Exclusive Distribution Agreement

Exhibit 10.10

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EXCLUSIVE DISTRIBUTORSHIP AGREEMENT

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AGREEMENT, made as of the 28th day of December, 1995, by

and between CAMBRIDGE HEART, INC., a corporation duly incorporated

under the laws of the State of Delaware (hereinafter referred to

as "Cambridge Heart"), having its office at One Oak Park, Bedford,

Massachusetts 01730, and KONTRON INSTRUMENTS LTD., a corporation,

having its principal office at Blackmoor Lane, Croxley Business

Park, Watford, Herts, United Kingdom WD1 8XQ (hereinafter referred

to as "Distributor").



W I T N E S S E T H:

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WHEREAS, Cambridge Heart is engaged in the development

of systems performing exercise stress test or measuring electrical

alternans; and



WHEREAS, Cambridge Heart has no distribution facilities,

places of business or employees in Europe and desires to arrange

for the distribution of its products in the area specified as the

Territory on Attachment A (the "Territory"); and



WHEREAS, Distributor desires to become the exclusive

distributor in Europe of Cambridge Heart's exercise stress test

system;



NOW THEREFORE, in consideration of the mutual promises,

covenants and conditions hereinafter contained, it is hereby

agreed as follows:



1. Appointment and Territory.

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1.1 Distributor is appointed exclusive and sole distributor in

the Territory for the Cambridge Heart Products (the "Products")

listed in Attachment A and their successors and extensions,

subject to the terms and conditions set forth in this agreement.

Cambridge Heart shall have the right subject to the prior written

approval of the distributor to appoint one or more OEMs in the

Territory to sell a private label version of the Product,

incorporated in a system or product consisting of a substantial

amount of other hardware and/or software which such OEM

manufactures, integrates or develops, and which will not include

electrical alternans calculation. The distributor shall not

unreasonably withhold such approval.



1.2 Kontron does not become an agent of Cambridge Heart by

virtue of this Agreement but rather shall purchase and sell in its

own name and for its own account, without being entitled to act in

the name of Cambridge Heart or to obligate Cambridge Heart in any

form towards any third party.



1.3 Kontron shall safeguard the interests of Cambridge Heart

with the due diligence of a responsible businessman and keep

Cambridge Heart informed as to its activities.



1.4 Kontron is entitled to appoint distributors, sub-

distributors, or directly/indirectly employed agents for the sale

of Cambridge Heart products in the Territory. Lists of such

agents shall be at Cambridge Heart's disposal for consultation at

any time. Such distributors, sub-distributors, or

directly/indirectly employed agents shall be subject to the terms

of this Agreement.



1.5 This Agreement and the rights, duties and obligations

hereunder, may not be assigned or delegated by any party without

the prior written consent of the party. Except that Kontron may

specifically assign the Agreement to any of its sister companies

listed in Attachment B, provided, that no such assignment shall

relieve Kontron of any responsibility or liability hereunder

(including its responsibility to coordinate its distribution

activities from a single point of contact). Notwithstanding the

foregoing, Cambridge Heart may assign its rights or delegate its

duties hereunder to any affiliated person or entity which

controls, is controlled by, or is under common control with,

Cambridge Heart or to any successor to its business.



2. Term and Termination

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2.1 Term: This agreement commences on the date of the

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execution of this agreement and continues until December 31, 1997,

unless sooner terminated in accordance with the provisions of the

Paragraphs below. This agreement shall be automatically renewed

for successive two-year periods unless terminated in accordance

with the provisions for termination outlined in the Agreement.



2.2 The parties agree to negotiate in good faith new Sales

Minima and Marketing Plans for each renewal term commencing no

later than ninety (90) days before the end of the initial term or

two year renewal term. The Sales Minima for subsequent periods

shall not be less than the greater of the actual sales of Products

in the Territory and the Sales Minima for the previous 12 month

periods ending with the start of negotiations or with the end of

the previous term.



If either party believes at the end of such 90-day negotiation

period that the other is not negotiating concerning renewal terms

in good faith, such party may require that the renewal terms be

finally settled by arbitration in Boston, Massachusetts, under the







Rules of Conciliation and Arbitration of the International Chamber

of Commerce by three arbitrators appointed in accordance with such

Rules; The arbitrator shall decide between the final proposal of

Distributor and of Cambridge Heart made prior to the end of the

ninety-day period.



