1
Exhibit 10.3
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
INTERNATIONAL DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of January 21, 1998, by and
between ASPECT MEDICAL SYSTEMS, INC. ("Aspect"), a Delaware, U.S.A. corporation
having offices at 0 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, U.S.A.,
Attention: X. Xxxxxxxxxxxx Eagle, Telecopy No.: 0-000-000-0000, and NIHON
KOHDEN CORPORATION ("NK"), a Japanese company having offices at 00-0
Xxxxxxxxxxx, 0-xxxxx, Xxxxxxxx-xx, Xxxxx 000 Xxxxx, Attention: Xxxxxx
Xxxxxxxxx, Telecopy No.: 00-0-0000-0000.
WITNESSETH:
In consideration of the mutual covenants and conditions herein
contained, and intending to be legally bound hereby, Aspect and NK (the
"Parties") mutually agree as follows:
1. PRODUCTS AND TERRITORY
(a) Aspect hereby appoints NK on an exclusive basis (except as provided in
(i) below) as its sole distributor in Japan (the "Territory") for the products
listed on Exhibit A hereto (the "Products") during the term of this Agreement;
PROVIDED, HOWEVER, that: (i) NK acknowledges that Aspect has an existing
bispectral index ("BIS") module license and sensor distribution arrangement with
SpaceLabs Medical, Inc. ("SMI"); and (ii) if any non-Japanese patient monitoring
companies other than SMI develop a bispectral index ("BIS") module for the
Japanese market, NK shall supply BIS sensors (as described in Exhibit A hereto)
to such companies' distributors (including such companies' branches and
Affiliates) in the Territory at a reasonable price. If such non-Japanese patient
monitoring companies' distributor in the Territory prefers to purchase BIS
sensors from such non-Japanese patient monitoring companies out of Japan, they
may do so, provided, however, that Aspect shall not directly sell BIS sensors to
such companies' distributors in Japan.
(b) NK shall not solicit orders for any Product from any prospective
purchaser outside the Territory. If NK receives an order for any Product from a
prospective purchaser outside the Territory, NK shall immediately refer that
order to Aspect. NK shall not accept any such orders. NK may not deliver or
tender (or cause to be delivered or tendered) any Product outside of the
Territory. NK shall not sell any Product to a purchaser in the Territory if NK
knows or has reason to believe that such purchaser intends to remove that
Product from the Territory. If Aspect receives any order or inquiry for any
Product from a prospective purchaser in the Territory, Aspect shall immediately
refer such order or inquiry to NK.
2
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
2. PRICES AND PAYMENT.
(a) NK shall order Products from Aspect by submitting a written purchaser
order identifying the Products ordered, requested delivery date(s) and any
export/import information required to enable Aspect to fill the order. All
orders for Products are subject to written acceptance by Aspect's Controller.
(b) If a purchase order is accepted in accordance with Section 2(a) above,
the transfer prices for Products covered by such purchase order shall be as
follows:
(i) FOR MONITORS:
(A) the transfer price for demonstration units of the
A-1050 monitor shall be US[**], but such units may
not be resold;
(B) prior to introduction of the A-2000 monitor in the
Territory, the transfer price for A-1050 monitors
will be US[**]; after introduction of the A-2000
monitor in the Territory (which will occur no later
than one year after the introduction of the A-2000
monitor in the United States), the transfer price for
the A-1050 monitor shall be reevaluated by the
Parties;
(C) the transfer price for the A-2000 monitor shall be
set by Aspect at such time as it is introduced in the
Territory. Aspect agrees that the transfer price for
the A-2000 will be no more than US[**];
(D) Aspect shall extend volume discounts for monitor
sales when hospital customers agree to purchase more
than one monitor at the same time. To administer this
provision, NK shall inform Aspect from time to time
(but no less frequently than quarterly) of the names,
addresses, and key contacts of hospitals purchasing
monitors. In the event a hospital purchases more than
one monitor at the same time, Aspect will provide NK
a credit applicable to NK's next monitor purchase
from Aspect. These volume discounts shall be as
follows:
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
Percentage
Volume Purchased by a Specific Hospital Discount
--------------------------------------- ----------
[**] monitors [**]
[**] monitors [**]
[**] monitors [**]
[**] monitors [**]
(E) In addition, and in its discretion, Aspect shall
consider, at NK's request, whether to provide a
volume discount for hospitals that purchase more than
one monitor at different times (E.G., hospital
purchases one monitor and then agrees to purchase two
more the following month)
(ii) FOR SENSORS AND OTHER ACCESSORIES:
(A) The transfer price for BIS sensors shall be US[**],
except where BIS sensors are being used for training,
demonstrations and customer evaluations, in which
case the transfer price shall be US[**]. Transfer
prices for accessories are listed in Exhibit B
attached hereto; and
(B) During the first 12 month after the date on which the
Japanese Ministry of Health and Welfare ("MHW")
approves the A-1050 monitor (the "MHW Approval Date"
and such 12-month period hereafter referred to as a
"Contract Year"), NK shall be granted a discount of
[**] for all BIS sensor purchases in excess of [**].
Thereafter, the Parties shall discuss the basis for
additional sensor volume discounts.
Aspect's transfer prices shall be FCA (FREE CARRIER) Natick, Massachusetts,
U.S.A. Notwithstanding anything contained in this Agreement to the contrary,
starting with the second (2nd) Contract Year, Aspect may change those transfer
prices; PROVIDED, HOWEVER, that: (i) such change may be made only once a year
effective as of the first day of April with the prior written notice to be given
by Aspect no later than the last day of December of the preceding year, after
consulting with NK; (ii) the annual increase shall be[**], except that,
effective the first day of second April after the introduction of the A-2000 in
the Territory, Aspect reserves the right to increase the transfer price of the
A-1050 by up to[**], after consulting with NK; and (iii) no price
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change shall affect purchase orders offered by NK and accepted by Aspect prior
to the date such price change becomes effective.
