Chromatics Color Sciences International Inc – ‘8-K/A’ for 11/3/98

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Amendment to Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K/A       Current Report                                        35    115K 

Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A-2

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

 Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

November 3, 1998

 CHROMATICS COLOR SCIENCES INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

New York

(State or other jurisdiction of incorporation)

0-21168      13-3253392   
-----------------------   
 (Commission File Number) (IRS Employer Identification Number)

5 East 80th Street, New York, New York 10021
--------------------------------------------
 (Address of Principal Executive Offices) (Zip Code)

 Registrant's telephone number, including area code (212) 717-6544
 -----------------------------------------------------------------

Page 1 of __ pages

 Exhibit Index located on page 4

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EXPLANATORY NOTE

This Current Report on Form 8-K/A-2 amends and restates in their
entirety the text of Item 7 of the Company's Current Report on
Form 8-K and Exhibit 10.1 thereto filed with
 the Securities and Exchange Commission on November 3, 1998.

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS     

(c)      Exhibits:                                                              

+10.1   Manufacturing Agreement, by and between the Company and Nova Biomedical 
Corporation, dated as of November 3, 1998.                      

+         Confidential treatment has been requested with respect to certain     
   portions of this exhibit, which have been omitted therefrom and
have been separately filed with the Commission.             

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the    
Registrant has duly caused this report to be signed on its behalf by the        
undersigned hereunto duly authorized.                                           

 CHROMATICS COLOR SCIENCES

 INTERNATIONAL, INC.

                               By:     /s/ Darby S. Macfarlane
                                           ---------------------------------
                                   Name: Darby S. Macfarlane
                                        Title: Chief Executive Officer

Date:      January 28, 2000                                                     

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 EXHIBIT INDEX

Document                                                                Page No.

+10.1    Manufacturing Agreement, by and between the Company and Nova           
     Biomedical Corporation, dated as of November 3, 1998.             5

+             Confidential treatment has been requested with respect to certain 
           portions of this exhibit, which have been omitted therefrom and
have been separately filed with the Commission.     

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Exhibit 10.1

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
THE INFORMATION REPRESENTED BY AN ASTERISK [*]
HEREIN. THE OMITTED INFORMATION HAS BEEN
SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 CCSI/NOVA
 Manufacturing Agreement
for Noninvasive Bilirubin Monitoring Devices

Introduction:                                                                   

THIS MANUFACTURING AGREEMENT and all schedules contained herein or attached     
hereto (collectively, the Agreement) is effective this 3rd day of November, 1998
(the "Effective Date") between NOVA Biomedical Corporation, a Massachusetts     
corporation with headquarters located at 200 Prospect Street, Waltham,          
Massachusetts (hereinafter called "NOVA"), and Chromatics Color Sciences        
International, Inc., a New York corporation with headquarters located at 5 East 
80th Street, New York, New York (hereinafter called "CCSI" and together with    
NOVA, referred to as the "parties").                                            

Term:                                                                           

Unless terminated earlier as provided in Section 13 hereof, this Agreement shall
have an initial term (the "Initial Term") which will run from the Effective Date
until four (4) years after the date when NOVA has received a purchase order for 
production units and the documentation to build the units has been released for 
production by CCSI ("Commencement of Production"). Subject to the termination   
provisions of Section 13 hereof, the Initial Term shall be automatically        
renewed, without further notice or action by either party, for additional and   
successive terms of one (1) year (the "Renewal Term(s)") unless either party    
gives written notice to the other of its intention not to renew not less than   
180 days prior to the end of the Initial Term or any Renewal Term(s).           

Roles and Responsibilities:                                                     

Product:                                                                        

The product (the "Product") is an instrument for noninvasive monitoring of      
bilirubin infant jaundice as described in Attachment 1. All rights to the       
Product are owned by CCSI as further defined in the Confidentiality Agreement   
(hereinafter defined).                                                          

Section 1/Product Design                                                        

CCSI is responsible for providing to NOVA the Product design, performance and   
product specifications (the "Product Specifications"). CCSI will be responsible 
for obtaining all U.S. Food and Drug Administration ("FDA") and other agency    
approvals, as needed, to distribute the Product.                                

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Section 2/Covenants                                                             
Covenants and Duties of CCSI                                                    

(a)     CCSI hereby agrees to purchase from NOVA (i) subject to Section 13      
    hereof, all of its final assembly and production requirements (other
      than the CCSI Equipment (hereinafter defined)) for the distribution in
       the United States (the "Exclusive Territory") of the Product identified
  in Sections 1 and 2 of Attachment 1; provided, however, NOVA meets
 mutually agreed upon price, delivery and quality standards and is
        otherwise in compliance with this Agreement, and (ii) on a non-exclusive
    basis, such amounts of the Product identified in Sections 1 and 2 of
       Attachment 1 as CCSI shall order for distribution outside the Exclusive
       Territory, provided that NOVA will be given the opportunity to bid for,
     and a right of first refusal with respect to, orders for distribution
      outside the Exclusive Territory, if NOVA can effect such production on
        equivalent economic terms to third-party bids offered to CCSI but taking
into account VAT, import/export duties, etc.                    

(b)     Notwithstanding the foregoing, within the Exclusive Territory, after    
     the first anniversary of the Effective Date of this Agreement, in the
      event CCSI should provide NOVA with an annual forecast for the Product
     identified in Section 2 of Attachment 1 for quantities less than [*],
      the parties agree that CCSI may place an order with a U.S. based third
     party manufacturer, that is FDA registered and ISO 9000 certified for
      orders less than [*] for Product identified in Section 2 of Attachment
    1, provided that NOVA will be given the opportunity to bid for and a
      right of first refusal with respect to, such orders if NOVA can effect
        such production on equivalent delivery and economic terms to third party
     bids offered to CCSI. If NOVA declines the right of first refusal, it
     will cooperate with CCSI to transition the manufacture of the Product
        identified in Section 2 of Attachment 1 to the alternative manufacturers
    over a period not to exceed six months and will take reasonable best
   efforts to ensure an uninterrupted supply of Products to meet CCSIs
     needs during the transition period. If at any time during the Initial
  Term or any Renewal Term(s) CCSI's annual forecast for the Product
   identified in Section 2 of Attachment 1 is for quantities of [*] or
   more, then the terms of Section 2(a) above apply to NOVA's right to
manufacture such Products.                                      

(c)     CCSI hereby agrees that NOVA may recondition the Products identified    
       in Section 3 of Attachment 1, and in this regard NOVA will be given the
     opportunity to bid for, and a right of first refusal with respect to,
 effecting such reconditioning of such Products identified in said
        Section 3, if NOVA can effect such reconditioning on equivalent delivery
  and economic terms to third-party bids offered to CCSI taking into
       account VAT, import/export duties, etc. For purposes of this subsection
    and subsection (d) below, "recondition" means bringing Products into
       conformance with the Product Specifications consistent with the Product
Regulatory Specifications.                                      

(d)     If at any time during the Initial Term or any Renewal Term(s), CCSI     
shall receive an offer from a third party for the (i)           
assembly/production of the Products for distribution outside the
        Exclusive Territory or (ii) reconditioning of the Products identified in
      Section 3 of Attachment 1, or (iii) assembly/production of the Product
identified in Section 2 of Attachment 1, subject to the terms of
      subsection 2(a) and (b), which offer CCSI shall desire to accept, CCSI
      shall promptly deliver to NOVA the terms of the third-party offer, and
 NOVA may, within fifteen (15) days thereafter, notify CCSI of its
       election with respect to subsection (i), (ii) or (iii), as the case may
      be, on the same economic and delivery terms to CCSI as those set forth
        in such offer taking into account VAT, import/export duties, etc., where
   applicable. If NOVA so elects, the parties shall execute a contract
       within fifteen (15) days after such election by NOVA on the third-party
economic and delivery terms set forth above with such further   
       modifications to make such terms economically equivalent to CCSI taking
   into account VAT, import/export duties, etc., where applicable. The
       parties agree that other than with respect to such third party economic
    and/or delivery terms, the terms of this Agreement shall govern with
     respect to subsection (i), (ii), or (iii), as the case may be. In the
    event that NOVA elects to decline the offer as set forth above, then
NOVA thereafter waives the right of first                       

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     refusal for that particular assembly/production or reconditioning, as
the case may be, and CCSI will use a third-party manufacturer.  

(e)     CCSI shall, at its own expense, supply all test materials required to   
        meet NOVAs quality control standards, when reasonably requested by NOVA.

(f)     CCSI shall render prompt technical support to NOVA on a continuing      
basis when reasonably requested by NOVA.                        

(g)     CCSI agrees to provide to NOVA on a timely basis, the design and        
        Product Specifications of the Product, as well as all engineering change
notices with respect to the Product.                            

Covenants and Duties of NOVA                                                    

(h)     NOVA shall manufacture and sell to CCSI all Products which CCSI shall   
        order by delivery of purchase orders to NOVA in the form attached hereto
        as Attachment 2. Subject to the next paragraph, if any term or condition
   of this Agreement conflicts with any term or condition of an issued
purchase order, this Agreement shall take precedence.           

(i)     NOVA agrees to accept a firm order placed by CCSI which meets the       
     terms of this Agreement or an agreed upon purchase order, as the case
 may be. In the event NOVA is unable to meet the terms of the CCSI
       purchase order, it shall notify CCSI within five (5) business days with
 proposed order modifications. If CCSI does not expressly agree in
        writing to such proposed terms, the terms of this Agreement shall govern
    unless such terms and conditions contained in any purchase order are
     agreed upon in writing by the parties by initialing the specific term
contained in such purchase order.                               

(j)     To shorten lead-times, NOVA will inventory long lead-time items and     
materials at CCSIs expense if so requested by CCSI in writing.  

