<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>ex-10_1.txt
<DESCRIPTION>SHAREHOLDERS AGREEMENT
<TEXT>
                                  Exhibit 10.1

                             SHAREHOLDERS AGREEMENT


         This  Shareholders  Agreement (the "Agreement") is made as of August 1,
2001,  by and among W.R.  Hambrecht/QIC,  LLC, a  California  limited  liability
company ("WRH/QIC"),  Philips Electronics North America Corporation,  a Delaware
corporation ("PENAC") (collectively, the "Shareholders"), and W.R. Hambrecht/QIC
Management,  LLC, a California  limited liability  company (the "Manager"),  and
such other  persons who  execute  this  Agreement  from time to time and thereby
agree to be bound by this Agreement as Shareholders.

                                    RECITALS

A. Each of the  Shareholders  is now or may become the owner of shares of voting
stock of QIC Holding  Corp.,  a California  corporation,  or any successor  (the
"Holding Company").


B. As a material  inducement  to the  purchase  by WRH/QIC  and  Hewlett-Packard
Company,  a  Delaware  corporation  ("HP"),  of their  respective  shares in the
Holding  Company,  WRH/QIC,  HP and  the  Manager  entered  into a  Shareholders
Agreement,  dated as of May 27, 1998 (the  "Original  Shareholders  Agreement"),
with  respect to the voting and  transfer of the shares in the  Holding  Company
held by WRH/QIC and HP,  including  any other  shares of the  Holding  Company's
capital stock which might  thereafter be owned by WRH/QIC and HP (the "Shares"),
for the purpose of  protecting  WRH/QIC and HP, as well as providing  continuity
for the Holding  Company's  business in the event of the  occurrence  of certain
events discussed in the Original Shareholders Agreement.

C. WRH/QIC is organized  under the terms of an Operating  Agreement  dated as of
April 22, 1998 (the  "Operating  Agreement").  As a material  inducement  to the
purchase  by HP of its shares in the  Holding  Company,  the  members of WRH/QIC
agreed  pursuant  to the terms of the  Operating  Agreement  to  restrict  their
ability to  transfer  their  interests  in WRH/QIC in any manner  which would be
inconsistent  with or in  violation  of the  terms of the  Original  Shareholder
Agreement and the Manager agreed to enforce such restrictions.

D. On  August  12,  1999,  HP and  Agilent  Technologies,  Inc.,  at that time a
wholly-owned subsidiary of HP ("Agilent"),  entered into a Master Separation and
Distribution  Agreement  under  which HP  transferred  to  Agilent,  pursuant to
Section 2.6 of the Original  Shareholders  Agreement,  its shares in the Holding
Company.

E. On November  17,  2000,  Agilent and  Koninklijke  Philips  Electronics  N.V.
("KPNV"),  entered into an Asset Purchase  Agreement which,  among other things,
provided  for the  transfer  by  Agilent  to KPNV  or one of its  affiliates  of
Agilent's shares in the Holding  Company.  In accordance with Section 2.3 of the
Original Shareholders  Agreement,  Agilent provided WRH/QIC with a First Refusal
Notice of the anticipated transfer and WRH/QIC declined to exercise the right of
first refusal related thereto.

F. PENAC is an indirect, wholly-owned subsidiary of KPNV.

G To complete the transfer of shares from  Agilent to PENAC in  accordance  with
Section 7 of the Original Shareholder Agreement, WRH/QIC and PENAC now desire to
enter into this Shareholders Agreement.

                  NOW, THEREFORE, the Shareholders agree as follows:

1.  COMPOSITION  OF BOARD OF  DIRECTORS.  The Board of  Directors of the Holding
Company shall consist of five (5) members.  Each of the Shareholders  shall vote
all of its shares now or hereafter  owned by it so that each of the following is
elected as a director of the Holding Company: (i) three (3) nominees of WRH/QIC;

<PAGE>


(ii) one (1) nominee of PENAC; and (iii) one (1) nominee of Zymed,  Incorporated
("Zymed").  Prior to each election of directors of the Holding Company, WRH/QIC,
PENAC,  and Zymed shall  designate their  respective  nominees in writing to the
Holding  Company.  The Holding Company shall promptly notify the Shareholders of
these nominees.