(c) NK shall be free to establish its own pricing for Products which it
resells. NK shall notify Aspect of its list prices and average selling prices to
its customers as in effect from time to time.
(d) The ultimate shipment of orders to NK shall be subject to the right and
ability of Aspect to make such sales, and obtain required licenses and permits,
under all decrees, statutes, rules and regulations of the government of the
United States and agencies or instrumentalities thereof presently in effect or
which may be in effect hereafter.
(e) NK hereby agrees: (i) to assist Aspect in obtaining any such required
licenses or permits by supplying such documentation or information as may be
requested by Aspect; (ii) to comply with such decrees, statutes, rules and
regulations of the government of the United States and agencies or
instrumentalities thereof; (iii) to maintain the necessary records to comply
with such decrees, statues, rules and regulations; (iv) to obtain all Japanese
governmental approvals and licenses necessary to import the Products into the
Territory; (v) not to sell, transfer or otherwise dispose of Products in
violation of the export laws of the United States; and (vi) to indemnify and
hold harmless Aspect from any and all fines, damages, losses, costs and expenses
(including reasonable attorneys' fees) incurred by Aspect as a result of any
breach of this Section 2(e) by NK.
(f) Unless NK requests otherwise, all Products ordered by NK shall be
packed for shipment and storage in accordance with Aspect's standard commercial
practices. It is NK's obligation to notify Aspect of any special packaging
requirements (which shall be at NK's expense). Aspect shall deliver Products
into the possession of a common carrier designated by NK in Natick,
Massachusetts, U.S.A. Risk of loss and damage to a Product shall pass to NK upon
the delivery of such Products to the common carrier designated by NK. If NK does
not designate a common carrier by the specified delivery date, then Aspect may
do so on NK's behalf. All claims for non-conforming shipments must be made in
writing to Aspect within ten days of the passing of risk of loss and damage.
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
(g) DELIVERY TIMES AND PAYMENT FOR PRODUCTS
(i) Within fifteen (15) days after the MHW Approval Date, but in
no event later than July 1, 1998 (unless through no fault of NK, the MHW
Approval Date has been delayed), NK shall pay Aspect US[**] as pre-payment for
the first 50 A-1050 monitors to be purchased by NK pursuant to this Agreement.
Within 90 days after making such payment, NK will deliver a purchase order to
Aspect for 50 monitors at a price of US[**]. Aspect agrees to deliver those
monitors FCA (FREE CARRIER) Natick, Massachusetts, U.S.A. to NK in accordance
with a delivery schedule to be agreed upon by the Parties, such that all of the
50 prepaid monitors are delivered to NK within six months after the MHW
Approval Date. In the event Aspect is unable to deliver those 50 monitors
pursuant to such schedule, Aspect agrees to refund to NK the prepayments for
those monitors it is unable to deliver, until such time as those monitors are
delivered.
(ii) NK shall pay Aspect an additional US[**] as pre-payment for
the second group of 50 A-1050 and/or A-2000 monitors to be purchased by NK
pursuant to this Agreement. Such additional pre-payment shall be paid to Aspect
on the earlier of: (A) the date on which the first 50 monitors have been
resold by NK; or (B) the end of the first (1st) Contract Year. NK shall deliver
a purchase order to Aspect for these second 50 monitors at price of US[**] at
such time. Aspect agrees to deliver those monitors FCA (FREE CARRIER) Natick,
Massachusetts, U.S.A. to NK in accordance with a delivery schedule to be agreed
upon by the Parties, such that all of the second 50 prepaid monitors are
delivered to NK within six months after receiving this purchase order. In the
event Aspect is unable to deliver that second group of 50 monitors pursuant to
such schedule, Aspect agrees to refund to NK the prepayments for those monitors
it is unable to deliver, until such time as the monitors are delivered.
(iii) For all other purchase orders of Products, Aspect agrees to
deliver such Products within 90 days after accepting such orders. A purchase
order placed by NK shall be deemed accepted by Aspect, unless notified in
writing to the contrary within ten (10) days after Aspect receives it.
(iv) For any Product not pre-paid in accordance with Section
2(g)(i) and (ii) above, all amounts due and payable with respect to such Product
delivered by Aspect in accordance with Section 2(f) hereof shall be paid in full
within 30 days after the date of Aspect's invoice therefor. All such amounts
shall be paid in U.S. Dollars by wire transfer, to such bank or account as
Aspect may from time to time designate in writing. All costs incurred in
connection with such wire transfer shall be the
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responsibility of NK. Whenever any amount hereunder is due on a day which is not
a day on which banks in Natick, Massachusetts, U.S.A. are open for business (a
"Business Day"), such amount shall be paid on the next such Business Day.
Amounts hereunder shall be considered to be paid as of the day on which funds
are received by Aspect's bank. No part of any amount payable to Aspect hereunder
may be reduced due to any counterclaim, set-off, adjustment or other right which
NK might have or assert against Aspect, any other party or otherwise.
(h) All amounts due and owing to Aspect hereunder but not paid by NK on the
due date thereof shall bear interest (in U.S. Dollars) at the rate 18 per cent
per annum. Such interest shall accrue on the balance of unpaid amounts from time
to time outstanding from the date on which portions of such amounts become due
and owing until payment thereof in full.
(i) In the event of any discrepancy between any purchase order accepted by
Aspect and this Agreement, the terms of this Agreement shall govern.
