-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 PmTK0tdEaozZh2iAnCPfsCl3WYUzG+4xBbj1YNaB6s9HTGfUBqGmD/nZbOHSyPhf
 ZCCOP/qoGU14X5XdogM2iQ==

<SEC-DOCUMENT>0000891836-03-000336.txt : 20030521
<SEC-HEADER>0000891836-03-000336.hdr.sgml : 20030521
<ACCEPTANCE-DATETIME>20030521160830
ACCESSION NUMBER:		0000891836-03-000336
CONFORMED SUBMISSION TYPE:	SC 13D/A
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20030521
GROUP MEMBERS:		PHILIPS ELECTRONICS NORTH AMERICA CORPORATION
GROUP MEMBERS:		PHILIPS HOLDING USA INC

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIAMETRICS MEDICAL INC
		CENTRAL INDEX KEY:			0000895380
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				411663185
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		SC 13D/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	005-42757
		FILM NUMBER:		03714663

	BUSINESS ADDRESS:	
		STREET 1:		2658 PATTON RD
		CITY:			ROSEVILLE
		STATE:			MN
		ZIP:			55113
		BUSINESS PHONE:		6516398035

	MAIL ADDRESS:	
		STREET 1:		2658 PATTON ROAD
		CITY:			ROSEVILLE
		STATE:			MN
		ZIP:			55113

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KONINKLIJKE PHILIPS ELECTRONICS NV
		CENTRAL INDEX KEY:			0000313216
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			P7
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		SC 13D/A

	BUSINESS ADDRESS:	
		STREET 1:		REMBRANDT TOWER AMSTELPLEIN 1
		STREET 2:		1096 HA AMSTERDAM
		CITY:			THE NETHERLANDS
		BUSINESS PHONE:		0113140791

	MAIL ADDRESS:	
		STREET 1:		REMBRANDT TOWER AMSTELPLEIN 1
		STREET 2:		1096 HA AMSTERDAM
		CITY:			THE NETHERLANDS

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILIPS ELECTRONICS N V
		DATE OF NAME CHANGE:	19930727

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILIPS NV
		DATE OF NAME CHANGE:	19910903
</SEC-HEADER>
<DOCUMENT>
<TYPE>SC 13D/A
<SEQUENCE>1
<FILENAME>sc0155.txt
<DESCRIPTION>AMENDMENT NO. 1 TO SCHEDULE 13D
<TEXT>
                                                                  CONFORMED COPY

                                                             OMB APPROVAL
                                                     ---------------------------
                                                     OMB Number:       3235-0145
                                                     Expires:  December 31, 2005
                                                     Estimated average burden
                                                     hours per response:......11
                                                     ---------------------------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  SCHEDULE 13D/A
                               (AMENDMENT NO. 1)

           INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
                   RULE 13D-1(a) AND AMENDMENTS THERETO FILED
                           PURSUANT TO RULE 13D-2(a).

                            DIAMETRICS MEDICAL, INC.
- --------------------------------------------------------------------------------
                                (Name of Issuer)

                     COMMON STOCK, PAR VALUE $0.01 PER SHARE
- --------------------------------------------------------------------------------
                         (Title of Class of Securities)

                                   252532 10 6
- --------------------------------------------------------------------------------
                                 (CUSIP Number)

                                 BELINDA W. CHEW
                  PHILIPS ELECTRONICS NORTH AMERICA CORPORATION
                           1251 AVENUE OF THE AMERICAS
                            NEW YORK, NEW YORK 10020
- --------------------------------------------------------------------------------
            (Name, Address and Telephone Number of Person Authorized
                     to Receive Notices and Communications)

                                 April 10, 2003
- --------------------------------------------------------------------------------
             (Date of Event which Requires Filing of This Statement)

If the filing person has previously  filed a statement on Schedule 13G to report
the  acquisition  which is the subject of this  Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].

NOTE:  Schedules  filed in paper format shall include a signed original and five
copies of the  schedule,  including  all  exhibits.  See Rule 13d-7(b) for other
parties to whom copies are to be sent.

*The  remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 (the "Act") or otherwise  subject to the liabilities of that section of the
Act but shall be subject to all other  provisions of the Act  (however,  see the
Notes).

         PERSONS WHO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
         IN THIS  FORM ARE NOT  REQUIRED  TO  RESPOND  UNLESS  THE FORM
         DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER.

SEC 1746 (03-00)

<PAGE>

                                  SCHEDULE 13D/A

- --------------------------------------------------------------------------------
CUSIP No. 252532 10 6                                       Page 2 of 18 Pages
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1    NAMES OF REPORTING PERSONS
     I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS

     KONINKLIJKE PHILIPS ELECTRONICS N.V.
- --------------------------------------------------------------------------------
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [_]
                                                                         (b) [X]
- --------------------------------------------------------------------------------
3    SEC USE ONLY
- --------------------------------------------------------------------------------
4    SOURCE OF FUNDS*

     WC
- --------------------------------------------------------------------------------
5    CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
     PURSUANT TO ITEMS 2(d) OR 2(e)                                          [_]
- --------------------------------------------------------------------------------
6    CITIZENSHIP OR PLACE OF ORGANIZATION

     THE NETHERLANDS
- --------------------------------------------------------------------------------
                  7    SOLE VOTING POWER

                       1,809,524
 NUMBER OF        --------------------------------------------------------------
  SHARES          8    SHARED VOTING POWER
BENEFICIALLY
 OWNED BY              0
   EACH           --------------------------------------------------------------
 REPORTING        9    SOLE DISPOSITIVE POWER
  PERSON
   WITH                1,809,524
                  --------------------------------------------------------------
                  10   SHARED DISPOSITIVE POWER

                       0
- --------------------------------------------------------------------------------
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     1,809,524
- --------------------------------------------------------------------------------
12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
     CERTAIN SHARES*                                                         [_]
- --------------------------------------------------------------------------------
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     6.66%
- --------------------------------------------------------------------------------
14   TYPE OF REPORTING PERSON*

     CO/HC
- --------------------------------------------------------------------------------

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!
          INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
       (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION


<PAGE>

                                  SCHEDULE 13D/A

- --------------------------------------------------------------------------------
CUSIP No. 252532 10 6                                       Page 3 of 18 Pages
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1    NAMES OF REPORTING PERSONS
     I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS

     PHILIPS HOLDING USA INC.
- --------------------------------------------------------------------------------
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [_]
                                                                         (b) [X]
- --------------------------------------------------------------------------------
3    SEC USE ONLY
- --------------------------------------------------------------------------------
4    SOURCE OF FUNDS*

     WC
- --------------------------------------------------------------------------------
5    CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
     PURSUANT TO ITEMS 2(d) OR 2(e)                                          [_]
- --------------------------------------------------------------------------------
6    CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARE
- --------------------------------------------------------------------------------
                  7    SOLE VOTING POWER

                       1,809,524
 NUMBER OF        --------------------------------------------------------------
  SHARES          8    SHARED VOTING POWER
BENEFICIALLY
 OWNED BY              0
   EACH           --------------------------------------------------------------
 REPORTING        9    SOLE DISPOSITIVE POWER
  PERSON
   WITH                1,809,524
                  --------------------------------------------------------------
                  10   SHARED DISPOSITIVE POWER

                       0
- --------------------------------------------------------------------------------
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     1,809,524
- --------------------------------------------------------------------------------
12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
     CERTAIN SHARES*                                                         [_]
- --------------------------------------------------------------------------------
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     6.66%
- --------------------------------------------------------------------------------
14   TYPE OF REPORTING PERSON*

     CO/HC
- --------------------------------------------------------------------------------

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!
          INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
       (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION


<PAGE>

                                  SCHEDULE 13D/A

- --------------------------------------------------------------------------------
CUSIP No. 252532 10 6                                       Page 4 of 18 Pages
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1    NAMES OF REPORTING PERSONS
     I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS

     PHILIPS ELECTRONICS NORTH AMERICA CORPORATION
- --------------------------------------------------------------------------------
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*                   (a) [_]
                                                                         (b) [X]
- --------------------------------------------------------------------------------
3    SEC USE ONLY
- --------------------------------------------------------------------------------
4    SOURCE OF FUNDS*

     WC
- --------------------------------------------------------------------------------
5    CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
     PURSUANT TO ITEMS 2(d) OR 2(e)                                          [_]
- --------------------------------------------------------------------------------
6    CITIZENSHIP OR PLACE OF ORGANIZATION

     DELAWARES
- --------------------------------------------------------------------------------
                  7    SOLE VOTING POWER

                       1,809,524
 NUMBER OF        --------------------------------------------------------------
  SHARES          8    SHARED VOTING POWER
BENEFICIALLY
 OWNED BY              0
   EACH           --------------------------------------------------------------
 REPORTING        9    SOLE DISPOSITIVE POWER
  PERSON
   WITH                1,809,524
                  --------------------------------------------------------------
                  10   SHARED DISPOSITIVE POWER

                       0
- --------------------------------------------------------------------------------
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

     1,809,524
- --------------------------------------------------------------------------------
12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
     CERTAIN SHARES*                                                         [_]
- --------------------------------------------------------------------------------
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

     6.66%
- --------------------------------------------------------------------------------
14   TYPE OF REPORTING PERSON*

     CO/HC
- --------------------------------------------------------------------------------

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!
          INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
       (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION


<PAGE>

          This Statement is hereby amended and restated in its entirety
as follows:

ITEM 1.  SECURITY AND ISSUER.

         The class of equity securities to which this statement relates is the
shares of Common Stock, $0.01 par value per share (the "Shares"), of Diametrics
Medical, Inc., a Minnesota corporation ("Diametrics"). The principal executive
office of Diametrics is located at 2658 Patton Road, Roseville, Minnesota 55113.

ITEM 2.  IDENTITY AND BACKGROUND.

         (a) This statement is being filed by Koninklijke Philips Electronics
N.V. ("KPENV"), Philips Holding USA Inc. ("PHUSA") and Philips Electronics North
America Corporation ("PENAC" and, collectively with KPENV and PHUSA, the
"Reporting Persons"). PENAC is a wholly owned subsidiary of PHUSA, which, in
turn, is a wholly owned subsidiary of KPENV.

         Certain information concerning each director and executive officer of
(i) KPENV is set forth in Schedule I hereto and incorporated herein by
reference, (ii) PHUSA is set forth in Schedule II hereto, and (iii) PENAC is set
forth in Schedule III hereto and is, in each case, incorporated herein by
reference.

         (b) The principal business address of KPENV is Breitner Centre,
Amstelplein 2, 1096 BC Amsterdam, The Netherlands. The principal business
address of PHUSA and PENAC is 1251 Avenue of the Americas, New York, New York
10020.

         (c) The primary business of each of the Reporting Persons is the
manufacture and distribution of electronic and electrical products, systems and
equipment, as well as information technology services.

         (d) None of the Reporting Persons or, to the best knowledge and belief
of the Reporting Persons, any of the individuals listed on Schedule I, II or III
has, during the past five years, been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors).

         (e) None of the Reporting Persons or, to the best knowledge and belief
of the Reporting Persons, any of the individuals listed on Schedule I, II or III
has, during the past five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.

         (f) KPENV is a company incorporated under the laws of the Netherlands.
PHUSA and PENAC are Delaware corporations.

         This Item 2 is qualified in its entirety by reference to Schedules I,
II and III, which are incorporated herein by reference.


                               Page 5 of 18 Pages
<PAGE>

ITEM 3.  SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

         Pursuant to the Asset Purchase Agreement, dated as of November 17,
2000, between KPENV and Agilent Technologies, Inc., a Delaware corporation
("Agilent"), on August 1, 2001, PENAC acquired, as part of KPENV's acquisition
of Agilent's healthcare solutions assets, 1,357,143 Shares and a warrant to
purchase from Diametrics 452,381 Shares at a price per Share of $8.40 (the
"Warrant"), which Warrant expires on August 4, 2003. KPENV paid Agilent
approximately $1.7 billion for such healthcare solutions assets, and a separate
price for the Shares and/or the Warrant was not specified or agreed.

         There have been no transactions by the Reporting Persons in securities
of Diametrics in the last 60 days.

         None of the persons listed on Schedules I, II or III hereto has
contributed any funds or other consideration towards the purchase of the Shares
reported in this statement.

ITEM 4.  PURPOSE OF THE TRANSACTION.

         Other than as set forth herein, none of the Reporting Persons, or to
the best knowledge and belief of the Reporting Persons, any of the individuals
listed on Schedules I, II or III hereto has plans or proposals which relate to
or would result in any of the events described by Items 4(a) through 4(j) of
Schedule 13D. Each Reporting Person expects to evaluate on an ongoing basis
Diametrics' financial condition, business operations and prospects, market price
of the Shares, conditions in securities markets generally, general economic and
industry conditions and other factors. Accordingly, each Reporting Person
reserves the right to change its plans and intentions at any time, as it deems
appropriate. In particular, each Reporting Person may at any time and from time
to time acquire additional Shares or securities convertible or exchangeable for
Shares; may dispose of Shares; and/or may enter into privately negotiated
derivative transactions with institutional counterparties to hedge the market
risk of some or all of its positions in such Shares. Any such transactions may
be effected at any time and from time to time be subject to any applicable
limitations of the Securities Act of 1933. To the knowledge of each Reporting
Person, each of the persons listed on Schedules I, II or III hereto may make the
same evaluation and reserves the same rights.

         On April 10, 2003, Diametrics and Philips Medical Systems North America
Company ("Philips Medical Systems"), a division of PENAC, entered into an
Amendment to Manufacturing and Distribution Agreement (the "New Distribution
Agreement"), pursuant to which (i) Diametrics appointed Philips Medical Systems
as a nonexclusive distributor of specified Diametrics products; (ii) Philips
Medical Systems agreed to refer to Diametrics any orders for specified
Diametrics products that Philips Medical Systems receives from its existing
distributors of such products outside North America; and (iii) Diametrics has
the nonexclusive right to purchase the Portal Product (as defined therein) from
Philips Medical Systems, in each case on specified terms. Concurrently,
Diametrics and Philips Medical Systems entered into a Portal Manufacturing
Agreement, pursuant to which Diametrics agreed to manufacture certain Portal
Products exclusively for Philips Medical Systems on specified terms.

         The foregoing paragraph is qualified in its entirety by reference to
the New Distribution Agreement and to the Portal Manufacturing Agreement, each
of which are incorporated herein by reference.


                               Page 6 of 18 Pages
<PAGE>

ITEM 5.  INTEREST IN SECURITIES OF THE ISSUER.

         (a) The percentage interest held by each Reporting Person presented
below is based on the number of Shares reported in Diametrics' Definitive Proxy
Statement on Schedule 14A, filed on April 25, 2003, to be outstanding as of
March 31, 2003 (the "Outstanding Shares").

         PENAC is the direct beneficial owner of 1,809,524 Shares, including
Shares issuable upon full exercise of the Warrant, which figure represents
approximately 6.66% of the Outstanding Shares.

         PHUSA may be deemed to beneficially own 1,809,524 Shares, including
Shares issuable upon full exercise of the Warrant, which figure represents
approximately 6.66% of the Outstanding Shares.

         KPENV may be deemed to beneficially own 1,809,524 Shares, including
Shares issuable upon full exercise of the Warrant, which figure represents
approximately 6.66% of the Outstanding Shares.

         None of the Reporting Persons or, to the best knowledge and belief of
the Reporting Persons, any of the persons listed on Schedules I, II or III
hereto beneficially owns any Shares other than as set forth herein.

         (b) Each Reporting Person has the power to vote or direct the vote and
dispose or direct the disposition of the Shares beneficially owned by such
Reporting Persons as indicated in pages 2 through 4.

         (c) Not applicable.

         (d) No other person has the right to receive or the power to direct the
receipt of dividends from or proceeds from the sale of Shares.

         (e) Not applicable.

ITEM 6.  CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
         TO SECURITIES OF THE ISSUER.

         There are no contracts, arrangements, understandings or relationships
between the Reporting Persons (or their wholly owned subsidiaries), and to the
best knowledge and belief of the Reporting Persons, none of the persons listed
on Schedules I, II or III hereto, and other persons with respect to the Shares.


                               Page 7 of 18 Pages
<PAGE>

ITEM 7.  MATERIAL TO BE FILED AS EXHIBITS.

Exhibit No.    Exhibit Description
- -----------    -------------------

1.             Joint Filing Agreement, dated as of March 21, 2003, among the
               Reporting Persons (incorporated herein by reference to Exhibit 1
               of the Schedule 13D filed by the Reporting Persons on March 21,
               2003).

2.             Amendment to Manufacturing and Distribution Agreement, dated
               April 10, 2003, between Diametrics and Philips Medical Systems.

3.             Portal Manufacturing Agreement, dated April 10, 2003, between
               Diametrics and Philips Medical Systems.




                               Page 8 of 18 Pages

<PAGE>

                                    SIGNATURE

         After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.


Date:  May 21, 2003              KONINKLIJKE PHILIPS ELECTRONICS N.V.
      -----------------

                                 By: /s/ ARIE WESTERLAKEN
                                    --------------------------------------------
                                    Name:  Arie Westerlaken
                                    Title: General Secretary



                                 PHILIPS HOLDING USA INC.


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



                                 PHILIPS ELECTRONICS NORTH AMERICA CORPORATION


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


                               Page 9 of 18 Pages
<PAGE>

                                   SCHEDULE I


         Name, Business Address, Principal Occupation or Employment and
Citizenship of:

(A)  Members Of The Supervisory Board Of Koninklijke Philips Electronics N.V.

Unless otherwise indicated, each person listed below is not employed, other than
as a member of the Supervisory Board, and thus no employer, employer's address
or employer's principal business is listed.

Name:                            L.C. van Wachem
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Retired. Former Chairman of the Committee of
                                 Managing Directors of the Royal Dutch/Shell
                                 Group.
Citizenship:                     The Netherlands


Name:                            W. de Kleuver
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Retired.  Former Executive Vice-President of
                                 Koninklijke Philips Electronics N.V.
Citizenship:                     The Netherlands


Name:                            J.M. Hessels
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Retired.  Former Chief Executive Officer of
                                 Royal Vendex KBB.
Citizenship:                     The Netherlands


Name:                            Sir Richard Greenbury
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Retired.  Former Chairman and Chief Executive
                                 Officer of Marks & Spencer.
Citizenship:                     United Kingdom


                               Page 10 of 18 Pages
<PAGE>

Name:                            Prof. K.A.L.M. van Miert
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            President of Nyenrode University.
Employer:                        Nyenrode University
Employer's Address:              Straatweg 25
                                 3621 BG Breukelen
                                 The Netherlands
Employer's Principal Business:   Higher education
Citizenship:                     Belgium


Name:                            L. Schweitzer
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Chairman and Chief Executive Officer of la
                                 regie nationale des usines Renault.
Employer:                        La regie nationale des usines Renault
Employer's Address:              34 Quai du Point du Jour
                                 BP 103 92109
                                 Boulogne Bilancourt
                                 Cedex, France
Employer's Principal Business:   Design, manufacture and sale of automobiles
                                 and related businesses
Citizenship:                     France

Name:                            J.M. Thompson
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Chairman of the Board, TD Bank Financial
                                 Group; Member of the Boards of Thomson
                                 Corporation and Robert Mondavi Corporation
Citizenship:                     Canada

Name:                            C.J.A. van Lede
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Chairman of the Supervisory Board of the Dutch
                                 Central Bank; Member of the Supervisory Boards
                                 of Sara Lee/DE and Heineken; non-executive
                                 board member of Sara Lee Corporation and
                                 Scania AB; Vice Chairman of the Board of
                                 Directors of INSEAD; Member of the European
                                 Round Table of Industrialists; Member of the
                                 Board of Trustees of The Conference Board;
                                 Member of the International Council of JP
                                 Morgan Chase.
Citizenship:                     The Netherlands


(B)  Members Of Board Of Management And Group Management Committee Of
     Koninklijke Philips Electronics N.V.

Unless otherwise indicated, each member of the Board of Management and Group
Management Committee is employed by Koninklijke Philips Electronics N.V. at
Breitner Centre, Amstelplein 2, 1096 BC Amsterdam, The Netherlands, whose
principal business is set forth in this Statement, and thus no employer,
employer's address or employer's principal business is listed.

Name:                            Gerard J. Kleisterlee
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            President and Chief Executive Officer of
                                 Koninklijke Philips Electronics N.V.
Citizenship:                     The Netherlands

                               Page 11 of 18 Pages
<PAGE>


Name:                            Jan H.M. Hommen
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Vice-Chairman of the Board of Management and
                                 Chief Financial Officer of Koninklijke
                                 Philips Electronics N.V.
Citizenship:                     The Netherlands


Name:                            Gottfried H. Dutine
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Executive Vice-President of Koninklijke
                                 Philips Electronics N.V.
Citizenship:                     Germany


Name:                            Ad Huijser
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Executive Vice-President and Chief Technology
                                 Officer of Koninklijke Philips Electronics N.V.
Citizenship:                     The Netherlands


Name:                            Arthur P.M. van der Poel
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Executive Vice-President of Koninklijke
                                 Philips Electronics N.V.
Citizenship:                     The Netherlands


Name:                            David Hamill
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Senior Vice-President, and President/CEO of
                                 the Philips Lighting Division, of Koninklijke
                                 Philips Electronics N.V.
Citizenship:                     United Kingdom


                               Page 12 of 18 Pages
<PAGE>


Name:                            Theo W.H.P. van Deursen
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Chief Executive Officer of BG Lightning
                                 Electronics (a.i.)
Citizenship:                     The Netherlands

Name:                            Tjerk Hooghiemstra
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Senior Vice-President of Koninklijke Philips
                                 Electronics N.V.
Citizenship:                     The Netherlands


Name:                            Jouko A. Karvinen
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Senior Vice-President, and President/CEO of
                                 the Medical Systems Division, of Koninklijke
                                 Philips Electronics N.V.
Citizenship:                     Finland


Name:                            Scott McGregor
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Senior Vice-President, and President and CEO
                                 of the Semiconductors Division, of
                                 Koninklijke Philips Electronics N.V.
Citizenship:                     United States


Name:                            Jan P. Oosterveld
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Senior Vice-President of Koninklijke Philips
                                 Electronics N.V.
Citizenship:                     The Netherlands


Name:                            Andrea Ragnetti
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Senior Vice-President of Koninklijke Philips
                                 Electronics N.V.
Citizenship:                     Italy


                               Page 13 of 18 Pages
<PAGE>


Name:                            Arie Westerlaken
Business Address:                Koninklijke Philips Electronics N.V.
                                 Breitner Centre
                                 Amstelplein 2
                                 1096 BC Amsterdam, The Netherlands
Principal Occupation:            Senior Vice-President, General Secretary,
                                 Chief Legal Officer and Secretary to the Board
                                 of Management of Koninklijke Philips
                                 Electronics N.V.
Citizenship:                     The Netherlands



                               Page 14 of 18 Pages
<PAGE>

                                   SCHEDULE II


         Name, Business Address, Principal Occupation or Employment and
Citizenship of all Directors and Executive Officers of Philips Holding USA Inc.
Unless otherwise indicated, each member of the board of directors and executive
officer is employed by Philips Electronics North America Corporation at 1251
Avenue of the Americas, New York, New York 10020, whose principal business is
set forth in this Statement, and thus no employer, employer's address or
employer's principal business is listed.

