1
Drager/Aspect Product Agreement
Drager-Aspect Vers1.doc
20.04.99
Exhibit 10.6
Aspect Medical Systems, Inc.
has requested that the marked portions of this agreement be granted confidential
treatment pursuant to Rule 406 under the Securities Act of 1933, as amended.
Drager/Aspect Product Agreement
between
Aspect Medical Systems, Inc.
0 Xxxxxx Xxxxx
Xxxxxx
XX 00000-0000
XXX
- hereinafter called "Aspect" -
and
Xxxxxx Medizintechnik GmbH
Moislinger Allee 53 - 55
23558 Lubeck
Germany
- hereinafter called "Drager" -
- Aspect and Drager together hereinafter called "the Parties" -
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
Whereas Aspect has a long-standing tradition of designing, manufacturing and
distributing neuromonitors including the BIS (Bispectral Index) and Sensors for
neuromonitors.
Whereas Drager has a long-standing tradition of designing, manufacturing and
distributing medical equipment.
Whereas Drager is in the process of designing a new anesthesia workplace.
Whereas Drager wishes to integrate Aspect's BIS technology and to offer a
Drager-BIS-Module as an option into this and other workplace solutions for the
[**] and [**]
Whereas Aspect desires to sell and Drager desires to purchase, on the terms and
conditions set forth below in this Agreement, certain quantities of Aspect BIS
Module Kits and the required Sensors manufactured by Aspect.
Now, therefore,
in consideration of the mutual covenants, terms and conditions hereinafter
expressed, the Parties agree as follows:
1. DEFINITIONS
1.1 The term "Aspect BIS Module Kits" shall mean Aspect's BIS Module Kits
as further defined in the specifications in Exhibit A.
The Parties hereto may change Exhibit A, to the extent it may then be
necessary to reflect a subsequent modification made pursuant to Clause
7 of this Agreement.
1.2 The term "Drager-BIS-Module" shall mean an Aspect BIS Module Kit that
is integrated by Drager into a Drager Workplace.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
1.3 The term "Aspect BIS Sensor" shall mean a single use disposable sensor
for the use with the Aspect BIS Module Kits or the Aspect stand-alone
BIS monitor.
1.4 The term [**] shall mean a [**] that has been [**] in accordance with
[**] to [**] with the [**] Drager shall own all right, title, and
interest in any modifications (the "[**]" made to the [**] to [**] the
[**] for use in the [**]. The [**] will [**] Aspect BIS Module Kits
sold by Aspect [**]. The [**] may [**] in [**] depending upon
negotiations between the Parties (See Exhibit A, Section 1.5).
1.5 The term "Products" shall mean the Aspect BIS Module Kits, the
Drager-BIS-Modules, the Aspect's BIS Sensors,[**].
1.6 The term "Drager Workplace" shall mean a combination of devices for
[**] and [**] with a [**] and [**] to all [**]. The definition Drager
Workplace includes a [**] and a [**] for [**].
2. XXXXXX'X RIGHTS TO PURCHASE AND SELL AND ASPECT'S RESPONSIBILITIES
2.1 Drager shall have the non-exclusive right during the term of this
Agreement to purchase the Aspect BIS Module Kit for the sole purpose of
integrating the Aspect BIS Module Kit into a Drager Workplace and
reselling the finished Drager-BIS-Module worldwide.
Subject to Clause 2.2 Drager shall have the exclusive right during the
term of this Agreement to purchase the [**] for the [**] of [**] the
[**] except in the USA. Aspect shall not have the right to manufacture
or distribute the [**] to [**].
Drager shall have the non-exclusive right during the term of this
Agreement to purchase the Aspect BIS Sensor for the non-exclusive
resale worldwide except in the USA.
2.2 Drager will sell the Drager-BIS-Module, the [**] and the Aspect BIS
Sensor through its designated distribution network, and Aspect shall
not with respect to the Drager-BIS-Module and the [**] make any sales
promotion, shall not establish any branch, shall not have any supply
depot or supply the Drager-BIS-Module or [**] to any party other than
Drager.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
It is understood, however, that in the event that Drager distributes
[**] and [**] customers using [**] of the number of [**] used by [**].
Drager shall then grant Aspect a non-exclusive royalty-free right and
license under its rights to the [**] to [**] Aspect BIS Sensors that
have been [**] for use with [**] to [**].
2.3 Aspect agrees to provide all reasonable help for Drager with respect to
the design and/or integration of the Aspect BIS Module Kit into a new
Drager Workplace.
2.4 Drager agrees [**] the [**] for an [**] equipment.
2.5 Aspect shall obtain any official approvals, permits, licenses and other
consent required to sell Aspect's BIS Module Kit and Aspect's BIS
Sensor worldwide, at such time and in such manner as determined by
Aspect or required by Drager to serve reasonable commercial purposes of
both companies. Drager shall receive copies of any such documents.
Drager shall obtain any official approvals, permits, licenses and other
consent required to sell Drager products worldwide, in such time and in
such manner as determined by Drager. If necessary, Aspect shall receive
copies of any such documents belonging to the Drager-BIS-Module and the
[**]. Aspect will provide any reasonable support required by Drager to
obtain the necessary approvals for the Drager-BIS-Module and the [**].
2.6 The parties intend to agree on a co-marketing concept for the Products.
3. PRICES
3.1 The prices for Aspect BIS Module Kits and BIS Sensors shall be as set
forth in Exhibit B hereto. The price per product is FOB, Boston as per
Incoterms 1990. All prices for Aspect BIS Module Kits and BIS Sensors
are exclusive of all taxes, levies and assessments imposed on such
products purchased hereunder, excluding taxes based on Aspect's
possession thereof prior to the originally scheduled delivery and taxes
on Aspect's net income from the transaction. Drager intends to
introduce the new Drager anesthesia workplace to the market [**].
