EXHIBIT 10.1(a) AGREEMENT

                                                                 EXHIBIT 10.1(a)
                                   AGREEMENT

     AGREEMENT, dated as of May 7, 1998, by and between ALARIS Medical Systems, 
Inc., a Delaware corporation ("Alaris"), having an address at 00000 Xxxxxxxxx 
Xxxxxx, Xxx Xxxxx, XX 00000 and Caesarea Medical Electronics Limited, a private 
limited company organized under the Israeli Companies Ordinance ("Caesarea"), 
having an address at 0 Xxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxx, 00000, Xxxxxx.

                             W I T N E S S E T H:

     WHEREAS, Caesarea has developed certain volumetric infusion pump 
technology, including the NIKI Technology (as hereinafter defined) and desires 
to transfer the same to Alaris on the terms set forth herein; and

     WHEREAS, Caesarea transferred technology to Clintec Nutrition Company 
("Clintec") pursuant to the terms of an Agreement on the Transfer of 
Intellectual Property dated July 14, 1996 (the "Transfer Agreement"), by and 
between Caesarea and Clintec, as amended by letter agreement dated November 6, 
1997, between Caesarea and Nestle Clinical Nutrition ("Nestle"), as 
successor-in-interest to Clintec; and

     WHEREAS, pursuant to the Transfer Agreement, Clintec granted to Caesarea 
an exclusive, royalty-free license for unrestricted parenteral use of specified 
technology (the "License") for a period of 20 years from July 14, 1996; and

     WHEREAS, Caesarea desires to transfer the License to Alaris and, in 
connection therewith, Alaris, Caesarea and Nestec, S.A., as 
successor-in-interest to Nestle, have entered into a letter agreement dated as 
of May 6, 1998 in the form of Exhibit A hereto.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements 
herein contained, and for other good and valuable consideration, the receipt 
and sufficiency of which are hereby acknowledged, the parties hereto hereby 
agree as follows:

     1.   DEFINITIONS.  Capitalized terms used in this Agreement and not 
otherwise defined shall have the meanings set forth below:

     "ACT"  means The Food, Drug and Cosmetic Act (21 U.S.C. Sections 310 ET. 
SEQ.), as amended from time to time, and the regulations promulgated thereunder.

     "BANKRUPTCY" means, with respect to Caesarea: (A) that Caesarea shall 
have: (i) made an assignment for the benefit of creditors; (ii) filed a 
voluntary petition in bankruptcy; (iii) been adjudicated bankrupt or insolvent, 
or had entered against it an order for relief, in any bankruptcy or insolvency 
proceeding; (iv) filed a petition or answer seeking for itself any 
reorganization, arrangement, composition, readjustment, liquidation, 
dissolution or similar relief under any statute, law or regulation; (v) filed 
an answer or other pleading admitting or failing to contest the material 
allegations of a petition filed against it in any proceeding set forth in (iv) 
above; (vi) sought, consented to, or acquiesced in the appointment of a 
trustee, receiver, or liquidator of all or any



substantial part of its properties; or: (B) if: (i) 120 days after the 
commencement of any proceeding against it seeking reorganization, arrangement, 
composition, readjustment, liquidation, dissolution or similar relief under any 
statute, law or regulation, the proceeding has not been dismissed; or (ii) 
within 90 days after the appointment, without Caesarea's consent or 
acquiescence, of a trustee, receiver, or liquidator of it or all or any 
substantial part of its properties, the appointment is not vacated or stayed, 
or within 90 days after the expiration of any such stay, the appointment is not 
vacated.

     "BUSINESS DAY" means any weekday on which commercial banks in both New 
York, New York and Caesarea, Israel are not required or authorized by law to 
close.

     "DIRECT COST" shall mean and be calculated in the manner specified on 
Schedule 1(a) hereto.

     "DOCUMENTS" shall mean all of the documents, plans, drawings, 
documentation, marketing materials and service materials related to the NIKI 
Technology, including, without limitation, those listed on Schedule 1(b) hereto.

     "EU" means the European Union.

     "EXISTING DISTRIBUTION AGREEMENTS" means the distribution, license or 
transfer agreements listed on Schedule 1(c) hereto.

     "EXISTING RIGHTS" means the patents, patent applications, trademarks, 
trade names and other Intellectual Property listed on Schedule 1(d) hereto.

     "FDA" means the United States Food and Drug Administration, or any 
successor agency.

     "FIELD" means the field of parenteral infusion through the use of a 
volumetric infusion pump and all complementary, related and associated 
activities.

     "F.O.B." means Free on Board, as such term is defined in the International 
Chamber of Commerce publication "International Incoterms 1990."

     "GOOD MANUFACTURING PRACTICES"  means: (A) the applicable current quality 
system (good manufacturing practice) regulations promulgated from time to time 
by (i) the FDA in accordance with the Act and (ii) to the extent applicable, 
European regulatory agencies; and (B) directives of the International Standards 
Organization, all for subcontractors.

     "IMPROVEMENT" means any enhancement or modification of the NIKI 
Technology, the NIKI Pump or the I.V. Valve that permits the NIKI Technology or 
products based thereon, the NIKI Pump, or the I.V. Valve, as the case may be, 
to perform its function in a better or more useful way.

     "INTELLECTUAL PROPERTY" means all intellectual property, including, but 
not limited to, inventions, all patent and patent applications and all 
divisions, continuations, continuations-in-part, re-examinations and reissues 
of any of the foregoing, copyrights, trademarks, trade names, copyright 


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applications, trade secrets, know-how, formulas, compositions of matter, 
software, algorithms, designs, manufacturing technology and other intellectual 
property and rights (including, without limitation, any intellectual property 
rights related thereto), including any foreign counterparts to any of the above.

     "I.V. VALVE" means the device described on Schedule 1(e) hereto.

     "MANUFACTURING ASSEMBLY KITS" means a complete set of all of the items 
forth on Schedule 1(f), which constitute all of the components necessary to 
assemble a Xxxxx 0 XXXX Pump.

     "MANUFACTURING DOCUMENTATION PACKAGE" means the items set forth on 
Schedule 1(g) Part 1 (Phase I NIKI Pump); Part 2 (Phase 2 NIKI Pump) and Part 3 
(Phase 3 NIKI Pump) hereto.

     "MILESTONE" means a Phase 1 Milestone, a Phase 2 Milestone or a Phase 3 
Milestone, as the case may be.

     "NIKI PUMP" means a volumetric infusion pump incorporating some or all of 
the NIKI Technology including, without limitation, the Phase 1 NIKI Pump; the 
Phase 2 NIKI Pump; and the Phase 3 NIKI Pump, including any Improvements to the 
NIKI Pump.

     "NIKI TECHNOLOGY" means: (A) all Intellectual Property included or 
utilized in, by or with respect to, the following inventions: (i) the 
Peristaltic Pump; (ii) the I.V. Valve; (iii) the Pump System with Error 
Detection; (iv) the System and Method; (B) the Existing Rights; and (C) any 
other Intellectual Property having any application in the Field at any time 
licensed to, owned, developed, created or reduced to practice by or on behalf 
of Caesarea, its employees or officers; provided, however, that NIKI Technology 
shall not include Intellectual Property transferred in accordance with the 
Transfer Agreement except to the extent that such Intellectual Property forms 
part of the technology subject to the License.  The parties acknowledge and 
agree that any valve, other than the I.V. Valve, and any syringe pump at any 
time licensed to, owned, developed, created or reduced to practice by or on 
behalf of Caesarea, its employees or officers, shall not be deemed part of the 
NIKI Technology.

     "PERISTALTIC PUMP" means the device described in Schedule 1(h) hereto.

     "PERSON" means any individual, corporation, association, partnership, 
limited liability company, joint venture, trust or other entity or organization.

     "PHASE 1 MILESTONES" means all of the sequential steps specified in 
Sections 6(a)(i) through 6(a) (iv) hereof.

     "PHASE 1 NIKI PUMP" means the NIKI Pump having the specifications set 
forth on Schedule 1(i) Part 1 hereto.

