Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 10.1
ASPECT MEDICAL SYSTEMS, INC.
OEM DEVELOPMENT AND PURCHASE AGREEMENT
Agreement dated this February 13, 2003, by and between Aspect Medical Systems,
Inc., a Delaware corporation with its principal offices located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ("Aspect") and Dixtal ("Dixtal"), a Brazilian
corporation with its principal offices located at ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ - AM, Brazil 69077-000 for the purchase and/or license by Dixtal
of products under the terms and conditions contained in this Agreement.
1. BACKGROUND
1.1 Aspect is a developer, manufacturer and distributor of medical
devices, equipment, related hardware, software and related
products and accessories.
1.2 Dixtal is a developer, manufacturer and distributor of medical
devices, equipment, related hardware, software and related
products and accessories, including multiparameter patient
monitors.
1.3 Dixtal desires to integrate Aspect's BIS technology into
Dixtal's multiparameter patient monitors.
1.4 Aspect agrees to sell and/or license to Dixtal the products
described below, subject to the terms and conditions contained
in this Agreement.
2. Definitions.
"Aspect's Bispectral Index" or "BIS" is Aspect's proprietary processed
EEG parameter that measures the hypnotic effects of anesthetic and
sedative agents on the brain during surgery.
"Dixtal Patient Monitor" means any multi-parameter patient monitoring
system manufactured by or for Dixtal. When the BIS Module Development
Project is complete, the Dixtal BIS module will allow the Dixtal
Patient Monitor to display BIS and provide setup and operation
information (user interface), alarming, and network connectivity.
"Dixtal BIS Module" is the sum of all components involved in
integrating the BIS with Dixtal Patient Monitors.
"DSC Cable" is a cable used to connect the DSC-XP to the Dixtal BIS
Engine.
"Dixtal BIS Engine" is the processing unit for deriving the BIS data
from the raw EEG signal and consists of Aspect's "BIS Engine" board
modified for Dixtal.
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"Digital Signal Converter - XP" (or "DSC-XP") is used to amplify the
analog EEG signals as acquired by the BIS sensors and convert it from
analog to digital signals. The DSC-XP components are provided to Dixtal
by Aspect for final assembly by Dixtal. The DSC-XP is used by Dixtal
BIS Module customers to obtain the BIS.
"Aspect BIS Module Kit" are the Aspect components of the Dixtal BIS
Module that are developed by Aspect and licensed/sold to Dixtal under
this Agreement: DSC-XP components, DSC Cable, Dixtal BIS Engine, and
Module Cable. The DSC Cable, Dixtal BIS Engine and Module cable are
manufactured by Aspect. The DSC-XP components are provided to Dixtal
for assembly.
"Aspect BIS Sensor" means a single use disposable sensor manufactured
by Aspect for use with the A2000 XP or with the Aspect BIS Module Kit
and that is required to generate Aspect's Bispectral Index.
"A2000 XP" means Aspect's stand-alone BIS monitor for use with the
Aspect BIS Sensor and that generates Aspect's Bispectral Index.
"Aspect Products" means Aspect BIS Module Kit and any other product
that can be ordered by Dixtal as listed in Exhibit A (Aspect Products
and Purchase Prices).
"Software" means Aspect software programs in binary code form that are
designed for use with the Aspect BIS Module Kit.
"Documentation" means the BIS Engine Serial Interface Specification.
"Territory" shall mean all countries in which Dixtal is permitted under
this Agreement to distribute Aspect Products.
"Party" or "Parties" shall mean Aspect and Dixtal each individually or
jointly.
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3. BIS MODULE DEVELOPMENT PROJECT.
3.1 Project Management.
(a) Each Party shall appoint a "Project Manager" who shall
oversee and manage the joint project on a day-to-day
basis.
(b) The Project Managers shall meet regularly based on the
project needs to assess the project status and discuss and
resolve any issues or problems. These meetings may be held
face-to-face or as telephone or video conferences.
(c) Each Party shall bear its own communication and travel
costs.
(d) All communication in conjunction with this Agreement shall
be directed to the appropriate person and address as
listed in Exhibit C (Contact Persons/Addresses).
3.2 Dixtal Responsibilities.
(a) Dixtal shall develop the Dixtal BIS Module according to
mutually agreed specifications at Dixtals own cost.
(b) Dixtal shall develop, design and test the modular
integration of the components of the Aspect BIS Module Kit
with the Dixtal Patient Monitors.
