SUMMIT MEDICAL SYSTEMS INC /MN/, 10-Q, 1996-05-15

SUMMIT MEDICAL SYSTEMS INC /MN/
10-Q, 1996-05-15
COMPUTER PROGRAMMING SERVICES

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ___________to___________
Commission File Number____________

SUMMIT MEDICAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

MINNESOTA 41-1545493
(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)

ONE CARLSON PARKWAY
SUITE 120
MINNEAPOLIS, MN 55447
612-473-3250
(Address including zip code, of Registrant's
principal executive offices and telephone
number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and has been subject to such filing requirements
for the past 90 days. X Yes No
----- ------

The number of shares outstanding of the Registrant's Common Stock on March 31,
1996 was

7,536,545 shares $.01 Par
<PAGE>

INDEX

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Consolidated statements of financial position--March 31, 1996 and
December 31, 1995

Consolidated statements of operations -- Three months ended March 31,
1996 and 1995

Consolidated statements of cash flows-- Three months ended March 31,
1996 and 1995

Notes to consolidated financial statements-- March 31, 1996

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 2. CHANGES IN SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

10.1 Agreement Regarding Distribution of Software Programs.
11.1 Computation of Earnings per Share
27 Financial Data Schedule

SIGNATURES

SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

This Quarterly Report on Form 10-Q may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties that may cause
the Company's actual results to differ materially from the results discussed in
the forward-looking statements. Factors that might cause such differences
include, but are not limited to, failure of the Company's joint marketing
partners to market successfully the Company's database software; termination of
any of the Company's joint marketing arrangements; failure of new products from
the Company or its joint venture to achieve market acceptance or significant
delays in the introduction of these new products; termination of one or more of
the Company's agreements with national medical societies: lack of continued
market acceptance of the Company's clinical outcomes database software; failure
of the Company to maintain the integrity of its national databases; inability of
the Company to manage growth effectively and to establish effective financial
and management controls; failure of the Company to integrate the businesses of
its recently acquired subsidiaries and its joint venture into the Company's
operations; changes in government regulation; loss of key management personnel;
increased competition; and inability of the Company to obtain adequate
protection for the Company's proprietary technology. The forward-looking
statements herein are qualified in their entirety by the cautions and risk
factors set forth in Exhibit 99, under the caption "Cautionary Statement," to
the Company's Annual Report on Form 10-K, dated March 28, 1996. A copy of the
Form 10-K may be obtained from the Public Reference Branch of the SEC at 450
Fifth Street, N.W., Washington, D.C. at prescribed rates.

<PAGE>

SUMMIT MEDICAL SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(UNAUDITED)

ASSETS March 31, December 31,
1996 1995
----------- ------------
<S> <C> <C>
Currents assets
Cash and cash equivalents $ 2,368,656 $ 2,035,399
Short-term investments 20,140,280 20,718,674
Accounts receivable (net of allowance of $110,343 5,384,713 6,309,745
and $101,397 respectively)
Note receivable-officer 27,080 59,632
Other current assets 1,184,058 769,365
----------- -----------
Total currents assets 29,104,787 29,892,815

Equipment and fixtures, net 1,521,493 1,385,663
Computer software costs, net 80,284 103,207
----------- -----------
Total assets $30,706,564 $31,381,685
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Accounts payable and accrued expenses $ 774,032 $ 1,154,728
Accrued compensation 780,998 498,057
Accrued royalties 264,107 332,773
Deferred revenue 1,229,069 1,334,967
Income taxes payable 8,062 110,062
Note payable - officer 0 17,991
Notes payable and convertible debentures 15,000 15,000
Current portion of long-term debt 0 13,278
----------- -----------
Total current liabilities 3,071,268 3,476,856

Long-term debt 12,431 20,580

Shareholders' equity:
Common stock, $.01 par value:
Authorized shares - 38,933,333
Issued and outstanding shares - 7,536,545
at March 31, 1996; 7,515,565 at
December 31, 1995 75,365 75,156
Additional paid-in capital 36,217,280 36,197,523
Accumulated deficit (8,669,780) (8,388,430)
----------- -----------
Total shareholders' equity 27,622,865 27,884,249
----------- -----------
Total liabilities and shareholders' equity $30,706,564 $31,381,685
=========== ===========

</TABLE>

See accompanying notes

Page 1

<PAGE>

SUMMIT MEDICAL SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)
<TABLE>
<CAPTION>

THREE MONTHS ENDED
March 31
-----------------------------
1996 1995
-----------------------------
<S> <C> <C>
Revenue
Software licenses $ 1,986,628 $ 1,465,829
Support and service 1,926,653 1,158,619
----------- -----------
Total revenue 3,913,281 2,624,448

Cost of sales
Software licenses 376,944 149,444
Support and service 857,570 726,058
----------- -----------
Total cost of sales 1,234,514 875,502

Gross profit 2,678,767 1,748,946

Operating expenses
Selling and marketing 1,901,340 1,254,924
Research and development 361,304 276,436
General and administrative 938,884 553,258
----------- -----------

Total operating expenses 3,201,528 2,084,618
----------- -----------

Loss from operations (522,761) (335,672)

Interest income, net 259,244 35,235
----------- ----------
Net loss before income taxes (263,517) (300,437)

Income tax expense 17,832 0
----------- ----------
Net loss ($281,349) ($300,437)
=========== ==========

Net loss per share
Primary ($0.04) ($0.09)
=========== ==========
Fully diluted ($0.04) ($0.07)
=========== ==========

Weighted average shares outstanding
Primary 7,527,314 3,378,874
=========== ==========
Fully diluted 7,527,314 4,445,530
=========== ==========
</TABLE>

See accompanying notes

Page 2

<PAGE>

SUMMIT MEDICAL SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

(UNAUDITED)
<TABLE>
<CAPTION>

THREE MONTHS ENDED
MARCH 31
-------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Operating activities:
Net loss ($281,349) ($300,437)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 148,991 112,340
Changes in operating assets and liabilities:
Accounts receivable 920,563 (79,267)
Other current assets (377,672) (3,220)
Accounts payable and accrued expenses (482,696) 107,671
Accrued compensation and royalties 214,275 38,685
Deferred revenue (105,898) (23,182)
---------- ----------
Net cash (used in) provided by operating activities 36,214 (147,410)

Investing activities
Purchase of short-term investments (9,203,645) (435,153)
Sales of short-term investments 9,782,039 1,027,457
Purchases of equipment and fixtures (287,433) (286,929)
Disposal of equipment and fixtures 25,534 -
---------- ----------
Net cash provided by investing activities 316,495 305,375

Financing activities
Proceeds from long-term debt 12,431 27,612
Principal payments on long-term debt (33,858) (7,426)
Principal payments on note payable - officer (17,991) -
Issuance of Common Stock - 105,008
Net proceeds from exercise of common stock options 19,966 10,000
---------- ----------
Net cash (used in) provided by financing activities (19,452) 135,194

Increase in cash and cash equivalents 333,257 293,159
Cash and cash equivalents at beginning of period 2,035,399 169,211
---------- ----------
Cash and cash equivalents at end of period $2,368,656 $462,370
========== ==========

Supplemental disclosures of cash flow information:
Cash paid during the year for interest $6,455 $677

</TABLE>
See accompanying notes.

Page 3

<PAGE>

SUMMIT MEDICAL SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
1996, are not necessarily indicative of the results that may be expected for the
year ended December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
December 31, 1995 included in the Annual Report of the Company.

NOTE B - CASH, CASH EQUIVALENTS AND INVESTMENTS

Cash in excess of current operating needs is invested in highly liquid money
market and/or marketable debt securities in accordance with the Company's
investment policy. Cash equivalents are highly liquid investments with
remaining maturities of 90 days or less at the time of purchase. Other highly
liquid investments with remaining maturities of one year or less at the time of
purchase are considered short-term investments.

NOTE C - DISTRIBUTION AGREEMENTS

During the first quarter of 1996, the Company entered into a product
distribution agreement with Meadox Medicals, a division of Boston Scientific
Corporation ("BSC"). The agreement grants BSC an exclusive right and license to
market, sell, and distribute vascular and endovascular surgery programs
worldwide. In order to maintain exclusivity, BSC has agreed to purchase a
minimum number of programs over the next five years.

Page 4
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL
- - -------

Summit Medical is a leading provider of clinical outcomes database software
and related products and services for selected medical specialties in the
healthcare industry. The Company's database software enables healthcare
providers to record, analyze and report detailed clinical, economic and patient-
reported outcomes data on medical procedures, diseases and patient functional
status.

RESULTS OF OPERATIONS
- - ---------------------

REVENUE:
- - --------

REVENUE was $3,913,000 for the first quarter of 1996, an increase of
$1,289,000 or 49% over the first quarter of 1995. Sales of software licenses
were $1,987,000 for the first quarter of 1996, an increase of $521,000 or 36%
over the first quarter of 1995, and accounted for 40% of the total revenue
growth. This increase is primarily attributable to increased unit volume in
cardiology and new subspecialty modules, a general price increase of cardiology
modules and increased sales to the Company's DOS customers of Windows Vista (R)
upgrades. Support and service revenue was $1,927,000 for the first quarter of
1996, an increase of $768,000 or 66% over the first quarter of 1995 and
accounted for 60% of total revenue growth. This increase is primarily
attributable to increased training and service fees related to the Company's
greater installed customer base, additional development fees from joint
marketing partners, and increased consulting and data conversion fees.

COST OF SALES:
- - --------------

TOTAL COST OF SALES was $1,235,000 in the first quarter of 1996, an
increase of $359,000 or 41% over the same period of 1995.

COST OF SOFTWARE LICENSE revenue was $377,000 for the first quarter of
1996, an increase of $228,000 or 153% over the first quarter of 1995. This
increase was primarily due to increased revenues and corresponding royalties and
freight.

COST OF SUPPORT AND SERVICE was $858,000 for the first quarter of 1996, and
increase of $132,000 or 18% compared to the first quarter of 1995. This increase
was due primarily to increased salary expense for permanent and temporary
personnel in customer service and data management areas.

Page 5

<PAGE>

OPERATING EXPENSES:
- - -------------------

SELLING AND MARKETING expenses were $1,901,000 during the first quarter of
1996, an increase of $646,000 or 51% compared to the same quarter of 1995. This
increase is primarily due to an expansion of the domestic sales force, increased
sales and marketing cost at Summit Medical Europe, and hiring of marketing
personnel.

RESEARCH AND DEVELOPMENT expense was $361,000 in the first quarter of 1996,
an increase of $85,000 or 31% compared to the same quarter of 1995. The increase
is due primarily to the hiring of additional technical personnel to aid in the
development of new software.

GENERAL AND ADMINISTRATIVE expense was $939,000 for the first quarter of
1996, an increase of $386,000 or 70% compared to the first quarter of 1995. The
increase is due primarily to the hiring of additional executive and
administrative personnel, higher legal and accounting fees, and increased
insurance expense.

INTEREST INCOME, NET of interest expense and unrealized loss on short term
investments was $259,000 for the first quarter of 1995, an increase of $224,000
compared to the first quarter of 1995. This increase is due to the interest
income earned on proceeds received from the Company's August 1995 initial public
offering.

INCOME TAX EXPENSE. The Company recorded minimal income tax expense for the
first quarter of 1996 due to the current period loss. No income tax was recorded
for the first quarter of 1995 due to the Company's accumulated net operating
loss carryforward.

NET INCOME (LOSS). The Company recorded a net loss of $281,000 or $.04 per
share for the quarter ended March 31, 1996 compared to a net loss of $300,000 or
$.09 per share (Primary) for the quarter ended March 31, 1995. Primary earnings
per share reflect a decrease in the loss per share of $.05 due to the increase
in weighted average shares outstanding after the Company's initial public stock
offering.

LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------

During the three months ended March 31, 1996, the Company's cash increased
$333,000 to $2,369,000. As of March 31, 1996, the Company had $5,385,000 in
accounts receivable including $2,216,000 in accounts receivable over 90 days
old.

Cash provided by operating activities was $36,000 for the three months ended
March 31, 1996. The primary sources of cash were a decrease in accounts
receivable of $921,000 due to collections exceeding revenues, and an increase in
accrued compensation and royalties of $214,000. These sources were partially
offset by a net loss of $281,000, an increase in other current assets of
$378,000 and a decrease in accounts payable and accrued expenses of $483,000.

Cash provided by investing activities was $316,000 which consists of the sales
of short-term investments of $9,782,000 and the purchase of equipment and
fixtures of $287,000, partially offset by the purchase of short-term investments
in the amount of $9,204,000.

Page 6
<PAGE>

Cash used in financing activities for the three months ended March 31, 1996, was
$19,000 related to principal payments on notes payable-officer and retirement of
long term debt.

The Company does not have any material scheduled commitments for capital
expenditures. The Company believes that the cash and short-term investments of
$22,509,000 on hand at March 31, 1996, together with anticipated cash flows from
operations, will be sufficient to fund operating cash needs through at least
fiscal year 1996.