(k)     NOVA understands and agrees that it is providing manufacturing          
     services hereunder as a customer-transparent contractor of CCSI under
CCSIs name. NOVAs name shall not appear on the Products or any  
 documentation, except that NOVAs name may appear on serial number
      labels, so long as such labels are not visible to CCSIs customers, and
        in documents relating to obtaining regulatory approval of the Product if
      agreed upon in writing by the parties. Nothing in this Agreement shall
   be deemed to grant NOVA any right to use CCSIs name for any purpose
other than as expressly provided herein.                        

(l)     NOVA shall at all times use commercially reasonable efforts, skill,     
        and experience to manufacture all Products in strict conformity with all
     applicable Product Specifications and all applicable laws, regulatory
        requirements and standards, federal, state and local, including, but not
        limited to, the Quality System Regulation (QSR), 21 C.F.R. Part 820, and
all standards, laws, regulations and directives applied to the  
     manufacture of medical devices in the European Union (EU) (including,
       but not limited to, ISO 9000 Series standards and EN46001) (the Product
        Regulatory Specifications). NOVA shall not make any change in or deviate
 in any way from the Product Specifications and Product Regulatory
 Specifications except pursuant to an Engineering Change Order (as
hereinafter defined) approved as provided in Section 8 of this  
Agreement.                                                      

(m)     In order to maintain the right to exclusive manufacture of the Product  
        in the Exclusive Territory, NOVA shall at all times provide to CCSI most
       favored customer status so as to provide CCSI the best commercial terms
     as are provided by NOVA to its other customers (as long as CCSI meets
the same                                                        

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       customer criteria as such other customers, e.g., size of annual orders)
     and without limiting any other of CCSIs rights as expressly set forth
herein.                                                         

(n)     NOVA shall manufacture the Products in its plant in Waltham,            
        Massachusetts, unless CCSI authorizes NOVA in writing to manufacture the
Products in another plant location.                             

(o)     Products shall be packaged and labeled in accordance with CCSI's        
requirements and specifications, including such requirements and
specifications listed in the Product Specifications.            

(p)     NOVA shall report to CCSI, as soon as possible, all delays related      
      to the manufacture and/or shipping of the Products to CCSI. CCSI shall
     have the right to cancel (without penalty) any order for any untimely
shipped Product in accordance with Section 5 hereof.            

(q)     NOVA represents and warrants to CCSI that: (1) NOVA has the right to    
    enter into this Agreement and the Confidentiality Agreement; (2) all
        necessary actions, corporate and otherwise, have been taken to authorize
       NOVA's execution and delivery of this Agreement and the Confidentiality
        Agreement and the same are the valid and binding obligation of NOVA; (3)
        all licenses, consents and approvals necessary for NOVA to carry out all
of the transactions contemplated in this Agreement and the      
       Confidentiality Agreement have been obtained by NOVA including, but not
       limited to, registering with the FDA as a device contract manufacturer;
  (4) NOVA has the experience and technical and physical capacity to
    fulfill its obligations under this Agreement; (5) NOVA has and shall
       pass to CCSI good title to the Products free and clear of all liens and
 encumbrances; and (6) no claim or action is pending or threatened
       against NOVA or, to NOVA's knowledge, against any supplier of NOVA that
     could adversely affect the ability of NOVA to produce the Products or
       the right of CCSI or any customer of CCSI to use the Products for their
intended use.                                                   

(r)     NOVA represents that it has and covenants that it will at all times     
       maintain the available manufacturing capacity to meet CCSI's production
 requirements relating to the Products as set forth in the Rolling
  Forecast (hereinafter defined) to the extent of 125% of the volume
       requirements for the period covered by such Rolling Forecast, including
 without limitation, volume production as set forth in the Pricing
     Schedules attached as Attachment 3. Notwithstanding the foregoing, in
       the event NOVA is unable to meet CCSI's volume requirements (other than
      due to unavailability of parts that are long lead time items), or does
        not accept firm orders as provided in Section 2(i) hereof, in each case,
 on three (3) separate occasions in any eighteen (18) month period
       (provided that only one of such events shall count toward such total of
three (3) in any three (3) month period, CCSI may, in its sole  
        discretion, elect to terminate NOVA's exclusive right to manufacture the
 Product for the Exclusive Territory, and accordingly engage other
suppliers to be the non-exclusive supplier of the Product in the
Exclusive Territory.                                            

Section 3/Distribution/Warehousing                                              

The Products shall be sold by NOVA to CCSI at the prices indicated in Attachment
3, FOB, Waltham, Massachusetts. The cost of freight and insurance shall be paid 
by CCSI. NOVA shall ship the Products via mutually agreed carriers to CCSI or to
CCSI's customers as directed by CCSI. CCSI shall insure CCSI Equipment          
(hereinafter defined) and upon passage of title thereto to CCSI, CCSI Capital   
Equipment (hereinafter defined), at its expense. NOVA shall insure any such CCSI
Capital Equipment purchased by NOVA on behalf of CCSI for the period prior to   
such passage of title to CCSI (naming CCSI as loss payee), and NOVA shall insure
at its expense any NOVA Materials (defined below). NOVA shall segregate the     
Products, CCSI Equipment, as well as any other CCSI equipment, including CCSI   
Capital Equipment, from its own and/or other customers' products, parts or      
equipment and shall keep such CCSI Equipment, CCSI Capital Equipment and the    
Products at all times free and clear of all encumbrances and liens attributable 
to any act or omission or insolvency of NOVA. NOVA shall be responsible at its  
sole cost and expense to ensure that its facilities contain adequate security to
protect the Products, CCSI Equipment and CCSI Capital Equipment, from damage    
and/or theft.                                                                   

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(a)     CCSI shall be responsible for payment of all export and import duties,  
   local sales taxes and similar charges with respect to the Products,
        subject to the provisions of Section 2(a) and (d) with respect to NOVA's
      right of first refusal for orders for Products distributed outside the
Exclusive Territory.                                            

(b)     Title, ownership and risk of loss to the Products shall pass to CCSI    
upon shipment of the Products from NOVA's facility in Waltham,  
  Massachusetts or on receipt of a written request from CCSI to hold
    completed and invoiced goods at NOVA for future shipment. NOVA shall
      provide commercially reasonable storage methods for such completed and
invoiced goods.                                                 

Section 4/Production Engineering Costs                                          

Prior to Commencement of Production, NOVA will complete all tasks related to    
implementing production such as building the product structure, developing      
documents and drawings related to the Device Master Record ("DMR"), creating    
assembly procedures and testing approaches, designing and fabricating test      
fixtures and assembly jigs, generating the documentation package from a 3D data 
base, and complying with all other Product Regulatory Specifications including  
FDA and EU requirements for the production of medical devices for which NOVA is 
responsible. NOVA will provide CCSI with a quote for completing these items (set
forth in Attachment 3) and will not proceed without prior CCSI written approval.

Following Commencement of Production, NOVA will provide all manufacturing       
engineering, drafting and documentation required to manufacture the Product and 
to conform to applicable Product Regulatory Specifications including FDA and EU 
laws and standards including ISO 9000 Regulations. NOVA shall maintain its      
documentation in compliance with CCSI's requirements and the Product Regulatory 
Specifications' requirements.                                                   

The NOVA price to CCSI indicated in Attachment 3 includes the costs of all      
manufacturing engineering necessary to implement production subsequent to       
Commencement of Production and, except as noted in Section 3, all packaging and 
handling charges.                                                               

CCSI will reimburse NOVA for all capital equipment/tooling costs purchased by   
NOVA on behalf of CCSI needed to implement production (e.g., molds, computers,  
automatic test equipment) or at CCSI's discretion CCSI will provide the capital 
equipment/tooling to NOVA; provided, however, NOVA obtains CCSI's written       
approval prior to purchasing such capital equipment/tooling (collectively, "CCSI
Capital Equipment"). CCSI shall be the sole owner of all such CCSI Capital      
Equipment, and NOVA will ensure that such equipment and tooling identifies CCSI 
as the titled owner of such equipment.                                          

(a)     CCSI may from time to time supply to NOVA parts for production of the   
     Products by NOVA (the "CCSI Equipment") as agreed by the parties from
      time to time. CCSI Equipment shall be supplied by CCSI at its cost and
       shipped to NOVA for its inspection and production of the Products. CCSI
      Equipment will be solely owned by CCSI, and NOVA shall ensure that the
CCSI Equipment is identified by NOVA as being owned by CCSI.    

Section 5/Pricing/Volume/Delivery                                               

The Pricing Schedule for different volumes is shown in Attachment 3. NOVA will  
develop the price based on actual material costs using this Pricing Schedule and
will provide CCSI with a costed copy of the Bill of Materials and direct labor  
times and costs used to calculate price if so requested by CCSI. NOVA will sell 
the                                                                             
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Products to CCSI at a price which depends on forecasted annual volume as set    
forth in Attachment 3. This price may be adjusted on an annual basis as         
described below.                                                                

Prior to Commencement of Production, CCSI will provide NOVA with a twelve (12)  
month rolling forecast estimating the number of Products, according to CCSI's   
market projections, CCSI anticipates it will purchase from NOVA (the "Rolling   
Forecast"). CCSI will thereafter update the Rolling Forecast every three (3)    
months with respect to the remaining nine (9) months of such original twelve    
(12) month period and for the additional three (3) month period added at the end
of the Rolling Forecast, provided that no change will be made to the portion of 
the Rolling Forecast relating to the first ninety (90) days of such nine- (9)   
month period. NOVA will use this forecast to procure materials and plan capacity
in consultation with CCSI, and with CCSI's prior consent with respect to any    
non-cancelable material orders.                                                 

CCSI will also provide NOVA with a forecast confirmation ninety (90) days in    
advance of the first day of the month in which a build is to take place, for    
availability/delivery to CCSI by the first day of the following month (the      
"Delivery Commitment Date"). CCSI agrees to accept all Products based on the    
firm orders accepted per Section 2(i) hereof and orders within the 90-day window
are not subject to change, provided such Products comply with the Product       
Specifications and Product Regulatory Specifications and were manufactured in   
compliance with the quality provisions of the Agreement.                        

