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Imagyn Medical Inc – IPO: ‘S-1/A’ on 5/29/96 – EX-10.12

As of:  Wednesday, 5/29/96   ·   Accession #:  912057-96-11021   ·   File #:  333-03542

Previous ‘S-1’:  ‘S-1/A’ on 5/28/96   ·   Latest ‘S-1’:  This Filing

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/29/96  Imagyn Medical Inc                S-1/A                  3:502K                                   Merrill Corp/FA

Initial Public Offering (IPO):  Pre-Effective Amendment to Registration Statement (General Form)   —   Form S-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement     94    606K 
                          (General Form)                                         
 2: EX-1.1      Underwriting Agreement                                25    104K 
 3: EX-10.12    Distributorship Agreement                             35     90K

EX-10.12   —   Distributorship Agreement
Exhibit Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
28Patents
"Trademarks
32Sales Representatives 
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     DISTRIBUTORSHIP AGREEMENT

This Agreement (the "Agreement"), dated and effective as of October 23, 
1995 by and between Imagyn Medical, Inc. ("IMI"), a corporation duly organized  
and existing under the laws of the State of California and having its principal 
place of business at 27651 LaPaz Road, Laguna Niguel, CA 92656, and United      
States Surgical Corporation ("USSC"), a corporation duly organized and existing 
under the laws of the State of Delaware and having its principal place of       
business at 150 Glover Avenue, Norwalk, Connecticut 06856.                      

WHEREAS, IMI develops, manufactures and markets certain laparoscopic    
products included in its MicroLap-TM- Endoscopy System; and                     

WHEREAS, USSC develops, manufactures and markets other laparoscopic     
surgical devices and products for open surgical procedures; and                 

 WHEREAS, USSC desires to purchase IMI Products from IMI for resale within
the Territory, as such term is defined below; and                               

NOW, THEREFORE, in consideration of the mutual promises, covenants and  
agreements hereinafter set forth, the parties hereto agree as follows:          

ARTICLE 1 - DEFINITIONS                                                 

 1.1 For purposes of this Agreement, the definitions set forth below shall
be applicable.                                                                  

  "Act" shall mean the United States Food, Drug and Cosmetic Act of 1938, as
amended to date and during the term of this Agreement, including, without       
limitation the Medical Device Amendments of 1976.                               

"Affiliate" of a Party (defined below) to this Agreement shall mean any 
corporation, partnership or other entity which, directly or indirectly,         
controls, is controlled by, or is under common control with such party.         
"Control" shall mean the legal power to direct or cause the direction of the    
general management or                                                           


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partners of such entity whether through the ownership of voting securities or by
contract, but only for so long as such ownership or control exist.              

 "Confidential Information" shall mean, unless specified in writing to the
contrary, any proprietary information or material regarding the business or     
affairs of USSC or IMI including, without limitation, know-how, research,       
development, customer lists and marketing information; provided, however, that  
"Confidential Information" shall not include information that (i) can be        
demonstrated to have been in the public domain or publicly known prior to the   
date of disclosure by the disclosing Party; or (ii) that can be demonstrated    
from written records, to have been in the receiving party's possession from     
another source not under an obligation of secrecy to the disclosing Party prior 
to disclosure by the disclosing Party; or (iii) that becomes part of the public 
domain or publicly known by publication or otherwise, not due to any            
unauthorized act by the receiving Party; or (iv) that can be demonstrated by    
written records to have been independently developed by the receiving Party     
without the use of the disclosing Party's Confidential Information.             

   "FDA" shall mean the United States Department of Health and Human Services,
Food and Drug Administration, or any successor agency.                          

   "FDA Clearance" shall mean approval or clearance to market the IMI Products
by the FDA, under the Act.                                                      

"Fixed Purchase Price Period" shall mean the period from commencement of
the term of this Agreement and continuing until [                              *
*                                                     ].                        

"IMI Product" or "IMI Products" shall mean the IMI Products described in
the Specifications (defined below), 2mm electrosurgery products (as and when the
same are offered for sale by IMI) and, subject to the provisions of this        
Agreement, all IMI Product Improvements (defined below), unless otherwise       
expressly stated herein.  In the event that IMI desires to have USSC distribute 
other IMI products that are neither products as set forth on EXHIBIT B nor IMI  
Product Improvements, IMI shall so advise USSC and, to the extent IMI and USSC  
so agree, such products shall be added to this Agreement as IMI Products.       

   "IMI Product Improvements" shall mean any adaptation, improvement, redesign
or modification of an IMI Product and any product developed, manufactured,      
licensed, marketed and/or sold by IMI as an alternative to an IMI Product until 
the sooner of (i) termination of this Agreement or (ii) solely with respect to  
an IMI Improvement to IMI's MicroLap-TM- Laparoscope, the introduction for      
general sale by USSC of a rigid laparoscope of between [     *                  

[*] Confidential Treatment Requested                                            

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*     ] in diameter that is substantially similar to IMI's MicroLap-TM-         
Laparoscope.                                                                    

   "Know-How" shall mean any and all secret or confidential information, trade
secrets, specifications, test results, analyses, data, inventions, methods,     
processes, formulae, compositions, designs, techniques, applications, ideas or  
concepts, whether or not reduced to practice relating, directly or indirectly,  
to a IMI Product, including, without limitation, technology that is or could be 
the subject matter of a foreign or domestic patent or patent application,       
whether or not reduced to writing in a patent application.                      

"Party" shall mean IMI or USSC, individually.  "Parties" shall mean both
IMI and USSC.                                                                   

  "Patents" or "Patent Rights" shall mean any and all world-wide patents and
patent applications, trademarks and trademark applications and copyrights       
relating to the IMI Products presently or hereafter owned by IMI and/or in which
IMI has obtained any right, title or interest including, without limitation the 
patent, patent applications, trademarks, and trademark applications set forth on
EXHIBIT A attached hereto.                                                      

 "Sales Representatives" shall mean the 12 entities set forth on EXHIBIT D
attached hereto under the caption "Sales Representatives."                      

"Specifications" shall mean the specifications of the IMI Products set  
forth in EXHIBIT B attached hereto (including any documents or other materials  
referred to therein but not otherwise actually provided in EXHIBIT B) or as such
specifications may be modified by the mutual written consent of the Parties.    

  "Subsidiary" shall mean any corporation, partnership or other entity fifty
percent (50%) or more of the outstanding shares of any class of stock, general  
partnership interests, or other equity of which is owned by a Party.            

"Territory" shall mean the countries identified on EXHIBIT E attached   
hereto.                                                                         

  "Trademarks" shall mean all trademarks used by IMI on IMI Products that it
sells prior to or during the term of the Agreement in the U.S.A.                

"USSC Products" shall mean any and all products developed, manufactured,
licensed, marketed and/or sold by USSC, other than IMI Products and IMI Product 
Improvements.                                                                   

   "Warranty" shall mean the warranty on the IMI Products set forth in EXHIBIT
C attached hereto.                                                              

[*] Confidential Treatment Requested                                            

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ARTICLE 2 - PAYMENT AND APPOINTMENT                                     