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
3.2 Prices, billing and all payments due hereunder shall be in US$.
3.3 September of each year with effect on 1st January of the following
year, the prices for Aspect's BIS Module Kit set forth in Exhibit B may
be adjusted by mutual Agreement. The first adjustment of prices may be
made prior to October 1, 2002 with effect on January 1, 2003.
The prices for Aspect's BIS Sensor will be based on the Sensor Price
Schedule set forth in Exhibit B applied to the prevailing List Price of
the BIS Sensor in the U.S.
Any adjustments to BIS Sensor prices may only be made prior to October
1 of each year for effect on January 1 of the following year. Assuming
[**] are requested [**] by [**] will be based on the Sensor Price
Schedule set forth in Exhibit B for the [**] to which will be [**]
required to [**] the [**] (See also Exhibit A, Section 1.5).
4. PURCHASE
4.1 All Products shall be ordered in writing, specifying the product type,
number of units, desired delivery date and means of shipment. Purchase
orders may be sent by facsimile machine. Such orders shall be
considered to have been accepted by Aspect only upon Aspect's issuance
of written acknowledgment confirming its acceptance of the purchase
order. Aspect's acknowledgment may be sent by facsimile machine and
shall state delivery date.
4.2 Ownership of, title to, and risk of loss with respect to any product
sold to Drager hereunder shall pass to Drager upon delivery to carrier
in Boston packed and ready for shipment to Drager. Aspect shall ship
products in a manner consistent with Aspect's usual shipping practices.
Transportation and shipping charges from Boston, including costs
incurred by Aspect relating to packing, storage, documentation and
similar items which result from special shipping instructions of
Drager, and the cost of any insurance which Drager may request in
connection with the products, shall be added to the price stated on
invoices and shall be paid by Drager at the time that payment of the
purchase price for such products is due and payable.
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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
4.3 Drager shall have the right to handle the purchase of Products via
another company belonging to the Xxxxxx Group. Drager will inform
Aspect in writing with respect to such decision. Drager will further
ensure that this company will adhere to the provisions of this
Agreement.
5. FORECAST, DELIVERY TIME
5.1 Drager shall provide a non-binding quarterly rolling forecast for a
minimum of the successive two quarters.
5.2 Aspect shall ship the Products in lots of [**] units.
5.3 Aspect shall ship Aspect BIS Module Kits within (eight) 8 weeks of its
receipt of purchase orders therefore, assuming the quantity ordered is
reasonably consistent with the forecast.
5.4 Aspect shall ship [**] within (four) 4 weeks of its receipt of purchase
orders therefore, assuming the quantity ordered is reasonably
consistent with the forecast.
5.5 In the event of cancellation of any purchase order, Drager will be
liable to Aspect for the payment of reasonable cancellation charges.
6. PAYMENT; INSPECTIONS; RETURNS
6.1 All purchases hereunder shall be paid within thirty (30) days from date
of invoice to Drager.
6.2 All Products received by Drager shall conform in all material respects
to the specifications set forth in Exhibit A.
Receiving inspection by Drager may be performed on a sampling basis
which shall be in accordance with the Testing Specifications as
established in Exhibit C. Exhibit C will be negotiated later.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
Acceptance by Drager on a sampling basis shall not prejudice or
restrict the right of Drager to accumulate and return at Aspect's
expense for full credit or replacement (freight and insurance prepaid
to Drager) non-conforming Products discovered during Xxxxxx'x
inspection process, which in no event shall extend beyond the warranty
period provided in Clause 8. Any such return must be made within 30
days of discovery of any such Products' nonconformance by Drager.
Aspect must be given the opportunity to inspect and/or correct Products
for which Drager shall request credit or replacement to enable Aspect
to determine for itself that said Products do not meet specifications,
and such credit or replacement shall be made by Aspect only if and when
it determines that Products do not meet specifications. No Product may
be returned without Aspect's approval, which, subject to the last
sentence of the preceding Paragraph under this Clause 6.2, shall not be
unreasonably withheld.
7. MODIFICATION OF PRODUCTS
7.1. Aspect shall inform Drager
(a) about planned modifications of Aspect's BIS Module Kit,
Aspect's BIS Sensors, [**] and modifications relating to BIS
of Aspect's stand alone Monitor,
(b) of any modification which will affect the approval of the
Products or the Drager Workplace and /or the proper function
within the Drager Workplace.
In case (b), Aspect shall not be allowed to modify Aspect's BIS Module
Kit, Aspect's BIS Sensor or [**] sold to Drager without Xxxxxx'x prior
written consent. Additionally Drager shall have the right to decide if
Drager wishes to take over the modification. If Drager refuses to take
over the modification, Aspect shall be obliged to deliver the
unmodified Aspect BIS Module Kit, Aspect's BIS Sensors and [**] for a
period of eighteen (18) months beginning with the date Drager announces
its decision. After this eighteen-months period Aspect can cease to
deliver the unmodified Aspect BIS Module Kit, Aspect's BIS Sensors or
[**]. In the event that Aspect believes that a modification or
improvement relates to patient safety, Drager will accept these
modifications under the condition that Aspect will agree to repair or
replace Aspect's BIS Module Kits, Aspect's BIS Sensors or [**]
previously provided to Drager or Drager customers at no charge.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
7.2. Drager shall promptly inform Aspect of any proposed modification which
will affect Aspect product approval.
7.3 Aspect agrees in principle to [**] of the [**] and [**] the [**] is
[**]. Aspect and Drager must agree on a mutually-acceptable time
schedule and on a mutually-acceptable price for the [**] Aspect shall
own all right title and interest in any [**] to the Aspect BIS Module
Kit pursuant to this Section 7.3.