Page 7
<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
The following exhibits are included herein:
Exhibit
No.
- - -------
(10.1) Agreement Regarding Distribution of Software Programs by and between
Meadox Medicals, a division of Boston Scientific Corporation and Summit
Medical Systems, Inc., dated as of March 26, 1996.
(11.1) Computation of Earnings Per Share
(27) Financial Data Schedule

Page 8
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly

Summit Medical Systems, Inc.
----------------------------

Date May 13, 1996 /s/ Anthony W. Rees
------------------------- ----------------------------
Anthony W. Rees
Chief Financial Officer

Page 9

<PAGE>

AGREEMENT REGARDING
DISTRIBUTION OF SOFTWARE PROGRAMS

THIS AGREEMENT ("AGREEMENT"), made as of March 26, 1996, by and between
Meadox Medicals, a division of Boston Scientific Corporation, a Delaware
Corporation ("BSC"), and SUMMIT Medical Systems, Inc., a Minnesota corporation
("SUMMIT").

RECITALS:

A. BSC is in the business of, among other things, distributing medical
devices to hospitals ("Hospitals") and physicians that are used to perform
vascular and endovascular surgery procedures.

B. SUMMIT has developed certain software programs including software
designed to manage clinical databases relevant to the activities of Hospitals
and physicians.

C. BSC and SUMMIT desire to enter into an agreement under which Summit will
develop certain other software programs for BSC and BSC shall have a right to
license certain software programs from SUMMIT for distribution and licensing to
Hospitals and physicians as provided in this Agreement.

AGREEMENTS:

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants contained in this Agreement, BSC and SUMMIT agree as follows:

1. DEFINITIONS
-----------

As used in this Agreement, the following terms shall have the meanings
indicated:

a. "BSC" shall specifically mean the Meadox division, and any other vascular
surgery/endovascularsurgery companies which are acquired by BSC in the
future.

b. "ADDITIONAL FEATURES" shall have the meaning given such term in
Section 3.3.

c. "END USERS" shall mean any party who purchases or otherwise acquires from
BSC a license to use the Program under the terms of this Agreement.

d. "LICENSED DOCUMENTATION" shall mean all documentation (other than the
Licensed Software), that is identified on the attached Schedule 1, and all
updates, revisions and enhancements thereto made by or for SUMMIT during
the term of this Agreement.
<PAGE>

e. "LICENSED SOFTWARE" shall mean the list of software specified in the
attached Schedules 2 in object code form, and all updates, revisions and
enhancements thereto made by or for SUMMIT during the term of this
Agreement.

f. "NATIONAL DATABASE" shall mean that certain databases containing the
aggregate clinical data relevant to the activities of Hospitals and
physicians that will be established in SUMMIT's current and future
databases and may be updated, modified or enhanced from time to time, but
not including the end-user database (as defined in Section 5.)

g. "PROGRAM(S)" shall mean the BSC Programs, and SUMMIT Programs,
collectively. "BSC PROGRAMS" and "SUMMIT PROGRAMS" shall mean that Licensed
Software identified as such on Schedule 2A and Schedule 2B, respectively,
together with all related Additional Features and Licensed Documentation.
References to Programs include the Licensed Software with or without the
Additional Features, as the case may be, as requested from time to time by
BSC.

h. "TRAINING PROGRAM" shall mean the training program conducted by SUMMIT in
Minneapolis, Minnesota, which is sometimes referred to as the SUMMIT
Training Institute and which provides training on the features and
applications of the Programs, as such training program currently exists or
as such training program may be updated, modified or enhanced from time to
time during the term of this Agreement.

i. "CO-EXCLUSIVE" shall mean that only SUMMIT and BSC shall have the right to
distribute the Programs.

2. DISTRIBUTION OF PROGRAMS
------------------------

2.1 DISTRIBUTION RIGHTS.
--------------------

2.1.1 GRANT OF DISTRIBUTION RIGHTS.
----------------------------

(a) SUMMIT hereby grants to BSC, and BSC hereby accepts, a co-
exclusive right and license (with SUMMIT) to market, demonstrate, use,
sell and otherwise distribute the BSC and SUMMIT Programs (as
identified on Schedule 2A and 2B).

(b) SUMMIT agrees and warrants that is not now rendering and shall not
directly or indirectly develop or provide during the term of this
Agreement (unless this Agreement is terminated by SUMMIT or

-2-
<PAGE>

BSC pursuant to Sections 2.1.2 or 7), any software programs for
Hospitals or physicians performing vascular and/or endovascular
surgery for distribution by any competitor of BSC. For purposes of
this Agreement, a "competitor" of BSC means any party in actual
competition or intending or preparing to be in competition with BSC
and/or BSC's products. Notwithstanding any other provision of this
Agreement, as BSC is the copyright owner of the BSC Programs, in no
event shall SUMMIT permit any third party to distribute the BSC
Programs without BSC's written consent.

2.1.2 MINIMUM PURCHASE REQUIREMENTS. In order for BSC to maintain
its distribution rights to the SUMMIT Programs on a co-exclusive
basis, BSC must make, on a cumulative basis, the minimum annual
purchase requirements set forth in Schedule 4 for aggregate purchases
of all Programs. In the event that BSC fails to meet such minimum
purchase requirements by the end of the applicable fiscal time periods
set forth on Schedule 4, BSC shall have a right to cure such purchase
deficiency within ninety (90) days of written notice from SUMMIT. In
the event that BSC fails to cure such minimum purchase deficiency
within such ninety (90) day period, SUMMIT shall have the right to
terminate this Agreement (in which case, BSC shall retain ownership of
the BSC Programs), which will be SUMMIT's sole and exclusive remedy
with respect to the failure by BSC to meet the minimum purchase
requirements set forth in Schedule 4. The failure by BSC to meet such
minimum purchase requirements on a cumulative basis by the end of the
applicable fiscal time period set forth on Schedule 4 shall not be
deemed a breach of this Agreement if BSC cures such deficiency within
ninety (90) days of written notice from SUMMIT. The failure of BSC to
meet such minimum purchase requirements on a cumulative basis by the
end of the applicable fiscal time period set forth on Schedule 4 due
to the unavailability of programs in accordance with their scheduled
market release dates shall not be deemed as a breach of this
Agreement.

The amount of sales by SUMMIT at any time of any additional software
programs or improvements to End Users who initially purchase a Program
from BSC shall be credited against BSC's minimum purchase
requirements. SUMMIT shall provide BSC with quarterly reports of all
such additional sales and BSC shall have a right to audit SUMMIT's
records to verify such quarterly reports.

-3-
<PAGE>

2.1.3 LICENSE OF SUMMIT NAME AND LOGO. SUMMIT hereby grants to BSC a
royalty free license to use and include SUMMIT's name, trademarks and
logo in promoting the sale of Programs and related services. BSC
agrees that prior to the use of any marketing materials containing
SUMMIT's name or logo, BSC shall first submit such materials for
review by SUMMIT.

2.2 PURCHASE OF PROGRAM LICENSES.
----------------------------

(a) During the term of this Agreement, BSC shall purchase and SUMMIT shall
sell copies of the Programs at a price determined in accordance with
the attached Schedule 5. Purchases of Programs by BSC shall be made
pursuant to written orders submitted by BSC which shall specify the
number of Programs ordered and the date of shipment. SUMMIT shall
submit invoices upon shipment of purchase orders and all payments with
respect to such invoices shall be due thirty (30) days from the date
of invoice. Invoices covering Programs shipped in advance of
specifications set forth in a purchase order shall not be payable
until after the date specified for delivery, unless otherwise agreed
in writing. SUMMIT shall bear the entire risk of loss, theft, damages
to or destruction of the Programs purchased by BSC hereunder until
such time as Programs are delivered to BSC or the End User at the
destination specified in the applicable purchase order for such
Programs.

(b) Upon execution of this agreement, BSC shall make an up-front payment
of (***) to SUMMIT, of which (***) shall be the initial payment for
the development of the BSC Programs listed in Schedule 2A and (***)
shall be a prepayment of Program inventory. In addition, for product
development, conditional payments in the amount of (***) each will be
made on the successful testing and acceptance of future BSC Programs
requested by BSC. These payments will be made within thirty (30) days
after receipt of invoice from SUMMIT. All prepayment of Program
inventory shall be an asset of BSC, but will be held by SUMMIT and
applied against BSC orders for Programs under this Agreement.

2.3 RESALE OF PROGRAM LICENSES BY BSC. BSC shall distribute the BSC
Programs to End Users subject to the terms and conditions of a Software License
Agreement in substantially the form attached hereto as Schedule 6 (the "SOFTWARE
AGREEMENT"), which shall govern the use of the Programs by End Users and the

(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.

-4-
<PAGE>

relationship between the End User and SUMMIT. SUMMIT shall execute such
agreements with each End User when necessary on each such agreement. Attached
to the Software Agreement shall be an additional agreement (the "BSC END USER
AGREEMENT") between BSC and the End User which shall set forth the terms of sale
or lease of the Program between BSC and the End User, and agreements regarding
use and ownership of data. BSC shall submit for SUMMITs review any proposed
form of BSC End User Agreement prior to use by BSC. The price, if any, charged
by BSC to End Users and the terms of payment thereof, shall be established by
BSC, at its discretion. SUMMIT shall perform its obligations under the terms of
the Software Agreement between SUMMIT and each End User.

The sales managers of BSC and SUMMIT shall work together in good faith to
resolve any issues that may arise with respect to the efforts of respective
sales representatives of BSC and SUMMIT to make an initial sale of a Program to
an End User. At all times, SUMMIT sales representatives shall be instructed by
and shall receive incentives from SUMMIT to facilitate and cooperate with BSC's
efforts in promoting sales and Support of the Programs to End Users.

SUMMIT shall refer to BSC any additional sales to End Users who initially
purchase a Program from BSC to the extent such additional sales arise during a
six-month period after the date of installation of the initial Program purchased
from BSC. However, during and after such six-month period, BSC shall be
credited with all such additional sales for purposes of Section 2.1.2.

2.4 INSTALLATION OF PROGRAMS. End Users are responsible for Program
installation on their hardware system. Hardware system and installation
requirements will be covered by SUMMIT during each Training Program.

2.5 EUROPEAN & JAPAN MARKETS. When SUMMIT has fully developed programs
for European markets, BSC and SUMMIT will negotiate additional minimum
performance objectives and an initial prepayment for program inventory for said
markets. BSC and SUMMIT shall negotiate in good faith an allocation of the
costs associated with market research, market entry, training and support
services for Japanese End Users. All other terms and conditions of this
Agreement will apply to Japan and European markets.

2.6 ADDITIONAL COVENANT OF BSC. As long as BSC is distributing programs
under this Agreement, BSC shall not distribute any clinical outcomes software
programs for Hospitals and physicians that are competitive with the Programs
listed in Schedules 2A, and 2B.

2.7 OPTION TO RESTRUCTURE AGREEMENT IN THE EVENT VASCULAR/ENDOVASCULAR
SOCIETIES CONSENTS TO DISTRIBUTION OF PROGRAMS. The parties acknowledge that
prior to entering into this Agreement they have discussed the possibility of the
potential

-5-
<PAGE>

endorsement of the programs covered by this Agreement, by the Society of
Vascular Surgery and/or other Vascular/Endovascular medical societies. In the
event this were to happen, both parties shall negotiate in good faith any
required modifications and/or additions to this Agreement.

3. TRAINING AND SOFTWARE SUPPORT.
------------------------------

3.1 INITIAL TRAINING OF BSC PERSONNEL. SUMMIT shall provide the Training
Program to up to twenty (20) BSC personnel at a mutually agreeable time. The
purpose of this Section 3.1 is to allow BSC personnel who will be involved in
the marketing and use of the Program to become familiar with the Program. The
Training Program shall be provided by SUMMIT at no cost to BSC.

3.2 ONGOING SALES SUPPORT. During the term of this Agreement, SUMMIT's
field sales representatives shall provide standard technical support to BSC's
sales representatives. Such support shall be provided at no cost to BSC. No
later than January 1, 1997, SUMMIT shall build and maintain a sales force of at
least twenty-five (25) sales representatives who shall provide such support, and
one (1) product manager who will be dedicated to vascular and endovascular
product lines.

3.3 PROGRAM DEVELOPMENT AND ENHANCEMENTS. SUMMIT shall develop the BSC
Programs pursuant to BSC's specifications. These programs will have the
capability for data exchange and comparisons with SUMMIT Programs. SUMMIT shall,
at BSC's request, develop and provide unique features, modifications or screens
to the Programs that are sold by BSC (the "ADDITIONAL FEATURES"). The Additional
Features might include customized BSC data screens (i.e., screens with BSC's
name or logo, screens to track and report the type and sequence of products used
during procedures, and a customized demonstration diskette). The Additional
Features and all reports based thereon will be owned by BSC and BSC will have
the exclusive right to market and use the Additional Features. The initial
specifications for BSC programs and their Additional Features shall be developed
by SUMMIT and provided to BSC, based on BSC's specifications. Demonstration
diskettes shall be developed and provided at no cost to BSC. SUMMIT shall
provide up to 80 additional hours of service to develop and implement such
future updates, revisions and enhancements to the BSC programs and their
Additional Features as BSC may request from time to time at no cost to BSC. Any
future updates, revisions, and enhancement BSC programs and their Additional
Features, that are requested by BSC after SUMMIT has provided such 80 hours of
service shall be provided at a cost to BSC to be mutually agreed upon.