2.1  (a)  Subject to the terms an conditions of this Agreement, as total
consideration for the appointment and grant of rights to USSC pursuant to       
Section 2.1(b) below USSC shall pay to IMI (i) [                       *        
*                           ], upon execution and delivery of this Agreement,   
and (ii) an additional sum of [                   *                  ], if and  
when IMI terminates the exclusive rights of Sales Representatives whose         
exclusive territory within the U.S.A., together with other area within the      
U.S.A. that are not covered by exclusive rights granted to Sales                
Representatives, constitute at least 50% of the total U.S.A. population, and    
delivers to USSC the full releases described below ("Releases") from such Sales 
Representatives, (iii) an additional [                   *                  ] if
and when IMI terminates additional Sales Representatives whose territory, when  
combined with the territories and areas included in the preceding clause (ii),  
constitute 90% of the total U.S.A. population, and IMI delivers to USSC Releases
from such Sales Representatives, and (iv) an additional sum of [        *     ] 
if and when, by March 31, 1996, the exclusive rights of all remaining Sales     
Representatives are terminated and IMI delivers their Releases to USSC.  In     
any event, IMI shall terminate the exclusive rights of at least seven Sales     
Representatives, and deliver to USSC their Releases by January 1, 1996, and     
shall terminate the exclusive rights of all other Sales Representatives, and    
deliver to USSC their Releases, by March 31, 1996.  As used herein,             
"Releases" shall mean full releases, satisfactory to USSC and signed by the     
Sales Representatives, confirming the termination of their exclusive rights     
to sell IMI Products and releasing USSC from any and all liability relating     
thereto.  In the event that all Sales Representative's exclusive rights are     
not terminated, and their Releases received by USSC by March 31, 1996, then     
not further payment pursuant to this Section 2.1 shall be due from USSC to      
IMI and, without limiting its rights and remedies with respect to such          
breach, USSC may attempt to secure agreement of the remaining Sales             
Representatives to termination of their exclusive rights.  In the event USSC    
elects to do so, IMI shall provide to USSC all assistance as USSC may           
reasonably request.                                                             

  (b)  Subject to Sections 2.1(c) and 2.1(d), for the term of this
Agreement, IMI hereby appoints USSC as its exclusive distributor throughout the 
Territory for the marketing and sale of IMI Products, alone or together with    
USSC                                                                            

[*] Confidential Treatment Requested                                            

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Products.  In connection with such appointment, IMI hereby grants to USSC a     
royalty free, paid-up license under the patents in the Territory to distribute  
and/or sell the IMI Products and, at USSC's option, to use any or all of the    
Trademarks on or with the package in which USSC resells IMI Products within any 
area of the Territory, other than the U.S.A., or in connection with the         
promotion of such resales.  All references in the Agreement to rights and       
obligations of USSC with respect to the IMI Products shall also be deemed to    
include Subsidiaries, Affiliates, and permitted assigns of USSC.                

       (c)  Without limiting the provisions of Section 2.1(a), IMI, entirely
at its own expense, shall use its best efforts to terminate as soon as possible,
(i) and, in any event shall terminate by the dates specified in Section 2.1(a)  
above, any and all exclusive rights granted by it prior to or as of the date    
hereof to the Sales Representatives, and (ii) in any case by May 1, 1996, all   
agreements with any other third-parties to the extent such agreements grant     
exclusive or non-exclusive rights to sell IMI Products in the Territory, and    
letters commencing termination notice periods with respect to all such          
agreements with third parties, other than Sales Representatives, shall be       
delivered to such third parties within 10 days of execution of this Agreement,  
and copies forwarded to USSC.  The foregoing shall not limit IMI from entering  
into non-exclusive agreements with the Sales Representatives or with any other  
non-manufacturing, similar-sized, local distributor for sale of IMI Products    
within the U.S.A., provided that the total number of such Sales Representatives 
and distributors, together, does not exceed 15 at any time.  IMI represents and 
warrants that EXHIBIT D contains a complete list of the existing Sales          
Representatives and other third parties with agreements of the foregoing type,  
and that such agreements with third parties, other than Sales Representatives,  
are subject to termination, in accordance with their terms, without cause upon  
the minimum notice periods specified in EXHIBIT D.  IMI covenants not to enter  
into such agreements with any other third party, or to extend, renew or make any
new grant of exclusive rights to a Sales Representative, at any item during the 
term of this Agreement, if such agreement would be contrary to the appointment  
made to USSC pursuant to Section 2.1(b) above or to any other term or condition 
contained in this Agreement.  IMI shall notify USSC in writing immediately as   
and when a Sales Representative's exclusive rights, or a third-party's          
agreement, is terminated, and immediately provide USSC with Releases signed by  
all Sales Representatives and                                                   

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full releases, satisfactory to USSC and signed by all third parties whose rights
or agreements, as the case may be, have been terminated.                        

        (d)  Notwithstanding Section 2.1(b) above, IMI shall retain the right,
co-exclusive with USSC, to market and sell IMI Products under the Trademarks in 
the U.S.A. with IMI's own sales force, through the Sales Representatives, and,  
subject to limitations set out in Section 2.1(c), other local distributors.     
With respect to IMI Products that it manufacturers, IMI shall retain the right  
and shall have the obligation to maintain, directly with its own employees, an  
expert capability to service or repair, at IMI's principal facility, such IMI   
Products.                                                                       

ARTICLE 3 - PRICES, ORDERS, PAYMENTS, FORECASTS AND CAPACITY            

   3.1  IMI shall manufacture or have manufactured and deliver to USSC all IMI
Products ordered by USSC during the term of this Agreement in accordance with   
the provisions of this Agreement, the Specifications and USSC's instructions    
concerning labels, inserts and serialization of instruments.                    

  3.2  The total purchase price, F.O.B. North Haven or Norwalk, Connecticut,
which USSC shall pay IMI for each IMI Product (including any IMI Product which  
includes or is an IMI Product Improvement, and including all packaging labels   
and inserts, and serialization of instruments as USSC may specify) purchased by 
USSC pursuant to this Agreement during the Fixed Purchase Price Period shall be 
fixed at the IMI Products applicable price as specified in EXHIBIT F attached   
hereto.  [                                                               *      

 *

*                                                        ]  In no event shall   
IMI increase the purchase price charged by it to USSC for IMI Products          
manufactured by IMI in any calendar year during the term of this Agreement by   
[                                                                          *    
*                                                                          *    
*                                                                  ]  For each  
IMI Product or IMI Product Improvement, other than serialization, USSC shall not
require markings that vary based upon the number of countries in which such     
product is marketed.  The packaging and label of such                           

[*] Confidential Treatment Requested                                            

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IMI Products and IMI Product Improvements may differ, to the extent deemed by   
USSC to be necessary or desirable to comply with regulatory or language         
requirements in the countries in which each of the IMI Products or IMI Product  
Improvements are marketed.  Except to the extent that an IMI Product Improvement
replaces the IMI Product which it improves, each product that first becomes an  
IMI Product or IMI Product Improvement during the term of this Agreement shall  
have a purchase price as agreed upon by IMI and USSC at the time such product   
first becomes an IMI Product or IMI Product Improvement.  Any IMI Product       
Improvement which replaces an IMI Product shall be treated, for purposes of     
IMI's purchase price to USSC, as having the same price that applies to such IMI 
Product.  At the time of any price change or addition of an IMI Product or IMI  
Product Improvement, a new EXHIBIT F shall be circulated which shall set forth  
the new price, new IMI Product or IMI Product Improvement, as the case may be.  
In all cases, the prices to USSC set forth on EXHIBIT F shall not include sales 
taxes, which, to the extent applicable to IMI's sale of an IMI Product or IMI   
Product Improvement to USSC, shall be paid by USSC.  Any and all duties, excise 
taxes, duties and transportation costs are also excluded from the foregoing     
prices, and shall be paid by the Parties on the basis of the F.O.B. North Haven 
or Norwalk, Connecticut (except any additional freight expended for overnight or
comparable express delivery requested by USSC shall be borne by USSC and other  
sales terms contained elsewhere in this Agreement.                              