NOVA will place orders with its suppliers based on these annual forecasts in    
order to achieve the best price for CCSI. In the event that CCSI revises its    
annual forecasts, cancels orders, or terminates the Agreement, other than for a 
reason set forth in Section 13(a) hereof, then subject to NOVA's reasonable     
efforts to first utilize same in manufacturing performed for its other          
customers, including any generic parts, CCSI will purchase all inventory of     
parts, work-in-process, or any excess inventory reasonably based on annual      
forecasts at NOVA's fully loaded costs and will pay all reasonable charges      
actually imposed by NOVA's suppliers resulting from cancellation of purchase    
orders based on forecasts. NOVA will use its best efforts to return any unused  
materials and negotiate reduction or elimination of cancellation or rescheduling
fees. NOVA will provide data to document the basis of price changes if requested
by CCSI.                                                                        

A cost reduction program will be established which will define the estimated    
reduction in cost resulting from changes in production techniques. Savings as a 
result of capital investment and engineering by NOVA and CCSI will result in a  
price reduction equivalent to the direct costs saved. In the event savings are  
realized by joint NOVA/CCSI investment, the savings will be negotiated and      
shared based on the contribution by either party. Any savings will be passed on 
to CCSI through an annual adjustment in price.                                  

At least three (3) months prior to the end of the initial year of production and
each subsequent year, both parties agree to negotiate in good faith regarding   
pricing for the following year. Pricing will be based on a minimum annual order 
quantity.                                                                       

Changes in pricing based on changes to the Product are discussed in Section 8   
herein.                                                                         

NOVA shall use commercially reasonable efforts to supply any parts, components  
or materials (including CCSI Capital Equipment) not provided by CCSI that meet  
the Product Specifications, to make completed Products available, in amounts    
necessary to satisfy CCSI's volume requirements as specified in the purchase    
order, for the Delivery Commitment Date (other than the CCSI Capital Equipment, 
the "NOVA Materials"). CCSI acknowledges that in certain situations where NOVA  
has determined, based on NOVA's material and manufacturing analysis, that it may
not meet the Delivery Commitment Date solely due to the unavailability of       
components, NOVA will provide CCSI with a new committed delivery date for the   
Product, which in no case will be longer than 30 days from the original Delivery
Commitment Date.                                                                

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In the event that NOVA fails to meet the Delivery Commitment Date or any new    
committed delivery date as set forth in subparagraph (h) above (other than with 
respect to product changes as set forth in Section 8 hereof), CCSI shall be     
entitled to procure the Product from any other available source, and NOVA's     
exclusive right to manufacture the Product in the Exclusive Territory shall     
immediately terminate upon notice thereof from CCSI.                            

In the event NOVA fails to meet the Delivery Commitment Date or any new         
committed delivery date as set forth in subparagraph (h) above (other than with 
respect to product changes as set forth in Section 8 hereof), CCSI shall be     
entitled to give NOVA written notice of its intention to terminate this         
Agreement forthwith; provided, however, that upon receipt of such notice, NOVA  
shall have thirty (30) days in which to remedy its failure to meet the Delivery 
Commitment Date, and provided further that if during such thirty (30) day period
NOVA fails to remedy such failure, CCSI may immediately terminate this          
Agreement.                                                                      

Section 6/Cost of Rework or Scrap                                               

NOVA will absorb all costs related to scrap or rework resulting from            
manufacturing errors, defects, etc. including, but not limited to, rework due to
non-compliance with the Product Specifications and Product Regulatory           
Specifications. CCSI will be charged all costs related to rework and scrapping  
of inventory as a result of design changes initiated by CCSI or to scrapping    
Product which is within design specifications but found to be unacceptable by   
CCSI.                                                                           

Section 7/Manufacturing/Engineering                                             

Following Commencement of Production, NOVA will provide manufacturing           
engineering services which are required (i) to ensure that the Product conforms 
with NOVA's quality standards and (ii) to support continuing cost and           
reliability improvements. NOVA shall manufacture the Product in compliance with 
the Product Specifications and the Product Regulatory Specifications, and       
provide CCSI with documentation necessary to establish such compliance upon     
CCSI's request.                                                                 

Section 8/Product Changes                                                       

NOVA shall maintain all documents, drawings, specifications, test procedures,   
and other necessary records associated with Product design manufacturing,       
labeling, packaging, maintenance, service and repair in the DMR in compliance   
with the Product Regulatory Specifications including the FDA's QSR and the EU's 
Medical Device Directive and ISO 9001 and EN46001 standards, and shall make     
these DMR documents immediately available to CCSI on request. All changes to the
DMR documents will be controlled by NOVA's Engineering Change Order ("ECO")     
procedures and CCSI will be on the required approval list. CCSI will control a  
master document that will list the names and locations of all the documents,    
drawings, specifications, test procedures and other necessary records that      
compose the entire DMR (including but not limited to those related to           
manufacturing, labeling, packaging, design, software development, safety and    
effectiveness, maintenance, service and repair). CCSI will make the master      
document, including all revisions thereto, immediately available to NOVA.       

CCSI and NOVA anticipate that during the term of the Agreement, modifications to
the Product design will occur. The parties agree to review any change to the    
specifications of the Product (a "Product Specification Change") and determine  
if such change directly affects material or labor costs not contemplated in     
Attachment 3. If such change impacts these costs, the price of the Product shall
be adjusted accordingly.                                                        

Prior to the implementation of any Product Specification Change both parties    
will agree on who is responsible for costs arising out of failures due to the   
product change. NOVA will make no Product Specification Change                  

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without written authorization by CCSI. All changes to any NOVA Operating        
Procedures, Drawings, Specifications, and other necessary documents will be     
controlled by NOVA's ECO procedures and CCSI will be on the required approval   
list.                                                                           

CCSI may from time to time request NOVA to incorporate an engineering change,   
(an "Engineering Change") into a Product not contemplated in Attachments 1 or 3.
Within seven (7) business days of receipt of such request, NOVA will inform CCSI
in writing of the earliest possible implementation date for the proposed        
Engineering Change, of any increase or decrease in the price of the Product as a
result of such change, and of any effect on production scheduling or quality    
assurance ("QA") test coverage. If CCSI elects to proceed with the change, NOVA 
will prepare an ECO for approval. NOVA shall be required to accept and implement
all reasonable Engineering Changes to the Products.                             

In support of its ongoing efforts to improve efficiency and reduce the costs of 
manufacturing Products, NOVA may from time to time suggest that an Engineering  
Change be made to a Product by delivering an "Engineering Change Proposal" to   
CCSI. Each Engineering Change Proposal shall be in writing and shall include a  
description of the proposed change, a description of any improvements in the    
Product or cost reductions which will result from the change, and the effect of 
the change, if any, on production scheduling or QA testing. Each Engineering    
Change Proposal shall provide detail sufficient to permit CCSI to evaluate the  
desirability of such change. CCSI agrees to consider each Engineering Change    
Proposal it receives from NOVA, but reserves the right to accept or reject each 
such Proposal in its sole discretion.                                           

In the event either CCSI or NOVA identifies an Engineering Change that must be  
implemented for reasons of safety (a "Safety Change"), the parties agree to     
cooperate so as to effect such Safety Change as soon as possible after          
discovery. Once such a Safety Change is discovered, the parties agree that no   
affected Product shall be manufactured or shipped until such Safety Change has  
been implemented and such change receives any necessary regulatory approvals,   
notwithstanding any delay in scheduled ship dates. The parties further agree to 
cooperate in the implementation of such Safety Change on the Product shipped    
prior to discovery of the hazard. In this regard, NOVA agrees to manufacture a  
field change kit or to implement factory retrofitting, as appropriate, with     
CCSI's obtaining any necessary regulatory approvals. CCSI and NOVA shall        
mutually agree on a case-by-case basis on appropriate charges for the           
implementation of a Safety Change prior to implementation.                      

CCSI and NOVA agree to review Engineering Changes, not contemplated in          
Attachments 1 or 3, and/or Safety Changes and determine if such change directly 
impacts material or labor costs. If such a change is due to modification of the 
design and impacts cost, the price of the Product will be adjusted pursuant to  
written mutual agreement of the parties.                                        

Section 9/Warranty                                                              

NOVA represents and warrants, for a period of eighteen (18) months from the date
of shipment to CCSI or CCSI's designee or customer (the "Warranty Period"), that
all Products supplied in connection with this Agreement (i) shall be new and    
unused; (ii) shall be free from defects in material and workmanship, (iii) shall
conform to the Product Specifications and Product Regulatory Specifications,    
including applicable documentation requirements thereunder; and (iv) shall be   
manufactured and provided by NOVA in accordance and conformity with FDA and EU  
requirements, including ISO 9001/EN46001 and the FDA's QSR, and in compliance   
with all applicable federal, state or municipal statutes, laws, rules and       
regulations, including those relating to the environment, medical devices, and  
occupational health and safety. Without limiting the foregoing, NOVA represents 
and warrants that it shall comply with all present and future statutes, laws,   
ordinances, regulations, directives and standards relating to the manufacture,  
assembly, labeling, packaging, maintenance, service and supply of the Products  
being provided hereunder, including, without limitation, those enforced by the  
FDA and the EU including compliance with future additions or revisions to the   
FDA's QSR, the ISO 9000 Series                                                  
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standards and EN46001 (the "Warranty"). Subject to Sections 13, 15 and 16 below,
and without limiting CCSI's remedies set forth therein, in the event that any   
Product or replacement part does not conform as aforesaid, CCSI's remedy shall  
be limited to the repair or replacement (at NOVA's option) of such nonconforming
Product or replacement part within a reasonable period of time not to exceed    
thirty (30) days. All costs of replacement, repair, or exchange (excluding      
reimbursement of incoming freight charges) of nonconforming Product or          
replacement parts during the Warranty Period shall be borne by NOVA, as set     
forth in Section 16 hereof. No repairs by an unauthorized third party for       
Products or replacement parts covered by the Warranty shall be made without     
mutual consent of NOVA and CCSI.                                                

Upon written request from CCSI, NOVA agrees to provide CCSI or CCSI's designee  
(which may include CCSI's distributors and/or end users of the Product) with    
replacement parts as required by CCSI to provide nonwarranty repair services or 
to repair out of warranty Products should NOVA not provide such services. CCSI  
shall pay for replacement parts provided for purposes of effecting any such     
non-warranty repair services or out of warranty Products. If NOVA is authorized 
by CCSI to provide non-warranty repair services including, without limitation,  
to correct defects in design specified by CCSI, or to repair out of warranty    
Products, CCSI will be charged and billed at a labor rate of [*] per hour for   
engineers and [*] per hour for technicians, plus material and NOVA's current and
auditable material overhead costs during the Initial Term of this Agreement with
respect to the work covered by this paragraph.                                  