3.4 TRAINING OF END USERS. SUMMIT shall make the Training Program
available to BSC's End Users at a cost of (i) (***) per person in classes with
paid attendance of ten (10) or more people; or (ii) $1,900 per person in classes
with paid attendance of less than ten (10) people. BSC shall determine in its
discretion the

-6-
<PAGE>

price, if any, charged to its End Users for attending the Training Program.
SUMMIT shall allow one or more BSC representatives to use up to two (2) hours of
the Training Program to train End Users on the use of BSC Programs and their
Additional Features.

3.5 SOFTWARE MAINTENANCE AND PROGRAM SUPPORT. SUMMIT shall provide
assistance for software error detection and software advice through a toll-free
support hot line available to BSC's End Users. SUMMIT shall also provide on-
going technical support, customer service, and software maintenance services to
End Users. Such services shall be provided by SUMMIT at no cost to BSC or BSC's
End Users for a period of six (6) months after the date the Program is installed
on the End User's system; thereafter, SUMMIT shall make such support and
maintenance available to the End Users on the same terms as are then made
generally available to SUMMIT's other customers. BSC shall conduct post-
installation visits to End Users for purposes of delivering available reports,
educating End Users on use of Additional Features and marketing additional or
modified Programs that may be developed.

3.6 PROGRAM LANGUAGES. The Program shall be developed in the Japanese
language or other agreed upon languages, if requested by BSC, and the actual and
reasonable costs of converting the Program to another language shall be shared
equally by BSC and SUMMIT.

4. WARRANTIES
----------

a. All Programs shall be free of defects in design, materials and
workmanship. All the Programs shall be free of Program defects
including those discovered in testing, and shall perform in accordance
with the software specifications that have been provided by SUMMIT to
BSC. SUMMIT shall promptly replace or correct any defects in the
Programs at no charge to BSC or the End User.

b. SUMMIT represents and warrants: (i) that it has the unrestricted right
to disclose any information it submits to BSC free of all claims of
third parties; (ii) that such disclosures do not breach or conflict
with any confidentiality provisions of any agreement to which SUMMIT
is a party; (iii) that the performance of this Agreement by BSC will
not violate any other agreement or any restriction of any kind binding
upon SUMMIT; (iv) that SUMMIT has the right to license, Licensed
Software and Licensed Documentation to BSC and BSC's End Users; and
(v) that to the best of its knowledge, the terms of this Agreement and
the distribution of the Programs under this Agreement and the exercise
of licenses or sublicenses granted in accordance with this Agreement
does not and will not infringe the intellectual property

-7-
<PAGE>
[[1]]SUMMIT FORM 10-Q R.R. Donnelley

rights of any third party under any applicable copyright, trademark,
patent or other intellectual property laws.

c. SUMMIT shall indemnify and hold BSC and the End Users harmless against
any claims, losses or damages (including attorneys fees and expenses)
arising out of any breach by SUMMIT of any of the foregoing
representations and warranties.

d. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR ANY SOFTWARE
AGREEMENT TO WHICH SUMMIT IS A PARTY, SUMMIT DISCLAIMS ALL OTHER
WARRANTIES, WHETHER EXPRESS OR IMPLIED.

e. SUMMIT shall be responsible for and shall indemnify BSC against and
warranty claims of the End Users with respect to any of the Programs
except that 13SC shall be responsible for and shall indemnify SUMMIT
against any warranties expressly extended by BSC to the End Users
beyond the scope of the warranties extended by SUMMIT to the End
Users.

5. HARVEST OF END USER DATA
------------------------

SUMMIT shall harvest from each of BSC's End Users and maintain in a
separate Database (the "END USER DATABASE") such data as the End User in
question shall have agreed to provide to BSC pursuant to the applicable BSC End
User Agreement. From time to time, at BSC's request, SUMMIT shall provide to
BSC the data contained in the End User Database to the extent the End User has
approved the use of such data by BSC. In addition, BSC agrees that data
contained in the End User Database will be uploaded to the National Database on
an annual basis, or more frequently if required by BSC and SUMMIT at no charge
to BSC. If BSC requests data from the End User Database together with clinical
correlation's thereon, SUMMIT shall download such data to BSC together with all
clinical correlation's and reports as BSC may request, from time to time at a
cost of no more than *** per End User, per data harvest. The parties agree (i)
that SUMMIT shall be deemed the copyright owner with respect to all Licensed
Software, Licensed Documentation and the National Database and all reports,
compilations and derivative products based thereon, for the SUMMIT Programs;
(ii) that BSC shall be deemed the copyright owner of all Licensed Software and
Licensed Documentation for the BSC Programs, Additional Features, the BSC End
User Database and all reports and compilations based thereon; and (iii) the
individual End Users shall be deemed the copyright owner of all raw data
contained in such End User's patient and clinical files.

6. NON-SOLICITATION OF EMPLOYEES.
------------------------------

SUMMIT and BSC each agree that during the term of this Agreement and for a
period of twelve (12) months thereafter, neither party shall recruit or hire any
sales representatives employed by the other party, without the written approval
of such other party.

7. TERM AND TERMINATION
--------------------

7.1 TERM OF AGREEMENT. The term of this Agreement shall commence on April
1, 1996 for an initial term through December 31, 2001, and shall be
automatically renewed for additional successive three (3) year terms thereafter
unless earlier terminated pursuant to the terms specified in Section 7.3.

7.2 TERM OF PROGRAM LICENSES. The term of the Program licenses granted to
BSC's End Users shall commence on the date of installation of the Program with
the End Users and shall continue in full force and effect for the term set forth
in the particular Software Agreement applicable to the respective End Users and
shall survive any earlier expiration or termination of this Agreement.

7.3 TERMINATION OF AGREEMENT. Neither party may cancel this Agreement
during the initial term of this Agreement except (i) upon a material breach by
the other party of this Agreement and a failure by the other party to cure such
default ninety (90) days of written notice from the other party; (ii) either
party may terminate this Agreement in the event of the voluntary or involuntary
filing for bankruptcy of the other party; and (iii) at the discretion of BSC in
the event of the sale of all or substantially all of the assets or capital stock
of SUMMIT to a competitor of BSC, and (iv) at the discretion of SUMMIT in the
event of an acquisition by BSC of a competitor of SUMMIT. After the initial
term, BSC or SUMMIT may terminate this Agreement by serving written notice at
any time at least one hundred eighty (180) days prior to such termination date;
or upon the occurrence of any of the events described in terms (i) through (iv)
of the foregoing sentence.

7.4 EFFECT OF TERMINATION. Any remedies for the breach of this Agreement
and the duties, obligations, covenants and representations contained in this
Agreement shall survive for one year from the termination of this Agreement.
Upon termination of this Agreement, (including termination under Paragraph 2.
1.2), BSC shall discontinue distribution of the SUMMIT Programs except that BSC
may distribute any remaining unsold inventory of such Programs unless SUMMIT
elects to repurchase such unsold inventory from BSC at the same price paid by
BSC. Nothing herein shall be construed to prevent BSC from complying with
existing obligations and commitments in existence on the effective date of
termination to distribute the Program to End Users. Upon any termination of
this Agreement,

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<PAGE>

SUMMIT shall immediately provide BSC with full and complete
copies of that data from the BSC Programs and End User Database that is derived
from the screens contained in the BSC Programs and their Additional Features and
shall delete all records thereof from SUMMIT's files. The provisions of
Paragraphs 3.5, 4, 6, 8, 9 and 10 shall survive any termination of this
Agreement.

8. SOURCE CODE.
-----------

SUMMIT and BSC acknowledge that the termination of this Agreement may
create severe hardships to BSC, the End Users, and SUMMIT, all of whom have
relied on the Programs and SUMMITs service and support thereof. Consequently,
immediately upon (a) any termination of this Agreement by SUMMIT, (b) any
termination by BSC based upon the terms of Section 7.3 hereof, (c) SUMMIT's
financial or other inability to serve BSC or End Users under this Agreement, or
the Software Agreements, SUMMIT shall provide for the delivery to BSC a copy of
the source code, for each of the Programs which SUMMIT will maintain in escrow
at the Norwest Bank of Minneapolis, Minnesota "in order to assure BSC continued
access to and the right to use the Programs and shall execute all documents
reasonably requested by BSC to evidence BSC's right to use the Programs." A copy
of the escrow agreement shall be provided to BSC. The source code maintained in
escrow must always be the most current version of the code and must accurately
and completely represent the source code needed to generate the program.
Verification of receipt of the initial source code and subsequent updates will
be provided by the Norwest Bank Trust Department to BSC's satisfaction.

9. CONFIDENTIALITY OF SUPPLIED INFORMATION AND TERMS OF AGREEMENT
--------------------------------------------------------------

Except as required by law or legal or administrative process, BSC and
SUMMIT each agree to hold in confidence, and not disclose to third parties
without the consent or the other party, confidential or proprietary information
received from the other party, except for (i) information that is independently
known by the receiving party, (ii) has legitimately entered the public domain,
(iii) is lawfully received from a third party having no obligation of
confidentiality to the deliverer, or (iv) is independently developed for the
receiving party by persons who did not receive the confidential information from
the other party. Except as required by law or legal or administrative process,
BSC and SUMMIT each agree to hold in confidence and not disclose the terms of
this Agreement to third parties without the consent of the other party. Any
public announcement or press release regarding this Agreement shall be limited
to a general disclosure of the existence of this Agreement and not the terms
hereof and shall be made at a time and place mutually agreeable to both parties.
The foregoing restrictions shall not be construed to restrict the right of BSC
to provide to End Users or potential End Users with information

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<PAGE>

regarding the use and application of the Programs by such End Users or potential
End Users or with general information regarding SUMMIT.

10. REMEDIES
--------

10.1 ALTERNATE DISPUTE RESOLUTION. The parties agree to effect all
reasonable efforts to resolve any and all disputes between them in connection
with this Agreement in an amicable manner. To the extent this cannot be done,
except for an action for injunctive relief or specific performance, any dispute
or claim arising out any parties performance or failure to perform under this
Agreement or the validity, interpretation, enforceability, or breach thereof,
shall be settled by binding alternative dispute resolution ("ADR") pursuant to
the procedure set forth on Schedule 7.

10.2 SPECIFIC PERFORMANCE. All parties agree and acknowledge that money
damages and the ADR procedure set forth above may not be an adequate remedy for
any breach of any of the provisions of Sections 6, 8 or 9 of this Agreement by
any party and that the non-breaching party, in its sole discretion, apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (but not for monetary damages) in order to enforce or prevent
any violations of any of the provisions of Sections 6, 8 and 9 of this
Agreement. The remedies provided under this Section 10.2 shall be in addition
to and not exclusive of any other remedies available to such party under the
terms of this Agreement, at law, or in equity.

10.3. NO WAIVER. No failure or delay on the part of any party in
exercising any right, power or remedy under this Agreement, or available to such
party at law or in equity shall operate as a waiver of such right, power or
remedy, nor shall any single or partial exercise of any such right, power or
remedy preclude any or further exercise thereof or the exercise of any other
right, power or remedy available to such party.

11. GENERAL
-------

11.1 SUCCESSORS AND ASSIGNS. Subject to the foregoing sentence, the
benefits and obligations of this Agreement shall inure to the benefit of, and be
binding upon BSC and SUMMIT and their respective successors and assigns. This
Agreement cannot be assigned by either party without the express written consent
of the other party, except that BSC may assign or sublicense its rights
hereunder to any subsidiary in which BSC owns at least eighty percent (80%) of
the outstanding stock.

11.2 ENTIRE AGREEMENT. All Exhibits referred to herein are incorporated
into this Agreement by such reference. This Agreement and the Exhibits attached
hereto constitute the entire agreement among the parties relating to the duties,
obligations

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<PAGE>

and rights by and among the parties, and all prior negotiations,
representations, agreements and understandings are superseded hereby. No
agreements altering, amending or supplementing the terms hereof may be made
except by means of a written document signed by the duly authorized
representatives of the parties hereto.

11.3 NOTICES. Any notice required by this Agreement shall be given by
hand delivery or prepaid, first class, certified mail, return receipt requested,
addressed as follows:

if to SUMMIT: SUMMIT Medical Systems, Inc.
One Carlson Parkway
Minneapolis, MN 55447
Attn: Dennis H. Powers

If to BSC/Meadox: Boston Scientific Corporation
Meadox Medicals
112 Bauer Drive
Oakland,NJ 07436
Attn: Paul Southworth
cc: General Council

or at such other addresses as may be given from time to time under the terms of
this notice provision.