     "PHASE 2 MILESTONES" means all of the sequential steps specified in 
Sections 6(b)(i) through 6(b) (iii) hereof.


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     "PHASE 2 NIKI PUMP" means the NIKI Pump having the specifications set 
forth on Schedule 1(i) Part 2 hereto.

     "PHASE 3 MILESTONES" means all of the sequential steps specified in 
Sections 6(c)(i) through 6(c) (iii) hereof.

     "PHASE 3 NIKI PUMP" means the NIKI Pump having the specifications set 
forth on Schedule 1(i) Part 3 hereto.

     "PUMP SYSTEM WITH ERROR DETECTION" means the device described on Schedule 
1(j) hereto.

     SPECIFIED LOCATION" means such location or locations as may, from time to 
time, be specified by Alaris by notice to Caesarea as the location or locations 
at which Alaris intends to take receipt of any NIKI Pump, Manufacturing 
Assembly Kit or any other device, good, document or product to be delivered by 
Caesarea hereunder.

     "SYSTEM AND METHOD" means the systems and methods described on Schedule 
1(k) hereto.

     "TEST DISPOSABLES" shall mean the disposables listed in Part 1 of Schedule 
1(i) as the same are hereafter delivered by Alaris to Caesarea.

     "US" means the United States of America.

     2.   SALE.  Caesarea hereby sells, assigns, transfers, conveys and 
delivers (the "Sale") to Alaris, its successors, assigns and sublicensees, on 
an exclusive, worldwide, royalty free basis, all of Caesarea's right, title and 
interest in and to the License and the NIKI Technology, including, without 
limitation, all rights, powers and privileges to:  (i) conduct research and 
development with respect to the NIKI Technology; and (ii) make, have made, use, 
lease, sell, offer to sell and import the NIKI Pump, the I.V. Valve and any and 
all other products, goods or devices incorporating the NIKI Technology.  Alaris 
is not assuming any of Caesarea's obligations under the Transfer Agreement.

     3.   IMPROVEMENTS.

     (a)  In addition to the Sale (and not in limitation thereof), Caesarea and 
Swi Barak hereby grant (and shall cause each of their respective affiliates, 
employees and officers to grant) to Alaris, during the period commencing on the 
date hereof and ending on the seventh anniversary of the date of first 
commercial sale by Alaris of a NIKI Pump, the exclusive, worldwide right and 
royalty-free license to use and exploit any Improvements made by or on behalf 
of Caesarea, its affiliates or any of their respective employees and officers, 
or in which any such person has any direct or indirect ownership, interest, 
right or participation, for any purpose, including, without limitation, the 
right to make, have made, use lease, sell, offer to sell and import any product 
incorporating any Improvements.


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     (b)  Caesarea acknowledges and agrees that Alaris shall have the right to 
make or have made Improvements and that any Improvements made by or on behalf 
of Alaris shall be the sole and exclusive property of Alaris. Caesarea shall 
cooperate fully with Alaris  in effecting any patent and/or copyright coverage 
with respect to the Improvements made by or on behalf of Alaris.

     (c)  Except as otherwise provided in Section 6 hereto, the parties 
acknowledge and agree that nothing contained herein shall obligate Caesarea to 
make any Improvements.

     4.   SALE OF ASSETS.  Caesarea hereby sells, assigns, transfers, conveys 
and delivers to Alaris, and Alaris hereby purchases from Caesarea, all of 
Caesarea's right, title and interest in and to the assets listed on Schedule 4 
hereto, which constitute all of the assets used by Caesarea and necessary to 
manufacture the NIKI Pump (the "Assets"), and the Documents. Caesarea shall 
retain the Assets which shall be used by Caesarea solely to manufacture the 
Manufacturing Assembly Kits for delivery to Alaris; provided, however, that 
unless the parties otherwise agree in writing, the Assets shall be delivered to 
Alaris no later than October 31, 1998.

     5.   PURCHASE PRICE.  Alaris shall pay to Caesarea, and Caesarea shall 
accept from Alaris, the sum of one million ($1,000,000) dollars (the "Purchase 
Price"), to be paid as follows:

     (a)  $120,000 of the Purchase Price (the "Advance") has been previously 
paid by Alaris to Caesarea as an option payment and shall not be refundable to 
Alaris under any circumstances; and

     (b)  $880,000 shall be paid upon execution of this Agreement.

     In addition, upon execution of this Agreement, Caesarea shall establish a 
standby letter of credit (the "LOC"), in the form of Exhibit B hereto, in the 
amount of $380,000 for the benefit of Alaris.  The LOC shall be maintained by 
Caesarea until completion of the Phase 1 Milestones in accordance with the 
provisions of Section 6(a) hereof.  In the event Alaris terminates this 
Agreement in accordance with the provisions of Section 6(a) hereof, Alaris 
shall be entitled to draw down the full amount of the LOC.

     6.   ADDITIONAL PAYMENTS.  In addition to the Purchase Price, Alaris shall 
pay to Caesarea the amounts set forth in subsections (a), (b) and (c) below 
(the "Additional Payments") with respect to the development and release of the 
Xxxxx 0 XXXX Xxxx, xxx Xxxxx 0 XXXX Pump and the Phase 3 NIKI Pump.  The 
parties acknowledge and agree that the failure to achieve any of the Xxxxx 0 
Xxxxxxxxxx, Xxxxx 0 Milestones or Phase 3 Milestones shall not be considered a 
breach of this Agreement and the sole remedy of Alaris with respect to any such 
failure shall be as specified in this Section 6.

     (a)  PHASE 1 NIKI PUMP.  Upon completion of each of the Phase 1 Milestones 
set forth below, Alaris will make the following payments (the "Phase 1 
Payments") to Caesarea:

          (i)   $500,000 shall be paid to Caesarea upon Acceptance (as 
                hereinafter defined) by Alaris of the final design (the "First 
                Final Design") of the Phase 1 NIKI Pump and receipt by Alaris 
                at the Specified Location, on or before July 0,


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                0000, xx 00 Xxxxx 0 XXXX Pumps meeting the requirements of the 
                First Final Design (the "Initial Phase 1 Pumps");

          (ii)  $250,000 shall be paid to Caesarea upon receipt by Alaris at the
                Specified Location, on or before July 1, 1998, and Acceptance by
                Alaris of a complete Manufacturing Documentation Package for the
                Phase 1 NIKI Pump;

          (iii) $750,000 shall be paid to Caesarea upon receipt by Alaris at the
                Specified Location, on or before September 15, 1998, and 
                Acceptance by Alaris, on or before October 1, 1998, of, at the 
                option of Xxxxxx, xxxxxx 000 Xxxxx 0 XXXX Pumps meeting all of 
                the specifications set forth on Schedule 1(i) Part 1 hereto 
                (including when used with the Test Disposables) and which meet 
                the requirements of the First Final Design (the "Final Phase 1 
                Pumps") or 500 Manufacturing Assembly Kits sufficient to permit 
                Alaris to manufacture the Xxxxx Xxxxx 0 XXXX Xxxx; provided, 
                that prior to delivery of the Final Phase 1 Pumps or 
                Manufacturing Assembly Kits, Alaris shall have first Accepted 
                the First Final Design, the Initial Phase 1 Pumps and the 
                Manufacturing Documentation Package on or prior to August 15, 
                1998; and

          (iv)  $500,000 shall be paid to Caesarea upon receipt by Alaris at the
                Specified Location, on or before October 15, 1998, and 
                Acceptance by Alaris, on or before November 15, 1998, of 500 
                Manufacturing Assembly Kits sufficient to permit Alaris to 
                manufacture an additional 500 Final Phase 1 NIKI Pumps.

