Exhibit 10.2
(ASPECT MEDICAL SYSTEMS(R) LOGO) (BRINGING INSIGHT OUT LOGO)
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
BISX LICENSE, DEVELOPMENT, AND SUPPLY AGREEMENT
BISx LICENSE, DEVELOPMENT AND SUPPLY AGREEMENT (hereinafter "Agreement") dated
this 17th day of October, 2005 (the "Effective Date"), by and between Aspect
Medical Systems, Inc., a Delaware corporation with its principal offices located
at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx ("Aspect") and Spacelabs Medical,
Inc., a Delaware corporation, with offices at 0000 000xx Xxx XX, Xxxxxxxx, XX
00000 ("Spacelabs") for the development, purchase of products and the licensing
of software by Spacelabs from Aspect under the terms and conditions contained in
this Agreement.
1. BACKGROUND
1.1 Aspect is a developer, manufacturer and distributor of medical
devices, equipment and related hardware, software and accessories,
including the BISx Device, a device adapted to process selected EEG
measurements and display the results thereof ("BIS") on a host patient
monitor system.
1.2 Spacelabs is a developer, manufacturer and distributor of medical
devices, equipment and related hardware, software and accessories,
including patient monitors and physiologic monitoring modules.
1.3 Spacelabs desires to use Aspect's BISx technology in conjunction with
Spacelabs' Patient Monitoring Systems.
1.4 Aspect agrees to sell and/or license to Spacelabs selected Aspect
Products, subject to the terms and conditions contained in this
Agreement.
2. DEFINITIONS
Bispectral Index or BIS Aspect's proprietary processed EEG parameter that may
be used as an aid in monitoring the effects of certain
anesthetic agents.
Spacelabs Patient Spacelabs designed multi-parameter patient monitoring
Monitoring System(s) systems including monitors and modules.
BISx Device The integrated solution of Aspect's BIS processing
technology and digital signal conversion technology.
BISx Kit BISx Device, Host Monitor Cable, and PIC designed for
use with Spacelabs Patient Monitoring Systems.
PIC or PIC Plus Patient interface cable
Host Monitor Cable The cable that connects the BISx Device to the
Spacelabs BISx Module. This cable will be designed by
Aspect, with assistance from Spacelabs.
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Host Cable Connector The connector that will be integrated into the Host
Monitor Cable for connection to the Spacelabs BISx
Module.
Spacelabs BISx Module The Spacelabs host device that provides power,
communication, and control to the BISx Kit.
BIS Sensor A single-use disposable or semi-reusable sensor
manufactured by Aspect for use with the BISx Kit that
is required to generate the Bispectral Index.
Aspect Products BISx Kit, BIS Sensors and any other product that can
be ordered by Spacelabs as listed in Exhibit A.
Software Aspect software programs in binary code form that are
designed for use with the BISx Kit.
Party (ies) Aspect and Spacelabs each individually or jointly.
Affiliate With respect to either Aspect or Spacelabs, any other
business entity which, directly or indirectly,
controls, is controlled by, or is under common control
with Aspect or Spacelabs, respectively.
Specification Technical Specification for the BISx Kit as attached
in Exhibit C.
BIS Ready Spacelabs patient monitor that is capable of
communicating with the Spacelabs BISx Module.
3. LICENSE.
3.1 Licenses - General.
Aspect agrees to sell to Spacelabs the Aspect Products listed on
Exhibit A (Aspect Products and Purchase Prices). The components of the
BISx Kits purchased from Aspect under this Agreement shall only be
used in conjunction with the Spacelabs BISx Module which Spacelabs
uses or sells, leases or otherwise makes available to third-party
users in the regular course of business. The components of the BISx
Kit shall only be resold, leased, rented, licensed or otherwise
transferred to third parties for use with Spacelabs BISx Modules or as
replacement parts used in BISx Kits and Spacelabs shall only sell
Aspect approved sensor products in connection with any BISx Kits.
3.2 Aspect Software License.
Aspect hereby grants to Spacelabs and its Affiliates a non-exclusive
and non-transferable license, with the right to sublicense only to
purchasers of the Spacelabs BISx Module, during the term of the
Agreement to use the Software loaded in the BISx Kit and related
documentation provided by Aspect solely in connection with operation
of the components of the BISx Kit with the Spacelabs BISx Module. All
rights sublicensed to Spacelabs customers to use the BISx Kit shall
survive any termination of this Agreement as long as they are in
compliance with applicable sublicense agreements.
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3.3 Distribution of BIS Sensors.
(a) Outside of the United States
Aspect hereby grants to Spacelabs (and Spacelabs' Affiliates) the
right to distribute outside the United States Aspect BIS Sensors
purchased from Aspect. The parties acknowledge that neither
Aspect nor Spacelabs has the ability to control the actual and
specific use of the Aspect BIS Sensors by their customers.
(b) Within the United States
Spacelabs may sell one box of twenty-five (25) Aspect BIS Sensors
with each Spacelabs BISx Module sold by Spacelabs.
Spacelabs may also purchase Aspect BIS Sensors in the United
States for demonstration purposes. Aspect BIS Sensors purchased
for demonstration use may not be resold to customers.
3.4 Trademark License.
Aspect hereby grants to Spacelabs (and Spacelabs' Affiliates) a
nonexclusive, worldwide, royalty-free license (without the right to
sublicense) to use Aspect's trademarks (as shown in Exhibit E) on the
Spacelabs patient monitor screen display, the operator manuals
provided by Spacelabs to its customers, or other locations designed to
designate or promote the inclusion of BIS technology in the Spacelabs
Patient Monitoring Systems provided that Aspect shall have the right
to terminate such license if such products do not satisfy Aspect's
quality standards, provided Spacelabs has been given reasonable notice
of such standards, an explanation of how Spacelabs has failed to meet
such standards and a reasonable opportunity to cure such failure.
Aspect shall have the right to use Spacelabs' trademarks only with
Spacelabs' prior written consent, which consent shall be granted in
Spacelabs' sole discretion. Neither Party shall have any other right
to use, display or utilize the other Party's Trademarks for any other
purpose or in any other manner.
3.5 Labeling.
Spacelabs Patient Monitoring Systems that have BIS capability shall be
labeled with a mutually agreed on logo located in a mutually agreed
upon location.
4. PRICES
4.1 Purchase Prices.
The prices of Aspect Products purchased by Spacelabs hereunder (the
"Purchase Prices"), which are ordered during the term of the
Agreement, shall be as set forth in Exhibit A (Aspect Products and
Purchase Prices).
4.2 Customization Costs.
Additional costs which have been agreed upon in writing (both NRE and
incremental unit cost) for customization of the product (mold color,
labeling) will be borne by Spacelabs. Spacelabs shall be responsible
for any charges associated with scrap of inventory due to any
subsequent changes made to customized product.
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4.3 Competitive Products and "BIS Ready" Price Discounts
If Spacelabs offers a directly competitive product to the BISx Kit ,
the discounts for "% of Systems BIS Ready" shown in Exhibit A will be
eliminated. Only discounts based on volume of BISx Kits shipped (with
[**]% of Systems BIS Ready) will be available from that time forward.
Products that display a parameter claiming to be a measure of the
hypnotic effect of anesthesia and sedation are considered to be
directly competitive products ("Competitive Products") for the
purposes of this Section 4.
4.4 Notwithstanding the provisions of Section 4.3 above, in the event
Spacelabs advises Aspect that it has begun marketing a Competing
Product because the Bispectral Index and/or the BISx Device are no
longer sufficiently competitive from a technological or pricing
standpoint, the application of Section 4.3 shall be tolled for a
period of up to six months from the date of such notification (the
"Tolling Period"). During the Tolling Period:
- Spacelabs shall promptly provide Aspect with written
documentation of the technological or pricing issues.
- Aspect shall either provide documentation to (i) contest
such assertion by Spacelabs or (ii) correct the
technological or pricing issues identified by Spacelabs.
- Aspect and Spacelabs shall agree in writing to the rationale
provided to address the assertion of non-competitiveness or
the proposal to correct the technological or pricing issues.
- In the event Aspect is unable to successfully correct or
contest technological or pricing issues within the Tolling
Period, the provisions of Section 4.3 shall be deemed to be
void for the term of this Agreement.
- In the event that Aspect does correct the technological or
pricing issue during such six-month period, the Tolling
Period shall end and the provisions of Section 4.3 shall
once again become in effect on a going forward basis.
5. DEVELOPMENT.
5.1 Project Management.
Each Party shall appoint a "Project Manager" who shall oversee and
manage the joint project on a day-to-day basis.
The Project Managers shall meet regularly based on the project needs
to assess the project status and discuss and resolve any issues or
problems.
Each Party shall bear its own communication and travel costs.
5.2 Spacelabs Responsibilities.
(a) Spacelabs and Aspect shall cooperate by the mutual provision of
information necessary for the development of compatible Spacelabs
BISx Modules and BISx
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Kits. Spacelabs will assume the reasonable cost, as agreed to in
writing by the two parties, which will not be unreasonably
withheld, for any custom modifications to the BISx Kit to meet
the technical requirements of the Spacelabs Patient Monitoring
Systems. Spacelabs will authorize work to be performed by Aspect
through the Purchase Order process.