11.4 SEVERABILITY. In the event any provision of this Agreement shall be
determined unenforceable under applicable law, that provision shall be modified
or deleted only to the extent necessary for such provision to conform with
applicable law, and the remaining provisions of this Agreement shall remain in
full force and effect.

11.5 INDEPENDENT CONTRACTORS: NO AGENCY. For purposes of this
Agreement, the parties shall be, and shall be deemed to be, independent
contractors and not agents, partners, joint venturers, or employees of the other
party. Neither party shall have authority to make any statements,
representations or commitments of any kind, or to take any action which shall be
binding on the other party, except as may be explicitly provided for herein or
authorized in writing.

11.6 EXPENSES. BSC and SUMMIT shall each pay their own respective fees
and expenses arising in connection with the preparation of this Agreement and
the performance by such party of its obligations hereunder.

11.7 APPLICABLE LAW. This Agreement shall be governed by, end construed
and enforced in accordance with the laws of the State of Minnesota, without
regard

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<PAGE>

to its choice-of-laws or conflicts-of-law rules. BSC and SUMMIT each hereby
consent to jurisdiction under the courts of the State of Minnesota and agree
that, subject to the provisions of Section 9, any action commenced in connection
with this Agreement or the documents executed in connection herewith or pursuant
to the terms hereof shall be venued in the State of Minnesota. BSC and SUMMIT
each hereby consent to service of process in the States of Minnesota.

11.8 FORCE MAJEURE. In the event that a delay or failure of a party to
comply with any obligation set forth in this Agreement is caused by Force
Majeure, that obligation shall be suspended during the continuance of the Force
Majeure condition. For purposes of this Agreement, "Force Majeure" means any
event beyond the reasonable control of the parties, including without
limitation, fire, flood, riots, strikes, epidemics, war (declared or
undeclared), embargoes and governmental actions and decrees.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.

BOSTON SCIENTIFIC CORPORATION
-----------------------------

By /s/ J. Daniel Cole
--------------------------------------------
Print Name J. Daniel Cole
------------------------------------
Its Senior Vice President Group President -
Vascular Businesses
----------------------------------------

SUMMIT MEDICAL SYSTEMS, INC.
----------------------------

By /s/ Dennis Powers
--------------------------------------------
Print Name Dennis Powers
------------------------------------
Its Senior Vice President
----------------------------------------

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<PAGE>

SCHEDULE 1
LICENSED DOCUMENTATION

1. Marketing Material.

2. End Users Operating Manual/Guide.

3. Price Lists.

4. Product Lists.

5. Software Demonstration Diskette.

6. Sample Reports.

7. Recommended Microcomputer Hardware Specifications Sheet.

Other documentation related to the Licensed Software, not listed above, will be
included in the Licensed Documentation as needed by BSC during the term of this
Agreement.

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<PAGE>

SCHEDULE 2A
BSC PROGRAMS

A. BSC PROGRAMS
- - --------------------------------------------------------------------------------

CUSTOMIZED FORMAT

1. Diseases/Conditions/Treatments/DRG's of the Aorta (Abdominal, Thoracic,
Aneurysms, Dissections)

2. Diseases/Conditions/Treatments/DRG's of the Peripheral Vascular System
(Iliac, SFA, Small Vessels, Renals, Stenosis, Occlusions, Aneurysms,
Aufistulas Thrombus Formation, Bypass, Carotid, PTA)

3. Creation and Management/DRG's of Hemodialysis Conduits

4. Venous Disease/Treatment/DRG's Venous Insufficiency/Ulcers, DVT, Valve
Compromise and Incompetency

Specific specifications to include DRG/cost data fields to be provided to SUMMIT
Medical for each software module. This program format includes the ability to
add additional fields of information the customer desires to include in the
program. The ability to add (or delete) fields to the program is accomplished
through an Edit feature of the software which allows the user to make changes in
the program at any time.

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<PAGE>

SCHEDULE 2B
SUMMIT PROGRAMS

A. SUMMIT MEDICAL PROGRAMS
- - --------------------------------------------------------------------------------

1. Demographics Program
2. Pinnacle(TM) Patient Satisfaction SF-36 Program

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<PAGE>

SCHEDULE 3
PROJECTED TIMETABLE

The parties anticipate that BSC's distribution of the Programs shall
commence under the following timetable. Such timetable is an estimate only and
not a binding commitment:

. Beta Sites (4) as soon as practicable

. Commencement of distribution in North America - January 1, 1997

. Commencement of distribution in Europe - TBD

. Commencement of distribution in Japan - TBD.

The development of BSC and SUMMIT Programs, and their scheduled market release
dates are as follows:

Module BSC Program SUMMIT Program
------ ----------- --------------

1. Demographics N/A Available now
2. Pinnacle(TM) Patient Satisfaction/ SF-36 N/A Available now
3. BSC Program Modules 7/96 N/A
(Schedule 2A)

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<PAGE>

SCHEDULE 4
MINIMUM PURCHASE REQUIREMENTS

Minimum North America purchase requirements on a cumulative basis, for BSC
to maintain exclusivity pursuant to Section 2.1 of Agreement:

Time Period No. of Programs Cumulative Total
----------- --------------- ----------------
Start-up Phase (***) (***)
(9/96- 1/97)
Year 1 (1/97-12/97) (***) (***)
Year 2 (1/98-12/98) (***) (***)
Year 3 (1/99-12/99) (***) (***)
Year 4 (1/00-12/00) (***) (***)
Year 5 (1/01-12/01) (***) (***)

Summit will provide, at no charge to BSC, each Beta Test site with one (1)
each of the program modules listed in schedules 2A and 2B for evaluation and
testing. These program modules will be credited against the cumulative minimum
purchase requirements set forth above.

- - ----------
(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.

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<PAGE>

SCHEDULE 5
PRICING

List Prices are included in this Agreement solely as a point of reference
in determining the price of the Programs to BSC and not as an indication of the
price at which BSC must resell the Programs. The List Prices contained herein
shall not change or be subject to change until March 31, 1997, except that in
the event that SUMMIT reduces its List Prices for sales of any or all of the
Licensed Software to other parties at any time, the corresponding List Prices
listed below shall be reduced accordingly. Commencing April 1, 1997, SUMMIT's
List Prices listed below shall be subject to negotiated increase or decrease to
reflect increases or decreases in SUMMIT List Prices for the applicable software
generally available to other parties. In the event SUMMIT creates additional
software programs in the future which may be distributed by BSC under this
Agreement, BSC may purchase such future software at SUMMIT's then current List
Price less a discount of (***). All List Prices are in U.S. dollars.

A. BSC AND SUMMIT PROGRAM LIST PRICING.
------------------------------------

# Program Modules/Sale SUMMIT Vista(TM) List Price
---------------------- ---------------------------

First BSC Program $ 7,500
Additional BSC Program $ 5,000
Full BSC Program (Aortic, Peripheral Vascular
System, Hemodialysis, Venous Disease Programs) $20,000
Pinnacle(TM) Program $ 3,500
Demographics Program $ 1,500

B. # Program Modules/Sale % Discount From List Price
---------------------- --------------------------

1- 2 Programs (***)
3+ Programs (***)

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<PAGE>

C. OTHER SUMMIT MEDICAL PRODUCTS AND SERVICES. BSC will receive a thirty-five
percent (35%) discount from SUMMITs list prices for the following products and
services:

<TABLE>
<CAPTION>
List Price
Price to Outside United Price to BSC
List Price BSC States Outside U.S.
Program/Service in United States in U.S. Other than Japan Other than Japan
- - --------------- ---------------- --------- ---------------- ----------------
<S> <C> <C> <C> <C>
Networking Capability
(1-5 Users) $4,000 (***) $4,800 (***)
Networking Capability
(6 + Users) $6,000 (***) $7,200 (***)
Health Card Hardware $3,500 (***) $4,200 (***)
Health Card $25/each (***) $30/each (***)
Technical $95/hour $100/per hour
Services/Programming
</TABLE>

- - -------------
(***) Denotes confidential information that has been omitted from the exhibit
and filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.

-20-
<PAGE>

SCHEDULE 6
FORM OF SOFTWARE LICENSE AGREEMENT

(see attached format)

-21-
<PAGE>

AGREEMENT REGARDING SALE
OF SOFTWARE LICENSE AND USE OF DATA
(DESIGNATED CREDIT)

THIS AGREEMENT ("AGREEMENT") is entered into as of _________________,
199[ ] (must be 1st day of month) by and between MEADOX MEDICALS, a division of
Boston Scientific Corporation, a Delaware Corporation ("MEADOX MEDICALS") and ,
a hospital facility whose business address is ("PARTICIPANT").

BACKGROUND

MEADOX MEDICALS is an authorized distributor of certain software programs
developed by SUMMIT Medical Systems, Inc., a Minnesota corporation having its
principal place of business at One Carlson Parkway, Minneapolis, Minnesota 55447
("SUMMIT"). PARTICIPANT desires to purchase from MEADOX MEDICALS a License to
use the software programs identified below. In addition, PARTICIPANT is willing
to permit MEADOX MEDICALS to use certain clinical, fiscal, and/or product usage
data (exclusive of patient name, address, position, hospital information) in
connection with a database established by MEADOX MEDICALS and managed by SUMMIT.

AGREEMENTS

1. SALE OF PROGRAM LICENSE. Pursuant to the terms and conditions of this
Agreement, MEADOX MEDICALS hereby agrees to sell and PARTICIPANT agrees to
purchase a non-exclusive license (the "LICENSE") to use the database software
program(s), as further identified on the attached Schedule 1 (the "PROGRAM"). In
addition to the terms and conditions of this Agreement, the License is subject
to the terms and conditions of a separate Agreement (the "LICENSE AGREEMENT") in
Schedule 2.

2. PRICE. PARTICIPANT will pay a license fee of ______________ dollars
($ ) and a training fee of _______________ dollars ($ ), for a total fee
of ______________ dollars ($ ), (including interest) which is to be paid to
MEADOX MEDICALS in accordance with the terms of Section 4. The Program includes
the software, documentation, training, and other materials identified in the
License Agreement, and PARTICIPANT shall have access to software support and
service from SUMMIT upon the terms set forth in the License Agreement.
PARTICIPANT shall be responsible for installation of the Program software on its
hardware system. PARTICIPANT shall be responsible for all applicable sales and
other taxes, if any, regardless of whether they are listed on Schedule 1.

-22-
<PAGE>

3. TRAINING AND SUPPORT. MEADOX MEDICALS has arranged for PARTICIPANT to
be able to attend the SUMMIT Training Institute in Minneapolis, Minnesota, which
is a training program created to maximize the benefits associated with
utilization of SUMMIT software programs. Sessions are held on a regular basis.
The training fee, specified in Section 2, is based on ________ individual(s)
attending this training program. The training program fee includes registration
fee, lodging, meals, training and materials

4. PAYMENT: DESIGNATED VOLUME DISCOUNT CREDIT. MEADOX MEDICALS offers
several payment options, including cash payment in full on installation,
extended payment and applied credit. The Participant has requested applied
credit.

(a) PARTICIPANT is eligible to earn a quarterly volume discount on purchases of
MEADOX MEDICALS products purchased during a given contract quarter, as defined
below. PARTICIPANT has requested that these quarterly volume discounts be
applied toward the acquisition of the Program specified in Schedule 1.

Contract Quarter Inclusive Dates
---------------- ---------------

1
2
3
4
5
6
7
8

(b) As payment in full for the license and training fees, PARTICIPANT shall
pay to MEADOX MEDICALS an amount equal to $__________________ within fifteen
(15) days of the close of each contract quarter until the price listed in
Section 2 above has been fully paid to MEADOX MEDICALS. As PARTICIPANT has
requested, payment will be made by application of any volume discounts earned
based on purchases of MEADOX MEDICALS products, as determined in (c) below. If
discounts previously earned are insufficient to equal PARTICIPANT's payment due
for any quarter, PARTICIPANT shall pay the balance in cash. Contract quarters
will correspond to the quarters of PARTICIPANT's fiscal year.

(c) PARTICIPANT may earn volume discounts for the purchase of any MEADOX
MEDICALS products other than the Program. Discounts are paid in the form of a
credit memorandum, based on the purchase of MEADOX MEDICALS products

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<PAGE>

during the previous contract quarter. The amount of discount earned depends on
the total volume of MEADOX MEDICALS products purchased during the contract
quarter. Schedule 3 contains MEADOX MEDICALS's current volume discount matrix
summarizing the discounts available to PARTICIPANT for volume purchases. If
PARTICIPANT earns discounts in excess of the amount required to pay for the
Program, PARTICIPANT can apply excess discounts earned in the form of a credit
memorandum for future quarterly purchases of MEADOX MEDICALS products.

(d) Discounts earned and applied under this Agreement must be treated as a
volume discount on MEADOX MEDICALS products and properly reported as such on any
PARTICIPANT Medicare and Medicaid cost reports for the fiscal year in which
earned or the immediately following fiscal year. In addition, Federal law
requires that PARTICIPANT retain a copy of this Agreement and any other
communications from MEADOX MEDICALS regarding this Agreement along with the
invoices for purchase (which will be marked "subject to end-of-quarter
discount") and permit agents of the U.S. Department of Health and Human Services
or any state Medicare agency access to such records upon request. MEADOX
MEDICALS may cancel this payment methodology at any time if it determines that
legal developments have raised a significant question as to compliance with
applicable law. In the event of cancellation, future payments due under this
Agreement shall be made in cash.