         1.1 NUMBER OF DIRECTORS. The Shareholders agree that they will not vote
to increase the number of directors of the Holding Company beyond seven (7), nor
below five (5),  without the consent of PENAC,  which shall not be  unreasonably
withheld.

2.  RESTRICTION  ON CERTAIN  TRANSFERS  OF  CONTROL.  Except as provided in this
Agreement,  no Shareholder  shall  voluntarily  sell,  assign,  transfer,  give,
bequeath,  donate or  otherwise  dispose of, or pledge,  deposit,  or  otherwise
encumber, in any manner, any of the Shares.

         2.1 PENAC'S RIGHT OF FIRST REFUSAL.  Except as provided in Section 2.4,
neither the Holding Company,  the Operating  Company,  WRH/QIC nor any member of
WRH/QIC,  shall enter into any  transaction  (or series of  transactions)  which
would  constitute a Transfer of Control  Transaction (as  hereinafter  defined),
unless at least twenty (20) days prior to entering into any such transaction (or
series of related transactions) (hereinafter a "Proposed Transaction"), PENAC is
notified in writing by the Holding Company,  the Operating Company,  WRH/QIC, or
the member of WRH/QIC,  as the case may be (the  "Relevant  Seller(s)"),  of any
such Proposed  Transaction  (the "First Refusal  Notice") and is given the first
opportunity to enter into such Proposed  Transaction with the Relevant Seller(s)
(the "Right of First Refusal") in the manner  specified  below.  For purposes of
this Agreement, "Transfer of Control Transaction" shall mean (i) a sale or other
transfer of all or substantially all of the assets of Quinton Instrument Company
or any successor  (the  "Operating  Company") or the Holding  Company;  (ii) any
merger, consolidation, refinancing, or recapitalization that changes the control
of the  Operating  Company or Holding  Company;  (iii) one or more  transfers of
voting stock of the Holding  Company which taken alone or together result in any
entity  (including  any  "group"  within the  meaning  of  Section  13d-5 of the
Securities  Exchange  Act of 1934)  other  than  WRH/QIC  or any of the  initial
members of WRH/QIC (other than Zymed),  directly,  indirectly,  beneficially  or
otherwise  owning more than fifty percent (50%) of the outstanding  voting stock
of the Holding Company; or (iv) one or more transfers of membership interests in
WRH/QIC  (the  "Units"),  which  taken  alone or  together  result in any entity
(including  any  "group")  other than  WRH/QIC or any of the initial  members of
WRH/QIC  (other than Zymed),  directly,  indirectly,  beneficially  or otherwise
owning more than fifty percent (50%) of the Units of WRH/QIC.

                  2.1.1 FIRST REFUSAL  NOTICE.  The First  Refusal  Notice shall
specify  the  identity  of  the  potential  acquiror(s)  (the  "Acquiror"),  the
structure  of the  Proposed  Transaction,  the  interests  that would be sold or
otherwise  transferred,  the  price to be paid for such  interests,  the form of
consideration,  the terms of  payment  and the time  within  which the  Relevant
Seller(s)  proposes to enter into any  agreement  to  consummate  such  Proposed
Transaction, and all other material terms and conditions upon which the Relevant
Seller(s)  proposes to enter into the Proposed  Transaction  (the "First Refusal
Terms"),  subject to the customary  conditions.  The First Refusal  Notice shall
include  a  representation  from the party  providing  the  notice  that (i) the
Acquiror  has  entered  into a  non-binding  term  sheet  or  other  non-binding
preliminary  written  document  with the  Relevant  Seller(s)  to enter into the
Proposed  Transaction  on the First Refusal Terms;  (ii) to its  knowledge,  the
Acquiror is prepared to  consummate  the  Proposed  Transaction,  subject to the
satisfaction of customary conditions; (iii) the Relevant Seller(s) has no reason
to believe that the Acquiror will not be able to obtain adequate financing;  and
(iv) the  Relevant  Seller(s)  have a good  faith  intention  to enter  into the
Proposed Transaction,  subject to the satisfaction of customary  conditions,  on
the First Refusal Terms.