(c) Dixtal shall assemble and test the DSC-XP using
specifications and procedures provided by Aspect. Dixtal
shall label the DSC-XP as a Dixtal product and shall
establish assembly protocols and labeling conventions to
identify on the Dixtal label the board set through the
Dixtal label on the DSC-XP housing. In addition to Dixtal
product specific information, the label will display the
BIS logo and appropriate Aspect trademark references as
required in Section 19.1.
3.3 Aspect Responsibilities.
Aspect shall design, develop, and test the Aspect BIS Module Kit
according to the mutually agreed specifications.
4. PURCHASE AND SALE OBLIGATIONS: LICENSES
4.1 General. Subject to the terms and conditions of this
Agreement, Aspect agrees to sell to Dixtal the Aspect Products
listed on Exhibit A (Aspect Products and Purchase Prices). The
components of the Aspect BIS Module Kits purchased from Aspect
under this Agreement shall only be used as components in,
incorporated into, integrated with, the Dixtal BIS Module
which Dixtal sells or leases to third-party users in the
regular course of business. The components of the Aspect BIS
Module Kits shall only be resold, leased, rented, licensed or
otherwise transferred to third parties for use as a part of a
Dixtal BIS Module or as replacement parts used in Dixtal BIS
Modules and Dixtal shall only sell Aspect approved accessories
including cables
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and sensor products in connection with any Dixtal BIS Module.
During the term of this Agreement, Dixtal agrees that it may
offer complementary but not directly competitive products to
the Dixtal BIS Module. Dixtal products other than the Dixtal
BIS Module that display a parameter claiming to be a measure
of the hypnotic effect of anesthesia, are considered to be
directly competitive products for purposes of this Section
4.1.
4.2 Distribution of Aspect BIS Sensors. Aspect hereby grants to
Dixtal a non-exclusive right to distribute Aspect BIS Sensors
solely to Dixtal customers within Brazil who have purchased
Dixtal BIS Modules. Prices for Aspect BIS Sensors purchased by
Dixtal hereunder shall be as set forth in Exhibit A (Aspect
Products and Purchase Prices).
4.3 Aspect Software License. Aspect hereby grants to Dixtal a
non-exclusive and non-transferable license, without the right
to sublicense (except to purchasers of Dixtal BIS Modules),
during the term of the Agreement to use the Software and
related Documentation provided by Aspect solely in connection
with operation of the components of Aspect BIS Module Kit in
the Dixtal BIS Module. Thereafter, Aspect grants to Dixtal a
right to use the Software and related Documentation used in
conjunction with the Dixtal BIS Modules being sold by Dixtal
on the date of termination with respect to service and support
of installed Dixtal BIS Modules for a period of 10 years after
termination of the Agreement. All rights granted to Dixtal
customers to use the Dixtal BIS Modules shall survive any
termination of this Agreement as long as such customers remain
in compliance with the terms of use for such Dixtal BIS
Modules. Dixtal shall not disclose, furnish, transfer,
distribute or otherwise make available the Software, the
Documentation or any portion thereof in any form to any third
party (other than to purchasers of Dixtal BIS Modules
(including Dixtal's subdistributors) and shall not duplicate
the Software, the Documentation or any part thereof (other
than for Dixtal's internal use as provided above). Title to
and ownership of any and all proprietary rights in or related
to the Software and the Documentation therefore shall at all
times remain with Aspect or its licensor(s). Nothing in this
Agreement shall be construed as a sale of any rights in the
Software or the Documentation. All references in this
Agreement to sale, resale or purchase of the Aspect BIS Module
Kits or the components thereof, or references of like effect,
shall, with respect to the Software and the Documentation mean
licenses or sublicenses of the Software and the Documentation
pursuant to this Section 4. Dixtal shall not disassemble,
decompile or otherwise reverse engineer the Software or any
part thereof. Dixtal shall retain and shall not alter or
obscure any notices, markings or other insignia affixed to the
Software, the Documentation or any part thereof at the time it
receives such Software or such Documentation.
4.4 Exclusivity. Nothing in this Agreement shall be construed to
grant Aspect any license to sell, distribute or license to any
third party any components of Dixtal incorporated in the
Dixtal BIS Module or the Dixtal BIS Engine. It is understood
that Aspect sells, distributes, and licenses to other third
parties both generic and customized Aspect BIS Engines and
Aspect BIS Module Kits to meet the needs of other OEM
customers, and
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nothing in this Agreement shall prohibit Aspect from
continuing to sell, distribute, or license these products or
components thereof to customers other than Dixtal.