     In the event that Caesarea fails to meet any of the Phase 1 Milestones set 
forth in subparagraphs (a)(i) through (a)(iv) above by the applicable dates, 
Alaris may require Caesarea to refund to Alaris the Purchase Price (less an 
amount equal to two times the Advance and any amounts paid to Alaris under the 
LOC) and all Phase 1 Payments made to Caesarea by Alaris hereunder and Alaris 
shall be under no further obligation to make any payments to Caesarea under 
this Agreement.  In such event,  this Agreement shall terminate and (i) Alaris 
shall return to Caesarea (a) all right, title and interest in and to the 
License, the NIKI Technology and the Assets and (b) all Documents, physical 
property and Intellectual Property previously delivered by Caesarea to Alaris.  
In addition, (i) Alaris shall not be liable to Caesarea for any loss of profits 
or prospective profits or any other losses or damages of any kind sustained or 
arising out of such termination and Caesarea hereby irrevocably waives any such 
rights to the fullest extent permitted under the laws of the State of Israel 
and further agrees that it shall not bring any action or proceeding of any 
nature whatsoever in any court, before any tribunal, or under any arbitration 
proceeding, seeking or claiming any such damage or loss; and (ii) Caesarea 
shall not be liable to Alaris for any loss of profits or prospective profits or 
any other losses or damages of any kind sustained or arising out of such 
termination and Alaris hereby irrevocably waives any such rights to the fullest 
extent permitted under the laws of the State of Israel and further agrees that 
it shall not bring any action or proceeding of any nature whatsoever in any 
court, before any tribunal, or under any arbitration proceeding, seeking or 
claiming any such damage or loss.

     (b)  PHASE 2 NIKI PUMP. Upon completion of each of the Phase 2 Milestones 
set forth below, Alaris will make the following payments (the "Phase 2 
Payments") to Caesarea:


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          (i)   $250,000 shall be paid to Caesarea upon Acceptance by Alaris of 
                the final design (the "Second Final Design") of the Phase 2 NIKI
                Pump, and receipt by Alaris at the Specified Location, on or 
                before December 31, 1998, and Acceptance by Alaris, on or before
                February 15, 1999, of 20 Xxxxx 0 XXXX Pumps meeting the 
                requirements of the Second Final Design;

          (ii)  $500,000 shall be paid to Caesarea upon receipt by Alaris at the
                Specified Location, on or before December 31, 1998, and 
                Acceptance by Alaris, on or before February 15, 1999, of 20 
                Manufacturing Assembly Kits and a complete Manufacturing 
                Documentation Package for the Xxxxx 0 XXXX Pump sufficient to 
                permit Alaris to manufacture the Xxxxx 0 XXXX Pump; and

          (iii) $250,000 shall be paid to Caesarea upon CE approval of the Phase
                2 NIKI Pump, which approval shall be obtained by Alaris (at its 
                sole cost and expense).

     (c)  PHASE 3 NIKI PUMP. Upon completion of each of the Phase 3 Milestones 
set forth below, Alaris will make the following payments (the "Phase 3 
Payments") to Caesarea:

          (i)   $250,000 shall be paid to Caesarea upon Acceptance by Alaris of 
                the final design (the "Third Final Design") of the Phase 3 NIKI 
                Pump, and receipt by Alaris at the Specified Location, on or 
                before March 1, 1999, and Acceptance by Alaris, on or before 
                Xxxxx 00, 0000, xx 00 Xxxxx 0 XXXX Pumps meeting the 
                requirements of the Third Final Design;

          (ii)  $500,000 shall be paid to Caesarea upon receipt by Alaris at the
                Specified Location, on or before March 1, 1999, and Acceptance 
                by Alaris, on or before April 15, 1999, of 20 Manufacturing 
                Assembly Kits and a complete Manufacturing Documentation Package
                for the Xxxxx 0 XXXX Pump sufficient to permit Alaris to 
                manufacture the Xxxxx 0 XXXX Pump; and

          (iii) $250,000 shall be paid to Caesarea upon FDA 510(k) approval of
                the Phase 3 NIKI Pump.

     (d)  Other than as set forth in subsection (a) above, this Agreement may 
not be terminated due to the failure of Caesarea to meet any Xxxxx 0 Xxxxxxxxx, 
Xxxxx 0 Milestone or Phase 3 Milestone.  Notwithstanding the failure of 
Caesarea to meet any of such Milestones and provided that this Agreement is not 
terminated as provided in Section 6(a) above, Alaris shall make Additional 
Payments to Caesarea as follows:

          (i)   in the event the Phase 1 NIKI Pump is sold by Alaris on a 
                commercial basis in any country other than the US or any country
                located in the EU, Alaris shall pay to Caesarea an amount equal 
                to the aggregate amount of the Phase 1 Payments less an amount 
                equal to any Phase 1 Payments previously made to Caesarea.


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          (ii)  in the event the Phase 2 NIKI Pump is sold by Alaris on a 
                commercial basis in any country located in the EU, Alaris shall 
                pay to Caesarea an amount equal to the aggregate amount of the 
                Phase 2 Payments less an amount equal to the sum of (i) any 
                Phase 2 Payments previously made to Caesarea and (ii) all direct
                costs and expenses incurred by Alaris to develop the Phase 2 
                NIKI Pump.

          (iii) in the event the Phase 3 NIKI Pump is sold by Alaris on a 
                commercial basis in the US, Alaris shall pay to Caesarea an 
                amount equal to the aggregate amount of the Phase 3 Payments 
                less an amount equal to the sum of (i) any Phase 3 Payments 
                previously made to Caesarea and (ii) all direct costs and 
                expenses incurred by Alaris to develop the Phase 3 NIKI Pump.

     7.   ACCEPTANCE CERTIFICATE.  "Acceptance" by Alaris of any matter, 
device, design, document, kit or product specified in Section 6 hereof as 
requiring the Acceptance of Alaris shall mean and be evidenced only by a 
written certificate (an "Acceptance Certificate") delivered by Alaris to 
Caesarea, on or before the date specified for Acceptance, specifying that the 
matter, device, design, document, kit or product has been delivered by Caesarea 
to Alaris, and that the matter, device, design, document, kit or product has 
been completed and presented in a form and manner which is satisfactory to 
Alaris.  In the event that the matter, device, design, document, kit or product 
has been completed and presented in a form and manner which is not satisfactory 
to Alaris, Alaris shall deliver a written certificate (a "Rejection 
Certificate") to Caesarea, on or before the date specified for Acceptance, 
containing a general description of the relevant items which require correction 
for an Acceptance by Alaris to take place.  Caesarea shall be granted an 
extension of 30 days from the date of receipt of such Rejection Certificate 
(the "Correction Period") to correct the items which are required for an 
Acceptance by Alaris to take place (the "Correction Items") and Alaris shall 
(at the sole cost and expense of Caesarea), upon the reasonable request of 
Caesarea, meet or engage in communications with Caesarea in order to assist 
Caesarea in understanding the reason that Alaris has delivered the Rejection 
Certificate.  If the Correction Items are corrected within the Correction 
Period in a manner satisfactory to Alaris, Alaris shall deliver an Acceptance 
Certificate to Caesarea.  In such event, Acceptance will be deemed to have 
taken place within the time period specified in Section 6 and any additional 
payment which is conditioned upon such Acceptance shall be made. If the 
Correction Items are not corrected in a manner satisfactory to Alaris within 
the Correction Period, the applicable additional payment shall not be made.

     8.   PURCHASE OF NIKI PUMPS.  In addition to the Additional Payments, for 
each NIKI Pump delivered to Alaris pursuant to and in accordance with Section 6 
hereof, Alaris shall pay to Caesarea the sum of three hundred fifty ($350) 
dollars within 30 days from the later of (i) receipt by Alaris of Caesarea's 
invoice issued upon shipment of the NIKI Pumps or (ii) delivery of the NIKI 
Pumps to the Specified Location.

     9.   MANNER OF DELIVERY.  All NIKI Pumps, Manufacturing Assembly Kits, 
Assets and all other devices, goods, documents and products to be delivered by 
Caesarea under this Agreement shall be delivered by Caesarea to Alaris F.O.B., 
Israel.  NIKI Pumps and Manufacturing Assembly Kits are supplied by Caesarea as 
a sub-contractor of Alaris.