                  2.1.2  EXERCISE  OF OPTION.  The First  Refusal  Notice  shall
constitute an irrevocable offer to PENAC to enter into such Proposed Transaction
with the Relevant  Seller(s) on the First  Refusal  Terms or terms  specified by
PENAC which  include cash to the same extent as the First  Refusal Terms and are
in other respects  economically  equivalent (i.e., PENAC may pay cash in lieu of
stock or other  consideration) to the First Refusal Terms (the "PENAC Equivalent
Terms"). The Right of First Refusal shall be exercisable by notice from PENAC to
the Relevant  Seller(s) within twenty (20) days of receipt by PENAC of the First
Refusal  Notice (the  "Option  Period").  Such  notice from PENAC shall  specify
PENAC's Equivalent Terms, if any. If PENAC exercises the Right of First Refusal,
then the Relevant  Seller(s)  shall enter into such  Proposed  Transaction  with
PENAC on the First Refusal Terms,  or, if such terms are specified by PENAC,  on
PENAC's  Equivalent  Terms  and the  Holding  Company,  the  Operating  Company,
WRH/QIC,  and the  members of WRH/QIC  shall each use its best  efforts and take
necessary  actions to permit PENAC to complete the Proposed  Transaction  on the


                                       2

<PAGE>


First Refusal Terms. The closing of such Proposed  Transaction  shall take place
on the second  business  day after  PENAC and all other  relevant  parties  have
obtained  or  made  all  consents,  approvals,  orders,  licenses,  permits  and
authorizations  of,  and  registrations,  declarations  and  filings  with,  any
governmental  authority or any other  person  required to be obtained or made in
connection with the consummation of such Proposed  Transaction,  but not earlier
than twenty (20) days following the date PENAC gives notice exercising its Right
of First Refusal,  nor more than one-hundred and twenty (120) days from the date
of that notice.

                  2.1.3 EXPIRATION OF OPTION PERIOD.  If PENAC does not give the
Relevant Seller written notice of PENAC's desire to exercise this Right of First
Refusal within the Option Period, PENAC's Right of First Refusal shall terminate
and the Relevant Seller(s) may thereafter  consummate the Proposed  Transaction,
but only to the purchaser identified in the First Refusal Terms and on terms and
conditions not  substantially  less favorable to the Relevant  Seller than those
contained  in the Term  Sheet and  provided  that the sale  must be  consummated
within one hundred and twenty (120) days  following the expiration of the Option
Period.  For purposes  hereof,  a downward  adjustment of more than five percent
(5%) in the purchase price to be paid at closing for the Offered Shares shall be
deemed  substantially less favorable,  but a downward adjustment of five percent
(5%) or less shall not be deemed substantially less favorable.

                  2.1.4 TERMINATION ON INITIAL PUBLIC OFFERING. PENAC's Right of
First Refusal shall automatically terminate in the event of any firm commitment,
underwritten  initial public  offering of common stock of the Holding Company or
the  Operating  Company  (an  "IPO") at a price per share of at least  $2.00 (as
adjusted to reflect subsequent  combinations,  stock splits, stock dividends, or
other  recapitalizations)  and either (i) with  aggregate  proceeds  of at least
$10,000,000, or (ii) in an IPO where PENAC sells (or has the right to but elects
not to sell) shares of the Holding  Company or Operating  Company  which provide
aggregate proceeds to PENAC of at least $2,400,000.

