<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>ex-10_4.txt
<DESCRIPTION>MANUFACTURER AND DISTRIBUTOR AGREEMENT
<TEXT>
                                  EXHIBIT 10.4

            ORIGINAL EQUIPMENT MANUFACTURER AND DISTRIBUTOR AGREEMENT

This document and attached exhibits establish an Agreement between Zymed, Inc.
(referred to herein as "Zymed") and Quinton Instrument Company (referred to
herein as Quinton).

Zymed desires to appoint Quinton as an authorized, exclusive Distributor of
certain medical Products, accessories and related goods ("Products") to be
supplied by Zymed, and Quinton desires to accept such appointment.

Quinton agrees to purchase and Zymed agrees to sell such Products upon the
following terms and conditions:

1.   DEFINITIONS

     a)   "Commencement Date" is July 1, 1998.

     b)   "Anniversary Date" is 12 months following the Commencement Date.

     c)   "Ordering Period" is the initial 1 month period following the
          Commencement Date and any 12 month ordering period thereafter.

     d)   "Forecasted Purchases" are the mutually agreed quantity of Products
          which Quinton plans to order during each ordering period (12 months).

     e)   "Exhibits" are documents attached to, incorporated by reference in, or
          added to this Agreement at a later date, by mutual agreement, which
          describes Products or Quinton Locations.

     f)   "Territories" are defined as follows:

          1)   "Quinton Territory" shall mean the United States, its possessions
               and Canada

          2)   "Zymed Territory" shall mean the countries of the Asia Pacific as
               set forth on Appendix A attached hereto

          3)   "Rest of World" or "ROW" shall mean all countries of the world
               other than those countries in the Quinton Territory or the Zymed
               Territory.

2.   APPOINTMENT

a.   Zymed hereby appoints Quinton as its exclusive distributor for the
     promotion, sale and support in the Quinton Territory of the products listed
     on the attached Exhibits (the "Products"), such Exhibits hereinafter
     referred to as Product Exhibits, upon the terms and conditions set forth in
     this Agreement and the Product Exhibits. Quinton accepts such appointment
     upon such terms and under such conditions. Zymed retains the exclusive
     right to promote, sell and support the Products in the Zymed Territory. The
     parties agree and acknowledge that both parties can promote, sell or
     support the Products in the ROW until such time as, by mutual agreement of
     the parties and on a country-by-country basis, the countries of the ROW are
     added to the Quinton Territory or the Zymed Territory, as applicable.

                                      -1-

<PAGE>

b.   Zymed agrees to provide existing sales literature for the Products listed
     in exhibit A. Quinton will be responsible for the creation of new sales
     literature for the Products it is promoting in the Quinton Territory. Zymed
     will contribute 30% of the cost of printing sales literature, mutually
     agreed upon, for Products listed in Exhibit A.

c.   Quinton agrees to maintain trained sales staff capable of demonstrating the
     Products. Zymed will offer, at Zymed's sole expense, and as part of Zymed's
     Distributor program, Product training and arrhythmia recognition classes.
     Quinton agrees to participate in Product training classes that are mutually
     defined and agreed upon by both parties.

d.   Zymed and Quinton agree to exert commercially reasonable efforts to
     promote, stock, merchandise, sell and support the Products to ultimate
     users of the Products. Quinton understands and agrees that Quinton's
     commitment to pre-sale and post-sale support for the Products is essential
     to Quinton's responsibility under this Agreement. Quinton agrees that the
     Purchasing Schedule set forth in the attached Product Exhibits is a
     reasonable approximate forecast of the performance to be expected from
     Quinton and that Zymed considers such standards in determining whether to
     renew this Agreement or exercise its rights under section 18 herein.

e.   Both Zymed and Quinton will exchange information on the status of inventory
     held for Quinton at Zymed's facilities. Quarterly reconciliation of the
     inventory status will be conducted by both parties. Zymed will provide
     weekly finished goods reports of all Products held for Quinton.

f.   Zymed shall provide Quinton with the same written materials (for example,
     service bulletins) that Zymed provides its own field service personnel and
     which is applicable to any of the Products. Additionally, Zymed shall
     provide to Quinton technical service updates regarding preventive
     maintenance, circumvention of bugs and notification of common failure modes
     with respect to all Products.