4.5 Standard of Care: Priority. In connection with Aspect's
performance of its obligations hereunder, Aspect shall use
commercially reasonable efforts in the performance of its
obligations hereunder and will do so with the same degree of
care, skill and prudence customarily exercised when engaged in
similar activities for its other OEM customers.
5. SCOPE OF DELIVERY
5.1 Purchase Orders. Purchase orders (via Fax, e-mail, other
electronic transmission or paper) for Aspect Products to be
purchased under this Agreement (the "Orders") must be received
by Aspect during the term of this Agreement and must specify a
delivery date in accordance with the lead-time schedule
outlined below under Section 5.6. All Dixtal Purchase Orders
shall make reference to the appropriate engineering drawing or
manufacturing reference numbers. There is a minimum volume
commitment of [**] for the first order. Volume commitments for
subsequent years in this Agreement are detailed in Appendix A.
5.2 Order Acknowledgements. Dixtal purchase orders shall be
acknowledged by Aspect within 5 days after receipt of the
order, provided that the order is technically correct and that
the requested delivery time is within the agreed lead time and
that the latest forecast provided by Dixtal is not exceeded by
more than [**]% and the quantity ordered does not exceed by
more than [**] percent ([**]%) of the quantity ordered in the
preceding month. If the requested delivery time is less than
the agreed lead time, or if Dixtal's latest forecast is
exceeded by more than [**]%, or if the quantity ordered
exceeds by more than [**] percent ([**]%) the quantity ordered
in the preceding month, Aspect shall use reasonable efforts to
complete the requirements of such nonconforming orders within
[**] days from the date it receives such nonconforming order
and to acknowledge such orders within 10 days of its receipt.
Order acknowledgements shall not be unreasonably withheld
5.3 Forecasts. Dixtal shall furnish to Aspect a non-binding
quarterly forecast during the term of this Agreement with the
number and type of Aspect Products for which Dixtal expects to
submit orders for the following twelve months.
5.4 Installed Base Reporting. On a quarterly basis, Dixtal will
report units installed and overall installed base of Dixtal
BIS modules. This report will include number of units
installed, date installed and the location.
5.5 Cancellation Charges. In the event of the cancellation of any
Order by Dixtal, Dixtal shall be liable for the payment of
cancellation charges based on the number of days prior to
scheduled delivery date that written notice of cancellation is
received by Aspect, as outlined below:
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> 10 weeks prior to acknowledged delivery [**]
6 - 10 weeks prior to acknowledged delivery [**]% of order value
4 - 6 weeks prior to acknowledged delivery [**]% of order value
2 - 4 weeks prior to acknowledged delivery [**]% of order value
< 2 weeks prior to acknowledged delivery [**]% of order value
5.6 Lead Times. Lead times for the Aspect BIS Module Kit are
expected to be [**] ([**]) days. Late deliveries are subject
to late fees of 1% per month (pro-rated daily). In the event
of late deliveries by Aspect, Aspect will also promptly
reimburse Dixtal for expedited shipment charges that Dixtal
incurs as a direct result of late shipments of the Aspect BIS
Module Kit from Aspect.
6. PRICES.
6.1 Purchase Prices. The prices of Aspect Products purchased by
Dixtal hereunder (the "Purchase Prices"), which are ordered
during the term of the Agreement, shall be as set forth in
Exhibit A (Aspect Products and Purchase Prices).
6.2 Purchase Price Changes. In consideration of the market
situation and after consultation with Dixtal, the Purchase
Prices set forth in Exhibit A (Aspect Products and Purchase
Prices) shall be reviewed 12 months after first delivery of
production units and annually thereafter. Any price adjustment
shall become effective only after mutual agreement between
both Parties. In the event materials costs for the Aspect
Products increase by more than [**] percent ([**]%), Aspect
shall have the right no more than once per year during the
term of this Agreement to increase the Purchase Price of the
Aspect Products without the consent of Dixtal by an equivalent
amount by delivering reasonable documentation supporting such
increase and by giving Dixtal written notice of the increase
not less than ninety (90) days prior to the date upon which
the increased Purchase Price is to become effective. No
Purchase Price increase shall apply to orders for Aspect
Products accepted by Aspect prior to or during such ninety
(90) day period, which are to be delivered within ninety (90)
days of the date of such notice. Notwithstanding anything to
the contrary in this Section 6.2, no Purchase Price increase
shall apply unless Aspect has used its reasonable efforts to
find alternate suppliers of the materials that have increased
in cost and, despite exercising such reasonable efforts, was
not able to locate such alternate suppliers.