3. NK'S OTHER OBLIGATIONS
(a) NK covenants that all of its activities under or pursuant to this
Agreement shall comply with all applicable laws, rules and regulations. NK shall
be responsible for obtaining all licenses, permits and approvals which are
necessary or advisable for the importation and sale of the Products in the
Territory and for the performance of its duties hereunder; PROVIDED, HOWEVER,
that NK shall not be responsible for obtaining, and shall not obtain, an Import
Approval (I.E., Xxxxx Xxxxxx) for any Product. For each Product for which the
approval of the MHW is required (I.E., for which a Xxxxxx is necessary), Aspect
shall obtain a Foreign Manufacturing Approval (I.E., Gaikoku Xxxxx Xxxxxx) and
NK shall be Aspect's In-Country Caretaker (I.E., Kokunai Kanrinin, as this term
is defined in 19-2 of Japan's Pharmaceutical Affairs Law). NK shall develop and
submit to the MHW (in Aspect's name and on Aspect's behalf) the application
dossier which is necessary for Aspect to obtain each such Foreign Manufacturing
Approval. NK shall use its best efforts to ensure that each such application is
submitted to and approved by the MHW at the earliest possible time. Except as
specifically provided for in Article 4 hereof, NK shall be responsible for all
costs and expenses related to the development, submission and approval of all
such applications.
(b) NK shall pay all of its expense, including without limitation all
travel, lodging and entertainment expenses, incurred in connection with its
activities hereunder, except as otherwise provided herein and/or agreed between
the Parties. Aspect shall not reimburse NK for any of those expenses.
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
(c) NK shall translate, at its own expense, all user and technical manuals
and advertising and marketing information with respect to the Products into
Japanese and provide Aspect with copies of all such materials. NK and Aspect
shall jointly own all copyrights in all translations. Aspect shall not be liable
for translation errors made by NK or at NK's direction or for the
non-conformance of such translations with the laws and regulations in force from
time to time in the Territory. NK shall indemnify and hold Aspect harmless to
the extent that a third party brings claims against Aspect based on such errors
or non-conformance.
(d) NK shall provide Aspect with written quarterly reports, which shall
include business trends, production planning of NK's primary customers, market
forecasts and other reports requested by Aspect.
(e) NK shall promptly give Aspect written notice of the MHW Approval Date.
(f) NK confirms that it has not previously, directly or indirectly,
marketed or manufactured monitoring equipment, either as stand-alone monitors
or as modules for monitors, which were designed to monitor the depth of
anesthesia. NK confirms that it has not previously, directly or indirectly,
developed monitoring equipment, either as stand-alone monitors or as modules
for monitors, which was designed to: (i) monitor the depth or effects of
anesthesia being administrated to patients; and (ii) indicate any index of the
depth or effects of anesthesia to assist anesthesiologists to evaluate the
depth or effects of anesthesia using EEG (electroencephalogram). Until the
first (1st) anniversary of the termination or expiration of this Agreement, as
the case may be, NK shall not, directly or indirectly, develop, market or
manufacture monitoring equipment, either as stand-alone monitors or as modules
for monitors which is designed to [**] [**]; PROVIDED, HOWEVER, that: [**] at
any time, [**] at any time, [**] after the expiration or termination of this
Agreement [**]. Specifically, it will [**}, subject to the terms and conditions
of this Section 3(f).
(g) NK agrees that any publicity or advertising which shall be released by
it in which Aspect is identified in connection with the Products shall be in
accordance with the terms of this Agreement and with any information or data
which Aspect has furnished in connection with this Agreement. Copies of all such
publicity and advertising shall be forwarded promptly to Aspect.
(h) NK may not customize, modify or have customized or modified any Product
unless it obtains the prior written consent of Aspect, which consent may be
withheld in the sole discretion of Aspect. Any unauthorized customizing or
modification of any Product by NK or any third party shall relieve Aspect from
any obligation it would otherwise have had with respect to such Product under
the warranties described in Exhibit C attached hereto and made a part hereof.
(i) NK shall engage in the market development activities described in its
proposal dated July 1997 (a copy of which is attached as Exhibit D hereto),
including without limitation participation in trade shows, advertising,
sponsorship of BIS lectures, establishing dedicated marketing/sales/and clinical
specialists, supporting BIS clinical investigators in Japan, and paying for the
translation of sales materials and users manuals required to make the Product
suitable for the use in the Territory.
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(j) The Products include circuitry and software programs in binary code
form which are designed for use with such Products (the "Circuitry and
Software"). Aspect hereby grants to NK a non-exclusive and non-transferable
license, without the right to sublicense (except to purchasers of such
Products), in the Territory during the term of this Agreement to use the
Circuitry, the Software and related documentation provided by Aspect (the
"Documentation") solely in connection with operation of the Products. NK shall
not disclosure, furnish, transfer or otherwise make available the Circuitry, the
Software, the Documentation or any portion thereof in any form to any third
party (other than to a purchaser of the Products for use solely in connection
with the operation of the Products) and shall not duplicate the Circuitry, the
Software, the Documentation or any part thereof. Title to and ownership of and
all proprietary rights in or related to the Circuitry, the Software, the
Documentation and all partial or complete copies thereof shall at all times
remain with Aspect or its licensor(s). This Agreement shall not be construed as
a sale of any rights in the Circuitry, the Software, the Documentation, any
copies thereof or any part thereof. All references in this Agreement to sale,
resale or purchase of the Products, or references of like effect, shall, with
respect to the Circuitry, the Software and the Documentation mean licenses or
sublicenses of the Circuitry, the Software and the Documentation pursuant to
this Section 3(j). Distributor shall not disassemble, decompile or reverse
engineer the Circuitry, the Software or any part thereof. NK shall retain and
shall not alter or obscure any notices, markings or other insignia which are
affixed to the Software, the Documentation or any part thereof at the time of
delivery of such Software or such Documentation.
(k) NK shall bear all expenses incurred in connection with obtaining new
reimbursement authorization for BIS monitoring.