         2.2 WRH/QIC RIGHT OF FIRST REFUSAL.  Except as provided in Section 2.4,
if PENAC desires to sell, assign,  transfer,  or otherwise dispose of any of its
shares of the Holding Company,  PENAC shall provide WRH/QIC with a First Refusal
Notice at least  twenty (20) days prior to entering  into such  transaction  and
WRH/QIC shall have a Right of First  Refusal with respect to the proposed  sale,
assignment,  transfer or disposition,  substantially as provided in Section 2.1.
For  purposes of this  Section,  all  references  to "PENAC" in  Sections  2.1.1
through  2.1.3 shall be read as "WRH/QIC",  and all  references to the "Relevant
Seller" shall be read as "PENAC."

                  2.2.1 TERMINATION ON INITIAL PUBLIC OFFERING.  WRH/QIC's Right
of First Refusal shall automatically terminate upon termination of PENAC's Right
of First Refusal.

         2.3  CO-SALE.  Except  as  provided  in  Section  2.4,  if,  after  the
consummation  of the  transaction  set forth in the First  Refusal  Notice,  the
transferee (or any "Group") in such transaction will own more than fifty percent
(50%) of the outstanding  voting stock of the Holding Company or more than fifty
percent (50%) of the Units of WRH/QIC,  PENAC shall have the right,  but not the
obligation,  to sell  its  shares  on the same  terms  and  conditions  as those
applicable  to WRH/QIC,  or the member of  WRH/QIC,  as  specified  in the First
Refusal  Notice,  including  the  same  time of  sale  and  the  same  per-share
consideration.  If the  Transfer of Control  Transaction  set forth in the First
Refusal Notice  involves a sale of Units of WRH/QIC (rather than shares of stock
of the Holding Company), and if PENAC wishes to exercise its co-sale right, then
PENAC shall have the right to exchange  with  WRH/QIC  that number of Shares for
that  number of Units in WRH/QIC  that  would  allow  PENAC to achieve  the same
economic  result as  described  above in the  context of a sale of Shares.  As a
condition to making such exchange,  and as promptly  thereafter as  practicable,
PENAC shall sell its Units on the same terms and conditions as applicable to the
member(s) of WRH/QIC that elected to sell their Units,  including  the same time
of sale and same per-Unit consideration,  but not subject to any fees, costs, or
carrying  interests  which the  members of WRH/QIC  may pay under the  Operating
Agreement; provided, however, that if the sale transaction is not consummated or
if PENAC does not sell its Units in such sale transaction, then PENAC's exchange
of Shares for Units shall be rescinded ab initio.


                                       3

<PAGE>


                  2.3.1  EXERCISE OF CO-SALE  RIGHT.  In order to  exercise  its
rights  under this  Section  2.3,  PENAC shall give  written  notice  thereof to
WRH/QIC and the Relevant  Seller  within  twenty (20) business days from PENAC's
receipt of the First Refusal  Notice,  which notice shall either (i) specify the
number of shares that PENAC intends to sell, or (ii) if applicable,  specify the
number of shares that PENAC  intends to  contribute  to WRH/QIC in exchange  for
Units to be sold in the  transaction.  No sales of shares or Units  shall  occur
until the expiration of such twenty (20) business day period.  If the sum of the
number of  shares  or Units to be sold by  WRH/QIC,  PENAC  and the  members  of
WRH/QIC pursuant to the exercise of these "tag-along"  rights exceeds the number
of shares the  purchaser is willing to buy, then WRH/QIC shall adjust the number
of shares or Units to be sold by  WRH/QIC,  PENAC and the  members of WRH/QIC to
ensure  that the ratio of the number of shares or Units  proposed  to be sold by
WRH/QIC,  or the members of  WRH/QIC,  to the ratio of shares  actually  sold by
WRH/QIC,  or the  members  of  WRH/QIC,  shall be equal to the ratio for  PENAC.
WRH/QIC shall provide in its Operating Agreement that it has the right to adjust
the number of Units sold by its members to comply with this Section 2.3.