(b) Spacelabs will develop and own all intellectual property rights
with respect to the necessary software for the Spacelabs BISx
Module to communicate with the BISx Device. This software will
allow the user to configure BIS parameters, and display the BIS
related information on the Spacelabs Patient Monitoring System.
(c) Spacelabs shall integrate and test the integration of the
components of the BISx Kit with the Spacelabs BISx Module and the
Spacelabs Patient Monitoring System.
(d) Spacelabs will lend to Aspect a Spacelabs patient monitor and a
Spacelabs BISx Module for testing purposes only. Said Spacelabs
patient monitor and Spacelabs BISx Module will be provided to
Aspect, at Spacelabs' cost and expense, at the appropriate time
in the development process.
(e) Spacelabs will identify a Host Cable Connector that will allow
the Host Monitor Cable to plug directly into the Spacelabs BISx
Module.
(f) Spacelabs will provide Aspect with necessary mechanical interface
information to mechanically interface the BISx Kit to Spacelabs
BISx Module. This may include, but is not limited to, mechanical
drawings or access to Spacelabs' third-party manufacturer of
connectors.
(g) Spacelabs will pay any agreed to NRE associated with the
development of the Spacelabs Host Monitor Cable.
5.3 Aspect Responsibilities.
(a) Aspect shall provide Spacelabs with a proposal and receive
Spacelabs authorization in writing before Aspect initiates any
billable work or tasks.
(b) Aspect shall design, develop and test the BISx Kit according to
the mutually agreed Specifications.
(c) Upon Spacelabs completing the integration of the BIS Kit into the
Spacelabs BISx Module, Aspect will verify the accurate display of
BIS on the Spacelabs Patient Monitoring System. Once successfully
verified, Aspect will provide Spacelabs with a certification
letter so indicating.
(d) Aspect will be responsible for maintaining and returning the
Spacelabs Patient Monitor and Spacelabs BISx Module in the same
condition as received, subject to normal wear and tear. Aspect
shall return such items to Spacelabs within thirty (30) days of
receipt of written request for return from Spacelabs.
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(e) Aspect will be responsible for developing the Software to insure
the terms of the Exclusivity section of this agreement are met.
6. MINIMUM PURCHASE VOLUME, PURCHASE ORDERS, FORECASTS, AND DELIVERY.
6.1 Scheduled Order Products.
All Aspect Products purchased under the Scheduled Order Process will
follow the process set forth in Exhibit B.
6.2 Discrete Purchase Order.
For products not identified as "Scheduled Order Products" in Exhibit
B, and/or for orders of Scheduled Order Products that are in addition
to previously forecasted need, Spacelabs will issue to Aspect
individual purchase orders ("Discrete Purchase Orders"). Each such
Discrete Purchase Order shall be in the form of a written or
electronic communication and shall contain, at a minimum, the
following information: (i) a description of the product by part
number; (ii) the quantity of the product; (iii) the delivery date or
shipping schedule; (iv) the location to which the product is to be
shipped; (v) transportation instructions; and (vi) any special
instructions. Each Discrete Purchase Order shall provide an order
number for billing purposes, and may include other instructions and
terms as may be appropriate under the circumstances. All Discrete
Purchase Orders shall be accepted or rejected by Aspect within five
(5) business days of receipt. Except as provided below, Aspect shall
use commercially reasonable good faith efforts to accept all Discrete
Purchase Orders, to the extent practicable. In the event that an
individual Discrete Purchase Order is neither accepted nor rejected
within five (5) days by Aspect, such order shall be deemed to have
been accepted by Aspect, unless Aspect establishes to Spacelabs'
reasonable satisfaction that the order in question was not received by
Aspect. In the event Spacelabs submits an order for product with
changes in the Specifications which causes Aspect to be unable to meet
the delivery schedule set forth in a proposed Discrete Purchase Order,
the parties shall negotiate in good faith to agree upon a delivery
schedule.
6.3 Forecast.
Upon the execution of this Agreement, Spacelabs shall provide Aspect
with an initial six month forecast. Aspect shall make purchase
commitments to suppliers based upon open orders and the forecast
(subject to purchase commitments for long lead-time items and minimum
buys in accordance with the lead-times and lot sizes set forth in
Exhibit B), and Spacelabs shall be responsible for all such
non-returnable components purchased in support of Spacelabs
then-current forecast and open purchase orders. For all other
purposes, however, the forecast shall be non-binding. Each week after
the initial forecast, Spacelabs shall provide an updated forecast, so
that a rolling forecast of twelve (12) months is always maintained.
6.4 Reschedule of Discrete Purchase Orders.
Spacelabs may reschedule all or part of a scheduled delivery under a
Discrete Purchase Order in accordance with the table below
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DAYS BEFORE P.O. DELIVERY PERCENTAGE RESCHEDULE
DATE ALLOWANCE
------------------------- ---------------------
00 - 14 [**]
15 - 44 [**]%
> 45 [**]%
6.5 Cancellation.
Discrete Purchase Orders may be terminated for convenience in whole or
in part by Spacelabs in accordance with this provision. Termination
hereunder shall be effected by the delivery to Aspect of a "Purchase
Order Cancellation Notice" specifying the date upon which such
termination becomes effective. Spacelabs liability to Aspect for
cancelled orders shall be as follows:
In the event of the cancellation of Discrete Purchase Orders by
Spacelabs, that is not superseded by another purchase order or
Scheduled Order, Spacelabs shall be liable for the payment of
cancellation charges based on the number of days prior to scheduled
delivery date that written notice of cancellation is received by
Aspect, as outlined below:
> 8 weeks prior to acknowledged delivery [**]
4-8 weeks prior to acknowledged delivery [**]% of order value
2 - 4 weeks prior to acknowledged delivery [**]% of order value
< 2 weeks prior to acknowledged delivery [**]% of order value
6.6 Delivery.
Aspect shall use commercially reasonable efforts to ship the product
to fill purchase orders submitted by Spacelabs to the delivery point
and by the delivery date requested in such purchase orders.
6.7 Shipment.
Aspect will ship products FOB origin.
6.8 Acceptance.
Within ten (10) business days after arrival at destination, Spacelabs
shall conduct its inspection and inform Aspect in writing if the
Aspect Product in the given shipment is non-conforming to the
Specification or in the number and type of product ordered. Spacelabs
shall have the right to reject and return to Aspect for credit any
Aspect Products in excess of quantities ordered, or the Aspect
Products that are damaged before shipment or that do not conform to
the requirements of this Agreement.
7. GENERAL CONDITIONS OF THIS AGREEMENT.
7.1 Exclusivity.
Neither Spacelabs nor Aspect shall create any products, nor assist any
third party in the creation of any products, compatible with the
Spacelabs BISx Module which would act
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as a substitute for the BISx Kit. Nothing in this Agreement shall be
construed to grant Aspect any license to sell, distribute or license
to any third party any Spacelabs specific components, including the
enabling Software and portions of the Host Monitor Cable customized
for Spacelabs. It is understood that Aspect sells, distributes, and
licenses to other third parties both generic and customized Aspect BIS
engines and BISx Kits to meet the needs of other OEM customers, and,
subject to the exclusivity provisions of this Section 7.1, nothing in
this Agreement shall prohibit Aspect from continuing to sell,
distribute, or license these products or components thereof to
customers other than Spacelabs.
8. ROYALTIES AND COMMISSIONS.
8.1 Commissions on Sales of Aspect BIS Sensors.
For each BIS Sensor sold by Aspect to Spacelabs customers in the
United States deemed to be for use with Spacelabs BISx Module, Aspect
shall pay Spacelabs a commission equal to[**] percent of the net sales
revenue (invoice price after discounts) billed by Aspect for such BIS
Sensors. Aspect shall pay such commissions to Spacelabs on a calendar
quarter basis. With such quarterly payments, Aspect shall provide to
Spacelabs a list of Spacelabs customers to which such sales were made,
the number of sensors sold in that quarter, and the net revenue billed
for the sale of the sensors by Aspect. This quarterly payment shall be
provided to Spacelabs no later than 30 days following the end of each
calendar quarter. In the event that Aspect's standalone BIS monitors,
the BIS modules and/or the BISx kits for other manufacturers have also
been installed at such sites in addition to Spacelabs BISx Module,
Spacelabs will be entitled to a [**] percent commission only on BIS
Sensor sales deemed to be for use with the Spacelabs BISx Module. For
the purposes of this Section 8.1, BIS Sensors shall be deemed to be
for use with Spacelabs BISx Modules on the basis of a pro rata
determination, based on the total number of BIS units of different
types installed at such locations during the period according to
Aspect's installed base records. To facilitate such calculations,
Spacelabs will be responsible for providing Aspect with the
documentation required in Section 8.2, and Aspect shall be responsible
for providing Spacelabs with accurate information regarding the total
number of non-Spacelabs units which have been installed, and are in
use, at such sites. Such information shall be auditable by an
independent auditor at Spacelabs' expense; provided, however, if the
results of such audit reveal that the number of such non-Spacelabs
units has been over reported by fifteen percent (15%) or more, Aspect
shall reimburse Spacelabs for the cost of such audit.
8.2 Installed Base Reporting.
In the United States, Spacelabs will be responsible for providing
Aspect with documentation, on a monthly basis for the month just
ended, of the total number of Spacelabs BISx Modules shipped in the
United States and the locations of such Spacelabs BISx Modules in the
United States.