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     10.  PUMP PAYMENT.

     (a)  In consideration of the Sale and the other undertakings of Caesarea 
hereunder, Alaris shall pay to Caesarea, in accordance with the provisions of 
subsection (b) below, $25.00 (the "Payment Amount") for each NIKI Pump which is 
manufactured and sold by Alaris or by any third party under agreement with or 
with the consent of Alaris, other than any sale by or to Caesarea, during the 
period commencing on the date of first commercial sale by Alaris of a NIKI Pump 
and ending on the seventh anniversary of said date (the "Payment Period").  For 
purposes of this Agreement, the assembly of a NIKI Pump using a Manufacturing 
Assembly Kit shall be considered the manufacture of a NIKI Pump.  The parties 
acknowledge and agree that Caesarea shall only be entitled to payment of the 
Payment Amount upon the first commercial sale of a NIKI Pump.

     (b)  Within 45 days after the end of each calendar quarter during the 
Payment Period, Alaris shall pay to Caesarea an amount equal to the number of 
NIKI Pumps in respect of which the Pump Payment is required to be made pursuant 
to subsection (a) above (less the number of NIKI Pumps returned or recalled 
during the quarter or any prior quarter in accordance with the provisions of 
subparagraph (c) below) multiplied by the Payment Amount.  All payments shall 
be accompanied by a statement, certified by an officer of Alaris, setting forth 
the number of NIKI Pumps sold, returned and recalled during the quarter.  In 
the event any NIKI Pump which had previously been returned or recalled is 
redelivered to the customer or end-user returning same, such redelivery shall 
be deemed a sale of such NIKI Pump (for which a Pump Payment shall be required 
to be made) in the quarter in which such NIKI Pump is redelivered.

     (c)  In the event that the number of NIKI Pumps returned or recalled 
during any quarter exceeds the number of NIKI Pumps in respect of which the 
Pump Payment is required to be made during such quarter pursuant to subsection 
(a) above (the "Excess Amount"), the number of NIKI Pumps in respect of which 
the Pump Payment is required to be made pursuant to subsection (a) above during 
the immediately succeeding quarter shall be reduced (in addition to any 
reduction based upon the number of NIKI Pumps returned or recalled during such 
quarter pursuant to subsection (b) above) by the Excess Amount.

     11.  PURCHASE OF MANUFACTURING ASSEMBLY KITS.

     (a)  Upon the terms and subject to the conditions herein contained, 
Caesarea agrees to manufacture and sell to Alaris and Alaris may purchase from 
Caesarea,  Manufacturing Assembly Kits for the NIKI Pump.

     (b)  For each Manufacturing Assembly Kit purchased by Alaris, Alaris 
agrees to pay Caesarea a price equal to Caesarea's Direct Costs plus ten (10%) 
percent, which shall not exceed an aggregate of $170 for each Xxxxx 0 XXXX Pump 
during the period commencing on the date hereof and ending on the first 
anniversary of the date of completion of the Phase 1 Milestones.  Payment for 
the Manufacturing Assembly Kits purchased from Caesarea shall be made within 30 
days from the later of (i) receipt of Caesarea's invoice issued upon shipment 
of the Manufacturing Assembly Kits or (ii) delivery of the Manufacturing 
Assembly Kits to the Specified Location.


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     (c)  On the first Business Day of each month following completion of the 
Phase 1 Milestones (each, a "Specified Date"), Alaris shall provide Caesarea 
with a forecast of its requirements of Manufacturing Assembly Kits covering the 
next 180 days deliveries at a minimum and indicating the requested delivery 
dates and Specified Location for delivery.  On the first Business Day following 
a Specified Date, the immediately following 90 days of the forecast shall be 
considered a firm and binding order for the number of Manufacturing Assembly 
Kits specified therein and any forecasts covering more than 90 days from such 
Specified Date (the "Extended Forecast Period") shall be considered non-binding 
and subject to change, modification and cancellation by Alaris; provided, 
however, that the number of Manufacturing Assembly Kits specified for delivery 
during the Extended Forecast Period in any forecast delivered by Alaris to 
Caesarea may not, without the consent of Caesarea, which consent shall not be 
unreasonably withheld, be increased by more than 50% from the number of 
Manufacturing Assembly Kits specified for delivery during the Extended Forecast 
Period in the immediately preceding forecast delivered by Alaris to Caesarea. 
At the request of Caesarea, or at the option of Alaris, Alaris will provide 
non-binding forecasts covering a period from six (6) months to twelve (12) 
months from a Specified Date.

     (d)  If Caesarea determines that it will be unable to timely deliver 
Manufacturing Assembly Kits in accordance with Alaris' orders issued in 
accordance with the provisions of Section 11(c) hereof, then Caesarea shall 
give Alaris prompt notice thereof and shall indicate the anticipated length of 
the delay.  If the delay will exceed 15 days from the date specified by Alaris 
for delivery, Alaris shall have the right at any time prior to delivery to 
cancel its order for such Manufacturing Assembly Kits; provided, however, that 
if the delay in delivery is a result of force majeure (as set forth in Section 
28(o) hereof) Alaris shall only have the right to cancel such order if the 
delay will exceed 30 days from the date specified by Alaris for delivery.

     12.  ENGAGEMENT OF SUBCONTRACTORS.  Caesarea may sub-contract the 
manufacture of NIKI Pumps and Manufacturing Assembly Kits only with the prior 
written consent of Alaris, which consent shall not be unreasonably withheld; 
provided, however, that the subcontracting by Caesarea of the NIKI Pumps and 
Manufacturing Assembly Kits shall not relieve Caesarea of any of its 
obligations hereunder and Caesarea shall remain responsible for all NIKI Pumps 
and Manufacturing Assembly Kits subcontracted as if Caesarea had manufactured 
the NIKI Pumps and Manufacturing Assembly Kits itself.  The parties acknowledge 
and agree that in the event Caesarea elects to sub-contract the manufacture of 
the NIKI Pumps and/or Manufacturing Assembly Kits, Alaris shall have the right 
to require that any sub-contractor selected by Caesarea submit to a Good 
Manufacturing Practice audit by Alaris.  If any such sub-contractor does not 
meet (i) all applicable regulatory requirements relating to the manufacturing 
of the NIKI Pumps or Manufacturing Assembly Kits, as the case may be, including 
Good Manufacturing Practices and other requirements of the FDA and applicable 
US and EU regulatory agencies, including, without limitation, the European 
Medical Device Directives and EN 46001 or EN 46002, as applicable, and (ii) any 
additional requirements which Alaris may reasonably require of its own 
subcontractors, Alaris may withhold its consent to the engagement of such 
subcontractor.


                                      10


     13.  MOLDS AND TOOLS.  Caesarea hereby grants to Alaris the right and 
option to purchase from Caesarea the molds and tooling utilized by Caesarea to 
manufacture the NIKI Pump at a purchase price equal to Caesarea's direct costs 
for such molds and tooling, excluding Caesarea's engineering costs related 
thereto, all of which costs are set forth on Schedule 13 hereto.  In the event 
Alaris purchases such molds and tooling, Caesarea shall no longer be obligated 
to supply Manufacturing Assembly Kits to Alaris pursuant to Section 11 hereof; 
provided, however, that if there are any outstanding orders for Manufacturing 
Assembly Kits, Caesarea shall have the option to fulfill such orders prior to 
delivery to Alaris of the molds and tooling.