Name:                            Robert M. Westerhof
Business Address:                Philips Holding USA Inc.
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Director, President and Chief Executive
                                 Officer of Philips Electronics North America
                                 Corporation.
Citizenship:                     The Netherlands


Name:                            Belinda W. Chew
Business Address:                Philips Holding USA Inc.
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Director, Senior Vice President, General
                                 Counsel and Secretary of Philips Electronics
                                 North America Corporation.
Citizenship:                     United States


Name:                            Wilhelmus C.M. Groenhuysen
Business Address:                Philips Holding USA Inc.
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Senior Vice President, Chief Financial Officer
                                 and Treasurer of Philips Electronics North
                                 America Corporation.
Citizenship:                     The Netherlands


Name:                            Robert N. Smith
Business Address:                Philips Holding USA Inc.
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Vice President of Philips Electronics North
                                 America Corporation.
Citizenship:                     United States


                               Page 15 of 18 Pages
<PAGE>

Name:                            Warren T. Oates, Jr.
Business Address:                Philips Holding USA Inc.
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Assistant Secretary of Philips Electronics
                                 North America Corporation.
Citizenship:                     United States


                               Page 16 of 18 Pages

<PAGE>

                                  SCHEDULE III

         Name, Business Address, Principal Occupation or Employment and
Citizenship of all Directors and Executive Officers of Philips Electronics North
America Corporation. Unless otherwise indicated, each member of the board of
directors and executive officer is employed by Philips Electronics North America
Corporation at 1251 Avenue of the Americas, New York, New York 10020, whose
principal business is set forth in this Statement, and thus no employer,
employer's address or employer's principal business is listed.

Name:                            Robert M. Westerhof
Business Address:                Philips Electronics North America Corporation
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Director, President and Chief Executive
                                 Officer of Philips Electronics North America
                                 Corporation.
Citizenship:                     The Netherlands


Name:                            Belinda W. Chew
Business Address:                Philips Electronics North America Corporation
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Director, Senior Vice President, General
                                 Counsel and Secretary of Philips Electronics
                                 North America Corporation.
Citizenship:                     United States


Name:                            Kevin W. Doran
Business Address:                Philips Electronics North America Corporation
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Senior Vice President of Philips Electronics
                                 North America Corporation.
Citizenship:                     United States


Name:                            Wilhelmus C.M. Groenhuysen
Business Address:                Philips Electronics North America Corporation
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Senior Vice President, Chief Financial Officer
                                 and Treasurer of Philips Electronics North
                                 America Corporation.
Citizenship:                     The Netherlands


                               Page 17 of 18 Pages
<PAGE>

Name:                            Thomas B. Patton
Business Address:                Philips Electronics North America Corporation
                                 1300 I Street N.W., Suite 1070-E
                                 Washington, D.C. 20005
Principal Occupation:            Vice President of Philips Electronics North
                                 America Corporation.
Citizenship:                     United States


Name:                            Robert N. Smith
Business Address:                Philips Electronics North America Corporation
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Vice President of Philips Electronics North
                                 America Corporation.
Citizenship:                     United States


Name:                            Raymond C. Fleming
Business Address:                Philips Electronics North America Corporation
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Controller of Philips Electronics North
                                 America Corporation.
Citizenship:                     United States


Name:                            Warren T. Oates, Jr.
Business Address:                Philips Electronics North America Corporation
                                 1251 Avenue of the Americas
                                 New York, New York 10020
Principal Occupation:            Assistant Secretary of Philips Electronics
                                 North America Corporation.
Citizenship:                     United States





                               Page 18 of 18 Pages

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>ex_99-2.txt
<DESCRIPTION>AMENDMENT TO MANUFACTURING AND DISTRIBUTION AGMT.
<TEXT>

              AMENDMENT TO MANUFACTURING AND DISTRIBUTION AGREEMENT
                     BETWEEN DIAMETRICS MEDICAL INCORPORATED
                           AND PHILIPS MEDICAL SYSTEMS

         This Amendment, dated April 10, 2003 ("Effective Date"), is by and
between DIAMETRICS Medical Incorporated, a Minnesota corporation having its
principal place of business at 2658 Patton Road, St. Paul, Minnesota 55113
("DIAMETRICS") and PHILIPS Medical Systems North America Company, a division of
PHILIPS Electronics North America Corporation, a Delaware corporation with
offices at 3000 Minuteman Road, Andover, Massachusetts 01810 ("PHILIPS").
DIAMETRICS and PHILIPS shall each be a "Party."

                                    RECITALS

         A. DIAMETRICS and PHILIPS' predecessor Hewlett-Packard Company entered
into a distribution agreement effective June 6, 1999 for the development and
distribution of blood analysis products (the "Agreement").

         B. Although the Agreement expired effective as of October 31, 2002, the
Parties desire to amend and clarify some of the surviving rights and obligations
solely as set forth herein. All other surviving rights and obligations of the
parties under the Agreement shall continue as set forth in the Agreement.

1.  DEFINITIONS.

         1.1. Accessories. Those accessories set forth on Exhibit 1.5.
Accessories may be deleted by mutual agreement of the Parties and DIAMETRICS
may, from time to time, add Accessories to such Exhibit.

         1.2. Agreement. The agreement, originally entered into by DIAMETRICS
and HP effective June 6, 1999.

         1.3. Cartridges. The cartridges used with IRMA and Portal Products.

         1.4. Confidential Information. Information of any kind and form,
whether technical or business, which a Party hereto holds in confidence and
regards as valuable, but only when treated by the disclosing Party as set forth
in Article 9.

         1.5. Consumables. Collectively, Cartridges, Sensors, and Accessories.
The specifications for the Cartridges and Sensors as of the Effective Date are
set forth on Exhibit 1.5 as may be amended by DIAMETRICS.

         1.6. idms. Information Data Management System for use with IRMA and
Portal Products (DIAMETRICS Part Numbers 464100 and 463000).


<PAGE>

         1.7. Intellectual Property. On a world-wide basis, any and all now
known or hereafter known tangible and intangible (a) patents and patent
applications; (b) rights associated with works of authorship including, without
limitation, copyrights, moral rights and mask-works; (c) trade secret rights;
(d) all other intellectual property rights of every kind and nature and however
designated, whether arising by operation of law, contract, license or otherwise;
and (e) all registrations, initial applications, renewals, extensions,
continuations, divisions or reissues hereof now or hereafter in force (including
any rights in any of the foregoing).

         1.8. Interface Module. A product or component of a product whose
function includes the ability to acquire the output of any Product and make it
available to a PHILIPS patient monitor at the patient's bedside, by any means of
transmission including physical connection, cable, radio frequency and/or
infrared.

         1.9. IRMA Product. The IRMA(R)SL Blood Analysis System for in-vitro
analysis of whole blood in humans, utilizing the Cartridges as described in
Exhibit 1.5.

         1.10. PHILIPS Existing Customers. Will have the meaning set forth in
Section 2.1.

         1.11. PHILIPS Product Inventory. Those IRMA and Trendcare Products and
their components and associated products and supplies (excluding Cartridges,
Sensors and software) which are owned by PHILIPS and set forth on the inventory
list to be provided by PHILIPS.

         1.12. Portal Product. The in-vitro intermittent monitoring product
consisting of a Portal Measurement Module, custom connector, DeviceSet software,
interface software, custom cable, and a custom power Interface Module that
interfaces with a PHILIPS patient monitor, currently marketed as M3560A Portal
Blood Analysis System.

         1.13. Portal Measurement Module. The Portal Cartridge reader M3561A
(M3561-60001), as more particularly described in the specifications attached to
the Portal Manufacturing Agreement.

         1.14. Portal Measurement Products. Means the Portal Measurement
Modules, the Portal Measurement Accessories and the DeviceSet/DeviceCom Software
(as such latter two terms are defined in Exhibit 3.4).

         1.15. Product. An IRMA, Trendcare, idms, Consumables or Portal Product.

         1.16. Sensors. The disposable sensor used with the Trendcare Product.

         1.17. Support. Consists of (a) help desk telephone service for
customers; (b) spare parts, on-site service and repair depot service (warranty
and out-of-warranty); (c) on-going training; (d) software upgrades and updates,
and (e) such other support activities of DIAMETRICS and/or PHILIPS described on
Exhibit 2.2.

         1.18. Trendcare Product. A continuous in-vivo blood gas monitoring
system utilizing the Sensors described in Exhibit 1.5 as may be amended by
DIAMETRICS.

                                       2
<PAGE>

         1.19. Exhibit References. All Exhibit references shall mean the
Exhibits to this Amendment.

2.  TRANSITION FOR CONSUMABLES, IRMA, TRENDCARE AND IDMS PRODUCTS.

         2.1. Sales and Support of Consumables. Subject to the terms and
conditions set forth herein, DIAMETRICS hereby appoints PHILIPS as a
non-exclusive distributor of Consumables in the Field (as defined in the
Agreement) through October 31, 2004, to customers who purchased a Product from
PHILIPS prior to November 1, 2002 ("PHILIPS Existing Customers"). This
appointment may not be assigned to any third party, other than regional
distributors in the normal course of business, without the prior written consent
of DIAMETRICS. PHILIPS shall be entitled to purchase Consumables from DIAMETRICS
(or its third party manufacturer, if any) for resale to PHILIPS Existing
Customers, through October 31, 2004, at the prices set forth on Exhibit 2.1,
which shall be non-discriminatory prices for non-exclusive distributors in the
territories in which PHILIPS is selling the Consumables. If PHILIPS becomes
aware that it is selling Consumables to customers other than PHILIPS Existing
Customers, PHILIPS shall so notify DIAMETRICS, and DIAMETRICS (or its
distributor) shall have the opportunity to sell Consumables to such customer,
and PHILIPS will use reasonable efforts to assign to DIAMETRICS or its designee
any long-term supply contract for Consumables, with such a customer. PHILIPS
shall inform its sales channel of its intention not to sell Consumables to
customers who are not PHILIPS Existing Customers.

         2.2. Support of IRMA, Trendcare and idms Products. Subject to the terms
and conditions set forth herein, PHILIPS, its distributors and subcontractors
shall have the non-exclusive right to provide Support for IRMA, Trendcare and
idms Products through October 31, 2004, to PHILIPS Existing Customers who have
not transitioned to DIAMETRICS pursuant to an executed Country Transition Letter
as set forth in Section 2.6.

         2.3. Service and Support Agreement. DIAMETRICS agrees to provide to
PHILIPS Support (including but not limited to warranty and out-of-warranty
Support) for the Consumables and the IRMA, Trendcare and idms Products on the
terms set forth in the Service and Support Agreement attached as Exhibit 2.2.

         2.4. Inventory. The Parties have agreed to the purchase of PHILIPS
Product Inventory by DIAMETRICS as set forth in Exhibit 2.4.

         2.5. PHILIPS Distributors.

              (a) The Parties acknowledge that PHILIPS has existing distributors
of IRMA, Trendcare, and idms Products outside North America (the "PHILIPS
Distributors"). PHILIPS has taken reasonable action, at its sole expense, to
amend its agreements or understandings with the PHILIPS Distributors to delete
IRMA, Trendcare and idms Products from the list of products PHILIPS sells to
such Distributors. PHILIPS agrees to refer to DIAMETRICS any orders for IRMA,
Trendcare and idms Products that PHILIPS may receive from such Distributors;
provided however, that the Parties may agree, on a case-by-case basis, to
exceptions to permit PHILIPS to sell IRMA, Trendcare and idms Products to such
PHILIPS Distributors, with reasonable compensation to both Parties.

                                       3
<PAGE>

              (b) In connection with the transition of sales and Support
contemplated in Section 2.6, on a country by country basis, PHILIPS shall
provide DIAMETRICS with contact information regarding PHILIPS Distributors who
sold IRMA, Trendcare, idms and Consumable Products and shall use commercially
reasonable efforts to introduce DIAMETRICS to such PHILIPS Distributors, and
DIAMETRICS shall be free to enter into distribution arrangements with such
Distributors for such Products on such terms as DIAMETRICS and such Distributors
may deem appropriate. To the extent feasible, PHILIPS will use reasonable
efforts to transfer and assign to DIAMETRICS its agreements with certain PHILIPS
Distributors for the distribution of the Products (excluding Portal Products),
subject to the prior approval of DIAMETRICS and consent of the applicable
PHILIPS Distributors, and provided that such transfer and assignment shall not
extend to any liabilities or claims arising prior to the date of the transfer or
assignment, or arising from an alleged improper assignment unless DIAMETRICS
expressly agrees in writing or except for the obligations expressly assumed by
DIAMETRICS under this Amendment (including all Exhibits hereto) and under
executed Country Transition Letters.

         2.6. Transition. In order to transition responsibility for sales and
Support of Consumable Products and Support of IRMA, Trendcare and idms Products
on a country by country (or group of countries) basis, PHILIPS and DIAMETRICS
shall enter into a Country Transition Letter (a copy of which is attached hereto
as Exhibit 2.6) according to a mutually agreed timetable defined in the
transition process, provided that PHILIPS has provided DIAMETRICS with:

              (a) a list of research/ reference sites with PHILIPS owned IRMA,
Trendcare and idms Products;

              (b) a list of unique follow-on customer support/complaint
activities to be completed by DIAMETRICS with respect to the Products (excluding
Portal Products), to be defined during the transition process;

              (c) installed base and/or distributor information (institution
name, address, contact) with respect to the Products (excluding Portal
Products). The installed base information contains contact information for the
customers to whom PHILIPS' shipped Products (other than Portal Products), and to
the best of PHILIPS' knowledge, for customers of the Products (other than Portal
Products) who have not ordered such a Product from PHILIPS;

              (d) funnel information (leads, demo, evaluation) for the Products
(excluding Portal Products).

         As part of the transition process, outside North America, contracts
between PHILIPS and PHILIPS Existing Customers for sales and Support of
Consumables and Support of IRMA, Trendcare and idms Products will be either (a)
assigned to and assumed by DIAMETRICS in writing or (b) canceled by PHILIPS and
the applicable customer and superceded by new customer service agreements
between DIAMETRICS and the customer. If an Existing PHILIPS Customer refuses to
assign such existing contract, PHILIPS may continue to sell Consumables to and
Support Consumables, IRMA, Trendcare and idms Products for that customer until
the

                                       4
<PAGE>

earlier of the date on which the contract is assigned to DIAMETRICS or through
October 31, 2004 pursuant to Section 2.1.

         Pursuant to the terms of the Country Transition Letter and as of the
date of execution of the Country Transition Letter, DIAMETRICS shall assume
responsibility for sales and Support of Consumables and Support (including
customer support and complaint activities) of the IRMA, Trendcare and idms
Products in the country, whether such Products were shipped or serviced by
PHILIPS or DIAMETRICS. Such responsibility shall not include any obligations of
PHILIPS accruing prior to the date of execution of such Country Transition
Letter, except for the obligations expressly assumed by DIAMETRICS under this
Amendment (including all Exhibits hereto) and under executed Country Transition
Letters.

         2.7. Reversion of Rights.

              (a) Except as expressly set forth herein, all rights with respect
to sales, support and distribution of the Consumables revert to DIAMETRICS,
including, without limitation, the right to sell and Support Consumables itself
or through a third party in the Field (as defined in the Agreement) for use with
any of the Products.

              (b) Except as expressly set forth herein, all rights with respect
to IRMA, Trendcare, and idms Products revert to DIAMETRICS, including, without
limitation, the right to sell and Support IRMA ,Trendcare, and idms Products
itself or through a third party; provided however, that the Parties may agree,
on a case-by-case basis, to exceptions to permit PHILIPS to sell IRMA, Trendcare
and idms Products to customers, with reasonable compensation to both Parties.

         2.8. Superceding Provisions. The Parties acknowledge and agree that the
rights and obligations with respect to Consumables set forth in this Amendment
supersede Section 11.4(a) of the Agreement.

3.  PORTAL PRODUCT AND PRODUCT CONNECTIVITY.

         3.1. Connectivity. PHILIPS shall enable connectivity and ensure
on-going compatibility of (a) the IRMA and Trendcare Products into and with
PHILIPS' CMS and IntelliVue products using a VueLink type or other method of
connectivity, and (b) the Portal Products with PHILIPS' CMS products, in each
case through October 31, 2004; provided that DIAMETRICS supplies the necessary
information for PHILIPS to maintain such connectivity and compatibility, and
that PHILIPS shall be obligated to so modify or change its products only if the
changes are not major, or if PHILIPS desires to make changes that are major.

         3.2. Access to Hardware and Software Upgrades and Support. PHILIPS
agrees to provide customers who purchase Portal Products from DIAMETRICS with
access to existing hardware and software upgrades for CMS and support for CMS on
a non-discriminatory basis from other customers who purchase Portal Products
from PHILIPS. PHILIPS shall provide its customary warranty and out-of-warranty
coverage for CMS.

         3.3. License to DIAMETRICS' Technology. The Parties acknowledge that
PHILIPS' license to DIAMETRICS' Technology as set forth in Section 7.6 of the
Agreement shall survive

                                       5
<PAGE>

for the term of this Amendment, provided that PHILIPS complies with the terms of
Section 7.6 of the Agreement.

         3.4. Manufacture of Portal Measurement Module. DIAMETRICS shall
manufacture the Portal Measurement Module solely for PHILIPS under the Portal
Manufacturing Agreement attached hereto as Exhibit 3.4. Nothing contained herein
shall restrict either Party's use of its solely and jointly owned Intellectual
Property.

         3.5. Portal Product Purchases.

              (a) DIAMETRICS shall have the non-exclusive right to purchase
Portal Product from PHILIPS for the term of this Amendment at prices set forth
on Exhibit 4.5 and to resell such Portal Products itself or through
distributors.

              (b) DIAMETRICS shall only distribute the Portal Product directly
to end-users or through DIAMETRICS' distributors to end-users which accept
software license terms that are substantially the same as PHILIPS' standard
end-user license agreement for the Portal Product. PHILIPS standard end-user
license agreement for the Portal Product provides, inter alia, that only a
personal, nontransferable right to use any software incorporated in the Portal
Product (the "Software") is granted to such end user; that no title to the
Software is transferred to such end user; that such end user will not copy the
Software except as necessary to use such Software on a single CPU; that such end
user will not transfer the Software, except as authorized by the entity
furnishing the Software; that such end user will not in any form export,
reexport, resell, ship or divert or cause to be exported, reexported, resold,
shipped or diverted, directly or indirectly, the Software or a direct product
thereof to any country for which the United States Government or any agency
thereof at the time or export or reexport requires an export license or other
governmental approval without first obtaining such license or approval; and that
such end user will not reverse compile or disassemble the Software.

              (c) PHILIPS hereby grants permission to DIAMETRICS to use any
PHILIPS trademark or trade name associated with the Portal Products if that use
is solely for the advertisement and promotion of the Portal Products during the
term of this Amendment. DIAMETRICS agrees to follow the guidelines at
www.philips.com\brandbook, for distributors of PHILIPS products. These
guidelines may be changed by PHILIPS at any time, in its sole discretion.
PHILIPS shall have sole ownership of the following trademarks: (a) the word mark
"PHILIPS" and Philips Shield Emblem and (b) such other trademarks owned or
licensed to PHILIPS or its affiliates as may be designated by PHILIPS for use in
the course of performance under the terms of this Agreement (the "Trademarks".)
DIAMETRICS acknowledges all rights of PHILIPS in and to the Trademarks and
further agrees that use of the Trademarks for the purposes of this Agreement
shall not be construed as a grant of any rights in such Trademarks by or for the
benefit of DIAMETRICS. DIAMETRICS has no license to or right in the Trademarks
and shall not use them in its marketing or sales literature or in any other way,
except as provided in this section, without the prior, written consent of
PHILIPS.

                                       6
<PAGE>

4.   SUPPLY OF CONSUMABLES, PORTAL MEASUREMENT PRODUCTS AND PORTAL PRODUCTS.

         4.1. Purchase Orders.

              (a) PHILIPS shall issue to DIAMETRICS a monthly written, rolling,
non-binding three (3) month forecast of its purchase of Consumables. Such
forecasts shall be updated monthly. PHILIPS shall issue binding written purchase
orders for Consumables at least sixty (60) days prior to the proposed shipping
date for such items. All purchase orders in excess of PHILIPS' forecast shall be
subject to written acceptance by DIAMETRICS. DIAMETRICS will use reasonable
efforts to supply such items in a timely fashion, subject to DIAMETRICS'
reasonable production capabilities and provided that such purchase orders are
consistent with PHILIPS' forecasts.

              (b) PHILIPS may purchase Portal Measurement Products from
DIAMETRICS in accordance with the Portal Manufacturing Agreement attached as
Exhibit 3.4.

              (c) The Parties acknowledge that in order to provide the pricing
set forth herein for the Portal Measurement Products and Consumables, DIAMETRICS
may be required to purchase components and materials in reliance on PHILIPS'
non-binding forecasts. As a result, if PHILIPS fails to purchase the quantities
set forth in such non-binding forecasts and DIAMETRICS is unable, after using
commercially reasonable efforts, to cancel or delay the purchase of such
components and materials or to reallocate or reuse such components and materials
within ninety days of such forecast, PHILIPS shall reimburse DIAMETRICS for any
payments incurred by DIAMETRICS for any unusable inventory or non-cancelable
purchase commitments made in good faith reliance on the forecast for Portal
Measurement Products and Consumables, plus any actual out-of-pocket costs of
disposing of such components and materials. PHILIPS may take delivery of any
components and materials, for which it has reimbursed DIAMETRICS hereunder.

              (d) To the extent that DIAMETRICS desires to purchase Portal
Products from PHILIPS, DIAMETRICS shall issue to PHILIPS a monthly written,
rolling, non-binding six (6) month forecast for such Portal Product. Such
forecasts shall be updated monthly. DIAMETRICS shall issue binding written
purchase orders for such Portal Product at least sixty (60) days prior to the
proposed shipping date. All purchase orders in excess of DIAMETRICS' forecast
shall be subject to written acceptance by PHILIPS. PHILIPS will use reasonable
efforts to supply such Portal Product in a timely fashion, subject to PHILIPS'
reasonable production capabilities and provided that such purchase orders are
consistent with DIAMETRICS' forecasts.