3.   RELATIONSHIP

a.   The relationship of Quinton to Zymed shall apply to only the Products in
     Exhibit A. This contract supersedes the OEM Agreement dated May 20, 1994
     and the Medical Products Distributor Agreement dated January 1, 1998.

b.   Any commitments Quinton makes with respect to unusual quantities, delivery
     times, a special modification, suitability of software, or suitability of
     Products to a particular hardware interface, in specific applications or
     otherwise, shall be Quinton's sole responsibility unless prior written
     authorization is obtained from Zymed.

c.   Quinton shall have no power or authority to enlarge or modify the user
     warranty defined in Section 10 or to make any warranty or commitment on
     behalf of Zymed. Quinton shall indemnify Zymed from any liability for any
     such warranty or commitment made by Quinton, unless prior written
     authorization is obtained from Zymed.

                                      -2-

<PAGE>

d.   Neither the making nor the performance of this Agreement shall be construed
     in any manner to have established a joint venture or partnership.

4.   TERM AND RENEWAL

a.   This agreement will commence on the Commencement Date and will remain in
     effect for 5 years ("Initial Term"), unless terminated as provided herein.

b.   Forecasted Purchases will be reviewed and revised, as appropriate, prior to
     each Anniversary Date. Prices will be reviewed and revised, as appropriate,
     prior to each Anniversary Date, or more frequently as provided in paragraph
     6. Any other changes for a renewal term must be mutually agreed in writing.

c.   This Agreement is renewable for an additional 5 years after the end of the
     5th year of the initial term, if mutually agreed by Quinton and Zymed.

d.   Forecasted Purchases will be based on sales commencing 07/01/98 and shall
     be calculated based on the Exhibit(s).

5.   DELIVERY

a.   Deliveries under this Agreement shall be initiated by written orders.

b.   Quinton shall comply with all Food and Drug Administration requirements
     pertaining to the Distributor of Products including reporting, tracking and
     listing as set forth in 21 CFR 800 and following.

c.   Zymed will commit to exerting its best effort towards product availability
     at the time Quinton's order is received. If Zymed fails to deliver Products
     for 30 days beyond the agreed delivery date, Quinton may cancel such orders
     at no charge and/or reduce the fixed purchasing schedule by the order
     amount.

d.   Products shipped under Quinton's shipping instructions, title and risk of
     loss and damage will pass to Quinton at Zymed's shipping dock.

e.   Zymed will ship according to Zymed standard commercial practice, second day
     delivery, at Quinton's expense, to locations as specified by Quinton.
     Quinton requested special packaging or shipping instructions must be
     mutually agreed, and charges will be billed separately to Quinton.

f.   Together with or immediately upon shipment of any Products, Zymed shall
     maintain and, if requested, provide Quinton with a copy of all test
     certifications and device history records with respect to such Products.

                                      -3-

<PAGE>

6.   PRICE AND PAYMENT

a.   The prices which Quinton shall pay Zymed for the Products purchased (net
     Quinton prices) shall be the price appearing on the Product Exhibits.

b.   Prices to Quinton will be reviewed every 3 months to maintain a distributor
     Over All Product Gross Margins of 50% (not including Home Trak). Price
     changes will apply to future orders only. If agreement on price or
     forecasted purchases can not be obtained during these review sessions,
     either party may terminate this agreement with a 180 days written notice.
     Previously existing pricing will remain in effect for the remainder of the
     agreement if the termination option is selected.

c.   Taxes are not included in prices and will be invoiced, if applicable, as
     separate items.

d.   Payment for all orders will be due 30 days from the date of Zymed's
     invoice.

7.   MODIFICATION OF PRODUCTS

a.   All Zymed Products marketed by Quinton shall be sold only in the form as
     packaged by Zymed. Quinton shall not alter, modify, or change any Product
     or its package without Zymed's prior written consent except when necessary
     for service reasons. Zymed will not alter specifications of Products
     without prior notification.

b.   During the term of this Agreement, the parties may revise the
     Specifications by mutual written agreement. After the Effective Date, Zymed
     shall not make any material change to the Specifications without notifying
     Quinton no less than thirty (30) days prior to the effective date of such
     change. No such change shall alter Zymed's obligation to manufacture the
     Products for Quinton under this Agreement. In the event that such change
     would result in the loss of any sale by Quinton of any Product pursuant to
     an agreement between Quinton and its customer entered into prior to
     Quinton's receipt of such notice, Zymed shall honor all of Quinton's orders
     made relating to such sale. Zymed shall immediately notify (both verbally
     and in writing) if Zymed determines that any software anomalies in any of
     the Products can be traced to software provided to Quinton and/or used in
     any Quinton product.