     14.  TECHNICAL ASSISTANCE. Upon execution of this Agreement, Caesarea 
shall deliver to Alaris all technical information and written manifestations of 
Intellectual Property with respect to the NIKI Technology.  Caesarea shall 
provide Alaris, at Caesarea's expense, with such technical assistance as may be 
reasonably necessary to inform Alaris fully about the NIKI Technology. In 
addition, Caesarea shall, at Caesarea's sole cost and expense, (i) provide to 
Alaris, upon reasonable request from Alaris from time to time, progress reports 
and updates regarding the status of development of the Xxxxx 0 XXXX Xxxx, xxx 
Xxxxx 0 XXXX Pump, and the Phase 3 NIKI Pump, (ii) provide to Alaris, upon 
reasonable request from Alaris from time to time, such development, 
manufacturing and other resources and efforts as shall be reasonably necessary 
or appropriate to ensure the satisfaction of the Phase 1 Milestones, the Phase 
2 Milestones and the Phase 3 Milestones and (iii) upon reasonable notice by 
Alaris and at reasonable times, but not more often than 60 days per year (the 
"Annual Assistance Days"), make all appropriate technical, production, 
engineering and marketing personnel available to Alaris, in order to permit 
Alaris to establish its own manufacturing capability for the NIKI Pump, the 
I.V. Valve and the I.V. administration sets to be used by Alaris with the NIKI 
Pump; provided, however, that reasonable direct out-of-pocket expenses, if any, 
incurred by Caesarea in providing such assistance to Alaris outside of Israel 
shall be borne by Alaris. In the event Alaris requests Caesarea to provide 
assistance in excess of the number of Annual Assistance Days, Alaris shall be 
responsible for payment of all reasonable direct out-of-pocket expenses, if 
any, incurred by Caesarea in providing such additional assistance.

     15.  REGULATORY RESPONSIBILITY.

     (a)  Alaris shall comply with all FDA and EU labeling requirements with 
respect to the NIKI Pump.

     (b)  Caesarea shall (i) be responsible for complying with all applicable 
regulatory requirements relating to the manufacturing and design activities of 
Caesarea contemplated herein, including Good Manufacturing Practices and other 
requirements of the FDA and applicable US and EU regulatory agencies, 
including, without limitation, the European Medical Device Directives and EN 
46001 or EN 46002, as applicable; and (ii) use its best efforts to obtain, at 
its sole cost and expense, the CE xxxx for the Xxxxx 0 XXXX Pump on or prior to 
September 1, 1998.  In addition to the foregoing, Caesarea shall (i) submit to 
Good Manufacturing Practices audits by Alaris upon reasonable notice and (ii) 
provide Alaris with a written failure analysis and corrective action plan 
relating to all complaints regarding Caesarea or the NIKI Pump within 30 
Business Days of receiving documentation or samples.


                                      11


     (c)  Alaris shall be responsible for obtaining, at its sole cost and 
expense, all other regulatory authorizations, approvals, permits and licenses 
(collectively, "Approvals") necessary to sell and distribute the NIKI Pump in 
the US, the EU and any other country in which it desires to sell the NIKI Pump, 
including, without limitation, FDA approval.  Caesarea agrees that to the 
extent it currently has obtained or made any of such Approvals, it will assign 
them to Alaris at no cost to Alaris and cooperate with Alaris to permit Alaris  
to complete such assignment or otherwise obtain or complete such Approvals.

     (d)  Alaris and Caesarea shall each notify the other in writing within one 
Business Day of their respective knowledge of a death involving the NIKI Pump 
and within three Business Days of their respective knowledge of the occurrence 
of any safety alert, significant customer complaint or any other event which 
would require the filing of a Medical Device Report.

     (e)  Alaris and Caesarea shall each keep the other fully informed with 
respect to any information, inquiry or correspondence from any government 
agency or authority (a "Governmental Inquiry") relating to the investigation or 
review of the compliance of the NIKI Pump with applicable legal, health or 
safety requirements.  Alaris and Caesarea shall each notify the other of its 
receipt of any Governmental Inquiry within three Business Days following the 
date of such receipt.

     16.  QUALITY CONTROL.  Caesarea shall comply with all applicable quality 
control standards and procedures of Alaris and those required by all applicable 
regulatory authorities.  Upon reasonable prior notice, Caesarea shall permit 
Alaris to review periodically Caesarea's production and quality control 
procedures and records and to visit Caesarea's facilities, at reasonable times 
with a representative of Caesarea present, in order to assure satisfaction of 
the requirements of this Section 16.

     17.  PRODUCT WARRANTY.  Caesarea warrants to Alaris that for a period 
commencing on the date of delivery to Alaris and ending on the eighteen (18) 
month anniversary of the date of first shipment to the end-user or customer 
(the "Warranty Period"), each NIKI Pump and each Manufacturing Assembly Kit 
will: (i) conform to the specifications set forth on Parts 1, 2 and 3 of 
Schedule 1(h) hereto and to the First, Second and Third Final Design, as 
applicable; (ii) be free from manufacturing defects; (iii) not be "adulterated" 
or "misbranded" as such terms are defined in the Act; and (iv) be in 
merchantable condition and fit and safe for its intended use.  Subject to the 
provisions of Section 27 hereof, Caesarea's sole obligation under this product 
warranty shall be, at the option of Alaris, either to repair or replace, at 
Caesarea's sole cost and expense, or, if repair or replacement is not feasible 
or is not made by Caesarea, to refund the purchase price of, any NIKI Pump or 
Manufacturing Assembly Kit returned within the Warranty Period that Alaris 
reasonably determines fails to meet any of the conditions of (i), (ii), (iii) 
or (iv) above.  This warranty shall not apply to any NIKI Pump or Manufacturing 
Assembly Kit that has been damaged by accident or has been misused, abused, 
altered or repaired by anyone other than Caesarea or its representatives.  In 
the case of a standard part supplied to Caesarea by a subcontractor engaged by 
Caesarea and approved by Alaris pursuant to the provisions of Section 12 
hereof, Caesarea shall grant to Alaris the benefit of any product warranty 
provided to Caesarea by such subcontractor and Caesarea will not bear any 
further liability to Alaris for such part under this Section 17; provided, that 
Alaris shall


                                      12


have first approved in writing the terms of the sub-contractor's product 
warranty for such part prior to the use thereof by Caesarea.

     18.  SALES AND MARKETING.  Caesarea acknowledges and agrees that Alaris 
will have the right to exploit the License, the NIKI Technology and the Assets 
and market and sell any product incorporating all or any portion of the same, 
upon such terms and in such manner as Alaris, in its sole and absolute 
discretion, shall determine; provided, that Alaris shall not promote the sale 
in the enteral market of any products utilizing the NIKI Technology.

     19.  PRODUCT RECALL.  In the event Alaris believes, in its sole and 
absolute discretion, that the NIKI Pump, the I.V. Value or any other product or 
device violates any provision of applicable law, should be recalled due to 
health or safety considerations or should otherwise be subject to alert or 
other appropriate treatment, Alaris shall have the sole authority to control 
all such actions and to determine the necessity for implementing any corrective 
action and the means of implementing the same.  Caesarea shall cooperate fully 
with Alaris in effecting any recall or any other type of corrective action, 
including, without limitation, communications to or with any purchasers, 
customers or other users of such product or device.

     20.  INSURANCE.  Alaris and Caesarea each agree to obtain and keep in 
force, for a period of ten (10) years from the date hereof, from an insurance 
carrier satisfactory to the other party, product liability insurance in an 
amount of not less than $1,000,000.  Each such insurance policy shall: (a) be 
endorsed to provide for written notification by the insurer to each of Alaris 
and Caesarea not less than 30 days prior to modification, expiration or 
cancellation thereof; (b) permit the other party to make payments to effect the 
continuation of such insurance coverage upon notice of cancellation due to 
nonpayment of premiums thereon; and (c) name the other party as an additional 
insured.  A certificate of insurance evidencing compliance with this paragraph 
and referencing this Agreement shall be furnished to the other party on the 
date hereof.

     21.  REPRESENTATIONS AND WARRANTIES OF ALARIS.  Alaris hereby represents 
and warrants to Caesarea that:

     (a)  It is duly organized, validly existing and in good standing under the 
laws of the State of Delaware and has full corporate power and authority to own 
or hold under lease the assets and properties which it owns or holds under 
lease and to enter into this Agreement and perform its obligations hereunder.