6.3 Taxes. All prices for Aspect Products are exclusive of all
federal, state and local taxes, levies and assessments, and
Dixtal shall be responsible for the payment of all such taxes,
levies and/or assessments imposed on Aspect Products purchased
and/or licensed by Dixtal hereunder, excluding taxes based on
Aspect's net income from the transaction. Dixtal shall be
responsible for providing in a timely manner all
documentation, in the nature of exemption certificates or
otherwise, necessary to allow Aspect to refrain from
collections, such as sales tax, which it would otherwise
6
be obligated to make.
7. TERMS OF PAYMENT.
7.1 Invoices. Dixtal shall pay to Aspect the Purchase Price for
all Aspect Products shipped hereunder within sixty (60) days
after the receipt of Aspect's invoice. Nothing herein shall
affect Aspect's right to withhold shipment or otherwise
exercise its rights under Section 21 (Termination) hereof in
the event of Dixtal's failure to make payment when due for
Aspect Products delivered to Dixtal. Dixtal shall have the
right to provide Aspect with a specific address to which
Aspect will send invoices for Aspect Products purchased under
this Agreement.
Late Payment Charge. Subject to applicable law, service and/or interest charges
not exceeding the lesser of 1% per month or the highest amount permitted by law
may, at the election of Aspect, be assessed on amounts past due more than thirty
(30) days (that is, more than thirty (30) days after the payment due date as
specified in Section 7.1).
8. SHIPMENT AND DELIVERY.
8.1 Delivery Location. Each shipment must indicate the exact
address of the recipient on the outside of the packaging as
follows:
DIXTAL BIOMEDICA IND E COM LTDA
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ - ▇▇
▇▇▇▇▇▇ 69077-000
8.2 Delivery Terms. All shipments hereunder shall be FOB Aspect's
Massachusetts point of origin (Incoterms 1990). All Aspect
Products shall be deemed delivered and subject to Dixtal's
dominion and control only when placed in the possession of a
carrier designated by Dixtal, properly packed and ready for
shipment to Dixtal. Aspect shall cooperate with Dixtal in the
documentation and proof of loss claims promptly presented by
Dixtal to the appropriate carrier and/or insurer.
8.3 Delivery Date and Date of Dispatch. The requested delivery
date shall be specified on the Dixtal Purchase Order provided
that such delivery date must be at least [**] days after the
date Aspect receives the Order; provided, however, that Aspect
shall use its reasonable efforts to deliver the Order as early
as reasonably possible (taking other customer demands on
Aspect into account). Aspect shall utilize reasonable efforts
to ensure that the order is delivered in accordance with
Aspect's order acknowledgement and that the date of dispatch
is ten (10) days prior to the delivery date. Late delivery
penalties to Aspect will apply as specified in Section 5.6 of
this Agreement.
7
9. ACCEPTANCE.
Any Aspect Product shipped hereunder may be subjected to inspection and
performance testing by Dixtal, to confirm that it functions in
accordance with Aspect's applicable product specifications in effect at
the time of delivery of such Aspect Products to Dixtal. Dixtal shall
provide written notice to Aspect of the rejection of any such Aspect
Product within [**] days of the date of receipt of any Aspect Product.
Aspect shall have [**] days from receipt of a notice from Dixtal
rejecting an Aspect Product either, at its option, to make any
necessary repairs to the defective Aspect Product or to replace it. If
Aspect replaces an Aspect Product, Dixtal shall dispose of the replaced
Aspect Product in accordance with Aspect's instructions and at Aspect's
expense. Dixtal's sole remedy for rejected Aspect Products shall be
limited to prompt repair or replacement of such Aspect Products.