  3.3  No later than the first day of each calendar month during the term of
this Agreement, USSC shall provide to IMI a forecast for purchases by USSC of   
IMI Products [                  *               ] (each forecast, a "Rolling    
Forecast").  The first [    *   ] of each forecast shall evidence a binding     
obligation of USSC to purchase the IMI Products in the quantities forecast for  
those [ * ] and a binding obligation of IMI to manufacture or have manufactured 
and sell such IMI Products to USSC during those [ * ].  The balance of each     
forecast shall be non-binding; provided, however, that (i) for the first year of
this Agreement (a) USSC shall submit binding purchase orders for at least [*] of
the quantity of each IMI Product or IMI Product Improvement set forth in each   
such rolling forecast for months [ * ] through [*] thereof, and (b) IMI shall   
not be obligated to accept USSC purchase orders or quantities of any IMI        
Products or IMI Product in excess of [*] of the quantity of each IMI Product or 
IMI Product Improvement set froth in each such rolling forecast for months [ * ]
and [*], and [*] for months [*] and [*] thereof; and (ii) for each succeeding   
year of this Agreement (a) USSC shall submit binding purchase                   

[*] Confidential Treatment Requested                                            

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orders for at least [*] of the quantity of each IMI Product or IMI Product      
Improvement set forth in each such rolling forecast for months [ * ] and [*] and
[*] for months five and six thereof, and (b) IMI shall not be obligated to      
accept USSC purchase orders for quantities of any IMI Products or IMI Product in
excess of [*] of the quantity of each IMI Product of IMI Product Improvement set
forth in each such rolling forecast for months [ * ] and [*], and [*] for months
[*] and [*] thereof.  The initial forecast shall be delivered within 10 days of 
execution of this Agreement and shall not become binding and effective at any   
time prior to January 1, 1996.                                                  

3.4  Purchase of IMI Products by USSC shall be made pursuant to written 
purchase orders issued by USSC to IMI from time to time during the term of this 
Agreement ("Purchase Orders") and, provided a Purchase Order is in accordance   
with the terms hereof (including, without limitation, the parameters set forth  
in Section 3.3), it shall be acknowledged and accepted promptly in writing by   
IMI.  Purchase Orders shall identify the quantities of IMI Products covered, the
shipping schedule, and include instructions, destination and packaging          
requirements and such other terms of sale not covered by this Agreement as may  
be agreed to in writing by the Parties.  Insofar as the terms and conditions of 
such Purchase Orders are contrary to or of this Agreement, including the        
Exhibits hereto, the terms and conditions of this Agreement and Exhibits hereto 
shall control.                                                                  

3.5  The purchase price for IMI Products purchased pursuant to USSC's   
written Purchase Order shall be paid by USSC to IMI within [      *      ] days 
from the date USSC receives the IMI Product and a compete invoice related       
thereto, unless USSC rejects the IMI Product in accordance with this Agreement. 
The invoice date may coincide with but shall not be earlier than the date of    
USSC's actual receipt of the F.O.B. destination shipment to USSC.               

3.6  The provisions of this Article 3, as they relate to Purchase Orders
submitted by USSC to IMI prior to termination of this Agreement, shall survive  
termination of this Agreement.                                                  

ARTICLE 4 - DELIVERY, ACCEPTANCE, RETURNS AND SERVICE                   

  4.1  Prior to accepting a shipment of the IMI Product, USSC shall have the
opportunity to inspect same.  If all or part of an IMI Product shipment fails to
meet the Specifications or the requirements set forth in the relevant Purchase  
Orders,                                                                         

[*] Confidential Treatment Requested                                            

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USSC shall have the right to reject the IMI Products failing to so conform      
("Rejected Products").  Without limiting IMI's warranty obligations or USSC's   
right to revoke acceptance in accordance with applicable commercial law, any IMI
Product not properly rejected within [    *    ] days after receipt of that IMI 
Product by USSC shall be deemed accepted.  For purposes hereof, an IMI Product  
shall be deemed received by USSC on the date it reaches USSC's warehouse to     
which such IMI Product was designated for shipment on USSC's applicable purchase
order.  Rejected Products shall be returned to IMI, F.O.B. USSC's Norwalk       
Connecticut, North Haven Connecticut, or other USSC facilities, as appropriate, 
but freight and insurance to Imagyn's principal facility shall be prepaid by    
USSC.  IMI shall credit USSC's account for the full amount of any purchase      
price, freight and insurance charges which USSC may have paid with respect to   
such Rejected Products.  Any rejection of Products by USSC shall not relieve IMI
of any of its obligations hereunder, or be deemed to have satisfied in any way, 
in whole or in part, IMI's obligation as set forth in this Agreement to sell IMI
Products to USSC.  Any rejection of IMI Products by USSC shall not act as a     
waiver of, or otherwise affect, USSC's rights and remedies including, without   
limit, any rights and remedies arising from IMI's breach of this Agreement due  
to failure to supply IMI Product meeting all Specifications and requirements set
forth in the related Purchase Orders or to meet agreed upon delivery schedules. 

  4.2  The parties acknowledge, covenant and agree that (a) all IMI Products
delivered by IMI under this Agreement shall be subject to, and each of USSC's   
customers shall have all of the rights and benefits of and under, the Warranty; 
(b) USSC may, but under no circumstances shall be obligated to, service, repair 
or replace IMI Products; and (c) IMI shall cause its own employees to provide   
service, repair and replacement services under the Warranty directly, or, at    
USSC's option, through USSC, to customers of all IMI Products sold by USSC in   
the Territory.  Should IMI fail to render such service, repairs or replacements 
promptly and efficiently during the Warranty period, USSC may provide such      
service, repairs and replacements to its customers, and, in such event, IMI     
shall reimburse USSC, within 30 days of USSC's invoice therefore, for USSC's    
associated costs.                                                               

4.3 [                                                                   

   *

]                                                           

[*] Confidential Treatment Requested                                            

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4.4  The provisions of this Article 4 shall survive termination of this 
Agreement.                                                                      

ARTICLE 5 - CERTAIN RESPONSIBILITIES OF USSC                            

  5.1  USSC shall be responsible for all marketing decisions with respect to
the IMI Products purchased by it pursuant to this Agreement including, without  
limitation, decisions regarding the packaging, advertising, promotion and       
distribution of the IMI Products purchased hereunder.  All decisions relating to
matters in USSC's area of responsibility including matters of pricing by USSC   
and terms of sale, shall be solely within the discretion of USSC.               

5.2  USSC shall have the right to promote and sell the IMI Product under
trademarks selected by USSC, which trademarks shall be and shall remain the     
property of USSC, or under trademarks licensed by IMI or any third party to     
USSC.  Except as set forth in this Agreement, nothing herein shall be deemed to 
give either Party, either during the term of this Agreement or thereafter, any  
right to any trademarks, copyrights or patents of the other Party or to their   
use.                                                                            

 5.3  USSC shall be responsible for compliance with all present and future
statutes, laws, ordinances and regulations of U.S. federal, state and local     
governments relating to the advertising, promotion, sale or other distribution  
of the IMI Products by USSC.  Notwithstanding the foregoing, USSC shall not be  
responsible for FDA Clearances or other compliance matters relating to good     
manufacturing practices, defect notifications, and any registration requirements
(including registration as a device manufacturer or producer) which may be      
imposed on a manufacturer of the IMI Products in accordance with the provisions 
of the Act, all regulations promulgated thereunder, and all other applicable    
laws and regulations in effect within the Territory, all of which shall be the  
responsibility of IMI.                                                          

  5.4  USSC shall provide IMI with a copy of any reported adverse experience
involving the Product purchased or sold by USSC in compliance with FDA          
regulations after USSC receives the report of such occurrence.  Any death,      
serious injury, potential for occurrence of the same, or change in the frequency
or occurrence in field experiences required to be reported by IMI to the FDA and
relating to an IMI Product sold by USSC shall be reported to IMI by USSC in a   
manner and time which will enable IMI to comply with applicable regulations in a
timely manner.                                                                  

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5.5  In any country, within the Territory, where USSC has a subsidiary, 
and, if, as and when it desires, elsewhere within the Territory, to the extent  
the same is not the responsibility of IMI pursuant to Article 6 below, USSC     
shall seek permission, and make filings with, such governmental bodies and      
agencies within the Territory as USSC deems necessary to allow it to resell IMI 
Products within the Territory.  IMI shall provide all cooperation to USSC as it 
may reasonably request in connection therewith, including but not limited to    
providing such technical and test information and copies of submissions made by 
IMI to FDA or other regulatory bodies.  USSC will assume and be solely          
responsible for all costs associated with the foregoing permissions USSC seeks  
and filings it makes, and shall reimburse IMI its out-of-pocket costs, other    
than attorney' or other consultant's fees and expenses, associated with         
cooperation requested by USSC in connection therewith.  Notwithstanding the     
result of USSC's efforts to procure the foregoing permission or make the        
foregoing filings, IMI shall have responsibility to secure a "CE" mark for the  
IMI Products, as specified in more detail in Section 6.4.  USSC shall provide   
IMI with copies of all materials and correspondence submitted by USSC to and/or 
received by USSC from regulatory authorities in any country in the Territory    
specifically regarding IMI Products or IMI Product Improvements.  Such copies   
shall be provided within 10 days after the time a submission is made or         
materials or correspondence is received, as the case may be in or from Norwalk  
or North Haven, Connecticut.  [                                                 

 *

]                         

5.6  The provisions of Section 5.4 shall survive termination of this    
Agreement.                                                                      

5.7  USSC shall not, during the term of this Agreement, market, sell or 
distribute IMI Products or IMI Product Improvements outside the Territory.      