8. WARRANTY
8.1 Subject to Exhibit E, Aspect hereby warrants to Drager that for a
period of twelve (12) months after each Product is sold by Drager, or
an authorized Drager Distributor and delivered to an end user, or
eighteen (18) months after such Products are received from Aspect by
Drager, whichever period shall be shorter, that such Products will
conform in all material respects to the specifications set forth in
Exhibit A and be free from any defects in workmanship and materials. In
the event of a breach of the warranty under this Section, Aspect's
responsibility and Xxxxxx'x remedy shall first be repair or replacement
of the Product, at Aspect's option. In the event that, after Aspect has
attempted to repair or replace the product, the Product does not
conform to the warranty provided in this Section 8.1, Aspect will
refund the purchase price for such Product. This paragraph summarizes
Aspect's responsibility and Xxxxxx'x sole remedy with respect to the
warranty set forth in this Section 8.1.
8.2 Notwithstanding the foregoing, Aspect's warranty as set forth above
does not cover:
(i) defects emanating from improper or unauthorized use or
maintenance of such products by Drager or any subsequent
purchaser thereof;
(ii) normal deterioration or normal wear and tear;
(iii) disposable items such as the [**] Aspect BIS Sensor after the
expiration date marked on the Sensor packaging
(iv) catastrophe, fault or negligence of Drager or anyone claiming
through or on behalf of Drager; or
(v) subject to Exhibit A, causes external to the Products
including without limitation power or air conditioning
failure.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
8.3 THE PROVISIONS OF THE FOREGOING WARRANTIES ARE IN LIEU OF ANY OTHER
WARRANTY, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL (INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE).
9. QUALITY ASSURANCE
Aspect shall adhere to a quality assurance system in accordance with
the Quality Assurance Agreement as established in Exhibit D.
10. SERVICE
10.1 Drager assumes full responsibility to render service with respect to
the maintenance, repair, or replacement of Products, accessory items,
or parts therefor sold by Drager.
10.2 Aspect agrees to supply Drager, at Xxxxxx'x expense, with any and all
special tools and equipment reasonably required for Drager to service,
maintain or test the Products sold hereunder. Drager agrees to make
payment for such items to Aspect within thirty (30) days from the date
of invoice.
10.3 Aspect shall adhere to the Service Agreement as per Exhibit E. Exhibit
E will be negotiated later.
11. TRAINING AND DOCUMENTS
Aspect personnel shall be made available free of charge for a
reasonable number of training sessions reasonably required by Drager
with respect to the sales and application know-how, the maintenance,
repair or replacement of the Products, or parts therefore.
Aspect will supply Drager free of charge with a reasonable quantity of
technical, sales and application materials for internal purposes in
English and German (if available) such as manuals and other technical
materials relating to the Aspect BIS Module Kits and Aspect's BIS
Sensors. Aspect will supply Drager at cost price with a reasonable
quantity of catalogues and literature relating to the Aspect BIS Module
Kits and Aspect's BIS Sensors.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
Drager agrees to provide, at its own expense, and subject to Aspect's
prior written approval, translation and printing of technical, sales,
operation and service materials in the language(s) commonly used in the
areas where Drager will sell the Products.
Drager Lubeck will coordinate training and flow of information for all
Drager participants. Training will be held in English language.
12. REPLACEMENT PARTS
Subject to Exhibit E, Aspect agrees to supply Drager with replacement
parts for the Aspect BIS Module Kits sold hereunder for a period of ten
(10) years after the date of the last sale of Aspect BIS Module Kits by
Aspect to Drager hereunder. Prices for the replacement parts will be
set by Aspect in accordance with Clause 3. Drager shall make payment of
the replacement parts supplied hereunder within thirty (30) days from
the date of invoice.
13. PATENT INDEMNITY
13.1 (a) Except as provided below, Aspect shall defend and indemnify Drager
from and against any damages, liabilities, costs and expenses
(including reasonable attorneys' fees) arising out of any claim that
the Aspect BIS Module, the Aspect BIS Sensor or the [**] infringe a
valid patent or copyright or misappropriates a trade secret of a third
party, provided that (i) Drager 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 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 Drager
the right to continue using such product, (2) replace or modify such
product so that it becomes non-infringing, or, if (1) and (2) are not
reasonably available to Aspect after consultation in good faith with
Drager, then (3) terminate Xxxxxx'x rights to the allegedly infringing
product and refund to Drager the amount which Drager has paid to Aspect
for such products which are in the possession of Drager or its
subdistributors. Drager will immediately inform Aspect as soon as
Drager becomes aware of any threatened or actual liability claim by a
third party relating to the Aspect BIS Module, the [**] and the Aspect
BIS Sensor.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
(b) Aspect shall have no liability or obligation to Drager hereunder
with respect to any patent, copyright or trade secret infringement or
claim thereof based upon (i) use of the Products by Drager in
combination with devices or products other than the Drager Workplace,
(ii) use of the Products in an application or environment for which
such Products were not designed or contemplated, (iii) modifications,
alterations or enhancements of the Products not created by or for
Aspect, or (iv) any claims of infringement of a patent, copyright or
trade secret in which Drager or any affiliate of Drager has an
interest. Drager shall indemnify and hold Aspect harmless from all
costs, damages and expenses (including reasonable attorneys' fees)
arising from any claim enumerated in clauses (i) through (iv) above,
provided that (i) Aspect shall have promptly provided Drager written
notice thereof and reasonable cooperation, information, and assistance
in connection therewith, and (ii) Drager shall have sole-control and
authority with respect to the defense, settlement or compromise
thereof. Aspect will immediately inform Drager as soon as Aspect
becomes aware of any threatened or actual liability claim by a third
party relating to Clause (iv) above.
(c) the foregoing states the entire liability of the Parties with
respect to infringement of patents, copyrights and trade secrets by the
Products or any part thereof or by their operation.
