇▇▇ the customer for [***] sensor sets per month.

APPENDIX C: SCHEDULE

SMI ships stress test system for development and testing to CHI by March 21,
2000

CHI completes Alpha Level product integration by May 29, 2000, and Beta Level
integration by June 26, 2000

CHI delivers user manual content to SMI by May 8, 2000

SMI's regulatory submission will be July 15, 2000

SMI will release the Products by November 15, 2000

APPENDIX D: MARKETING ACTIVITIES

SMI will complete the following marketing activities:

1. Create a new T-Wave Alternans Datasheet by July 15, 2000.

2. Add T-Wave Alternans information to the Quest Brochure by August 4,
2000.

3. Add T-Wave Alternans information to the SMI ▇▇▇▇▇▇▇ Virtual Salesman CD
by August 4, 2000.

4. Complete a direct mailing to existing Quest customers by September 8,
2000.

5. Attend and display T-Wave Alternans and Quest at the following trade
shows: ACC, NASPE and AHA.

APPENDIX E: PATENTS

A patient issued in 1999 to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and licensed to Marquette,
#5,921,94, has claims substantially similar to some of those in a patent issued
to CHI in 1997, #5,570,696. CHI has received an opinion from its patent counsel,
Fish and ▇▇▇▇▇▇▇▇▇▇, that the ▇▇▇▇▇▇▇ patent is not valid.

------------------ -------------------------------------- -------------- -------
Effective: 5/1/00 OEM Alternans Product Specifications ▇▇-▇▇▇▇-▇▇▇ Page
------------------ -------------------------------------- -------------- -------

APPENDIX F: LICENSE AGREEMENT TERMS

1. The Products licensed hereunder contain hardware and Alternans Software from
Cambridge Heart, Inc. ("CHI") intended for use in measuring T-wave alternans
(collectively, "CHI Products"). This Agreement and the purchase of CHI Products
hereunder do not provide the Customer with a license to use the CHI Alternans
Software or applicable CHI patents. A license to use the CHI Alternans Software
is conferred by payment of the fees described in the following paragraph.

2. A $50.00 fee, payable in advance, is due to CHI for each alternans
test performed by the Customer with the CHI Products. This fee is
included in the purchase price of CHI Alternans Sensors manufactured by
CHI, such that no additional fee is due for a particular alternans test
performed using CHI Alternans Sensors. This fee requirement is
perpetual and shall survive the expiration, cancellation or termination
of this Agreement.

3. At no time does the purchase of CHI Products or the use of CHI
sensors in the performance of an alternans test provide the Customer
with any rights of ownership or use of CHI's patents or other
intellectual property.

4. The license to use the CHI Alternans Software will terminate
immediately upon use of the CHI Alternans Software to perform an
alternans test without payment in advance of the per-use fee for that
test. The Customer acknowledges that the performance of an alternans
test without payment of the per-use fee constitutes a violation of
CHI's rights.

CHI is a third-party beneficiary of this Agreement and shall have the right to
enforce the terms of this Agreement directly against the Customer.

APPENDIX G: FORM OF SOURCE CODE ESCROW AGREEMENT

THIS SOURCE CODE ESCROW AGREEMENT is made effective as of the __________ day of
___________,2000 (the "Effective Date"), by and among CAMBRIDGE HEART, INC., a
Delaware corporation ("Licensor"); SPACELABS MEDICAL, INC., a California
corporation ("Licensee"); and FORT ▇▇▇▇ ESCROW SERVICES (the "Escrow Agent").

RECITALS

A. Pursuant to the terms of a Distribution and License
Agreement entered into by and between the parties effective as of May
_, 2000 (the "License Agreement"), Licensor has granted Licensee a
license to incorporate into its products the object code version of
certain software developed and owned by Licensor and has agreed to make
the source code version of the software incorporated into the
Licensor's Products (collectively, the "Software"), available to
Licensee under the terms of this Agreement.

B. Licensee has required Licensor to furnish Licensee with
access to the source code corresponding to such Software.

C. Licensor has agreed to place such source code in escrow for
the benefit of Licensee on the terms and conditions hereof.