              (e) The Parties acknowledge that in order to provide the pricing
set forth herein for the Portal Product, PHILIPS may be required to purchase
subcomponents and materials in reliance on DIAMETRICS non-binding forecasts. As
a result, if DIAMETRICS fails to purchase the quantities set forth in such
non-binding forecasts and PHILIPS is unable, after using commercially reasonable
efforts, to cancel or delay the purchase of such components and materials or to
reallocate or reuse such subcomponents and materials within ninety days of such
forecast, DIAMETRICS shall reimburse PHILIPS for any payments incurred by
PHILIPS for any unusable inventory or non-cancelable purchase commitments made
in good faith reliance

                                       7
<PAGE>

on the forecast for such components, plus any actual out-of-pocket costs of
disposing of such subcomponents and materials. DIAMETRICS may take delivery of
any subcomponents and materials, for which it has reimbursed PHILIPS hereunder.

         4.2. Purchase Order Forms. Each Party shall be entitled to use its then
current standard purchase order for its purchases hereunder. In the event of a
conflict between the terms of any such purchase order and the terms of this
Amendment, the terms of this Amendment shall take precedence. Additional terms
included in the purchase order that are not terms of this Amendment will be
subject to prior mutual written agreement.

         4.3. Delivery. All deliveries of Portal Products and Consumables shall
be made by the selling Party F.O.B. such selling Party's U.S. or European
facility. Title and risk of loss shall pass to the purchasing Party at the time
of tender at the selling Party's facility to the carrier designated by the
purchasing Party. Upon delivery to the purchasing Party's designated carrier,
the purchasing Party will assume title and risk of loss, and will be responsible
for transportation, and, if applicable, export of such products from the country
of manufacture and shall be entitled to any duty drawback for which the products
qualify. The selling Party shall provide the purchasing Party, upon the
purchasing Party's reasonable request and at the purchasing Party's expense,
reasonable substantiation and assistance with respect to such duty drawbacks.
The pricing for products excludes, and the purchasing Party shall pay, all
shipping, handling and insurance costs for and other costs of transporting such
products after delivery to the F.O.B. point.

         4.4. Payment. All payments for Products shall be due and payable within
thirty-five (35) days of the date of the applicable invoice. The purchasing
Party shall make all payments in immediately available funds to the location and
in the manner reasonably designated by the selling Party from time to time. A
late fee shall be paid by the purchasing Party on any amount not received by the
selling Party when due at a rate of 1.5% per month on all unpaid amounts, or the
maximum rate permitted by law, whichever is less. As between the Parties, the
purchasing Party shall be responsible for all taxes relating to Products so
purchased (except for taxes on the selling Party's net income).


                                       8
<PAGE>

5.   PRODUCT WARRANTY

         5.1. Warranty for Consumables. DIAMETRICS warrants to PHILIPS that the
Consumables at the time of their delivery by DIAMETRICS to PHILIPS (a) shall
meet the agreed specifications as set forth on Exhibit 1.5; (b) shall have been
manufactured in accordance with all laws and regulations applicable to their
manufacture in those jurisdictions in which PHILIPS is distributing the
Consumables (provided that PHILIPS gives DIAMETRICS at least ninety (90) days
written notice of any jurisdictions in addition to those in effect as of the
Effective Date of this Amendment); (c) shall be new or newly manufactured; and
(d) shall be of good and merchantable title, free of liens and encumbrances.
DIAMETRICS shall, promptly, at DIAMETRICS' sole option, replace, repair or make
a purchase price (in the amount paid by PHILIPS to DIAMETRICS) refund for any of
such Consumables proved to be non-conforming, provided that written notice and
reasonable documented evidence of each warranty claim and the fact that the
failure occurred during the warranty period is received by DIAMETRICS within
thirty (30) days after the expiration thereof. DIAMETRICS shall have the sole
right to verify such non-conformance. Such replacement, repair or refund shall
be PHILIPS' sole remedy hereunder. Unless otherwise agreed by the Parties, the
warranty period under this Section 5.1 for (1) any Sensor shall be the stated
shelf life as set forth on the label for such Sensor, not to be less than ten
(10) months from the date of shipment to PHILIPS; (2) any Cartridge shall be the
stated shelf life as set forth on the label for such Cartridge, not less than
three (3) months from the date of shipment to PHILIPS, except that the shelf
life of the GL & H4 (M3587A & M3617A)) Cartridge shall be not less than nine (9)
weeks and the shelf life of H4E (M3617B) Cartridge shall be not less than eleven
(11) weeks; and (3) any Accessory shall be ninety (90) days from the date of
shipment to PHILIPS. If requested by DIAMETRICS, PHILIPS shall return the
non-conforming Consumable to DIAMETRICS at the time of submission of the
warranty claim therefore. PHILIPS agrees to provide DIAMETRICS sufficient notice
of additional countries in which it intends to distribute the Consumables to
permit DIAMETRICS to meet its obligations under subsection (b) of this Section
5.1.

         5.2. Customer Complaints, Warranty Repair for Consumables. PHILIPS will
be responsible for handling customer complaints regarding the Consumables and
DIAMETRICS will provide reasonable assistance to PHILIPS in resolving such
customer complaints unless such country is transitioned pursuant to Section 2.6.
Upon transition in a particular country pursuant to Section 2.6, DIAMETRICS will
assume PHILIPS' obligations under this Section 5.2 and under any Consumables
warranties provided by PHILIPS' to its customers to the extent that such
warranties do not exceed the warranties provided by DIAMETRICS under Section
5.1. DIAMETRICS will accept the return of any Consumables that do not conform to
the warranties set forth in Section 5.1, and will repair or replace any such
defective Consumable (or refund PHILIPS' purchase price) as provided in Section
5.1.

         5.3. Supply of Consumables to Customers. DIAMETRICS will continue to
make Consumables available to customers for a period of five (5) years from the
last production run of the IRMA, Trendcare and Portal Products; this obligation
shall survive the termination or expiration of this Amendment.

         5.4. Warranty for Portal Products. PHILIPS shall warrant the Portal
Products to DIAMETRICS in accordance with the terms of the warranty attached
hereto as Exhibit 5.4.

                                       9
<PAGE>

         5.5. Warranty for Products Purchased Prior to Effective Date. Sections
8.2 through 8.4 of the Agreement survive expiration of the Agreement with
respect to Products (other than Portal Measurement Products) purchased by
PHILIPS from DIAMETRICS prior to the Effective Date of this Amendment; provided
however, that upon transition in a particular country pursuant Section 2.6,
DIAMETRICS will assume PHILIPS' obligations under Sections 8.2 through 8.4 of
the Agreement for such Products in such country. Portal Measurement Products
will be warranted in accordance with the Portal Manufacturing Agreement,
attached hereto as Exhibit 3.4.

         5.6. Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 5.1,
5.4 and 5.5, THE SELLING PARTY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED
OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.

         5.7. Customer Warranties. The purchasing Party shall be entitled to
warrant the applicable Products to its customers on terms it deems appropriate;
provided that the purchasing Party shall bear any expenses it may incur with
respect to such warranties, to the extent that such warranties exceed the scope
or term of the express warranties made by the selling Party hereunder.

6.   INTELLECTUAL PROPERTY.

         6.1. Intellectual Property from Agreement. Ownership of Intellectual
Property of the Products under the Agreement remains unchanged. Under the terms
of the Agreement, the Parties acknowledge and agree that the ownership of the
Intellectual Property in certain Products and the Portal Measurement Products
shall be as set forth on Exhibit 6.1. Nothing in Exhibit 6.1 shall imply any
further commitment by either party under this Amendment to develop the C-BAM or
X-BAM.

         6.2. Software Licenses. To the extent that a Party (each, a
"distributing Party") receives one or more copies of any software of the other
Party hereunder, it shall have the right to use that software internally in
order to exercise its rights hereunder. The foregoing use right shall not
include the right to copy and distribute such software, copies of which must be
purchased from the other Party. In addition and subject to Section 3.5(b), the
Parties acknowledge that any software or other proprietary portion of the
applicable Products is licensed, not sold, to the distributing Party and its end
user customers, and that such license shall be pursuant to the distributing
Party's customary license terms used for the distributing Party's customary
license terms used for the distributing Party's software or proprietary products
as are in effect from time to time.

7.   REGULATORY MATTERS.

         7.1. Regulatory Approvals. DIAMETRICS will retain all rights to and
ownership of all regulatory approvals for the Products (excluding Portal
Products), and will grant to PHILIPS a right of reference to its regulatory
submissions and technical files for all Products, including, without limitation,
those regulatory approvals as necessary to fulfill its obligations hereunder.
DIAMETRICS will maintain FDA and EU regulatory approvals for the Products
(excluding

                                       10
<PAGE>

Portal Products). PHILIPS will retain all rights to and ownership of all
regulatory approvals for Portal Products, and will grant to DIAMETRICS a right
of reference to its regulatory submissions and technical files, including,
without limitation, those regulatory approvals as necessary to fulfill its
obligations hereunder. PHILIPS will maintain FDA and EU regulatory approvals for
Portal Products. Prior to the transition contemplated in Section 2.6, PHILIPS
will use commercially reasonable efforts to transfer and assign to DIAMETRICS
such regulatory approvals in the applicable country that are held by PHILIPS (or
its distributors) and that apply specifically to the Consumables and IRMA,
Trendcare and idms Products (including approvals to import and sell the
Consumables and IRMA, Trendcare and idms Products), to the extent that such
approvals may be transferred and assigned lawfully.

         7.2. Product Inserts and Labeling. DIAMETRICS shall be responsible for
the text and regulatory compliance of all package labels and Product inserts
used in connection with the Products (except Portal Products). PHILIPS shall be
responsible for the text and regulatory compliance of all package labels and
product inserts used in connection with Portal Products. All Portal Product
labels and labeling shall be as set forth in the current specifications for the
Portal Product. For purposes of this Agreement, the terms "label" and "labeling"
shall have the meanings set forth in Sections 201(k) and 201(m) respectively of
the U.S. Federal Food, Drug and Cosmetics Act.

         7.3. Product Reporting.

              (a) DIAMETRICS will maintain MDR and other product performance
monitoring systems for the Products (excluding Portal Products), and PHILIPS
will maintain MDR and other product performance monitoring systems for Portal
Products. The Distributing Party shall cooperate with the Manufacturing Party in
connection with the Manufacturing Party's obligations under this Section 7.3.
The Distributing Party shall provide to the Manufacturing Party, the necessary
reports relating to complaints and product performance issues relating to the
Products on a timely basis to permit the reporting party to fulfill its
regulatory obligations. Notwithstanding the foregoing, upon the execution of a
Country Transition Letter, DIAMETRICS shall become responsible for complaint
handling in that country, as set forth in the Service and Support Agreement
attached hereto as Exhibit 2.2. Upon reasonable request by the Manufacturing
Party, the Distributing Party shall promptly make such reports (on behalf of the
Manufacturing Party, if appropriate) directly to the appropriate regulatory
authorities.

              (b) For the purposes of this Section 7.3(b), DIAMETRICS shall be
the Manufacturing Party for the Products, except for the Portal Product for
which PHILIPS shall be the Manufacturing Party. PHILIPS shall be the
Distributing Party for the Products, except for the Portal Product for which
DIAMETRICS shall be the Distributing Party. The Distributing Party shall
maintain sales and service records to assist it in locating the applicable
Products for the purpose of implementing recalls and other corrective actions.
If the Manufacturing Party implements a recall or corrective action in
accordance with Section 7.5 of this Amendment, the Distributing Party shall
provide such location information to the Manufacturing Party unless the
Distributing Party implements such recall or corrective action itself. Each
Party shall be responsible for bearing its own costs associated with all product
tracking, complaint analyses and related evaluations.

                                       11
<PAGE>

         7.4. Regulatory Audits. Each Party shall permit the other Party
reasonable access to its regulatory records, no more than once in any twelve
(12) month period, to permit the auditing Party to determine that regulatory
obligations are being met. The auditing Party shall provide ten (10) days prior
written notice of such an audit.

         7.5. Product Recall

              (a) If either Party believes that a recall of any Product
distributed under this Amendment is desirable or required by law, it shall
promptly notify the other Party. The Parties shall then discuss reasonably and
in good faith whether such recall is appropriate or required and the manner in
which any mutually agreed recall shall be handled. This Section 7.5 shall not
limit the obligations of either Party under law with respect to recall of
Products required by law or properly mandated by governmental authority.
Voluntary recalls shall be conducted by mutual agreement (with such agreement
not to be unreasonably withheld) provided that if mutual agreement is not
reached, either Party may individually conduct the voluntary recall in question
in a manner consistent with its own regulatory guidelines and criteria. The
"Recalling Party" shall bear all costs and expenses of any voluntary recall of
any Products and shall reimburse the "Other Party" for the reasonable,
out-of-pocket costs incurred by the Other Party as a result of such recall,
including the replacement cost of any Products affected thereby, unless the
cause or basis of such recall is attributable to a condition, fact or action
that constitutes (i) a breach by the Other Party of any of its obligations
hereunder or (ii) negligence or willful misconduct of the Other Party in which
case the Other Party will be liable for the costs and expenses of such recall,
and shall reimburse the Recalling Party for the reasonable, out-of-pocket costs
incurred by Recalling Party as a result of such recall, including the
replacement cost of any Product affected thereby. The Parties shall cooperate
fully with each other in effecting any recall of the Products pursuant to this
Section 7.5, including communications with any customers or to the public.

              (b) For the purposes of this Section 7.5(b) for the Products
purchased under this Amendment, DIAMETRICS shall be the Manufacturing Party for
the Products, except for the Portal Product for which PHILIPS shall be the
Manufacturing Party. PHILIPS shall be the Distributing Party for the Products,
except for the Portal Product for which DIAMETRICS shall be the Distributing
Party. If any governmental agency having jurisdiction (including without
limitation the FDA) shall request or order any corrective action with respect to
Products supplied hereunder, including any Product recall, customer notice,
restriction, corrective action or market action or any Product change, the
Manufacturing Party shall bear the costs and expenses of such corrective action
and shall reimburse the Distributing Party for the reasonable, out-of-pocket
costs incurred by the Distributing Party as a result of such corrective action,
including the replacement cost of any Products affected thereby, unless the
cause or basis of such corrective action is attributable to a condition, fact or
action that constitutes (A) a breach by the Distributing Party of any of its
obligations hereunder or (B) negligence or willful misconduct of the Other
Party, in which case, the Distributing Party shall bear the costs and expenses
of such corrective action, and shall reimburse the Manufacturing Party for the
reasonable out-of-pocket costs incurred by the Manufacturing Party as a result
of such action, including the replacement cost of any Product affected thereby.
Recalls of the Portal Measurement Products are excluded from this Section 7.5
and covered by Section 18 of the Portal Manufacturing Agreement.

                                       12
<PAGE>

         7.6. Products for Products Purchased Prior to Effective Date. Article 6
(Regulatory) of the Agreement survives expiration of the Agreement with respect
to Products (other than Portal Measurement Products) purchased by PHILIPS from
DIAMETRICS prior to the Effective Date of this Amendment; provided however, that
upon transition in a particular country pursuant Section 2.6, for that country
DIAMETRICS shall assume PHILIPS' obligations under Section 6.4 (Product
Reporting) and 6.5 (Product Recalls) in the Agreement for those transitioned
Products and as set forth in the Service and Support Agreement attached hereto
as Exhibit 2.2.

8.   TERM AND TERMINATION

         8.1. Term. This Amendment shall become effective upon the Effective
Date hereof and shall expire on October 31, 2004 or terminate as set forth in
this Article 8.

         8.2. Termination for Material Breaches. In the event of a material
default by a Party of a material obligation hereunder, including, but not
limited to, failure to pay any material moneys due excepting amounts as to which
there is a legitimate dispute, the other Party may provide written notice to the
defaulting Party. If the defaulting Party fails to cure such default within
ninety (90) days (or ten (10) days in the case of amounts owing that are not
subject to a good faith dispute) of such notice, this Amendment shall terminate
in its entirety (except for such rights and obligations that expressly survive
pursuant to Section 8.4) effective upon the expiration of such cure period. In
the case of bankruptcy or insolvency of a Party, to the extent permitted by U.S.
bankruptcy law, the other Party may terminate this Agreement in its entirety
(except for such rights and obligations that expressly survive pursuant to
Section 8.4) effective immediately upon written notice to such Party.

         8.3. No Prejudice. Termination of this Agreement for any reason shall
be without prejudice to either Party's right to receive all payments accrued and
unpaid on the effective date of termination and shall not release either party
hereto from any liability which at such time has already accrued or which
thereafter accrues from a breach or default prior to such expiration or
termination. Except as expressly provided herein, all of the parties' rights and
remedies hereunder are cumulative and non-exclusive.

         8.4. Surviving Obligations of the Amendment. No termination or
expiration of this Amendment shall affect or discharge any obligations, rights,
disclaimers, conditions or limitations of either Party which arose prior to the
effective date of such termination. The following Sections of this Amendment
shall survive termination or expiration of the Amendment: Articles 5 (Product
Warranty), 6 (Intellectual Property), 7 (Regulatory Matters), 8 (Term and
Termination), 9 (Confidentiality) and 10 (Miscellaneous) and any Sections
necessary to give effect to this Section 8.4 shall survive any termination or
expiration of this Amendment.

9.   CONFIDENTIALITY

         9.1. Non-Use and Non-Disclosure. Each Party acknowledges and agrees
that all the other Party's Confidential Information is confidential to the
disclosing Party. Each Party shall take the same reasonable measures as it uses
to protect its own confidential information from the unauthorized disclosure or
misuse to protect the other Party's Confidential Information from unauthorized
disclosure or misuse, including without limitation, any disclosure by its
employees,

                                       13
<PAGE>

agents, contractors, permitted sublicensees, or consultants of the other Party's
Confidential Information. As used herein, the term reasonable measures shall
mean at least those measures a Party applies to the protection of its own
Confidential Information and the term misuse shall mean use for any purpose
other than as permitted or required hereunder.

         9.2. Marking. To be entitled to protection as Confidential Information,
all DIAMETRICS or PHILIPS documents containing that Party's Confidential
Information shall be appropriately and clearly marked as "Proprietary,"
"Secret," "Confidential," or other words to similar effect. If a disclosure of
Confidential Information is made orally, as in a meeting, the disclosing Party
shall indicate the nature of that information at the time of its disclosure and
shall confirm such designation in writing within ten (10) days of the date of
such disclosure to the receiving Party.

         9.3. Exclusions. Information shall not be considered Confidential
Information hereunder if it:

              (a) was already in the possession of the receiving Party prior to
its receipt from the disclosing Party;

              (b) is, or becomes, part of the public knowledge or literature
through no fault, act or omission of the receiving Party, provided, Confidential
Information shall not be deemed to have entered the public domain by reason of
its having been filed with any regulatory authority; provided the disclosing
Party has taken advantage of any procedures available to protect
confidentiality, including FOIA marking and protective orders;

              (c) is, or becomes, available to the receiving Party from a source
other than the disclosing Party, which source has rightfully obtained the same
information and has no obligation of confidentiality to the disclosing Party
with respect to it;

              (d) is made available on an unrestricted basis by the disclosing
Party to a third party unaffiliated with the disclosing Party; or

              (e) is required to be revealed pursuant to law or requirements of
any securities exchange on which a Party's shares are listed and traded,
provided, however, the receiving Party which is under any such requirement of
law shall give reasonable notice to the disclosing Party of such requirement and
shall cooperate with the disclosing Party, at the disclosing Party's expense in
reasonable legal efforts to limit or mitigate any such revelation so as to
preserve the proprietary nature of any Confidential Information contained
therein.

         9.4. Duration; Surviving Obligation. This Article 9 shall be deemed to
cover and include any non-public information disclosed by a Party to the other
during the course of their negotiations of this Amendment, whether or not marked
or indicated as provided in Section 9.2. Each Party's obligations of non-use and
non-disclosure of the other Party's Confidential Information shall apply during
the term of this Amendment and shall also survive for a period of three (3)
years after its termination for any reason.

         9.5. Confidentiality of this Agreement. The terms of this Amendment
itself and the Exhibits hereto shall be deemed to be Confidential Information
hereunder. In the event that a

                                       14
<PAGE>

Party is required to disclose the content of this Amendment pursuant SEC
requirements or requirements of any securities exchange on which a Party's share
are listed and traded, such Party shall use its reasonable efforts to obtain
confidential treatment of at least the terms of Exhibits 2.1, 2.4 , 3.5, and
6.1.

10.  MISCELLANEOUS

         10.1. Effect of this Amendment, Entire Agreement. Except as expressly
amended hereby, the surviving terms of the Agreement shall continue in full
force and effect, in accordance with its terms. In the event of any conflict
between this Amendment and the surviving terms of the Agreement, this Amendment
shall prevail. The Agreement and this Amendment, including all Exhibits thereto
and hereto, set forth the entire agreement between Parties with respect to the
subject matter hereof and as such, supersede all prior and contemporaneous
negotiations, agreements, representations, understandings and commitments with
respect thereto and shall take precedence over all terms, conditions and
provisions on any purchase order form, or order acknowledgment, or order release
purporting to address the same subject matter. Neither the Agreement nor this
Amendment shall be released, discharged, changed or modified in any manner
except by a writing signed by the duly authorized officers or agents of each
Party hereto, which writing shall make specific reference to the Agreement or
Amendment and shall express the plan or intention to modify same.

         10.2. Surviving Provisions of the Agreement. Sections 3.7 (Trademarks),
3.11 (License of Product Software), 10 (Indemnification) and 13 (Miscellaneous)
(excluding Sections 13.2, 13.5, 13.6, 13.13 and 13.15) of the Agreement are
incorporated by reference and made a part of this Amendment. Sections 6.4, 6.5,
10 and 13 (excluding Sections 13.2, 13.5, 13.6, 13.13 and 13.15) of the
Agreement shall survive termination or expiration of this Amendment.