Subject to Section 15 below, NOVA warrants that for a period of time beginning  
on the date of delivery to CCSI or CCSI's designee or customer of any           
replacement parts provided pursuant to this Section 9 and continuing thereafter 
until the conclusion of the Warranty Period with respect to the Product in which
such part is included, each such part shall be covered by the Warranty.         

(a)     Upon written request from CCSI, NOVA may refurbish Products which have  
      been shipped to or used by CCSI or its customers (the "Used Products")
       as required by CCSI. CCSI agrees to pay for such refurbishment on terms
   mutually agreed upon by the parties. Such refurbished Used Products
 shall then be considered Product subject to all the terms hereof,
        including without limitation Section 9 hereof, except that the period of
    Warranty for such refurbished Used Product shall be ninety (90) days
   from the date of shipment by NOVA to CCSI or CCSI's designee or its
customer, as the case may be.                                   

  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NOVA DISCLAIMS ALL
       WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT
TO THE PRODUCTS INCLUDING, WITHOUT LIMITATION, ANY WARRANT OF 
         MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.
         NEITHER PARTY SHALL IN ANY EVENT BE LIABLE TO THE OTHER FOR ANY LOSS OF
     DATA, PROFITS OR USE OF THE PRODUCTS, OR FOR ANY SPECIAL, INDIRECT,
         INCIDENTAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES ARISING OUT OF
  OR IN CONNECTION WITH THE MANUFACTURE, USE OR PERFORMANCE OF THE
PRODUCT.                                                      

         All Products shall be subjected to quality control inspection and final
release by NOVA in accordance and conformance with NOVA's quality control       
standards and system and the FDA's QSR, the ISO 9000 Series standards and       
EN46001. NOVA's quality control standards shall be sufficient to ensure that all
Products conform to the Product Specifications and Product Regulatory           
Specifications. At CCSI's request, NOVA shall provide a copy of its standards to
CCSI and shall in all respects adhere to such standards, and shall deliver a    
"Certificate of Conformance" to CCSI for each Product manufactured by NOVA for  
CCSI. NOVA shall permit CCSI to review periodically NOVA's production and       
quality control procedures and records subject to Section 18.                   

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Section 10/Notice                                                               

All notices and demands required or permitted to be given or made pursuant to   
this Agreement shall be in writing and shall be effective when personally given 
or made or when sent by U.S. registered mail or certified mail, postage prepaid,
return receipt requested, addressed as follows:                                 

If to CCSI:                               If to NOVA:                 
Darby S. Macfarlane                       John Wallace                
Chief Executive Officer                   COO                         
5 East 80th Street                        Nova Biomedical Corporation 
New York, N.Y.  10021                     200 Prospect Street         
                               Waltham, MA 02254

Copies to -                                                           
Eric M. Lerner, Esq.                                                  
Rosenman & Colin LLP                                                  
575 Madison Avenue                                                    
New York, New York  10022                                             

or to such other address as to which either party may notify the other.         

Section 11/Governing Law                                                        

This Agreement shall be governed by, and construed and enforced in accordance   
with, the laws of the Commonwealth of Massachusetts without regard to its       
principles of conflict of laws.                                                 

Section 12/Liability Insurance                                                  

NOVA agrees to carry during the Initial Term and any Renewal Term(s), and with  
companies acceptable to CCSI, insurance of the kinds and in the amounts listed  
below. NOVA acknowledges that such insurance will be an umbrella policy which   
will include coverage for all of its customers including CCSI.                  

   (i)         Worker's Compensation statutory limits in each state in which
             NOVA is required to provide Worker's Compensation coverage.

(ii)        Comprehensive General Liability, including Contractual    
                Liability, Products and/or Completed operations Liability, and
                 Personal Injury / Property damage coverage in a combined single
               limit of not less than [*] aggregate with [*] per occurrence.
                 In addition, Umbrella Liability with a combined single limit of
not less than [*].                            

(iii)      Business Interruption of not less than [*] million.      

Section 13/Termination                                                          

This Agreement may be terminated by CCSI if NOVA's manufacturing quality does   
not meet mutually acceptable standards. These manufacturing quality standards   
will be specified prior to beginning full production but as a minimum will      
include NOVA's continuing ISO 9001 Certification and compliance, and conformance
to the Product Specifications and other Product Regulatory Specifications,      
including EN46001 and the FDA'S QSR.                                            

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This Agreement may be terminated prior to the expiration hereof by either party,
if the other party: (i) files a voluntary petition in bankruptcy, (ii) is       
adjudicated a bankrupt, (iii) has a receiver appointed for its property or      
affairs (unless such receiver is removed within sixty (60) days from the date of
its appointment), (iv) has involuntary proceedings instituted against it in     
bankruptcy (unless such proceedings are dismissed within sixty(60) days after   
the date of such institution), or (v) fails to comply in any material respect   
with any provision hereof or fails to fulfill any of its material obligations   
hereunder (it being agreed that, without limitation, all obligations hereunder  
relating to the payment of money or the compliance with applicable regulatory   
requirements is material), in the manner prescribed, which failure shall not be 
cured within fifteen (15) business days (or such shorter period as is           
specifically provided herein with respect to a particular failure, occurrence or
default) after delivery of written notice to the breaching party calling for    
remedy of such breach. Upon the expiration of such fifteen (15) days (or such   
shorter period as is specifically provided herein with respect to a particular  
failure, occurrence or default), if the party has not cured the breach, this    
Agreement shall automatically terminate without the necessity of any further    
notice. If any provision gives any party the right to terminate this Agreement  
upon the occurrence or non-occurrence of any stipulated event(s), such          
termination shall be effective upon delivery of written notice to the other     
party, subject to the previous sentence.                                        

Subject to Section 5(d) above, upon any termination of this Agreement and upon  
CCSI's request, NOVA will sell and transfer to CCSI, free and clear of all liens
and encumbrances, all of NOVA's inventory and work-in-process of Products       
relating to the manufacture of the Product. The purchase price for such         
inventory and work-in-process shall be NOVA's cost including manufacturing      
overhead. NOVA shall complete any work in process as if no termination notice   
was given at CCSI's written request, unless the reason for termination by NOVA  
relates to the non-payment of money by CCSI hereunder.                          

Notwithstanding the foregoing, upon termination of this Agreement, for any      
reason, NOVA agrees to return to CCSI all copies of the Product Specifications, 
Product Regulatory Specifications and related materials, CCSI Capital Equipment,
CCSI Equipment and any other CCSI equipment within twenty (20) business days of 
such termination. If termination occurs, NOVA will provide a data package       
containing all information updated as of the date of termination. The material  
shall include a full drawing package containing all information updated as of   
the date of termination in reproducible form and any revisions or updates,      
including but not limited to, GSF Autocad files, fabrication drawings, approved 
supplier list, test specifications, tooling specifications and drawings,        
manufacturing, assembly, labeling, packaging, maintenance and service           
instructions (to the extent such materials are included in the DMR), quality    
assurance protocols, test equipment, specifications and drawings and engineering
change notice history, device master files, and device history records, repair  
records and any other records or documents relevant to the design, manufacture, 
packaging, labeling and servicing/repair of the Product. Notwithstanding the    
foregoing, NOVA will not be obligated to provide CCSI with NOVA's proprietary   
policies and procedures for NOVA's proprietary manufacturing processes and      
NOVA's software for NOVA's proprietary manufacturing processes.                 

In the case of any termination of this Agreement by either party, it is         
expressly agreed that no termination indemnity or payment of any kind shall be  
due from one party to the other hereunder for loss of goodwill or profit        
expectations or otherwise.                                                      

Section 14/Terms of Payment                                                     

CCSI shall pay NOVA for the full amount of each invoice within thirty (30) days 
of the invoice date.                                                            

Payment shall not constitute acceptance of non-conforming Products; such        
non-conforming Products as referenced in Section 9(a) hereof.                   

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Payment shall be made in United States dollars.                                 

Section 15/Indemnifications                                                     

CCSI shall indemnify and hold NOVA and its affiliates, officers, directors,     
shareholders, employees and agents harmless from and against any claims,        
demands, actions and suits ("Claims") made or brought by third parties for any  
resulting losses (but not lost profits or sales), liabilities, damages, expenses
and costs, including, without limitation, reasonable attorneys' fees and costs  
where the Claim is based on: (a) a breach of any of the warrants,               
representations, and/or obligations provided by CCSI herein; (b) any Claim      
including, without limitation, a Claim of bodily injury (including death) or    
property damage arising out of, or in connection with, the use,                 
commercialization, marketing, distribution or sale of any of the Products, other
than any Claim arising out of or in connection with NOVA's regulatory           
non-compliance, negligence, reckless conduct, willful misconduct or other breach
of obligations hereunder or (c) any act or omission, whether negligent or       
otherwise, of CCSI or its employees or agents, including, but not limited to,   
Claims of product liability, other than any Claim arising out of or in          
connection with NOVA's regulatory non-compliance, negligence, reckless conduct, 
willful misconduct or other breach of obligations hereunder. NOVA shall give    
CCSI prompt written notice of the assertion of any such Claim, provided,        
further, that CCSI shall have the right to select counsel and control the       
defense and/or settlement of any such Claim, subject to the right of NOVA to    
participate in any such action or proceeding at its own expense with counsel of 
its own choice and provided that such settlement provides NOVA with a general   
release and does not provide for equitable relief against NOVA. If CCSI shall   
fail to diligently defend any such Claim, NOVA shall be entitled to do so at    
CCSI's expense with attorneys of its choosing. In such event, NOVA shall not    
settle or compromise any such Claim without the prior written consent of CCSI,  
which consent will not be unreasonably withheld. Notwithstanding the foregoing, 
the foregoing indemnity shall not apply to the extent that any such Losses are  
due to (1) the failure of a Product manufactured by NOVA meet the Warranty      
provided in Section 9 above or (2) NOVA's or its affiliates', directors',       
officers' employees' and agents' regulatory non-compliance, negligence, reckless
conduct, willful misconduct or other breach of obligations hereunder.           