AGREEMENT

1. DEFINITIONS

For purposes of this Agreement, each capitalized term not otherwise defined
herein shall have the meaning that is ascribed to such term in the License
Agreement. The following definitions shall apply to the following respective
capitalized terms:

1.1 "IMPACT EVENT" means any of the following:

(a) Licensor's admission in writing that it is unable
to pay its debts generally as they become due;

(b) Licensor's making of a general assignment for the
benefit of creditors;

(c) the commencement of foreclosure proceedings
affecting the Software by any creditor of Licensor,
which proceedings are not dismissed within sixty (60)
days after service thereof on Licensor;

(d) Licensor's consent to the filing of a petition of
bankruptcy against it;

(e) the filing of a petition of bankruptcy against
Licensor that remains unstayed or is not dismissed
within sixty (60) days after such filing;

(f) the adjudication of Licensor as being bankrupt or
insolvent by a court of competent jurisdiction;

(g) any action by Licensor seeking reorganization
under any bankruptcy act or law of debtor's
moratorium or Licensor's consent to the filing of a
petition seeking such reorganization;

(h) the entry of a decree against Licensor by a court
of competent jurisdiction appointing a receiver,
liquidator, trustee, or assignee in bankruptcy or in
insolvency covering all or substantially all of
Licensor's property or providing for the liquidation
of Licensor's property or business affairs;

(i) the termination of substantially all of
Licensor's on-going business operations relating to
the Software;

(j) any liquidation of Licensor, or involuntary sale;

(k) cessation of business or of the maintenance or
support of the Software by Licensor.

1.2 "SOURCE CODE" means a copy of the source code
corresponding to the Software, including all Source Code
Updates delivered to the Escrow Agent from time to time
pursuant to this Agreement, plus any pertinent commentary or
explanation that may be necessary to render the Source Code
understandable and useable by a computer-programming expert.
The Source Code shall include system documentation, statements
of principles of operation and schematics, all as necessary or
useful for the effective understanding and use of the Source
Code. Insofar as the "development environment" employed by
Licensor for the development, maintenance, and implementation
of the Source Code includes any device, programming, or
documentation not commercially available to Licensee on
reasonable terms through readily known sources other than
Licensor, the Source Code shall include all such devices'
programming, or documentation. The foregoing reference to such
"development environment" is intended to apply to any
programs, including compilers, "workbenches," tools, and
higher-level (or "proprietary") languages, used by Licensor
for the development, maintenance, and implementation of the
Source Code.

1.3 "SOURCE CODE UPDATE" means a copy of the Source Code
version of each Upgrade.

2. REPRESENTATIONS AND WARRANTIES OF LICENSOR

2.1 OWNERSHIP OF SOURCE CODE. Licensor represents and warrants
that it is the owner of, and holder of all rights in, the
Source Code, free and clear of all claims, liens and
encumbrances and has the right to grant to Licensee the
license rights to the Source Code pursuant to Section 5 hereof
and to deposit the Source Code with the Escrow Agent pursuant
to the terms of this Agreement.

2.2 SOFTWARE CORRESPONDS WITH SOURCE CODE. Licensor represents
and warrants that the Source Code deposited with the Escrow
Agent will at all times be the source code version of the
current version of the Software, together with any and all
Upgrades.

2.3 USEABILITY OF SOURCE CODE. Licensor represents and
warrants that the Source Code is and shall be understandable
and useable by a trained computer programmer. Licensor further
represents and warrants that the Software does not involve any
proprietary languages or programming components that such a
programmer could not reasonably be expected to understand,
except to the extent the Source Code contains sufficient
commentary to enable such programmer to understand and use
such languages or components. Licensor further represents and
warrants that the Source Code includes all of the devices,
programming, and documentation necessary for the maintenance
of the Software by Licensee upon release of the Source Code
pursuant to this Agreement.

3. DEPOSIT, CUSTODY, RELEASE AND EXAMINATION OF SOURCE CODE

3.1 DEPOSIT OF SOURCE CODE. The Escrow Agent agrees to accept
from Licensor, and Licensor agrees to deposit with the Escrow
Agent, within ten (10) days of the Effective Date of this
Agreement, a copy of the Source Code relating to the current
version of the Software. The Escrow Agent will issue a receipt
to Licensor, accompanied by a general list or description of
the materials so deposited.

3.2 DEPOSIT OF SOURCE CODE UPDATES. The Escrow Agent agrees to
accept from Licensor, and Licensor agrees to deposit with the
Escrow Agent within ten (10) days after each Software Upgrade
is made available to Licensee, a corresponding Source Code
Update. For each deposit, the Escrow Agent will issue a
receipt to Licensor, accompanied by a general list or
description of the materials so deposited.

3.3 CUSTODY OF SOURCE CODE. The Escrow Agent shall exercise
reasonable care to protect and safeguard all Source Code
delivered pursuant to this Agreement and shall segregate and
label such Source Code according to the date of delivery and
any other identifying information supplied by Licensor.

3.4 RELEASE OF SOURCE CODE. The Escrow Agent shall release
copies of the Source Code deposited in escrow pursuant to this
Agreement only in accordance with the terms of this Agreement.