c.   If, during the term of this Agreement Zymed makes any changes to the
     hardware and/or software configurations of its own products, including but
     not limited to any (a) algorithm enhancements for beat detection or
     arrhythmia analysis and classification, or (b) upgrades to the software
     also contained in any Product, Zymed shall notify Quinton of such changes
     no less than thirty (30) days in advance of Zymed's institution of such
     changes. In the event that (1) Quinton determines such changes would
     enhance the current features of any Product and (2) such changes do not
     constitute a new feature for which Zymed is separately charging its own
     customers Zymed shall proceed to update all Products with such changes at
     no charge to Quinton provided that Quinton shall have the right to qualify
     for acceptance any hardware substitutions that Zymed deems necessary

                                      -4-

<PAGE>

     due to obsolescence or cost reduction, such acceptance not to be
     unreasonably withheld by Quinton.

8.   ADVERTISING, TRADEMARKS AND COPYRIGHTED MATERIALS

a.   Zymed will provide, at Zymed's expense, sales literature, advertising
     materials, promotional plans, and other information. programs and sales
     support to assist Quinton in developing its own sales literature,
     advertising materials, promotional plans, and sales support to support the
     selling of the Products in the Quinton Territory.

b.   Zymed hereby grants Quinton a revocable license to use any Zymed trademark
     or trade name associated with the Produces solely in the advertisement and
     promotion of the Products during the term of this Agreement. Except as
     provided in this paragraph, Quinton shall have no right, title or interest
     in or to any patent, trademark or trade name belonging to Zymed.

c.   Quinton shall advertise, promote, market, and sell the Products either
     separately or as part of other products under any of its trademarks
     (including, without limitation, Quinton(R), HolterWorks(TM), and
     HolterWorks Plus(TM)), copyright, tradename, or logo, whether registered or
     unregistered. Zymed shall have no right, title, or interest in or to any
     such trademark, copyright, tradename or logo. So long as Quinton or any
     Affiliate of Quinton shall have any interest in any such trademark,
     copyright, tradename, or logo, whether registered or unregistered, whether
     as proprietor, owner, or licensee in any country of the world, Zymed shall
     not adopt, use, apply for registration, register or own such trademark,
     copyright, tradename, or logo, or any such item confusing similar thereto
     in any country of the world, or take any action which, in Quinton sole
     opinion, weakens or undermines Quinton's proprietary rights.

d.   With Zymed's written consent, one copy of Zymed copyrighted materials
     (software and printed documentation) may be retained for archive purposes,
     to replace a defective copy or for program error verification by Quinton.

9.   TELEMARKETING

a.   Quinton has the option to subcontract Zymed's Telemarketing Department for
     the lead generation of Quinton products. The cost of this service is
     $7,500.00 per telemarketer, per quarter.

10.  WARRANTY

a.   The Products will be covered by a written Warranty in favor of the ultimate
     purchaser and user of such Products (the "User Warrantee") set forth in
     Exhibit B hereto. Such Products shall be referred to as the "Warranty
     Products". The User Warranty covering the Warranty Products is the only
     consumer warranty covering any Product sold herein.

                                      -5-

<PAGE>

b.   Zymed will supply a copy of the User Warranty with each Warranty Product
     sold herein. In addition, Zymed will supply Quinton with point-of-sale
     copies of the User Warranty for pre-sale disclosure to prospective users.

c.   Zymed warrants to Quinton that the Products will conform to and comply with
     all applicable Federal, State and local laws, regulations and codes.

11.  INDEMNIFICATION AND INSURANCE

a.   Zymed shall, at its expense, defend any action or claim instituted against
     Quinton and indemnify and hold harmless Quinton and its Affiliates together
     with their respective officers, directors, employees, agents, and insurers
     for any "Loss" or "Losses": All liability claims, demands, damages,
     actions, suits, and judgments instituted by third parties against each of
     the parties hereunder attributable to bodily injury, sickness, disease,
     death, injury to property, infringement of intellectual property rights or
     otherwise, including, without limitation, attorney's fees and investigation
     and other costs ("Loss") arising out of Zymed's obligations under this
     Agreement, including but not limited to any allegation that a Product is
     defectively or negligently designed, manufactured or tested.
     Notwithstanding the foregoing, Zymed's obligations under this Subsection
     11a shall not apply to any Loss caused by the independent negligence of
     Quinton or its employee for which Quinton shall, at its expense, defend any
     action or claim instituted against Zymed and indemnify and hold harmless
     Zymed and its Affiliates together with their respective officers,
     directors, employees, agents, and Insurers for any "loss" or "losses" as
     previously defined.