         10.3. Binding Effect and Assignment. During the term of this Amendment,
the rights of either Party under this Amendment and the surviving rights under
the Agreement shall not be assigned nor shall the performance of either Party's
duties hereunder be delegated, without the other Party's written consent (which
shall not be unreasonably withheld) except that, without the other Party's prior
consent, either Party may assign this Amendment and the Agreement (i) to an
Affiliate that is an affiliate as of the date of execution of this Amendment or
(ii) to an Affiliate whose assets consist entirely of the assets of an Affiliate
or Affiliates that were Affiliates as of the date of execution of this Amendment
or (iii) in connection with a merger, consolidation, reorganization or sale of
substantially all of its assets. No sale, assignment or other transfer of any
rights of a Party hereunder shall be effective unless the purchaser, assignee or
transferee assumes such Party's obligations under this Amendment and the
Agreement. Any assignment shall not relieve the assigning Party of its
responsibility for its obligations hereunder. Nothing in this Section 10.3 shall
restrict a Party from appointing sales agents and distributors in the normal
course of business.

         10.4. Communications. Within ten (10) days of the Effective Date, the
Parties will confer with each other on each Party's written communications
describing the Parties' agreement with respect to distribution and Support of
the Products; provided that each Party retains the right to communicate with
such customers in a manner that it deems appropriate.

                                       15
<PAGE>

         10.5. Publicity. Neither Party hereto shall originate any joint
publicity, joint news release, or other joint announcement, written or oral,
whether to the public press, the trade, PHILIPS' or DIAMETRICS' customers or
otherwise, relating to this Amendment, or to performance hereunder or the
existence of an arrangement between the Parties.

         10.6. Limitation on Liability. NEITHER PARTY SHALL BE LIABLE TO THE
OTHER PARTY UNDER THIS AMENDMENT FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL OR
PUNITIVE DAMAGES, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN INFORMED OF THE
POSSIBILITY OF SUCH DAMAGE.

         IN WITNESS WHEREOF, PHILIPS and DIAMETRICS have executed this Amendment
by their respective duly authorized officers or representatives as of the day
first above written.

DIAMETRICS MEDICAL                         PHILIPS MEDICAL SYSTEMS
INCORPORATED


By:                                        By:
   --------------------------------           ----------------------------------


Schedule of Exhibits:
- ---------------------

Exhibit:
- --------

Exhibit 1.5        Accessories, Cartridges and Sensors

Exhibit 2.1        Prices for Consumables and Portal Measurement Modules

Exhibit 2.2        Service and Support Agreement

Exhibit 2.4        PHILIPS Product Inventory

Exhibit 2.6        Country Transition Letter

Exhibit 3.4        Portal Manufacturing Agreement

Exhibit 3.5        Prices for Portal Products supplied by PHILIPS

Exhibit 5.4        PHILIPS Warranty on Portal Products

Exhibit 6.1        IP Ownership


<PAGE>

                                   Exhibit 1.5
                             Cartridges and Sensors

     (SPECIFICATIONS ARE SUBJECT TO CHANGE DURING THE TERM OF THE AGREEMENT)

1.       NEOTREND

         The  Neotrend  system  (Neotrend  sensor  and  TrendCare  hardware)  is
         intended for continuous  monitoring of pO2, pCO2, pH and temperature in
         neonatal  arterial  blood.  An Umbilical  Artery Catheter is used as an
         access device.

         1.1      NEOTREND SENSOR

         The sensor  incorporates  optical  sensors for the  measurement of pO2,
         pCO2 and pH, and a thermocouple for temperature measurement. The sensor
         is calibrated in the TrendCare Calibrator. It is a sterile,  disposable
         single-use  device and is used in conjunction  with an Umbilical Artery
         Catheter as an access device.

         1.2      NEOTREND SENSOR SPECIFICATIONS

                    Measured Parameters   pO2, pCO2, pH and temperature

                                  Range   pO2     20 to 500mmHg
                                          pCO2    10 to 160mmHg
                                          pH      6.80 to 7.80
                                          Temp    10(Degree) to 42(Degree)C

         Performance specifications meet 95% confidence limits based on in vitro
         evaluations using tonometered solution

                      In vitro Accuracy   pO2     +/-5% or +/-3mmHg <120mmHg
                                                  (whichever is greater
                                                  +/-10% (120 - 430mmHg)
                                          pCO2    +/-3mmHg (10 - 80mmHg)
                                          pH      +/-0.03
                                          Temp    +/-0.3(Degree)C

                                  Drift   pO2     < 0.5%/hour
                                          pCO2    <0.5%/hour

                                          pH      <0.005/hour

                        Time to Respond   Typically less than 15 seconds
                                          @ 37(Degree)C

                       Outside Diameter   Less than 0.5 mm (average)

       Material (in contact with blood)   Polyethylene with covalently-bonded
                                          bioactive surface treatment[1]

                          Sterilization   Gamma irradiation. For single use
                                          only.

- --------------------
[1]  Carmeda Bioactive Surface - heparin

<PAGE>

                             Shelf Life   18 months, indicated by expiry date
                                          on the package.

                                Package   Sterile product within sealed
                                          thermoformed tray.

                                Storage   0(Degree)C to 40(Degree)C.
                                          Do not freeze.

2.       PARATREND 7

         The Paratrend 7 system  (Paratrend 7 sensor and TrendCare  hardware) is
         intended for continuous  monitoring of pO2, pCO2, pH and temperature in
         an adult or paediatric  peripheral artery.  Usually a radial or femoral
         arterial catheter is used as an access device.

         2.1      PARATREND 7 SENSOR

         The sensor  incorporates  optical  sensors for the  measurement of pO2,
         pCO2 and pH, and a thermocouple for temperature measurement. The sensor
         is  calibrated in the TrendCare  Calibrator  and then  connected to the
         TrendCare monitor. It is a sterile,  disposable,  single use device and
         is used in conjunction with an arterial catheter.

         The sensor has two introducer versions: a telescopic introducer for the
         Paratrend 7FL and a dial-in introducer for the Paratrend 7+.

         2.2      PARATREND 7+ SENSOR SPECIFICATIONS

                    Measured Parameters   pO2, pCO2, pH and temperature

                                  Range   pO2     20 to 500mmHg
                                          pCO2    10 to 160mmHg
                                          pH      6.80 to 7.80
                                          Temp    10(Degree) to 42(Degree)C


<PAGE>




         Performance specifications meet 95% confidence limits based on in vitro
         evaluations using tonometered solution

                      In vitro Accuracy   pO2     +/-5% or+/-3mmHg  <120mmHg
                                                  (whichever is greater))
                                                  +/-10% (120 - 430mmHg)
                                          pCO2    +/-3mmHg (10 - 80mmHg)
                                          pH      +/-0.03
                                          Temp    +/-0.3(Degree)C

                                  Drift   pO2     < 0.5%/hour
                                          pCO2    <0.5%/hour

                                          pH      <0.005/hour

                        Time to Respond   Typically less than 15 seconds
                                          @ 37(Degree)C

                       Outside Diameter   Less than 0.5mm (average)

       Material (in contact with blood)   Polyethylene with covalently-bonded
                                          bioactive surface treatment[2]

                          Sterilisation   Gamma irradiation.  For single use
                                          only.

                             Shelf Life   18 months, indicated by expiry date
                                          on the package.

                                Package   Sterile product within sealed
                                          thermoformed tray.

                                Storage   0(Degree)C to 40(Degree)C.
                                          Do not freeze.


3.       INTERMITTENT CARTRIDGE

The Cartridges are compatible  with the IRMA SL Blood Analysis System & a subset
are also compatible with the Portal Product.

CARTRIDGE SPECIFICATIONS (IRMA & PORTAL):

CATEGORY                                    SPECIFICATION
- --------------------------------------------------------------------------------

OPERATING TEMPERATURE:                      12-30C (54-86F)

CARTRIDGE STORAGE TEMPERATURE:              15-30C (59-86F)

MEASUREMENT TEMPERATURE:                    37C

- --------------------
[2]  Carmeda, Bioactive Surface - Heparin

<PAGE>

OPERATING RELATIVE HUMIDITY:                0-80%

OPERATING BAROMETRIC PRESSURE:              350-900 mmHg (measured by on-board
                                            barometer)

SAMPLE SIZE:                                0.125-5.0 mL

ANALYSIS TIME:                              Less than 90 seconds after sample
                                            injection (depends on parameter)

SIZE (LXWXH) AND WEIGHT:

Cartridge Temp Card:                        2.6" x 1.3" x 0.6; 1oz.
                                            66 x 33 x 15.24mm;  28g.

CARTRIDGE/ANALYTE CONFIGURATIONS:

Cartridges are available in the following configurations:

<TABLE>
<CAPTION>
- -------------------- ------------------------------------------- -----------------------------------
CARTRIDGE            MEASURED                                    CALCULATED

==================== =========================================== ===================================
<S>                  <C>                                         <C>
BG                   pH, pCO2, pO2                               HCO3-,  TCO2, Beb, BEecf, O2Sat
- -------------------- ------------------------------------------- -----------------------------------
CC                   pH, pCO2, pO2, HCT,  Na+, K+, iCa           HCO3-,  TCO2, Beb, BEecf, O2Sat,
                                                                 tHb, iCa(N)
- -------------------- ------------------------------------------- -----------------------------------
H3                   HCT,  Na+, K+, iCa                          tHb, iCa(N)
- -------------------- ------------------------------------------- -----------------------------------
H4                   HCT,  Na+, K+, Cl-, BUN/Urea                tHb
- -------------------- ------------------------------------------- -----------------------------------
GL[3]                Glu,  Na+, K+ , Cl-
- -------------------- ------------------------------------------- -----------------------------------
</TABLE>

CARTRIDGE EQUILIBRATION TIMES:

Following removal from their shiping container, IRMA cartridges must equilibrate
to room temperature prior to use. Equilibration time depends on the product type
as follows:

- --------------------- -------------------------------------
CARTRIDGE             EQUILIBRATION TIME (HOURS)

===================== =====================================
BG                    72
- --------------------- -------------------------------------
CC                    72
- --------------------- -------------------------------------
H3                    1
- --------------------- -------------------------------------
H4                    1
- --------------------- -------------------------------------
GL1                   1
- --------------------- -------------------------------------


- ---------------------
[3]  Available only on IRMA
<PAGE>

REPORTABLE RANGES :

The default reportable ranges for each parameter are as follows:

- --------------------------------------------------------------------------------
MEASURED
- --------------------------------------------------------------------------------
pH                  6.000 - 8.000 pH units
- ------------------- ------------------------------------------------------------
pCO2                4.0 - 200.0 mmHg (0.53 - 26.6 kPa)
- ------------------- ------------------------------------------------------------
pO2                 20.0 - 700.0 mmHg (2.67 - 93.33 kPa)
- ------------------- ------------------------------------------------------------
Hct                 10.0 - 80.0 % (.100 -.800 SI)
- ------------------- ------------------------------------------------------------
Na+                 80.0 - 200.0 (mM, mEq/L)
- ------------------- ------------------------------------------------------------
K+                  1.00 - 20.0 (mM, mEq/L)
- ------------------- ------------------------------------------------------------
iCa                 0.20 - 5.00 mM (0.80 - 20.4 mg/dL; 0.40 - 10.00 mEq/L)
- ------------------- ------------------------------------------------------------
Cl-                 30.0 - 150.0 (mM, mEq/L)
- ------------------- ------------------------------------------------------------
BUN/urea            (H4  P/N 055700)
- ------------------- ------------------------------------------------------------
      BUN           3 - 100 mg/dL (1.1 - 3.57 mM)
- ------------------- ------------------------------------------------------------
      Urea          6 - 321 mg/dL (1.1 - 35.6 mM)
- ------------------- ------------------------------------------------------------
BUN/urea            (H4  P/N 055703)
- ------------------- ------------------------------------------------------------
      BUN           3 - 150 mg/dL (1.1 - 53.5 mM)
- ------------------- ------------------------------------------------------------
      Urea          6 - 321 mg/dL (1.1 - 53.4 mM)
- ------------------- ------------------------------------------------------------
Glu[1]              20 - 500 mg/dL (1.1 - 27.8)
- --------------------------------------------------------------------------------
CALCULATED
- --------------------------------------------------------------------------------
HCO3-               0 - 99.9 mM
- ------------------- ------------------------------------------------------------
TCO2                0 - 99.9 mM
- ------------------- ------------------------------------------------------------
Beb                 +/- 99.9 mM
- ------------------- ------------------------------------------------------------
BEecf               +/- 99.9 mM
- ------------------- ------------------------------------------------------------
O2Sat               0 - 100%
- ------------------- ------------------------------------------------------------
tHb                 3.4 - 27.2 g/dL (2.1 - 16.9 mM)
- ------------------- ------------------------------------------------------------
iCa(N)              0.20 - 5.00 mM (0.80 - 20.04 mg/dL; 0.40 - 10.00 mEq/L
- ------------------- ------------------------------------------------------------

DISPLAY RESOLUTION:

The display resolution for each parameter is as follows:

- --------------------------------------------------------------------------------
MEASURED
- --------------------------------------------------------------------------------
pH                  0.001 pH units
- ------------------- ------------------------------------------------------------
pCO2                0.1 mmHg (0.01 kPa)
- ------------------- ------------------------------------------------------------
pO2                 0.1 mmHg (0.01 kPa)
- ------------------- ------------------------------------------------------------
Hct                 0.1% (.001 SI)
- ------------------- ------------------------------------------------------------
Na+                 0.1 (mM, mEq/L)
- ------------------- ------------------------------------------------------------
K+                  0.01 (mM, mEq/L)
- ------------------- ------------------------------------------------------------
iCa                 0.01 (mM, mEq/L, mg/dL)
- ------------------- ------------------------------------------------------------
Cl-                 0.1 (mM, mEq/L)
- ------------------- ------------------------------------------------------------
BUN/Urea            1 mg/dL (0.1 mM)
- ------------------- ------------------------------------------------------------
Glu                 1 mg/dL (0.1 mM)
- ------------------- ------------------------------------------------------------

- ---------------------
[1]  Available only on IRMA

<PAGE>


                                   EXHIBIT 2.1
                                 PRODUCT PRICES

1.   Cartridges

  Philips P/N            DMI P/N                                 Transfer Price
                                                                 (ea box of 25)
- ------------------------ ------------------ -------------------- --------------
M3614A                   048100             BG                          *
M3615A                   048400             H3                          *
M3616A                   039900             CC                          *
M3680A                   048102             BG                          *
M3681A                   048400             H3                          *
M3682A                   039902             CC                          *
M3584A                   048103             BG                          *
M3585A                   048400             H3                          *
M3586A                   039903             CC                          *
M3617A                   055700             H4 (original)               *
M3617B                   055703             H4 (new)                    *
M3587A                   065200             GL                          *


2.   IRMA Products and accessories (used for support)

<TABLE>
<CAPTION>
Philips P/N              DMI P/N                                                     Transfer
                                                                                     price ea
- ------------------------ ------------------ ---------------------------------------- ---------------
<S>                      <C>                <C>                                      <C>
M3664A                   448700             NiMH Battery for IRMA                       *
M3628A                   442900             NiMH 15 Vdc Battery Charger,                *
M3629A                   573400             15 V power supply                           *
M3669A                   438000             IRMA Carrying Bag                           *
                                            (will get 5x5 number for support use)
M3670A                   440100             AC Adapter assembly                         *
M3666A                   432001             IRMA Temp Card                              *
M3671A                   403800             IRMA print paper 5 rolls                    *
M3624A                   443800             Pole mount for IRMA (will get 5x5           *
                                            number for support use)
M3627A                                      J&J Lifescan SureStep Pro glucose           *
                                            module--
                                            5x5 number M3627-60101 for support use
M3674A                   040500             Capillary Collection device                 *
M3679A                   428400             IRMA edge connector                         *
M3672A                   450000             IRMA edge connector cleaner                 *
M3677A                   463120             Barcode scanner and mount (will get         *
                                            5x5 part number)
M3678A                   463130             Barcode scanner mount kit (will get         *
                                            5x5 part number)
M3622-68701              443900             DMI-443900 IRMA, Modem (Glucose ready)      *
M3622-60701              443900             DMI-443900 IRMA, Modem (Glucose ready)      *
                                            (for support only)
M3623-68701              443901             DMI-443901 IRMA, w/out Modem (Glucose
                                            ready)                                      *
</TABLE>

*  Confidential treatment requested

<PAGE>

<TABLE>
<S>   <C>                <C>                <C>                                      <C>
M3623-60701              443901             DMI-443901 IRMA, w/out Modem (Glucose       *
                                            ready) (for support only)
M3622-40301              402000             IRMA printer cover                          *
                                            453563339101
M3622-42501              420400             IRMA printer spindle                        *
                                            453563339111
M3622-61610              552700             Cable RJ45                                  *
                                            453563339141
M3622-61620              552702             Cable - RJ45/modRJ45                        *
                                            453563339151
M3622-63901              428400             Edge connector kit                          *
                                            453563339161
M3622-67610              552900             Adapter-RJ45/DB9 Female                     *
                                            453563339171
M3622-67611              552800             Adapter-RJ45 to DB9 male                    *
                                            453563339181
M3622-67620              514000             Adapter-RJ45 to DB25                        *
                                            453563339191
M3622-67621              516000             Adapter RJ45/DB25                           *
                                            453563339201
</TABLE>

Note 1:  Pricing for repair and reconditioning as  follows:

  IRMA SL in Warranty requiring repair only                            *
  IRMA SL in warranty requiring repair and reconditioning              *
  IRMA SL out of Warranty requiring repair only                        *
  IRMA SL out of  warranty requiring repair and reconditioning         *


3.   idms Products (used for support)

<TABLE>
<CAPTION>
Philips P/N              DMI P/N                                                      Transfer
                                                                                      price each
- ------------------------ ------------------ ----------------------------------------- --------------
<S>                      <C>                <C>                                       <C>
M3667-10802              464100             IRMA idms SW 6.0 Disk set, Data                *
                                            management
M3667-10803              463000             IRMA idms SW 4.0.7 Disk set, Data              *
                                            management
M3667-20002              468600             idms v5 Assembled Binder 1.5"                  *

M3667-9001C              464000             idms Manual Contents                           *
</TABLE>


* Confidential treatment requested

<PAGE>

4.   Trendcare Products (used for support)

<TABLE>
<CAPTION>
                                                         Transfer Price each
- ------------------------ ----------------------------- --------------------------------------
<S>                      <C>                           <C>

M3651-60110              Trendcare Satellite                       *
                         TCM 6000
M3651-60111              Trendcare Satellite                       *
                         TCM 6000/Nordic
M3650-60101              Senior monitor (115V)                     *
M3650-60102              Senior monitor (230V)                     *
M3652-60101              calibrator                                *
M3653-60101              PDM                                       *
M3651-68101              Exchange satellite                        *
M3652-68101              Exchange calibrator                       *
M3653-68101              Exchange PDM                              *
</TABLE>


5.   Trendcare Sensors and accessories

<TABLE>
<CAPTION>
Philips P/N              DMI P/N                                                      Transfer price
- ------------------------ ------------------ ----------------------------------------- ----------------
<S>                      <C>                <C>                                       <C>
XXXXX                    XXXXXXX            Trendcare software (new features only)           *
M3643A                   MPS7004P           Paratrend sensor, 5/pack, 7+                     *
M3673A                   N7004L             Neotrend sensor, 5/pack L N7004L                 *
M3654A                   MPP7005            Thermal printer paper  MPP 7005                  *
M3655A                   MCG7010            Gas packs, 3 cylinders, F1                       *
                                            MCG 7010
M3644A                   AST015             Fixation strap, 15 pack                          *
</TABLE>

*  Confidential treatment requested


<PAGE>





                                   Exhibit 2.2






  SUPPORT AND SERVICES AGREEMENT BETWEEN PHILIPS MEDICAL SYSTEMS AND DIAMETRICS
                                 MEDICAL, INC.












                                       1
<PAGE>


TABLE OF CONTENTS

SECTIONS

1.0      Introduction
2.0      Roles and Responsibilities
3.0      Repair Strategy
4.0      WW Call Flow with Distributors
5.0      Call flow for Europe/Asia Pacific
6.0      Call flow for US and Canada
7.0      Resource Definition
8.0      Training Definition
9.0      Diametrics Warranty
10.0     Service Call Coding Requirement
11.0     Service/Repair for End of Support
12.0     Repair and Return of IRMA's
13.0     Repair and Return of Trendcare
14.0     IDMS Support
15.0     Service Repair Pricing
16.0     After Hours Support Consumables
17.0     Customer Training
18.0     Customer Training Materials
19.0     Additional Customer Needs
20.0     Escalation



                                       2
<PAGE>



1.0 Introduction

This document is an exhibit to the Amendment to the Manufacturing and
Distribution Agreement, dated April 10, 2003. All capitalized terms not defined
in this Agreement will have the meanings set forth in the Amendment. In case of
any conflict between this exhibit and the Amendment, the Amendment will control.
The purpose of this document is to define the roles and responsibilities of
Philips Medical Systems ("Philips") and Diametrics Medical, Inc. ("Diametrics")
in support of M3622A and M3623A IRMA, the M3667A idms, the M3650A Senior
Trendcare Monitor, M3651A Trendcare Satellite Monitor, the M3652A Trendcare
Calibrator, and the M3653A Trendcare PDM. It also includes all supporting
options as well as sensors and cartridges utilized with these products sold by
Philips. A complete list of all products is included at the end of this document
Addendum F. The roles and responsibilities of Philips and Diametrics with
respect to the M3650A Portal Blood Analysis System and its components is defined
in the Amendment, including the Portal Manufacturing Agreement for Portal
(Exhibit 3.4).

Both parties agree that the ultimate responsibility for customer support could
be for 5 years or as defined by local custom or law (i.e. local law or sales and
support contracts protected by local law).

Pursuant to the Amendment, Philips has the non-exclusive right to provide
Support to the Philips Existing Customers for Products through October 31, 2004.
Diametrics may also provide Support to such Philips Existing Customers, on terms
to be mutually agreed between such Customers and Diametrics. For Products, this
document applies to those Philips Existing Customers who continue to use Philips
for Support.

It is acknowledged by both parties that a single customer may have a "mixed"
installation if additional IRMA/Trendcare/idms products are sold by Diametrics
into any Philips existing accounts after October 31st, 2002. This may require
the customer to utilize two support services, Philips and Diametrics.