   5.8  USSC agrees and acknowledges that the purchase by USSC of IMI Products
hereunder and the sale of such IMI Products by IMI conveys no right or license  
under the Patents to manufacture the IMI Products, and that (except as set forth
in Section 6.9), IMI has granted no rights to USSC to manufacture or have       
manufactured any IMI Product.                                                   

[*] Confidential Treatment Requested                                            

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ARTICLE 6 - CERTAIN RESPONSIBILITIES OF IMI                             

6.1  IMI shall permit, or cause USSC to be permitted, to inspect        
production, labeling, shipping, packaging, quality control and sterilizing      
facilities as well as all records relating to the manufacture of IMI Products to
allow USSC to verify IMI's compliance with its obligations under this Agreement.
[                                                                               

 *

                                   ]

  6.2  IMI shall label the Product, packages and shipping containers for the
Product sold to USSC in accordance with the Specifications and the Purchase     
Orders, and shall cause all third parties which label same to comply with the   
foregoing.                                                                      

  6.3  In addition to complying with its obligations set forth in the second
sentence of Section 5.3, IMI shall comply, and shall cause all third parties    
which manufacture or assemble the IMI Product to comply, with all present and   
future statues, laws, ordinances, and regulations relating to the manufacture,  
assembly and supply of the IMI Product, including, without limitation, those    
enforced or promulgated by the FDA (E.G., compliance with good manufacturing    
practices), defect notifications and any other registration requirements which  
may be imposed on the manufacturing, assembly or supply of medical devices.     

  6.4  IMI shall use its best efforts to secure as quickly as possible, but,
in any case, by December 31, 1997, and thereafter shall maintain throughout the 
Territory, a "CE" mark which will allow USSC to import and market IMI Products  
throughout the European Economic Area.  IMI will assume and be solely           
responsible for all costs associated with procurement of the CE mark and shall  
reimburse USSC its out-of-pocket costs, other than attorneys and other          
consultants fees and expenses, associated with cooperation requested by IMI in  
connection with regulatory interaction.  IMI shall keep USSC fully informed on a
reasonably current basis of the status of IMI's efforts to secure the CE mark.  

6.5  [                                                                  
                                                                           *

[*] Confidential Treatment Requested                                            

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*                                                                               

 *

                                     ]

6.6  IMI shall fulfill its obligations to USSC's customers under the    
Warranty in accordance with Section 4.2.                                        

  6.7  IMI shall provide USSC with a copy of any reported adverse experience
involving the IMI Products purchased or sold by IMI or third parties to which   
IMI has granted any distribution or sales rights promptly after such occurrence.
Any death, serious injury, potential for occurrence of the same, or change in   
the frequency or occurrence in field experiences required to be reported by USSC
to the FDA shall be reported to USSC by IMI in a manner and time which will     
enable USSC to comply with applicable regulations in a timely manner.           

6.8  IMI represents, warrants and covenants to USSC that (i) the        
performance by IMI of its obligations under this Agreement will not result in a 
violation or breach of, and not conflict with or constitute a default under, its

[*] Confidential Treatment Requested                                            

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Certificate of Incorporation or other incorporation documents, corporate bylaws 
or any contract, commitment, agreement or other obligation to which IMI or any  
of its Subsidiaries and Affiliates is a party or by which any of them is bound; 
and (ii) there is no claim, demand, action, suit, proceeding or investigation   
pending or currently threatened against it or any of its Subsidiaries or        
affiliates involving or relating to the IMI Products or Know-How or which, if   
adversely determined, would restrict or limit IMI's right to enter into this    
Agreement, transfer the rights or carry out its obligations under this          
Agreement; and (iii) it has or will have at the time of sale or transfer of IMI 
Products to USSC, good and marketable title and the right to sell, assign and   
transfer the IMI Products to be sold and the rights to be transferred or        
licensed hereunder, free and clear of all liens, mortgages, pledges, conditional
sales agreements, restrictions on transfer or other encumbrances or charges.    

6.9  IMI covenants and agrees to have, directly or through a third party
manufacturer, sufficient equipment and facilities to provide manufacturing      
capacity for Purchase Orders it accepts and agrees to use reasonable commercial 
efforts to meet Purchase Orders.  Without limiting the foregoing, IMI agrees to 
give first priority to USSC in the actual production of IMI Products for USSC   
and IMI's other customers.  At IMI's expense for all resulting out-of-pocket    
expenses incurred by USSC, USSC shall consult with and assist IMI as IMI may    
reasonably request in connection with any technical difficulty IMI encounters in
its process for manufacturing IMI'S MicroLap-TM- laparoscopes for USSC in       
quantities ordered by USSC.  In any case, however, if, for any two calendar     
quarters occurring during any single calendar year occurring during the term of 
this Agreement, IMI is unwilling, unable or for any other reason fails to       
manufacture and supply to USSC IMI Products pursuant to the Specifications and  
in quantities of at least [*] of the quantities for IMI Products set forth in   
USSC Purchase Orders which IMI is obligated to accept under this Agreement (even
if due to one or more Force Majeure Events (defined below)) (each, a "Capacity  
Event") then, in such event, USSC shall have the right to require IMI on written
notice to (i) immediately disclose the identities, addresses and telephone      
numbers of manufacturers of IMI Products that USSC does not manufacture and     
cooperate with USSC in its negotiations with such manufacturers for sale of such
products directly from the manufacturer to USSC, and cooperate with USSC in its 
procurement of any regulatory approvals or clearances necessary for USSC to     
receive such products pursuant to requirements of the Act, (ii) for all IMI     
Products IMI does manufacture, other than the MicroLap-TM- laparoscope, (a)     
immediately transfer to                                                         

[*] Confidential Treatment Requested                                            

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USSC IMI's FDA regulatory approvals or clearances or, if such approvals or      
clearances as are needed for USSC to manufacture or have manufactures for it the
foregoing IMI Products may be secured within 60 days by USSC directly, cooperate
fully with USSC in its procurement of the same, (b) immediately provide to USSC 
the information necessary to manufacture or have a third party manufacture IMI  
Products, and (c) grant to USSC a license and right to manufacture IMI Products,
during the remaining term of this Agreement, for USSC's sales in the Territory  
under the Patents or Know-How, and (iii) for the MicroLap-TM- laparoscope,      
transfer to a third-party manufacturer selected by USSC and reasonably          
satisfactory to IMI the manufacturing Know-How needed to manufacture the same,  
and grant to such manufacturer a license and right to manufacture such          
laparoscopes for sale to USSC.  Such manufacturer shall be automatically deemed 
satisfactory to IMI if it fails to object and specify in writing reasonable     
bases for such objection within 5 days following identification of such         
manufacturer by USSC.  IMI shall provide assistance to USSC in effecting the    
aforesaid transfer provided USSC shall pay to IMI the out-of-pocket costs of    
such transfer.  In order to effect the aforesaid transfer promptly if and when a
Capacity Event shall occur, IMI hereby grants USSC access to Know-How during the
term of this Agreement and, immediately following any such Capacity vent, shall 
name USSC as a manufacturer of the IMI Products for FDA regulatory approvals.   