b.   In addition to Quinton's remedies for breach of the warranties set forth in
     subsection 10a and 10c hereof, Zymed shall also indemnify, defend, and hold
     harmless Quinton and its Affiliates, together with their respective
     officers, directors, employees, agents, and insurers against all Losses
     arising out of any breach of said warranties, notwithstanding the
     foregoing, Zymed's obligations under subsection 10a and 10c shall not apply
     to any Loss caused by the independent negligence of Quinton or its employee
     for which Quinton shall, at its expense, defend any action or claim
     instituted against Zymed and indemnify and hold harmless Zymed and its
     Affiliates together with their respective officers, directors, employees,
     agents, and Insurers for any "loss" or "losses" as previously defined.

c.   Zymed shall maintain, during the term of this Agreement and such additional
     periods as Quinton may reasonably request (and, in no event, for a period
     not less than five (5) years after any termination of this Agreement),
     Comprehensive General Liability Insurance, including full Products
     Liability coverage, with an insurance carrier reasonably acceptable to
     Quinton, and coverage limits of not less than $5,000,000.00 per occurrence
     and at least $5,000,000.00 aggregate coverage for claims of bodily injury
     and property damage arising out of any Loss. Such policy or policies shall
     extend coverage with respect to occurrences during a policy period,
     regardless of the dates on which claims arising from such an occurrence are
     made, and shall include Quinton as named insured in

                                      -6-

<PAGE>

     such policy or policies. Such policy or policies shall also expressly cover
     any liability Zymed may incur as an indemnitor under this Agreement.

d.   Both parties shall provide notice to the other of any Loss, whether actual
     or threatened, promptly upon receipt of notice thereof.

12.  RECALLS

a.   If either party determines that it is necessary to recall or perform a
     major field correction on any Product, it shall immediately notify the
     other party.

b.   Prior to commencing any recall or major field correction, the parties shall
     review with one another the manner in which the recall or major field
     correction is to be carried out and any instructions or suggestions of the
     applicable regulatory authorities. Zymed and Quinton shall effect the
     recall or mayor field correction in the manner agreed upon between the
     parties in as expeditious a manner as possible and in such a way as to
     cause the least disruption to the sales of any Products and to preserve the
     goodwill and reputation associated with the Products and with all other
     Products manufactured and/or distributed by and the names of Zymed, Quinton
     and their respective Affiliates.

c.   Except for recalls or major field corrections caused by the independent
     negligence of Quinton or its employees, Zymed shall: (i) Reimburse Quinton
     for all of Quinton's costs, losses and expenses incurred as a result of any
     recall or major field correction, but in no event shall Zymed be obligated
     to pay to Quinton more than Zymed received from Quinton as its price for
     the Product plus all other costs and expenses incurred by Quinton in
     connection with the recall or major field correction and the sale for the
     recalled Product and (ii) Defend, indemnify, and hold harmless Quinton and
     its Affiliates, together with their respective officers, directors,
     employees, agents, and insurers from and against all Losses arising out of
     any recall or major field correction.

13.  REPAIR OF QUINTON OWNED DEFECTIVE GOODS

a.   Zymed and Quinton agree that the procedure provided herein for return and
     repair or replacement of defective units shall be Quinton's sole and
     exclusive remedy for any claim by Quinton relating to any alleged defect or
     nonconformity in the Products sold herein. This provision shall not
     otherwise limit the rights and remedies available to Quinton and Zymed set
     forth in sections 11 or 12 hereof.

b.   After Zymed approves the return of the defective unit, Zymed will inform
     Quinton as to the return location.

c.   Zymed shall be entitled to verify the reason for the return set forth in
     the Service Information Card arid to determine at its discretion whether to
     replace (rather than repair) the unit. Zymed shall not repair or replace
     units returned for the following reason:

          i.   Damage from abuse or misuse;

                                      -7-

<PAGE>

          ii. Attempted repair by unauthorized service center;
          iii. Repossession;
          iv. Use by Quinton as demonstration units.