                                       3
<PAGE>


2.0 ROLES AND RESPONSIBILITIES

- --------------------------------------------------------------------------------
Function                                        By Whom
- --------------------------------------------------------------------------------
Performs call screening, to determine if        Local Philips Response
product is a Diametrics product                 Centers
- --------------------------------------------------------------------------------
1st level application support

        Distributor Controlled                  Distributor who sold the
        Countries (Worldwide)                   Diametrics product to the
                                                customer

        Europe                                  Local Philips Response
                                                Centers

        USA, Canada and Latin America Field     Philips Medical Systems
Organization (LAFO)                             Medical Response Center
                                                Alpharetta, GA
                                                1-800-548-8833

        Asia-Pacific (AP)                       Appropriate Philips Response
                                                Centers (China, Japan,
                                                Singapore, Australia, India)
- --------------------------------------------------------------------------------
Order /send exchange unit (Via mail or          Local Philips Response
Courier) to customer when problem               Centers Worldwide
determined to be Diametrics hardware
- --------------------------------------------------------------------------------
Verify customer has sent their broken unit      Local Philips Response Center
to Philips SLI (System Logistics                Admin Worldwide
International)
- --------------------------------------------------------------------------------
Performs complaint investigation and            1st level investigation: Philips
escalations for Diametrics products             Technical Marketing

                                                2nd level investigation
                                                Diametrics
- --------------------------------------------------------------------------------

                                       4


<PAGE>

- --------------------------------------------------------------------------------
Function                                        By Whom
- --------------------------------------------------------------------------------
Reporting of all Diametrics product             Distributor who sold the
complaints and feedback to Diametrics           Diametrics product to the
per Section 7.3 of the amendment, dated         customers
April 10, 2003 as follows:  Diametrics will
maintain MDR and other product
performance monitoring systems for the          Local Philips Response
Consumables and the IRMA, Trendcare             Centers
and idms products. Philips shall
cooperate with Diametrics in connection         Philips Medical Systems
with Diametrics' obligations under              Medical Response Center
Section 7.3 of the amendment (Philips           Alpharetta, GA 1-800-548-
Service Call Coding Process (A-Q2925-           8833
00134)).  Philips will provide to
Diametrics the necessary reports relating       Appropriate Philips Response
to complaints and product performance           Centers (China, Japan,
issues relating to the Consumables, and         Singapore, Australia, India)
the IRMA, Trendcare and idms products
on a timely basis to permit the reporting
party to fulfill its regulatory obligations.
Upon reasonable request by Diametrics,
Philips shall promptly make such reports
(on behalf of Diametrics, if appropriate)
directly to the appropriate regulatory
authorities.
- --------------------------------------------------------------------------------





                                       5
<PAGE>


3.0 REPAIR STRATEGY

Diametrics Products Repair Strategy is unit exchange for IRMA/idms.


For the Trendcare products the repair strategy for Philips is spare parts repair
on-site, if possible, and unit exchange if not possible.

For the US only the repair strategy will be unit exchange and/or repair via
Medical Repair Depot (MRD) in Dallas, TX to Diametrics repair bench in
Malvern/Roseville or other location designated by Diametrics.

PHILIPS MAY INITIATE EXTENDED WARRANTY TERMS TO ITS IRMA/TRENDCARE/IDMS
CUSTOMERS FOR A PERIOD NOT TO EXCEED OCTOBER 31, 2004.

Note: After a country transitions from Philips to Diametrics, the Diametrics
TrendCare exchange policy will be unit exchange only for Out of Box Failures.
All other repairs will be covered with loaner units from Diametrics until the
repaired customer unit can be returned.

- --------------------------------------------------------------------------------

4.0 WW CALL FLOW WHEN COUNTRY USES DISTRIBUTORS

DIAMETRICS PRODUCTS WORLDWIDE CALL FLOW FOR COUNTRIES, WHICH UTILIZE
DISTRIBUTORS FOR THE SALE OF THE UNITS.


[GRAPHIC]

o    Customer should call Philips local Distributor directly, when transfer to
     Diametrics is not completed.
o    After transfer of customers to Diametrics, customer will be informed of the
     changes to call Diametrics support line instead of Philips Distributor, if
     not the same.
o    This communication is a Philips/Diametrics/Distributor responsibility as
     agreed by the regional transition plans.

o    Distributor will file questions regarding Diametrics products to the
     appropriate support channel (Philips before/Diametrics after transfer)
o    If it is determined the hardware/software has failed, the
     distributor/dealer orders / sends (via mail or courier an exchange unit to
     the customer using the responsible supply channel (Philips before/
     Diametrics after transfer)

o    Philips Technical Marketing/Diametrics technical resources handle
     application and technical questions / issues as appropriate to the transfer
     situation. If Philips Technical Marketing is unable to resolve situation,
     they will contact Diametrics for additional assistance.
o    If it is determined the hardware / software has failed the responsible
     supply channel will send exchange part to customer.

                                       6
<PAGE>

5.0 CALL FLOW FOR EMEA/ASIA PACIFIC

DIAMETRICS PRODUCTS CALL FLOW FOR EMEA AND ASIA PACIFIC COUNTRIES, WHICH DO NOT
UTILIZE DISTRIBUTORS FOR THE SALE OF THE UNITS.


[GRAPHIC]

o    Customer should call Philips local Response Center directly, when transfer
     to Diametrics is not completed.
o    After transfer of Philips customers to Diametrics, customer will be
     informed of the changes to call Diametrics support line instead of Philips
     Response Center.
o    This communication is a Philips/Diametrics/Distributor responsibility as
     agreed by the regional transition plans.

o    Philips Response Center Engineer will file questions regarding Diametrics
     products to the appropriate support channel (Philips Technical Marketing)
o    After transfer of the Diametrics support channel will take over
     appropriately
o    If it is determined the hardware/software has failed, the Philips Response
     Center Engineer/Diametrics support orders / sends (via mail or courier an
     exchange unit to the customer using the responsible supply channel (Philips
     before/Diametrics after transfer)

o    Philips/Diametrics technical resources handle application and technical
     questions /issues as appropriate to the transfer situation. If Philips
     Technical Marketing is unable to resolve situation, they will contact
     Diametrics for additional assistance.
o    If it is determined the hardware / software has failed the responsible
     supply chanel will send exchange part to customer.

Philips may initiate extended warranty terms to its IRMA customers for a period
not to exceed October 31, 2004.



                                       7


<PAGE>

6.0 CALL FLOW FOR US AND CANADA

DIAMETRICS PRODUCTS CALL FLOW FOR US AND CANADA, WHICH DO NOT UTILIZE
DISTRIBUTORS FOR THE SALE OF THE UNITS.

[GRAPHIC]

The customer should call the Philips Response Center at 1-800-548-8833
o    After transfer of Philips customers to Diametrics, customer will be
     informed of the changes to call Diametrics support line instead of Philips
     Response Center.
o    This communication is the responsbility of Philips/Diametrics regional
     transition managers.
o    No Philips customer should call Diametrics directly, unless support has
     been transferred to Diametrics
o    When call has been determined to be for Diametrics products, the call is
     forwarded to the appropriate Philips Response Center Engineer.
o    If it is determined to be a hardware/software problem, an exchange unit is
     ordered / sent to customer.

o    If that Philips Response Center Engineer needs additional assistance to
     resolve the customer issue they will contact the appropriate Philips
     Technical Marketing Engineer.
o    If PHilips Technical Marketing Engineer is unable to resolve issue, they
     will contact Diametrics technical support for additional assistance.

o    Diametrics technical resource handles application questions / issues as
     appropriate and responds to Philips Technical Marketing Engineer..


                                       8

<PAGE>

- --------------------------------------------------------------------------------

7.0 RESOURCE DEFINITION



The following list provides the suggested resource to perform the service
function.

<TABLE>
<CAPTION>
               Function                                       Resource
- --------------------------------------------------------------------------------------------
<S>                                     <C>
1st level application support contacts

         Distributor Controlled         Distributor who sold the Diametrics products to the
         Countries (Worldwide)          customer

         Europe                         Local country Philips Response Centers

         US, Canada and LAFO            Philips Medical Response Center

                                        Alpharetta, GA

                                        1-800-548-8833

         AP                             In country dealer

                                        Diametrics or their representatives once support
                                        transfer has occurred.

- --------------------------------------------------------------------------------------------
Local Customer Feedback Analyst         Local Philips person who processes the Customer
                                        Feedback Forms for the local Response Center
- --------------------------------------------------------------------------------------------
Diametrics products Technical           Philips Technical Marketing Engineer AND/BBN
Resource                                After transfer to Diametrics then Diametrics support
- --------------------------------------------------------------------------------------------
Customer Feedback Contacts for          For complaints: Philips Complaint coordinator
Diametrics                              Thomas Bauer; For non-complaints: Philips Technical
                                        Marketing Engineer  AND/BBN
- --------------------------------------------------------------------------------------------
Philips Field Service Engineer          Philips Customer Service Engineer
- --------------------------------------------------------------------------------------------
Philips QSP                             Philips Quality Service Provider
- --------------------------------------------------------------------------------------------
Philips CAS                             Philips Clinical Application Specialist
- --------------------------------------------------------------------------------------------

</TABLE>


                                       9
<PAGE>

- --------------------------------------------------------------------------------

8.0 TRAINING DEFINITION

The following list provides the resources that need to be trained to perform the
service/training /CFA function for the Diametrics products. It will be the
responsibility of Diametrics to provide training to the appropriate Philips
personnel for software upgrades, work around solutions for hardware or software
problems, troubleshooting for all new consumable and software releases. In
addition, with the release of new software, a compatibility matrix defining the
performance of that revision of software with previous revisions of
complimentary products will be provided to Philips as will customer training
materials, instructions, etc. This will be provided to Philips at no charge;
however, any travel related expenses for requested on-site training will be at
the expense of Philips.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
               Resource                                    Pre-requisites
- --------------------------------------------------------------------------------------------
<S>                                     <C>
Distributor Countries (Worldwide)       Existing Distributors on-going
- --------------------------------------------------------------------------------------------
                                        For transfer: transition criteria must be met
                                        (Addendum A)
- --------------------------------------------------------------------------------------------
Local Philips Response Center Call      According to Philips TEDS ( Training and Education
Coordinator                             System) training profile
- --------------------------------------------------------------------------------------------
Local Philips Response Center Engineer  According to Philips TEDS training profile
- --------------------------------------------------------------------------------------------
Philips CAS                             According to Philips TEDS training
                                        profile. In addition, the following
                                        pre-requisites are required/desirable:

                                        o  Hospital experience in the
                                           laboratory for at least 2 years
                                        o  Biochemical qualification
                                        o  Understanding of the stages of
                                           biochemical analysis, especially
                                           blood gas analysis.
                                        o  Understanding of the role of the
                                           nurses and doctors in the stages of
                                           biochemical analysis.
                                        o  Appreciate the concept of Point of
                                           Care (POC) and be able to discuss
                                        o  Be able to work as part of a team
                                           both locally and across the
                                           geography
                                        o  Speak and write English well
                                        o  Be willing to travel
                                        o  Experience with comparison studies
                                           would be an advantage, but not
                                           necessary.
- --------------------------------------------------------------------------------------------
</TABLE>


                                       10
<PAGE>

<TABLE>
<S>                                     <C>
- --------------------------------------------------------------------------------------------
Philips Customer Engineer               According to Philips TEDS training
                                        profile (for US only: No training for on-
                                        site support for US Philips CEs, because
                                        Philips utilizes Philips Dallas Repair
                                        Depot)
- --------------------------------------------------------------------------------------------
Philips QSP                             According to Philips TEDS training profile
- --------------------------------------------------------------------------------------------
Philips Customer Feedback Analyst       According to Philips TEDS training profile
- --------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------------------------------------
9.0 DIAMETRICS WARRANTY
- --------------------------------------------------------------------------------
Diametrics on-going obligations to provide products warranty and out of warranty
support to Philips and to Philips Existing customers who have transitioned to
Diametrics are set forth in the Amendment. This is a summary of the warranty
from Diametrics to Philips for the Standalone Products:
- --------------------------------------------------------------------------------
Warranty period for hardware products    18 month period defined from date of
                                         Diametrics shipment to Philips
- --------------------------------------------------------------------------------
Service location                         Unit replacement via Philips RCs
- --------------------------------------------------------------------------------
Support level                            Next business day
- --------------------------------------------------------------------------------
Consumables:

  Cartridges                             Cartridges - Stated Shelf life, but not
                                         to be less than 3 months from the date
                                         of shipment to Philips for Combo
                                         product. Minimum shelf life is 9 weeks
                                         for GL & H4 (M3587A & M3617A)) and 11
                                         weeks for H4E (M3617B).
- --------------------------------------------------------------------------------
  Sensors                                Sensors - Stated Shelf life, but not to
                                         be less than 10 months from the date of
                                         shipment to Philips
- --------------------------------------------------------------------------------
Accessories (e.g. Catheters, Gas,        No warranty - customer dissatisfaction
Printer paper etc.)                      issues will be dealt with via Supplier
                                         Action Request process (Addendum B -
                                         SAR process, A-Q2920-00224)
- --------------------------------------------------------------------------------
idms, DeviceSet, DeviceCom software      45 days after date of delivery to
                                         Philips customer

- --------------------------------------------------------------------------------

                                       11

<PAGE>

10.0 SERVICE CALL CODING  REQUIREMENTS
- --------------------------------------------------------------------------------
Service Call Coding Requirement when taking calls for Diametrics products.
- --------------------------------------------------------------------------------
o    Coding according to process A-Q2925-00134 (Addendum C)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

11.0  SERVICE / REPAIR FOR END OF SUPPORT REQUIREMENTS

Diametrics will also provide out-of-warranty repair service on all hardware
components of the products for a period of not less than seven (7) years after
last shipment to Philips or such longer period as may required by local laws.
When applicable Philips and Diametrics will consider having an exchange program
to newer product(s) of a supported but obsolete product to guarantee at least
the functionality of the old product or will have an extended functionality
within the newer product. When applicable, Philips and Diametrics will have an
exchange program to newer product(s) of a supported but obsolete product to
provide at least the functionality of the old product or an extended
functionality within the newer product. The support of the M3650A Senior monitor
is such a case. If and when within this support period, Diametrics may deplete
its supply of spare parts to repair the obsolete Senior monitor M3650A,
Diametrics may at that time offer an exchange/replacement of the M3650A Senior
monitor with a M3651A Satellite and M3652A calibrator.

Standard repair/exchange is via SLI (System Logistics International) to
Diametrics (exceptions are described below in section 12.0 through section
15.0). Diametrics will repair and return unit within 30 days after receipt from
SLI.

11.1  ACTIVE UPGRADES

The following describes the status of active Trendcare product upgrades and the
agreement between Diametrics and Philips as to the completion of these upgrades.

11.1.1  STATUS: UPGRADE A
Low Modulation SW upgrade and Calibrator "new bracket" HW upgrade ("Upgrade A")
will be transitioned and done by Diametrics according to the following agreed
upgrade planning-

o    Missing Upgrades as agreed between Philips and Diametrics to be done by
     Diametrics as part of their support responsibility as countries are
     transitioned.

o    Diametrics will provide traceability of the upgrade records to complete
     Philips files.

11.1.2  STATUS: UPGRADE B

o    Senior Spike Upgrade ("Upgrade B") NOT A REQUIRED UPGRADE.

o    Trained POCD CS completed the US Seniors upgrade.


                                       12
<PAGE>

o    Diametrics will complete the upgrade as part of their support
     responsibility as countries are transitioned

Impact:
- -------

o    Diametrics (DML) will provide upgrade records to Philips as available.

11.1.3   STATUS: CALIBRATOR EXCHANGE

o    Calibrator exchange from "old gas system" to "copper-and-brass fittings" at
     customer site

o    Maintain exchange program for customer calibrators through Diametrics for
     all remaining calibrators

11.1.4  STATUS: FUTURE UPGRADES

o    Future Upgrades for Products may consist of hardware, software, as well as
     Installation and Verification procedures in a quality controlled format for
     upgrades to be performed as corrective action as well as for upgrades for
     new features

To-Do:
- ------

o    Corrective actions and new features upgrades can only be performed by
     trained individuals for support (either trained CEs and RCEs from Philips
     or Diametrics engineers on mutual agreement will do upgrades)

o    Diametrics will provide the tools and spare parts to Philips for upgrades
     of instruments still under support of Philips or Philips and Diametrics
     will mutually agree to have Diametrics engineers do upgrades.

     Status of Trendcare Upgrades as of the effective date of the Amendment.

% Done               US & Canada   EMEA          LAFO         Asia Pacific (AP)
- -------------------  ------------  ------------  -----------  -----------------
Upgrade A            100 %         95 %          20 %         0 %

Upgrade B            100 %         15 %          0 %          0 %

Calibrator New       95 %          33 %          0 %          0 %
fittings

12.0 REPAIR/RETURN OF IRMA'S TO THE CUSTOMER (US ONLY)

This process only applies to Philips Existing Customers requesting this service
(i.e., request the same serial number unit returned). The standard repair for
warranty, service contract, and T & M customers is unit exchange.

1.   The customer should contact the Philips Medical Response Center at
     1-800-548-8833. The RCE will log the call, do troubleshooting and request
     the repair and return of their same serial number IRMA. The Response Center
     Engineer ("RCE") will note if the repair is under warranty, service
     contract or T & M (time and materials). For T & M repairs, the RCE will
     obtain a PO number from the customer. The RCE will inform the customer that
     the total Turn Around Time (TAT) for the repair will be 10-14 business
     days, from the date of shipment to Philips of the product. The RCE will
     determine if the customer utilizes other complimentary products (i.e. IRMA
     and idms) to determine


                                       13
<PAGE>

     compatibility if the product to be repaired is compatible with the s/w
     revision of the complimentary product. If there is a compatibility issue,
     the RCE will notify Diametrics that the product being returned is not to be
     upgraded to the current revision of software.

2.   The customers will be instructed to ship the unit to the Philips Dallas
     repair depot after removing the temp card and batteries (if applicable). If
     an appropriate shipping container is required, the Philips Dallas repair
     depot will ship the container to the customer.

3.   The Philips Dallas repair depot will perform the system decontamination and
     forward it to Diametrics in Roseville, MN.

4.   After the repair, Diametrics will return the unit to the Philips Dallas
     repair depot. The Philips Dallas repair depot will close out the Philips
     Service Call and return the unit to the customer.

5.   Diametrics agrees to a 10 business day TAT (turn around time) for repair
     upon arrival at the Diametrics facility. Customer units to be repaired and
     returned will be treated as P-1 (Priority 1) status.

6.   If Diametrics determines the repair time will exceed 10- business days,
     they will notify the PMD RCE. Diametrics will provide an expected date for
     the product to be returned to the customer. The Philips RCE will contact
     the customer to reset expectations. All communication with Diametrics and
     customer will be documented and tracked in the relevant Service Call
     database.

13.0  REPAIR/RETURN OF TRENDCARE TO THE CUSTOMER (WORLDWIDE)

For those Philips Existing Customers requesting a repair and return of their
Trendcare unit the following will apply (i.e., request the same serial number
unit returned). The standard repair for warranty, service contract, and T & M
customers is unit exchange or repair on-site where applicable.

1.   The customer should contact the local Philips Medical Response Center. The
     RCE will log the call, do troubleshooting and request the repair if needed
     (e.g. Senior monitor M3650A). The RCE will note if the repair is under
     warranty, service contract or T & M. For T & M repairs, the RCE will obtain
     a PO number from the customer. The customer will be informed that the TAT
     will be 14- 21 business days from the date of shipment by the customer of
     the product. This TAT includes the assumption that Philips return process
     takes no longer than 5 day TAT from customer to Diametrics. The equipment
     must also be shipped as repairs are needed (no retention of units allowed
     to enable one large shipment of product). The RCE will determine if the
     customer can utilize other complimentary products (i.e. Satellite monitor
     M3651A and Calibrator M3652A) to determine replacement if the product is
     not to be repaired anymore. If not, the RCE will be notified by Diametrics
     that the product being returned is not to be repaired anymore and offer the
     customer replacement.

2.   For US only: The customers will be instructed to ship the unit to the
     Philips repair depot in Dallas. If an appropriate shipping container is
     required, the Philips Dallas repair depot will ship the container to the
     customer.


                                       14
<PAGE>

     For ROW: The customer will be informed where to ship the unit on a case by
     case basis (if to High Wycombe, UK or Malvern, PA) or other location
     specified by Diametrics.

3.   The Philips Dallas repair depot will perform the system decontamination and
     forward it to Diametrics in Malvern/Roseville or other designated location.
     In all other cases (ROW) Philips/Diametrics will perform the
     decontamination according to their policies.

4.   After the repair Diametrics will return the unit to the Philips Dallas
     repair depot (US) or to the customer directly (ROW). For the ROW,
     Diametrics needs to inform the local Philips Response Center that the RCE
     can close out the Service Call. For the US: The Philips Dallas repair depot
     will close out the Philips Service Call and return the unit to the
     customer.

5.   Diametrics agrees to a 10-15 business day TAT for repair upon arrival at
     the Diametrics facility. Customer units to be repaired and returned will be
     treated as P-1 status.

6.   If Diametrics determines the repair time will exceed the announced TAT,
     they will notify the PMD RCE. Diametrics will provide a new expected date
     for the product to be returned to the customer. The Philips RCE will
     contact the customer to reset expectations. All communication with
     Diametrics and customer will be documented and tracked in the relevant
     Service Call database.

14.0 idms SUPPORT

For all idms systems installed prior to 31 October 2002, Philips will continue
to provide first level support to Philips Existing Customers for the product
including contacting the appropriate third party vendor if the problem involves
an LIS interface. If the RCE exhausts their ability to resolve the issue, they
will escalate the issue to Philips Technical Marketing for further assistance.

For all idms systems sold into Philips accounts as part of a Portal/CMS solution
after 31 October 2002, Diametrics will be responsible for providing system
training, installation, troubleshooting, repair and support.

Any s/w upgrades to provide for bug fixes or product enhancement that are being
offered to Diametrics customers free of charge will also be supplied to Philips
to give to their customers free of charge. If any additional classroom training
is needed on these upgrades for the Philips technical support staff, the
required training program will be provided to Philips free of charge. Any
Diametrics travel related expenses for requested on-site training will be at the
expense of Philips.

15.0 SERVICE REPAIR PRICING

Philips has requested Diametrics to provide reconditioning (including software
upgrades) on units returned for repair per reconditioning guidelines defined by
Philips. As a result of the additional services to be provided, the following
agreement has been reached.


                                       15
<PAGE>

o    Philips and Diametrics have established the following p/n's to reflect
     refurbished IRMA Analyzers:

<TABLE>
<CAPTION>
Philips New P/N             Philips (Exchange)       Diametrics P/N        Product Description
                            Reconditioning P/N
- ---------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                      <C>                   <C>
M3622-60701                 M3622-68701              443900                IRMA, Modem (Glucose Ready)
- ---------------------------------------------------------------------------------------------------------------------------
M3623-60701                 M3623-68701              443901                IRMA, w/out Modem (Glucose Ready)
- ---------------------------------------------------------------------------------------------------------------------------
                            M3623-68701              443902                IRMA, w/out Modem(Glucose Ready)Refurbished
- ---------------------------------------------------------------------------------------------------------------------------
M3622-60721*                M3622-68721              436300                IRMA, Modem(Non-Glucose Ready)
- ---------------------------------------------------------------------------------------------------------------------------
M3623-60721*                M3623-68721              436301                IRMA, w/out Modem (Non-Glucose Ready)
- ---------------------------------------------------------------------------------------------------------------------------
                            M3623-68721              436303                IRMA, w/out Modem(Non-Glucose Ready) Refurbished
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* M3622-60721 and M3623-60721 are not available as new product. These parts are
obsolete and are only repaired at DMI for the installed base.