4. ASPECT'S OBLIGATIONS
(a) Aspect shall develop and host up to three (3) three-day sales and BIS
training programs in the United States for key marketing/sales/and clinical
specialist personnel of NK. In addition, Aspect agrees to offer one or two
technical training programs of up to three days each in the United States for NK
technical service representatives. Such programs shall be scheduled at dates
that are mutually acceptable to the Parties (but in no event later than June 30,
1999). The travel, lodging and related costs of NK personnel attending these
programs in the United States shall be borne by NK.
(b) From time to time, Aspect personnel or advisers scheduled to travel to
Japan shall make themselves available to provide additional training for NK
personnel in Japan. The travel, lodging and related costs of Aspect personnel in
connection with such visits shall be borne by Aspect.
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(c) All reasonable costs of any new clinical studies required to obtain
marketing approvals for A-1050 and A-2000 monitors as EEG and BIS monitors will
be shared equally by the Parties. To defray its share of the cost of such
clinical studies, Aspect shall provide, free of charge, all monitors and BIS
sensors reasonably needed to performance such clinical studies. NK shall bear
all other costs of such clinical studies; PROVIDED, HOWEVER, that the total cost
of such clinical studies shall be divided equally between the Parties. The
Parties shall jointly develop strategies and acceptable timelines for these
submissions.
(d) Aspect shall provide NK with all relevant clinical trial data used in
comparable submissions by Aspect to the U.S. Food and Drug Administration.
(e) Aspect shall provide NK with copies of all marketing, sales, and
promotional materials developed by Aspect with respect to the Products for the
U.S. market to the extent such materials may be useful for NK's introduction of
the Products in the Territory.
(f) In the event that Aspect modifies, alters, changes or discontinues any
Product, Aspect shall provide NK with at least four (4) months prior written
notice.
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.
(g) Aspect shall (i) fully comply with any applicable law, regulation and
rule of the government of the United States and agencies or instrumentalities
thereof; (ii) maintain all U.S. governmental approvals and licenses necessary to
produce and export Products; and (iii) indemnify and hold harmless NK from
reasonable costs and damages actually incurred by NK as a result of any breach
of this Section 4(g) by Aspect.
(h) Aspect shall immediately provide NK with a written notice upon Aspect
becoming aware of the occurrence of any of the following events: (i) Aspect
recalls any Product, or ceases or suspends the sale of any Product due to any
problem which relates to such Product's efficacy and patient safety, in any
country outside Territory; (ii) any defect of any Product, which relates to such
Product's efficacy or patient safety, is published, reported or made known to
the public by any third party, or found by Aspect; or (iii) any Product
contributed to or caused a death or serious injury, or any Product malfunctioned
and if that malfunction occurred again, it would be likely to contribute or
cause a death or serious injury.
5. RELATIONSHIP OF THE PARTIES.
(a) NK shall be considered to be an independent contractor. The
relationship between Aspect and NK shall not be construed to be that of employer
and employee, nor to constitute a partnership, joint venture or agency of any
kind. Neither Party shall have any right to enter into any contracts or
commitments in the name of, or on behalf of, the other Party, or to bind the
other Party in any respect whatsoever.
(b) NK shall not obligate or purport to obligate Aspect by issuing or
making any affirmations, representations, warranties or guaranties with respect
to Products to any third party, other than the warranties described in Exhibit C
hereto.
6. MINIMUM PURCHASE REQUIREMENTS.
(a) NK shall purchase a sufficient amount of Products from Aspect so as to
meet or exceed both the minimum purchase requirement for monitors set forth in
Section 6(a)(i) below and the minimum purchase requirement for sensors set forth
in Section 6(a)(ii) below.
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
(i) PURCHASES OF MONITORS:
(A) For the first (1st) Contract Year, NK's minimum
purchase requirement shall be [**].
(B) For the second (2nd) Contract Year, NK's minimum
purchase requirement shall be [**].
(C) For the third (3rd) Contract Year, NK's minimum
purchase requirement shall be [**].
For the purposes of this provision, a "purchase" of monitors within a specified
time period shall mean paying Aspect for such monitors on or before the last day
of such period.
(ii) PURCHASES OF SENSORS. After MHW Approval Date, NK's minimum
purchase of sensors from Aspect per year shall be[**] for each monitor resold to
NK's customers. For the purpose of this provision, such one year period for the
minimum purchase of sensors for each monitor shall separately commence on the
first day of the month following the month when NK resells such monitor to NK's
customers. To administer this provision, NK shall inform Aspect from time to
time (but no less frequently than quarterly) of the names and addresses of
hospitals purchasing monitors. The sensors purchased by NK at US[**] under
Section 2(b)(ii) herein shall not be counted toward this minimum purchase of
sensors. For the purpose of this provision, a "purchase" of sensors within a
Contract Year shall mean paying Aspect for such sensors on or before the last
day of such Contract Year.
(b) For the purposes of determining Aspect's A-1050 monitor and A-2000
monitor sales in the United States during the relevant periods, monitors that
are placed by Aspect free-of-charge for any reason shall not be considered a
sale. Aspect hereby gives NK the right to audit Aspect's reports of monitor
sales in a reasonable manner to confirm the accuracy of such reports.
(c) Failure to meet either of the minimum purchase requirements described
in Sections 6(a)(i) and (ii) above shall constitute a material breach of this
Agreement for the purposes of Section 11(a) below. Termination shall be the only
consequence of NK failing to satisfy either of these minimum purchase
requirements.
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7. TRADEMARKS, SERVICE MARKS AND TRADE NAMES.
(a) NK may use Aspect's trademarks, service marks and trade names listed in
Exhibit E hereto (the "Trademarks") on a non-exclusive basis in the Territory
only for the duration of this Agreement and solely for display or advertising
purposes in connection with selling and distributing the Products in accordance
with this Agreement. NK shall not at any time do or permit any act to be done
which may in any way impair the rights of Aspect in the Trademarks.