14.  WARRANTY AND PRODUCT SAFETY ISSUES

a.   In order to comply with regulatory bodies and to verify the warranty start
     date, Zymed will utilize the shipping information provided by Quinton to
     Zymed for all Products sold hereunder as well as for warranty Products to
     be used by Quinton as a display or demonstration system.

b.   In the event Quinton learns by any means of an incident involving
     malfunction of a Warranty Product sold by Quinton, Quinton agrees to notify
     Zymed of such incident within three (3) working days in case of serious
     injury or death, and within ten (10) working days otherwise.

c.   Quinton shall comply with all Food and Drug Administration requirements for
     distributors. See 21 CFR 807.

15.  IN-WARRANTY REPAIR

a.   Zymed will provide a thirteen (13) month warranty on Products sold to
     Quinton, with the exception of Digital Recorders which Zymed will provide a
     24 month warranty. The warranty period starts when the Products are shipped
     to Quinton's customer using the shipping date as the starting date.

b.   Field repair service and installation shall be performed by Quinton at
     Quinton's expense for all Products sold by Quinton, provided, however, that
     the Product meets the specifications set forth in Exhibit E.

c.   Products under Warranty are covered by Zymed. Quinton or its customer must
     pay for transportation, insurance, and handling charges in all cases of
     shipment of Product to Zymed for Warranty. Repaired Warranty Products will
     be returned to sender at Zymed's expense.

d.   Quinton shall be responsible for the satisfactory handling and resolution
     of complaints from its customers with Zymed's support.

16.  OUT-OF-WARRANTY REPAIR

a.   Except as provided in section 11 Quinton or its customer shall bear all
     shipping charges for out-of-warranty repairs.

b.   Repairs made by Zymed outside of the warranty period shall be billed at 70%
     of the current Zymed repair charge at the time of repair. Repairs due to
     design flaws will be done at no charge.

                                      -8-

<PAGE>

c.       All repairs will be made by an authorized factory service
         representative or authorized Zymed representative and shall be
         performed at Quinton's customer's site or, at Zymed's option, at a
         Zymed facility depending on specific Product warranty.

d.   An optional service contract will be available to Quinton or Quinton's
     customers.

e.   Yearly service repair charges will not exceed 3% of the total revenue
     generated by Quinton from the cumulative sales of the Products during prior
     years. This figure will be calculated every 12 months and a credit to
     Quinton will be issued for any excess over the 3% during the prior 12 month
     period. Not included in the repair charges calculations are: accessories,
     product configurations changes and billable field support.

17.  SAFE HARBOR REGULATIONS

a.   Quinton shall comply with all requirements of the Safe Harbor regulations
     42 CFR 1001 and following with respect to any discounts, rebates or credits
     offered to its customers.

18.  TERMINATION

a.   Either party may terminate this Agreement without cause at 5 years upon 120
     days prior written notice to the other party.

b.   If either party becomes insolvent, is unable to pay its debts when due,
     files for bankruptcy, is the subject of involuntary bankruptcy, has a
     receiver appointed, the other party may terminate this Agreement upon
     providing written notice and may cancel any unfulfilled obligations.

c.   If a party materially breaches this Agreement, and within sixty (60) days
     of notice of breach from the non-breaching party, the breaching party has
     not initiated good faith efforts to cure such breach to the reasonable
     satisfaction of the non-breaching party, then the non-breaching party may
     terminate this Agreement in writing promptly after expiration of such sixty
     (60) day period. In the event of termination under this Section 18(c),
     either party may set off any amounts owing to such party against any
     amounts owing to the other party under this or any other agreement between
     the parties.

d.   Quinton shall immediately cease to be an authorized Zymed Distributor upon
     the effective date of the termination of this Agreement. Quinton shall
     thereafter refrain from representing itself as an authorized Zymed
     Distributor and from using any Zymed trademark or trade name except as
     required to sell any unsold inventory or to honor and service commitments
     with Quinton customers.

e.   All claims of every kind thereto shall cease and there shall be nothing
     payable by either party except as may be due as a result of prior sales and
     these shall be paid as they fall due.

                                      -9-

<PAGE>

19.  NOTICE

a.   Any notices given hereunder shall be given in writing by mail to the
     addresses of the parties hereinafter set forth in below or to such other
     address for wither party as it may designate by written notice to the
     other.