13.2 The obligation of the Parties hereto as set forth in this Clause 13
shall continue notwithstanding the termination of this Agreement.
14. TRADEMARK
Any Drager-BIS-Module or [**] sold by Drager under this Agreement shall
bear the trademark of Drager.
Drager is required to xxxx the Drager-BIS-Module and [**] additionally
to the Drager trademark with the Aspect BIS(TM) trademark as approved
by Aspect and in accordance with the following provisions:
(a) Ownership. Drager acknowledges and agrees that Aspect is the sole and
exclusive owner of all right, title and interest in and to the
following trademarks (the "Aspect Trademarks"): "Aspect", "BIS", "BIS
Sensor".
Drager recognizes the value of the Aspect Trademarks and the good will
associated with the Aspect Trademarks. Drager agrees that its use of
the
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Aspect Trademarks and any good will arising therefrom shall inure to
the benefit of Aspect. 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 Drager, other than the grant of a license in
Section 14(c) below; it being acknowledged and agreed that all other
right, title and interest in and to the Aspect Trademarks is expressly
reserved by Aspect. Drager shall keep the Aspect Trademarks free from
all liens, mortgages or other encumbrances. Drager agrees that it will
not attack or otherwise challenge the title, validity or any other
rights of Aspect in or to the Aspect Trademarks.
(b) Notice. All Products that use the Aspect Trademarks shall be
accompanied, where reasonable and appropriate, by a proprietary notice
with respect to Aspect consisting of the following elements:
1. The statement "[insert trademark(s)] is a proprietary trademark(s)
of Aspect."
2. Drager will include the "(TM)" or "(R)" symbol, as instructed by
Aspect, a reasonable time before the first prominent use of the Aspect
Trademark in the Products.
3. Drager shall reproduce copyright and trademark notices of Aspect in
the relating documents.
(c) License. Aspect hereby grants to Drager a nonexclusive, worldwide,
royalty-free license (without the right to sublicense) to use the
Aspect Trademarks to designate and promote Products. Drager shall have
no other right to use, display or utilize the Aspect Trademarks for any
other purpose or in any other manner.
(d) Quality Standards. Upon reasonable notice and request, Aspect may
inspect copies of the Products, advertising and promotional materials
on which the Aspect Trademarks are used so that Aspect may monitor
compliance with this Agreement. Quality standards are further described
in Exhibit D to this Agreement.
(e) Protection and Infringement. Drager agrees to cooperate with and assist
Aspect in obtaining, maintaining, protecting, enforcing and defending
Aspect proprietary rights in and to the Aspect Trademarks. In the event
that Drager learns of any infringement, threatened infringement or
passing-off of the Aspect Trademarks, or that any third party claims or
alleges that the Aspect Trademarks infringe the rights of the third
party or are otherwise liable to
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cause deception or confusion to the public, Drager shall be required to
notify Aspect giving the particulars thereof, and Drager shall provide
necessary information and assistance to Aspect in the event that Aspect
decides that proceedings should be commenced.
(f) Termination. In addition to the termination rights set forth in Section
21 hereof, in the event that Drager is in material breach of any
provision of this Section 14, Aspect may, upon 30 days written notice,
terminate the license granted in Section 14(c) if Drager does not cure
such breach or default within such 30-day period. The parties recognize
that curing such breach or default may require development of a new
version of the Product. If this is the case, then Drager will be deemed
to have cured such breach or default if, within the 30-day cure period,
Drager presents to Aspect a plan for revision of the Product that will
cure such breach or default, such plan is reasonably acceptable to
Aspect, and such revision is released and distributed within three
months following written notice of such breach or default.
In addition to the provisions of Section 21 hereof, upon termination of
the license granted in Section 14(c), or upon termination of this
Agreement, for whatever cause except Sections 21.5, 21.6 and 21.7:
1. Drager shall immediately cease and desist from any further use
of the Aspect Trademarks and any trademarks confusingly
similar thereto, either directly or indirectly;
2. All rights in the Aspect Trademarks granted to Drager
hereunder shall immediately revert to Aspect;
3. In the event that this Agreement is terminated for any reason
other than a material breach or material default by Drager,
Drager shall have a period of 30 days thereafter to dispose of
all of the unsold Products bearing the Aspect Trademarks and
advertising and promotional materials relating thereto which
had been completed by it prior to such termination, provided
such Products and materials were in the process of manufacture
more than 30 days before such termination.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
15. PRODUCT RECALL PROGRAM
In the event of any recall of the Product by Aspect or required by
Drager for safety or efficacy reasons resulting from Aspect's failure
to supply any BIS Module Kits, Aspect BIS Sensors, or [**] that (1)
conform in all material respects to the specifications set forth in
Exhibit A or (2) are free from defects in workmanship and materials,
Aspect agrees to repair or replace all recalled Products previously
supplied to Drager at no expense to Drager. Aspect also agrees to
consult with Drager to establish a reasonable process for managing the
recall. Drager will maintain all necessary sales records to facilitate
the recall.
16. PRODUCT LIABILITY
16.1 Aspect will indemnify, protect, and save Drager harmless from all
claims, demands, suit, or actions for damages to property or person
which may be sustained by any third party, and which are caused by any
defect or deficiency in the design or manufacture of any of the
Products sold to Drager under this Agreement.
The foregoing indemnity shall survive the expiration or termination of
this Agreement, but Aspect shall not be responsible for any loss or
damage caused by acts or omissions of Drager. Aspect shall have no
liability or responsibility of any kind to Drager under this Clause 16
for any claims, demands, suits, or actions unless Aspect shall have
been notified within 30 days time following notification to Drager of
any such claims, demands, suits, or actions and shall have an adequate
opportunity to defend. Aspect shall have the sole control and authority
with respect to the defense, settlement or compromise thereof.