(b) In order to comply with Aspect's quality control standards, NK shall:
(i) use the Trademarks in compliance with all relevant laws and regulations;
(ii) accord Aspect the right to inspect during normal business hours, without
prior advance notice, NK's facilities used in connection with efforts to sell
Products in order to confirm that NK's use of such Trademarks is in compliance
with this Section; and (iii) not modify any of the Trademarks in any way and not
use any of the Trademarks on or in connection with any goods or services other
than the Products.
8. LIMITED WARRANTY.
(a) Aspect makes the warranties set forth in Exhibit C hereto. Under no
circumstances shall the warranties set forth in Exhibit C apply to any Product
which has been customized, modified, damaged or misused by NK or any third party
without Aspect's authorization. NK's sole remedy for a non-conforming Product
is, at Aspect's election, the repair or replacement of such Product.
(b) THE PROVISIONS OF THE FOREGOING WARRANTIES ARE IN LIEU OF ANY OTHER
WARRANTY, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL (INCLUDING ANY WARRANTY OF
MERCHANT ABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.
9. INDEMNIFICATIONS.
(a) NK hereby agrees to indemnify, defend and hold harmless Aspect, its
Affiliates and all officers, directors, employees and agents thereof from all
liabilities, claims, damages, losses, costs, expenses, demands, suits and
actions (including without limitation attorneys' fees, expenses and settlement
costs) (collectively, "Damages") arising out of: (i) NK's failure to comply with
relevant laws and regulations; and (ii) NK's making representations or
warranties which are not authorized by Aspect hereunder.
(b) Aspect hereby agrees to indemnify, defend and hold harmless NK, its
Affiliates and all officers, directors, employees and agents thereof from all
Damages arising out of: (i) NK's selling of the Products infringing on the
intellectual property
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rights of third parties; or (ii) personal injuries and/or property damages
resulting from the Products; PROVIDED, HOWEVER, that:
(i) Aspect shall have no obligation for any claim of infringement
arising from: (i) any combination by NK of the Products with any other product
not supplied or approved in writing by Aspect, where such infringement would not
have occurred but for such combination; (ii) the adaptation or modification of
the Products not performed or not authorized by Aspect, where such infringement
would not have occurred but for such adaptation or modification; (iii) the
misuse of the Products or the use of the Products in an application for which
they were not designed, where such infringement would not have occurred but for
such use or misuse, unless instructed or authorized by Aspect; or (iv) a claim
based on intellectual property rights owned by NK or any of its Affiliates.
(ii) In the event that any of the Products are held in a suit or
proceeding to infringe any intellectual property rights of a third party, and
the use of such Products is enjoined or Aspect reasonably believes that it is
likely to be found to infringe or likely to be enjoined, Aspect shall, at its
sole cost and expense, either (i) procure for NK the right to continue selling
such Products, or (ii) replace such Products with non-infringing Products of
equivalent functionality. If neither (i) or (ii) are practicable, either Party
may terminate this Agreement, effective immediately, upon giving the other party
written notice. Upon such termination, Aspect shall refund to NK any unused
portions of the prepayments made under Section 2(g)(i) and (ii) above.
(iii) This Section 9(b) constitutes NK's exclusive remedy in the
event that the Products infringe on the intellectual property rights of third
parties.
(c) The Party benefitting from any indemnity hereunder (the "indemnified
party") hereby agrees that: (A) the other Party (the "indemnifying Party") shall
have sole control and authority with respect to the defense or settlement of any
such claim; and (B) the indemnified Party and its Affiliates, officers,
directors, employees and agents thereof shall cooperate fully with the
indemnifying Party, at the indemnifying Party's sole cost and expense, in the
defense of any such claim. Any settlement of any such claims that imposes any
liability or limitation on the indemnifying Party shall not be entered into
without the prior written consent of the indemnifying Party.
(d) In the event a claim is based partially on an indemnified claim
described in Sections 9(a) and/or 9(b) above and partially on a non-indemnified
claim, or is based partially on a claim described in Section 9(a) above and
partially on a claim described in Section 9(b) above, any payments and
reasonable attorney fees incurred in connection with such claims are to be
apportioned between the Parties in accordance with the degree of cause
attributable to each Party.
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10. LIMITATIONS OF LIABILITY.
(a) EXCEPT AS PROVIDED IN SECTION 9 HEREIN, ASPECT'S LIABILITY ARISING OUT
OF THE MANUFACTURE, SALE OR SUPPLYING OF THE PRODUCTS OR THEIR USE OR
DISPOSITION, WHETHER BASED UPON WARRANTY, CONTRACT, TORT OR OTHERWISE, SHALL NOT
EXCEED THE ACTUAL PURCHASE PRICE PAID BY NK FOR THE PRODUCTS.
(b) IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
LOSS OF PROFITS OR LOSS OF USE DAMAGES) ARISING OUT OF THE MANUFACTURE, SALE OR
SUPPLYING OF THE PRODUCTS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR LOSSES.
11. TERMINATION AND TERM.
(a) Upon the occurrence of a material breach or default as to any
obligation hereunder by either party and the failure of the breaching party to
promptly pursue (within thirty (30) days after receiving written notice thereof
from the non-breaching party) a reasonable remedy designed to cure (in the
reasonable judgment of the non- breaching party) such material breach or
default, this Agreement may be terminated by the non-breaching party by giving
written notice of termination to the breaching party, such termination being
immediately effective upon the giving of such notice of termination.
(b) The initial term of this Agreement shall begin on the date first
indicated above and shall (unless terminated earlier pursuant to the terms of
Section 11(a) above) expire at the end of the third (3rd) Contract Year or any
renewal period. The term of this Agreement shall be automatically renewed for
additional periods of one (1) Contract Year each unless either Party gives the
other Party a written notice not to renew this Agreement at least three (3)
months before the expiration of the original term or any such renewal of this
Agreement. If such three (3) months notice has not been given, then both Parties
shall agree in writing on mutually acceptable terms for such renewed Contract
Year.