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Outside the United States, Spacelabs will be responsible for providing
Aspect with documentation, on a monthly basis, for the month just
ended, of the total number of Spacelabs BISx Modules shipped outside
the United States and the country locations of such Spacelabs BISx
Modules.
9. WARRANTY.
9.1 General.
Aspect warrants solely to Spacelabs that Aspect Products (including
Software) delivered hereunder shall perform in accordance with the
Specifications in Exhibit C (BISx Kit) and shall be free from defects
in materials and workmanship, when given normal, proper and intended
usage, for [**] months from the date of shipment of the BISx Kit to
the Spacelabs end customer site or [**] months from the date of
shipment by Aspect to Spacelabs, whichever is sooner. This warranty
shall not apply to expendable components and supply items, such as,
but not limited to, cables (except for failures occurring within 180
days of receipt of shipment by Spacelabs), or disposable items such as
a BIS Sensor after the expiration date marked on the BIS Sensor
packaging. Aspect shall not have any obligation under this Agreement
to make repairs or replacements which result, in whole or in part,
from catastrophe, fault or negligence of Spacelabs, or anyone claiming
through or on behalf of Spacelabs, or from improper or unauthorized
use of Aspect Products, or use of Aspect Products in a manner for
which they were not designed.
9.2 Warranty Procedures.
Spacelabs shall notify Aspect of any Aspect Products which it believes
to be defective during the applicable warranty period and which are
covered by the warranties set forth in Section 9.1. At Aspect's
option, such Aspect Products shall be returned by Spacelabs to
Aspect's designated facility for examination and testing, or may be
repaired on site by Aspect. Aspect shall either repair or replace,
within thirty (30) days of receipt by Aspect, any such Aspect Product
found to be defective and return these Products to Spacelabs.
Transportation and insurance costs shall be borne by Aspect. Should
Aspect's examination and testing disclose that there was no defect
covered by the foregoing warranty, Aspect shall so advise Spacelabs
and dispose of or return the Aspect Product in accordance with
Spacelabs' instructions and at Spacelabs' expense, and Spacelabs shall
reimburse Aspect for transportation and insurance costs.
9.3 Repair Warranty.
Aspect warrants its repair work and/or replacement parts for the
duration of the original warranty period as set forth in Section 9.1
or at least [**] months, whichever is longer; provided, however, if
the applicable law in any country in which such Aspect Products are
repaired or replaced requires a longer warranty period for such
repaired or replaced items, the applicable warranty period offered by
Aspect shall be increased by the amount necessary to comply with such
laws.
9.4 DISCLAIMER OF WARRANTIES.
THE PROVISIONS OF THE FOREGOING WARRANTIES ARE IN LIEU OF ANY OTHER
WARRANTY, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL,
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INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NONINFRINGEMENT.
10. SERVICE AND SUPPORT
10.1 Installation, Service, and Support.
Subject to the warranty provisions of Section 9, Spacelabs shall be
responsible for providing installation, service (including repair) and
support to its end customers for the Aspect Products Spacelabs sells
to such customers, and, except as otherwise required by the warranty
provisions herein, Spacelabs shall bear all related costs incurred for
labor, parts, or travel to perform such service. Aspect shall make
available world-wide technical and clinical support to Spacelabs
during normal business hours (7AM - 5PM ET).
10.2 Central Repair Service
For the term of this Agreement, Aspect agrees to provide central
repair service (as opposed to field service) to Spacelabs for Aspect
Products sold hereunder. For Aspect Product no longer under warranty,
repair will be charged at Aspect's then current service rate for labor
and materials.
10.3 Training.
Aspect agrees to provide training, without charge to Spacelabs, at
mutually agreed upon times and locations in the United States, Europe,
Asia and Latin America, to a mutually agreed upon number of Spacelabs
personnel prior to the market release of the Spacelabs BISx Module and
BISx Kit. Aspect shall provide additional training from time-to-time
to Spacelabs personnel to keep Spacelabs up to date on product and
clinical applications changes.
10.4 Customer In-service.
Aspect shall provide initial in-service support to Spacelabs customers
within the United States with respect to BIS theory and algorithm, BIS
sensor usage and clinical applications upon request. Spacelabs shall
provide customer training on all other aspects of Spacelabs products.
Spacelabs shall provide training to its customers outside the Unites
States with respect to Aspect Products.
10.5 Service Period.
For a period of seven (7) years following the last delivery to
Spacelabs of the applicable Aspect Product (excluding refurbished
product) ordered by Spacelabs hereunder, Aspect shall use its
reasonable efforts to make available repair service (or at Aspect's
sole discretion, exchange units or replacement parts for the Aspect
Products) for purchase by Spacelabs and third-party users of the
Aspect products at Aspect's then-current prices for such repair
services and exchange units. After expiry of this seven (7) year
period, Aspect may, in its sole discretion, continue to supply repair
services (and/or exchange units for the Aspect Products) subject to
the mutual written agreement of the Parties.
10.6 Service Records.
For a period beginning with the first shipment of BISx Kits from
Aspect to Spacelabs,
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to ten years ten (10) years after the last shipment of new BISx Kits
from Aspect to Spacelabs, Aspect shall maintain a complete record of
all repair activities performed on any Aspect Products received from
Spacelabs or Spacelabs customers for repair. Aspect shall make such
records available for inspection by Spacelabs upon reasonable written
notice.
11. QUALITY ASSURANCE
11.1 Certification Status.
Both parties agree to maintain, as applicable, ISO900x or ISO13485,
European directive 93/42/EEC Annex II ("MDD AX-II") certification
status and compliance with the U.S. Food and Drug Administration's
("FDA") Quality System Regulation ("QSR"), the European Medical Device
Directive ("MDD"), and other appropriate regulations pertinent to the
development, manufacturing and marketing of medical products similar
to the Aspect Products.
11.2 Aspect Product Compliance.
All Aspect Products sold by Aspect under this Agreement shall fully
comply with applicable laws and regulations, including the above
quality requirements, and with the standards set forth in Exhibit F.
11.3 QA and Regulatory Audits.
Aspect shall permit Spacelabs' Quality Assurance department to conduct
a reasonable audit of its facilities at a mutually agreed upon date
after the date of this Agreement for the purpose of approving its
status as an OEM supplier, and reasonable periodic audits thereafter
for the purpose of confirming continuing compliance with applicable
quality and regulatory requirements. Such audits shall be scheduled
with at least thirty (30) days advance notice during normal business
hours and shall not take place more than once per calendar year. All
costs incurred by Spacelabs for such audits shall be the sole
responsibility of Spacelabs.
12. REGULATORY MATTERS.
12.1 Aspect Products.
Aspect shall assume full regulatory responsibility for the Aspect
Products, including obtaining and maintaining all applicable
governmental authorizations and regulatory approvals required to
distribute the BISx Kit. In particular, Aspect shall be responsible
for generating its own Device Master Record for the BISx Kit. The BISx
Device shall be labeled as manufactured by Aspect.
12.2 Spacelabs BISx Module.
Spacelabs shall assume the regulatory responsibility for the Spacelabs
BISx Module and the integrated system with the BISx Kit. Aspect shall
provide commercially reasonable support to Spacelabs as required in
the process of obtaining regulatory approvals by making available to
Spacelabs any required information, data, certificates, or technical
files in the requested formats as requested by the regulatory
authorities. The Spacelabs BISx Module shall be labeled as
manufactured by Spacelabs.
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12.3 Product Complaints and Incident Reporting.
Spacelabs and Aspect shall inform each other (in writing) monthly of
any and all customer complaints that have come to their attention
during the prior month regarding the Spacelabs BISx Module, the BISx
Kit or Aspect BIS Sensors that were used in conjunction with a
Spacelabs Patient Monitoring System and relating to Aspect technology.
Both parties will cooperate and use reasonable efforts to resolve such
customer complaints. Closure of any such customer complaints relating
to the Spacelabs BISx Module will occur when Spacelabs notifies Aspect
that the problem is resolved. Closure of any such customer complaint
relating solely to Aspect Products or Aspect BIS Sensors will occur
when Aspect notifies Spacelabs that the problem is resolved.
Spacelabs and Aspect shall inform each other in writing of all
incidents relating to Aspect Products or the Spacelabs BISx Module,
within 48 hours of making a determination that such event requires
reporting under any applicable regulatory or other governmental
reporting requirements, including without limitation incidents
involving death or serious injury, malfunctions that, if recurrent,
may cause or contribute to death or serious injury or other material
quality problems or concerns; provided, however, for the purposes of
clarity, if such reportable event involves a third party product into
which BIS, a BISx Device or other Aspect Product has been
incorporated, but the cause of reportable incident was some other
aspect or attribute of such third party product, then the notification
requirement in this paragraph shall not apply. Aspect will be
responsible for reporting such incidents to the appropriate regulatory
authority for the BIS Sensors and BISx Devices. Spacelabs will be
responsible for reporting such incidents to the appropriate regulatory
authority for the Spacelabs BISx Module. Both parties shall fully
cooperate with each other as may be necessary to comply with any
reporting obligations regarding such incidents or quality concerns. If
FDA or other authorities contact either party to inquire about or
investigate the Products sold to Spacelabs under this Agreement, the
contacted party, unless required to maintain confidentiality by such
authorities, shall inform the other party immediately thereof. The
parties shall cooperate closely to clear any regulatory issues or
potential regulatory issues promptly.