20.  PATENT INDEMNITY

a.   Zymed shall, except as otherwise provided below, defend or settle any claim
     made or any suit or proceeding brought against Quinton so far as it is
     based on an allegation that any Product furnished herein infringes a patent
     or other proprietary right of a third party, if notified promptly in
     writing and given information, reasonable assistance and the sole authority
     to defend or settle same (at Zymed's expense), and Zymed shall pay all
     damages and costs, including Attorney's fees, finally awarded or reasonably
     incurred, in any such suit or proceeding against Quinton. In case said
     Product is in such suit held to infringe and the use or said Product is
     enjoined, or in the case of a settlement as referred to above, Zymed shall
     have to option at its own expense, to procure for Quinton the right to
     continue using or selling said Product, or replace same with a
     non-infringing Product; or modify same so it becomes non-infringing; or
     grant Quinton a credit for the depreciated value of said Product and accept
     return of same. The foregoing states the entire liability of Zymed for
     patent infringement by Products furnished herein.

21.  EXPORTING

a.   If Quinton exports Products Quinton assumes responsibility for complying
     with applicable laws and regulations and for obtaining required export and
     import authorizations.

22. GENERAL CONDITIONS

a.   Neither party may assign rights or obligations without prior written
     consent of the other party. Quinton shall advise Zymed of any changes in
     control of Quinton or its operating arrangement and such change shall not
     give rise to a right of termination by Zymed. Zymed shall advise Quinton of
     any changes in control of Zymed or its operating arrangement and such
     change shall not give rise to a right of termination by Quinton.

b.   Neither party's failure to exercise any of its rights under this Agreement
     will constitute or be deemed a waiver or forfeiture of those rights.

c.   Any disputes arising in connection with this Agreement will be governed by
     the laws of Washington without regards to any conflicts of law provisions
     thereof.

d.   This Agreement supersedes any previous communication, representations, or
     agreements between the parties, whether oral or written, regarding
     transactions hereunder. Zymed and Quinton's additional or different terms
     and conditions on any order or acceptance

                                      -10-

<PAGE>

     forms will not apply. This Agreement may not be changed except by an
     amendment signed by an authorized representative of each party.

e.   The obligations contained in Sections 10, 11, 12, 13, 14, 15, 16 and 19,
     will survive termination or expiration of this agreement. 15e will
     terminate 12 months following termination or expiration of this agreement

23.  APPENDIX AND EXHIBITS

     The attached Appendix and Exhibits are hereby made a part of this
     Agreement:

          Appendix A: Specific locations referred to as "Asia Pacific"

          Exhibit A:  Pricing
          Exhibit B: Warranty
          Exhibit C: Quinton Locations
          Exhibit D: Supplies
          Exhibit E: Product Specifications

Distributor:                                 Seller:

Quinton Instrument Company                   ZYMED, INC.

3303 Monte Villa Parkway                     20 North Aviador Street

Bothell, WA 98021                            Camarillo, CA 93010

/s Mark Tauscher                             /s/ Hosmel Galan
---------------------------------            ---------------------------------
Authorized Representative Signature          Authorized Representative Signature

Name:  Mark Tauscher                         Name:  Hosmel Galan

Title:  Executive V.P. Sales/Marketing       Title:  Executive V.P.

Date:  March 31, 1999                        Date:  3/9/99

                                      -11-

<PAGE>

APPENDIX A:  ASIA PACIFIC COUNTRIES - EXCLUDED

AFGHANISTAN
BANGALADESH
BHUTAN
BRUNEI
CHINA, PEOPLES REPUBLIC OF
HONG KONG
INDIA
INDONESIA
JAPAN
KOREA, SOUTH
KOREA, NORTH
MACAU
MALAYSIA
MALDIVES ISLANDS
MYANMAR
NEPAL
PAKISTAN
PHILIPPINES
SINGAPORE
SRI LANKA
TAIWAN - REPUBLIC OF CHINA
THAILAND
UZBEKISTAN
TURKMENISTAN
VIETNAM
AUSTRALIA
COOK ISLANDS
FIJI ISLANDS
NEW ZEALAND
PAPUA NEW GUINEA

                                      -12-

<PAGE>

EXHIBIT A:  PRICING

The Holter Monitoring System Products listed below are priced in accordance with
the schedules stated on this Exhibit.