5. TERM AND TERMINATION. This Agreement shall be effective for two years
and shall be automatically renewed for successive one year terms on an annual
basis thereafter unless any party provides the other with a written notice of
termination or proposed modification, at least 90 days prior to appropriate
anniversary of the effective date hereof; provided, that any part may terminate
this Agreement upon the other's material breach of this Agreement by providing
the other party with at least 30 days written notice thereof; and provided
further, that PARTICIPANT's rights to make use of the Program in accordance with
the terms of the License Agreement shall survive any termination hereof as long
as PARTICIPANT continues to make in cash payments required under Section 4(b)
above, or has fully paid for the Program. In the event of termination, any
future payments due shall be paid in cash.

6. DATABASE. PARTICIPANT acknowledges that MEADOX MEDICALS has
established a database (the "DATABASE") which is currently managed by SUMMIT.
PARTICIPANT agrees to submit certain product, clinical and/or fiscal information
for addition to the Database. On an ongoing basis, PARTICIPANT shall provide
MEADOX MEDICALS with all data requested on the data collection forms furnished
to PARTICIPANT by MEADOX MEDICALS or SUMMIT (the "DATA"), exclusive of patient
name, address, position and hospital information, via computer disks on a
periodic basis for the purpose of contributing to the Database information

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<PAGE>

concerning relevant procedural outcomes. The data collection forms provided to
PARTICIPANT by MEADOX MEDICALS or SUMMIT shall be used by PARTICIPANT for
purposes of collecting this information. PARTICIPANT shall deliver the data on
a computer disk directly to SUMMIT. PARTICIPANT warrants, represents and
covenants that (a) all Data shall be accurate and complete, (b) PARTICIPANT
shall submit Data from all relevant patient files rather than self selecting
files for inclusion in the Database, and (c) PARTICIPANT shall have obtained all
required and appropriate patient consents to release of such Data. Data
received from PARTICIPANT shall be merged into the Database along with similar
information received from other hospitals or cardiologists who agree to
participate in the Database. PARTICIPANT's raw data will be used only for
preparing aggregate reports and such raw data will not be viewed by MEADOX
MEDICALS personnel without PARTICIPANT's written consent.

7. REPORTS. PARTICIPANT hereby grants its permission for MEADOX MEDICALS
to incorporate the Data received from PARTICIPANT into the Database and any and
all reports, analyses or correlation's prepared by or for MEADOX MEDICALS which
are based upon information contained in the Database. Certain of these reports,
as determined by MEADOX MEDICALS from time to time, shall be distributed by
MEADOX MEDICALS to PARTICIPANT at no cost. Such reports, analyses or
correlations may be prepared by SUMMIT at MEADOX MEDICALS's request.
PARTICIPANT acknowledges that MEADOX MEDICALS may also prepare and use reports
based on Data in the Database for clinical studies and other purposes. MEADOX
MEDICALS and PARTICIPANT agree (i) that MEADOX MEDICALS shall be deemed
copyright owner with respect to all software documentation contained in the
Program, including all associated source codes; (ii) that MEADOX MEDICALS shall
be deemed the copyright owner with respect to the Database, and any and all
reports thereon; and (iii) that PARTICIPANT shall be deemed the copyright owner
with respect to all individual and aggregate data contained in PARTICIPANT's
files. The provisions of this paragraph 7 shall survive any termination of this
Agreement.

8. LIMITATION OF WARRANTIES AND LIABILITY. PARTICIPANT ACKNOWLEDGES THAT
MEADOX MEDICALS IS NOT RESPONSIBLE FOR THE OPERATION OF THE PROGRAM AND HEREBY
WAIVES AND COVENANTS NOT TO SUE MEADOX MEDICALS FOR ANY AND ALL POSSIBLE CLAIMS
THAT IT MAY HAVE AGAINST MEADOX MEDICALS ARISING OUT OF OR RESULTING FROM USE OF
THE PROGRAM. PARTICIPANT ACKNOWLEDGES THAT MEADOX MEDICALS IS NOT EXTENDING ANY
WARRANTIES WITH REGARD TO THE PROGRAM AND THAT THE ONLY WARRANTIES BEING
EXTENDED TO PARTICIPANTS ARE THE LIMITED WARRANTIES EXTENDED BY SUMMIT PURSUANT
TO THE LICENSE. ALL SUCH WARRANTIES SHALL BE THE LIABILITY OF SUMMIT AND MEADOX
MEDICALS SHALL HAVE NC) LIABILITY THEREFOR MEADOX MEDICALS DISCLAIMS ALL
WARRANTIES

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<PAGE>

EXPRESS OR IMPLIED WITH RESPECT TO THE PROGRAM. UNDER NO CONDITIONS SHALL MEADOX
MEDICALS HAVE ANY LIABILITY IN EXCESS OF THE PROGRAM LICENSE FEE ACTUALLY PAID
BY PARTICIPANT TO MEADOX MEDICALS HEREUNDER.

9. RELATIONSHIP OF PARTIES. The relationship of the parties to this
Agreement is that of independent contractors and not that of master and servant,
principal and agent, employer and employee, partners or joint venturers.

10. WAIVER. A waiver by any party to this Agreement of any of its terms
or conditions in any one instance shall not be deemed or construed to be a
general waiver of such term or condition or a waiver of any subsequent breach.

11. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with federal law and the internal laws of the commonwealth of
Massachusetts.

12. SEVERABILITY. All provisions of this Agreement are severable. If any
provision or portion hereof is determined to be unenforceable by a court of
competent jurisdiction, such provision or portion shall be modified to give the
fullest possible effect to such provision and the remainder of this Agreement
shall remain in full effect, provided that its general purposes remain
reasonably capable of being effected.

13. SEVERABILITY. All provisions of this Agreement are severable. If any
provision or portion hereof is determined to be unenforceable by a court of
competent jurisdiction, such provision or portion shall be modified to give the
fullest possible effect to such provision and the remainder of this Agreement
shall remain in full effect, provided that its general purposes remain
reasonably capable of being effected.

14. ENTIRE AGREEMENT. This entire Agreement constitutes the entire
Agreement between MEADOX MEDICALS and PARTICIPANT with respect to the subject
matter hereof and supersedes and replaces all prior Agreements, oral or written,
between MEADOX MEDICALS and PARTICIPANT relating to subject matter hereof and,
except as otherwise indicated herein, may not be modified, amended or otherwise
changed in any manner except by written instrument executed by the party against
whom enforcement is sought.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date and year first above written.

PARTICIPANT BOSTON SCIENTIFIC CORPORATION
----------- -----------------------------

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<PAGE>

By ______________________________ By ______________________________

Print Name ______________________ Print Name ______________________

Its ______________________________ Its _____________________________

PO#: _______________________

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<PAGE>

SCHEDULE 1
----------

LISTING OF DATABASE SOFTWARE PROGRAMS
-------------------------------------
Total
Item Descriptions Order # Price Interest Interest
- - ----------------- ------- ----- -------- --------

____________________ _________ $________ $________ $________

TOTAL $________ $________ $________

TRAINING
--------

Total
Item Descriptions Order # Qty Price Interest Interest
- - ----------------- ------- --- ----- -------- --------

___________________ _________ _____ $________ $________ $________

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<PAGE>

SCHEDULE 2
SUMMIT MEDICAL SYSTEMS, INC.
FORM OF PARTICIPATION & SOFTWARE LICENSE AGREEMENT

THIS AGREEMENT is entered into this _____ day of , 199_, by and between
SUMMIT MEDICAL SYSTEMS, INC., a Minnesota corporation with its principal place
of business at One Carlson Parkway, Minneapolis 55447 ("Summit"), and
____________ ("Participant"), whose business address is at: ______________

VISTA(TM) PLATFORM PROGRAM(S): _____________________

_____________________

IT IS AGREED:

1. PROGRAM LICENSE

Pursuant to this Agreement and the additional terms and conditions of Exhibit A,
which is attached hereto and incorporated herein by reference, Summit hereby
grants to Participant a non-exclusive license to use Summit's clinical database
software program(s) identified above which will enable Participant to enter
patient data files and generate tables, lists, numeric field analyses, and
biostatistics, including risk stratification ("The Program").

2. PARTICIPATION IN NATIONAL DATABASE
Participant hereby agrees to participate in the National Database in accordance
with this Agreement and the additional terms and conditions of Exhibit A.

3. PRICE
The program includes User Documentation Manual, program disks, Data Collection
Forms, ongoing Support and Service, and access to data analyses of the Database.
Subject to the terms and conditions of Exhibit A, Participant shall pay no
service fees to Summit for Summit's ongoing services subsequent to its delivery
of the Program through the first six (6) months, provided however, after this
date, the Participant shall pay Summit an annual fee for ongoing Support and
Service (the "Service Fees"). The Service Fee shall be 1-1/2% of the list cost
of the Program per month.

4. LIMITATION OF LIABILITY

Participant acknowledges that Summit is not responsible for the operation of the
Program, and hereby waives, and covenants not to sue Summit for any and all
possible claims that it might have against Summit arising out of, or resulting
from, any aspect of this Agreement. Moreover, in no event shall Summit be
liable for any damages arising out of Participant's misuse or inability to use
the Program, and

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<PAGE>

under no condition will the liability of Summit under this Agreement exceed
Participant's Initial License Fee.

5. TERM AND TERMINATION
This Agreement shall be effective for one year, and shall be automatically
renewed on an annual basis thereafter unless either party provides the other
with a written notice of termination at least ninety (90) days prior to that
date or any subsequent December 31; provided, however, that either party may
terminate this Agreement upon the others material breach of this Agreement, by
providing the other party with at least thirty (30) days written notice thereof.

6. ASSIGNMENT
This Agreement may not be assigned by either party without the express written
approval of the other party.

7. RELATIONSHIPS OF PARTIES
The relationships of the parties to this Agreement are those of independent
contractors and not those of master and servant, principal and agent, employer
and employee, or partners or joint venturers.

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

9. WAIVER
A waiver by either party to this Agreement of any of its terms or conditions in
any one instance shall not be deemed or construed to be a general waiver of such
term or condition or a waiver of any subsequent breach.

10. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with federal law
and the laws of the State of Minnesota.

11. SEVERABILITY
All provisions of this Agreement are severable. If any provision or portion
hereof is determined to be unenforceable by a court or competent jurisdiction,
then the rest of the Agreement shall remain in full effect, provided that its
general purposes remain reasonably capable of being effected.

12. ENTIRE AGREEMENT
This Agreement (a) constitutes the entire Agreement between the parties hereto
with respect to the subject matter hereof, (b) supersedes and replaces all prior
Agreements, oral or written, between the parties relating to the subject matter

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<PAGE>

hereof, and (c) except as otherwise indicated herein, may not be modified,
amended or otherwise changed in any manner except by a written instrument
executed by the party against whom enforcement is sought.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date and year first written above.

SUMMIT MEDICAL SYSTEMS, INC. PARTICIPANT

By ________________________________ By ________________________________

Title ______________________________ Title _____________________________

Date _______________________________ Date ______________________________

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<PAGE>

EXHIBIT A

ADDITIONAL TERMS AND CONDITIONS OF THE SUMMIT MEDICAL SYSTEMS NATIONAL DATABASE
PARTICIPATION AND SOFTWARE LICENSE AGREEMENT.

1. PROGRAM INCENSE

The Program will run on the MS/DOS operating system, and includes a special
feature that will allow Participant to transfer data to disks for transport to,
and inclusion in, the National Database described at Paragraphs 4 hereof.

2. DELIVERY OF PROGRAM AND RELATED MATERIALS

Within thirty (30) days after receipt of the attached Agreement, payment, and
final program format, Summit shall schedule delivery of the Program to
Participant at Participant's business address; and the Program's opening screen
shall be customized by Summit to reflect the name of Participant. The Program
will be provided on either 5" or 3" disks to accommodate the different floppy
disk drives in the various IBM compatible microcomputers, along with a
Documentation Manual including appropriate user information, Data Collection
Forms, and software for presentation graphics. In order for the Participant to
use the Program, Participant must have an IBM or IBM compatible microcomputer.
The microprocessor must be 486DX/33 or higher; MS/DOS version 6.0 or higher;
Microsoft Windows/TM/ version 3.1 or higher. The Summit Medical Vista/TM/
Programs operate in a graphics environment called Microsoft Windows, created by
Microsoft Corporation(R); (to run Summit Database Programs under Microsoft
Windows, Participant needs to license and install Microsoft Windows); a minimum
of 340 Mb hard disk for data storage; 8 Mb RAM; 580 Kb conventional memory;
super VGA color monitor; SVGA with 512K memory video card; Microsoft compatible
mouse and any printer supported by Windows version 3.1.