(a)     NOVA shall indemnify and hold CCSI, each of its customers and each of   
    CCSI's and its customers respective affiliates, officers, directors,
       shareholders, employees and agents harmless from and against any Claims
       made or brought by third parties for any resulting losses (but not lost
       profits or sales), liabilities, damages, expenses and costs, including,
        without limitation, reasonable attorneys' fees and costs where the Claim
  is based on: (a) a breach of any of the warrants, representations,
    and/or obligations provided by NOVA herein; (b) any Claim including,
  without limitation, of bodily injury (including death) or property
       damage arising out of, or in connection with, the manufacture of any of
      the Products (other than as a result of design defects attributable to
   CCSI), whether claimed by reason or breach of warranty, negligence,
    product defect or otherwise, and regardless of the form in which any
        such Claim is made, other than any Claim arising out of or in connection
      with CCSI's regulatory non-compliance, negligence, reckless conduct or
   willful misconduct or (c) any act or omission, whether negligent or
 otherwise, of NOVA or its employees or agents, including, but not
        limited to, Claims of product liability other than any Claim arising out
      of or in connection with CCSI's regulatory non-compliance, negligence,
   reckless conduct or willful misconduct. CCSI shall give NOVA prompt
     written notice of the assertion of any such Claim, provided, further,
        that NOVA shall have the right to select counsel and control the defense
    and/or settlement of any such Claim, subject to the right of CCSI to
    participate in any such action or proceeding at its own expense with
    counsel of its own choice and provided that such settlement provides
     CCSI with a general release and does not provide for equitable relief
     against CCSI. If NOVA shall fail to diligently defend any such Claim,
       CCSI shall be entitled to do so at NOVA's expense with attorneys of its
     choosing. In such event, CCSI shall not settle or compromise any such
       Claim without the prior written consent of NOVA, which consent will not
be unreasonably withheld.                                       

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(b)     CCSI shall indemnify and hold NOVA and its affiliates, officers,        
       directors, shareholders, employees and agents harmless from and against
        any Claim made or brought by a third party for any resulting losses (but
     not lost profits or sales), liabilities, damages, expenses and costs,
   including, without limitation, reasonable attorneys' fees and costs
  where the Claim is that the manufacture, use, or sale of a Product
     infringes any intellectual property right claimed by such third party
and relating (1) to CCSI's technology (technology, know how etc.
       developed solely by CCSI) or (2) to the use of CCSI's technology or (3)
  any technology other than NOVA's technology. Indemnification shall
proceed as provided under Section 15 (f).                       

(c)     NOVA shall indemnify and hold CCSI and its affiliates, officers,        
       directors, shareholders, employees and agents harmless from and against
        any Claim made or brought by a third party for any resulting losses (but
     not lost profits or sales), liabilities, damages, expenses and costs,
   including, without limitation, reasonable attorneys' fees and costs
  where the Claim is that the manufacture of a Product infringes any
       intellectual property right claimed by such third party and relating to
     (1) NOVA's technology (technology, know how, etc. developed solely by
        NOVA) or (2) the use of NOVA's technology. Indemnification shall proceed
as provided under Section 15(f).                                

(d)     In the event that a claim is based partially on an indemnified Claim    
     described in Sections 15(a), (b), (c) or (d) above and partially on a
      non-indemnified Claim, or is based partially on a Claim indemnified by
     CCSI pursuant to Sections 15(a) or (c) above and partially on a Claim
indemnified by NOVA pursuant to Sections 15(b) or (d) above, any
       payments, expenses and costs, including, without limitation, reasonable
        attorneys' fees incurred in connection the Claims, are to be apportioned
       between the parties in accordance with the degree of cause attributable
to each party.                                                  

(e)     In the event that either party becomes aware of the possible            
      infringement or other misuse by a third party of intellectual property
    rights of CCSI or NOVA incorporated into or used in the marketing or
       sales of the Products, such party will promptly notify the other party.
       The owner of the right infringed or misused shall promptly consult with
      the other party with respect to taking appropriate action to terminate
        the infringement or misuse. For purposes of clarification, CCSI shall be
       the owner with respect to CCSI's technology and NOVA shall be the owner
with respect to NOVA's technology.                              

(f)     If either CCSI or NOVA becomes aware of an infringement allegation      
       which might give rise to a right or obligation of indemnification under
     Section 15 (c) or Section 15 (d) such party shall promptly notify the
       other. The party in the role of indemnitor shall control, bear the full
expense of, and retain all proceeds of, the defense against or  
        settlement of such allegation, unless NOVA and CCSI agree otherwise. The
        indemnitee shall cooperate in such action if reasonably requested by the
indemnitor. In no event shall the indemnitor settle or otherwise
terminate any allegation in a manner which might abrogate any   
      obligations, rights or licenses between CCSI and NOVA granted or which
might be granted under this Agreement unless NOVA and CCSI agree
       otherwise. The indemnitee may, in its own discretion, be represented in
      the defense or settlement of any such allegation by counsel of its own
choosing at its sole expense.                                   

Section 16/Product Recall or Corrective Action                                  

In the event that CCSI or NOVA recalls or takes any corrective action (a        
"Corrective Action" (defined below)) with respect to any of the Products, sold  
or distributed by CCSI including, without limitation, because the Products are  
believed to violate any provision of applicable law, NOVA shall bear all costs  
and expenses, including costs and expenses to CCSI and/or NOVA, of any          
Corrective Action related to matters which are caused by NOVA's breach of the   
Warranty or other contractual obligations hereunder including, without          
limitation, expenses or obligations to third parties, the cost of notifying     
customers, costs associated with the                                            

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shipment of such recalled or corrected Products from customers to CCSI or NOVA  
and direct costs related to handling or correcting the Products and any other   
related costs (the "Corrective Action Costs"). Similarly, CCSI shall bear all   
costs and expenses of any Corrective Action related to the incorporation of CCSI
technology into the Products, unless the Product does not conform under NOVA's  
Warranty in which case NOVA bears such Corrective Action Costs.                 

Both parties shall maintain complete and accurate records, for such periods as  
may be required by applicable law, of all the Products sold or distributed by   
them. The parties will cooperate fully with each other in effecting any         
Corrective Action with respect to, the Products, including communications with  
any purchasers or users.                                                        

(a)     For purposes of this section, Corrective Action means a field or other  
     action relative to any of the Products (voluntarily or as required by
    the FDA or another authority) or any field or other action including
     mandatory notification, repair, replacement and refund, safety alert,
  "cease distribution and notification" and mandatory recall action,
        voluntary recall, market withdrawal, stock recovery, and "device removal
    or correction," as defined or understood under FDA law or policy (or
   those of another authority) and other action necessary to address a
    product safety or effectiveness problem and any "enforcement action"
(defined for this purpose as any seizure, injunction, criminal  
  prosecution, civil penalties and any other legal or administrative
    action that the FDA or another authority can bring against CCSI, its
Products and/or its officers/employees).                        

Section 17/Disclosure of Information                                            

NOVA and CCSI have entered into a Confidentiality Agreement (the                
"Confidentiality Agreement") which agreement is attached hereto as Exhibit A.   
All obligations of confidentiality set forth in the Confidentiality Agreement   
shall survive the termination or expiration of this Agreement.                  

Section 18/Regulatory Matters                                                   

A.   Obligations                                                                
NOVA Obligations:                                                               

NOVA represents that it has appropriately registered its facilities, where the  
Products will be made, with FDA, including as a medical device contract         
manufacturing site under 21 C.F.R. Part 807, Subpart B, and shall continue to   
comply with applicable establishment registration requirements under 21 C.F.R.  
Part 807, Subpart B. Upon request, NOVA shall promptly provide to CCSI a copy of
its initial and current annual establishment registration forms.                

(a)     NOVA shall comply with all obligations under the Quality System         
Regulation, 21 C.F.R. Part 820.                                 

(b)     NOVA shall comply in all material respects with responsibilities        
      that it has under its own quality system and other regulatory standard
operating procedures ("SOP") and will cooperate with any        
       responsibilities it has under the requirements of CCSI's quality system
 and other SOPs, including but not limited to any responsibilities
 enumerated in the complaint handling and medical device reporting
("MDR") SOPs.                                                   

(c)     NOVA shall comply in all material respects with all regulatory          
       obligations, necessary for marketing the Products in foreign countries.
       As part of fulfilling such obligations, NOVA represents that it has and
  will retain its ISO 9001 Certification and will maintain a quality
       system in compliance with the ISO 9000 Series standards and EN46001 for
the duration of this Agreement.                                 

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(d)     NOVA shall comply in all material respects with all additional          
       regulatory obligations it has as a manufacturer of its own devices that
      could adversely effect its obligations relating to its compliance with
the Product Regulatory Specifications.                          

(e)     NOVA shall manufacture all Products to comply with all Product          
       Specifications and Product Regulatory Specifications and will deliver a
     "Certificate of Conformance" to CCSI for each Product manufactured by
NOVA.                                                           

(f)     NOVA shall deliver to CCSI a written report of corrective actions       
     implemented to correct the regulatory requirements that CCSI notified
NOVA were non compliant based on CCSI's September 1998 audit.   