12.4 Notifications to Spacelabs.
Aspect agrees to promptly inform Spacelabs of any official
observations of the FDA relating to any Aspect Product or the
manufacturing of such Aspect Product as well as Aspect's response to
such findings. Aspect will immediately inform Spacelabs of any Aspect
Product that does not meet the Specification or does not perform as
intended, as well as any Medical Device Report ("MDR") reportable
event of which it becomes aware.
12.5 Recall.
In the event that a corrective action (including notifications or
recalls) is initiated with respect to any Aspect Product, and such
action (i) is required to comply with applicable laws or regulations,
(ii) is initiated by Aspect in its discretion for a reasonable
business purpose or for safety reasons or (iii) is the result of
Aspect's failure to supply Aspect Products that conform in all
material respects to the applicable standards, Aspect shall
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be responsible for the repair or replacement of the Aspect Products
without cost to Spacelabs. Aspect agrees to consult with Spacelabs to
establish a reasonable process for managing the corrective action and
Aspect shall be responsible for all reasonable out-of-pocket
expenditures incurred by Spacelabs if Aspect fails to take such
action. In the event that Aspect or Spacelabs is required to take such
action to comply with applicable laws or regulations or such action is
reasonably necessary for safety and efficacy reasons or for the
failure of the Aspects Products to comply with specifications (other
than minor deviations from specifications) and fails to do so within
10 days of being notified of the need for such action, Spacelabs shall
have the right to take such action and Aspect shall reimburse
Spacelabs for all reasonable out-of-pocket expenditures incurred in
connection with such action by Spacelabs. If it is determined by an
arbitrator that such action was not necessary for safety reasons or
for the failure of Aspect Products to comply with specifications
(other than a minor deviation from such specifications), Spacelabs
will return to Aspect any amounts previously paid to Spacelabs by
Aspect in connection with such action.
12.6 Delegation.
Spacelabs may at its sole discretion delegate some of the obligations
under this Section 12 to its sub-distributors. Notwithstanding
anything to the contrary herein, Spacelabs shall remain responsible
for compliance with this Section 12 even after such delegation.
12.7 Traceability.
Spacelabs agrees to maintain traceability through Aspect serial number
and/or lot code for all Aspect Products shipped to Spacelabs.
13. PRODUCT UPDATES, PRODUCT CHANGES; DISCONTINUED PRODUCTS;
13.1 Product Updates.
Promptly upon release, Aspect shall make available to Spacelabs all
future features and performance improvements to the Aspect Products
and/or Software.
13.2 Product Changes
Aspect shall have the right, at any time and from time to time, to
make substitutions and modifications to Aspect Products, provided that
such substitutions or modifications shall not materially affect form,
fit, function, functional interchangeability or interface capability
or materially negatively affect the reliability, serviceability or
performance of Aspect Products. In the event that any proposed
substitution or modification affects such form, fit, function,
reliability, serviceability, performance, functional
interchangeability or interface capability of an Aspect Product,
Aspect shall give Spacelabs written notice of such proposed
substitution or modification at least ninety (90) days prior to its
taking effect and Spacelabs shall have the right, during such ninety
(90) day period and for ninety (90) days thereafter, to order Aspect
Products without such substitution or modification for delivery up to
ninety (90) days after such substitution or modification takes effect.
Aspect shall provide the appropriate verification and validation
information for evaluating the effect of the change on the BISx Kit.
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13.3 Discontinued Products.
Aspect agrees to notify Spacelabs in writing not less than twelve (12)
months in advance of the discontinuance of any Aspect Products.
Spacelabs shall be able to place orders for at least six (6) months
after receipt of the written notice in any case. In addition,
Spacelabs shall be entitled to determine its lifetime-buy quantities
and place a corresponding last purchase order.
14. OWNERSHIP AND PROTECTION OF RESULTS.
14.1 No Transfer of Ownership.
It is expressly agreed that neither Aspect nor Spacelabs shall
transfer to the other Party ownership of any patent rights, copyrights
or other intellectual property of any kind that either Party owns.
14.2 Models, Patterns, Dies, etc.
The Party paying for the design, development and manufacture of any
models, patterns, dies, molds, jigs, fixtures, and other tools made
for or obtained in connection with this Agreement shall have title
thereto, and possession thereof shall be transferred to such title
holder no later than thirty (30) days after termination of this
Agreement.
15. DOCUMENTATION AND TRAINING.
Aspect agrees to provide Spacelabs with product literature, sales team and
customer training tools, operations and maintenance manuals, and other
information to provide initial training to the Spacelabs sales team to sell
and maintain Aspect Products.
16. CONFIDENTIALITY.
No confidential information disclosed by either Party to the other in
connection with this Agreement shall be disclosed to any person or entity
other than the recipient Party's employees and contractors directly
involved with the recipient Party's use of such information who are bound
by written agreement to protect the confidentiality of such information,
and such information shall otherwise be protected by the recipient Party
from disclosure to others with the same degree of care accorded to its own
confidential information of like importance. In addition, each Party and
its representatives shall use the confidential information only for the
purposes specified under this Agreement and such information shall not be
used for any other purpose without the prior written consent of the
disclosing Party. Both sides should consider as confidential and protect
any information that could reasonably be construed as confidential. This
would include but not be limited to, technical information and
specifications, sales plans including customer names and locations and
product information including new developments and product roadmaps.
Information shall not be subject to this provision if it is or becomes a
matter of public knowledge without the fault of the recipient Party, if it
was a matter of written record in the recipient Party's files prior to
disclosure of it by the other Party, if it was or is received by the
recipient Party from a third person under circumstances permitting its
unrestricted disclosure by the recipient Party, or if it was independently
developed by the recipient Party without reference to the confidential
information. Upon termination of this Agreement, each Party shall promptly
destroy all confidential information of the other Party in
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the possession or control of such Party and all copies thereof, provided
that each Party may retain one copy thereof for archival purposes. The
obligations under this Section 16 shall continue for both Parties for a
period of five (5) years after delivery by Aspect to Spacelabs of the last
Aspect Product under this Agreement. Spacelabs is entitled to transmit
confidential information of Aspect to Spacelabs subsidiaries and affiliated
companies. In such case these subsidiaries and affiliated companies may
only use such information to the same extent as Spacelabs is entitled to
use such information under this Agreement and shall be subject to the terms
of this Section 16. Spacelabs shall be responsible if any of these
subsidiaries and affiliated companies fails to comply with the
confidentiality provisions of this Agreement.
17. INDEMNITIES.
17.1 Indemnification by Aspect
(a) Aspect represents and warrants that it has not granted anywhere
in the world any exclusive licenses or exclusive sublicenses in
the Aspect Products that would prevent it from granting Spacelabs
the licenses set forth in Section 3.2 (Aspect Software License).
Aspect also represents and warrants that it has the right and
authority to engage in the joint development of the Spacelabs
BISx Module and BISx Kit as contemplated hereunder and further,
that to its knowledge, such activity will not infringe upon or
misappropriate any third party's intellectual property rights or
violate the terms of any agreement Aspect has entered into with a
third party.
(b) Aspect will defend at its own expense, and will pay the costs and
damages (including reasonable attorneys fees, other professional
fees and other costs of litigation or settlement) made in
settlement or awarded as a result of, any action brought against
Spacelabs or any of Spacelabs' customers based on an allegation
of infringement or misappropriation with respect to any Aspect
Product, provided Spacelabs shall have promptly provided Aspect
written notice thereof and reasonable cooperation, information,
and assistance in connection therewith, and (ii) Aspect shall
have sole control and authority with respect to the defense,
settlement, or compromise thereof. Should any Aspect Product
become or, in Aspect's opinion, be likely to become the subject
of an injunction preventing its use as contemplated herein,
Aspect may, at its option, (1) procure for Spacelabs the right to
continue using such Aspect Product, (2) replace or modify such
Aspect Product so that they become non-infringing, or, if (1) and
(2) are not reasonably available to Aspect, then (3) terminate
Spacelabs' right to use the allegedly infringing Aspect Product
and, subject to the provisions of Section 23.6 below, shall
compensate Spacelabs for any loss or damages incurred by
Spacelabs as a result of such alleged infringement or
misappropriation or such termination of rights. Aspect shall have
no liability or obligation to Spacelabs hereunder with respect to
any patent, copyright or trade secret infringement or claim
thereof based upon (i) use of the Aspect Product by Spacelabs in
combination with devices or products not provided by Aspect, (ii)
use of the Aspect Product in an application or environment for
which such Aspect Product
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were not designed or contemplated, (iii) modifications,
alteration or enhancements of the Aspect Product not created by
or for Aspect, or (iv) any claims of infringement of a patent,
copyright or trade secret in which Spacelabs or any affiliate of
Spacelabs has an interest.
(c) In the event that any claim is brought against Spacelabs as a
result of personal injuries and/or property damages resulting
from any Aspect Product or that portion of the BISx Kit developed
and/or manufactured by or for Aspect, and provided further that
such claims are a result of the defective design or manufacture
of the Aspect Products or other negligence on the part of Aspect,
and do not arise as a result of the misuse of the Aspect
Products, or the use of the Aspect Products in an application for
which it was not designed by Aspect, where such claim would not
have occurred but for such misuse or use, Aspect agrees that it
shall indemnify and hold Spacelabs and its directors, officers,
employees, representatives and agents harmless from and against
any damages, liabilities, costs and expenses (including
reasonable attorneys' and other professional fees and other costs
of litigation) arising out of such claim, provided that the
procedures set forth in Section 17.3 are followed.