Should Drager desire to have its own counsel participate in any such
action or suit, the cost of such counsel shall be borne exclusively by
Drager. The obligation of the Parties set forth in this Clause 16 shall
continue notwithstanding the termination of this Agreement.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
16.2 Drager will indemnify, protect, and save Aspect harmless from all
claims, demands, suit, or actions for damages to property or person
which may be sustained by any third party and which are caused by any
defect or deficiency in the design or manufacture of the Drager
Workplace or of that portion of the Drager-BIS-Module developed or
manufactured by Drager, or which relate to the failure of Drager to
incorporate the Aspect BIS Module Kit within the Drager-BIS-Module in
accordance with the technical information provided by Aspect, or
Xxxxxx'x activities in connection with use or sale of the Products.
The foregoing indemnity shall survive the expiration or termination of
this Agreement, but Drager shall not be responsible for any loss or
damage caused by acts or omissions of Aspect. Drager shall have no
liability or responsibility of any kind to Aspect under this Clause 16
for any claims, demands, suits, or actions unless Drager shall have
been notified within [**] time following notification to Aspect of any
such claims, demands, suits, or actions and shall have an adequate
opportunity to defend. Drager shall have sole control and authority
with respect to the defense, settlement or compromise thereof.
Should Aspect desire to have its own counsel participate in any such
action or suit, the cost of such counsel shall be borne exclusively by
Aspect. The obligation of the Parties set forth in this Clause 16 shall
continue notwithstanding the termination of this Agreement.
17. [**] PROJECT
17.1 It is Xxxxxx'x intention that the Product will become the [**] for
monitoring the level of hypnosis in Drager anesthesia Workplaces and it
is [**] of the [**]. However, Drager shall be free to provide
alternative technology in the event that
(i) necessary regulatory approvals for the Products are withdrawn
and will not be granted during a [**] period after withdrawn,
(ii) approvals have not been granted within a period of [**]
following the completion of the Drager-BIS-Module and
submission of the necessary requests for approvals to the
appropriate regulatory agencies
(iii) Aspect is unable to supply Aspect BIS Module Kits in
accordance with the specifications and is unable to
reinstitute supply within [**] days of written notification
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
(iv) Aspect's market share worldwide for monitoring the effect of
anesthesia on the brain with BIS [**].
(v) Aspect stops or reduces marketing and product improvement
activities materially below the level currently performed.
17.2 Drager may offer in Drager anesthesia workplaces and in other Drager
products complementary parameters [**] to Aspect's Bispectral Index.
Any parameter claimed to be a measure of the hypnotic effect of
anesthetics based on processing of the continuous EEG, is considered to
be [**] will only be [**] to the BIS.
Notwithstanding the foregoing, Drager is free to offer EEG parameters
based on the continuous EEG such as median frequency, spectral edge
frequency, compressed spectral array (CSA) and/or density spectral
array (DSA), and may also offer evoked potentials, in addition to the
BIS.
17.3 In the event that the Aspect's BIS Module Kit sold to Drager contains
applications unique to Drager Aspect shall for the term of this
Agreement and for [**] after its termination refrain from selling
similar products to any third party.
18. FORCE MAJEURE
Neither Aspect nor Drager shall be liable for any delay in, or failure
of, performance hereunder due to any contingency reasonably beyond its
control, rendering performance commercially unreasonable including, but
not limited to, an act of God, war (declared or undeclared),
mobilization, riot, strike, labor dispute, fire, flood, shortages, or
failure or delays of energy, materials, supplies or equipment,
unavailability of transportation, goods or services, transportation
embargoes or delays, or breakdowns in machinery or equipment,
governmental restrictions or actions but shall not include any royalty
or other payment imposed or agreed to by Aspect or Drager resulting
from a third party claim of intellectual property right infringement or
violation as further described in Clause 13; provided, however, that
the Party affected shall exert its reasonable best efforts to eliminate
or cure or overcome any of such causes and to resume performance of its
covenants.
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19. SECRECY
19.1 If marked as "Confidential Information", Drager and Aspect are each
obliged to preserve in strict confidence any trade secrets,
confidential information and technical information of the other Party
and to refrain from disclosing, during the period of this Agreement and
any time after expiration of this Agreement, any such information to
third parties. Notwithstanding the foregoing, information which is
orally or visually disclosed to the recipient by the disclosing party,
or is disclosed in writing without an appropriate letter, proprietary
stamp or legend, shall constitute Confidential Information if the
disclosing party, within thirty (30) days after such disclosure,
delivers to the recipient a written document or documents describing
such Confidential Information and referencing the place and date of
such oral, visual or written disclosure and the names of the employees
or officers of the recipient to whom such disclosure was made.
Both Parties represent and warrant that they have exercised, and will
continue to exercise the same standard of due care in hiring,
supervising and selecting those employees to whom they disclose such
confidential information, so that the confidentiality of all such
information is protected. No such 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's employees
and contractors directly involved with the recipient's use of such
information who are bound by written agreement to protect the
confidentiality of such information, and such information shall be
otherwise protected by the recipient from disclosure to others with the
same degree of care accorded to its own proprietary information.
19.2 The Parties' obligation of non-disclosure shall not apply with respect
to such information, which
(1) is already known to the receiving Party before disclosure by
the divulging Party, providing that the receiving Party has
written records to substantiate its knowledge; or
(2) is in the public domain at the time of disclosure to the
receiving Party or, after such disclosure, enters into the
public domain through no fault of the receiving Party;
(3) is independently developed by the receiving Party without
reference to or reliance on the Confidential Information; or
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(4) is lawfully disclosed to the receiving Party by a third party
under circumstances permitting its unrestricted disclosure by
the receiving party.