ITEM                                  PRODUCT                         PRICE

*2010 Holter                          Holter Workstation              $14,000ea
HomeTrak                              Event Recorder                  $   750ea
HomeTrak (HW & SW)                    Receiving Station               $ 3,500ea
Zybit (Software License)              Server Software                 $ 3,000ea
Zybit (Software License)              Remote Software                 $ 1,000ea
Zybit (Hardware - Server)             Server Hardware & Software      $ 4,750ea
Zybit (Hardware - Remote)             Remote Hardware & Software      $ 3,400ea
*HolterWorks                          Holter Workstation              $ 9,000ea
*HolterWorks Plus                     Holter Workstation              $12,000ea
Zip Drive Option                                                      $   185ea
Jaz Drive Option                                                      $   550ea
Home Trak Plus                        EASI Event Recorder             $   750ea
HomeTrak Plus Receiving Station       Receiving Station               $ 3,500ea
*20/20                                Cassette Recorder               $   690ea
*20/20D                               Digital Recorder                $ 1,025ea
*Fax/Modem Option                                                     $   200ea
HP TraceMaster Interface                                               TBD
(TBD upon final product release)
*NT Holter                                                             TBD
(TBD upon final product release)


* Within the exclusive territories, Quinton is the only authorized dealer for
these products. All other products are non-exclusive.

HOLTER MONITORING SYSTEM PURCHASING SCHEDULE
On July 1, 1998, and subsequently, every "Anniversary Date", the Fixed
Purchasing Schedule will be reviewed and adjusted, if appropriate. The Fixed
Purchasing Schedule can be increased and/or accelerated by mutual agreement.

FIXED PURCHASING SCHEDULE*:
July 1 1998 -September 30, 1998:            20 Units
October 1, 1998 - December 31, 1998:        18 Units
January 1, 1999 - March 31, 1999:           24 Units
April 1, 1999 - June 30, 1999:              24 Units
ESTIMATED PURCHASING SCHEDULE**:
July 1, 1999 - September 30, 1999:          30 Units
October 1, 1999 - December 31, 1999:        35 Units

                                      -13-

<PAGE>

January 1, 2000 - March 31, 2000:           30 Units
April 1, 2000 - June 30, 2000:              30 Units

PAYMENT TERMS:                              Due upon reported on Manufacture Log

* The fixed purchasing schedule can be made of any mix of HolterWorks,
HolterWorks Plus, 2010 and NY Holter product. At the end of every quarter (i.e.
March 31, June 30) title to products held at Zymed's location and risk of loss
or damage to such products will pass to Quinton for any of the fixed purchasing
schedule units ordered but not shipped during that quarter.

** July 1, 1999 - June 30, 2000 is based upon the release of the NT Holter
product to QIC by June 1, 1999. Fixed Purchasing Schedule will be revised to
mutually agreed quantity in the event that NT Holter is not released per
specification by June 1, 1999.




                                      -14-

<PAGE>

                                    WARRANTY

The Zymed Product is warranted against defects in materials and workmanship for
a period of 13 months from the date of shipment (except 20/20D Recorders which
are warranted for a period of 24 months). The product is warranted to meet its
specifications per Exhibit E. During the warranty period, Zymed will, at its
option, either repair or replace Products which prove to be defective. Zymed
does not warrant that the operation of the Product's software, firmware, or
hardware shall be uninterrupted or error free. No other warranty is expressed or
implied. Zymed specifically disclaims the implied warranties of merchantability
and fitness for a particular purpose other than described herein.

                             LIMITATION OF WARRANTY

The foregoing warranty shall not apply to defects resulting from:

1.    Improper or Inadequate maintenance by buyer.
2.    Buyer-supplied software or interfacing.
3.    Unauthorized modification or misuse.
4.    Operation outside of the environment specification for the product.
5.    Improper site preparation and maintenance.





                                      -15-

<PAGE>


EXHIBIT C: QUINTON LOCATIONS

[Locations where Quinton business is conducted]

Address:
                           Quinton Instrument Company
--------------------------------------------------------------------------------
                           3330 Monte Villa parkway
--------------------------------------------------------------------------------
                           Bothell, WA 98021
--------------------------------------------------------------------------------
Phone:                     425/402-2000
      --------------------------------------------------------------------------
Fax:                       425/402-2005
    ----------------------------------------------------------------------------