10. WARRANTY.
10.1 General. Aspect warrants solely to Dixtal that Aspect Products
(excluding the DSC-XP components) delivered hereunder shall
perform substantially in accordance with the specifications in
Exhibit B (Aspect's Standard Module Kit) or other applicable
product specifications as published by Aspect in effect at the
time of delivery of such Aspect Product (including Software),
and shall be free from defects in materials and workmanship,
when given normal, proper and intended usage, for [**] months
from the date of shipment of the Dixtal BIS Module to Dixtal's
end customer site or [**] months from the date of shipment by
Aspect to Dixtal, whichever is less. This warranty shall not
apply to expendable components and supply items, such as, but
not limited to, cables, fuses and bulbs (or disposable items
such as an Aspect BIS Sensor after the expiration date marked
on the Sensor packaging); nor shall Aspect have any obligation
under this Agreement to make repairs or replacements which are
required by normal wear and tear, or which result, in whole or
in part, from catastrophe, fault or negligence of Dixtal, or
anyone claiming through or on behalf of Dixtal, or from
improper or unauthorized use of Aspect Products, or use of
Aspect Products in a manner for which they were not designed,
or by causes external to Aspect Products such as, but not
limited to, power or air conditioning failure.
10.2 DSC-XP. Aspect warrants solely to Dixtal that the components
for the DSC-XP shall be free from defects in materials and
workmanship, when given normal, proper and intended usage, for
[**] months from the date of shipment by Aspect to Dixtal.
Aspect shall have no obligation under this Agreement to make
repairs or replacements which are required by normal wear and
tear, or which result, in whole or in part, from catastrophe,
fault or negligence of Dixtal, or anyone claiming through or
on behalf of Dixtal, or from improper or unauthorized use of
the DSC-XP components, or use of the DSC-XP components in a
manner for which they were not designed.
10.3 Warranty Procedures. Dixtal shall notify Aspect of any Aspect
Products which it believes to be defective during the
applicable warranty period and which are covered
8
by the warranties set forth in Section 10.1. At Aspect's
option, such Aspect Products shall be returned by Dixtal to
Aspect's designated facility for examination and testing, or
may be repaired on site by Aspect. Aspect shall either repair
or replace, within [**] days of receipt by Aspect, any such
Aspect Product found to be so defective and promptly return
such Aspect Products to Dixtal. Transportation and insurance
costs shall be borne by Aspect. Should Aspect's examination
and testing not disclose any defect covered by the foregoing
warranty, Aspect shall so advise Dixtal and dispose of or
return the Aspect Product in accordance with Dixtal's
instructions and at Dixtal's sole expense, and Dixtal shall
reimburse Aspect for such transportation and insurance costs.
10.4 Repair Warranty. Aspect warrants its repair work and/or
replacement parts for the duration of the original warranty
period as set forth in Section 10.1 or at least [**],
whichever is longer.
10.5 DISCLAIMER OF WARRANTIES. 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, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT.
11. SERVICE AND SUPPORT.
11.1 Service and Support. Dixtal shall be responsible for providing
installation, customer training, service and support
(including repair) to its end customers for the Aspect
Products Dixtal sells to such customers, and Dixtal shall bear
all related costs incurred for labor, parts, or travel to
perform such service.
11.2 Service Training. Aspect agrees to provide initial service
training to a mutually agreed upon number of Dixtal service
representatives prior to the market release of the BIS module,
as well as periodic (annually at a minimum) ongoing training
for existing and new Dixtal service personnel.
11.3 Service Period. For a period of [**] years following the last
delivery to Dixtal of the applicable Aspect Product ordered by
Dixtal hereunder, Aspect shall use its reasonable efforts to
make available repair service (or at Aspect's sole discretion,
exchange units for the Aspect Products) for purchase by Dixtal
and third party users of the Aspect products at Aspect's
then-current prices for such repair services and exchange
units. After expiry of this [**] year period, Aspect may, in
its sole discretion, continue to supply repair services
(and/or exchange units for the Aspect Products) subject to the
mutual written agreement of the Parties.
12. Quality Assurance.
12.1 Certification Status. Both parties agree to maintain, as
applicable, compliance with the U.S. Food and Drug
Administrations ("FDA") Quality System Regulation
9
("QSR"), the European Medical Device Directive ("MDD"), and
other appropriate regulations pertinent to the development,
manufacturing and marketing of medical products similar to the
Aspect Products.
12.2 Aspect Product Compliance. All Aspect Products sold by Aspect
under this Agreement shall fully comply with the above quality
requirements and guidelines (MDD, FDA QSR, etc.).
12.3 QA and Regulatory Audits. Aspect shall permit Dixtal's Quality
Assurance department to conduct a reasonable audit of its
facilities at a mutually agreed upon date after the date of
this Agreement for the purpose of approving its status as an
OEM supplier, and reasonable periodic audits thereafter for
the purpose of confirming continuing compliance with
applicable quality and regulatory requirements and guidelines.