Upon termination of this Agreement, each party shall promptly deliver
to the other all confidential information of the other party in the
possession or control of such party and all copies thereof. The
obligations under this Section 19 shall continue for both parties for a
period of 3 years after delivery by Aspect to Drager of the last
Product under this Agreement.
20. RELATIONSHIP BETWEEN THE PARTIES
During the term hereof, the relationship of the Parties is that of
seller (Aspect) and buyer (Drager).
Nothing herein contained shall be deemed to authorize or empower either
Party, its affiliates, its agents or employees, to act as agent for the
other Party or conduct business in the name, or for the account of the
other Party or any of its affiliates or otherwise bind it or them in
any manner.
21. TERM AND TERMINATION
21.1 This Agreement shall come into force when it has been duly signed by
both Parties and shall remain in force until December 31, 2005, unless
earlier terminated in accordance with the provisions hereof.
It shall be automatically renewed thereafter for additional periods of
one (1) calendar year each unless one Party gives at least twelve (12)
calendar months prior to the end of the original term hereof and each
one (1) year period thereafter a written notice to the other Party of
its intention to terminate. First notice of termination may not be
given until [**].
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
21.2 Aspect shall have the right to terminate this Agreement, effective upon
the delivery of written notice to Drager, in the event Drager fails to
make any payment when due to Aspect pursuant to this Agreement or any
invoice for Products. Aspect will [**] to Drager after Xxxxxx'x receipt
of Aspect's written demand for payment, provided Aspect has submitted
proof of delivery in order to rectify any payment problem or
discrepancy and has stated that the Agreement will be terminated if
Drager fails to make the due payment within the [**].
21.3 Furthermore, either Party may terminate this Agreement if the other
Party commits any material breach of its obligations hereunder (other
than payment defaults addressed in Clauses 21.2 hereof) and such breach
is not resolved within [**] after written notice thereof is given to
the Party in breach of this Agreement.
21.4 Should Drager or Aspect at any time during the period of this Agreement
be adjudged bankrupt or insolvent, or have a Receiver appointed in
respect of its assets or shall make any arrangement or composition with
its creditors or shall be wound up, whether voluntarily or
compulsorily, or make a general assignment for the benefit of
creditors, then in such event the other Party may, at its option,
terminate this Agreement effective upon giving notice thereof in
writing to the other. In the event either Drager or Aspect exercises
this option, said Party shall incur no liability or obligation with
respect to said termination.
21.5 In the event of the merger, consolidation or sale of substantially all
assets of Aspect to a competitor of Drager, Drager may, at its option,
terminate Section 17 of this Agreement effective upon giving notice
thereof in writing to Aspect. In the event Drager wishes to exercise
this option, Drager shall do so within 30 days following written notice
from Aspect of the merger, consolidation or sale of substantially all
assets of Aspect, and neither Aspect (or its successors) or Drager
shall incur liability or obligation with respect to said termination.
In the event of the merger, consolidation or sale of substantially all
assets of Drager to a company outside of the Xxxxxx-Group, Aspect may,
at its option, terminate this Agreement effective upon giving notice
thereof in writing to Drager. In the event Aspect exercises this
option, Aspect shall do so within 30 days following written notice from
Drager of the merger, consolidation or sale of substantially all assets
of Drager, and neither Drager (or its successors) or Aspect shall incur
liability or obligation with respect to said termination.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
21.6 Subject to the second paragraph of this Section 21.6, in the event of
termination the Parties agree that Drager shall have the right to
purchase the Aspect BIS Module Kit and the [**] for [**] following
termination of the Agreement or Aspect BIS Sensors for [**] following
termination of the Agreement.
In the event of termination of the Agreement as a result of a material
breach of the Agreement by Drager in accordance with Sections 21.2 or
Section 21.3, Drager shall not be permitted to continue to purchase
[**] Aspect BIS Sensors beyond [**] termination of the Agreement. If
Aspect intends to [**] of the [**] the Parties shall [**] in good
faith.
21.7 In the event of termination, the Parties further agree to finalize
current sales projects. A complete list of these sales projects has to
be exchanged by the Parties no later than fourteen (14) days after the
termination.
21.8 Due to the fact that some Exhibits of this Agreement will be negotiated
later each Party shall have the right to terminate this Agreement if
the parties cannot reasonably agree on the content of one of these
Exhibits.
22. MISCELLANEOUS
22.1 This Agreement shall not be assignable either in whole or in part
without the prior written consent of the other Party except, subject to
Section 21.5, to a party that acquires all or substantially all of
either Parties' business by merger, sale of assets, or otherwise.
22.2 Subject to Clause 21.1 hereof, this Agreement shall inure to the
benefit of and be binding upon the Parties hereto.
22.3 The headings used herein are for ease of reference only and are not to
be used in interpretation or construction of this Agreement.
22.4 The provisions of this Agreement and its Exhibits shall not be
extended, varied, changed, modified or supplemented other than by
agreement in writing signed by the Parties hereto.
22.5 In the event of any inconsistency or conflict between the provisions of
this Agreement and any Purchase Order or other document, the provisions
of this Agreement shall prevail.
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22.6 All notices or other communications which shall or may be given
pursuant to this Agreement shall be in writing in the English language
and shall be delivered by personal delivery, certified mail, or telefax
at the address set forth below, or at such other address as such party
may hereafter designate in writing as the appropriate address for the
receipt of such notice.
To Aspect at:
Aspect Medical Systems, Inc.
0 Xxxxxx Xxxxx
Xxxxxx
XX 00000-0000
XXX
Tel.: 000-000-0000
Fax: 000-000-0000
Attention: X.Xxxxxxxxxxxx Eagle
To Drager at:
Xxxxxx Medizintechnik GmbH
Moislinger Allee 00 - 00
X-00000 Xxxxxx
Xxxxxxx Xxxxxxxx of Germany
Tel.: 000-000-0000
Fax: 000-000-0000
Attention: Business Unit Anaesthesia, Swen Grunitz-Post
All notices shall be deemed served on the day on which personally
served, or of by certified mail, or telefax on the date of actual
receipt.