     (b)  The execution and delivery of this Agreement by it, the performance 
by it of its obligations hereunder and the consummation by it of the 
transactions contemplated hereby have been duly authorized by all necessary 
corporate action. When executed and delivered by it this Agreement shall 
constitute its valid and legally binding agreement enforceable against it in 
accordance with the terms hereof, except as may be limited by bankruptcy, 
insolvency or other laws affecting generally the enforceability of creditors' 
rights and by limitations of the availability of equitable remedies.


                                      13


     (c)  Neither the execution and delivery of this Agreement nor the 
consummation of the transactions contemplated herein will violate any provision 
of the certificate of incorporation or by-laws of Alaris or any law, rule 
regulations, writ, judgment, injunction, decree, determination, award, or other 
order of any court, government or governmental agency or instrumentality, 
domestic or foreign, binding upon Alaris, or conflict with or result in any 
breach of or event of termination under any of the terms of, or constitute a 
default under or result in the termination of or the creation or imposition of 
any mortgage, deed of trust, pledge, lien, security interest or other charge or 
encumbrance of any nature pursuant to, the terms of any contract or agreement 
to which Alaris is a party or by which Alaris or any of its assets and 
properties is bound.

     22.  REPRESENTATIONS AND WARRANTIES OF CAESAREA.  Caesarea hereby 
represents and warrants to Alaris that:

     (a)  It is duly organized, validly existing and in good standing under the 
laws of the State of Israel and has full corporate power and authority to own 
or hold under lease the assets and properties which it owns or holds under 
lease and to enter into this Agreement and perform its obligations hereunder.

     (b)  The execution and delivery of this Agreement by it, the performance 
by it of its obligations hereunder and the consummation by it of the 
transactions contemplated hereby have been duly authorized by all necessary 
corporate action. When executed and delivered by it, this Agreement shall 
constitute its valid and legally binding agreement enforceable in accordance 
with the terms hereof, except as may be limited by bankruptcy, insolvency or 
other laws affecting generally the enforceability of creditors' rights and by 
limitations on the availability of equitable remedies.

     (c)  Neither the execution and delivery of this Agreement nor the 
consummation of the transactions contemplated herein will violate any provision 
of the certificate of incorporation or by-laws of Caesarea or any law, rule, 
regulation, writ, judgment, injunction, decree, determination, award, or other 
order of any court, government or governmental agency or instrumentality, 
domestic or foreign, binding upon Caesarea, or conflict with or result in any 
breach of or event of termination under any of the terms of, or constitute a 
default under or result in the termination of or the creation or imposition of 
any mortgage, deed of trust, pledge, lien, security interest or other charge or 
encumbrance of any nature pursuant to, the terms of any contract or agreement 
to which Caesarea is a party or by which Caesarea or any of its assets and 
properties is bound.

     (d)  Except as set forth on Schedule 22(d) hereof and the Transfer 
Agreement, Caesarea owns all right, title and interest in  the Assets, the 
Documents, the NIKI Technology and all Improvements for all purposes, in each 
case on an unrestricted basis, free and clear of all liens, claims, 
restrictions, limitations and encumbrances.

     (e)  There are no claims, disputes, actions, suits or proceedings, 
including, without limitation, suits for patent infringement, pending or, to 
the knowledge of Caesarea, threatened against or affecting the NIKI Technology, 
or the use thereof by Caesarea or Alaris. To the knowledge of Caesarea, after 
reasonable inquiry, neither the NIKI Technology, nor the use thereof


                                      14


by Alaris under this Agreement, does or will infringe or conflict with any 
patents, patent applications, know-how, processes, trade secrets, techniques, 
procedures or other proprietary property rights or Intellectual Property, of or 
held by, any Person. 

     (f)  The Assets are all of the tangible assets used by Caesarea and 
necessary to manufacture the NIKI Pump in its present form.

     (g)  Except for the Existing Distribution Agreements, Caesarea is not a 
party to any distribution, license or transfer agreement with respect to the 
NIKI Technology.

     23.  NON-COMPETITION.

     (a)  Caesarea agrees that for a period of seven (7) years following the 
date hereof, neither Caesarea, Swi Barak, nor any affiliate of either of them 
will (and Caesarea and Swi Barak agree not to and to cause all such Persons not 
to), directly or indirectly, either for itself or himself, or any other person, 
firm, partnership, corporation or other business venture, own, manage, operate, 
control, or participate in, permit its or his name, as the case may be, to be 
used by, consult with, be employed by, render services for or otherwise assist 
in any manner, any Person that is engaged in the research, acquisition, 
manufacture, promotion, sale or marketing of a volumetric infusion pump or 
technology related thereto having its primary application in the Field, other 
than for the purpose of performing the obligations of Caesarea under this 
Agreement.  The parties acknowledge and agree that the development by Caesarea, 
Swi Barak, or any affiliate of either of them, of a valve, other than the I.V. 
Valve, or a syringe pump shall not be deemed a violation of this Section 23.

     (b)  The parties hereto acknowledge that it is impossible to measure in 
money the damages that will accrue to Alaris in the event of the breach of any 
of the covenants in (a) above and, if Alaris shall institute any action or 
proceeding to enforce those covenants, Caesarea and Swi Barak hereby waive and 
agree not to assert the claim or defense that Alaris has an adequate remedy at 
law or for damages.  The foregoing shall not prejudice Alaris' right to seek 
money damages from Caesarea or Swi Barak with respect to any such breach.

     (c)  If the provisions of Section 23(a) are determined by any court of 
competent jurisdiction to be unenforceable by reason of its extending for too 
long a period of time or over too large a geographic area or by reason of its 
being too extensive in any other respect or for any other reason it will be 
interpreted to extend only over the longest period of time for which it may be 
enforceable and/or over the largest geographical area as to which it may be 
enforceable and/or to the maximum extent in all other aspects as to which it 
may be enforceable, all as determined by such court and in such court.

     24.  TERMINATION OF EXISTING DISTRIBUTION AGREEMENTS.  Caesarea shall, as 
promptly as practicable after execution of this Agreement, but in any event not 
later than November 30, 1998, terminate, in a manner reasonably satisfactory to 
Alaris,  the Existing Distribution Agreements, other than its Existing 
Distribution Agreement with its Israeli distributor.  Upon the request of 
Alaris at any time after December 31, 1998, Caesarea and Alaris shall cooperate 
in dealing with Caesarea's Israeli distributor and shall endeavor to reach an 
agreement, upon terms and conditions mutually


                                      15


agreeable to Alaris and Caesarea, on the termination or renegotiation of the 
Existing Distribution Agreement with Caesarea's Israeli distributor.  All costs 
associated with the termination or renegotiation of Caesarea's Existing 
Distribution Agreement shall be borne exclusively by Caesarea, and Alaris shall 
cooperate fully with Caesarea in effecting any such termination or 
renegotiation.  In the event Caesarea fails to terminate or, in the case of 
Caesarea's Israeli distributor terminate or renegotiate to Alaris' 
satisfaction, the Existing Distribution Agreements, as provided for in this 
Section 24, Alaris shall only pay to Caesarea one-half of the Additional 
Payments until such time as Caesarea terminates or renegotiates to Alaris' 
satisfaction, as the case may be, the Existing Distribution Agreements.  Upon 
termination, or renegotiation to Alaris' satisfaction, of such Existing 
Distribution Agreements, Alaris shall pay to Caesarea any Additional Payments 
required to have been made and not so made due to the failure of Caesarea to 
terminate or renegotiate such Existing Distribution Agreements.

     25.  BANKRUPTCY OF CAESAREA.  In the event of the Bankruptcy of Caesarea, 
or the impairment or interruption of Caesarea's business, Alaris shall be under 
no further obligation to make payments to Caesarea under this Agreement other 
than the payments provided for in Sections 6(d) and 10 hereof.

     26.  DISTRIBUTION AGREEMENT.  Following the date hereof Caesarea and 
Alaris shall enter into negotiations for a distribution agreement generally 
upon the terms set forth on Schedule 26 hereto and otherwise upon terms and 
conditions mutually agreeable to Alaris and Caesarea.