3. SUPPORT AND SERVICE

Summit shall provide Participant with ongoing Support and Service of the Program
including, but not limited to, providing Participant with relevant Program
updates and related materials, on-line HELP screens, and expert assistance on a
special 800-WATS line number dedicated to the servicing of the Program and the
National Database described in Paragraph 5 hereof. Summit personnel, experienced
in the operation of the Program and the National Database, will be available
from 8:00 a.m. until 6:00 p.m. (Central Time) on weekdays. Those individuals
will handle Participant's inquiries, troubleshooting, and requests for special
reports.

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<PAGE>

4. NATIONAL DATABASE

4.1
Participant shall provide Summit with all of Participant's relevant patient data
files exclusive of patient name, address, physician, and hospital information
(the "Patient Information"), via either written Data Collection Forms, computer
disks or electronic transfer on a regular basis for the purpose of contributing
clinical information to a database for the benefit of receiving national
outcomes reports. PARTICIPANT WARRANTS THAT ALL PATIENT INFORMATION SHALL BE
ACCURATE AND COMPLETE. The Data Collection Forms provided to Participant by
Summit, pursuant to Paragraph 2 hereof, shall be used by Participant for
purposes of collecting the Patient Information. If Participant employs manual
data entry by Summit Medical Systems, the Participant shall pay to Summit a fee
of twelve dollars ($12.00) per record.

4.2
Upon receipt of the Patient Information from Participant, Summit will review the
data for accuracy and completeness by performing key field data analyses. If
Summit reasonably concludes that the Patient Information is incorrect or
incomplete, then Summit promptly shall request additional data from Participant,
and Participant shall use its best efforts to provide the data to Summit within
sixty (60) days after its receipt of Summit's request. In the event that
Participant does not supply Summit with acceptable Patient Information for any
two consecutive calendar quarters, then Summit may withhold any and all reports
to which Participant is otherwise entitled pursuant to Paragraph 4.3 hereof, and
may terminate the attached Agreement by providing Participant with sixty (60)
days prior written notice and an opportunity for Participant to provide
acceptable Patient Information during the notice period. Upon Summit's receipt
of complete and accurate Patient Information, Summit shall merge that
information into the National Database.

4.3
Summit shall provide Participant with up to three (3) special analyses, based
upon the aggregate national data from the National Database, per calendar
quarter at no charge. The cost of any additional reports, in any given calendar
quarter, shall be negotiated between Participant and Summit. The Participant
agrees to only use aggregate data from the National Database for Participant's
internal purposes; and that Participant may not release, share, publish, or
otherwise use any aggregated data from the National Database without first
obtaining the express written consent of Summit.

5. COPYRIGHT OWNERSHIP

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<PAGE>

that it created pursuant to this Agreement. Participant shall be deemed the
copyright owner with respect to all individual and aggregate Patient Information
provided to Summit by the Participant. Participant hereby grants permission for
Participant's Patient Information to be incorporated into the National Database
and any and all reports based thereon. Participant may copy the Program for
backup purposes or for multi-user access, but not onto any microcomputer system
that operates independent of Participant. The provisions of this Paragraph 5
shall survive any termination of the attached Agreement.

6. CONFIDENTIALITY

Summit shall hold and maintain as confidential all data received from
Participant, and shall protect such data received from Participant from use for
any purpose other than the design, development, and implementation of the
program and the National Database as contemplated in the attached Agreement.
During the term of the attached Agreement, Summit shall maintain all data
incorporated in the National Database in a special secure computer system, and
during the hours of operation, when data is being audited, merged, and analyzed,
Summit shall ensure that Participant's Patient Information and the National
Database are accessible only to a single user. In order to help maintain
confidentiality, Summit shall provide Participant with a User Identification
Number that is unique to Participant and will be used to verify Participant's
identity in all communications with Summit including, but not limited to, the
submission of Patient Information and all telephone contacts with Summit.
Except as otherwise indicated, the provisions of this Paragraph 7 shall survive
any termination of the attached Agreement.

7. SUMMIT'S WARRANTIES

Summit covenants, warrants, and represents that the Program will operate
appropriately on all IBM compatible microcomputers, will perform free of defects
in design or manufacture, and that Summit shall correct any such defects
promptly at no charge to the Participant. The provisions of this Paragraph 7
shall survive any termination of the attached Agreement.

8. NOTICES

All notices and demands of any kind or nature, which any party to the attached
Agreement may be required or may desire to serve upon the others in connection
with the Agreement, shall be in writing to the addresses appearing at the
preamble to the attached Agreement. Service of such notice, or demand so made,
shall be deemed complete on the day of actual delivery. Any party hereto may,
from time to time, by notice in writing served upon the other parties as
aforesaid, designate a different mailing address or a different person to which
all further notices or demands shall thereafter be addressed.

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<PAGE>

SCHEDULE 3
(DISCOUNT PRICING MATRIX APPLICABLE
TO [XYZ HOSPITAL)

Quarterly Quarterly
Tier Dollar Volume Level Discount %
------------------- ----------

Applicable discount percentage will be calculated retrospectively on the total
dollar volume of MEADOX MEDICALS products purchased during the most recent
contract quarter. Discounts earned will be applied to the acquisition of the
software programs described in Schedule I hereto, at PARTICIPANT's option, to
future purchases of MEADOX MEDICALS products.

-35-
<PAGE>

AGREEMENT REGARDING SALE
OF SOFTWARE LICENSE AND USE OF DATA
(PAYMENT TERMS)

THIS AGREEMENT ("AGREEMENT") is entered into as of ___________, 199[ ]
(must be 1st day of month) by and between MEADOX MEDICALS, a division of Boston
Scientific Corporation, a Delaware Corporation ("MEADOX MEDICALS") and
_________________________, a hospital facility whose business address is
__________________________________________ ("PARTICIPANT").

BACKGROUND

MEADOX MEDICALS is an authorized distributor of certain software programs
developed by SUMMIT Medical Systems, Inc., a Minnesota corporation having its
principal place of business at One Carlson Parkway, Minneapolis, Minnesota 55447
("SUMMIT"). PARTICIPANT desires to purchase from MEADOX MEDICALS a license to
use the software programs identified below. In addition, PARTICIPANT is willing
to permit MEADOX MEDICALS to use certain clinical, fiscal, and/or and product
usage data (exclusive of patient name, address, position, hospital information)
in connection with a database established by MEADOX MEDICALS and managed by
SUMMIT.

AGREEMENTS

1. SALE OF PROGRAM LICENSE. Pursuant to the terms and conditions of this
Agreement, MEADOX MEDICALS hereby agrees to sell and PARTICIPANT agrees to
purchase a non-exclusive license (the "LICENSE") to use the database software
program(s), as further identified on the attached Schedule I (the "PROGRAM").
In addition to the terms and conditions of this Agreement, the License is
subject to the terms and conditions of a separate agreement (the "LICENSE
AGREEMENT") in Schedule 2.

2. PRICE. PARTICIPANT will pay a license fee of ______ dollars ($ )
and training fee of _______ dollars ($ ), for a total fee of
_______ dollars ($ ), (including interest) which is to be paid to
MEADOX MEDICALS in eight (8) quarterly payments of _______ dollars ($ ).
The Program includes the software, documentation, training, and other
materials identified in the License Agreement, and PARTICIPANT shall have access
to software support and service from SUMMIT upon the terms set forth in the
License Agreement. PARTICIPANT shall be responsible for installation of the
Program software on its hardware system. PARTICIPANT shall be responsible for
applicable sales and other taxes, if any, regardless of whether they are listed
on Schedule 1.

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<PAGE>

3. TRAINING AND SUPPORT. MEADOX MEDICALS has arranged for PARTICIPANT to
be able to attend the SUMMIT Training Institute in Minneapolis, Minnesota, which
is a training program created to maximize utilization of SUMMIT software
programs. Sessions are held on a regular basis. The training fee, specified in
Section 2, is based on individual(s) attending this twining program. The
training fee includes registration fee, lodging, meals, training and materials.

4. TERM AND TERMINATION. This Agreement shall be effective for two
year(s) and shall be automatically renewed on an annual basis thereafter unless
any party provides the other with a written notice of termination or proposed
modification at least 90 days prior to the appropriate anniversary of the
effective date hereof; provided, that any party may terminate this Agreement
upon the others material breach of this Agreement by providing the other party
with at least 30 days written notice thereof; and provided further, that
PARTICIPANT's rights to make use of the Program in accordance with the terms of
the License Agreement shall survive any termination hereof as long as
PARTICIPANT continues to make in cash payments required under Section 2 above,
or has fully paid for the Program.

5. DATABASE. PARTICIPANT acknowledges that MEADOX MEDICALS has
established a database (the "DATABASE") which is currently managed by SUMMIT.
PARTICIPANT agrees to submit certain product, clinical and/or fiscal information
for addition to the Database. On an ongoing basis, PARTICIPANT shall provide
MEADOX MEDICALS with all data requested on the data collection forms furnished
to PARTICIPANT by MEADOX MEDICALS or SUMMIT (the "DATA"), exclusive of patient
name, address, position and hospital information, via computer disks on a
periodic basis for the purpose of contributing to the Database information
concerning relevant procedural outcomes. The data collection forms provided to
PARTICIPANT by MEADOX MEDICALS or SUMMIT shall be used by PARTICIPANT for
purposes of collecting this information. PARTICIPANT shall deliver the Data on
a computer disk to SUMMIT. PARTICIPANT warrants, represents and covenants that
(a) all Data shall be accurate and complete, (b) PARTICIPANT shall submit Data
from all relevant patient files rather than self selecting files for inclusion
in the Database, and (c) PARTICIPANT shall have obtained all required and
appropriate patient consents to release of such Data. Data received from
PARTICIPANT shall be merged into the Database along with similar information
received from other hospital or cardiologists who agree to participate in the
Database.

6. REPORTS. PARTICIPANT hereby grants its permission for MEADOX MEDICALS
to incorporate the Data received from PARTICIPANT into the Database and any and
all reports, analyses or correlation's prepared by or for MEADOX MEDICALS which
are based upon information contained in the Database. Certain of these reports,
as determined by MEADOX MEDICALS from time to time, shall be distributed by
MEADOX MEDICALS to PARTICIPANT at no cost. Such reports,

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<PAGE>

analyses or correlations may be prepared by SUMMIT at MEADOX MEDICALS's request.
PARTICIPANT acknowledges that MEADOX MEDICALS may also prepare and use reports
based on Data in the Database for clinical studies and other purposes. MEADOX
MEDICALS and PARTICIPANT agree (i) that MEADOX MEDICALS shall be deemed
copyright owner with respect to all software documentation contained in the
Program, including all associated source codes; (ii) that MEADOX MEDICALS shall
be deemed the copyright owner with respect to the Database, and any and all
reports thereon; and (iii) that PARTICIPANT shall be deemed the copyright owner
with respect to all individual and aggregate data contained in PARTICIPANT's
files. PARTICIPANT's raw data will be used only for preparing aggregate reports
and such raw data will not be viewed by MEADOX MEDICALS personnel without
PARTICIPANT's written consent. The provisions of this Paragraph 6 shall survive
any termination of this Agreement.

7. LIMITATION OF WARRANTIES AND LIABILITY. PARTICIPANT ACKNOWLEDGES THAT
MEADOX MEDICALS IS NOT RESPONSIBLE FOR THE OPERATION OF THE PROGRAM AND HEREBY
WAIVES AND COVENANTS NOT TO SUE MEADOX MEDICALS FOR ANY AND ALL POSSIBLE CLAIMS
THAT IT MAY HAVE AGAINST MEADOX MEDICALS ARISING OUT OF OR RESULTING FROM USE OF
THE PROGRAM. PARTICIPANT ACKNOWLEDGES THAT MEADOX MEDICALS IS NOT EXTENDING ANY
WARRANTIES WITH REGARD TO THE PROGRAM AND THAT THE ONLY WARRANTIES BEING
EXTENDED TO PARTICIPANTS ARE THE LIMITED WARRANTIES EXTENDED BY SUMMIT PURSUANT
TO THE LICENSE AGREEMENT. ALL SUCH WARRANTIES SHALL BE THE LIABILITY OF SUMMIT
AND MEADOX MEDICALS SHALL HAVE NO LIABILITY THEREFOR. MEADOX MEDICALS DISCLAIMS
ALL WARRANTIES EXPRESS OR IMPLIED WITH RESPECT TO THE PROGRAM. UNDER NO
CONDITIONS SHALL MEADOX MEDICALS HAVE ANY LIABILITY IN EXCESS OF THE PROGRAM
LICENSE FEE ACTUALLY PAID BY PARTICIPANT TO MEADOX MEDICALS HEREUNDER.

8. RELATIONSHIP OF PARTIES. The relationship of the parties to this
Agreement is that of independent contractors and not that of master and servant,
principal and agent, employer and employee, partners or joint venturers.

9. WAIVER. A waiver by any party to this Agreement of any of its terms or
conditions in any one instance shall not be deemed or construed to be a general
waiver of such term or condition or a waiver of any subsequent breach.

10. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with federal law and the internal laws of the commonwealth of
Massachusetts.

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<PAGE>

11. NOTICES. All notices and demands of any kind or nature given under
this Agreement shall be in writing and shall be given by hand delivery, by
courier who guarantees overnight delivery, or by certified or registered mail,
mail, return receipt requested, addressed to the other party at the address
appearing in the preamble to this Agreement. Any party may, from time to time,
by notice in writing to the other party, designate a different address to which
all further notices or demands shall thereafter be addressed.

13. ENTIRE AGREEMENT. This entire Agreement constitutes the entire
Agreement between MEADOX MEDICALS and PARTICIPANT with respect to the subject
matter hereof and supersedes and replaces all prior agreements, oral or written,
between MEADOX MEDICALS and PARTICIPANT relating to subject matter hereof and,
except as otherwise indicated herein, may not be modified, amended or otherwise
changed in any manner except by written instrument executed by the party against
whom enforcement is sought.

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date and year first above written.

PARTICIPANT BOSTON SCIENTIFIC CORPORATION

By _________________________ By _________________________

Print Name ___________________ Print Name __________________

Its _________________________ Its _________________________

PO #: _______________

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<PAGE>

SCHEDULE 1
----------

LISTING OF DATABASE SOFTWARE PROGRAMS
-------------------------------------
<TABLE>
<CAPTION>
Interest Total with
Item Descriptions Order # Price at 8% Interest
----------------- ------- ----- ---------- ----------
<S> <C> <C> <C> <C>
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ _______ $_______ $_________ $_________
___________________________________ TOTAL $_______ $_________ $_________

TRAINING
--------

Interest Total with
Item Descriptions Order # Qty Price at 8% Interest
----------------- ------- ----- ---------- --------- ----------
___________________________________ _______ _______ $_________ $_________ $_________
</TABLE>
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<PAGE>

SCHEDULE 2
SUMMIT MEDICAL SYSTEMS, INC.
FORM OF PARTICIPATION & SOFTWARE LICENSE AGREEMENT

THIS AGREEMENT is entered into this ______ day of ____________, 199_, by and
between SUMMIT MEDICAL SYSTEMS, INC., a Minnesota corporation with its principal
place of business at One Carlson Parkway, Minneapolis 55447 ("Summit"), and
____________________________ ("Participant"), whose business address is at
_______________________________________________________.

VISTA/TM/ PLATFORM PROGRAM(S): _______________________
_______________________
_______________________

IT IS AGREED:

1. PROGRAM LICENSE
Pursuant to this Agreement and the additional terms and conditions of Exhibit A,
which is attached hereto and incorporated herein by reference, Summit hereby
grants to Participant a non-exclusive license to use Summit's clinical database
software program(s) identified above which will enable Participant to enter
patient data files and generate tables, lists, numeric field analyses, and
biostatistics, including risk stratification ("The Program").

2. PARTICIPATION IN NATIONAL DATABASE
Participant hereby agrees to participate in the National Database in accordance
with this Agreement and the additional terms and conditions of Exhibit A.

4. LIMITATION OF LIABILITY
Participant acknowledges that Summit is not responsible for the operation of the
Program, and hereby waives, and covenants not to sue Summit for any and all
possible claims that it might have against Summit arising out of, or resulting
from, any aspect of this Agreement. Moreover, in no event shall Summit be liable
for any damages arising out of Participant's misuse or inability to use the
Program, and

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<PAGE>

under no condition will the liability of Summit under this Agreement exceed
Participant's Initial License Fee.

6. ASSIGNMENT
This Agreement may not be assigned by either party without the express written
approval of the other party.

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

10. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with federal law
and the laws of the State of Minnesota.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date and year first written above.

SUMMIT MEDICAL SYSTEMS, INC. PARTICIPANT

BY __________________________ BY ________________________

TITLE ________________________ TITLE ______________________

DATE ________________________ DATE _______________________

PO# _______________________

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<PAGE>

EXHIBIT A

ADDITIONAL TERMS AND CONDITIONS OF THE SUMMIT MEDICAL SYSTEMS NATIONAL DATABASE
PARTICIPATION AND SOFTWARE LICENSE AGREEMENT.

1. PROGRAM LICENSE

2. DELIVERY OF PROGRAM AND RELATED MATERIALS

3. SUPPORT AND SERVICE

Summit shall provide Participant with ongoing Support and Service of the Program
including, but not limited to, providing Participant with relevant Program
updates and related materials, on-line HELP screens, and expert assistance on a
special 800-WATS line number dedicated to the servicing of the Program and the
National Database described in Paragraph 5 hereof. Summit personnel experienced
in the operation of the Program and the National Database, will be available
from 8:00 a.m. until 6:00 p.m. (Central Time) on weekdays. Those individuals
will handle Participant's inquiries, troubleshooting, and requests for special
reports.

4. NATIONAL DATABASE

4.1
Participant shall provide Summit with all of Participant's relevant patient data
files exclusive of patient name, address, physician, and hospital information
(the

-44-
<PAGE>

"Patient Information"), via either written Data Collection Forms, computer
disks or electronic transfer on a regular basis for the purpose of contributing
clinical information to a database for the benefit of receiving national
outcomes reports. PARTICIPANT WARRANTS THAT ALL PATIENT INFORMATION SHALL BE
ACCURATE AND COMPLETE. The Data Collection Forms provided to Participant by
Summit, pursuant to Paragraph 2 hereof, shall be used by Participant for
purposes of collecting the Patient Information. If Participant employs manual
data entry by Summit Medical Systems, the Participant shall pay to Summit a fee
of twelve dollars ($12.00) per record.

5. COPYRIGHT OWNERSHIP

The parties hereby agree that Summit shall be deemed the copyright owner with
respect to all software, documentation, associated source codes, National
Database any and all reports based thereon, all Program format designs and other
materials that it created pursuant to this Agreement. Participant shall be
deemed the copyright owner with respect to all individual and aggregate Patient
Information provided to Summit by the Participant. Participant hereby grants
permission for Participant's Patient Information to be incorporated into the
National Database and any and all reports based thereon. Participant may copy
the Program for backup

-45-
<PAGE>

purposes or for multi-user access, but not onto any microcomputer system that
operates independent of Participant. The provisions of this Paragraph 5 shall
survive any termination of the attached Agreement.

6. CONFIDENTIALITY

Summit shall hold and maintain as confidential all data received from
Participant, and shall protect such data received from Participant from use for
any purpose other than the design, development, and implementation of the
program and the National Database as contemplated in the attached Agreement.
During the term of the attached Agreement, Summit shall maintain all data
incorporated in the National Database in a special secure computer system, and
during the hours of operation, when data is being audited, merged, and analyzed,
Summit shall ensure that Participant's Patient Information and the National
Database are accessible only to a single user. In order to help maintain
confidentiality, Summit shall provide Participant with a User Identification
Number that is unique to Participant and will be used to verify Participant's
identity in all communications with Summit including, but not limited to, the
submission of Patient Information and all telephone contacts with Summit. Except
as otherwise indicated, the provisions of this Paragraph 7 shall survive any
termination of the attached Agreement.

7. SUMMIT'S WARRANTIES

8. NOTICES

-46-
<PAGE>

SCHEDULE 3
(CREDIT PRICING MATRIX APPLICABLE
TO [XYZ HOSPITAL)

Quarterly Quarterly
Tier Dollar Volume Level Discount %
------------------- ----------

Applicable credit percentage will be calculated retrospectively on the total
dollar volume of MEADOX MEDICALS products purchased during the most recent
contract quarter. Credits earned will be applied to the acquisition of the
software programs described in Schedule 1 hereto, at PARTICIPANT's option, to
future purchases of MEADOX MEDICALS products.

-47-
<PAGE>

SCHEDULE 7
ADR PROCEDURE

A. COMMENCEMENT OF ADR. If a party intends to begin ADR to resolve a
dispute, such party shall provide written notice to the other party stating such
intention and the issues to be resolved. Within 10 business days after its
receipt of such notice, the other party may, by written notice to the party
initiating ADR add additional issues to be resolved. The ADR shall take place
at a location mutually agreed upon by BSC and SUMMIT, or, if BSC and SUMMIT are
unable to agree upon a location, at a location in Minneapolis, Minnesota
selected by the CPR.

B. SELECTION OF NEUTRAL. Within 20 business days following receipt of
the original ADR notice, the parties (unless they have already agreed upon a
neutral) shall request the Center for Public Resources, New York, New York (the
"CPR") to provide a list of neutrals. Unless otherwise agreed by the parties,
the neutral shall be an individual having legal experience in the medical
technology field and shall not be an employee, director, or shareholder of
either party or of an affiliate of either party. If the parties have not agreed
upon a neutral from such list within ten (10) business days of receiving it, the
CPR shall be requested to select a neutral. Either party may strike at most one
selection by the CPR.

C. PROCEDURE. The ADR shall be conducted in the following manner:

(i) No later than five (5) business days after selection, the neutral
shall establish a date for a hearing to resolve the disputed issues
identified by the parties, which date shall be no more than ninety
(90) days after the date of selection of the neutral.

(ii) Discovery in the ADR proceeding shall be limited to the following and
such discovery shall be completed no later than thirty (30) days prior
to the hearing contemplated by Paragraph C(i) above:

(a) Each party shall be entitled to take the deposition of no more
than five (5) witnesses, of which no more than one (I) may be an
expert witness.

(b) There shall be no more than ten (10) interrogatories, including
subparts.

(c) Each party shall deliver to the other party copies of all
documents in its possession related to the issue in dispute,
excepting only those documents for which it could claim a
privilege under the Federal Rules of Civil Procedure and Evidence.

-48-
<PAGE>

(iii) At least 5 days prior to the hearing, each party must submit to the
neutral and serve on the other party a proposed ruling on each issue
to be resolved, which proposed ruling shall be limited to not more
than 50 pages.

(iv) Each party shall be entitled to no more than 12 hours of hearing to
present testimony or documentary evidence. Such time limitation shall
apply to any direct, cross, or rebuttal testimony, but such time
limitation shall only be charged against the party conducting such
direct, cross, or rebuttal testimony. It shall be the responsibility
of the neutral to determine whether the parties have had the 12 hours
to which each is entitled.

(v) Each party shall have the right to be represented by counsel. The
neutral shall have the sole discretion with regard to the
admissibility of evidence.

D. Award. An award in the ADR shall be made in the following manner:
-----

(i) The neutral shall rule on each disputed issue within 30 business days
following the completion of the testimony of both parties. Such
ruling shall adopt in its entirety the proposed ruling of one of the
parties on each disputed issue.

(ii) In addition to all other relief provided, the prevailing party shall
be entitled to an award against the losing party of its costs and
expenses, including reasonable attorneys' fees, incurred in such ADR,
and the losing party shall also bear all fees and expenses of the
ADR. In the event that there is no party that has prevailed on
substantially all issues, such legal expenses and expenses of the ADR
shall be allocated between the parties as the neutral deems
appropriate.

(iii) The award rendered in the ADR may be entered in any court having
competent jurisdiction.

EXHIBIT A

ADDITIONAL TERMS AND CONDITIONS OF THE SUMMIT MEDICAL SYSTEMS NATIONAL DATABASE
PARTICIPATION AND SOFTWARE LICENSE AGREEMENT.

1. PROGRAM LICENSE

-49-
<PAGE>

2. DELIVERY OF PROGRAM AND RELATED MATERIALS

Within thirty (30) days after receipt of the attached Agreement, payment, and
final program format, Summit shall schedule delivery of the Program to
Participant at Participant's business address; and the Program's opening screen
shall be customized by Summit to reflect the name of Participant. The Program
will be provided on either 5" or 3" disks to accommodate the different floppy
disk drives in the various IBM compatible microcomputers, along with a
Documentation Manual including appropriate user information, Data Collection
Forms, and software for presentation graphics. In order for the Participant to
use the Program, Participant must have an IBM or IBM compatible microcomputer.
The microprocessor must be 486DX/33 or higher; MS/DOS version 6.0 or higher;
Microsoft Windows /TM/ version 3.1 or higher. The Summit Medical Vista /TM/
Programs operate in a graphics environment called Microsoft Windows, created by
Microsoft Corporation(R); (to run Summit Database Programs under Microsoft
Windows, Participant needs to license and install Microsoft Windows); a minimum
of 340 Mb hard disk for data storage; 8 Mb RAM; 580 Kb conventional memory;
super VGA color monitor; SVGA with 512K memory video card; Microsoft compatible
mouse and any printer supported by Windows version 3.1.

3. SUPPORT AND SERVICE

4. NATIONAL DATABASE

-50-
<PAGE>

ACCURATE AND COMPLETE. The Data Collection Forms provided to Participant by
Summit, pursuant to Paragraph 2 hereof, shall be used by Participant for
purposes of collecting the Patient Information. If Participant employs manual
data entry by Summit Medical Systems, the Participant shall pay to Summit a fee
of twelve dollars ($12.00) per record.