         2.4 PERMITTED TRANSFERS.  Notwithstanding any of the provisions of this
Agreement,  (i) any member of WRH/QIC may (a)  transfer  its Units in WRH/QIC to
other initial  members of WRH/QIC,  or to one or more trusts  established by the
member for estate or succession  planning purposes;  or (b) pledge such Units as
collateral security to financial  institutions or other non-operating  companies
in  accordance  with  Section  5 of  this  Agreement;  provided,  however,  that
transfers  can be made to Zymed only as long as Zymed holds  (whether  directly,
indirectly, beneficially, or otherwise) less than 19% of WRH/QIC, and (ii) PENAC
may  transfer  its shares in the  Holding  Company to KPNV or to any one hundred
percent (100%) (directly or indirectly) owned subsidiary of KPNV.

         2.5  MANAGER  OBLIGATION.  The  Manager  covenants  that  it  (and  any
successor)  shall not permit the members of WRH/QIC to transfer  any interest in
WRH/QIC in any way which is  inconsistent  or in conflict with the provisions of
this Agreement or the Operating Agreement.

3. INTERESTED PARTY TRANSACTIONS.

         3.1 INTERESTED  PARTY.  For the purposes of this Agreement,  the phrase
"Interested  Party" shall mean PENAC,  Zymed, W.R. Hambrecht & Co., LLC ("WRH"),
WRH/QIC and their respective employees, affiliates, and investors.

         3.2  SIGNIFICANT  TRANSACTIONS.  Before  the  Holding  Company  or  the
Operating  Company may enter into any transaction with an Interested Party which
would under California corporate law require a shareholder vote, the transaction
shall have been  approved  by the Board of  Directors  at a meeting of the Board
held on notice to PENAC's  nominee  director and the Board shall have found that
the terms and conditions of such proposed  transaction are not less favorable to
the Holding Company or the Operating Company,  as the case may be, than could be
obtained  on  an   arm's-length   basis  from  unrelated   third  parties.   If,
notwithstanding Board approval, PENAC believes that the terms of the transaction
are more favorable to the  Interested  Party than would have been obtained on an
arm's-length  basis,  PENAC shall notify the Board within five (5) business days
after the Board's  approval of the transaction and PENAC may require the company
to  submit  the  proposed  transaction  to an  independent  investment  bank  or
independent public accountants of recognized  national standing (the "Neutral").
The Neutral  shall review the proposed  transaction  and shall decide as soon as
possible,  and in any event  within  thirty (30) days,  whether the terms of the
proposed  transaction are more favorable to the Interested Party than would have
been obtainable in an "arms' length" transaction. The proposed transaction shall
not proceed if the Neutral  determines  it is more  favorable to the  Interested
Party than would have been  obtainable in an "arms' length"  transaction  unless
its terms are amended to satisfy the Neutral's  determination of what provisions
were less than "arms' length."

         3.3 SALARY AND  COMPENSATION  ISSUES.  Any salary,  fee or compensation
matter (other than  reimbursement of travel expenses of directors) which relates
to any  employee,  consultant  or board  member of the  Holding  Company  or the
Operating Company who is an employee, consultant, director or Manager in WRH/QIC
or WRH (or in any  entity  which  is  controlled  by  WRH/QIC  or WRH,  or which
controls  WRH/QIC or WRH), or an employee,  consultant,  or director of PENAC or
Zymed, shall require the unanimous consent of the Board of Directors;  provided,
however,  that the  limitations  in this  Section  3.3  shall  not  apply to any
individual  who is  employed  primarily  by,  or on a  full  time  basis  by the
Operating Company.