6.10 IMI shall provide to USSC technical literature and personnel to    
conduct an initial technical training of USSC personnel at USSC's Norwalk,      
Connecticut facility on such date as USSC may reasonably request.  The cost of  
making such personnel available, including travel and other expenses, shall be  
born by IMI.  Additional training shall be provided by IMI as and to the extent 
as the Parties may agree.                                                       

 6.11 IMI shall institute and fund any recall, field corrective action, or
the like in circumstances relating to a IMI Product defect or failure which     
requires such action as determined by the FDA, any other regulatory agency or   
IMI or as otherwise may be required pursuant to applicable laws, rules or       
regulations.  In such circumstances, the actual retrieval of the IMI Products   
sold by USSC will be undertaken by USSC.  Both parties will maintain adequate   
records concerning traceability of IMI Products.  In the event of any recall of 
IMI Products conducted for safety or efficacy reasons which are the result of   
the failure of the Product to (i) conform in all respects to Specifications; or 
(ii) be free from defects, IMI shall accept IMI Products for replacement at its 
sole cost and expense.                                                          

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  6.12 USSC shall have the right, upon reasonable notice and during business
hours to inspect IMI's production facilities for the IMI Product and to review  
compliance with USSC's quality systems and procedures.  Such review will be     
conducted against applicable USSC corporate quality control and quality         
assurance requirements included in the Specifications and shall be conducted not
more than twice during any twelve (12) month basis.  Any information obtained   
during such reviews shall be treated confidentially.  IMI covenants that it     
shall cause all third parties which manufacture or assemble the IMI Product to  
provide USSC with the same inspection and review rights regarding third party   
production facilities for the IMI Product.                                      

6.13 The provisions of this Article 6 shall survive termination of this 
Agreement.                                                                      

ARTICLE 7 - INDEMNITY AND INSURANCE                                     

 7.1  In order to distribute between themselves the responsibility for the
handling and expense of claims arising out of the manufacture, distribution,    
sale or use of the IMI Product, the Parties agree as follows:                   

(a)  IMI shall be liable for and shall indemnify and hold USSC
harmless against any liability, damage or loss and from any judgements, awards, 
claims, actions, suits, proceedings, demands, recoveries or expenses, including,
subject to Section 7.2, attorneys fees and expenses, arising out of (i) total or
partial IMI Product recalls, or (ii) any actual or alleged defects in materials,
workmanship, mechanical design or malfunction of any IMI Products manufactured  
by IMI, or (iii) any misrepresentation or any breach of any warranty or covenant
of IMI hereunder or any default in the observance or performance of any term or 
provision to be observed or performed by IMI hereunder, (iv) the termination of 
rights granted to Sales Representatives or termination of third party           
agreements, pursuant to Section 2.1(c), or (v) the failure of such terminations 
to be enforced by a court or other governmental tribunal or authority having    
jurisdiction.  Notwithstanding the foregoing, IMI shall have no obligation to   
indemnify USSC hereunder for liability relating to activities of USSC in any    
portion of the Territory with respect to which a distributor or Sales           
Representative has exclusive rights to sell IMI Products which IMI has not      
terminated.                                                                     

        (b)  Within ten (10) days of the effective date of this Agreement, IMI
shall provide USSC with evidence of satisfactory product liability insurance in 
respect of the IMI Products manufactured, delivered or sold to USSC for death,  
illness,                                                                        

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bodily injury and property damage in a amount not less than Five Million Dollars
($5 million) per occurrence, shall name USSC as an additional insured           
thereunder, and shall continue to maintain such insurance during the term of    
this Agreement.  Upon USSC's request from time to time, IMI shall provide a     
certificate of insurance evidencing such coverage.                              

   (c)  Excluding matters for which IMI is responsible under Section
7.1(a), USSC shall be liable for and shall indemnify and hold IMI harmless      
against any liability, damage or loss and from any judgement, awards, claims,   
action suits, proceedings, demands, recoveries or expenses, including, subject  
to Section 7.2, attorneys' fees and expenses, arising out of (i) negligent      
handling by USSC of the IMI Products; (ii) marketing IMI Products, or making    
claims with respect to IMI Products, in a manner which violates the Act, (iii)  
tortious or criminal conduct of USSC personnel in marketing, selling and        
distributing IMI Products, or (ii) a misrepresentation or breach of any warranty
or covenant of USSC hereunder or any default in performance of any term or      
provision to be observed or performed by USSC hereunder.                        

    (d)  If any lawsuit concerning the IMI Product or the transactions
contemplated by this Agreement is brought by or on behalf of a third party      
against IMI and/or USSC, in such event IMI and USSC shall reasonably consult    
concerning the handling of such matter.  However, this obligation to consult    
shall not affect the liabilities and obligations imposed by this Section 7.1.   

7.2  Promptly after receipt by a party indemnified pursuant to this     
Agreement of the commencement of any such claim, demand, action, suit or        
proceeding (collectively, "Action") against such indemnified party in respect of
which indemnity or reimbursement may be sought against the indemnifying party   
hereunder, such indemnified party shall promptly notify the indemnifying party  
in writing of the commencement of the Action, but the failure to do so notify   
the indemnifying party shall not relieve it of any liability which it may have  
to any such indemnified party unless such a failure substantially prejudices the
rights of the indemnifying party hereunder.  If any such action shall be        
brought against any indemnified party and it shall notify the indemnifying      
party of the commencement thereof, the indemnifying party shall be entitled to  
participate therein, and to the extent it so desires, jointly with any other    
indemnifying party similary notified, to control the defense thereof, with      
counsel reasonably satisfactory to such indemnified party. After notice is      
given by the indemnifying party to the indemnified party of its election to so  
assume the defense thereof, the indemnified party may participate in the        
defense thereof but the indemnifying party shall not be liable to such          
indemnified party under this Section 7.2 for any legal or other expenses        
subsequently incurred by such indemnified party in connection with its          
participation in the defense thereof other than out of pocket costs and         
expenses of the indemnified party (excluding legal costs and expenses) in       
connection with assistance rendered to the indemnifying party at the specific   
request of the indemnifying party.                                              

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7.3  The provisions of this Article 7 shall survive termination of this 
Agreement.                                                                      

ARTICLE 8 - PATENTS; INVENTIONS                                         

8.1  IMI shall obtain and maintain all Patents, licenses, permits and   
authorizations involving or related to the manufacturing, packaging, processing,
and the like for preparing the IMI Products and for their delivery and sale to  
USSC.  IMI shall keep USSC advised of the status of all such Patents, licenses, 
permits and authorizations.                                                     

8.2  IMI shall indemnify and hold USSC, its Subsidiaries, Affiliates,   
and permitted assigns and sublicensees, and all of the directors, officers,     
employees and agents of any thereof, harmless from and against all claims,      
demands, actions, damages, costs and expenses, including attorneys fees,        
resulting from claimed infringement of any patent, trademark or copyright of a  
third party involving or relating to the manufacture, sale or use of the IMI    
Products.  IMI shall keep USSC advised of the status of all such claims and     
litigation and shall provide USSC with a copy of all litigation papers received 
or prepared involving or relating thereto.  USSC shall cooperate with IMI in    
connection with any such Action provided IMI pays USSC's out of pocket expenses 
in providing such cooperation.  USSC shall also have the right in its           
discretion to join in the defense of any such Action provided that it pays the  
costs and expenses of its counsel.  Insofar as a claimed infringement results   
in a temporary or permanent injunction affecting USSC's ability to purchase and 
resell IMI Products, the foregoing indemnity shall include, without limitation, 
an appropriate refund of the payment made by USSC to IMI pursuant to Article 2. 
Appropriateness shall take into consideration the duration of injunction, size  
of the IMI Product market affected by the injunction, and any other relevant    
factors.                                                                        

8.3  Should USSC desire that a claim or Action be brought against third 
party infringers to enforce Patents, USSC shall so notify IMI.  IMI shall have  
the right to bring such action on its own at its own expense and shall be       
entitled to                                                                     