3.5 VERIFICATION AND TESTING OF SOURCE CODE. Licensee shall be
permitted, in the presence of the Escrow Agent and Licensor to
inspect, compile, test, verify, confirm and review the Source
Code (subject to appropriate undertakings of confidentiality
and restrictions on copying, subsequent use, or disclosure) in
connection with the initial deposit of the Source Code in
escrow and at the time of each subsequent deposit hereunder
and the Escrow Agent shall permit such inspections and testing
promptly upon request.

4. IMPACT EVENT AS BASIS FOR RELEASE OF SOURCE CODE

4.1 RELEASE. If Licensor suffers an Impact Event at any time,
Licensor shall immediately so notify Licensee. In the event
Licensee becomes aware that Licensor has suffered an Impact
Event as a result of notice from Licensor or otherwise
Licensee may so notify the Escrow Agent in writing. Licensee's
notice to the Escrow Agent shall be accompanied by a copy of
written notice from Licensee to Licensor informing Licensor of
Licensee's intent to request release of the Source Code by the
Escrow Agent on a release date that shall be not less than
fourteen days from the date of such notice (the "Release
Date") unless (a) for Impact Events "a" through "h" and "j"
Licensor shall obtain an order from a court of competent
jurisdiction hereunder enjoining the release of the Source
Code or, (b) for Impact Events "i" and "k", Licensor objects
in writing within ten (10) days of Licensor's receipt of
Licensee's written notice of the occurrence of the Impact
Event, in which case such dispute shall be resolved through
expedited arbitration in accordance with Section 4.3 below.
During the pendency of such arbitration regarding Impact
Events "i" and "k" the Escrow Agent shall not release the
Source Code. Upon the Release Date, unless the Licensor shall
have delivered such objection notice to the Escrow Agent and
the Licensee, the Escrow Agent shall promptly release and
deliver a copy of the Source Code to Licensee.

4.2 INTENTION. In the event that Licensor or its successors or
representatives rejects or terminates the License Agreement or
this Agreement in breach of the provisions thereof or hereof,
including as contemplated under Section 365 of the Bankruptcy
Code, it is acknowledged that this Agreement contemplates the
manner in which Licensee may retain its rights in the
Software, including associated intellectual property rights,
if Licensee chooses to do so in accordance with Section 365(n)
of the Bankruptcy Code. This Agreement serves as a contract
supplementary to the License Agreement in such regard. It is
the parties' intent that the rights Licensee shall be entitled
to retain shall be of the scope provided in Section 6 hereof
in all items delivered or required to be delivered under the
License Agreement and this Agreement. Further, such rights
shall be subject to no restriction following an election by
Licensor, to reject or terminate the License Agreement or this
Agreement. Such rights shall be exclusive and either renewable
or perpetual to the extent so provided under the License
Agreement.

4.3 EXPEDITED ARBITRATION. In the event objection notice is
given by Licensor under Section 4.1 (b) above, the controversy
as to the occurrence of Impact Events "i" or "k" shall be
settled by binding arbitration in accordance with the Rules of
the American Arbitration Association using its provisions
regarding Expedited Procedures. The hearing shall be held in
Seattle, Washington before a single neutral arbitrator who
shall be selected by the American Arbitration Association. The
sole issue for arbitration shall be whether either Impact
Events "i" or "k" has occurred. The arbitrator shall have no
authority to modify, amend or change this Agreement, the
License Agreement, or any other agreements between Licensor
and Licensee. The parties shall prepare their arguments for
presentation before the arbitrator within fifteen (15) days
from the day of appointment of the

arbitrator. No more than two (2) business days shall be
allotted for oral argument. The arbitrator shall render its
decision within ten (10) days of the completion of oral
arguments, and the arbitrator shall agree to comply with this
schedule before accepting appointment. If the arbitrator
decides that either Impact Event "i" or Impact Event "k" has
occurred, the arbitrator shall order the release of, and
Escrow Agent shall so release to Licensee, the Source Code for
use by Licensee in accordance with the provisions of this
Agreement. The decision of the arbitrator shall be final and
binding on the Licensor and Licensee and may be entered and
enforced in any court of competent jurisdiction.

5. LICENSE OF SOURCE CODE

In the event that a copy of the Source Code is authorized hereunder to be
delivered out of escrow to Licensee, Licensee shall immediately be granted,
without any further action, authorization, or instrument, a paid-up,
irrevocable, perpetual, nonexclusive license from Licensor to use, modify,
maintain, and update the Source Code in any manner that may be necessary or
appropriate to enable Licensee to fulfill Licensor's support and maintenance
obligations with respect to the Software and for no other purpose.