Such audits shall be scheduled with at least thirty (30) days
advance notice during normal business hours and shall not take
place more than once per calendar year.
13. REGULATORY MATTERS.
13.1 Aspect Products. Aspect shall assume full regulatory
responsibility for the Aspect Products, including obtaining
and maintaining all applicable governmental authorizations and
regulatory approvals required to distribute the Aspect BIS
Module Kit. Both Parties shall work together to develop a
regulatory plan which defines precisely what the regulatory
and localization requirements are for Brazil.
13.2 Device Master Record. Aspect shall be responsible for
generating its own Device Master Record for the Aspect
Product, except the DSC-XP. Aspect shall maintain traceability
at the board level on the DSC-XP. Dixtal shall be responsible
for generating the Device Master Record for the assembled
DSC-XP. It is understood that the Aspect BIS Module Kit shall
be a component of the Dixtal BIS Module. Dixtal shall be
responsible for obtaining and maintaining all applicable
governmental authorizations and regulatory approvals required
to distribute the combination of Aspect and Dixtal products in
the Dixtal BIS Module as provided in Section 13.3.
13.3 Dixtal Patient Monitors. Dixtal shall assume full regulatory
responsibility for the Dixtal Patient Monitors, including
obtaining and maintaining all applicable governmental
authorizations and regulatory approvals required to distribute
the Dixtal Patient Monitors in all countries in the Territory.
13.4 Dixtal BIS Module. Dixtal shall assume the regulatory
responsibility for the combination of the Aspect and Dixtal
components in the Dixtal BIS Module. Aspect shall fully
support Dixtal as required in the process of obtaining
regulatory approvals by making available to Dixtal any
required information, data, certificates, or technical files
in the requested formats.
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13.5 Product Complaints and Incident Reporting. Dixtal and Aspect
shall inform each other in writing immediately about any event
that may require incident reporting in any country. Dixtal and
Aspect shall inform each other in writing within two (2)
business days of a customer complaint regarding the Dixtal BIS
Module, the Aspect Products, or (within the Territory) Aspect
BIS Sensors. Both parties will cooperate and use commercially
reasonable efforts to resolve such customer complaints.
Closure of any customer complaint relating to the Dixtal BIS
Module will occur when Dixtal notifies Aspect that the problem
is resolved. Closure of any customer complaint relating solely
to Aspect Products or Aspect Sensors will occur when Aspect
notifies Dixtal that the problem is resolved.
13.6 Recalls. In the event of any recall of an Aspect Product
required by either a governmental agency, by Aspect, or by
Dixtal for safety or efficacy reasons which is the result of
Aspect's failure to supply Aspect Products that (1) conform in
all material respects to the applicable published
specifications (including the specifications set forth in
Exhibit B (Aspect's Standard Module Kit)) or (2) are free from
defects in material and workmanship (when given normal, proper
and intended usage), Aspect agrees to repair or replace [**]
all Aspect Products subject to the recall and previously
delivered to Dixtal. Aspect also agrees to consult with Dixtal
to establish a reasonable process for managing the recall and
Aspect shall be [**] (including, but not limited to [**]) that
are consistent with the recall process agreed to by the
Parties. In the event that Aspect at its sole discretion
requests a recall that is not required by a governmental
agency for safety or efficacy reasons, Aspect shall be
responsible for determining the scope of the recall, including
the number of units, timeframe for the recall, and criteria
for completion. Dixtal agrees to maintain all necessary sales
records to facilitate the recall.
13.7 Delegation. Dixtal may at its sole discretion delegate some of
the obligations under this Section 13 to its sub-distributors.
Traceability. For the purpose of facilitating product traceability, all
Products purchased from Aspect by Dixtal shall require identification
of an internal order number and tracking code.
14. PRODUCT CHANGES; DISCONTINUED PRODUCTS; FUTURE PRODUCTS; CONTINUED
SUPPLY.
14.1 Product Changes. Aspect shall have the right, at any time and
from time to time, to make substitutions and modifications to
Aspect Products, provided that such substitutions or
modifications shall not materially affect form, fit, function,
reliability, serviceability, performance, functional
interchangeability or interface capability of Aspect Products.