CCSI Obligations:                                                               

(g)     CCSI shall comply in all material respects with its medical device      
      establishment registration and medical device listing obligations as a
specification developer under 21 C.F.R. Part 807, Subpart B.    

(h)     CCSI shall be responsible in all material respects for all              
        regulatory obligations arising under the premarket notification (510(k))
provisions of 21 C.F.R. Part 807, Subpart E.                    

(i)     CCSI shall be responsible in all material respects for developing and   
    revising product labeling in accordance with the appropriate medical
device labeling provisions of 21 C.F.R. Part 801 and ss. 809.10.

(j)     CCSI shall be responsible in all material respects for MDR              
obligations under 21 C.F.R. Part 803, with NOVA's assistance if 
specified in CCSI's MDR SOP.                                    

(k)     CCSI shall be responsible in all material respects for medical          
     device "removal and correction" obligations under 21 C.F.R. Part 806,
except as otherwise specified in Section 16 of this Agreement.  

(l)     CCSI shall comply in all material respects with all obligations under   
the Quality System Regulation, 21 C.F.R. Part 820.              

(m)     CCSI shall comply in all material respects with all responsibilities    
      it has under its own quality system and other regulatory SOPs and will
    cooperate with any responsibilities it has under the requirements of
NOVA's quality systems and other SOPs.                          

(n)     CCSI shall comply in all material respects with its regulatory          
       obligations, necessary for marketing its Products in foreign countries.

A.       Inspection Reports: NOVA shall advise CCSI in writing immediately      
      upon NOVA's receiving notice from the FDA or other authority that it
      intends to perform an inspection of NOVA's facilities. Additionally,
         NOVA shall provide CCSI with copies of any Forms FDA-483 or ISO/EN46001
     audit observations, follow-up Warning Letters or analogous letters,
  close-out reports, and NOVA's responses e.g., responses to Forms
  FDA-483, ISO/EN460001 observations, Warning Letters or analogous
       letters, for the portions of inspections relating specifically to the
       manufacture of the Products or any portion of NOVA's facilities where
such Products are manufactured.                               

B.       Inspection Rights:                                                     

NOVA shall permit CCSI or CCSI's designee, from time-to-time, during normal     
business hours and upon reasonable notice, to audit NOVA's facilities in order  
to confirm that NOVA and/or any of its subcontractors is                        

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complying with the terms and conditions of this Agreement. If CCSI reasonably   
determines that NOVA or any of NOVA's subcontractors is not complying with the  

terms and conditions of this Agreement, CCSI shall give notice of such breach to
NOVA in accordance with Section 10 of this Agreement. Additionally, NOVA shall  
permit CCSI's distributor, during normal business hours and upon reasonable     
notice, to inspect all finished Products prior to the Products being shipped to 
CCSI's designated location. If the distributor reasonably determines that the   
Product is defective in material or workmanship or in non-conformance with any  
applicable Product Specifications or Product Regulatory Specifications, NOVA    
agrees to correct such defect at its sole cost and expense and within fifteen   
(15) days of distributor's notice/report thereof.                               

(a)     NOVA shall be entitled to subcontract aspects or items for the          
   production of the Product at no additional cost (including, without
        limitation, any freight, insurance or other shipment expense relating to
        transition of production between or among NOVA and/or any subcontractor)
        to CCSI however, final assembly shall be done by NOVA. Any subcontractor
       used by NOVA who receives CCSI confidential information in the assembly
        or manufacture of the Product shall acknowledge in writing, prior to the
      commencement of its engagement as a subcontractor, that the provisions
       of the Confidentiality Agreement shall apply, mutatis mutandis, to such
       subcontractor. Notwithstanding the foregoing however, NOVA shall remain
       responsible for supervising, and shall remain liable hereunder for, any
        such subcontractor's performance of the subcontracted work in accordance
 with the terms and conditions of this Agreement and the schedules
     attached hereto. Without limiting the foregoing, NOVA represents that
    any subcontractor shall be in compliance with any applicable Product
        Regulatory Specifications, and NOVA shall be responsible for any Product
  Regulatory Specifications relative to its subcontractors including
        complying with purchasing controls (21 C.F.R.ss.820.50 and any analogous
ISO/EN provision).                                              

(b)     NOVA shall permit Underwriters Laboratories, Inc. ("UL"), without       
 prior notice, to inspect NOVA's and/or any of its subcontractors'
       facilities for compliance with requirements related to UL certification
qualification marking.                                          

A.      Contacts: Each party shall designate an individual within its           
   organization to be the primary contact regarding regulatory issues.
      Such individual can be changed by giving written notice thereof to the
    other party. The initial contact for NOVA will be Paul MacDonald and
the initial contact for CCSI will be Darby S. Macfarlane.       

Section 19/Compliance with Law                                                  

NOVA represents that it is, and will remain, in compliance with the Product     
Regulatory Specifications and all other applicable federal, state, and local    
statutes, laws, regulations, directives, standards and orders.                  

Section 20/Miscellaneous                                                        

Survival: Notwithstanding any right of a party to investigate the affairs of the
other party, each party shall have the right to rely fully upon the             
representations and warranties, covenants and agreements of the other party     
contained in this Agreement and the Confidentiality Agreement and to pursue all 
rights and remedies in connection therewith. The representations, warranties and
covenants of the parties set forth in Sections 2(i), 2(n), the second sentence  
of 7, 13(d), 13(e), 14, 15, 16, 17, 18(B), 18(C)(a), 18(C)(b), and 20 (Specific 
Performance) shall survive the termination or expiration of this Agreement.     

Status of Parties: The relationship of the parties under this Agreement shall be
and at all times remain one of independent contractors. Neither party is an     
employee, agent or legal representative of the other party or shall have any    
authority to assume or create obligations on the other party's behalf.          

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Binding Effect; Assignment: This Agreement shall be binding upon and inure to   
the benefit of the parties and their successors and permitted assigns. Neither  
this Agreement nor any rights granted hereby may be assigned by either party    
without the other party's prior written consent.                                

Entire Agreement: This Agreement, the Confidentiality Agreement attached hereto 
as Exhibit A and the Confidentiality Agreement dated September 16, 1998 between 
the parties constitute the entire agreement between NOVA and CCSI relating to   
the subject matter hereof and shall not be amended, altered, or changed except  
by a written agreement signed by the parties hereto.                            

Waivers: No delay or omission on the part of either party to this Agreement in  
requiring performance by the other party hereunder, or in exercising any right  
hereunder, shall operate as a waiver of any provision hereof or of any right or 
rights hereunder, and the waiver or omission or delay in requiring performance  
or exercising any right hereunder on one occasion shall not be construed as a   
bar to or waiver of such performance or right, or of any right or remedy under  
this Agreement, on any future occasion.                                         

Force Majeure: NOVA shall not be liable, in any respect, for failure to ship,   
for any supplier's failure to ship or for delays in transportation nor CCSI for 
failure to receive Products where such failure or delay shall have been due,    
wholly or in part, to the elements, acts of God, acts of civil or military      
authority, fires, floods, epidemics, quarantine restrictions, war, riots,       
accidents to machinery, or any other like or different events beyond the control
of the party whose performance is interfered with. In any such case, prompt     
written notice shall be given by the affected party to the other of the         
existence of such cause and of readiness to resume performance. It is understood
that neither party shall be required to settle a labor dispute against its will.
Notwithstanding the foregoing, if any such delay continues for a period in      
excess of one (1) month, the other party shall have the immediate right to      
terminate this Agreement, without liability to either party. Without limitation 
of any other provisions hereof, failure to meet the Y2K standard shall not be   
considered a Force Majeure hereunder.                                           

With respect to any such period of excused nonperformance, this Agreement       
automatically shall become and remain nonexclusive until NOVA notifies CCSI that
its ability to perform hereunder has been substantially restored, in which event
the exclusivity provisions of this Agreement automatically shall revert into    
full force and effect. CCSI shall have the right to obtain the manufacture of   
the Product from an alternative source in the interim on a job-by-job basis     
only.                                                                           

Inventions: The subject matter of inventions is covered in Paragraphs 6 and 7 of
the Confidentiality Agreement attached hereto as Exhibit A.                     

Independent Contractor:                                                         

CCSI, its employees and agents, are not and shall not act or purport to act as  
employees, agents, or representatives of NOVA, but they are, and shall act as,  
independent contractors, maintaining full responsibility and complete control   
over all of their employees and operations. CCSI shall have no authority to     
represent or bind NOVA in any way.                                              

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NOVA, its employees and agents, are not and shall not act or purport to act as  
employees, agents, or representatives of CCSI, but they are, and shall act as,  
independent contractors, maintaining full responsibility and complete control   
over all of their employees and operations. NOVA shall have no authority to     
represent or bind CCSI in any way. Nothing contained herein shall be deemed to  
create a partnership, joint venture, or relationship of principal and agent     
between the parties hereto or between NOVA and CCSI.                            

Specific Performance: The parties to this Agreement recognize that any breach of
their respective obligations under this Agreement and the Confidentiality       
Agreement could result in irreparable injury to the other party. Each party     
shall, therefore, be entitled, without restricting such party from other legal  
and equitable remedies, to injunctive and other equitable relief to prevent or  
restrain the breach of this Agreement, including, without limitation, the return
and delivery of property immediately upon any termination of this Agreement as  
provided herein.                                                                

Hiring of Other Party's Employees and Officers:                                 

Each party agrees not to hire any of the other party's employees or officers    
assigned to perform services under this Agreement, without the prior and written
agreement of the other party, even if the request for hiring is initiated by the
staff member her/himself. This mutual non-hiring covenant is valid until the    
first anniversary of the termination or expiration of this Agreement, as the    
case may be.                                                                    

IN WITNESS WHEREOF, authorized representatives of the parties have executed this
Agreement.                                                                      

Nova Biomedical Corporation               Chromatics Color Sciences             
                       International, Inc.