6. FEES AND PAYMENTS

6.1 ESCROW FEES. Licensor shall pay to the Escrow Agent,
annually in advance during the term hereof, all fees of the
Escrow Agent at its prescribed rate. Licensee shall reimburse
Licensor for fifty percent (50%) of such fees within thirty
(30) days after receipt of Licensor's invoice for such amount,
accompanied by a copy of the Escrow Agent's receipt. In the
event that Licensor shall fail to pay such fees, Licensee
shall have the right, but not the obligation, to pay all of
such fees and shall be entitled to set off against any sums
owing to Licensor its share of such fees.

6.2 PAYMENTS FOR SOFTWARE. In the event the Source Code is
released to Licensee pursuant to this Agreement, Licensee
shall continue to pay any Product Fees, Royalties, or Purchase
Price Payments due and not yet paid under the terms of the
License Agreement, the Software License Agreement or the Asset
Purchase Agreement, reduced by any loss or expense incurred by
Licensee as a result of the events giving rise to the release
of the Source Code.

7. LIMITATION UPON OBLIGATION OF THE ESCROW AGENT

7.1 LIMITED DUTY OF INQUIRY. The Escrow Agent shall not be
required to inquire into the truth of any statements or
representations contained in any notices, certificates, or
other documents required or permitted hereunder, and it may
assume that the signatures on any such documents are genuine,
that the persons signing on behalf of any party thereto are
duly authorized to issue such document, and that all actions
necessary to render any such documents binding on any party
thereto have been duly undertaken.

7.2 RELEASE AND INDEMNIFICATION OF THE ESCROW AGENT. Licensor
and Licensee do hereby release, and agree to indemnify and
hold harmless, the Escrow Agent from and against any and all
liability for losses, damages, and expenses (including
attorney's fees) that may be incurred by it on account of any
action taken by the Escrow Agent in good faith pursuant to
this Agreement, and agree to defend and indemnify the Escrow
Agent from and against any and all claims, demands, or actions
arising out of or resulting from any action taken by the
Escrow Agent in good faith pursuant to this Agreement.

8. TERM OF AGREEMENT

8.1 TERM. The term of this Agreement shall commence on the
effective date hereof and shall continue from year to year
until this Agreement is terminated hereunder.

8.2 TERMINATION. This Agreement may be terminated:

(a) By mutual consent of Licensor and Licensee at any
time;

(b) By the E crow Agent at any time, provided that
the Escrow Agent has given Licensor and Licensee
notice to that effect in writing at least one hundred
twenty (120) days before the contemplated date of
termination, whereupon Licensee may identify an
independent successor Escrow Agent, who is agreeable
to assuming, and will assume, all further obligations
of the Escrow Agent hereunder; or

(c) Automatically, in the event that a copy of the
Source Code is released to Licensee in accordance
with the terms of this Agreement.

Upon termination of this Agreement, following
distribution of a complete copy to Licensee to the
extent so required hereunder, any remaining copies of
the Source Code shall be delivered to Licensor,
except that in the event of termination at the
instance solely of the Escrow Agent, such copies
shall be delivered to the successor Escrow Agent.

9. MISCELLANEOUS

9.1 ENTIRE AGREEMENT. This Agreement is the entire agreement
among the parties with respect to the subject matter hereof
and may only be modified in a writing signed by all parties.

9.2 SURVIVAL. The terms of this Agreement that by their nature
should survive the expiration or termination of this Agreement
will do so.

9.3 INVALIDITY OF A PROVISION. If one or more of the
provisions of this Agreement is invalid or unenforceable, all
other provisions of this Agreement will remain in full force.
The parties will substitute the invalid or unenforceable

provision with a valid or enforceable provision that most
closely approximates their original commercial intent.

9.4 NO ASSIGNMENT. No portion of this Agreement may be
transferred or assigned by Licensor or Licensee without the
prior written consent of the other party which consent shall
not be unreasonably withheld, provided, however, either party
may assign this Agreement to any subsidiary of that party or
of its parent company. Subject to the foregoing, this
Agreement shall be binding upon the respective successors and
assigns of the parties.

9.5 INDEPENDENT CONTRACTORS. The parties hereto are
independent contractors and are not and shall not be deemed or
considered to be joint venturers, partners, agents, servants,
employees, fiduciaries, or representatives of one another, and
no party to this Agreement shall have the right or power to
bind or obligate any other party to, or third party
beneficiary of this Agreement, except as set forth herein.
Without limiting the generality of the foregoing, the Escrow
Agent shall be regarded as an independent custodian of the
Source Code and not as an agent or trustee of Licensor.