17.2 Indemnification by Spacelabs.
(a) Spacelabs represents and warrants that it has the right and
authority to engage in the development of the Spacelabs BISx
Module and BISx Kit as contemplated hereunder and that to its
knowledge such activity will not infringe upon or misappropriate
any third party's intellectual property rights or violate the
terms of any agreement Spacelabs has entered into with a third
party.
(b) Spacelabs will defend at its own expense, and will pay the costs
and damages (including reasonable attorneys fees, other
professional fees and other costs of litigation or settlement)
made in settlement or awarded as a result of, any action brought
against Aspect based on an allegation of infringement or
misappropriation with respect to any Spacelabs-supplied component
of the Spacelabs BISx Module or BISx Kit.
(c) In the event that any claim is brought against Aspect as a result
of personal injuries and/or property damages resulting from the
Spacelabs BISx Module, and provided further that such claims do
not arise as a result of the defective design or manufacture of
that portion of the Spacelabs BISx Module developed or
manufactured by Aspect or as a result of reliance by Spacelabs
upon faulty information received from Aspect, Spacelabs agrees
that it shall indemnify and hold Aspect and its directors,
officers, employees, representatives and agents harmless from and
against any damages, liabilities, costs and expenses (including
reasonable attorneys' and other professional fees and other costs
of litigation) arising out of such claim, provided that the
procedures set forth in Section 17.3 are followed.
17.3 Indemnification Procedures.
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(a) In the event that any person intends to claim indemnification
pursuant to this Agreement, (an "Indemnitee"), it shall promptly
notify the indemnifying Party (the "Indemnitor") in writing of
such alleged liability, provided that the failure to promptly
notify the Indemnitor shall not relieve the Indemnitor of any
obligation under this Agreement except to the extent such failure
to provide prompt notice adversely impairs the Indemnitor's
ability to defend against the claim, suit or proceeding.
(b) The Indemnitor shall have the sole right to control the defense
and settlement thereof, provided, that (i) the Indemnitor may not
consent to imposition of any obligation or restriction on, or the
admission of any wrongdoing on the part of, the Indemnitee in any
settlement unless mutually agreed among Aspect and Spacelabs (ii)
Indemnitor shall keep Indemnitee fully informed and permit the
Indemnitee to participate (at Indemnitee's expense) as the
Indemnitee may reasonably request and (iii) Indemnitee may,
without affecting its right to indemnity hereunder, defend and
settle any such claim, suit or proceeding if Indemnitor declines
to defend against such claim, suit or proceeding or Files for
Bankruptcy. The Indemnitee shall reasonably cooperate with the
Indemnitor and its legal representatives in the investigation of
any action, claim or liability covered by this Agreement, at the
expense of the Indemnitor.
(c) The Indemnitee shall not, except at its own cost, voluntarily
make any payment or incur any expense with respect to any claim
or suit without the prior written consent of Indemnitor, which
Indemnitor shall not be required to give, provided that the
Indemnitee may, without affecting its right to indemnity
hereunder, defend and settle any such claim, suit or proceeding
if the Indemnitor declines to take responsibility or Files for
Bankruptcy.
18. TRADEMARKS.
18.1 Trademarks.
(a) Ownership.
Spacelabs acknowledges and agrees that, as between Aspect and
Spacelabs, Aspect is the sole and exclusive owner of all right,
title and interest in the trademarks identified on Exhibit E
("Aspect Trademarks"). Aspect acknowledges and agrees that, as
between Aspect and Spacelabs, Spacelabs is the sole and exclusive
owner of all right, title and interest in and to the trademarks
identified on Exhibit E ("Spacelabs Trademarks") (collectively
the "Trademarks"). Each Party recognizes the value of the other
Party's Trademarks and the good will associated with the other
Party's Trademarks. Spacelabs agrees that its use of the Aspect
Trademarks and any good will arising therefrom shall inure to the
benefit of Aspect. Aspect agrees that its use of the Spacelabs
Trademarks and any good will arising therefrom shall inure to the
benefit of Spacelabs. Nothing contained herein shall create, nor
shall be construed as an assignment of, any right, title or
interest in or to the Aspect Trademarks to Spacelabs, or the
Spacelabs Trademarks to Aspect, other than the grant of the
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licenses in Section 3.4; it being acknowledged and agreed that
all other right, title and interest in and to the Aspect
Trademarks is expressly reserved by Aspect and its licensors, and
all other right, title and interest in and to the Spacelabs
Trademarks is expressly reserved by Spacelabs. Each Party shall
keep the other Party's Trademarks free from all liens, mortgages
or other encumbrances. Each Party agrees that it shall not attack
or otherwise challenge the title, validity or any other rights of
the other Party in or to its Trademarks, unless in the context of
a claim for indemnification resulting from an allegation by a
third party of trademark infringement arising from a Party's use
of the other Party's Trademark as permitted hereunder.
(b) Notice.
All Spacelabs BISx Modules or BISx Kits that use the Aspect
Trademarks shall be accompanied, where reasonable and
appropriate, by a proprietary notice consisting of the following
elements:
(i) The statement "[insert trademark(s)] is a trademark(s) of
[or licensed to] Aspect Medical Systems, Inc."
(ii) Spacelabs shall include the "(TM)" or "(R)" symbol, as
instructed by Aspect, after the first prominent use of the
Aspect Trademark in Spacelabs patient monitor related
materials. Spacelabs shall have a period of sixty (60) days
in which to begin to use the "(R)" symbol in replacement of
the "(TM)" symbol upon receiving instructions to do so by
Aspect for all new stock of such materials. Spacelabs may
continue to deliver stocked literature printed before the
change becomes effective.
(c) Quality Standards.
(i) Inspection.
In the event that a Party uses the other Party's Trademarks
as authorized herein, then, upon reasonable notice and
request, the licensee Party will furnish to the licensor
Party samples of the licensee Party's applicable advertising
and promotional materials as necessary to allow the licensor
Party to monitor compliance with this Agreement. In
addition, upon reasonable notice and request, each licensee
Party will permit the licensor Party to examine any products
bearing the licensor Party's Trademarks to verify that such
.products meet the licensor Party's quality control
standards for such products. If such products do not meet
the licensor Party's quality control standards, the licensee
Party shall not distribute such products with the licensor
Party's Trademarks.
(ii) Protection and Infringement.
Each Party agrees to reasonably cooperate with and assist
the other Party, at such other Party's expense, in
obtaining, maintaining, protecting, enforcing and defending
the other Party's proprietary rights in and to its
Trademarks. In the event that either Party learns of any
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infringement, threatened infringement or passing-off of the
other Party's Trademarks, or that any third party claims or
alleges that the other Party's Trademarks infringe the
rights of the third party or are otherwise liable to cause
deception or confusion to the public, the Party obtaining
such information shall notify the other Party giving the
particulars thereof, and if such claims or allegations
relate to this Agreement, the Spacelabs BISx Module, the
BISx Kit or Aspect Products sold hereunder, shall provide
necessary information and assistance reasonably requested by
such other Party (at the requesting Party's cost and
expense) in the event that such other Party decides that
proceedings should be commenced.
(d) Termination.
In addition to the termination rights set forth in Section 20
hereof, in the event that either Party is in material breach of
any provision of this Section 18, the non-breaching Party may,
upon thirty (30) days written notice, terminate the license
granted in Section 3.4 if the breaching Party does not cure such
breach or default within such thirty (30) day period. In addition
to the provisions of Section 18 hereof, upon termination of the
license granted in Section 3.4, or upon termination of this
Agreement, for whatever cause:
(i) Each Party shall immediately cease and desist from any
further use of the other Party's Trademarks and any
trademarks confusingly similar thereto, either directly or
indirectly;
(ii) All rights in the Aspect Trademarks granted to Spacelabs
hereunder shall immediately terminate, and all rights in the
Spacelabs Trademarks granted to Aspect hereunder shall
immediately terminate.
(e) Promotional Claims.
The general form of any promotional claims by Spacelabs regarding
Aspect's Bispectral Index technology and/or the integration of
Aspect's Bispectral Index technology in Spacelabs Patient
Monitors, and the specific form of the use of Aspect's trade
names and Trademarks, and of intended use claims regarding
Aspect's Bispectral Index technology, in promotional material,
advertisement, and/or in written technical literature shall be
subject to review and approval by Aspect prior to its publication
or display, which approval shall not be unreasonably withheld.
The general form of any promotional claims by Aspect regarding
Spacelabs' Patient Monitors or the integration of Aspect's
Bispectral Index technology in Spacelabs Patient Monitors, and
the specific form of the use of Spacelabs' trade names and
Trademarks, and of intended use claims regarding the Spacelabs
BISx Modules, in promotional material, advertisement, and/or in
written technical literature shall be subject to review and
approval by Spacelabs prior to its publication or display, which
approval shall not be unreasonably withheld.