21.7 The waiver by either Party hereto of any default hereunder or of any
breach of any covenant, agreement or condition contained herein shall
not be construed to constitute a waiver of any other default or breach
hereof whether similar or otherwise.
22.8 If any provision of this Agreement should be held unenforceable, or
illegal with respect to any jurisdiction, it (i) shall be deemed
severable from the other provisions which shall remain valid and
enforceable; and (ii) shall remain in effect in other jurisdiction
where such provision is otherwise enforceable and legal.
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This Agreement may be executed simultaneously in multiple counterparts,
each of which shall be deemed an original and all of which together
shall constitute one and the same agreement.
22.10 Neither party shall have the right to sublicense any of the rights or
licenses granted under this agreement outside the company group without
the other's prior written consent.
21.11 Compliance with Laws. Drager shall comply with all laws, legislation,
rules, regulations, governmental requirements and industry standards
with respect to the Products, and the performance by Drager of its
obligations hereunder, existing in any jurisdiction into which Drager
directly or indirectly distributes the Products. Aspect shall inform
Drager if export of Aspect's BIS Module Kit or Aspect's Sensors are
restricted to any country or require certain permission in any country.
21.12 IN THE EVENT THAT U.S. LAW IS APPLIED TO THIS AGREEMENT, ASPECT OR
DRAGER SHALL NOT BE LIABLE FOR ANY LOSS OF DATA, LOSS OF PROFITS OR
LOSS OF USE OF THE PRODUCTS OR FOR ANY INDIRECT DAMAGES OF ANY KIND
(WHETHER SPECIAL, INCIDENTAL, CONSEQUENTIAL OR OTHER INDIRECT DAMAGES)
IN CONNECTION WITH THE USE OR PERFORMANCE OF THE PRODUCTS.
23. APPLICABLE LAW
This Agreement shall be governed, construed and interpreted in
accordance with the laws of Switzerland, without regard to its conflict
of laws principles.
The United Nations Convention on contracts for the International Sale
of Goods shall not apply.
24. DISPUTE SETTLEMENT, PLACE OF JURISDICTION
24.1 The Parties shall try to settle any dispute arising in connection with
this present Agreement amicably. In case of a local sales conflict a
task force of Drager and Aspect consisting of the persons named under
Clause 22.6 will take care of such dispute settlement.
24.2 In the event disputes cannot be settled amicably according to Clause
24.1, in connection with this present Agreement shall be exclusively
and finally settled by the courts of Zurich.
Natick, ......April 29, 1999..... Lubeck, .......May 5, 1999..............
X. Xxxxxxxxxxxx Eagle [Illegible]
................................. ........................................
Aspect Medical Systems, Inc. Drager Medizintechnik GmbH
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
EXHIBIT A
of the Drager/Aspect Product Agreement
between Aspect Medical Systems, Inc.
and Drager Medizintechnik GmbH
Products
1.1 The Drager-BIS-Module will incorporate Aspect's BIS Module Kit.
Aspect's BIS 'Module Kit' is designed specifically for OEM applications
and allows the integration of Aspect's BIS monitoring technology into
OEM equipment. The BIS Engine will interface to the patient via the
Aspect BIS sensor and to the OEM equipment utilizing a serial (RS-232)
3-wire interface and the necessary power connections.
The BIS Module Kit consists of a Digital Signal Converter (DSC-2) that
is placed in proximity to the patient and a small circuit board that
resides in the OEM equipment. The DSC-2 is a small (palm sized)
front-end to the BIS Engine circuit board that provides the patient
interface and performs the high performance analog to digital
conversion of the EEG signals. The EEG signals are transmitted in
digital format from the DSC-2 to the BIS engine circuit board via a 12
foot cable that is hard wired connected at the DSC-2.
The BIS Engine circuit board measures 3 x 4 inches. This board performs
digital signal processing on the digitized EEG signal and outputs the
Bispectral Index to the OEM system via the RS-232 serial connection.
The board is constructed using double sided surface mount techniques.
The connections to the BIS Engine circuit board are a serial interface
(RS-232), power, and DSC connections.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
- 24 -
Detailed Technical Specifications:
Digital Output: [**]
Main Parameters: [**]
Electrical Safety: [**]
Power: [**]
Artifact Rejection: [**]
Bispectral Index: [**]
Digital Signal Converter (DSC-2)
Description: [**] to the [**]
Weight: [**]
Dimensions: [**]
Cable Length: [**]
BIS Engine PCB
Physical: [**]
Processing Power: [**]
Software Upgrades
[**] software is stored in [**]. Software upgrades can be accomplished
[**] via the [**].
Serial Identifier
Each [**] serial identifier. This allows for [**].
25
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
[Graphic of Aspect BIS Module Kit and Sensor]
1.2 In addition to the main parameters indicated in Exhibit A, Section 1.1,
the Aspect BIS Module Kit shall also provide the [**].
When the Drager-BIS-Module is in use in a Drager Workplace System,
there will be a possibility to display each of the following [**] as
well as the [**] in the [**] when used for [**] and in [**].
1.3 Aspect shall ensure that all BIS enhancements that Aspect develops for
Aspect's stand alone BIS monitor will be available in the BIS Module
Kit sold to Drager as appropriate and as soon as reasonably possible.
Drager will agree to distribute a modified BIS Sensor in the event
Aspect determines that an enhancement to the BIS Module Kit requires
the use of a modified Sensor. All conditions, prices and so on won't be
changed for the new sensors. If this occurs, and if [**] in accordance
with Section 1.5 of Exhibit A, [**] to provide a [**] of the [**] for
the [**] use of [**]. Possible additional costs will be incorporated in
the transfer price for the [**] and reasonable volumes will be
required.