(c) Upon termination or expiration of this Agreement, neither party shall
have any obligation to the other party, or to any employee of the other party,
for compensation or for damages of any kind, whether on account of the loss by
the other party or such employee of present or prospective sales, investments,
compensation, goodwill or otherwise. Each party, for itself and on behalf of
each of its employees, hereby waives any rights which may be granted to it or
them under the laws and regulations of the Territory or otherwise which are not
granted to it or them by this Agreement. Each party hereby indemnifies and holds
the other party harmless from and against
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any and all claims, costs, damages and liabilities whatsoever asserted by any of
its employees, agents or representatives under any applicable termination,
labor, social security or other similar laws or regulations.
(d) Notwithstanding Section 11(c) above or any other provision of this
Agreement, termination of this Agreement shall not affect the obligation of NK
to pay Aspect all amounts owing or to become owing as a result of Products
delivered on or before the date of such termination, as well as interest thereon
to the extent any such amounts are paid after the date they became or will
become due pursuant to this Agreement.
(e) Notwithstanding anything else in this Agreement to the contrary, the
parties agree that Sections 2(e)(vi), 3(c) and (f), 8, 9, 10, 11(c), (d) and
(e), 12 and 13 shall survive the termination or expiration of this Agreement, as
the case may be.
(f) Before or upon termination or expiration of this Agreement, the Parties
shall discuss the rights and obligations of the Parties after such termination
regarding NK's inventories of Products not resold to any customers at the time
of such termination or expiration (including NK's right to sell, or Aspect's
obligation to repurchase, such inventories), and regarding the after-service for
Products resold to the customers in the Territory by NK before such termination
or expiration (including Aspect's responsibility for taking over such
after-service or for supplying NK with any parts that are necessary for such
after-service).
(g) After termination or expiration of this Agreement, Aspect or its
designee shall continue to supply NK with BIS sensors to use with BIS monitors
sold by NK before such termination or expiration.
12. CONFIDENTIALITY MAINTAINED.
(a) Each Party (the "disclosing Party") has a proprietary interest in
information which it discloses to the other Party (the "receiving Party"),
whether in connection with this Agreement or otherwise, which is (i) a trade
secret, confidential or proprietary information, (ii) not publicly known, and
(iii) annotated by a legend, stamp or other written identification as
confidential or proprietary information, or if disclosed orally, is identified
as confidential or proprietary by a written instrument within 30 days of such
disclosure (hereinafter referred to as "Proprietary Information"). The receiving
Party shall disclose the Proprietary Information of the disclosing Party only to
those of its agents and employees to whom it is necessary in order properly to
carry out their duties as limited by the terms and conditions hereof. Both
during and after the term of this Agreement, all disclosures by the receiving
Party to its agents and employees shall be held in strict confidence by such
agents and employees. During and after the term of this Agreement, the receiving
Party, its agents and employees shall not use the Proprietary Information for
any purpose other than in connection with discharging its duties pursuant to
this Agreement. The
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receiving Party shall, at its expense, return to the disclosing Party the
Proprietary Information of the disclosing Party as soon as practicable after the
termination or expiration of this Agreement. During the term of this Agreement
and thereafter, all such Proprietary Information shall remain the exclusive
property of the disclosing Party. This Section 12 shall also apply to any
consultants or subcontractors that the receiving Party may engage in connection
with its obligations under this Agreement.
(b) Notwithstanding anything contained in this Agreement to the contrary,
the receiving Party shall not be liable for a disclosure of the Proprietary
Information of the disclosing Party if the information so disclosed: (i) was in
the public domain at the time of disclosure without breach of this Agreement; or
(ii) was known to or contained in the records of the receiving Party from a
source other than the disclosing Party at the time of disclosure by the
disclosing Party to the receiving Party and can be so demonstrated; or (iii)
becomes known to the receiving Party from a source other than the disclosing
Party without breach of this Agreement by the receiving Party and can be so
demonstrated; or (iv) was disclosed pursuant to court order or as otherwise
compelled by law.
13. MISCELLANEOUS.
(a) This Agreement and the rights and obligations hereunder may not be
assigned, delegated or transferred by either Party without the prior written
consent of the other Party; PROVIDED, HOWEVER, that the other Party's consent
shall not be required with respect to any assignment, delegation or transfer by
a Party to (i) an Affiliate of such Party; or (ii) the purchaser of all or
substantially all of the assets or stock of such Party, through merger,
consolidation or otherwise. To the extent permitted by this Agreement, this
Agreement shall be binding upon and inure to the benefit of the permitted
successors and assigns of both Parties.
(b) This Agreement shall be construed and governed according to, and any
arbitration shall be conducted in accordance with, the laws of the Commonwealth
of Massachusetts, U.S.A. excluding its conflicts of laws principles.
(c) Any dispute, controversy or claim arising out of or relating to this
Agreement or to a breach hereof, including its interpretation, performance or
termination, shall be finally resolved by arbitration. The arbitration shall be
conducted by three (3) arbitrators, one to be appointed by Aspect, one to be
appointed by NK and a third being nominated by the two arbitrators so selected
or, if they cannot agree on a third arbitrator, by the President of the American
Arbitration Association. The arbitration shall be conducted in English and in
accordance with the commercial arbitration rules of the United Nations
Commission on International Trade Law. The arbitration, including the rendering
of the award, shall take place in Los Angeles, California, U.S.A. and shall be
the exclusive forum for resolving such dispute, controversy or claim. The
decision of the arbitrators shall be binding upon the parties hereto, and
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the expense of the arbitration (including without limitation the award of
attorneys' fees to the prevailing party) shall be paid as the arbitrators
determine. The decision of the arbitrators shall be executory, and judgment
thereon may be entered by any court of competent jurisdiction. Notwithstanding
anything contained in this Section to the contrary, each Party shall have the
right to institute judicial proceedings against the other Party or anyone acting
by, through or under such other Party, in order to enforce the instituting
Party's rights hereunder through reformation of contract, specific performance,
injunction or similar equitable relief.