                                      -16-

<PAGE>

EXHIBIT D:  SUPPLIES

<TABLE>
<CAPTION>
DESCRIPTION                                  PART #           PRICE           EXCHANGE               SUPPLIER
-----------                                  ------           -----           --------               --------
<S>                                        <C>              <C>               <C>               <C>
Laser Paper                                100000-001         $4.00              N/A                   N/A
Hookup Kit                                 101147-001         $7.00              N/A                  Zymed
Pouch w/Strap                              102066-005         $20.00             N/A               Terra Craft
Test Box                                   102980-001         $95.00             N/A                  Zymed
14" Monitor                                108010-001        $400.00             N/A                   CTX
Tape Deck Assembly                         108040-001       $2,416.00         $1,208.00               Zymed
Acquisition Board                          108050-001       $1,800.00          $900.00                Zymed
Printer Cable                              131018-001         $25.00             N/A                   N/A
Power Strip                                131021-001         $13.00             N/A                   N/A
1 Meg Module                               151006-217         $90.00             N/A                  Intel
8 Meg Module                               151006-200        $100.00             N/A                  Intel
Patient Cable                              163003-005         $28.00             N/A                 Tronomed
Waist Belt                                 164008-005         $5.60              N/A               Terra Craft
17" Monitor                                164021-018        $850.00             N/A                  Arcus
17" Monitor                                164002-045        $850.00             N/A                   CTX
Disk Controller                            164022-056         $40.00             N/A                 Worldnet
Graphite Video Card                        164022-078        $450.00             N/A              Hercules PG420
Dynamite                                   164022-079        $450.00             N/A                 Dynamite
Fax Board                                  164022-087        $170.00             N/A            Karby TMB-240 CTP
Pentium Zappa 120                          164022-200        $900.00             N/A               Zappa Board
Motherboard (486-33)*                      164022-600        $900.00             N/A              Micronics, DTK
Motherboard (486-66)*                      164022-800        $900.00             N/A              Micronics, DTK
DOS 6.2                                    164023-006         $66.00             N/A                Microsoft
Keyboard                                   164024-004         $50.00             N/A                 Fujitsu
Mouse Pad                                  164024-005         $0.00              N/A               Distributor
Mouse                                      164024-001         $50.00             N/A                Microsoft
Laser Toner Cartridge                      164025-014        $150.00             N/A             Hewlett Packard
Laser IV Plus                              164025-050       $1,400.00            N/A             Hewlett Packard
Hard Disk                                  164027-063        $300.00             N/A                  Maxtor
3.5" Floppy Disk                           164035-012         $80.00             N/A                   Teac
Intel Falsh Card (20 Meg)                  164039-020        $275.00             N/A                  Intel
Chassis (tower, bezel, cover, p.s.)        164051-001        $150.00             N/A                Am Enhance
Power Supply                               164051-050         $85.00             N/A                Am Enhance
Recorder Operators Manual                  172003-010         $17.50             N/A                  Zymed
20/20D Recorder Only                       031371-002          $925              N/A                  Zymed
20/20D Recorder w/Accessories              00365-002        $1,025.00            N/A                  Zymed
20/20 Recorder w/Accessories               000365-001        $690.00             N/A                  Zymed
Recorder Chassis                           164060-001        $325.00             N/A
Holterworks Plus Tower                     031285-005       $9,750.00            N/A                  Zymed
Holterworks Plus Tower                     031285-006       $9,750.00            N/A                  Zymed
Holterworks Plus System                    000364-004       $12,000.00           N/A                  Zymed
(Tower, 17" Monitor, Printer)
2010 Holter Tower (110 volts)              35694-001        $11,750.00           N/A                  Zymed
2010 Holter Tower (220 volts)              35694-002        $11,750.00           N/A                  Zymed
HW Tower                                   031282-005       $7,300.00            N/A                  Zymed
Laser Jet 4000                             35695-001        $1,400.00            N/A             Hewlett Packard
Laser Jet 5                                 18842019        $1,400.00            N/A             Hewlett Packard
Laser Jet 5L                                18842017         $850.00             N/A             Hewlett Packard
Card Reader                                164022-087        $170.00             N/A            Karby TMB-240 CTP
</TABLE>

                                      -17-

<PAGE>

* Does not include memory.
ORDERING SUPPLIES
Supply orders can be placed by calling Zymed at:
(800) 235-5941 - or - by contacting Zymed's e-mail address at:  zysales@zmi.com
Monday - Friday, 6:30am - 4:30pm
Pacific Standard Time




                                      -18-

<PAGE>


EXHIBIT E:  PRODUCT SPECIFICATIONS

REFER TO:

2010
DOCUMENT NUMBER                             SRS 172235-000
REVISION:                                   A

HOLTER NT
DOCUMENT NUMBER                             SRS 172285-000
REVISION:                                   --

HOLTER WORKS PLUS:                          SRS 172239-000
REVISION:                                   A





                                      -19-

</TEXT>
</DOCUMENT>