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all amounts recovered from opposing parties, if any, excluding, subject to the  
following conditions, any such amounts attributed to USSC's lost profits or     
other damages directly attributable to losses incurred by USSC.  USSC shall be  
entitled to share in damages attributable to USSC's lost profits or other       
damages attributable to losses incurred by USSC if and to the extent USSC       
participates in such action and bears its pro rata share, based on relative     
damages claimed by IMI and USSC, of the costs and expenses of prosecuting such  
action.  Subject to the foregoing, USSC shall have the right in its discretion  
to join in any such action provided that it pays the costs and expenses of its  
counsel.  IMI shall keep USSC advised of the status of such claim and litigation
and shall provide a copy of all litigation papers received or prepared involving
or relating thereto.  USSC shall cooperate with IMI in connection with any such 
action provided IMI pays USSC's out-of-pocket expenses in providing such        
cooperation.                                                                    

 8.4  Except to the extent modified by this Article 8, the indemnification
notice and procedure provisions of Section 7.2 shall be applicable to Actions   
covered under this Article 8.                                                   

8.5  The Parties each acknowledge that the other party has developed or 
acquired methods, processes and apparatus relating to their respective fields of
endeavor.  Notwithstanding anything in this Agreement to the contrary, each     
Party shall retain all right and title in and to such methods, processes and    
apparatus developed for owned on their respective parts prior to or during the  
term of this Agreement.                                                         

8.6  The provisions of this Article 8 shall survive termination of this 
Agreement.                                                                      

ARTICLE 9 - EXCLUSIVITY AND NON-COMPETE                                 

  9.1  During the term of this Agreement, IMI shall have the right to market
and sell IMI Products outside the Territory or, on a co-exclusive basis with    
USSC, within the U.S.A., but, other than for resale on a non-exclusive basis    
within the U.S.A. of IMI Products under the IMI name, sales to the Sales        
Representatives or any other non-manufacturing, similar-sized, local distributor
(provided that the total number of such Sales Representatives and distributors, 
together, does not exceed 15 at any time), IMI shall otherwise not, directly or 
indirectly, without USSC's prior written consent, in its sole and absolute      
discretion, (a) market or sell, permit any Sales Representative or other of its 
distributors or other third parties to market or sell, IMI Products in the      
Territory.                                                                      

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  9.2  During the first two years of the term of this Agreement or until the
earlier termination of this Agreement, unless such earlier termination is       
pursuant to Section 11.2(h) or is a result of USSC's breach, USSC shall not,    
directly or indirectly, without IMI's prior written consent, market or sell a   
rigid laparoscope of between a [   *   ] diameter that is substantially similar 
to IMI's MicroLap-TM- Laparoscope.                                              

ARTICLE 10 - CONFIDENTIALITY                                            

10.1 Each Party represents, warrants and covenants that it has not,     
directly or indirectly, disclosed and agrees that is shall not, directly or     
indirectly, disclose to any third party or entity either during the term of this
Agreement or for a period of [   *   ] years subsequent to the termination of   
this Agreement, (a) any Confidential Information concerning the other Party     
disclosed in accordance with this Agreement; or (b) the specific terms or       
conditions of this Agreement except as required by law or legal process in the  
reasonable opinion of counsel to the disclosing party; provided that prior to   
any such disclosure with as much prior notice as is reasonably possible and     
shall not take any action to prevent the other Party from taking any legal      
action as it deems necessary or desirable to prevent or limit any such          
disclosure.                                                                     

10.2 Notwithstanding Section 10.1, each Party may disclose Confidential 
Information received pursuant to this Agreement to its directors, officers,     
employees, consultants, attorneys and accountants provided that such persons and
entities are obligated to hold the Confidential Information in confidence.  Each
Party covenants that it shall exercise the same degree of care with respect to  
the other Party's Confidential Information as it would its own Confidential     
Information.                                                                    

   10.3 Upon termination of this Agreement, each Party shall, upon the request
of the other Party, return all documents received by it from the other Party    
which contain the other Party's Confidential Information or destroy all of such 
documents and confirm in writing the destruction thereof to the other Party,    
except that one copy thereof may be retained solely for archival purposes int he
files of the counsel for the Party.                                             

10.4 The provisions of this Article 10 shall survive termination of this
Agreement.                                                                      

[*] Confidential Treatment Requested                                            

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ARTICLE 11 - TERM AND TERMINATION; RIGHT OF NEGOTIATION                 

   11.1 This Agreement and its term shall remain in full force and effect from
the date hereof until terminated pursuant to Section 11.2.                      

11.2 This Agreement may be terminated as follows:                       

     (a)  by IMI, in the event that USSC materially fails to purchase in
any calendar year the minimum quantities specified in EXHIBIT G of IMI's        
MicroLap-TM- Laparoscope, upon at least 90 days prior notice of such failure,   
provided that such notice is delivered to USSC within six months of such        
failure;                                                                        

     (b)  [                                                            *

 *

*                                                                        ]      

       (c)  by either Party, in the event the other Party files any petition
in a bankruptcy or similar proceeding or, if the other Party has a petition in a
bankruptcy or similar proceeding filed against it and such proceeding continues 
unstayed after forty-five (45) days after the filing thereof;                   

      (d)  by either Party, in the event the other Party becomes insolvent
or makes an assignment for the benefit of its creditors;                        

   (e)  by either Party, int he event a Force Majeure Event (defined
below) prevents the other Party from performing for more than one hundred and   
twenty (120) days;                                                              

       (f)  by either Party, in the event the other Party refuses to perform
or shall materially breach or materially fail in the observance or performance  
of any representation, warranty, covenant or obligation under this Agreement    
following notice of such refusal, breach or failure; provided, however, that,   
except for a breach by IMI of the provisions of Article 2, the Party receiving  
such notice shall have sixty (60) days, or if such breach relates to IMI'S      
obligations under Article 3, thirty (30) days, after receiving notice to cure   
the refusal, breach or failure.  In the event such refusal, breach or failure is
not cured, this Agreement shall then terminate at the end of such sixty (60) or 
thirty (30) day period, as the case may be.  Notwithstanding the foregoing, USSC
shall not be deemed in default thereof for                                      

[*] Confidential Treatment Requested                                            

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failure to pay any amount to IMI providing it is diligently and in good faith   
contesting such amount by an action, suit or proceeding;                        

 (g)  by IMI, in the event that USSC introduces for sale a rigid
laparoscope of between [    *    ] in diameter that is substantially similar to 
IMI's MicroLap-TM- laparoscope, whether or not such introduction occurs during  
or after the two year period specified in Section 9.2; or                       

    (h)  by USSC, for any or no reason, at any time after the first 12
months of the term of this Agreement, upon six (6) months notice.               

11.3 In the event of termination, (i) each Party shall fulfill all      
obligations existing as of the effective date of termination, including but not 
limited to supply for all open Purchase Orders and Payment for IMI Product that 
may be due, and (ii) USSC shall continue to have the right to distribute and/or 
sell all remaining IMI Product then remaining in its possession or control or to
be supplied to USSC under open Purchase Orders until all such IMI Products are  
delivered by IMI to USSC and resold by USSC; provided that USSC shall not have  
such rights if termination of this Agreement is due to a breach by USSC of      
Section 9.2.                                                                    

11.4 IMI hereby grants to USSC, and USSC hereby accepts, the rights set 
forth herein.  During the term of the Agreement if IMI's Board of Directors     
decides to commence discussions with any party with respect to the sale or other
transfer (a "Transaction") of any interest in the IMI Products or in the Patents
or Know-How, or in all or substantially all of the assets or voting equity of   
IMI, or receives an unsolicited offer from a third party with respect to a      
Transaction, IMI shall promptly notify USSC of the receipt of such offer (but,  
not necessarily the terms of the offer, or the identify of the third party) and 
shall, before entering into any agreement with respect thereto, during a sixty  
(60) day period in good faith negotiate with USSC concerning such transfer.  If 
at the end of such period the parties are unable to agree upon mutually         
acceptable terms thereof, IMI shall thereafter have the right to continue or    
enter into discussions with third parties but may not thereafter enter into any 
agreement with respect thereto with a third party on terms more favorable to a  
third party than those offered to or by USSC either during or after such period.