By:_______________________________        By:_______________________________    
Name:  John Wallace                       Name:  Darby S. Macfarlane            
Title:     Chief Operating Officer        Title:    Chief Executive Officer     

Date: _____________________________       Date: _____________________________   

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Attachment 1

Section 1                                                                       

This Product includes a TLc-BiliSensor(TM) which is packaged in a durable, soft 
carry case, a TLc-Touch(TM) palmtop computer and an RS23 cable.                 

The TLc-BiliSensor(TM) is a non-invasive, light weight                          
Trans-Light-Cutaneous-Bilirubin Monitor. Using [*] flashes a light on the skin  
and performs a color measurement to detect the yellow content of the newborn's  
skin.                                                                           

The TLc-Touch(TM) palmtop computer features the TLC-Soft(TM) program on a       
TLc-Flash Ram card. This Product is used with the TLc-Lensette(TM) individual   
calibration standards, which NOVA is inserting into the [*], but NOVA is [*] the
individual calibration standards. This model offers 4 AA batteries for the      
TLc-Sensor(TM) and 2 AA batteries for the TLc- Touch(TM) palmtop or [*]. This   
model includes labels and shipping/packaging.                                   

Section 2                                                                       

This Product is a hand-held light weight [*] version of the TLc-BiliSensor(TM). 
It has [*]. Only the working prototype exists and development of this Product   
including all FDA required design controls are to be developed to an FDA cleared
mass-manufactured device. This Product is used with the [*] which NOVA is       
inserting into the packing/shipping box, but NOVA [*]. This model includes      
labels and shipping/packaging.                                                  

Section 3                                                                       

This Product, the TLc-BriefcaseSystem(TM) includes an electrically powered      
TLC-BiliSensor(TM), a TLc-Laptop(TM) 512K computer, a 40 column thermal printer,
and is run on AC power only. The TLc-Laptop(TM) features the TLc-Soft(TM)       
program on the TLc-SofTest Diskette(TM), and is used with the TLc-Lensette(TM)  
individual calibration standard, which NOVA is inserting into the [*], but NOVA 
[*] the individual calibration standards. This model includes labels and        
shipping/packaging.                                                             

---------------------                                                           
The calibration standards (TLc-Lensettes(TM)) used to calibrate the             
color-measurement instruments described in all Sections of this Attachment 1 [*]
by NOVA, are not included in any Product as defined in this Agreement or        
attachments thereto other than the Confidentiality Agreement (but shall         
constitute CCSI Equipment as defined in the Agreement), and are not subject to  
exclusive manufacturing or Exclusive Territory terms and conditions of this     
Agreement. Notwithstanding the above the terms of the Confidentiality Agreement 
apply to the calibration standards.                                             

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                                                                        PURCHASE
                                      Attachment 2                       ORDER
[*]                                                                             

 SHOW OUR ORDER NUMBER ON ALL INVOICES, PACKAGES SHIPPING PAPERS AND
CORRESPONDENCE

                                                        [Enlarge/Download Table]


PURCHASE ORDER NO.            CHANGE ORDER NO.       DATES ISSUED            PAGE                                 

                                                     S                                                            
T                                                    H   T                                                        
O                                                    I   O                                                        
                                                     P                                                            

             FOB                  SHIP               Mass. Tax Exempt                                             
                                  VIA                / / YES        #000-089-100   / / NO                         

                                                                                                                  
LINE    QUANTITY     U/M  P/N/DWG/ REV               DESCRIPTION             DUE DATE      UNIT PRICE       AMOUNT
                                                                                            TOTAL                 
/ / DRAWINGS ENCLOSED          / / CONFIRMING ORDER        TO:                                                    

                                                                                           AUTHORIZED SIGNATURE   

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Attachment 3
 Pricing for Section 1 of Attachment 1

Chromatics Color Sciences Inc                                                   

                                                        [Enlarge/Download Table]


                               Estimated     Estimated                                                              
Item No.:   Description        Mat'l Cost    Labor Cost       Comments                                              
                                                                                                                    
  1                [*]            n/a                         assumed to be supplied by CCSI                        
  2                [*]            n/a                         assumed to be supplied by CCSI                        
  3                [*]                        [*]             build, test & inspect                                 
  3a               [*]            n/a                         assumed to be supplied by CCSI                        
  3b               [*]            $[*]                        per [*]                                               
  3c               [*]            $[*]                        per [*], -[*] or almond was priced                    
  3d               [*]            $[*]                                                                              
  3e               [*]            $[*]                                                                              
  3f               [*]            $[*]                                                                              
  3g               [*]            $[*]                                                                              
  3h               [*]            $[*]                                                                              
                   [*]                        [*]             build or assemble, kit, test & inspect                
                   [*]                                        Unknown                                               
  5                [*]                                                                                              
  5a               [*]            $[*]                        [*]                                                   
  5b               [*]                        [*]             Program, verify, label & inspect                      
  5c               [*]            $[*]                                                                              
  6                [*]            n/a                                                                               
  7                [*]            n/a                         Assumed to be supplied by CCSI                        
  8                [*]            $[*]        [*]             Assembly & inspect, there will be a one time charge of
                                                              $[*] to [*] for tooling to produce the [*]            
  9                [*]            $[*]                                                                              
                           Total: $[*]        [*]                                                                   

  Material   Material O/H     Labor        Lab O/H     Total  Margin        Transfer Price                          
   $[*]      $[*]             $[*]         $[*]        $[*]   $[*]          $[*]                                    


Other Items:                                                                    

    1   The cost to transact an order, including both order entry and shipping
will be a $[*] flat rate.                                     

2   Current FedEx shipping costs, for [*], for all of the US is $[*]  
overnight, $[*] next day and $[*] 2nd day.                    

3   NOVA requires [*] days from receipt of order for the 1st delivery.

   4   Incoming inspection costs for CCSI supplied materials will be charged
      at $[*] per hour, we estimate that the time will be [*] to [*] hours
per line item per lot.                                        

Extended Warranty Cost: The cost of extending the warranty to [*] from NOVA's   
[*] warranty period will be [*]% of NOVA's selling/transfer price of each       
Product to CCSI.                                                                

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Attachment 3
 Pricing for Section 2 of Attachment 1

Pricing Method

NOVA will use the following method to price [*] Units to CCSI                   

Calculation of standard cost                                                    
----------------------------                                                    

Actual Material Cost Plus                                   
Material overhead rate - Currently [*]% Plus                
Labor cost (hours x $[*] (current rate)) Plus               
Labor overhead rate       -     Currently [*]%                                  
Equals                                                
Total Standard Cost                                                             

Note for year one only, NOVA will bid on smaller quantities and will use a      
margin of [*]%                                                                  

Price depends on volume:                                                        

Units per year                         Margin                         
--------------                         ------                         

[*]                          No bid               
[*]                           [*]%                
[*]                           [*]%                
[*]                           [*]%                

                                                                [Download Table]


Example                                    Example   Example 
                                           Cost ($)  Cost ($)
                                           --------  --------

                                                             
         Material Cost (key item)               [*]      [*] 
         [*]% material overhead*                [*]      [*] 
         Labor cost ([*] hours @ $[*]/hr)       [*]      [*] 
         [*]% labor overhead*                   [*]      [*] 
         Standard Cost                         $[*]     $[*] 
         -------------                         ----     ---- 

Based on our current forecast, we expect our [*] to be [*] next year. These     
numbers reflect our current forecast.                                           

                                                                [Download Table]


Year 2 Forward              Price if Standard    Price if Standard
Units per year    Margin         Cost is $[*]       Cost is $[*]  
--------------    ------         ------------       ------------  

                                                                  
          [*]     no bid         no bid ([*])       no bid ([*])  
          [*]      [*]%                [*]                  [*]   
          [*]      [*]%                [*]                  [*]   
          [*]      [*]%                [*]                  [*]   
          ---      ----                ---                  ---   

Note: Example assumes constant materials cost.  [*].                            

Extended Warranty Cost:                                                         

The cost of extending the warranty to [*] from NOVA's [*] warranty period will  
be [*]% of NOVA's selling/transfer price of each Product to CCSI.               

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                                                                   Exhibit A
                                                                   ---------

 CONFIDENTIALITY AGREEMENT
 -------------------------

                 This Agreement made this 3rd day of November, 1998 is between
Chromatics Color Sciences International, Inc., a New York corporation ("CCSI")  
and Nova Biomedical Corp., a Massachusetts corporation ("NOVA").                

                  WHEREAS, CCSI has developed and owns a commercial model device
for the measurement of color (e.g., the measurement of skin color indicative of 
bilirubin infant jaundice) and prototype [*] devices for the measurement of     
color and technical, financial and business information relating thereto, all of
a confidential, proprietary and secret nature, those devices, technical,        
financial and business information being hereinafter referred to as             
"Confidential Information."                                                     

             WHEREAS, CCSI desires to disclose certain portions of the
Confidential Information to NOVA for the purpose of enabling NOVA to manufacture
the commercial model device for CCSI and to develop and design for CCSI         
commercial [*] devices based on those prototype devices and other Confidential  
Information under the terms and conditions set forth below.                     