In the event that any proposed substitution or modification
affects, in Aspect's reasonable judgment, the form, fit,
function, reliability, serviceability, performance, functional
interchangeability or interface capability of an Aspect
Product, Aspect shall give Dixtal written notice of such
proposed substitution or modification at least [**] days prior
to its taking effect and Dixtal shall have the right, during
such [**] day period and for [**] days thereafter, to
11
order Aspect Products without such substitution or
modification for delivery up to [**] days after such
substitution or modification takes effect. Aspect shall
provide the appropriate verification and validation
information for evaluating the effect of the change on the
Dixtal BIS Module.
14.2 Discontinued Products. Aspect agrees to notify Dixtal in
writing not less than [**] in advance of the discontinuance of
any Aspect Product. Dixtal shall be able to place orders for
at least [**] after receipt of the written notice in any case.
In addition, Dixtal shall be entitled to determine its
lifetime-buy quantities and place a corresponding last
purchase order.
14.3 Future Products. The Aspect Products are designed for use in
measuring the effects of anesthetic and sedative agents on the
brain during surgery. In the event that Aspect develops a
product involving this or a different type of index, patient
sensor, or application, Aspect and Dixtal agree to discuss in
good faith a new agreement for the purchase of such new
product or products by Dixtal.
15. OWNERSHIP AND PROTECTION OF RESULTS.
15.1 No Transfer of Ownership. It is expressly agreed that neither
Aspect nor Dixtal shall transfer to the other Party any patent
rights, copyrights or other intellectual property of any kind
that either Party owns as of the Effective Date of this
Agreement.
15.2 Models, Patterns, Dies, etc. Aspect shall retain the title to
and possession of any models, patterns, dies, molds, jigs,
fixtures, and other tools made for or obtained in connection
with this Agreement and related to the Aspect Products, even
if made for, obtained by or paid for by Dixtal.
15.3 Developments. If there are developments (including patentable
inventions) conceived, created or reduced to practice under
this Agreement then the rights to such developments shall be
retained (a) by Aspect if conceived, created and reduced to
practice solely by Aspect, or (b) by Dixtal, if solely
conceived, created and reduced to practice by Dixtal, or (c)
jointly by Dixtal and Aspect (without any duty to account to
the other) if jointly developed by Dixtal and Aspect, provided
that:
(i) Dixtal shall assign to Aspect all rights to any
developments conceived, created or reduced to
practice by Dixtal solely relating to the Aspect
BIS Module Kit; and
(ii) Aspect shall assign to Dixtal all rights to any
development solely relating to the Dixtal Patient
Monitor.
16. DOCUMENTATION AND TRAINING.
12
Aspect agrees to provide Dixtal with such product literature,
operations and maintenance manuals, and other information and training
(including training to avoid possible misrepresentation of Aspect's
Bispectral Index) as is mutually agreed, to enable Dixtal to properly
sell and maintain Aspect Products. Aspect will use its best reasonable
efforts to provide adequate training to Dixtal in Brazil at a mutually
agreed training session on an annual basis. Dixtal and Aspect agree to
share the costs of this training session.
17. CONFIDENTIALITY.
No confidential information disclosed by either Party to the other in
connection with this Agreement shall be disclosed to any person or
entity other than the recipient Party's employees and contractors
directly involved with the recipient Party's use of such information
who are bound by written agreement to protect the confidentiality of
such information, and such information shall otherwise be protected by
the recipient Party from disclosure to others with the same degree of
care accorded to its own confidential information of like importance.
In addition, each Party and its representatives shall use the
confidential information only for the purposes specified under this
Agreement and such information shall not be used for any other purpose
without the prior written consent of the disclosing Party. To be
subject to this provision, information must be delivered in writing and
designated as proprietary or confidential, or if initially delivered
orally, must be identified at the time of disclosure, and confirmed in
writing as confidential within ten (10) days after such oral
disclosure. Information shall not be subject to this provision if it is
or becomes a matter of public knowledge without the fault of the
recipient Party, if it was a matter of written record in the recipient
Party's files prior to disclosure to it by the other Party, if it was
or is received by the recipient Party from a third person under
circumstances permitting its unrestricted disclosure by the recipient
Party, or if it was independently developed by the recipient Party
without reference to the confidential information. Upon termination of
this Agreement, each Party shall promptly destroy all confidential
information of the other Party in the possession or control of such
Party and all copies thereof, provided that each Party may retain one
copy thereof for archival purposes. The obligations under this Section
17 shall continue for both parties for a period of five (5) years after
delivery by Aspect to Dixtal of the last Aspect Product under this
Agreement. Dixtal is entitled to transmit confidential information of
Aspect to Dixtal subsidiaries and affiliated companies. In such, case
these subsidiaries and affiliated companies may only use such
information to the same extent as Dixtal is entitled to use such
information under this Agreement. Dixtal shall be responsible if any of
these subsidiaries and affiliated companies fails to comply with the
confidentiality provisions of this Agreement.