[*] Confidential Treatment Requested                                            

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ARTICLE 12 - FORCE MAJEURE                                              

12.1 If either Party is prevented from performing any of its obligations
hereunder due to any cause which is beyond the non-performing Party's reasonable
control, including fire, explosion, floor, or other acts of God; acts,          
regulations, or laws of any government; war or civil commotion; strike, lock-out
or labor disturbances; or failure of public utilities or common carrier (a      
"Force Majeure Event"), such non-performing Party shall promptly give notice    
thereof to the other party and shall use its best efforts to cure or correct any
such Force Majeure Event and to resume performance of its affected obligations  
as soon as possible.  A party's non-performance due to a Force Majeure Event    
will be excused only once during any period of 360 consecutive days.            

ARTICLE 13 - LIMITATION ON LIABILITY                                    

13.1 IMI'S LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO REPAIR,     
REPLACEMENT OR A REFUND OF USSC'S CUSTOMER'S PURCHASE PRICE.  IN NO EVENT SHALL 
IMI BE LIABLE TO USSC FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE    
CUSTOMER OR FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR BREACH OF  
WARRANTY.  IN ADDITION, IN NO EVENT SHALL IMI BE LIABLE TO USSC, OR USSC LIABLE 
TO IMI, FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, EXCEPT AS SET FORTH   
UNDER THE PROVISIONS OF ARTICLES 7 AND 8 HEREOF.  THIS LIMITATION SHALL REMAIN  
EFFECTIVE NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSES OF ANY LIMITED      
REMEDY.                                                                         

ARTICLE 14 - MISCELLANEOUS                                              

   14.1 This Agreement shall be binding upon and shall inure to the benefit of
the parties, and their respective successors and permitted assigns.  Neither    
party shall transfer or assign this Agreement, in whole or in part, without the 
prior written consent of the other; except that USSC may, without such consent, 
assign this Agreement to a Subsidiary or Affiliate of USSC provided USSC remain 
liable for the performance thereof.                                             

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14.2 All notices, and other communications required or called for under 
this Agreement shall be in writing, shall be transmitted by overnight U.S. mail,
postage prepaid, or by certified or registered U.S. Mail, return receipt        
requested, postage prepaid or by overnight Federal Express or another nationally
recognized courier service (billed to sender) and shall be deemed delivered when
received by the Party to whom it is addressed at:                               

If to IMI:                    If to USSC:                               
Franklin D. Brown             Thomas R. Bremer                          
Chief Executive Officer       Senior Vice President and General Counsel 
Imagyn Medical, Inc.               United States Surgical Corporation   
27651 LaPaz Road              150 Glover Avenue                         
Laguna Niguel, CA  92656      Norwalk, CT  06856                        

14.3 This Agreement supersedes all prior discussions, negotiations, and 
agreements between the Parties and cannot be altered or amended except by       
agreement in writing signed by the Parties.                                     

14.4 No previous course of dealing or performance or usage of trade not 
specifically set forth in this Agreement shall be admissible to explain, modify 
or contradict this Agreement.  Either Party's failure to require performance by 
the other of any provisions hereof shall, in no way, be deemed a waiver or      
affect the right of either Party to require such performance at any time        
thereafter.                                                                     

14.5 This Agreement shall not constitute either Party as an employee,   
agent, partner or legal representative of the other Party for any purpose, or   
give either party any right to supervise or direct the functions or the other   
Party.  Neither Party shall have authority to act for or obligate the other     
Party in any way or to extend any representation or warranty on behalf of the   
other Party.  Each Party agrees to perform under this Agreement solely as an    
independent contractor and shall not hold itself out as an employee or agent of 
the other Party in any sense.  Each Party agrees not to permit its employees or 
agents to do anything which might be construed or interpreted as acts of the    
other Party.  Each Party agrees that the other party shall not be responsible   
for any acts or omissions by it or its directors, officers, employees and agents
and shall indemnify and hold harmless the other party from and against all      
losses, damages, claims, judgments, and costs (excluding attorneys' fees and    
expenses)                                                                       

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claimed or rendered against such other Party on account of acts or omissions by 
such Party, its directors, officers, employees and agents.                      

14.6 Neither party shall originate any publicity, new release or other  
announcement, written or oral, relating to the specific terms and conditions of 
this Agreement without the prior written consent of the other Party except as   
may be necessary in the reasonable opinion of counsel to a Party to comply with 
applicable law or legal process.                                                

14.7 If any provisions of this Agreement should be or become fully or   
partly invalid or unenforceable for any reason whatsoever or violate any        
applicable law, this Agreement is to be considered divisible as to such         
provision and such provision is to be deleted from this Agreement, and the      
remainder of this Agreement shall be deemed valid and binding ad if such        
provision were not included herein.  There shall be substituted for any such    
provision deemed to be deleted a suitable provision which, as far as legally    
possible, comes nearest to what the parties desired according to the sense and  
purpose of this Agreement had this point been considered when concluding this   
Agreement.                                                                      

 14.8 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware applicable to contracts entered into 
and to be performed entirely within the State of Delaware without reference to  
its conflict of laws provisions.  Any controversy or claim arising out of or    
relating to this Agreement, or the breach thereof, shall be exclusively settled 
by arbitration in Chicago, Illinois in accordance with the rules then obtaining 
of the American Arbitration Association.  The parties consent to the            
jurisdiction of the state and federal courts located in Chicago for all         
purposes in connection with arbitration and agree that judgment upon any        
arbitration award may be entered into such court. The parties consent that any  
process or notice of motion or other application to either of said courts, and  
any paper in connection with arbitration, may be served by certified mail,      
return receipt requested or by person service or in such other manner as may be 
permissible under the rule of the applicable court or arbitration tribunal,     
provided a reasonable time for appearance is allowed.  The parties further      
agree that arbitration proceedings must be instituted within two years after    
the aggreived party knew or reasonably should have known of such claimed breach 
and that the failure to institute arbitration proceedings within such period    
shall constitute an absolute bar to the institution of proceedings in reference 
to such breach and a waiver of all claims arising from such breach.             

      25


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14.9 The Article headings included in this Agreement are for reference  
purposes only and shall not affect the meaning or interpretation of this        
Agreement.                                                                      

   14.10     This Agreement may be executed in two counterparts, each of which
shall be deemed to be an original instrument, but both such counterparts        
together shall constitute but one agreement.                                    

  IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by
their respective corporate officers as of the date first above written.         

IMAGYN MEDICAL, INC.  

   By: /s/ FRANKLIN D. BROWN
                  ----------------------------------
Franklin D. Brown 
     Chief Executive Officer

            UNITED STATES SURGICAL CORPORATION

  By: /s/ THOMAS R. BREMER
                          ------------------------------------------
Thomas R. Bremer  
                       Senior Vice President and General Counsel

      26


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EXHIBITS                                                                        

A   Patents and Trademarks                                                      
B   Specifications                                                              
C   Warranty                                                                    
D   Sales Representatives and Other Distributors                                
E   Territory                                                                   
F   IMI Product Prices                                                          
G   Minimum Purchase Levels                                                     

      27


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                                     EXHIBIT A

      PATENTS AND TRADEMARKS

PATENTS:                                                                        
--------                                                                        

[                                                                               

* 

                                                                               ]

TRADEMARKS:                                                                     
-----------                                                                     

MicroLap-TM- Endoscopy System (Pending)                                         
MicroLap-TM- Laparoscope (Pending)                                              
MicroLap-TM- Introducer (Pending)                                               
MicroLap-TM- Graspers (Pending)                                                 
MicroLap-TM- Blunt Probe (Pending)                                              
MicroLap-TM- Coupier (Pending)                                                  

[*] Confidential Treatment Requested                                            

      28


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                                     EXHIBIT B
      SPECIFICATIONS