In the event that Aspect develops a different product involving a
different type of index, patient sensor, or application, Aspect and
Drager will develop a mutually-satisfactory new, or amended, agreement.
1.4 For integration into a Drager Workplace, Drager will design an Drager
Workplace specific Drager-BIS-Module. Aspect will grant all reasonable
help to Drager designing the Drager-BIS-Module.
1.5 On the [**]. The possibility to use [**] the original Aspect BIS
monitor will be negotiated later. Possible additional costs [**] will
be incorporated in the transfer price and [**] will be required.
1.6 Both Parties agree to work out a common technical requirement
specification for the Products. The latest version of this technical
requirement specification signed by both Parties will be the
specification of the Product to be manufactured by Aspect for Drager.
Natick, .....4/29/99............. Lubeck, .........May 5, 1999 ...........
X. Xxxxxxxxxxxx Eagle [illegible]
................................. ........................................
Aspect Medical Systems, Inc. Drager Medizintechnik GmbH
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
EXHIBIT B
of the Drager/Aspect Product Agreement
between Aspect Medical Systems, Inc.
and Drager Medizintechnik GmbH
PRICES AND DISCOUNTS
The price for one Aspect BIS Module Kit is US$[**].
The components consists of a [**] and [**] and a [**] and [**].
Drager shall have the right to manufacture on a royalty free basis the
circuit board based on design specifications provided by Aspect. In
this case the price for the remaining components is US$[**] for one
Aspect BIS Module Kit. The Parties will agree in the future on the
terms of a manufacturing license.
The price of the Aspect BIS Module Kit always includes 5 Sensors.
Drager agrees to supply these Sensors together with each
Drager-BIS-Module to its customers.
The Parties agree that Aspect will grant to Drager an additional
discount on the price of the Aspect BIS Module Kit depending on a
certain yearly quantity : Aspect will grant an additional discount of
[**] for a yearly quantity of more than [**] Aspect BIS Module Kits.
Aspect [**] the [**] subsequent to the date of this agreement, for
products sold by Aspect [**] to other customers of Aspect [**]. Aspect
will provide Drager with a [**] to [**] that [**] by other Aspect
customers.
The price to Drager for the Aspect-BIS-Sensor will be as follows:
The transfer price to Drager for the Aspect BIS Sensor will vary
between[**] of the List Price of the Aspect BIS Sensor in the United
States. This is equivalent to a discount off of Aspect's List price in
the United States for the BIS Sensor between [**].
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
As of January 1, 1999, the List Price for Aspect's BIS Sensor is
US$15.00 The actual amount of the discount off the U.S. List Price will
depend upon the volume of Aspect BIS Sensors shipped by Drager for use
with Drager-BIS-Modules. Prior to the shipment by Drager of the first
[**]Drager-BIS-Modules, the discount available to Drager for purchase
of the Aspect BIS Sensors will be set at [**] of Aspect's List Price
for the BIS Sensor in the United States. Following the shipment of the
first [**] Drager-BIS-Modules, the discount available to Drager will
depend upon the volume of Aspect BIS Sensors shipped each quarter
divided by the number of documented Drager-BIS-Modules installed minus
the first [**] Drager-BIS-Modules installed. Using this formula, the
Aspect BIS Sensor price schedule is as follows:
Sensor Shipments per module per quarter-Note 1 Discount off US List price
---------------------------------------------- --------------------------
up [**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
[**] [**]
or more [**] [**]
Note 1: Sensor consumption rate calculated based on total Aspect BIS Sensors
shipped during the quarter divided by the average Drager-BIS Module installed
base during the quarter minus [**].
In the event that Drager requests that Aspect develop the Drager-BIS-Sensor,
Aspect will sell Drager-BIS-Sensors to Drager in accordance with the same
discount schedule as above, with possible additional costs as noted in Section
1.5 of Exhibit A.
According to Clause 2.1 of the Agreement Drager shall not distribute Sensors in
the USA. Therefore, Aspect will pay a commission to Drager of [**] of the
amounts paid by the customer for each Sensor shipped for use with a
Drager-BIS-Module in the USA.
Natick, .......4/29/99 ............ Lubeck, ......May 5, 1999 ......
X. Xxxxxxxxxxxx Eagle [illegible]
................................... .................................
Aspect Medical Systems, Inc. Drager Medizintechnik GmbH
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EXHIBIT C
of the Drager/Aspect Product Agreement
between Aspect Medical Systems, Inc.
and Drager Medizintechnik GmbH
TESTING SPECIFICATIONS FOR THE PRODUCTS
(to be negotiated later)
Natick, .......4/29/99 ................ Lubeck, ......May 5, 1999 .......
X. Xxxxxxxxxxxx Eagle [illegible]
....................................... ..................................
Aspect Medical Systems, Inc. Drager Medizintechnik GmbH
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EXHIBIT D
of the Drager/Aspect Product Agreement
between Aspect Medical Systems, Inc.
and Drager Medizintechnik GmbH
QUALITY ASSURANCE AGREEMENT
(to be negotiated later)
Natick, .......4/29/99 ................. Lubeck, ......May 5, 1999 ....
X. Xxxxxxxxxxxx Eagle [illegible]
........................................ ...............................
Aspect Medical Systems, Inc. Drager Medizintechnik GmbH
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EXHIBIT E
of the Drager/Aspect Product Agreement
between Aspect Medical Systems, Inc.
and Drager Medizintechnik GmbH
SERVICE AGREEMENT
(to be negotiated later)
Natick, .......4/29/99 ................. Lubeck, ......May 5, 1999 ....
X. Xxxxxxxxxxxx Eagle [illegible]
........................................ ...............................
Aspect Medical Systems, Inc. Drager Medizintechnik GmbH