2.3 Ordinary termination will require 24 months written notice

by either party. Such notice cannot be given before December,

1996. In the event of such a notice of termination by Cambridge

Heart, Cambridge Heart shall have the right to render the

Distributor's exclusive distribution rights non-exclusive by at

least 90 days notice in writing but not effective prior to the

expiration of the first 12 months of the 24 months ordinary

termination notice period. In the event of such a notice of

termination by Distributor, Cambridge Heart may terminate this

agreement at any time upon thirty (30) days written notice.



During the period of the 24 months termination phase in which the

Distributor's rights remain exclusive, Distributor must continue

to achieve the Sales Minima and must sell not less in any calendar

quarter than the amount sold in the equivalent quarter in the year

before termination.



During the period of the 24 month termination phase in which the

Distributor rights may be non-exclusive, the distributor will

continue to use its best efforts to continue to promote, advertise

and market the products of Cambridge Heart, but will not be

required to meet any sales Minimum or Marketing Plans and will

receive terms of trade as favorable as those offered to any other

distributor operating in the Territory.



2.4 Cambridge Heart shall also have the right, by at least six

(6) months' written notice to Distributor given within 6 months of

the event, to terminate the agreement (the ability to so terminate

being a material inducement to Cambridge Heart to the appointment

of and grant of a license to Distributor hereunder), if

Distributor has failed to achieve the Sales Minima defined in

Appendix C.



In the event that Distributor's failure to reach an agreed Sales

Minimum results from any of the following specified conditions,

Distributor shall be entitled to delay its compliance with sales

minimas adversely affected by such condition, by the amount of

such delay:



(a) The failure of Cambridge Heart to obtain regulatory

approval of the Product specified in Paragraph 9.1

hereof by January 31, 1995;



(b) The failure of Cambridge Heart to ship products







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within the applicable period for orders properly

placed at least 45 days prior to the end of such



2.5 This agreement may be terminated by mutual consent of the

parties hereto and may also be terminated by written notice to any

party hereto as follows:



(a) In the case of dissolution or liquidation of either



(b) In the case of insolvency or bankruptcy of either



(c) If either party shall sell its company or business

in whole or in part or shall sell or assign all or

any of its shares to any competitor.



(d) If such party shall fail to perform or comply with

any material terms, provisions or conditions of

this agreement to be performed or complied with or

by it and shall fail to remedy such default or

failure, or, in the event that such remedy is not

entirety within its control, shall have failed to

take all reasonable steps within its control to

affect such remedy, within thirty (30) days after

receipt of written notice thereof.



2.6 During any 24 month ordinary termination period Cambridge

Heart may terminate without any further notice or payment by the

payment of:



(a) for each remaining month of the exclusive portion

of the ordinary termination period a sum equal to

******* of the sales by Cambridge Heart to

Distributor in the 12 months prior to termination,



(b) for each remaining month of the non-exclusive

portion of the ordinary period a sum equal to

******* of the sales by Cambridge Heart to



It being agreed by the parties that this payment constitutes the

total due for compensation and damages due to Distributor, whether

awarded by a court or otherwise, for any such termination.



Cambridge Heart sales is defined as the revenues received by

Cambridge Heart from Distributor for system sales only does not

include service parts or accessories. In this context, the word







system includes hardware and software and includes the cost of any

hardware included in the system per Appendix A and supplied

locally by Kontron.



3. Obligation at Termination

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3.1 The termination of this Agreement shall not release either

party from any liability or obligation which existed as of the

date of notice of such termination.



3.2 Upon termination or expiration of this agreement,

Distributor shall immediately discontinue the use of the Software

and of any trade names, trademarks, symbols or designations

associated with Cambridge Heart or the Products and shall

immediately discontinue designating itself as an authorized

distributor of Cambridge Heart. In such event, all rights of

Distributor in or to Software, including the right to copy, and

distribute and market Software shall cease, and Distributor shall

return to Cambridge Heart all copies of Software in its possession

or control.