5. COPYRIGHT OWNERSHIP

-51-
<PAGE>

6. CONFIDENTIALITY

7. SUMMIT'S WARRANTIES

8. NOTICES

-52-
<PAGE>

SCHEDULE 3
(DISCOUNT PRICING MATRIX APPLICABLE
TO [XYZ HOSPITAL)

Quarterly Quarterly
Tier Dollar Volume Level Discount %
------------------- ----------

-53-
<PAGE>

AGREEMENT REGARDING SALE
OF SOFTWARE LICENSE AND USE OF DATA
(PAYMENT TERMS)

BACKGROUND

MEADOX MEDICALS is an authorized distributor of certain software programs
developed by SUMMIT Medical Systems, Inc., a Minnesota corporation having its
principal place of business at One Carlson Parkway, Minneapolis, Minnesota 55447
("SUMMIT"). PARTICIPANT desires to purchase from MEADOX MEDICALS a license to
use the software programs identified below. In addition, PARTICIPANT is willing
to permit MEADOX MEDICALS to use certain clinical, fiscal, and/or and product
usage data (exclusive of patient name, address, position, hospital information)
in connection with a database established by MEADOX MEDICALS and managed by
SUMMIT.

AGREEMENTS

1. SALE OF PROGRAM LICENSE. Pursuant to the terms and conditions of this
Agreement, MEADOX MEDICALS hereby agrees to sell and PARTICIPANT agrees to
purchase a non-exclusive license (the "LICENSE") to use the database software
program(s), as further identified on the attached Schedule I (the "PROGRAM").
In addition to the terms and conditions of this Agreement, the License is
subject to the terms and conditions of a separate agreement (the "LICENSE
AGREEMENT") in Schedule 2.

2. PRICE. PARTICIPANT will pay a license fee of _______ dollars ($ )
and training fee of _______ dollars ($ ), for a total fee of
_______ dollars ($ ), (including interest) which is to be paid to
MEADOX MEDICALS in eight (8) quarterly payments of _______ dollars ($ ).
The Program includes the software, documentation, training, and other
materials identified in the License Agreement, and PARTICIPANT shall have access
to software support and service from SUMMIT upon the terms set forth in the
License Agreement. PARTICIPANT shall be responsible for installation of the
Program software on its hardware system. PARTICIPANT shall be responsible for
applicable sales and other taxes, if any, regardless of whether they are listed
on Schedule 1.

-54-
<PAGE>

3. TRAINING AND SUPPORT. MEADOX MEDICALS has arranged for PARTICIPANT to
be able to attend the SUMMIT Training Institute in Minneapolis, Minnesota, which
is a training program created to maximize utilization of SUMMIT software
programs. Sessions are held on a regular basis. The training fee, specified in
Section 2, is based on individual(s) attending this twining program. The
training fee includes registration fee, lodging, meals, training and materials.

-55-
<PAGE>

10. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with federal law and the internal laws of the commonwealth of
Massachusetts.

-56-
<PAGE>

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date and year first above written.

PARTICIPANT BOSTON SCIENTIFIC CORPORATION

By _________________________ By _________________________

Print Name ___________________ Print Name __________________

Its _________________________ Its _________________________

PO #: _______________

-57-
<PAGE>

SCHEDULE 1
----------

TRAINING
--------

SCHEDULE 2
SUMMIT MEDICAL SYSTEMS, INC.
FORM OF PARTICIPATION & SOFTWARE LICENSE AGREEMENT

VISTA/TM/ PLATFORM PROGRAM(S): _______________________
_______________________
_______________________

IT IS AGREED:

2. PARTICIPATION IN NATIONAL DATABASE
Participant hereby agrees to participate in the National Database in accordance
with this Agreement and the additional terms and conditions of Exhibit A.

-59-
<PAGE>

under no condition will the liability of Summit under this Agreement exceed
Participant's Initial License Fee.

5. TERM AND TERMINATION

This Agreement shall be effective for one year, and shall be automatically
renewed on an annual basis thereafter unless either party provides the other
with a written notice of termination at least ninety (90) days prior to that
date or any subsequent December 31; provided, however, that either party may
terminate this Agreement upon the others material breach of this Agreement, by
providing the other party with at least thirty (30) days written notice thereof.

6. ASSIGNMENT

This Agreement may not be assigned by either party without the express written
approval of the other party.

7. RELATIONSHIPS OF PARTIES

The relationships of the parties to this Agreement are those of independent
contractors and not those of master and servant, principal and agent, employer
and employee, or partners or joint venturers.

8. COUNTERPARTS

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

9. WAIVER

A waiver by either party to this Agreement of any of its terms or conditions in
any one instance shall not be deemed or construed to be a general waiver of such
term or condition or a waiver of any subsequent breach.

10. GOVERNING LAW

This Agreement shall be construed and enforced in accordance with federal law
and the laws of the State of Minnesota.

11. SEVERABILITY

All provisions of this Agreement are severable. If any provision or portion
hereof is determined to be unenforceable by a court or competent jurisdiction,
then the rest of the Agreement shall remain in full effect, provided that its
general purposes remain reasonably capable of being effected.

12. ENTIRE AGREEMENT

This Agreement (a) constitutes the entire Agreement between the parties hereto
with respect to the subject matter hereof, (b) supersedes and replaces all prior
Agreements, oral or written, between the parties relating to the subject matter

-60-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date and year first written above.

SUMMIT MEDICAL SYSTEMS, INC. PARTICIPANT

BY __________________________ BY ________________________

TITLE ________________________ TITLE _____________________

DATE ________________________ DATE _____________________

PO# _____________________

-61-
<PAGE>

EXHIBIT A

ADDITIONAL TERMS AND CONDITIONS OF THE SUMMIT MEDICAL SYSTEMS NATIONAL DATABASE
PARTICIPATION AND SOFTWARE LICENSE AGREEMENT.

1. PROGRAM LICENSE

2. DELIVERY OF PROGRAM AND RELATED MATERIALS

Within thirty (30) days after receipt of the attached Agreement, payment, and
final program format, Summit shall schedule delivery of the Program to
Participant at Participant's business address; and the Program's opening screen
shall be customized by Summit to reflect the name of Participant The Program
will be provided on either 5" or 3" disks to accommodate the different floppy
disk drives in the various IBM compatible microcomputers, along with a
Documentation Manual including appropriate user information, Data Collection
Forms, and software for presentation graphics. In order for the Participant to
use the Program, Participant must have an IBM or IBM compatible microcomputer.
The microprocessor must be 486DX/33 or higher; MS/DOS version 6.0 or higher;
Microsoft Windows/TM/ version 3.1 or higher. The Summit Medical Vista/TM/
Programs operate in a graphics environment called Microsoft Windows, created by
Microsoft Corporation/(R)/; (to run Summit Database Programs under Microsoft
Windows, Participant needs to license and install Microsoft Windows); a minimum
of 340 Mb hard disk for data storage; 8 Mb RAM; 580 Kb conventional memory;
super VGA color monitor; SVGA with 512K memory video card; Microsoft compatible
mouse and any printer supported by Windows version 3.1.

3. SUPPORT AND SERVICE

Summit shall provide Participant with ongoing Support and Service of the Program
including, but not limited to, providing Participant with relevant Program
updates and related materials, on-line HELP screens, and expert assistance on a
special 800-WATS line number dedicated to the servicing of the Program and the
National Database described in Paragraph 5 hereof. Summit personnel experienced
in the operation of the Program and the National Database, will be available
from 8:00 a.m. until 6:00 p.m. (Central Time) on weekdays. Those individuals
will handle Participant's inquiries, troubleshooting, and requests for special
reports.

4. NATIONAL DATABASE

4.1
Participant shall provide Summit with all of Participant's relevant patient data
files exclusive of patient name, address, physician, and hospital information
(the

-62-
<PAGE>

5. COPYRIGHT OWNERSHIP

-63-
<PAGE>

6. CONFIDENTIALITY

Summit shall hold and maintain as confidential all data received from
Participant, and shall protect such data received from Participant from use for
any purpose other than the design, development, and implementation of the
program and the National Database as contemplated in the attached Agreement.
During the term of the attached Agreement, Summit shall maintain all data
incorporated in the National Database in a special secure computer system, and
during the hours of operation, when data is being audited, merged, and analyzed,
Summit shall ensure that Participant's Patient Information and the National
Database are accessible only to a single user. In order to help maintain
confidentiality, Summit shall provide Participant with a User Identification
Number that is unique to Participant and will be used to verify Participant's
identity in all communications with Summit including, but not limited to, the
submission of Patient Information and all telephone contacts with Summit. Except
as otherwise indicated, the provisions of this Paragraph 7 shall survive any
termination of the attached Agreement.

7. SUMMIT'S WARRANTIES

8. NOTICES

-64-
<PAGE>

SCHEDULE 3
(CREDIT PRICING MATRIX APPLICABLE
TO [XYZ HOSPITAL)

Quarterly Quarterly
Tier Dollar Volume Level Discount %
---------------------- ------------

-65-
<PAGE>

SCHEDULE 7
ADR PROCEDURE

A. COMMENCEMENT OF ADR. If a party intends to begin ADR to resolve a
dispute, such party shall provide written notice to the other party stating such
intention and the issues to be resolved. Within 10 business days after its
receipt of such notice, the other party may, by written notice to the party
initiating ADR add additional issues to be resolved. The ADR shall take place at
a location mutually agreed upon by BSC and SUMMIT, or, if BSC and SUMMIT are
unable to agree upon a location, at a location in Minneapolis, Minnesota
selected by the CPR.

B. SELECTION OF NEUTRAL. Within 20 business days following receipt of the
original ADR notice, the parties (unless they have already agreed upon a
neutral) shall request the Center for Public Resources, New York, New York (the
"CPR") to provide a list of neutrals. Unless otherwise agreed by the parties,
the neutral shall be an individual having legal experience in the medical
technology field and shall not be an employee, director, or shareholder of
either party or of an affiliate of either party. If the parties have not agreed
upon a neutral from such list within ten (10) business days of receiving it, the
CPR shall be requested to select a neutral. Either party may strike at most one
selection by the CPR.

C. PROCEDURE. The ADR shall be conducted in the following manner:
---------

(ii) Discovery in the ADR proceeding shall be limited to the following and
such discovery shall be completed no later than thirty (30) days prior
to the hearing contemplated by Paragraph C(i) above:

(a) Each party shall be entitled to take the deposition of no more
than five (5) witnesses, of which no more than one (1) may be an
expert witness.

(b) There shall be no more than ten (10) interrogatories, including
subparts.

-66-
<PAGE>

(v) Each party shall have the right to be represented by counsel. The
neutral shall have the sole discretion with regard to the
admissibility of evidence.

D. Award. An award in the ADR shall be made in the following manner:
-----

(iii) The award rendered in the ADR may be entered in any court having
competent jurisdiction.

-67-

<PAGE>

SUMMIT MEDICAL SYSTEMS, INC. EXHIBIT 11.1
Computation of Earnings Per Share
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended
March 31,

1996 1995
--------------------------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE:
Weighted average shares outstanding 7,527,314 3,263,350
Net effect of dilutive stock options--based
on the treasury stock method - -
SAB No. 83 shares--for stock options granted
at exercise prices less than the 12 months
preceding the initial public offering
using the treasury method - 115,524
--------------------------
7,527,314 3,378,874
==========================
Net loss $ (281,349) $ (300,437)
==========================
Net loss per share $ (0.04) $ (0.09)
==========================

FULLY DILUTED EARNINGS PER SHARE:
Weighted average shares outstanding 7,527,314 4,330,006
Net effect of dilutive stock options--based
on the treasury stock method - -
SAB No. 83 shares--for stock options granted
at exercise prices less than the 12 months
preceding the initial public offering
using the treasury method - 115,524
--------------------------

7,527,314 4,445,530
==========================
Net loss $ (281,349) $ (300,437)
==========================
Net loss per share $ (0.04) $ (0.07)
==========================
</TABLE>

<PAGE>

<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the Consolidated Statement of Financial Position for March 31, 1996 and the
Consolidated Statement of Operations for the three months ended March 31, 1996
and is qualified in its entirety by reference to such financial statements.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 22,508,936
<SECURITIES> 0
<RECEIVABLES> 5,301,450
<ALLOWANCES> 110,343
<INVENTORY> 0
<CURRENT-ASSETS> 29,104,787
<PP&E> 2,630,683
<DEPRECIATION> 1,109,190
<TOTAL-ASSETS> 30,706,564
<CURRENT-LIABILITIES> 3,071,268
<BONDS> 12,431
<COMMON> 75,365
0
0
<OTHER-SE> 27,547,500
<TOTAL-LIABILITY-AND-EQUITY> 30,706,564
<SALES> 0
<TOTAL-REVENUES> 3,913,281
<CGS> 0
<TOTAL-COSTS> 1,234,514
<OTHER-EXPENSES> 3,192,582
<LOSS-PROVISION> 8,946
<INTEREST-EXPENSE> 6,455
<INCOME-PRETAX> (263,517)
<INCOME-TAX> 17,832
<INCOME-CONTINUING> (281,349)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (281,349)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)

</TABLE>