     27.  INDEMNIFICATION.

     (a)  Caesarea shall indemnify, defend and hold harmless Alaris, its 
directors, officers, employees, agents, and their respective legal 
representatives, successors and assigns (individually, an "Indemnified Party") 
from and against any and all direct or consequential damages, costs, expenses, 
losses, claims, demands, liabilities and/or obligations, including, without 
limitation, reasonable counsel fees (collectively, "Losses"), incurred by an 
Indemnified Party arising out of, resulting from or based upon: (i) any 
negligence or wilful misconduct of Caesarea or its affiliates; (ii) any product 
liability, warranty or other claims resulting from the sale, lease, license or 
use of the NIKI Pump to the extent caused by any defect in the design of the 
NIKI Pump, any defect in the manufacture of the NIKI Pump or Manufacturing 
Assembly Kits manufactured by or on behalf of Caesarea or any other defect, 
nonconformity or deficiency attributable to any action or activity by or on 
behalf of Caesarea; and (iii) any action or claim that the NIKI Technology or 
the use thereof infringes upon the rights, power or privileges of any Person, 
including, without limitation, any such claim brought against Alaris or any 
other Person as a result of the exercise of its rights under this Agreement.

     (b)  Notwithstanding the provisions of subparagraph (a) above, Caesarea 
shall not be liable to indemnify an Indemnified Party for any Losses incurred 
by such Indemnified Party if such Losses arise out of, result from or are based 
upon the sale or use of the NIKI Technology or the NIKI Pump where the NIKI 
Technology or the NIKI Pump, as the case may be, has been modified by any 
Person other than Caesarea and such Losses arise out of or result from such 
modification.


                                      16


     (c)  If the facts giving rise to any such indemnification pursuant to this 
Section 27 shall involve any actual claim or demand by any third party against 
an Indemnified Party (a "Third Party Claim"), Caesarea shall be entitled to 
written notice of and entitled (without prejudice to the right of any 
Indemnified Party to participate at its own cost and expense through counsel of 
its own choosing) to defend such Third Party Claim at its expense and through 
counsel of its own choosing (which counsel shall be reasonably satisfactory to 
the Indemnified Party); if it gives written notice (a "Defense Notice") of its 
intention to do so no later than the 15th day following receipt of such written 
notice; PROVIDED, HOWEVER, that if the defendants in any action shall include 
both Caesarea and an Indemnified Party and the Indemnified Party shall have 
been advised by its counsel that the counsel selected by Caesarea has a 
conflict of interest because of the availability of different or additional 
defenses to the Indemnified Party, the Indemnified Party shall have the right 
to select separate counsel to participate in the defense of such action on its 
behalf, at the expense of Caesarea.  The failure of an Indemnified Party so to 
notify Caesarea shall not relieve Caesarea of any liability which it may have 
to any Indemnified Party except to the extent to which such liability may have 
been mitigated as a result of the timely receipt of such notice.  The 
Indemnified Party shall cooperate fully in the defense of such Third Party 
Claim and shall make available to Caesarea pertinent information under its 
control relating thereto, but shall be entitled to be reimbursed, as provided 
in this Section 27, for all out-of-pocket costs and expenses payable to third 
parties incurred by it in connection therewith, including, without limitation, 
reasonable fees and disbursements of counsel.  If Caesarea assumes the defense 
of any Third Party Claim, it will not, without the prior written consent of the 
Indemnified Party, which consent shall not be unreasonably withheld, settle or 
compromise any Third Party Claim, or permit a default or consent to the entry 
of a judgement in respect thereof.

     (d)  If Caesarea elects to defend a Third Party Claim, an Indemnified 
Party shall have the right, notwithstanding the provisions of Section 27(a) 
hereof, to control, at its own cost and expense,  the defense of any Third 
Party Claim with respect to such Indemnified Party and such costs and expenses 
shall not constitute Losses.

     (e)  Caesarea shall reimburse an Indemnified Party for all Losses incurred 
by the Indemnified Party within 30 days of the Indemnified Party's demand 
therefor.  In the event Caesarea fails to reimburse the Indemnified Party 
within such 30 day period, Caesarea shall pay to the Indemnified Party interest 
on such unpaid Losses, at the rate of nine (9%) per annum, from the date the 
Indemnified Party incurred such Loss through the date of payment by Caesarea.

     (f)  In the event an Indemnified Party elects to defend a Third Party 
Claim, or if Alaris elects to initiate proceedings to enforce its rights in or 
with respect to the NIKI Technology, including, without limitation, as a result 
of any infringement thereof, Caesarea shall cooperate fully in the defense or 
prosecution thereof, as the case may be, including, without limitation, making 
available to Alaris or the Indemnified Party, as the case may be, all pertinent 
technical and other information under its control relating thereto and making 
appropriate employees officers of Caesarea available as witnesses for Alaris or 
the Indemnified Party.  Alaris or the Indemnified Party, as the case may be, 
shall reimburse Caesarea for all out-of-pocket costs incurred by it in 
connection therewith except to the extent the same constitutes Losses subject 
to indemnity hereunder.


                                      17


     (g)  Under no circumstances shall the total liability of Caesarea for any 
Losses arising out of, resulting from or based upon any claim under Section 
27(a)(iii) hereof exceed sixty (60%) percent of the aggregate amount of all 
payments received by Caesarea hereunder (excluding amounts received by Caesarea 
under Sections 8 and 11 hereof) and under the distribution agreement referred 
to in Section 26.

     28   GENERAL.

     (a)  CHOICE OF LAW.  This Agreement and all purchase orders issued 
hereunder shall be governed and interpreted, and all rights and obligations of 
the parties hereunder shall be governed and determined in accordance with the 
laws of the State of Israel, without regard to its conflict of laws rules.  The 
courts of Jerusalem, Israel shall have exclusive jurisdiction concerning any 
dispute relating to or arising out of this Agreement and Alaris and Caesarea 
hereby submit to the exclusive jurisdiction of such courts.  In connection with 
any litigation hereunder, no party shall be required to deposit any security 
for costs, and each party hereby irrevocably waives any right that it might 
otherwise have to require declarations (or exhibits thereto) to be translated 
from English into Hebrew.

     (b)  NOTICES.  All notices, requests, demands, waivers, consents, 
approvals or other communications to any party hereunder shall be in writing 
and shall be deemed to have been duly given if delivered personally to such 
party or sent to such party by telegram or telex or by international overnight 
courier, as follows:


                                      18


     If to Alaris:

             Alaris Medical Systems, Inc.
             00000 Xxxxxxxxx Xxxxxx
             Xxx Xxxxx, Xxxxxxxxxx 00000
             Attention: Xxxx X. xx Xxxxx, Vice President and General Counsel
             Telephone: (000) 000-0000
             Facsimile: (000) 000-0000

     With a copy (which shall not constitute notice) to:

             Xxxxxx Xxxxxx Butowsky Xxxxxxx Xxxxxx & Xxxx
             000 Xxxx 00xx Xxxxxx
             Xxx Xxxx, Xxx Xxxx 00000
             Attention: Xxxxx X. Xxxxxxxxx, Esq.
             Telephone: (000) 000-0000
             Facsimile: (000) 000-0000

             and

             Xxxxx Xxxxx & Co.
             0 Xxxxxx Xxxxxx Xxxxxx
             Xxx Xxxx, Xxxxxx 00000
             Attention: Xxxxx Xxxxxxx, Adv.
             Telephone: 000-0-000-0000
             Facsimile: 972-3-696-4770

     If to Caesarea:

             Caesarea Medical Electronics Limited
             0 Xxxxxxx Xxxxxx
             Xxxxxxxx, Xxxxxx 00000
             Telephone: 000-0-000-000
             Facsimile: 972-6-326-125

     With a copy (which shall not constitute notice) to:

             Xxxxxxxx Xxxxxx Law Xxxxxx
             0 Xxxxx Xxxxxxxx Xxxxxx
             Xxxxxxxxx, Xxxxxx 00000
             Attention: Xxx Xxxxx, Adv.
             Telephone: 000-0-000-0000
             Facsimile: 972-2-561-8847


                                      19


or such other address as the addressee may have specified in notice duly given 
to the sender as provided herein.  All notices and communications given 
hereunder shall be deemed received upon (i) actual receipt thereof by the 
addressee, (ii) actual delivery thereof to the appropriate address, or (iii) in 
the case of a facsimile transmission, upon transmission thereof by the sender 
and the issuance by the transmitting machine of a confirmation slip confirming 
that the number of pages constituting the notice have been transmitted without 
error.  In the case of notices sent by facsimile transmission, the sender shall 
contemporaneously mail a copy of the notice to the addressee by international 
overnight courier service.  However, such mailing shall in no way alter the 
time at which the notice sent by facsimile transmission is deemed received

     (c)  ENGLISH LANGUAGE.  If this Agreement is translated into any language, 
the English language version shall govern in the event of any conflict or 
question of construction or interpretation.