9.6 NOTICES. All notices sent hereunder must be in writing and
will be deemed given when delivered in person or when received
by mail, postage prepaid, registered or certified mail,
express courier, or telefax with proof of delivery received by
the sending party:

If to Licensee: Spacelabs Medical, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇, Vice President,
Product Development
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

With a copy to: Spacelabs Medical, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice
President, General Counsel and
Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

If to Licensor: Cambridge Heart, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman,
President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

With a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

If to Escrow Agent: Fort ▇▇▇▇ Escrow Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

9.7 GOVERNING LAW AND JURISDICTION. This Agreement will be
governed by the internal laws of the Commonwealth of
Massachusetts, without regard to conflict of laws provisions
that may provide a different result. Any suit related to this
Agreement must be brought in a state or federal court located
in Boston, Massachusetts, and the parties irrevocably consent
to the venue and personal jurisdiction of such courts.

9.8 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will constitute an original and
enforceable instrument, but all of which will constitute one
and the same agreement.

9.9 NO WAIVER. No party shall, by mere lapse of time, without
giving notice or taking other action hereunder, be deemed to
have waived any breach by the other party(ies) of any of the
provisions of this Agreement. Further, the waiver by any party
of any particular breach of this Agreement by any other party
shall not be construed to constitute a continuing waiver of
such breach or of any other breaches of the same or other
provisions of this Agreement.

9.10 BINDING EFFECT. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their
respective successors and assigns.

9.11 REMEDIES. The description of the possible occurrences
that would constitute an Impact Event, and the consequences
thereof, shall create no presumption that Licensor may or
should be permitted to reject or terminate the License
Agreement or this Agreement under applicable law. The parties
agree that such a rejection or termination would be highly
prejudicial to Licensee's interests, and enforcement of the
Agreement will not provide a complete or adequate remedy for
the harm to Licensee's interests.

9.12 LIABILITY OF ESCROW AGENT. Except for intentional
misrepresentation, negligence or intentional misconduct Fort
▇▇▇▇ shall not be liable to Licensor or to Licensee for any
act, or failure to act, by Fort ▇▇▇▇ in connection with this
Agreement. Any liability of Fort ▇▇▇▇ regardless of the cause
shall be limited to

$50,000. Fort ▇▇▇▇ will not be liable for special, indirect,
incidental or consequential damages hereunder.

LICENSEE: LICENSOR:

SPACELABS MEDICAL, INC. CAMBRIDGE HEART, INC.

By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ---------------------------------

Title: Vice President, Business Title: Chairman, President and CEO
Development ------------------------------
------------------------
ESCROW AGENT:

FORT ▇▇▇▇ ESCROW SERVICES, INC.

By:_____________________________
(signature)
Name:___________________________

Title:__________________________

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

APPENDIX H: PARTS PRICE LIST

----------------------- -------------------------------------------- ---------------------------- --------------------
RECOMMENDED DISTRIBUTOR
PART NO. DESCRIPTION LIST PRICE PRICE
----------------------- -------------------------------------------- ---------------------------- --------------------

▇▇-▇▇▇▇-▇▇▇ PM-3 Patient Module $[***] $[***]
----------------------- -------------------------------------------- ---------------------------- --------------------
▇▇-▇▇▇▇-▇▇▇ PM-3 Alternans Patient Cable (US) -- for [***] [***]
Alternans Testing
----------------------- -------------------------------------------- ---------------------------- --------------------
▇▇-▇▇▇▇-▇▇▇ PM-3 Alternans Patient Cable (Int'l) -- [***] [***]
for Alternans Testing
----------------------- -------------------------------------------- ---------------------------- --------------------
▇▇-▇▇▇▇-▇▇▇ PM-3 Alternans Patient Cable (US) -- for [***] [***]
Standard Stress Testing
----------------------- -------------------------------------------- ---------------------------- --------------------
▇▇-▇▇▇▇-▇▇▇ PM-3-Lead Patient Cable (Int'l) -for -- [***] [***]
Standard Stress Testing
----------------------- -------------------------------------------- ---------------------------- --------------------
20606-002 Replacement Belt and Buckle [***] [***]
----------------------- -------------------------------------------- ---------------------------- --------------------
▇▇-▇▇▇▇-▇▇▇ Replacement Leadwire Clips (set of 10) [***] [***]
----------------------- -------------------------------------------- ---------------------------- --------------------

Exhibit 10.1 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. DISTRIBUTION AND LICENSE AGREEMENT Effective as of May 10, 2000 (the "Effective Date") SMI Medical, Inc., a...

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