PRICING FOR REPAIR AND RECONDITIONING AS FOLLOWS:

IRMA SL in Warranty requiring repair only                          *
IRMA SL in Warranty requiring repair and reconditioning            *
IRMA SL out of Warranty requiring repair only                      *
IRMA SL out of Warranty requiring repair and reconditioning        *

     o    Pricing will be subject to change upon 90 days written notice by
          Diametrics or upon change in reconditioning requirements by Philips
          Medical.
     o    Philips Medical will issue purchase orders to Diametrics prior to
          authorization of return of instruments to Diametrics.
     o    This agreement to provide reconditioning service may be terminated by
          either party upon 90 days written notice.
     o    Repair pricing is subject to 90 day notice of change.
     o    Repair and reconditioning will be to current built standards unless
          specified otherwise.
     o    Out of warranty repair excludes customer abused or damaged equipment.

OUT OF WARRANTY REPAIR FOR TRENDCARE:

Senior repair                                                 USD        *
Satellite repair                                              USD        *
PDM repair                                                    USD        *
Calibrator repair                                             USD        *

($1000 if calibrator needs copper and brass fittings => new hard piped gas
system upgrade)

o    Repair pricing is subject to 90 day notice of change.

o    Out of warranty repair excludes customer abused or damaged equipment.

FOR US ONLY:

Senior validation                                             USD        *


*  Confidential treatment requested


                                       16
<PAGE>

Satellite validation                                          USD        *
PDM validation                                                USD        *
Calibrator validation                                         USD        *

16.0  AFTER HOURS SUPPORT FOR CONSUMABLES AND/OR HARDWARE: (US ONLY)

Since cartridges and sensors are not able to be obtained through Philips SLI
(System Logistics International) for after hours needs (including weekends,
holidays, etc.), Philips will continue to utilize the services established by
Diametrics at Network Courier. Diametrics will maintain the inventory at Network
Courier including monitoring expirations dates of time sensitive materials. In
the event that Philips utilizes this service for consumables or hardware
shipments, the cost as well as the additional charges for next flight out and
delivery to site (if requested) will be billed to the Philips Blanket Service
Order (BPO) designated for Diametrics support/repairs.

17.0  CUSTOMER TRAINING

FOR ALL CUSTOMERS WHO PURCHASED EQUIPMENT PRIOR TO 31 OCTOBER 2002:
The Philips Clinical Application Specialist or their designee will do
installation and follow up training.

FOR ALL CURRENT IRMA AND TRENDCARE CUSTOMERS WHO PURCHASE INCREMENTAL UNITS FROM
DIAMETRICS AFTER 31 OCTOBER 2002 AND REQUIRE ADDITIONAL TRAINING:
The Diametrics Clinical Application Specialist or their designee will do
installation and follow up training.

The Diametrics Clinical Application Specialist or their designee will do
installation and follow up training of the IRMA and idms(including method
validation, install appropriate clinical data server description file, and LIS
connectivity).

FOR ALL CUSTOMERS WHO PURCHASE PMS PORTAL MODULES AND DIAMETRICS IDMS AND/OR
IRMA AFTER 31 OCTOBER 2002:

It is understood that this system sale will include the coordination of both
Philips and Diametrics representatives to meet the customer needs. Portal
modules can be sold by either Philips or Diametrics non-exclusively. IRMA and
idms are sold by Diametrics.

The Philips Clinical Application Specialist or their designee will do
installation and training on the Portal Module if sold by Philips.

The Diametrics Clinical Application Specialist or their designee will do
installation and follow up training of the IRMA and idms (including method
validation, install appropriate clinical data server description file, and LIS
connectivity).


*  Confidential treatment requested


                                       17
<PAGE>

While every effort will be made to coordinate the delivery of services needed
for the connectivity of the Portal/idms solution, each vendor should define
their own project management plan that defines scope, Work Break Down Structure
(WBS), deliverables, and billing milestones separately with the customer.

18.0  CUSTOMER TRAINING MATERIALS

All customer training material developed by Diametrics after 31 Oct. 2002, that
would be appropriate for IRMA, idms, and Trendcare units, will be made available
to Philips through October 31, 2004 at Diametrics' media cost, to provide to
their customers.

19.0  ADDITIONAL CUSTOMER SUPPORT NEEDS

Diametrics agrees to the continued responsibility of establishing and publishing
the reportable ranges for each lot of RNA controls for IRMA. Philips will
reimburse Diametrics for establishing the reportable ranges for each lot of
controls for Portal. This is done an average of 4 times per year (4 controls)
with and average estimated cost of $8000 (includes cartridges, controls and
labor) per year billable at the end of the year. This information will be made
available to the Philips RC as well as all Diametrics IRMA and Philips Portal
module customers via a posting on the Diametrics web site. In addition, Philips
will continue to share in the financial responsibility for completing the CAP
(College of American Pathologists) surveys applicable to IRMA. Surveys are
performed 3 times per year and the kits are ordered on an annual basis
(approximately $5000 for 10 kits to be paid for by Philips). Diametrics' share
of the expense will be to supply cartridges and labor costs to facilitate the
required testing and report the results to CAP to allow IRMA to be listed in a
peer group (minimum of 10 instruments) ensuring that results for these
instruments will only be compared to other results for this same instrument
(method).

In addition, any issues identified with cartridges, sensors or accessories that
may cause customer dissatisfaction and/or necessitate a recall will be
communicated to the appropriate regulatory person(s) within the Philips
organization. Product recalls are addressed per Section 6.5 of the Distribution
Agreement dated 06 June 1999 between the Companies.

It is recommended that a monthly conference call be established between the
Philips RC and field clinical specialists, a Philips technical marketing
engineer and the Diametrics technical support team and field clinical
specialists to discuss issues related to customer calls, product issues, etc.

If additional clinical support is needed for customer training, installations,
hot sites, etc., both parties agree that the other organization's clinical
specialists may be used and paid for by the agreed upon schedule (See Addendum
D). These requests for additional assistance should be considered only as a
one-time request for support. It does not imply that support of the customer is
being turned over to the other company unless all other agreed upon transition
parameters are met and if agreement between Philips and Diametrics Transition
Managers has been achieved.


                                       18
<PAGE>

20.0  ESCALATION PROCESS.

Philips will escalate issues/non-compliance arising under this Exhibit through
its SAR (Supplier Action Request) process, and Diametrics will escalate issues
arising under this Exhibit through its DAR (Distributor Action Request) process.

If a formal response is not received in a reasonable timeframe as requested on
the DAR or SAR, the issue will then be escalated to the Philips and Diametrics
Relationship Managers (currently Joe Harrington and Diane Norton).


                                       19
<PAGE>


ADDENDUM A:

READ ME:

The following Form shall be used regarding the transition of Philips Customers
to Diametrics. It is the responsibility of the regional transition managers to
complete the form as changes occur and to submit the records to Joe Harrington
and Herbert van Dyk Instruction: The following table will be used to show
conditions to be met prior to initiation of transition activities.

Please use the relevant color and indicate an appropriate reference in the cell,
which will demonstrate the evidence

Boblingen November 25, 2002 _ Herbert van Dyk (revised 28 Jan 03 by Joe
Harrington)
- --------------------------------------------------------------------------------
Diametrics Transition Criteria for A-P,
EMEA, NA-LA
- --------------------------------------------------------------------------------
Last Update: January 28, 2002
- --------------------------------------------------------------------------------

Owner: name
- --------------------------------------------------------------------------------
Instruction: The following table will be used to show conditions to be met prior
to initiation of transition activities. Items marked with an asterisk (*) are
those which must be completed. Other items are for Philips /Diametrics internal
purposes only.
Please use the relevant color and indicate an appropriate reference in the cell
___, which will demonstrate the evidence
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Legend:                        NOT READY
                               IN PROGRESS
                               READY
                               COMPLETE

COUNTRY:                       Country    Country   Country   Country   Country   Country   Country   Country   Country
- --------                       -------    -------   -------   -------   -------   -------   -------   -------   -------

<S>                            <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
REGULATORY
Regulatory process clearly
defined and requirements
fulfilled. This will include
all legal vigilance
requirements, e.g. Complaint
handling, traceability.*

DEALER (IF APPLICABLE)
Appropriate Dealer appointed
</TABLE>


                                       20
<PAGE>

<TABLE>
<CAPTION>

<S>                            <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Pricing negotiated and agreed

Terms of sale agreed

Export conditions met e.g.,
Types of invoice, customs
requirements etc.*

All PMS/Dealer contract/credit
issues resolved

SALES/SUPPORT/SERVICE

Technical support resources*

Clinical and sales support
clearly defined and in place*

Clearly defined warranty
delineation agreed
(including End of Life Support
terms)*

Escalation management defined*

Research/reference site(s)
transfer agreed to and
documented, as appropriate*

Post- transition follow-on
customer support/complaint
activities (by Diametrics)
documented (i.e. add'l sensors
provided at no charge) *

Transition of Service
Agreement (s) Documented  & in
place (as appropriate)

Customer/Distributor
information provided -
name,address,contact*

Country demo units/consignment
inventory returned to factory

TRANSITION TIMELINES

Start of transition*

Estimated end of
transition/complete date*
</TABLE>


                                       21

<PAGE>

ADDENDUM B:

Philips SAR Process (A-Q2920-00224); excerpt of process as needed from
Diametrics can be obtained from Philips Q&R responsible personnel.

ADDENDUM C:

Philips Service Call Coding Process (A-Q2925-00134); excerpt of process as
needed from Diametrics can be obtained from Philips Q&R responsible personnel.



                                       22
<PAGE>


ADDENDUM D:

New Options and Pricing
Standard Hours (consecutive 8 hour period between 7:00AM-7:00PM M-F)


o H1027B

o A01 - 1 Day Clinical Configuration and Implementation Services - $1700.00
o A02 - 2 Days Clinical Configuration and Implementation Services - $3200.00
o A03 - 3 Days Clinical Configuration and Implementation Services - $4500.00
o A04 - 4 Days Clinical Configuration and Implementation Services - $5800.00
o A05 - 5 Days Clinical Configuration and Implementation Services - $7100.00

Other New Options

o H1027B

o IV2 - IntelliVue Screen Creation - $1900.00 per day.

o CTS - Custom Clinical Configuration and Implementation Services - Requires AEO
DM Approval.



                                       23

<PAGE>


ADDENDUM E:

Diametrics DAR Form No. 391



                                       24
<PAGE>




ADDENDUM F:

     AVAILABLE PRODUCT LIST

1.   Cartridges

Type
- ------------------------ -----------------------------
M3614A                   BG
M3615A                   H3
M3616A                   CC
M3680A                   BG
M3682A                   CC
M3584A                   BG
M3585A                   H3
M3586A                   CC
M3617A                   H4 (original)
M3617B                   H4 (new)
M3681A                   H3
M3587A                   GL


2.   IRMA Products and accessories (used for support)

M3664A                  NiMH Battery for IRMA
M3628A                  NiMH 15 Vdc Battery Charger,
                        Power Supply
M3629A                  15 V power supply
M3669A                  IRMA Carrying Bag
                        Will get 5x5 number for
                        support use
M3670A                  AC Adapter assembly
M3666A                  IRMA Temp Card
M3671A                  IRMA print paper 5 rolls
M3624A                  Pole mount for IRMA
                        Will get 5x5 number for
                        support use


                                       25
<PAGE>

M3627A                  J&J Lifescan SureStep Pro
                        glucose module
                        5x5 number M3627-60101  for
                        support use
M3674A                  Capillary Collection device
M3679A                  IRMA edge connector
M3672A                  IRMA edge connector cleaner
M3677A                  Barcode scanner and mount
                        Will get 5x5 number for
                        support use
M3678A                  Barcode scanner mount kit
                        Will get 5x5 number for
                        support use
M3622-68701             DMI-443900 IRMA, Modem
                        (Glucose ready)
M3623-68701             DMI-443901 IRMA, w/out Modem
                        (Glucose ready)
M3622-40301             IRMA printer cover
                        453563339101
M3622-42501             IRMA printer spindle
                        453563339111
M3622-61610             Cable RJ45
                        453563339141
M3622-61620             Cable - RJ45/modRJ45
                        453563339151
M3622-63901             Edge connector kit
                        453563339161
M3622-67610             Adapter-RJ45/DB9 Female
                        453563339171
M3622-67611             Adapter-RJ45 to DB9 male
                        453563339181
M3622-67620             Adapter-RJ45 to DB25
                        453563339191


                                       26
<PAGE>

M3622-67621             Adapter RJ45/DB25
                        453563339201


3.   IDMS Products (used for support)

M3667-10802              IRMA IDMS SW 6.0 Disk set,
                         Data management

M3667-10803              IRMA IDMS SW 4.0.7 Disk
                         set, Data management
M3667-20002              IDMS v5 Assembled Binder
                         1.5"
M3667-9001C              IDMS Manual


4.   Trendcare Products (used for support)

M3561 60110              Trendcare Satellite TCM
                         6000
M3651 60111              Trendcare Satellite TCM
                         6000/Nordic
M3652-60101              Calibrator
M3653-60101              PDM
M3650-68101              Repair/Exchange Senior
                         monitor (115V)
M3650-68102              Repair/Exchange Senior
                         monitor (230V)
M3651-68101              Repair/Exchange satellite
M3652-68101              Repair/Exchange calibrator
M3653-68101              Repair/Exchange PDM


                                       27
<PAGE>

5.   Trendcare Sensors and Accessories

M3643A                   Paratrend 7+ sensor, 5/pack

                         Neotrend L sensor
M3673A                   5/pack L N7004L
M3654A                   Thermal printer paper  MPP
                         7005
M3655A                   Gas packs, 3 cylinders, F1
                         MCG 7010
M3644A                   Fixation strap


<PAGE>

                                                         Confidential treatment



                                   EXHIBIT 2.4
                           INVENTORY BUY-BACK PROCESS



*

- ----------
*  Confidential treatment requested


<PAGE>



*

- ----------
*  Confidential treatment requested


<PAGE>



                                   EXHIBIT 2.6
                            COUNTRY TRANSITION LETTER

                          [PHILIPS MEDICAL LETTERHEAD]

                                     [DATE]

Diametrics Medical Incorporated
2658 Patton Road
St. Paul, MN 55113

Re:  Transfer of Support of Consumables and IRMA, TrendCare, and idms Products
     from Philips to Diametrics

Dear ____________:

         This letter constitutes a letter agreement between Philips and
Diametrics with respect to the transfer of sales and support for Consumables and
support for installed IRMA, TrendCare and idms products (the "Transitioned
Products") in [COUNTRY] as follows:

     1.   The parties confirm that to the best of each party's knowledge, the
          criteria (as set forth in Addendum A to the Service and Support
          Agreement between the Parties) for transitioning, from Philips to
          Diametrics, the sales and support of Consumables and support for IRMA,
          TrendCare and idms products installed at Philips' customer sites have
          been completed in [COUNTRY]. Effective as of [DATE], Diametrics shall
          be responsible for sales and support for Consumables and support for
          IRMA, TrendCare and idms products in [COUNTRY], whether previously
          shipped or serviced by Philips or Diametrics, as defined in the
          Amendment and the Service and Support Agreement. In addition,
          Diametrics will resume all legal and regulatory obligations for all
          Transitioned Products in [COUNTRY] shipped by Diametrics prior to June
          6, 1999. The attached customer list contains contact information for
          the customers to whom Philips shipped Transitioned Products, and to
          the best of Philips' knowledge, customers of the Transitioned Products
          who did not order such Transitioned Products from Philips.

     2.   With respect to the Transitioned Products in [COUNTRY] as of the date
          of this letter agreement, the warranty, support and regulatory
          provisions set forth in the Amendment and the Service and Support
          Agreement shall apply.


<PAGE>

     3.   Attached is a mutually agreed list of unique follow-on customer
          support/complaint activities to be completed by Diametrics.

     4.   The parties confirm that for this country, Philips has provided
          Diametrics:
          a. installed base and/or distributor information (institution name,
          address, contact) and
          b. funnel information (leads, demo, evaluation).

     5.   In this country, Philips customer service agreements for the
          Transitioned Products have been either (a) assigned to and assumed by
          Diametrics in writing or (b) canceled by Philips and the applicable
          customer and superceded by new customer service agreements between
          Diametrics and the customer.

     6.   Diametrics has provided Philips contact information (name, address,
          telephone number, email address) of the Diametrics person to contact
          in case a customer, government agency, or third party contacts Philips
          about the Transitioned Products. Furthermore, Philips and Diametrics
          agree to separately communicate to customers and distributors that the
          country transition has been completed and include the new Diametrics'
          contact information for support to customers/distributors.

         If this letter agreement is acceptable to you, please sign below.


                                               PHILIPS MEDICAL SYSTEMS



                                               By:
                                                  ------------------------------
                                               Title:
                                                     ---------------------------

Accepted and Agreed:

Diametrics Medical Incorporated


By:
- ---------------------------------
Title:
- ---------------------------------


<PAGE>



                                   Exhibit 3.5
                     Portal Products purchased from Philips

                                                         Transfer Price
- --------------------------------------------------------------------------------
M3562A                   Interface module (for                 *
                         support use only)

M3561A                   Portal measurement module             *
                         (for support use only)

                         Users guide                           *

M3560A                   Portal Analysis Module                *
                          ( solution totally boxed
                         but without cable and
                         without mount) (for product
                         sale)

M3561-6160x              Interface Cable  2m                    *

                         Interface cable  4m                    *

M3570A                   Mount                                  *

M3571A                   Mount                                  *

M3572A                   Mount                                  *

M3573A                   Mount                                  *

M3574A                   Mount                                  *


* Mount price based on purchase minimum of * each.

Prices will be subject to change upon 90 days written notice by Philips.


<PAGE>

                                   EXHIBIT 5.1
                                  IP OWNERSHIP



*


- ----------
*  Confidential treatment requested


<PAGE>

*

- ----------
*  Confidential treatment requested


<PAGE>



*

- ----------
*  Confidential treatment requested



<PAGE>



*

- ----------
*  Confidential treatment requested



<PAGE>



*

- ----------
*  Confidential treatment requested




<PAGE>



*

- ----------
*  Confidential treatment requested



<PAGE>



*

- ----------
*  Confidential treatment requested



<PAGE>


*

- ----------
*  Confidential treatment requested



<PAGE>


                                  ATTACHMENT A

                                IP REVIEW PROCESS


<PAGE>



*

- ----------
*  Confidential treatment requested



<PAGE>


*

- ----------
*  Confidential treatment requested




<PAGE>



                                  ATTACHMENT B

                    PHILIPS/DIAMETRICS DISTRIBUTION AGREEMENT
                                 DATED 6 JUNE 99

                             CONTRACTUAL PROVISIONS


<PAGE>



*

- ----------
*  Confidential treatment requested



<PAGE>


                                   Exhibit 5.4

                                 Portal Products

                               WARRANTY STATEMENT

a)   Portal Products purchased by Diametrics from Philips will receive the
     standard warranty of: 18 months from date of receipt (90 days for parts) or
     12 months from date of installation by Diametrics whichever comes first.

b)   Philips warrants Philips hardware Products against defects in materials and
     workmanship. Philips further warrants that Philips hardware Products
     conform to Specifications. These warranties do not include periodic
     recalibration (recommended for some Philips Products).

c)   Philips warrants that Software will not fail to execute its programming
     instructions due to defects in materials and workmanship when properly
     installed and used on the Device designated by Philips. Philips further
     warrants that Philips owned standard Software will substantially conform to
     Specifications. Philips does not warrant that Software will operate in
     hardware and software combinations selected by Customer, or meet
     requirements specified by Customer.

d)   Philips does not warrant that the operation of Products will be
     uninterrupted or error free.

e)   If Philips receives notice of defects or non-conformance to hardware
     Specifications, or substantial non-conformance to Philips owned standard
     Software Specifications during the warranty period, Philips will, at its
     option, repair (and recalibrate only as necessitated by repairs), or
     replace the affected Products. If Philips is unable, within a reasonable
     time, to repair, replace or correct a defect or non-conformance in a
     Product to a condition as warranted, Diametrics will be entitled to a
     refund of the purchase price upon prompt return of the Product to Philips.
     Diametrics will pay expenses for return of such Products to Philips.
     Philips will pay expenses for shipment of repaired or replacement Products.

f)   Philips warrants that Philips Support will be provided in a professional
     and workmanlike manner. Philips will replace, at no charge, parts which are
     defective and returned to Philips within 90 days of delivery.

g)   Some newly manufactured Philips Products may contain and warranty service
     may use remanufactured parts, which are equivalent to new in performance.

h)   The above warranties do not apply to defects resulting from improper or
     inadequate maintenance or calibration by Customer; Customer or third party
     supplied software, interfacing or supplies; unauthorized modification;
     improper use or operation outside of the Specifications for the Product;
     abuse, negligence, accident, loss or damage in transit; improper site
     preparation; or unauthorized maintenance or repair.

i)   THE ABOVE WARRANTIES ARE EXCLUSIVE AND NO OTHER WARRANTY, WHETHER WRITTEN
     OR ORAL, IS EXPRESSED OR IMPLIED. PHILIPS SPECIFICALLY DISCLAIMS THE
     IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>ex_99-3.txt
<DESCRIPTION>PORTAL MANUFACTURING AGREEMENT (REDACTED)
<TEXT>

                         PORTAL MANUFACTURING AGREEMENT

                                 By and between

                            DIAMETRICS MEDICAL, INC.