     (d)  SEVERABILITY.  In the event that any provision of this Agreement 
shall be found in any jurisdiction to be in violation of public policy or 
illegal or unenforceable in law or equity, such finding shall in no event 
invalidate any other provision of this Agreement in that jurisdiction, and this 
Agreement shall be deemed amended to the minimum extent required to comply with 
the law of such jurisdiction.

     (e)  ENTIRE AGREEMENT.  This Agreement and the other documents referred to 
herein state the entire agreement reached between the parties hereto with 
respect to the transactions contemplated hereby and may not be amended or 
modified except by written instrument duly executed by the parties hereto.  Any 
and all previous agreements and understandings between the parties regarding 
the subject matter hereof, whether written or oral, including, without 
limitation, the Term Sheet dated March 11, 1998, between Alaris and Caesarea, 
are superseded by this Agreement.

     (f)  NO WAIVER.  The failure of either party hereto to enforce at any time 
or for any period of time, any provision of this Agreement shall not be 
construed as a waiver of such provision or of the right of such party 
thereafter to enforce each and every provision.

     (g)  ASSIGNMENT, BINDING EFFECT. Caesarea shall not assign this Agreement 
nor any of its rights or obligations hereunder without the prior written 
consent of Alaris, which consent shall not be withheld unreasonably and any 
such attempted assignment without such consent shall be void.  This Agreement 
and the rights herein granted shall be binding upon and shall inure to the 
benefit of Alaris and its successors, assigns and transferees.

     (h)  INDEPENDENT CONTRACTOR.  Each party shall act as the independent 
contractor of the other party.  Neither party shall be the legal agent of the 
other for any purpose whatsoever and therefore has no right or authority to 
make or underwrite any promise, warranty or representation, to execute any 
contract or otherwise to assume any obligation or responsibility in the name of 
or in behalf of the other party, except to the extent hereafter specifically 
authorized in writing by the other party.  None of the parties hereto shall be 
bound by or liable to any third persons for any act or for any obligation or 
debt incurred by the other toward such third party, except to the extent 
hereafter specifically agreed to in writing by the party so to be bound.


                                      20


     (i)  HEADINGS.  All section headings contained in this Agreement are for 
convenience of reference only, do not form a part of this Agreement and shall 
not affect in any way the meaning or interpretation of this Agreement.

     (j)  NUMBER AND GENDER.  The definitions in this Agreement shall apply 
equally to both the singular and plural form of the terms defined.  Whenever 
the context may require, any pronoun shall include the corresponding masculine, 
feminine and neuter form.  The words "include," "includes," and "including" 
shall be deemed to be followed by the phrase "without limitation."

     (k)  COUNTERPARTS.  This Agreement may be executed in one or more 
counterparts, each of which when executed and delivered shall be deemed to be 
an original and all of which counterparts, when taken together, shall 
constitute one and the same instrument.

     (l)  FURTHER ASSURANCES.  The parties and Swi Barak shall, from time to 
time, execute all such documents and do all such things as any of the other 
parties hereto may reasonably require for perfecting the transactions intended 
to be effected under or pursuant to this Agreement.

     (m)  SALES AND TRANSFER TAXES.  Except as otherwise provided in Section 9 
hereof, all taxes, levies, impositions, deductions, charges, withholdings, 
premiums, custom duties and other governmental fees, like assessments or 
charges of any kind whatsoever including, without limitation, all transfer, 
documentary, sales, ad valorem, value added, use and other such taxes, any 
penalties, interest and additions to tax, imposed as a result of the 
transactions contemplated hereunder (including, without limitation, the Sale, 
the sale of the Assets, the payments provided in Sections 5, 6 and 10, and the 
purchases pursuant to Sections 8, 11 and 13) shall be borne by Caesarea (but 
excluding any taxes imposed on the net income of Alaris).  Caesarea and Alaris 
shall cooperate in the timely making of all filings, returns, reports and forms 
as may be required in connection therewith.

     (n)  OFFSET.  Alaris shall have the right to offset against any amount 
otherwise payable by Alaris to Caesarea hereunder, any and all amounts payable 
by Caesarea to Alaris hereunder.  Caesarea shall have the right to offset 
against any amount otherwise payable by Caesarea to Alaris hereunder, any and 
all amounts payable by Alaris to Caesarea hereunder.

     (o)  FORCE MAJEURE.  In no event will either party be liable for any 
delays or failure to perform hereunder when the same are caused, directly or 
indirectly by, or in any way arise as a result of, fire, floods, civil or 
military unrest, terrorist activities, acts of god, war, governmental 
interference, legal restrictions applicable in any relevant jurisdiction, 
embargoes, shortages of raw materials (including components, assembled parts, 
etc.) or labor, strikes (whether or not authorized by law).  Any party 
experiencing such an event shall advise the other promptly, explaining the 
nature of the event and the anticipated duration.

     (p)  CONFLICTING COMMERCIAL FORMS.  The terms and conditions of this 
Agreement shall supersede and control over any conflicting or additional terms 
or conditions of any purchase orders,


                                      21


acknowledgments, invoices or other commercial forms exchanged between the 
parties concerning the subject matter hereof.

     (q)  PAYMENTS.  All payments required to be made hereunder shall be in 
United States Dollars.

     (r)  LIMITATION OF LIABILITY.  Caesarea shall not be liable to Alaris for 
any special, indirect or consequential damages arising out of this Agreement, 
its performance or termination.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 
day and year first above written


                                       ALARIS MEDICAL SYSTEMS, INC.

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


                                       CAESAREA MEDICAL ELECTRONICS LIMITED

                                       By: 
                                           -----------------------------
                                           Name: Swi Barak
                                           Title: General Manager


ACCEPTED AND AGREED TO
(solely with respect to Sections
3(a), 23 and 28(l) hereof)

--------------------------------
SWI BARAK


                                      22


                        LIST OF SCHEDULE AND EXHIBITS

EXHIBIT          DESCRIPTION
-------          -----------
A.               Agreement with Nestec, S.A.
B.               Form of Standby Letter of Credit

SCHEDULE         DESCRIPTION
--------         -----------
1(a)             Calculation of Direct Costs
1(b)             Documents related to NIKI Technology
1(c)             Existing Distribution Agreements
1(d)             Existing Intellectual Property
1(e)             Description of I.V. Valve
1(f)             Manufacturing Assembly Kit specifications for Xxxxx 0 XXXX Pump
1(g) Part 1      Manufacturing Documentation Package - Phase 1 NIKI Pump
1(g) Part 2      Manufacturing Documentation Package - Phase 2 NIKI Pump
1(g) Part 3      Manufacturing Documentation Package - Phase 3 NIKI Pump
1(h)             Description of Peristaltic Pump
1(i) Part 1      Specifications for Phase 1 NIKI Pump
1(i) Part 2      Specifications for Phase 2 NIKI Pump
1(i) Part 3      Specifications for Xxxxx 0 XXXX Pump
1(j)             Description of Pump System with Error Detection
1(k)             Description of System and Method
4                List of Assets
13               Engineering Costs
22               Rights to Intellectual Property
26               Terms of Distribution Agreements


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