             WHEREAS, the parties recognize that NOVA in the course of
manufacturing the commercial model device for CCSI and developing and designing 
for CCSI commercial [*] devices may develop further confidential information,   
(including                                                                      

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improvements to CCSI's proprietary information set forth in Exhibit C but       
excluding NOVA's policies and procedures for NOVA's proprietary manufacturing   
processes and NOVA's software for NOVA's proprietary manufacturing processes, in
NOVA's possession prior to the date of this Agreement or developed by NOVA after
the date of this Agreement which is not an improvement on CCSI's proprietary    
information set forth in Exhibit C), hereinafter referred to as "Derivative     
Confidential Information."                                                      

       WHEREAS, NOVA acknowledges the need to preserve the
confidential nature of the Confidential Information and the Derivative          
Confidential Information.                                                       

             NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, the parties hereto agree as   
follows:                                                                        

              1. CCSI shall disclose Confidential Information to NOVA in
confidence for the purpose of enabling NOVA to manufacture for CCSI the         
commercial model device for the measurement of color and to develop and design  
for CCSI commercial [*] devices for the measurement of color. Confidential      
Information as well as Derivative Confidential Information may be in tangible or
intangible form, including but not limited to: oral disclosures, written        
disclosures, ideas, know-how, drawings, graphs, plans, specifications, models,  
prototypes, samples, equipment, data, formulas, processes, designs, hardware and
software and marketing, costs and supplier information. All written Confidential
Information disclosed to NOVA by CCSI shall bear the notice "Confidential       
Information."                                                                   

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             2. Unless excluded by paragraph 5, NOVA shall be under an
obligation to maintain in confidence the Confidential Information disclosed by  
CCSI to NOVA pursuant to this Agreement and the Derivative Confidential         
Information developed by NOVA, as well as the identity of CCSI, its suppliers   
and customers, and shall take all precautions reasonably necessary to prevent   
any unauthorized disclosure of the Confidential Information or the Derivative   
Confidential Information. In the event NOVA finds it necessary to disclose      
Confidential Information or Derivative Confidential Information to any of its   
employees or independent agent/subcontractor in order to carry out the purpose  
of this Agreement, NOVA shall first inform the employee or independent          
agent/subcontractor that the information is confidential and subject to the     
obligations of the agreement NOVA has in place with that employee or independent
agent/subcontractor (copies attached as Exhibits A and B).                      

                3. Unless excluded by paragraph 5, NOVA shall not use, copy,
duplicate or otherwise replicate any of the Confidential Information disclosed  
by CCSI to NOVA pursuant to this Agreement or the Derivative Confidential       
Information developed by NOVA, in whole or in part, for any purpose other than  
the purpose of this Agreement, without the prior written consent of CCSI, and   
upon request shall return all tangible materials provided by CCSI to NOVA.      

                  4. Nothing contained in this Agreement shall prevent NOVA from
making its services available to other companies or other legal entity who may  
compete with CCSI, provided that NOVA in rendering such services does not breach
paragraphs 2,3,6 or 7 of this Agreement. Should NOVA develop, assemble or       
manufacture for another company or legal entity any instrument or system for the
measurement of color                                                            

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("Other Manufacture") NOVA shall ensure that no personnel, documentation, or    
expertise of NOVA or NOVA's subcontractors used or gained in the performance of 
work for CCSI (including CCSI's proprietary information set forth in Exhibit C  
and improvements thereon but excluding NOVA's policies and procedures for NOVA's
proprietary manufacturing processes and NOVA's software for NOVA's proprietary  
manufacturing processes in NOVA's possession prior to the date of this Agreement
or developed by NOVA after the date of this Agreement which is not an           
improvement on CCSI's proprietary information set forth in Exhibit C) will be   
used in the performance of work on such Other Manufacture. CCSI acknowledges    
that NOVA may in the future develop, manufacture and/or sell devices (which are 
not color measurement systems or instruments) [*]. CCSI agrees that nothing     
contained in this Agreement shall prevent NOVA from such development,           
manufacturing and/or selling activities provided that NOVA does not use CCSI's  
proprietary technology as defined in Exhibit C.                                 

             5. The obligations of non-use set forth in this Agreement
shall not apply to Confidential Information which (a) was publicly available at 
the time of disclosure by CCSI to NOVA, or became publicly available after the  
disclosure by CCSI to NOVA through no act or fault of NOVA, (b) was in NOVA's   
possession prior to the time of disclosure by CCSI to NOVA, otherwise than as a 
result of NOVA's breach of any legal obligation, as proven by NOVA's written    
records made prior to the time of disclosure by CCSI to NOVA, or (c) becomes    
known to NOVA through disclosure by a third party who had possession of that    
information prior to the time of disclosure by that third party to NOVA, as     
proven by that third party's written records made prior to the time of          
disclosure by that third party to NOVA and whose disclosure to NOVA is not a    
breach                                                                          

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directly or indirectly of an obligation of confidentiality owing to CCSI.       
The obligations of confidentiality set forth in this Agreement shall not apply  
to Confidential Information which (a) was publicly available at the time of     
disclosure by CCSI to NOVA, or became publicly available after the disclosure by
CCSI to NOVA through no act or fault of NOVA or (b) was in NOVA's possession    
prior to the time of disclosure by CCSI to NOVA, otherwise than as a result of  
NOVA's breach of any legal obligation, as proven by NOVA's written records made 
prior to the time of disclosure by CCSI to NOVA.                                

                  6. The obligations of non-use and confidentiality set forth in
this Agreement shall not apply to Derivative Confidential Information which (a) 
was publicly available at the time of development by NOVA or became publicly    
available after the development by NOVA through no act or fault of NOVA, or (b) 
was in NOVA's possession prior to the date of this Agreement, as proven by      
NOVA's written records made prior to the date of this Agreement.                

                7. NOVA agrees that (1) all right, title and interest in and
to any and all inventions, works of authorship, discoveries, developments and   
improvements based upon, derived from, or related to the Confidential           
Information disclosed by CCSI to NOVA pursuant to this Agreement or the         
Derivative Confidential Information made, conceived, reduced to practice or     
developed by NOVA during the course of its work for CCSI (the "Inventions")     
shall be and will remain the property of CCSI and any and all patent            
applications, patents, trademarks or copyrights (whether or not considered to be
work for hire) thereon shall be owned exclusively by CCSI and (2) NOVA hereby   
assigns and agrees to assign to CCSI the entire right, title and interest in    
each Invention, agrees to obtain an assignment therefrom each employee, agent or
subcontractor involved and (3)                                                  

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NOVA shall assist CCSI, at CCSI's expense but without additional compensation,  
to apply for, prosecute, obtain, perfect, maintain, defend and enforce such     
patent applications, patents, trademarks and copyrights and shall execute       
assignments to CCSI of all right, title and interest in and to all such         
inventions, works of authorship, discoveries, developments, improvements, patent
applications, patents, trademarks and copyrights.                               

               8. NOVA agrees that it has no right, title or interest with
respect to the Confidential Information disclosed by CCSI to NOVA pursuant to   
this Agreement or the Derivative Confidential Information developed by NOVA, and
agrees to disclose to CCSI promptly, fully and in writing, any and all          
inventions, works of authorship, data, material information, enhancements,      
discoveries, developments and improvements based upon, derived from, or related 
to the Confidential Information disclosed by CCSI to NOVA pursuant to this      
Agreement or the Derivative Confidential Information made, conceived, reduced to
practice or developed by NOVA or any of its employees, subcontractors or agents 
during the course of its work for CCSI.                                         

                9. Nothing herein contained shall be construed as a grant by
CCSI to NOVA of any license or right, express or implied, with respect to the   
Confidential Information disclosed by CCSI to NOVA pursuant to this Agreement or
the Derivative Confidential Information developed by NOVA.                      

              10. In the event that NOVA is requested or becomes legally
compelled (by oral questions, interrogatories, requests for information or      
documents, subpoena, criminal or civil investigative demand or similar process) 
to disclose any Confidential Information or Derivative Confidential Information 
(including disclosures to regulatory agencies such as the FDA), NOVA will, to   
the extent it is aware of such fact, provide                                    

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CCSI with prompt written notice of such requirement so that CCSI may seek (with 
the cooperation of NOVA) a protective order or other appropriate remedy and/or  
waive compliance with the provisions of this Agreement. In the event that such  
protective order or other remedy is not obtained, NOVA shall furnish only that  
portion of the Confidential Information or the Derivative Confidential          
Information which it is advised by written opinion of counsel of its choice it  
is legally required to furnish and will exercise its reasonable legal efforts to
obtain reliable assurance that confidential treatment will be accorded to the   
Confidential Information or the Derivative Confidential Information so          
furnished.                                                                      

       11. The obligations of confidentiality, non-use and
non-competition set forth in this Agreement may be enforced at any time and any 
material violation or threatened violation thereof will cause irreparable injury
and incalculable harm to CCSI and therefore CCSI shall, in addition to any other
rights and remedies which it may have, be entitled to preliminary and permanent 
injunctive or other equitable relief without the posting of any bond.           

                 12. This Agreement and the September 16, 1998 Confidentiality
Agreement between the parties constitute the entire understanding of the parties
with respect to the subject matter hereof and shall not be modified or waived,  
in whole or in part, except by a written agreement signed by both parties.      

       13. The terms and conditions of this Agreement, the
Manufacturing Agreement dated as of November 3, 1998, and the existence of the  
discussions between the parties are confidential and shall not be disclosed by  
NOVA, except as may be provided elsewhere in this Agreement, without the written
consent of CCSI.                                                                

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                14. This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts, without reference to 
its choice of law.                                                              

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

Chromatics Color Sciences                                                       

International, Inc.                      NOVA Biomedical Corp.                  

By: ____________________________         By: _____________________________      
Name:  Darby S. Macfarlane               Name:    John Wallace                  
Title:   Chief Executive Officer         Title:   Chief Operating Officer       

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 EXHIBIT C

1.       CCSI's Proprietary color measuring instruments and system for the      
non-invasive measurement of bilirubin.                        

2.       CCSI's proprietary computer software in any form (including its        
   contents, its source and object codes, hard copies and printouts)
     whether stored on magnetic means, optical means or any other means,
e.g., disc, flash ram card, chip.                             

3.       CCSI's proprietary specification of the calibration and verification   
standards and their mode of operation.                        

4.       CCSI's proprietary specification of each [*].                          

5.       CCSI's proprietary specification including [*] and their mode of       
operation.                                                    

6.       CCSI's proprietary specifications of the sensor for the [*] devices and
its mode of operation.                                        

7.       CCSI's proprietary color measuring [*] parts or components from CCSI's 
supplier.                                                     

Provided however, this Exhibit C does not include [*].        

 1

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K/A’ Filing		Date		First		Last			Other Filings
Filed on:		1/28/00		3					8-K/A,  S-3/A
For Period End:		11/3/98		1		33			8-K
		9/16/98		21		33
									List all Filings