                                       4

<PAGE>


         3.4 AGREEMENTS WITH INTERESTED  PARTIES.  Except as provided in Section
3.2, before the Holding  Company or Operating  Company enters into any agreement
with an Interested  Party, it shall have been approved by the Board of Directors
of the Holding Company at a meeting of the Board held on notice to PENAC's board
nominee  and at which  the  interest  of any  director  has been  disclosed.  No
director shall be disqualified  from voting on the transaction by reason of such
interest. If,  notwithstanding Board approval,  PENAC believes that the terms of
the  transaction are more favorable than would have been obtainable in an "arms'
length" transaction, PENAC shall notify the Board within five (5) days after the
Board's  approval of the transaction and PENAC may require the company to submit
the proposed  transaction to the Neutral.  The Neutral shall review the proposed
transaction and shall decide as soon as possible, and in any event within thirty
(30) days,  whether the terms of the proposed  transaction are more favorable to
the  Interested  Party  than  would have been  obtainable  in an "arms'  length"
transaction.  If the Neutral  decides  that the terms are more  favorable to the
Interested   Party  than  would  have  been  obtainable  in  an  "arms'  length"
transaction,  then the proposed  transaction  shall not proceed unless its terms
are amended to satisfy the Neutral's  determination of what provisions were less
than "arms' length."


4.       PLEDGES, HYPOTHECATIONS AND OTHER ENCUMBRANCES.

         4.1 SHARES OF THE  HOLDING  COMPANY.  Neither  Shareholder  may pledge,
hypothecate, or otherwise encumber its shares in the Holding Company as security
for any debt  without the consent of the other  Shareholder  (which shall not be
unreasonably  withheld);  provided,  however,  that  either  Shareholder  can so
pledge,  hypothecate,  or  otherwise  encumber  its  shares in  connection  with
obtaining financing for the Operating Company from a financial institution.

         4.2  INVESTORS  IN  WRH/QIC.  WRH/QIC  shall  provide in its  Operating
Agreement  that no member of  WRH/QIC  may  pledge,  hypothecate,  or  otherwise
encumber its Units unless the secured creditor has agreed that, prior to selling
any or all of such Units in satisfaction of the debtor member's obligation, such
Units  shall be  offered  to first to  WRH/QIC,  then to the  other  members  of
WRH/QIC,  and  finally to HP to the extent that the Units are not  purchased  by
WRH/QIC or its  members.  If PENAC buys Units of  WRH/QIC,  those Units shall be
subject to all of the provision in the Operating  Agreement of WRH/QIC,  but not
subject to any fees, costs or carrying interest which the members of WRH/QIC may
pay under the Operating Agreement.

5.  TERMINATION OF AGREEMENT.  This Agreement shall terminate on the earliest of
the written  agreement of all parties  and,  except as necessary to preserve any
causes  of  action  arising  prior to such  termination,  such  time as only one
Shareholder remains.

6. LEGEND ON SHARES.  Each  Shareholder  shall have  placed on the  certificates
representing its shares the following words:

         SALE,  TRANSFER,  HYPOTHECATION,  ENCUMBRANCE,  OR  DISPOSITION  OF THE
         SHARES  REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY THE PROVISIONS
         OF A  SHAREHOLDERS  AGREEMENT  AMONG THE  SHAREHOLDERS  DATED AUGUST 1,
         2001. ALL PROVISIONS OF THE SHAREHOLDERS  AGREEMENT ARE INCORPORATED BY
         REFERENCE IN THIS CERTIFICATE. A COPY OF THE AGREEMENT MAY BE INSPECTED
         AT THE PRINCIPAL  OFFICE OF QIC HOLDING  CORP. AT 550 15TH STREET,  SAN
         FRANCISCO, CALIFORNIA, 94103.

A copy of this  Agreement  shall be  delivered  to the  secretary of the Holding
Company.  Each  Shareholder  shall  have the right to vote his or her shares and
receive the dividends  paid on them until the shares are sold or  transferred as
provided in this Agreement.