(d) This Agreement supersedes and cancels any previous agreements or
understandings, whether oral, written or implied, heretofore in effect and sets
forth the entire agreement between Aspect and NK with respect to the subject
matter hereof. No modification or change may be made in this Agreement except by
written instrument duly signed by a duly authorized representative of each
Party.
(e) All notices given under this Agreement shall be in writing and shall be
addressed to the Parties at their respective addresses and telecopy numbers, and
to the attention of the individuals set forth above. Either Party may change its
address, telecopy number and contact person for purposes of this Agreement by
giving the other Party written notice of its new address, telecopy number or
contact person. Any such notice if given or made by registered or recorded
delivery international air mail letter shall be deemed to have been received on
the earlier of the date actually received and the date fifteen (15) calendar
days after the same was posted (and in proving such it shall be sufficient to
prove that the envelope containing the same was properly addressed and posted as
aforesaid) and if given or made by telecopy transmission shall be deemed to have
been received at the time of dispatch, unless such date of deemed receipt is not
a day on which banks in the receiving party's home city are open for business,
in which case the date of deemed receipt shall be the next day on which banks in
the receiving party's home city are open for business.
(f) None of the conditions or provisions of this Agreement shall be held to
have been waived by any act or knowledge on the part of either Party, except by
an instrument in writing signed by a duly authorized officer or representative
of such Party. Further, the waiver by either Party of any right hereunder or the
failure to enforce at any time any of the provisions of this Agreement, or any
rights with respect thereto, shall not be deemed to be a waiver of any other
rights hereunder or any breach or failure of performance of the other Party.
(g) No rights or licenses with respect to the Products or the Trademarks
are granted or deemed granted hereunder or in connection herewith, other than
those rights expressly granted in this Agreement.
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(h) Taxes now or hereafter imposed with respect to the transactions
contemplated hereunder (with the exception of income taxes or other taxes
imposed upon Aspect and measured by the gross or net income of Aspect) shall be
the responsibility of NK, and if paid or required to be paid by Aspect, the
amount thereof shall be added to and become a part of the amounts payable by NK
hereunder.
(i) If any provision of this Agreement is declared invalid or unenforceable
by a court having competent jurisdiction, it is mutually agreed that this
Agreement shall endure except for the part declared invalid or unenforceable by
order of such court. The Parties shall consult and use their best efforts to
agree upon a valid and enforceable provision which shall be a reasonable
substitute for such invalid or unenforceable provision in light of the intent of
this Agreement.
(j) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(k) For the purposes of this Agreement, an "Affiliate" of a Party shall
mean any entity controlling, controlled by or under common control with such
Party.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement under
seal.
ASPECT MEDICAL SYSTEMS, INC.
By: /s/ X. Xxxxxxxxxxxx Eagle
-----------------------------------------
Name: X. Xxxxxxxxxxxx Eagle
Title: Chairman
NIHON KOHDEN CO., LTD.
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive Officer
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EXHIBIT A: PRODUCTS
MONITORING SYSTEM COMPONENTS
A-1050(TM) MONITOR WITH THE BISPECTRAL INDEX(TM) (BIS(TM))
Includes:
(1) A-1050 BIS(TM) (Bispectral Index(TM)) Monitor with power cord
(1) Digital Signal Converter (DSC-2) with cable
(1) A-1050 Operator's Manual-English
MONITOR AND DIGITAL SIGNAL CONVERTER INCLUDE ONE YEAR WARRANTY
A-1050 DIGITAL SIGNAL CONVERTER (DSC-2)
INCLUDES ONE YEAR WARRANTY
A-2000(TM) MONITOR WITH THE BISPECTRAL INDEX(TM) (BIS(TM))
Includes:
(1) A-2000 BIS(TM) (Bispectral Index(TM)) Monitor with power cord
(1) Digital Signal Converter (DSC-2) with cable
(1) A-2000 Operator's Manual-English
MONITOR AND DIGITAL SIGNAL CONVERTER INCLUDE ONE YEAR WARRANTY
A-2000 DIGITAL SIGNAL CONVERTER (DSC-2)
INCLUDES ONE YEAR WARRANTY
ACCESSORIES
BIS SENSOR(TM): 1 CASE
1 case contains 50 sensors (25/box, 2 boxes/case)
BIS SENSOR PATIENT INTERFACE CABLE (PIC-S)
ZIPPREP(TM) SELF-PREPPING, DISPOSABLE ELECTRODES: 1 CASE
1 case contains 60 packs (15/box, 4 boxes/case)
2-CHANNEL BIPOLAR PATIENT INTERFACE CABLE
For use with Zipprep electrodes
PRINTREX INKLESS, NON-IMPACT THERMAL PRINTER WITH INTEGRAL ROLL PAPER
Compatible for use with the A-1050. Includes one
Centronics parallel port interface cable.