19. EXPORT.
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Spacelabs shall not export, directly or indirectly, Aspect Products
(including when integrated into a Spacelabs BISx Module) or other products,
information or materials provided by Aspect hereunder, to any country for
which the United States requires any export license or other governmental
approval at the time of export without first obtaining such license or
approval. It shall be Spacelabs' responsibility to comply with the latest
United States export regulations, and Spacelabs shall defend and indemnify
Aspect from and against any damages, fines, penalties, assessments,
liabilities, costs and expenses (including reasonable attorneys' fees and
court costs) arising out of any claim that the BISx Kit or other products,
information or materials provided by Aspect hereunder were exported or
otherwise shipped or transported in violation of applicable laws and
regulations.
20. TERM: DEFAULT AND TERMINATION.
20.1 Term and Renewal.
The initial term of this Agreement shall commence on the Effective
Date and shall continue for a period of three (3) years following
introduction of the Spacelabs BISx Module. The term of this Agreement
shall thereafter be renewed automatically for successive twelve (12)
month periods, unless either Party provides written notice of
termination to the other Party at least one hundred eighty (180) days
prior to expiration of the Agreement.
20.2 Termination for Cause.
Material Competitive Features.
Either party may terminate this Agreement if the other Party's
component products do not have material competitive features for
measuring the hypnotic effects of anesthetic and sedative agents on
the brain. In order to exercise its rights under this Section 20.2(a),
a Party must provide six months prior written notice to the other
Party, specifying in reasonable detail the material features or
capabilities that are required. Following receipt of such
notification, the notified Party shall have six calendar months to
include such features in its component products. If at the end of such
six month period, the notified Party is unable to do so, the notifying
Party may terminate the Agreement.
20.3 Events of Default.
The following shall constitute events of default under this Agreement:
(a) if either Party assigns this Agreement or any of its rights or
obligations hereunder without the prior written consent of the
respective other Party, except: (a) as specifically permitted
under this Agreement; or (b) in connection with the sale or other
transfer of such Party's business to which this Agreement relates
(the word "assign" to include, without limiting the generality
thereof, a transfer of a majority interest in the Party) or
(b) if either Party shall neglect or fail to perform or observe any
of its material obligations to the other Party hereunder,
including, without limiting the
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generality thereof, the timely payment of any undisputed sums
due, and such failure is not cured within thirty (30) days after
written notice thereof from the other Party; or
(c) if there is (a) a dissolution, termination of existence,
liquidation, insolvency or business failure of either Party, or
the appointment of a custodian or receiver of any part of either
Party's property, if such appointment is not terminated or
dismissed within thirty (30) days; (b) a composition or an
assignment or trust mortgage for the benefit of creditors by
either Party; (c) the commencement by either Party of any
bankruptcy proceeding under the United States Bankruptcy Code or
any other federal or state bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the
rights of creditors generally; or (d) the commencement against
either Party of any proceeding under the United States Bankruptcy
Code or any other federal or state bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the
rights of creditors generally, which proceeding is not dismissed
within thirty (30) days ("File for Bankruptcy").
20.4 Remedies.
Upon any event of default, and in addition to any other remedies
either Party may have at law or in equity, the non-defaulting Party
may terminate the Agreement, cancel any outstanding Order, refuse to
make or take further Orders or deliveries, and declare all obligations
immediately due and payable. Any such termination or other action
taken by the non-defaulting Party pursuant to this Section 20.4 shall
not relieve the defaulting Party of its obligations hereunder and the
non-defaulting Party shall retain all legal and equitable remedies
after such termination.
21. INSURANCE.
Upon request, Aspect shall provide evidence of product liability, general
liability and property damage insurance against an insurable claim or
claims which might or could arise regarding Aspect Products purchased from
Aspect. Such insurance shall contain a minimum limit of liability for
bodily injury and property damage of not less than 1,000,000 (one million)
US$.
22. DISPUTE RESOLUTION.
22.1 General.
Any dispute, controversy or claim arising out of or relating to this
Agreement or any related agreement or the validity, interpretation,
breach or termination thereof (a "Dispute"), including claims seeking
redress or asserting rights under applicable law, shall be resolved in
accordance with the procedures set forth herein. Until completion of
such procedures, no Party may take any action not contemplated herein
to force a resolution of the Dispute by any judicial or similar
process, except to the limited extent necessary to; (i) avoid
expiration of a claim that might eventually be permitted hereby; or
(ii) obtain interim relief, including injunctive relief, to preserve
the status quo or prevent irreparable harm.
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22.2 Waiver.
In connection with any Dispute, the parties expressly waive and forego
any right to (i) punitive, exemplary, enhanced or other indirect
damages in excess of compensatory damages and (ii) trial by jury.
22.3 Good Faith Negotiations.
Any Dispute relating to this Agreement will be resolved first through
good faith negotiations between appropriate management-level
representatives of each Party having responsibility for the sale or
use of products involved.
22.4 Arbitration.
If within thirty (30) days the parties are unable to resolve the
Dispute through good faith negotiation, a Party may submit the Dispute
for resolution by arbitration pursuant to the Commercial Arbitration
Rules of the American Arbitration Association as in effect on the date
hereof, unless the parties agree to adopt such rules as in effect at
the time of the arbitration. The arbitral tribunal shall be composed
of one arbitrator; and the arbitration shall be conducted in Boston,
Massachusetts. If the resolution of the Dispute is not found within
the terms of this Agreement, the arbitrator shall determine the
Dispute in accordance with the governing law of the Agreement, without
giving effect to any conflict of law rules or other rules that might
render such law inapplicable or unavailable. The prevailing Party in
any arbitration conducted under this Section may, in the discretion of
the arbitrator, be entitled to recover from the other Party (as part
of the arbitral award or order) all or a portion of its reasonable
attorneys' fees and other costs of arbitration.
22.5 Applicable Law.
The law applicable to the validity of this arbitration provision, the
conduct of the arbitration, the challenge to or enforcement of any
arbitral award or order or any other question of arbitration law or
procedure shall be governed exclusively by the Federal Arbitration
Act, 9 U.S.C. sections 1-16; however, the award can be modified or
vacated on grounds cited in the Federal Arbitration Act or, if the
arbitrator's findings of facts are not supported by substantial
evidence or the conclusions of law are erroneous, under the laws of
the Commonwealth of Massachusetts. The place of arbitration shall be
in Boston, Massachusetts. The Parties agree that the federal and state
courts located in the Commonwealth of Massachusetts shall have
non-exclusive jurisdiction over any action brought to enforce this
arbitration provision, and each Party irrevocably submits to the
jurisdiction of said courts. Notwithstanding the foregoing sentence,
either Party may apply to any court of competent jurisdiction,
wherever situated, for enforcement of any judgment on an arbitral
award.
22.6 Time Limit.
Except as time barred under any applicable statute of limitations of
lesser duration, any claim by either Party shall be time-barred unless
the asserting Party commences an arbitration proceeding with respect
to such claim within two (2) years after the Party has actual notice
of the events or circumstances giving rise to the cause of action.
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22.7 Provisional or Interim Judicial Measures.
Notwithstanding any other provision of this Agreement, the Parties
expressly agree that prior to the first meeting of the arbitrator
either Party shall have the right to apply to any state or federal
court in the Commonwealth of Massachusetts or any other court that
would otherwise have jurisdiction, for provisional or interim
measures.
22.8 Consolidated Proceedings.
Each Party hereby consents to a single, consolidated arbitration
proceeding of multiple claims, or claims involving more than two
parties. The prevailing Party or parties in any arbitration conducted
under this paragraph may, in the discretion of the arbitrator, be
entitled to recover from the other Party or parties (as part of the
arbitral award or order) all or a portion of its or their reasonable
attorneys' fees and other reasonable costs of arbitration.
23. GENERAL PROVISIONS.
23.1 Force Majeure.
In the event that either Party is prevented from performing, or is
unable to perform, any of its obligations under this Agreement due to
any act of God, fire, casualty, flood, war, strike, lock out, failure
of public utilities, injunction or any act, exercise, assertion or
requirement of governmental authority, epidemic, destruction of
production facilities, insurrection, labor, equipment, transportation
or energy insufficient to meet manufacturing needs, or any other cause
beyond the reasonable control of the Party invoking this provision,
and if such Party shall have used its best efforts to avoid such
occurrence and minimize its duration and has given prompt written
notice to the other Party, then the affected Party's performance shall
be excused and the time for performance shall be extended for the
period of delay or inability to perform due to such occurrence.
23.2 Publicity.
Neither Party shall originate any publicity, news release or other
public announcement relating to this Agreement or the existence of an
arrangement between the Parties without the prior written approval of
the other Party, except as otherwise required by law.
23.3 Waiver.
The waiver by either Party of a breach or a default of any provision
of this Agreement by the other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provision,
nor shall any delay or omission on the part of either Party to
exercise or avail itself of any right, power or privilege that it has,
or may have hereunder, operate as a waiver of any right, power or
privilege by such Party.
23.4 No Agency.
Nothing contained in this Agreement shall be deemed to constitute
either Party as the agent or representative of the other Party, or
both Parties as joint venturers or partners for any purpose. Neither
Party shall be responsible for the acts or omissions of the other
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Party, and neither Party shall have authority to speak for, represent
or obligate the other Party in any way without prior written authority
from the other Party.
23.5 Survival of Obligations.
All obligations of either Party under Sections 9 (Warranty), 10
(Service and Support), 12 (Regulatory Matters), 12.5 (Recall) 14
(Ownership and Protection of Results), 16 (Confidentiality), 17
(Indemnities), 18 (Trademarks), 22 (Dispute Resolution), and 23.6
(Limitation on Liability) shall survive the expiration or termination
of this Agreement and continue to be enforceable.