3.3 Except as set forth below, in the event of termination or

expiration of this agreement, Distributor shall immediately return

to Cambridge Heart all copies of Software, sales manuals,

operating and service manuals, parts identification data,

instructions, catalogs, descriptions, price lists, order forms,

advertising, and other similar materials and all confidential or

proprietary information furnished to Distributor by Cambridge

Heart and all materials derived therefrom. Notwithstanding the

foregoing, provided Distributor is not then in default under

Distributor's obligations hereunder and provided Distributor will

continue to service products after expiration of this agreement,

upon expiration of this agreement, Distributor may retain such of

the foregoing materials as Cambridge Heart may deem necessary for

Distributor's continued servicing of Products. However, should

Distributor cease servicing Products at any time thereafter,

Distributor shall immediately, return to Cambridge Heart all such

materials retained by Distributor and all materials derived



3.4 In the event of the termination or expiration of this

agreement, unless otherwise requested by Cambridge Heart,

Distributor shall have the obligation to continue to provide

warranty service and Cambridge Heart shall continue to supply

spare parts for such service. For systems out of warranty the

parties will negotiate in good faith the means to provide

continued service to their customers and the associated

disposition of distributors remaining spare parts inventory.



3.5 Termination or expiration of this agreement shall not







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affect the rights of any Software licensees not affiliated with

Distributor and, to the extent the licenses under this agreement

apply to Distributor or its affiliates as end users of the

Product, termination or expiration shall not affect the rights of

the Distributor or its affiliates to the licenses granted.



3.6 Upon termination but only if such is initiated by Cambridge

Heart and for a twelve month period thereafter, Cambridge Heart

shall refrain from hiring people who are employed directly or

indirectly as "agenti mono-mandatari" at that time or in any

previous six months by Kontron, other than subdistributors not

affiliated with Kontron, unless specifically exempted in writing

from this requirement by Kontron.



4. Prices and Payment Terms

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4.1 All purchases of Products by Distributor shall be at the

prices, terms and discounts described in Attachment A. All prices

are exclusive of, and Distributor is responsible to pay, all

tariffs, duties and taxes due in the country of destination, and

all insurance, delivery and shipping charges. All payments to

Cambridge Heart shall be paid in U.S. dollars. Cambridge Heart

may change its prices from time to time and will give Distributor

at least ninety (90) days' notice of such price changes, but in no

case shall Distributor be required to pay more than any other

distributor of Cambridge Heart with similar terms.



4.2 Price increases for the Product without Alternans during

the initial term or any two-year renewal term must not exceed ***

umulatively per year plus the cumulative increase in the U.S.

Producer Price Index ("PPI"). In the event that Cambridge Heart

experiences a material increase in product cost in excess of ****

**********, Cambridge Heart will notify Distributor and the

parties will negotiate new prices in good faith. If at the time

of any such price increase there are any quotes outstanding,

copies of which have been received and approved by Cambridge

Heart, those quotes will be honored for up to six (6) months.

These restrictions do not apply to the Alternans module or any

future modules.



4.3 Should the ECU to U.S. Dollar exchange rate deviate more

than plus or minus ten (10) per cent from the rate prevailing at

the time of the Agreement, then either of the parties may initiate

a review of pricing; both parties agreeing herein to conduct such

a review with good faith.



4.4 All orders for products shall be placed only on

Distributors standard purchase order form and will be valid upon

acceptance and confirmation in writing by Cambridge Heart.

Cambridge Heart is only obliged to accept orders place in







accordance with agreed marketing plans, sales minimas and

forecasts and to the established or agreed specifications.

Cambridge Heart will use its best efforts to ship orders within

Distributors most recent quarterly forecast within 45 days after

receipt of the Purchase Order and other required ordering



4.5 Payment for shipments through December 31, 1997 shall be

45 days from the date of shipment; payment for shipments

thereafter shall be due 60 days from the date of shipment.



5. Forecasting

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5.1 On or before the first day of each calendar quarter during

the term of this agreement, Distributor will deliver to Cambridge

Heart a written forecast of the number and type of products

Distributor intends to order during each of the next six

successive calendar months.



6. Software

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6.1 Cambridge Heart grants to Distributor a nontransferable

limited license to (i) use and display the object code version of

the Software in promoting and servicing Products in accordance

with this agreement, and (ii) copy and grant sublicenses of the

run time version of the Software included in the Product for use

solely with and as part of the Product for which license fees are

paid to Cambridge Heart in accordance with this agreement. For

purposes hereof, "Software" shall mean the programs, routines,

subroutines, algorithms, translations, compilers and operating

systems which Cambridge Heart has developed or has the right to

sublicense for general commercial use with the Product.



6.2 In order to constitute a valid license of the Software

object code, prior to delivery of Software to each end user,

Distributor shall have each end user execute a Software License

Agreement with Distributor acting on behalf of and assigning its

rights to Cambridge Heart in a form approved in advance by

Cambridge Heart (the "Software License Agreement"). Upon execution

of the Software License Agreement by the end user, Distributor

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