INCLUDES ONE YEAR WARRANTY
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ACCESSORIES CONTINUED:
PRINTER INTERFACE CABLE:
DB25 parallel port, Centronics 36, shielded
PERMANENT THERMAL PAPER: 4 ROLLS/CASE
100 feet per roll
For use with Printrex printer
PERMANENT THERMAL PAPER: 8 ROLLS/CASE
100 feet per roll
For use with Printrex printer
A-1050 OPERATOR'S MANUAL - ENGLISH
A-1050 SERVICE MANUAL - ENGLISH
GCX POLYMOUNT ROLL STAND FOR THE A-1050 MONITOR
Includes:
Baseweight for added stability
Roll stand handle
12" X 8" X 3.5" basket
GCX POLYMOUNT ROLL STAND ADAPTER FOR THE PRINTREX PRINTER
Includes:
6" utility basket
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
EXHIBIT B: PRICE LIST
MONITORING SYSTEM COMPONENTS PRICE
---------------------------- -----
A-1050(TM) MONITOR WITH THE BISPECTRAL INDEX(TM) (BIS(TM)) [**]
Includes:
(1) A-1050 BIS(TM) (Bispectral Index(TM)) Monitor with power cord
(1) Digital Signal Converter (DSC-2) with cable
(1) A-1050 Operator's Manual-English
MONITOR AND DIGITAL SIGNAL CONVERTER INCLUDE ONE YEAR WARRANTY
A-1050 DIGITAL SIGNAL CONVERTER (DSC-2) [**]
INCLUDES ONE YEAR WARRANTY
A-2000(TM) MONITOR WITH THE BISPECTRAL INDEX(TM) (BIS(TM)) TO BE DETERMINED
Includes:
(1) A-2000 BIS(TM) (Bispectral Index(TM)) Monitor with power cord
(1) Digital Signal Converter (DSC-2) with cable
(1) A-2000 Operator's Manual-English
MONITOR AND DIGITAL SIGNAL CONVERTER INCLUDE ONE YEAR WARRANTY
A-2000 DIGITAL SIGNAL CONVERTER (DSC-2) TO BE DETERMINED
INCLUDES ONE YEAR WARRANTY
ACCESSORIES
BIS SENSOR(TM): 1 CASE [**]
1 case contains 50 sensors (25/box, 2 boxes/cases)
BIS SENSOR PATIENT INTERFACE CABLE (PIC-S) [**]
ZIPPREP(TM) SELF-PREPPING, DISPOSABLE ELECTRODES: 1 CASE [**]
1 case contains 60 packs (15/box, 4 boxes/case)
2-CHANNEL BIPOLAR PATIENT INTERFACE CABLE [**]
For use with Zipprep electrodes
PRINTREX INKLESS, NON-IMPACT THERMAL PRINTER WITH INTEGRAL
ROLL PAPER
Compatible for use with the A-1050. Includes
one Centronics parallel port interface cable.
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
INCLUDES ONE YEAR WARRANTY
PRINTER INTERFACE CABLE: [**]
DB25 parallel port, Centronics 36, shielded
PERMANENT THERMAL PAPER: 4 ROLLS/CASE [**]
100 feet per roll
For use with Printrex printer
PERMANENT THERMAL PAPER: 8 ROLLS/CASE [**]
100 feet per roll
For use with Printrex printer
A-1050 OPERATOR'S MANUAL - ENGLISH [**]
A-1050 SERVICE MANUAL - ENGLISH [**]
GCX POLYMOUNT ROLL STAND FOR THE A-1050 MONITOR [**]
Includes:
Baseweight for added stability
Roll stand handle
12" x 8" x 3.5" basket
GCX POLYMOUNT ROLL STAND ADAPTER FOR THE PRINTREX PRINTER [**]
Includes:
6" utility basket
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EXHIBIT C:
WARRANTY
Aspect warrants to the initial Purchaser that the A-1050 EEG monitor, the A-2000
monitor, and the Digital Signal Converter ("Warranted Product") will be free
from defects in workmanship or materials, when given normal, proper, and
intended usage for a period of 18 months from the date of its initial shipment
to Purchaser or 12 months from the date of resale by Purchaser, whichever period
first expires. Excluded from this warranty are expendable components and supply
items such as, but not limited to, electrodes, cables, and prep solutions.
Aspect's obligations under this warranty are to repair or replace any Warranted
Product or part thereof that Aspect reasonably determines to be covered by this
warranty and to be defective in workmanship or materials provided that the
Purchaser has given notice of such warranty claim within the Warranty Period and
the Warranted Product is returned to the factory with freight prepaid. Repair or
replacement of Products under this warranty does not extend the Warranty Period.
To request repair or replacement under this warranty, Purchaser should contact
Aspect at 0 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, 000-000-0000 or
000-000-0000. Aspect will authorize Purchaser to return the Warranted Product
(or part thereof) to Aspect. Aspect shall determine whether to repair or replace
Products and parts covered by this warranty and all Products or parts replaced
shall become Aspect's property. In the course of warranty service, Aspect may
but shall not be required to make engineering improvements to the Warranted
Product or part thereof. If Aspect reasonably determines that a repair or
replacement is covered by the warranty, Aspect shall bear the costs of shipping
the repaired or replacement Product to Purchaser. All other shipping costs shall
be paid by Purchaser. Risk of loss or damage during shipments under this
warranty shall be borne by the party shipping the Product. Products shipped by
Purchaser under this warranty shall be packaged in the original shipping
container or equivalent packaging to protect the Product. If Purchaser ships a
Product to Aspect in unsuitable packaging, any physical damage present in the
Product on receipt by Aspect (and not previously reported) will be presumed to
have occurred in transit and will be the responsibility of Purchaser.
Unless authorized or instructed by Aspect in advance, this warranty does not
extend to any Warranted Products or part thereof: that have been subject to
misuse, neglect or accident; that have been damaged by causes external to the
Warranted Product, including but not limited to failure of or faulty electrical
power; that have been used in violation of Aspect's instructions; that have been
affixed to any nonstandard accessory attachment; on which the serial number has
been removed or made illegible; that have been modified by anyone other than
Aspect; or that have been disassembled, serviced, or reassembled by anyone other
than Aspect, unless authorized by Aspect. Aspect shall have no obligation to
make repairs, replacements,
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or corrections which result, in whole or in part, from normal wear and tear.
Aspect makes no warranty (a) with respect to any products that are not Warranted
Products, (b) with respect to any products purchased from a person other than
Aspect or an Aspect-authorized distributor or (c) with respect to any product
sold under a brand name other than Aspect.
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