23.6 LIMITATION ON LIABILITY.
EXCEPT AS PROVIDED IN SECTION 17, EACH PARTY'S LIABILITY ARISING OUT
OF THE MANUFACTURE, SALE OR SUPPLYING OF PRODUCTS OR THEIR USE OR
DISPOSITION, WHETHER BASED UPON WARRANTY, CONTRACT, TORT OR OTHERWISE,
SHALL NOT EXCEED THE SUM OF ALL AMOUNTS PAID AND PAYABLE BY SPACELABS
TO ASPECT UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR
OTHER INDIRECT DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF
PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES) ARISING OUT OF THE
MANUFACTURE, USE, SALE OR SUPPLYING OF PRODUCTS BY SPACELABS OR
ASPECT.
23.7 Severability.
In the event that any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable because it is invalid or
in conflict with any law of any relevant jurisdiction, the validity of
the remaining provisions shall not be affected and the rights and
obligations of the Parties shall be construed and enforced as if the
Agreement did not contain the particular provisions held to be
unenforceable, unless the stricken provisions affect the basis of the
Agreement.
23.8 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without reference to
conflict of laws principles, and the UN Convention on Contracts for
the International Sale of Goods shall not be applicable.
23.9 Notices.
Any notice or communication with regard to the termination of or
changes to this Agreement from one Party to the other shall be in
writing and either personally delivered, sent via confirmed overnight
delivery, or sent via certified mail, postage prepaid and return
receipt requested addressed, to such other Party at the address of
such Party specified in this Agreement or such other address as either
Party may from time to time designate by notice hereunder.
23.10 Entire Agreement.
This Agreement constitutes the entire agreement between the Parties
for the Products defined herein. No waiver, consent, modification or
change of terms of this Agreement
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shall bind either Party unless in writing signed by both Parties, and
then such waiver, consent, modification or change shall be effective
only in the specific instance and for the specific purpose given.
There are no understandings, agreements, representations or
warranties, expressed or implied, not specified herein regarding this
Agreement or the Aspect Products purchased and/or licensed hereunder.
Only the terms and conditions contained in this Agreement shall govern
the transactions contemplated hereunder, notwithstanding any
additional, different or conflicting terms which may be contained in
any Order or other document provided by one Party to the other.
Failure of either Party to object to provisions contained in any Order
or other document provided by the other Party shall not be construed
as a waiver or modification of the terms and conditions of this
Agreement.
23.11 Headings.
Captions and headings contained in this Agreement have been included
for ease of reference and convenience and shall not be considered in
interpreting or construing this Agreement.
23.12 Exhibits:
The following Exhibits shall be part of this Agreement:
Exhibit A: Aspect Products and Purchase Prices
Exhibit B: Scheduled Order Process
Exhibit C: Specifications: BISx Kit
Exhibit D: Contact Persons/Addresses
Exhibit E: Aspect and Spacelabs Trademarks
Exhibit F: Applicable Standards
23.13 Beneficiaries.
Except for the provisions of Section 17 hereof, which are also for the
benefit of the other persons indemnified, this Agreement is solely for
the benefit of the parties hereto and their respective affiliates,
successors in interest and permitted assigns and shall not confer upon
any other person any remedy, claim, liability, reimbursement or other
right in excess of those existing without reference to this Agreement.
23.14 Assignment.
Neither Party may assign or delegate this Agreement or any rights or
obligations under this Agreement without the prior written consent of
the other, which shall not be unreasonably withheld; provided,
however, that Spacelabs may, without the prior written consent of
Aspect, assign and delegate this Agreement and any or all of its
rights and obligations hereunder to any of its Affiliates, and
provided that either party shall have the right to assign this
Agreement in connection with a sale of the business of such party to
which this Agreement relates.
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IN WITNESS WHEREOF, this Agreement has been duly executed as a sealed instrument
as of the date specified above.
Aspect Medical Systems, Inc. Spacelabs Medical, Inc.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx Xxxxxx
--------------------------------- ------------------------------------
Title: CFO Title: President
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EXHIBIT A
ASPECT PRODUCTS AND PURCHASE PRICES
A) BISX KIT:
ASPECT PART NUMBER SPACELABS PART NUMBER PRODUCT DESCRIPTION UNIT OF MEASURE LIST PRICE
------------------ --------------------- ------------------- --------------- ----------
186-0195-SL 000-0000-00 BISx Kit 1 (one) each $[**]
Volume discounts:
% OF NEW MONITORS BISX KITS PURCHASED (AS A
SHIPPED "BIS READY" % OF TOTAL NEW MONITORS SOLD) SPACELABS PRICE
------------------- ----------------------------- ---------------
<[**]% [**]% $[**]
[**]% $[**]
>[**]% $[**]
[**]% [**]% $[**]
[**]% $[**]
>[**]% $[**]
>[**]% [**]% $[**]
[**]% $[**]
>[**]% $[**]
B) BIS DISPOSABLE SENSORS
ASPECT PART NUMBER SPACELABS PART NUMBER PRODUCT DESCRIPTION UNIT OF MEASURE LIST PRICE
------------------ --------------------- ------------------- --------------- ----------
186-0100 719-0008-00 BIS Standard Sensor Box of 25 $[**]
186-0106 719-0002-00 BIS Quatro Sensor Box of 25 $[**]
186-0200 719-0001-00 BIS Pediatric Sensor Box of 25 $[**]
186-0160 719-0003-00 BIS Extend Sensor Box of 25 $[**]
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i) Volume discounts:
ANNUAL SENSOR PURCHASE VOLUMES SENSOR PRICE
(BOXES OF 25 SENSORS) (PER BOX OF 25 SENSORS)
------------------------------ -----------------------
[**] $[**]
[**] $[**]
[**] $[**]
>[**] $[**]
Volume discount pricing is valid for all disposable BIS Sensors (BIS
Standard Sensor, BIS Quatro Sensor, BIS Extend Sensor and BIS Pediatric
Sensor).
ii) Demonstration sensors:
ASPECT PART NUMBER SPACELABS PART NUMBER PRODUCT DESCRIPTION UNIT OF MEASURE SPACELABS PRICE
------------------ --------------------- ------------------------- --------------- ---------------
186-XXXX xxx-xxxx-xx BIS Quatro Starter Kit Box of 5 $[**]
186-XXXX xxx-xxxx-xx BIS Pediatric Starter Kit Box of 5 $[**]
Demonstration sensors cannot be resold by Spacelabs.
C) BIS SEMI-REUSABLE SENSORS
ASPECT PART NUMBER SPACELABS PART NUMBER PRODUCT DESCRIPTION UNIT OF MEASURE LIST PRICE SPACELABS PRICE
------------------ --------------------- ------------------- --------------------- ---------- ---------------
186-0164 719-0005-00 SRS System Box of 100 plus cable $[**] $[**]
BIS Semi-Reusable Sensors are not for sale or distribution in the United
States.
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D) SPARE PARTS/ACCESSORY PRICES
ASPECT PART NUMBER SPACELABS PART NUMBER ORDERABLE PARTS/PRODUCTS UNIT OF MEASURE ASPECT LIST PRICE SPACELABS PRICE
------------------ --------------------- ------------------------ --------------- ----------------- ----------------------
186-0195-SL 000-0000-00 BISx Kit (replacement) Ea $[**] Current Discount Price
for BISx Kit
186-0126 719-0004-00 PIC+ Cable (replacement) Ea $[**] $[**]
186-0137 719-0009-00 Sensor Simulator Ea $[**] $[**]
E) CALCULATION OF VOLUME DISCOUNT:
For the purpose of calculating the volume discount for a given calendar
year, all BISx Kits and BIS Disposable Sensors shipped during that calendar
year (excluding Demonstration Sensors and Products that are shipped free of
charge) will be included in the total volume discount calculation.
The initial pricing for a given calendar year is based on the total volume
of BISx Kits and BIS disposable sensors purchased in the prior calendar
year. For example, if [**] boxes of BIS disposable sensors were purchased
in year 1, the initial volume pricing level for year 2 will be the [**] box
level.
If a higher volume level of BISx Kits or BIS disposable sensors is achieved
during a given calendar year, the price on purchases made after achieving
the higher volume level will reflect the price associated with the
appropriate volume level achieved. All price adjustments will apply on a
going forward basis. For example, if midway through year 1, [**] boxes of
BIS disposable sensors are purchased, the price on [**] box of BIS
disposable sensors will reflect the next volume break.
F) CURRENCY
United States Dollars
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EXHIBIT B
SCHEDULE ORDER PROCESS
BACKGROUND
The purpose of this Exhibit is to provide a mechanism through which Spacelabs'
inventory of Aspect's Products may be maintained. Spacelabs shall provide a Firm
Order Commitment to purchase Parts from Aspect; Aspect shall commit to maintain
Parts inventory between established Minimum Levels and Maximum Levels.
1. Definitions.
1.1 PART shall mean an item sold by Aspect as is identified by Aspect part
number and Spacelabs part number on the Part Detail Sheet.
1.2 FIRM ORDER COMMITMENT shall mean the quantity of a Part that Spacelabs
commits to purchase from Aspect. Such quantity shall be equal to the
specified gross requirements for a week, as set in a Demand Schedule,
multiplied by the time frame specified in the Part Detail Sheet.