IMI Products and IMI Product Improvements and packaging containing the same     
shall be labeled with logos specified from time to time by USSC and with USSC-  
approved copy; otherwise, existing IMI packaging and boxes will be used, except 
as the same may be altered pursuant to specifications provided from time to time
by USSC.                                                                        

ML-3000 MicroLap-TM- Laparoscope:                                               
--------------------------------                                                
Fiber optic, rigid, one price lapraoscope with integral eyepiece                

[                                                                               

*                                                         

]                               

MI-XXXX [*] Instruments:                                                        
------------------------                                                        
Stainless steel, one piece, reusable surgical instruments with the following    
configurations:  cup grasper, standard grasper, single action atraumatic        
grasper, double action atraumatic grasper, biopsy punch, scissors, calibrated   
probe and irrigation/aspiration cannula.                                        

[                                                                               
*                                                         
]                               

LI-1500 MicroLap-TM- Intorducer:                                                
-------------------------------                                                 
Single use, sterile introducer                                                  

[                                                                               
*                                                         
]                               

VS-XXX MicroLap-TM- C-Mount Couplers:                                           
------------------------------------                                            
Low mass optical coupler [         *          ]                                 
Low mass optical coupler [         *          ]                                 

VN-1510 [*] Disposable Veress Needle:                                           
------------------------------------                                            
Single use, sterile Veress needle                                               

Length:       15 cm                                                             

VS-3550 Universal Light Cable, 3.5mm:                                           
------------------------------------                                            
3.5mm light cable with the following adapters:  Olympus, Wolf, Storz and ACMI   

[*] Confidential Treatment Requested                                            

      29


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     EXHIBIT C
      WARRANTY

MicroLap-TM- Laparoscope:                                                       

Warranty shall cover defects in materials or workmanship for the period of [ *  
*      ] from the date of original purchase.  This warranty is contingent upon  
proper use of the product in the application for which it was intended and does 
not cover product that were modified without Imagyn's approval or that were     
subjected by the customer to unusual physical or electrical stress.             

EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE, IMAGYN GRANTS NO OTHER         
WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, REGARDING THE PRODUCT, 
THEIR FITNESS FOR ANY PURPOSE, THEIR QUALITY, THEIR MERCHANTABILITY, OR         
OTHERWISE. IMAGYN'S LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO REPAIR,    
REPLACEMENT OR A REFUND OF THE PURCHASE PRICE.  IN NO EVENT SHALL IMAGYN BY     
LIABLE FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE CUSTOMER OR FOR   
ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR BREACH OF WARRANTY.        

MicroLap-TM- Instruments:                                                       

Products shall be free from defects in material and workmanship for a period of 
[     *    ] from the date of purchase.  The warranty shall not apply to defects
or failures (in whole or part) by; (1) use, handling, operation, maintenance or 
storage that is not in accordance with manufacturer's instruction or            
recommendations and standard practice or constitutes negligence or other misuse;
(2) repair of modifications performed by anyone other than manufacturer or a    
party authorized in writing by manufacturer; (3) use in any manor or procedure  
other than those for which it is labeled; (4) use by an person other than       
trained medical personnel under order of a physician.  THIS WARRANTY IS         
EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESSED, IMPLIED, ORAL 
OR WRITTEN, INCLUDING (WITHOUT LIMITING THE FOREGOING) ANY WARRANTIES OF        
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.  Customer's exclusive      
remedy for any breach of this warranty shall be replacement or repair by        
manufacturer of the defective product.  Manufacturer shall not under any        
circumstances be liable for punitive, special, consequential or incidental      
damages such as (but not limited to) damage to or loss of other property or     
equipment, loss of profits or revenues or business, cost of capital, cost of    
purchase product or replacement goods.                                          

Universal Light Cable and MicroLap-TM- C-Mount Optical Coupler:                 

[*] Confidential Treatment Requested                                            

      30


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Warranty shall cover defects in materials or workmanship for the period of [ *  
*      ] from the date of original purchase.  This warranty is contingent upon  
proper use of the product in the application for which it was intended and does 
not cover product that were modified without Imagyn's approval or that were     
subjected by the customer to unusual physical or electrical stress.             

EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE, IMAGYN GRANTS NO OTHER         
WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, REGARDING THE PRODUCT, 
THEIR FITNESS FOR ANY PURPOSE, THEIR QUALITY, THEIR MERCHANTABILITY, OR         
OTHERWISE.  IMAGYN'S LIABILITY UNDER THE WARRANTY SHALL BE LIMITED TO REPAIR,   
REPLACEMENT OR A REFUND OF THE PURCHASE PRICE.  IN NO EVENT SHALL IMAGYN BY     
LIABLE FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE CUSTOMER OR FOR   
ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR BREACH OF WARRANTY.        

[*] Confidential Treatment Requested                                            

      31


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     EXHIBIT D
      SALES REPRESENTATIVES AND OTHER DISTRIBUTORS

SALES REPRESENTATIVES:                                                          

[                                                                               

*                                                 

]                 

DISTRIBUTORS AND TERMINATION PERIODS:                                           

[      *       ]             90 days following notice                           

[      *             ]       90 days following notice                           

[      *       ]             180 days following notice                          

[      *       ]             90 days following notice                           

[      *       ]             90 days following notice                           

[      *       ]             90 days following notice                           

[      *             ]       March 30, 1996                                     

[*] Confidential Treatment Requested                                            

      32


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                                                 EXHIBIT E
     TERRITORY

The Territory shall include the United States, Japan, Canada, and all   
countries within the area bounded on the north and west by the Atlantic Ocean,  
on the south by the Mediterranean Sea, and to the east by the Siberian          
coastline, including, without limitation, the following: all countries which are
members of the European Union, all countries which are within Eastern Europe,   
all countries which are within the Commonwealth of Independent States,          
Switzerland, Norway and Turkey.                                                 

      33


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                                                   EXHIBIT F
      IMI PRODUCT PRICES

ML-3000  MicroLap Laparoscope                         [  *  ]                   

VS-3550  Universal Light Cable, 3.5mm                 [  *  ]                   

VS-2350  MicroLap C-Mount Coupler, 3.5mm              [  *  ]                   

VS-2280  MicroLap C-Mount Coupler, 28mm               [  *  ]                   

MI-2100  2mm Probe                                    [  *  ]                   

MI-2100  2mm Grasper                                  [  *  ]                   

MI-2140  2mm Single Action Atraumatic Grasper         [  *  ]                   

MI-1800  2mm Double Action Atraumatic Grasper         [  *  ]                   

MI-2200  2mm Biopsy Punch                             [  *  ]                   

MI-2300  2mm Scissors                                 [  *  ]                   

IA-1000  2mm Irrigation/Aspiration Cannula            [  *  ]                   

VN-1510  15cm Disposable Veress Needle (box of 10)    [  *  ]                   

LI-1500  MicroLap Introducer (box of 10)              [  *  ]                   

[*] Confidential Treatment Requested                                            

      34


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                                     EXHIBIT G

     MINIMUM PURCHASE LEVELS

For the first full twenty-four calendar months occurring immediately after      
elimination by IMI of all Sales Representatives' exclusive rights to sell the   
same, the minimum annual purchase level for the MicroLap-TM- Laparoscope shall  
be [     *    ]  For each succeeding twelve calendar months occurring during the
next 60 months, the minimum annual purchase level for the MicroLap-TM-          
Laparoscope shall be equal to [*] of the actual purchase level by USSC of the   
MicroLap-TM- Laparoscope during the immediately preceding 12 months.  The       
minimum annual purchase for the MicroLap-TM- Laparoscope after the first 60     
months shall be set by agreement of the parties or, absent agreement, shall be  
[*] of the actual purchase by USSC of the MicroLap-TM- laparoscope during the   
immediately proceeding 12 months.                                               

[*] Confidential Treatment Requested                                            

      35

Dates Referenced Herein

Referenced-On Page
This ‘S-1/A’ Filing    Date First  Last      Other Filings
12/31/9712None on these Dates
Filed on:5/29/96
5/1/965
3/31/964
3/30/9632
1/1/9648
10/23/951
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