                                2658 PATTON ROAD

                             ST. PAUL, MN 55113, USA

                    (hereinafter referred to as "DIAMETRICS")

                                       and

                             PHILIPS MEDICAL SYSTEMS

                     (hereinafter referred to as "PHILIPS")

         on the supply of Portal cartridge reader M3561A (M3561-60001);
                        exchange repair unit M3561-68000
        plus accessories edge connector cleaning kit M3672A (DMI 450000);
           temp card M3565A (DMI 467900); edge connector M3561-66403
      (DMI 516300); and DeviceSet with DeviceCom on a CD M3564A (DMI464218)



<PAGE>


                         PORTAL MANUFACTURING AGREEMENT

         THIS PORTAL MANUFACTURING AGREEMENT (the "Manufacturing Agreement"),
made as of this 10th day of April, 2003 (the "Effective Date"), by and among
Diametrics Medical Incorporated, a Minnesota corporation having its principal
place of business at 2658 Patton Road, St. Paul, Minnesota 55113 ("Diametrics")
and Philips Medical Systems North America Company, a division of Philips
Electronics North America Corporation, a Delaware corporation with offices at
3000 Minuteman Road, Andover, Massachusetts ("Philips"). Diametrics and Philips
shall each be a "Party."

                                    RECITALS

         A. Philips and Diametrics previously entered into a distribution
agreement dated June 6, 1999 (the "Distribution Agreement") the term of which
expired on October 31, 2002, and the parties are entering into an amendment to
the Distribution Agreement, dated as of the date of this Manufacturing Agreement
(the "Amendment") in order to clarify some of the surviving rights and
obligations under the Distribution Agreement. All capitalized terms shall have
the meanings set forth in this Manufacturing Agreement.

         B. Whereas as governed by the Distribution Agreement, Philips and
Diametrics have jointly developed the M3650A Blood Analysis Portal System
consisting of the M3561A Portal Reader and the M3562A Interface Module.

         C. Under the terms of the Distribution Agreement, Philips has surviving
rights to distribute the Portal Measurement Module as a part of the Portal
Product in a specific field of use until October 31, 2004, and Diametrics will
manufacture the Portal Measurement Products in accordance with the Amendment and
this Manufacturing Agreement and provide Portal Measurement Products to Philips
to allow for the completing of the postponement step by Philips of the Portal
Products.

         C. The Parties desire to enter into this Manufacturing Agreement for
the purposes of Diametrics' manufacture of the Portal Measurement Products
solely for Philips on the terms of this Manufacturing Agreement.

         NOW THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and subject to the terms and conditions set forth herein below,
Philips and Diametrics agree as follows:

1.   Definitions

     1.1  DeviceSet/DeviceCom Software. Means DeviceSet software with DeviceCom
          software on a CD M3564A (DMI 464218), as more particularly described
          in the Specifications.

     1.2  Portal Measurement Accessories. Means the following (a) accessories
          edge connector cleaning kit M3672A (DMI 450000); (b) temp card M3565A
          (DMI 467900); (c) edge connector M3561-66403 (DMI 516300), and (d)
          M3561-40003

                                       1
<PAGE>

          edge connector cover (DMI 466400), as more particularly described in
          the Specifications.

     1.3  Portal Measurement Module. Means the Portal cartridge reader M3561A
          (M3561-60001), as more particularly described in the Specifications.

     1.4  Portal Measurement Products. Means the Portal Measurement Module, the
          exchange repair unit M3561-68000, Portal Measurement Accessories and
          DeviceSet/DeviceCom Software, collectively.

     1.5  Portal Products. Has the meaning set forth in Section 1.14 of the
          Amendment.

     1.6  Required Quality Data. Means the data and information described on
          Schedule 1.

     1.7  Specifications. Means the specifications set forth in Schedule 2.

     1.8  Term. Means the period from the Effective Date through October 31,
          2004.

     1.9  Schedule References. All Schedule references shall mean the Schedules
          to this Amendment.

2.   EFFECT OF AGREEMENT

     2.1  Portal Manufacturing Agreement. This Manufacturing Agreement
          stipulates the additional terms and conditions for the supply of
          Portal Measurement Products to Philips by Diametrics, including any
          Portal Measurement Products supplied by Diametrics prior to or during
          the Term hereof. The Portal Measurement Products will be manufactured
          and supported by Diametrics as provided herein and the Amendment.

     2.2  Supplementary Agreement. The Parties are executing this Manufacturing
          Agreement as a supplement to the Amendment in order to provide for
          certain additional terms and conditions relating to the manufacture of
          the Portal Measurement Products. This Manufacturing Agreement does not
          supercede the Amendment, and the terms of the Amendment shall apply to
          the Portal Measurement Products, except as expressly set forth herein.

3.   EXAMINATION AND DELIVERY OF THE DIAMETRICS PRODUCTION UNITS PRIOR TO
     SHIPMENT TO PHILIPS.

     3.1  Supplier Evaluation. Diametrics shall manufacture the Portal
          Measurement Products with material purchased directly by Diametrics. A
          list of suppliers and contacts have been provided by Philips to
          Diametrics. Philips agrees to provide initially the "Supplier
          Evaluation". Diametrics' and Philips' engineering contacts (listed on
          Schedule 5) will jointly agree as to which supplied components of the
          Portal Measurement Module are required to be periodically audited by
          the Diametrics quality personnel.

                                       2
<PAGE>

     3.2  Certificate of Compliance. Each serialized Portal Measurement Module
          will be provided with a completed Diametrics "Certificate of
          Compliance" certifying that said product was inspected and tested per
          controlled manufacturing procedures.

     3.3  Production Units. Diametrics shall produce units of Portal Measurement
          Modules and other Portal Measurement Products in accordance with the
          terms and provisions hereof. The scope of delivery and supply shall be
          as set forth in this Manufacturing Agreement and the Amendment.

     3.4  Audit by Philips. Philips may periodically audit via a functional test
          a sample of the delivered Portal Measurement Module. Should Philips
          detect deviations from the Specifications or defects during the course
          of the functional check of the full production Portal Measurement
          Modules, Philips shall inform Diametrics thereof forthwith in writing
          via an SAR ( Supplier Action Request) per the Supplier Action Request
          Process Q2920-00224. In this event, Diametrics shall provide Philips
          with repaired or newly manufactured units of Portal Measurement
          Modules which are free of the defect(s) in question and shall provide
          a written corrective action plan within a reasonable period of time to
          be defined and agreed to by the Parties. Diametrics shall ensure that
          defects are remedied and rectified by certified employees. Subject to
          mutual agreement between the Parties, such rectification of defects
          may be carried out by Philips.

     3.5  Functional Checks after Delivery. Following delivery of the repaired /
          newly manufactured units, Philips shall conduct another functional
          check in accordance with Section 3.4 above. If deviations from the
          Specifications or defects are still detected in the repaired/newly
          manufactured Portal Measurement Modules and these are not remedied and
          rectified within mutually agreed upon date negotiated within the SAR
          process, subject to mutual agreement of the Parties, such
          rectification of defects may be carried out by Philips or a third
          party named by Diametrics and agreed by Philips prior to the
          implementation at Diametrics expense.

     3.6  Ship to Stock. The quality of the Portal Measurement Modules will
          allow ship-to-stock, without need of incoming inspection/test. Philips
          may periodically audit via a functional test a sample of the delivered
          Portal Measurement Module with a goal of acceptable failure rate of 1
          per 100 units.

4.   SCOPE OF DELIVERY.

     4.1  Forecasting and Ordering. Philips shall issue to Diametrics a monthly
          written, rolling, non-binding six (6) month forecast of its purchase
          of Portal Measurement Products. Such forecasts shall be updated
          monthly. Philips shall issue binding written purchase orders for
          Portal Measurement Products at least sixty (60) days prior to the
          proposed shipping date for such items. All purchase orders in excess
          of Philips' forecast shall be subject to written acceptance by
          Diametrics. Diametrics will use reasonable efforts to supply such
          items in a timely fashion,

                                       3
<PAGE>

          subject to Diametrics' reasonable production capabilities and provided
          that such purchase orders are consistent with Philips' forecasts.

     4.2  Fluctuations in Orders. The parties shall address purchasing of
          components and materials as provided in Section 4.1(c) of the
          Amendment. In addition, Diametrics will diligently monitor its supply
          chain and its production processes and will promptly inform Philips of
          any anticipated interruption or inability to supply Portal Measurement
          Products to Philips to meet its forecasts or its firm, binding
          purchase orders, in order to permit Philips to assess the
          manufacturing situation, to inform its sales and planning personnel to
          attempt to adjust for such shortfall, and to advise and assist
          Diametrics, at Diametrics' expense in its efforts to minimize or avert
          such interruption in or inability to supply Portal Measurement
          Products.

5.   DELIVERY.

     5.1  Purchase Orders for Portal Measurement Products. Philips shall be
          entitled to use its then current standard purchase order for its
          purchases hereunder. In the event of a conflict between the terms of
          any such purchase order and the terms of this Manufacturing Agreement,
          the terms of this Manufacturing Agreement shall take precedence.
          Additional terms included in the purchase order that are not terms of
          this Manufacturing Agreement will be subject to prior mutual written
          agreement.

     5.2  Terms for Delivery. All deliveries of Portal Measurement Products and
          Consumables shall be made by Diametrics F.O.B. Diametrics U.S. or
          European facility. Title and risk of loss shall pass to Philips at the
          time of tender at Diametrics' facility to the carrier designated by
          Philips. Upon delivery to Philips' designated carrier, Philips will
          assume title and risk of loss, and will be responsible for
          transportation, and, if applicable, export of such products from the
          country of manufacture and shall be entitled to any duty drawback for
          which the products qualify. Diametrics shall provide Philips, upon
          Philips' reasonable request and at Philips' expense, reasonable
          substantiation and assistance with respect to such duty drawbacks. The
          pricing for products excludes, and Philips shall pay, all shipping,
          handling and insurance costs for and other costs of transporting such
          products after delivery to the F.O.B. point.

     5.3  Diametrics Supply Obligation. Diametrics shall manufacture the Portal
          Measurement Products in accordance with the applicable specifications
          and in accordance with the FDA, EU and all applicable regulations.

6.   PRICES.

     6.1  Prices. Portal Measurement Products shall be supplied at the prices
          set forth in Schedule 4. All prices are F.O.B. Diametrics
          manufacturing facility.

                                       4
<PAGE>

     6.2  Price Changes. Prices may be changed upon ninety (90) days written
          notice by Diametrics. Any changes will not impact orders received
          prior to the date of such change.

     6.3  Terms of Payment. All payments for Portal Measurement Products shall
          be due and payable within thirty-five (35) days of the date of the
          applicable invoice. Philips shall make all payments in immediately
          available funds to the location and in the manner reasonably
          designated by Diametrics from time to time. A late fee shall be paid
          by Philips on any amount not received by Diametrics when due at a rate
          of 1.5% per month on all unpaid amounts, or the maximum rate permitted
          by law, whichever is less. As between the Parties, Philips shall be
          responsible for all taxes relating to the Portal Measurement Products
          so purchased (except for taxes on Diametrics' net income).

7.   INVOICE ADDRESS.

     All of Diametrics' invoices are the addressed to:

              Philips Medizin Systeme Boeblingen Gmbh
              Financial Service Center
              Postfach 1471
              71034  Boeblingen/ Germany

8.   CONTACT PERSONS. Diametrics and Philips shall each designate a Contact
     Person who will meet (by phone or in person) as required to discuss and
     monitor any manufacturing and manufacturing capacity issues for the Portal
     Measurement Products. Both Parties shall appoint additional contact persons
     in Schedule 5 to facilitate communication regarding specific aspects of the
     manufacture and supply of the Portal Measurement Products hereunder.

9.   TERM AND TERMINATION OF THIS MANUFACTURING AGREEMENT.

     9.1  Term. This Manufacturing Agreement shall become effective on the
          Effective Date and shall terminate on October 31, 2004, unless
          terminated as provided herein.

     9.2  Termination for Material Breach. Either party may terminate this
          Manufacturing Agreement if the other party materially breaches this
          Manufacturing Agreement and fails to remedy such breach within ninety
          (90) days written notice from the non-breaching party. Material
          breaches shall include failure by Diametrics to meet the agreed
          quality standards for the Portal Measurement Products as set forth in
          Schedule 2.

     9.3  Effect of Termination. No termination or expiration of this
          Manufacturing Agreement shall affect or discharge any obligations,
          rights, disclaimers, conditions or limitations of either Party which
          arose prior to the effective date of

                                       5
<PAGE>

          such termination. In addition, Articles 15 (Confidentiality) and 21
          (Miscellaneous) and any Sections necessary to give effect to this
          Article 9 shall survive any termination or expiration of this
          Manufacturing Agreement.

10.  TECHNICAL ALTERATION. Diametrics agrees and undertakes to effect technical
     alterations (i.e., any required technical changes due to third party
     supplier changes, such as part obsolescence, revision changes and the like)
     to the Portal Measurement Modules only after written consent of Philips.

11.  Product Change Notification. No process changes, design changes,
     geographical relocation of manufacturing processes, or process step
     discontinuances affecting the electrical performance (whether specified or
     not), the mechanical form or fit, the environmental compatibility or
     material chemical characteristics, or the life reliability of Portal
     Measurement Products, but excluding any changes that do not affect the fit,
     form or function of the Portal Measurement Products (hereinafter
     collectively called "Changes") shall be made or incorporated in Portal
     Measurement Products without following the change notification process
     established herein. Diametrics shall give Philips written notice of any
     proposed change via the established Philips/Diametrics change order process
     and provide evaluation samples and other appropriate information as
     specified by Philips. For planned/scheduled changes that require
     re-qualification by Philips, Diametrics notice must be received by Philips
     at least three (3) months prior to the first proposed shipment of any such
     Products. For changes not requiring re-qualification by Philips, Diametrics
     notice must be received by Philips at least one (1) month prior to the
     first proposed shipment unless mutually agreed by the Parties. The Supplier
     Change Notification Agreement process Q2920-00094 will be followed. All
     product changes will be reflected in the 10 digit serial number by an
     appropriate change of the year (digit 3) and/or week of the change (digit
     4-5) as appropriate.

12.  REPLACEMENT REQUIREMENTS/EXCHANGE PRODUCTS. Diametrics guarantees to
     Philips that replacement and or exchange Portal Measurement Modules will be
     supplied for a further seven (7) years following delivery of the last
     series/batch. After expiration of this seven (7) year period, Diametrics
     shall make available replacements (backward compatible or equivalent) in
     accordance with the respective technical possibilities or give Philips the
     possibility of placing a final order of a reasonable quantity, thus
     guaranteeing Philips a supply up until the end of the service period. The
     prices, terms and conditions as well as the technical feasibility of these
     two cases will form the subject of a separate agreement at the time of
     delivery of the last series/batch.

13.  REPAIRED / EXCHANGED PRODUCTS.

     Diametrics will provide a test and repair service for Portal Measurement
     Modules returned from the customers (internal or external) as faulty
     whether still in warranty or out of warranty. Philips will provide
     Diametrics' field failure information. Philips will pay Diametrics the
     exchange repair cost per Schedule 4. Diametrics shall perform root cause
     analysis (sub-assembly level) on any failed unit in order to determine
     failure mode.

                                       6
<PAGE>

     Diametrics will provide a pareto trend analysis of failure data for all
     failed units to Philips on a monthly basis.

14.  DOCUMENTATION

     14.1 Rights of Access. Philips shall have the right to access and use
          Diametrics' manufacturing documentation for the Portal Measurement
          Products to comply with regulatory requirements.

     14.2 Record Retention. Diametrics shall retain records of any safety,
          quality and reliability related data relating to the Portal
          Measurement Products as well as any data necessary for "Current Good
          Manufacturing Practices" (CGMP, as required by FDA), the "In Vitro
          Diagnostics Directive" (the IVDD, as required by the European Union)
          and the "Medical Device Directive" (MDD, as required by the European
          Union), to the extent provided under Schedule 1, Required Quality
          Data.

     14.3 Access to Filings. Diametrics assures the access of DHR (Device
          History Record), DHT (Device History Traveler), and DMR (Device Master
          Record) in support of Philip's timely answering of Portal Measurement
          Product questions from the FDA. Diametrics shall cooperate with
          Philips in connection with its regulatory obligations to provide to
          Philips, on a timely basis, the necessary reports relating to
          complaints and product performance issues regarding the Portal
          Measurement Products. Upon reasonable request, Diametrics shall
          promptly make such reports (on behalf of Philips) directly to the
          appropriate regulatory authorities.

15.  CONFIDENTIALITY.

     15.1 Non-Use and Non-Disclosure. Each Party acknowledges and agrees that
          all the other Party's Confidential Information is confidential to the
          disclosing Party. Each Party shall take the same reasonable measures
          as it uses to protect its own confidential information from the
          unauthorized disclosure or misuse to protect the other Party's
          Confidential Information from unauthorized disclosure or misuse,
          including without limitation, any disclosure by its employees, agents,
          contractors, permitted sublicensees, or consultants of the other
          Party's Confidential Information. As used herein, the term reasonable
          measures shall mean at least those measures a Party applies to the
          protection of its own Confidential Information and the term misuse
          shall mean use for any purpose other than as permitted or required
          hereunder.

     15.2 Marking. To be entitled to protection as Confidential Information, all
          Diametrics or Philips documents containing that Party's Confidential
          Information shall be appropriately and clearly marked as
          "Proprietary," "Secret," "Confidential," or other words to similar
          effect. If a disclosure of Confidential Information is made orally, as
          in a meeting, the disclosing Party shall indicate the nature of that

                                       7
<PAGE>

          information at the time of its disclosure and shall confirm such
          designation in writing within ten (10) days of the date of such
          disclosure to the receiving Party.

     15.3 Exclusions. Information shall not be considered Confidential
          Information hereunder if it:

          (a)  was already in the possession of the receiving Party prior to its
               receipt from the disclosing Party;

          (b)  is, or becomes, part of the public knowledge or literature
               through no fault, act or omission of the receiving Party,
               provided, Confidential Information shall not be deemed to have
               entered the public domain by reason of its having been filed with
               any regulatory authority; provided the disclosing Party has taken
               advantage of any procedures available to protect confidentiality,
               including FOIA marking and protective orders;

          (c)  is, or becomes, available to the receiving Party from a source
               other than the disclosing Party, which source has rightfully
               obtained the same information and has no obligation of
               confidentiality to the disclosing Party with respect to it;

          (d)  is made available on an unrestricted basis by the disclosing
               Party to a third party unaffiliated with the disclosing Party; or

          (e)  is required to be revealed pursuant to law or requirements of any
               securities exchange on which a Party's shares are listed and
               traded, provided, however, the receiving Party which is under any
               such requirement of law shall give reasonable notice to the
               disclosing Party of such requirement and shall cooperate with the
               disclosing Party, at the disclosing Party's expense in reasonable
               legal efforts to limit or mitigate any such revelation so as to
               preserve the proprietary nature of any Confidential Information
               contained therein.

     15.4 Duration; Surviving Obligation. This Article 15 shall be deemed to
          cover and include any non-public information disclosed by a Party to
          the other during the course of their negotiations of this
          Manufacturing Agreement, whether or not marked or indicated as
          provided in Section 15.2. Each Party's obligations of non-use and
          non-disclosure of the other Party's Confidential Information shall
          apply during the term of this Manufacturing Agreement and shall also
          survive for a period of three (3) years after its termination for any
          reason.

     15.5 Confidentiality of this Agreement. The terms of this Manufacturing
          Agreement itself and the Schedules hereto shall be deemed to be
          Confidential Information hereunder. In the event that a Party is
          required to disclose the content of this Manufacturing Agreement
          pursuant SEC requirements or requirements of any securities exchange
          on which a Party's share are listed and traded, such Party

                                       8
<PAGE>

          shall use its reasonable efforts to obtain confidential treatment of
          at least the terms of Schedules 1, 2, 4, 6 and 7.

16.  WARRANTY.

     16.1 Warranty Terms. Diametrics warrants to Philips that the Portal
          Measurement Products at the time of their delivery by Diametrics to
          Philips (a) shall meet the Specifications as set forth on Schedule 2;
          (b) shall have been manufactured in accordance with all laws and
          regulations applicable to their manufacture in those jurisdictions in
          which Philips is distributing the Portal Measurement Products
          (provided that Philips gives Diametrics at least ninety (90) days
          written notice of any jurisdictions in addition to those in effect as
          of the Effective Date of this Amendment); (c) shall be new or newly
          manufactured; and (d) shall be of good and merchantable title, free of
          liens and encumbrances. Diametrics shall, promptly, at Diametrics'
          sole option, replace, repair or make a purchase price (in the amount
          paid by Philips to Diametrics) refund for any of such Portal
          Measurement Products proved to be non-conforming, provided that
          written notice and reasonable documented evidence of each warranty
          claim and the fact that the failure occurred during the warranty
          period is received by Diametrics within thirty (30) days after the
          expiration thereof. Diametrics shall have the sole right to verify
          such non-conformance. Such replacement, repair or refund shall be
          Philips' sole remedy hereunder. Unless otherwise agreed by the
          Parties, the warranty period under this Section 16.1 for (1) the
          Portal Measurement Modules shall be eighteen (18) months from the date
          of shipment to Philips; (2) any DeviceSet/DeviceCom Software shall be
          forty-five (45) days from the date of delivery of such software to
          Philips' customer; and (3) any Portal Measurement Accessory shall be
          ninety (90) days from the date of shipment to Philips. If requested by
          Diametrics, Philips shall return the non-conforming Portal Measurement
          Products to Diametrics at the time of submission of the warranty claim
          therefore. Philips agrees to provide Diametrics sufficient notice of
          additional countries in which it intends to distribute the Portal
          Measurement Products to permit Diametrics to meet its obligations
          under subsection (b) of this Section 16.1.

     16.2 Exclusions. This warranty does not apply to Portal Measurement Modules
          or Portal Measurement Accessories that have been repaired, modified or
          tampered with by anyone other than Diametrics qualified technical
          personnel, nor to Portal Measurement Modules or Portal Measurement
          Accessories that have been exposed (by customer negligence) to adverse
          conditions through improper installation, application or maintenance.

     16.3 NFF Procedures. Any Portal Measurement Modules returned to Diametrics
          with no fault found (NFF) shall undergo twenty four (24) hour
          "burn-in" (i.e. 4 cycles of Treadmill test) upon no fault
          determination. Following completion of burn-in, the Portal Measurement
          Modules shall be subjected to a full functional test. Provided no
          fault is found, the Portal Measurement Modules shall be labeled (i.e.

                                       9
<PAGE>

          DHR annotated) prior to return to Philips in order to identify the
          Portal Measurement Modules, should they every be returned again. If
          the same Portal Measurement Modules should be returned to Diametrics'
          facility for a second time, and NFF, the Portal Measurement Modules
          shall be analyzed and replaced. For Portal Measurement Module's second
          NFF, the pc boards will be replaced and product fully tested before
          returned to Philips. If same Portal Measurement Module is returned a
          third time and NFF, the entire Portal Measurement Module will be
          removed from use and replaced at Diametrics' expense. The foregoing
          obligations apply only if the Portal Measurement Module is under
          warranty.