7. RESTRICTIONS ON TRANSFEREES.  Each transferee or any subsequent transferee of
shares in the Holding  Company,  or any interest in such shares,  shall hold the
shares or interest in the shares subject to all provisions hereof and shall make
no transfers except as provided in this Agreement.  Transfer of the shares shall
not be entered on the books of the Holding Company until an amended copy of this
Agreement has been executed by the prospective transferee. Failure or refusal to
sign such an amended  copy of this  Agreement  shall not relieve any  transferee
from any obligations under this Agreement.  Any purported  transfer in violation
of any provision of this Agreement shall be void ab initio and shall not operate
to transfer any right, title or interest to the purported transferee.

8.       MISCELLANEOUS PROVISIONS.

         8.1.  FURTHER ACTS. Each party to this Agreement  agrees to perform any
further  acts and  execute  and deliver  any  documents  that may be  reasonably
necessary to carry out the provisions of this Agreement.

         8.2.  AMENDMENTS.  The  provisions  of this  Agreement  may be  waived,
altered,  amended,  modified,  or  repealed,  in whole  or in part,  only on the
written consent of all parties to this Agreement.


                                       5

<PAGE>


         8.3.  SUCCESSORS AND ASSIGNS.  This  Agreement  shall be binding on and
enforceable by and against the parties to it and their respective  heirs,  legal
representatives, successors, and assigns.

         8.4. ENFORCEABILITY.  All provisions of this Agreement are separate and
divisible,  and if any part is held  invalid,  the  remaining  provisions  shall
continue in full force and effect.

         8.5. NOTICES. All notices, requests,  demands, and other communications
under this  Agreement  shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or within three business days after mailing, if mailed to the party
to whom notice is to be given,  by  first-class  mail,  registered or certified,
postage prepaid,  and properly addressed to the party at the following addresses
(or any  other  address  that a party may  designate  by  written  notice to the
others):


                           a.       If to WRH/QIC, to:

                                    W.R. Hambrecht/QIC, LLC
                                    539 Bryant Street, Suite 100
                                    San Francisco, CA 94107
                                    ATTN:  J.D. Delafield

                           b.       If to PENAC, to:

                                    Philips Medical Systems NA
                                    3000 Minuteman Road
                                    Andover, MA  01810
                                    ATTN:  S. Rusckowski

                                    With a copy to:

                                    Philips Medical Systems NA
                                    3000 Minuteman Road, MS230
                                    Andover, MA  01810
                                    ATTN:  S. Freeman

                           c.       If to WRH/QIC Management, to:

                                    W.R. Hambrecht/QIC Management, LLC
                                    539 Bryant Street, Suite 100
                                    San Francisco, CA 94107
                                    ATTN:  J.D. Delafield

                           d.       If to the Holding Company, to:

                                    QIC Holding Corp.
                                    539 Bryant Street, Suite 100
                                    San Francisco, CA 94107
                                    ATTN:  J.D. Delafield

         8.6.  CHOICE OF LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of California.

         8.7.  COUNTERPARTS.  This  Agreement  may be  executed  in one or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

         8.8. ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof,  and any and
all other written or oral  agreements  existing  between the parties  hereto are
expressly cancelled.

                                       6

<PAGE>


         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date first shown above.


                                  W.R. HAMBRECHT/QIC, LLC


                                  By:    /s/ J.D. Delafield
                                       -----------------------------------------
                                  Name:    J.D. Delafield
                                         ---------------------------------------
                                  Title:
                                         ---------------------------------------

                                  PHILIPS ELECTRONICS NORTH AMERICA CORPORATION


                                  By:    /s/ Belinda W. Chew
                                       -----------------------------------------
                                  Name:    Belinda W. Chew
                                         ---------------------------------------
                                  Title:   Senior Vice President
                                         ---------------------------------------

                                  W.R. HAMBRECHT/QIC MANAGEMENT, LLC


                                  By:    /s/ J.D. Delafield
                                       -----------------------------------------
                                  Name:    J.D. Delafield
                                         ---------------------------------------
                                  Title:   Manager
                                         ---------------------------------------

</TEXT>
</DOCUMENT>