1.3 LONG LEAD TIME COMMITMENT shall mean the amount of long lead time or
raw material components of a Part that Spacelabs commits to purchase
from Aspect. Such Long Lead Time Commitment is shown as a monetary
figure in the Part Detail Sheet.
1.4 FORECASTED DEMAND shall mean Spacelabs' estimate of future demand
based on anticipated and actual customer orders.
1.5 SPACELABS PREMISES shall mean Spacelabs' manufacturing facility,
located at 00000 XX 00xx Xxxxxx, Xxxxxxxx, XX 00000.
1.6 MINIMUM LEVEL shall mean the minimum level of Part inventory that
Aspect must maintain at the Spacelabs Premises, as set in the Part
Detail Sheet.
1.7 MAXIMUM LEVEL shall mean the maximum level of Part inventory that
Aspect may maintain at the Spacelabs Premises, as set in the Part
Detail Sheet.
1.8 OVER SHIPMENT shall mean a delivery that causes the Quantity on Hand
to exceed the agreed Maximum Level.
1.9 QUANTITY ON HAND shall mean the total Part inventory physically
available at the Spacelabs Premises.
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1.10 PART DETAIL SHEET shall mean the information sheet stating Minimum
Levels, Maximum Levels, Part Numbers, Firm Order Commitments, Purchase
Price and Long Lead Time Commitment as is attached hereto and
incorporated herein by this reference.
1.11 DEMAND SCHEDULE IS AS DEFINED IN PARAGRAPH 3 (DEMAND SCHEDULE).
2. Part Purchase Orders.
Purchase Orders will be issued by Spacelabs for each Part covered under
this Agreement. Part Purchase Orders authorize shipment to Spacelabs of the
Parts identified in that Part Purchase Order in accordance with the terms
of this Agreement.
3. Demand Schedule.
Spacelabs shall provide Aspect with a copy of a demand schedule stating,
for the relevant Part, the Quantity on Hand, the Minimum Level and Maximum
Level required as stated in the Part Detail Sheet, and nine months of
Forecasted Demand (the first 8 weeks shown individually, then shown in
monthly blocks thereafter). Such Demand Schedule shall be provided to
Aspect on a weekly basis.
4. Minimum Level Issue.
Aspect agrees to provide at Spacelabs Premises sufficient quantities of
such Part to meet or exceed such Minimum Level within a reasonable period
of time from the provision to Aspect of the Demand Schedule.
5. Maximum Level Issue.
Aspect agrees to provide at Spacelabs Premises sufficient quantities of
such Part not to exceed such Maximum Levels. Spacelabs reserves the right
to reject that amount of the Parts exceeding the Maximum Level and return
the same to Aspect at Aspect's cost, and Aspect agrees to issue a Return
Merchandise Authorization to Spacelabs for such Parts.
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FIRM ORDER LONG LEAD TIME COMMITMENT
COMMITMENT FOR LONG LEAD
SLM P/N, REV. SUPPLIER P/N, REV. MINIMUM LEVEL MAXIMUM LEVEL TIME FRAME PURCHASE PRICE OR RAW COMPONENTS (IF ANY)
------------- ------------------ ------------- ------------- ---------- -------------- --------------------------
1.
2.
3.
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EXHIBIT C
SPECIFICATIONS: BISX KIT
PHYSICAL SPECIFICATIONS
BISX KIT
[**]
BISX INTEGRAL CABLES
[**]
SAFETY SPECIFICATIONS
- The BISx complies with the essential requirements of the Medical Device
Directive 93/42/EEC, as well as IEC 60601-1 and IEC 00000-0-00.
- It is a Type BF applied part. It has internal optical coupling and an
isolation transformer for patient isolation.
- It is protected against damage from defibrillation as long as the sensor is
not located between the defibrillator pads and is resistant to artifact
from electrosurgery.
- United States federal law restricts this device to sale by or on the order
of a physician.
- BISx and cables are latex free.
ENVIRONMENTAL SPECIFICATIONS
WATER RESISTANCE: IEC 529 IPX4
TEMPERATURE RANGE
Operating: 0 to 40 degrees C (32 to 104 degrees F)
Storage: -40 to 70 degrees C (-40 to 158 degrees F)
HUMIDITY
Operating: 10 to 95% RH at 40 degrees C (104 degrees F), non-condensing
Storage: 10 to 95% RH at 60 degrees C (140 degrees F), non-condensing
ALTITUDE RANGE
Operating: Up to 6,130 m (20,000 ft)
Storage: Up to 15,300 m (50,000 ft)
PERFORMANCE SPECIFICATIONS
MEASUREMENT RANGES
[**]
NOISE (EEG WAVEFORM) [**]
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BIS NUMERIC UPDATE FREQUENCY [**]
BANDWIDTH [**]
IMPEDANCE MEASUREMENT RANGE [**]
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EXHIBIT D
CONTACT PERSONS/ADDRESSES
CONTACT PERSONS AND RESPONSIBILITIES AT ASPECT:
EMAIL
PHONE NUMBER
PERSON TITLE RESPONSIBILITY FAX NUMBER
--------------- ----------------------------- ------------------------------ -----------------------
Xxxx Xxxxx Xx. Director, Global Upstream Contract and Marketing xxxxxx@xxxxxxxx.xxx
Marketing
Xxxxx Xxxxxxxxx Director, OEM Engineering Project Manager xxxxxxxxxx@xxxxxxxx.xxx
Xxxxx Xxxxx Director, Quality Systems Quality and Regulatory Matters xxxxxx@xxxxxxxx.xxx
MAILING ADDRESS: Aspect Medical Systems, Inc.
000 Xxxxxxx Xx.
Xxxxxx, XX 00000
XXX
CONTACT PERSONS AND RESPONSIBILITIES AT SPACELABS:
EMAIL
PHONE NUMBER
PERSON TITLE RESPONSIBILITY FAX NUMBER
----------------- -------------------------- ------------------------------ --------------------------
Xxxxx Bild Product Manager, Global Marketing xxxxx.xxxx@xxxx.xxx
Strategic Marketing
Haji Habibi Project Manager, Product Engineering xxxx.xxxxxx@xxxx.xxx
Development
Al Van Houdt Manager RA/QA Quality and Regulatory Matters xx.xxxxxxxx@xxxx.xxx
Xxxxxxxxx Xxxxxxx Director, Marketing xxxxxxxxx.xxxxxxx@xxxx.xxx
Global Strategic Marketing
Xxxx Xxxxxxx Supply Chain Manager Supplier Relationship and xxxx.xxxxxxx@xxxx.xxx
Agreements
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MAILING ADDRESS: Spacelabs Medical, Inc.
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
PHYSICAL ADDRESS: 0000 000xx Xxxxxx XX
Xxxxxxxx, XX 00000
And for official notices to Spacelabs hereunder, a copy of such notice shall be
delivered via telecopier to Spacelabs Legal Department at 000-000-0000.
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EXHIBIT E
ASPECT AND SPACELABS TRADEMARKS
ASPECT TRADEMARKS REFERENCE
----------------- ---------
Aspect(R) Aspect is a registered trademark of Aspect Medical
Systems, Inc
A-2000(TM) A-2000 is a trademark of Aspect Medical Systems, Inc.
Bispectral Index(R) Bispectral is a registered trademark of Aspect Medical
Systems, Inc.
BIS(R) BIS is a registered trademark of Aspect Medical Systems,
Inc.
BISx(TM) BISx is a trademark of Aspect Medical Systems, Inc.
BIS Ready(TM) BIS Ready is a trademark of Aspect Medical Systems, Inc.
(BIS(R) LOGO) BIS logo is a registered trademark of Aspect Medical
Systems, Inc.
(BISX(R) LOGO) BISx logo is a registered trademark of Aspect Medical
Systems,
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SPACELABS TRADEMARKS REFERENCE
-------------------- ---------
(SPACELABS MEDICAL LOGO)
An OSI Systems Company
Spacelabs is a registered trademark of Spacelabs Medical,
Inc.
Ultraview(R) Ultraview is a registered trademark of Spacelabs Medical,
Inc
Ultraview SL(TM) Ultraview SL is a registered trademark of Spacelabs
Medical, Inc
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EXHIBIT F
APPLICABLE STANDARDS
DOMESTIC
UL 60601-1 Medical Electrical Equipment, Part 1: General
Requirements for Safety
AAMI HE74:2001 Human Factors Design Process for Medical Devices
INTERNATIONAL
CSA 22.2 #601.1 Medical Electrical Equipment, Part 1: General
Requirements for Safety
AS/NZS 2064.1/2 Australian EMC Standard: Industrial, Scientific &
Medical Equipment
HARMONIZED EU STANDARDS
EN 475 Medical Devices - Electrically generated alarm signals
EN 1041 Information Supplied by the Manufacturer with Medical
Devices
EN 60601-1 Medical Electrical Equipment, Part 1: General
Requirements for Safety
EN 00000-0-0 Medical Electrical Equipment, Part 1: Electromagnetic
Compatibility
EN 00000-0-0 Medical Electrical Equipment, Part 1: Programmable
Medical Systems
ISO 14971-1 Medical Devices - Risk Management - Part 1:
Application of Risk Analysis
EN 00000-0-00 Medical Electrical Equip., Part 2: Particular
requirements for the safety of electroencephalographs.
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