     16.4 Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 16
          OF THIS AGREEMENT, DIAMETRICS MAKES NO REPRESENTATIONS OR WARRANTIES,
          EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
          MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

     16.5 Customer Warranties. Philips shall be entitled to warrant the Portal
          Measurement Products to its customers on terms it deems appropriate;
          provided that Philips shall bear any expenses it may incur with
          respect to such warranties, to the extent that such warranties exceed
          the scope or term of the express warranties made by Diametrics
          hereunder.

     16.6 Customer Complaints, Warranty and Out-of Warranty Repair. Philips will
          be responsible for handling customer complaints regarding the Portal
          Measurement Products. Diametrics will provide reasonable assistance to
          Philips in resolving such customer complaints. Diametrics will accept
          the return of any Portal Measurement Products that do not conform to
          the warranties set forth in Section 16.1, and will repair or replace
          any such defective Portal Measurement Product (or refund Philips'
          purchase price) as provided in Section 16.1. Philips agrees to
          maintain an inventory of Portal Measurement Products to meet its
          on-going repair obligations; provided that Diametrics agrees to
          maintain a reasonable inventory of Portal Measurement Products to
          support significant Product warranty issues. As between Diametrics and
          Philips, Philips will be responsible for providing its customers with
          such replacement Portal Measurement Products for use while such
          defective Products are being repaired or replaced. Diametrics will
          also provide out-of-warranty repair service on the Portal Measurement
          Modules, on the terms set forth on Schedule 4 for a period of not less
          than seven (7) years after last production run of the Portal
          Measurement Module (or such longer period as may be required by local
          laws).

     16.7 Return Procedures. Reasonable attempts by Philips 1st Level
          Application Support (Response Centers) to determine failure mode(s) of
          the Portal Measurement Products is assumed. This information will be
          transferred to Diametrics prior to any Portal Measurement Products
          being returned from the field. This will provide initial information
          to assist in the investigation of the failed Portal Measurement
          Product. Upon receipt of a failed Portal Measurement

                                       10
<PAGE>

          Module, the unit will go through the standard repair process, which
          includes the known repair (if applicable) and then 1 cycle of
          Treadmill testing (roughly equivalent to 6 hour "burn-in"), and the
          subsequent quality tests. If the failure mechanism cannot be
          identified the unit will undergo the quality (diagnostic) tests, the
          repair pursued and then a full retest of the Portal Measurement Module
          (including Treadmill and the quality tests). If the fault cannot be
          re-created internally, and it passes all testing requirements the unit
          will be sent back out as acceptable (and documented as no fault found
          ("NFF") on the DHR). Diametrics will follow the Supplier Corrective
          Action Report ("SCAR") process or Distributor Action Request ("DAR")
          process to notify Philips if there is are multiple failures of any one
          component of any of the Philips engineered components. Diametrics,
          likewise will also pursue a Corrective Action Report ("CAR") if there
          are multiple failures of any one component of any Diametrics
          engineered components. Philips will be notified at the time of the CAR
          initiation.

     16.8 Repair Period. Diametrics agrees to use commercially reasonable
          efforts to repair or replace the non-conforming Portal Measurement
          Products and return conforming Portal Measurement Products to Philips
          within four (4) weeks of receipt of Diametrics. Failed units returned
          from the field that are out-of-warranty will be repaired within 10
          working days for customer units and within 30 days for Service
          Logistics International ("SLI") exchange units.

17.  QUALITY PERFORMANCE. If the failure rate of the Portal Measurement Module
     exceeds specified limits, (e.g. as per Section 3.5) and/or the Philips
     field failure rate is higher than the expectation (i.e. for Portal
     Measurement Module less than 4% the first year with a decrease to 1% the
     second year), Diametrics commits to initiate an SCAR, DAR or CAR driven
     corrective action project for quality / reliability improvements on Portal
     Measurement Modules (material, processes, subassemblies) effective per the
     SCAR or CAR.

     The goal for the Portal Measurement Module is not to exceed an annual
     failure rate (AFR) of 4% the first year with a decrease to 1% the second
     year for the Portal Measurement Module within a one year rolling period
     starting when the contract becomes effective:

          AFR =  # units failed/ #units shipped by Philips  (annualized)

     Diametrics and Philips will do a monthly failure clearance on a common
     basis before entering the numbers into the calculation.

18.  PRODUCT RECALL.

     18.1 If either Party believes that a recall of any Portal Measurement
          Product manufactured under this Manufacturing Agreement is desirable
          or required by law, it shall promptly notify the other Party. The
          Parties shall then discuss reasonably and in good faith whether such
          recall is appropriate or required and the

                                       11
<PAGE>

          manner in which any mutually agreed recall shall be handled. This
          Section 18 shall not limit the obligations of either Party under law
          with respect to recall of Portal Measurement Products required by law
          or properly mandated by governmental authority. Voluntary recalls
          shall be conducted by mutual agreement (with such agreement not to be
          unreasonably withheld) provided that if mutual agreement is not
          reached, either Party may individually conduct the voluntary recall in
          question in a manner consistent with its own regulatory guidelines and
          criteria. The "Recalling Party" shall bear all costs and expenses of
          any voluntary recall of any Portal Measurement Products and shall
          reimburse the "Other Party" for the reasonable, out-of-pocket costs
          incurred by the Other Party as a result of such recall, including the
          replacement cost of any Portal Measurement Products affected thereby,
          unless (i) such recall is unjustified and neither requested nor
          classified as a recall by a governmental agency or delegee or (ii) the
          cause or basis of such recall is attributable to a condition, fact or
          action that constitutes (A) a breach by the Other Party of any of its
          obligations hereunder or (B) negligence or willful misconduct of the
          Other Party in which case the Other Party will be liable for the costs
          and expenses of such recall, and shall reimburse the Recalling Party
          for the reasonable, out-of-pocket costs incurred by Recalling Party as
          a result of such recall, including the replacement cost of any Product
          affected thereby. The Parties shall cooperate fully with each other in
          effecting any recall of the Products pursuant to this Section 18,
          including communications with any customers or to the public.

     18.2 If any governmental agency having jurisdiction (including without
          limitation the FDA) shall request or order any corrective action with
          respect to Portal Measurement Products supplied hereunder, including
          any Portal Measurement Product recall, customer notice, restriction,
          corrective action or market action or any Product change, Diametrics
          shall bear the costs and expenses of such corrective action and shall
          reimburse Philips for the reasonable, out-of-pocket costs incurred by
          Philips as a result of such corrective action, including the
          replacement cost of any Products affected thereby, to the extent that
          the cause or basis of such corrective action is attributable to a
          condition, fact or action that constitutes (A) a breach by Diametrics
          of any of its obligations hereunder or (B) negligence or willful
          misconduct of Diametrics. Philips shall bear all other costs and
          expenses of such corrective action, and shall reimburse Diametrics for
          the reasonable out-of-pocket costs incurred by Diametrics as a result
          of such action, including the replacement cost of any Portal
          Measurement Product affected thereby.

                                       12
<PAGE>

19.  ENVIRONMENTAL CONSIDERATIONS.

     Diametrics agrees to provide commercially reasonable support to Philips, at
     Philips' written request and at Philip's expense, as required to meet
     United States and international environmental laws, regulations and
     standards applicable to the manufacture of the Portal Measurement Products.

20.  PRODUCT DISCONTINUANCES. Diametrics acknowledges its obligation to
     manufacture the Portal Measurement Products during the term of this
     Manufacturing Agreement; however, if the Portal Measurement Products will
     not be available from Diametrics prior to the conclusion of the term,
     Diametrics shall give written notice to Philips. Diametrics notice shall be
     given immediately upon Diametrics knowing about the unavailability, but in
     any event no less than six (6) months in advance of the last order date of
     the Products. In any event of termination of this Manufacturing Agreement
     and subject to Diametrics' manufacturing capacity, and in addition to any
     other remedies that Philips may have at law or in equity, Philips shall be
     entitled to determine its lifetime-buy quantities and to purchase such
     quantities in accordance with this Manufacturing Agreement for purchase and
     shipment by the end of the Term.

21.  MISCELLANEOUS PROVISIONS

     21.1 Entire Agreement. This Manufacturing Agreement, together with any
          Schedules or other Attachments hereto and the Amendment, constitutes
          the entire agreement between the parties in relation to this subject
          matter and as such, supersedes all prior and contemporaneous
          negotiations, agreements, representations, understandings and
          commitments with respect thereto and shall take precedence over all
          terms, conditions and provisions on any purchase order form, or order
          acknowledgment, or order release purporting to address the same
          subject matter.

     21.2 Modification. This Manufacturing Agreement shall not be released,
          discharged, changed or modified in any manner except by a writing
          signed by the duly authorized officers or agents of each Party hereto,
          which writing shall make specific reference to this Manufacturing
          Agreement and shall express the plan or intention to modify same.

     21.3 Severability. If any provision or provisions of this Manufacturing
          Agreement shall be determined to be unenforceable, then the Parties
          shall in good faith negotiate for a substitute provision addressing
          the same subject matter as the unenforceable provision(s) as may then
          be considered to be enforceable, provided, however, if no substitute
          provision can be formulated which shall be accepted by the Parties as
          enforceable, this Manufacturing Agreement shall nonetheless continue
          in full force and effect with the unenforceable provision(s) stricken
          here from. In such case the applicable law shall apply with regard to
          unenforceable and / or void provisions.

                                       13
<PAGE>

     21.4 Governing Law. This Manufacturing Agreement shall be governed by and
          construed in accordance with the laws of the United States and the
          State of Delaware, excluding its choice of law rules. The Parties
          consent to the jurisdiction of the state and federal courts of
          Delaware.

22.  SCHEDULES. Should conflicts occur between this Manufacturing Agreement and
     any part of the following Schedules, the requirements of this Manufacturing
     Agreement shall govern. The following Schedules form an integral part of
     this Manufacturing Agreement:

     Schedule 1:  Required Quality Data
     Schedule 2:  Portal Measurement Products and Specifications
     Schedule 3:  Philips Terms of Delivery
     Schedule 4:  Prices/Quantities
     Schedule 5:  Contact Persons
     Schedule 6:  Cosmetic Defect Guideline
     Schedule 7:  Cosmetic Inspection Guideline


DIAMETRICS MEDICAL, INC.               PHILIPS MEDICAL SYSTEMS NORTH AMERICA
                                       COMPANY, A DIVISION OF PHILIPS
                                       ELECTRONICS NORTH AMERICA CORPORATION


By:                                    By:
   ---------------------------------      -------------------------------------
   David Kaysen, Chairman of the          Jay Mazelsky
   Board and Chief Executive Officer      Vice-President & General
                                          Manager - POCD

                                       14
<PAGE>



                                   SCHEDULE 1

                              REQUIRED QUALITY DATA

Diametrics assures 5 years of record retention of all the following quality and
reliability related data:

Starting on the Effective Date, Diametrics shall provide the following data to
Philips Procurement once every quarter:

1.   Outgoing data (Also known as F2 data) on each Portal Measurement Module:
          100% outgoing inspection means
          N = total (100%) each products tested.

2.   YIELD (overall - from incoming through outgoing -
          Philips expects a yield > 92%, per test station
          @ manufacturing, 1st cycle)

          2.1) and a pareto analysis of all materials failures,1st cycle.

          2.2) and a pareto analysis of all process failures, 1st cycle.

3.   A pareto analysis of all root cause failures (sub-assembly level) for
     returned products.



                                       1
<PAGE>


                                   SCHEDULE 2

                  PORTAL MEASUREMENT PRODUCTS & SPECIFICATIONS

Item         Part Number                Respective               Date of
             Description                Specification            Specification

1.     M3561A Portal Reader             B-M3561-60000-1*         09/12/03
       (M3561-6001)

2.     M3561-68001                      B-M3561-60000-1          09/12/03
       Exchange repair Portal

3.     M3565A temp card                 B-M3561-60000-1          09/12/03
       (DMI 467900)

4.     M3561-66403 edge connector
       (DMI 516300)                     B-M3561-60000-1          09/12/03

5.     M3564A DeviceSet w/DeviceCom
       (DMI 464218)                     B-M3561-60000-1          09/12/03

6.     M3672A edge connector
       Cleaning kit (DMI 450000)        N/A                      N/A

7.     Cosmetic Defect Guideline        see schedule 6

8.     Cosmetic inspection              see schedule 7

*B-M3561-60000-1 is the M3561A Portal Product Specification. Rev. A of such
specification applied prior to 9/12/03. To the extent of any conflict between
Rev. A or B of the M3561A Portal Product Specification and Diametrics'
manufacturing process document MP46000 Rev. X., MP46000 shall apply.


                                       1
<PAGE>


                                   SCHEDULE 3

                                TERMS OF DELIVERY

- -    Delivery and Packaging Standard of Philips HP Dwg. A-5961-3658-1, Rev. D

- -    EDI - capabilities for order receiving and acknowledgment

- -    Shipping date as specified on Philips-Purchase Order

- -    Date of dispatch:  Philips Delivery Date minus 7 days

- -    Mode of transport:  Airfreight

- -    Each shipment must indicate the exact address of the addressee on the
     outside of the packaging.

- -    Products are shipped F.O.B. point of origin.

     FOR SHIPPING AND PRODUCTION AND FAILURE ANALYSIS:

              PHILIPS MEDIZIN SYSTEME BOEBLINGEN GMBH
              HEWLETT PACKARD STR. 2
              71034 BOEBLINGEN /GERMANY
              POCD PRODUCTION ENGINEER
              GEBAEUDE 5/ EBENE 3 2 F15

- -    The minimum order and ship quantity is 10 pieces.
- -    Dangerous goods must be packed and labeled in accordance with the relevant
     regulations (Postal regulations, Regulation on the transport of dangerous
     goods, etc.).

- -    Each shipment must contain a delivery voucher indicating the Philips order
     number and the Philips part number.

- -    The total number of Portal Measurement Modules shipped shall be exactly as
     specified on the Philips purchase order.



                                       2
<PAGE>


                                   SCHEDULE 4

                       DIAMETRICS/PHILIPS TRANSFER PRICES

1.        M3561A Portal Reader                  *
          (M3561-60001)

2.        M3561-68000           Exchange repair Portal

The first two rates assume the unit is part of the exchange program, whereas the
third rate assumes the unit is not part of the exchange program.

<TABLE>
<S>                                                           <C>
- - Combined repair/recondition rate (if outside warranty):     *
         (assumes part of exchange program, and covers
         reconditioning and functional repairs while
         outside of the standard warranty period)

- - Recondition only rate (would apply if within warranty):     *
         (assumes part of exchange program, and covers
         reconditioning and functional repairs while within
         the standard warranty period, e.g., reconditioning
         is not covered by warranty)

- - Repair only rate (no recondition occurs):                   *
     (assumes not part of exchange program)

3.        M3565A temp card                                    *
          (DMI 467900)

4.        M3561-66403 edge connector                          *
          (DMI 516300)

5.        M3564A DeviceSet w/DeviceCom                        *
          (DMI 464218)

6.        M3672A edge connector                               *
          Cleaning kit (DMI 450000)

7.        M3561-40003 edge connector cover                    *
          (DMI 466400)
</TABLE>


*  Confidential treatment requested


                                       3
<PAGE>


                                   SCHEDULE 5

                                 CONTACT PERSONS

FOR PHILIPS:

MANUFACTURING            E-MAIL: GUIDO.SARNOWSKI@PHILIPS.COM
                         TELEPHONE:+49 (07031) 463-1218
                         FAX:+49(7031)463-1660

PURCHASING DEPT.         E-MAIL: GABRIELE.SOUTHWOOD@PHILIPS.COM
                         TELEPHONE:+49(07031)464-1770
                         FAX:+49 (07031)464-1881

MATERIALS ENGINEERING    E-MAIL: JOCHEN.SPONHOLZ@PHILIPS.COM
                         TELEPHONE:+49(07031)463-1932
                         FAX:+49(7031)463-1660

ORDER PROCESSING         E-MAIL:GABRIELE.SOUTHWOOD@PHILIPS.COM
                         TELEPHONE:+49(07031)464-1770
                         FAX:+49(07031)464-1881

- --------------------------------------------------------------------------------


FOR DIAMETRICS:

OPERATIONS                                E-MAIL:dnorton@diametrics.com
Diane Norton                              TELEPHONE:  651-638-1153
                                          FAX:  651-638-1060

PURCHASING DEPT.                          E-MAIL:   vjereczek@diametrics.com
Vern Jereczek                             TELEPHONE:  651-638-1162
                                          FAX:  651-638-1060

MATERIALS ENGINEERING/MANUFACTURING       E-MAIL:   jkurkowski@diametrics.com
Jim Kurkowski                             TELEPHONE:  651-638-1112
                                          FAX:  651-638-1060

ORDER PROCESSING                          E-MAIL: acottrell@diametrics.com
Amy Cottrell                              TELEPHONE:  651-638-1191
                                          FAX:  651-638-1060

                                       4
<PAGE>



                                   SCHEDULE 6
                            COSMETIC DEFECT GUIDELINE

                    Exchange Portal Cosmetic Defect Guideline

PURPOSE

This document provides guidelines for inspecting used (also called exchange)
Portal Measurement Modules during the repair process. The overall purpose of
this guideline is to ensure that exchange products which are shipped to
customers are in a condition which will lead to consistent customer
satisfaction.

SCOPE

This document does not cover cosmetic specifications for individual recovered
parts of assemblies, nor cosmetic specifications for new whole units. This
guideline only applies to the Portal Measurement Module and its related exchange
parts.

Because this guide applies to refurbished product only, inspectors should be
examining the product for end-user and shipping induced damage, or wear, not
defects caused during manufacturing. Only cosmetic defects that could be caused
by end-user or shipment can fail the product since any manufacturing-induced
defects have already passed manufacturing inspection. For that reason,
manufacturing-caused cosmetic defects such as blush, flash, flow marks, haze,
sinks, and weld lines should not be considered as defects when examining
refurbished units.

GENERAL GUIDELINES

Cosmetics, in this context refer to superficial, visual appearance of the
product and as such do not affect the functioning of the product. Any defect
that interferes with the normal operation of the product, should be considered a
non-cosmetic defect. In the strictest sense, missing parts are not considered a
cosmetic defect, even if they are not needed for the operation of the product
(example: missing label). Note, however, that a missing part would be considered
a defect, and would necessitate some form of repair or action. Also, it is very
important to realize that cosmetics are largely subjective, so inspectors should
apply their best judgment in all cases.

The guiding principal when applying this judgment should be that this product is
not a new product and should not be considered as such. A balance needs to take
place between attempting to achieve near perfect cosmetic appearances which
would result in a large financial liability to the company versus the
possibility of having a high customer dissatisfaction rate if we were to ship
exchange product which looks shabby.

EVALUATION CRITERIA

Cosmetic defects will be evaluated using a weighted criteria basis based on the
location of the defect and the severity of the defect. Guidance is provided in
Table 1.


                                       5
<PAGE>

CUSTOMER ADDED LABELS

Any labels or marking put on a system by customers must be removed . This
includes such items as inventory tags and safety stickers. All glues used to
attach these labels must also be removed.

<TABLE>
<CAPTION>

                                (a)   Type of Cosmetic Defect
    SURFACE
      AREA        --------------------------------------------------------------------------------------
    LOCATION         PAINT                         HEAT                        SMALL          DEEP
- -----------------  DISCOLOR-      ABRASION       DISCOLOR-      PITS,        SCRATCHES      SCRATCHES
                   ATION OR                       ATION         NICKS        (MINIMAL-        (VERY
                    OR WEAR                                    GOUGES-      LY VISIBLE)      VISIBLE
                                                               (NOTE 2                       NOTE 2)
                  ------------- --------------- ------------ ------------ -------------- ---------------

<S>               <C>           <C>             <C>          <C>          <C>            <C>
PRODUCT           Minor OK-     Minor OK-       Minor OK-    Minor OK     Minor OK       OK
SERIAL # LABEL

                  Note 1        Note 1          Note 1       Note 1       Note 1         Note 1


LOGO "PORTAL"     Very minor;   Very minor;     Very minor;     None      Very minor;       None
(TOP)
                  Still         Still clearly   Still                     Still
                  clearly       read name       clearly                   clearly read
                  read name                     read name                 name

DISPLAY SCREEN
(GLASS AREA)          N/A            None           N/A         None          None          None

CASE TOP          Minor OK      Minor OK        Minor OK     None         Minor OK       None

CASE BOTTOM       Minor OK      Minor OK        Minor OK     Minor OK     Minor OK       Minor OK
- ----------------- ------------- --------------- ------------ ------------ -------------- ---------------
</TABLE>

NOTE 1: Damage to the label that makes the reading of the serial number, product
number, impossible or difficult to read are not acceptable.
NOTE 2: Judgment needed here. A scratch, gouge, or nick, could be deep but small
in size (width and length). If this defect is small in size it may be acceptable
if in a location where seldom seen).



                                       6
<PAGE>



                                   SCHEDULE 7

                          COSMETIC INSPECTION GUIDELINE


<TABLE>
<CAPTION>
ACCEPTANCE CRITERIA

<S>                      <C>
Checking Contents        Packaging / box labeling
                         Portal
                         Edge connector cleaning kit
                         Certification sheet

Checking Portal          Confirm Correct Label, Placement & Affixment for the Unit
                         Ensure that there are 4 Rubber Feet and no abnormal
                         scuffing or damage, other than normal production scuffs
                         Check for 4 torque screws on the bottom of Portal
                         Check for serial port cover and 2 torque screws
                         Check for light pipe
                         No scratches or fingerprints on screen
                         No dust between the touchscreen and display
                         No residues on portal
                         Sensor/IR probe flush or less
                         Discoloration, Flow marks, and Haze:  Two per surface; max dimension;
                         0.5 mm (.02")
                         Weld Line Exceptions:  Weld lines of up to 9.5mm (.375") long shall be
                         allowed next to the IR Probe hole and the Light Pipe hole in the M3561-
                         40000 Top Housing
                         Pits and Specks:  Two per surface; max dimension; 0.5 mm (.02)
                         Scratches:  Two per surface; max dimension: 0.3 mm x 0.8 mm (.01" x
                         .03")
                         Sinks:  Two per surface; max dimension: 0.8mm (.03")
                         Weld Lines per surface:  Two; max dimension:  3 mm (.125")
                         No visual gasket btw. Touchscreen and top housing

Checking portal box      Edge connector cleaning kit in Box
                         Certificate of Conformance
                         No crumb or dirt in the box
                         No bent connector pins
                         Confirm Correct Label, Placement & Affixment / for the BOX
</TABLE>



                                       7

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