18. WARRANTIES AND INDEMNITIES.
18.1 Warranties by Aspect.
(a) Aspect represents and warrants that it either has all rights,
title and interest in, or valid licenses to, the Aspect
Products and any related intellectual property rights
13
thereto. Aspect represents and warrants that it has not
granted in the Territory any exclusive licenses or exclusive
sublicenses in the Aspect Products that would prevent it from
granting Dixtal the licenses set forth in Section 4.3 (Aspect
Software License). Aspect also represents and warrants that it
has the right and authority to engage in the joint development
of the Dixtal BIS module as contemplated hereunder and that to
its knowledge such activity will not infringe upon or
misappropriate any third party's intellectual property rights.
(b) Aspect warrants that it will deliver all Aspect Products free
from the rightful claims of any third party for infringement
of any Patents, Trademarks or Copyrights or misappropriation
of Trade Secrets. Aspect also warrants that as of the date of
this Agreement, Aspect has received no notice of a claim of
infringement or misappropriation from any third party
regarding Aspect Products. Dixtal's exclusive remedy with
respect to breach of any warranty provided in this Section
18.1 shall be that Aspect will defend at its own expense, and
will pay the costs and damages (including attorneys fees,
other professional fees and other costs of litigation or
settlement) made in settlement or awarded as a result of, any
action brought against Dixtal or any of Dixtal's customers
based on an allegation of such infringement or
misappropriation with respect to any Aspect Product, provided
that the Indemnification Procedures set forth in Section 18.3
are followed. If an injunction is obtained against Dixtal's or
its customers' use of an Aspect Product by reason of an
infringement or misappropriation described above, or if in
Aspect's opinion an Aspect Product or any part thereof is
likely to become the subject of a claim of such infringement
or misappropriation, Aspect will, at its option and its own
expense procure the right for Dixtal and its customers to
continue using such Aspect Product, or replace or modify such
Aspect Product or any part thereof so that it becomes
non-infringing. If neither of the foregoing options are
reasonably available to Aspect, Aspect shall have the right to
discontinue supplying such Aspect Products to Dixtal. Aspect
shall not have any obligation to Dixtal or its customers under
any provision of this Section if the infringement or
misappropriation claim is based upon the modification of any
Aspect Product not made by Aspect, the use of Aspect Products
in combination with any program or equipment, or any part
thereof, not furnished or recommended in writing by Aspect, or
the use of such Aspect Products in a manner or environment, or
for any purpose, for which Aspect did not design or license
them.
(c) In the event that any claim is brought against Dixtal as a
result of personal injuries and/or property damages resulting
from that portion of the Dixtal BIS Module developed and
manufactured by Aspect, and provided further that such claims
do not arise as a result of the misuse of the Aspect Products,
or the use of the Aspect Products in an application for which
it was not designed by Aspect, where such claim would not have
occurred but for such misuse or use, Aspect agrees that it
shall indemnify and hold Dixtal and its directors, officers,
employees, representatives and agents harmless from and
against any damages, liabilities,
14
costs and expenses (including attorneys' and other
professional fees and other costs of litigation) arising out
of such claim, provided that the procedures set forth in
Section 18.3 are followed.
18.2 Warranties by Dixtal.
(a) Dixtal represents and warrants that it either has all rights,
title and interest in, or valid license to, the Dixtal Patient
Monitor and any related intellectual property rights thereto.
Dixtal also represents and warrants that it has the right and
authority to engage in the development of the Dixtal BIS
Module as contemplated hereunder and that to its knowledge
such activity will not infringe upon or misappropriate any
third party's intellectual property rights or violate the
terms of any agreement Dixtal has entered into with a third
party.
(b) Dixtal warrants that as of the date of this Agreement, Dixtal
has received no notice of a claim of infringement or
misappropriation from any third party regarding the Dixtal
Patient Monitor or any other Dixtal-supplied component of the
Dixtal BIS Module. Aspect's exclusive remedy with respect to
breach of any warranty provided in this Section 18.2 shall be
that Dixtal will defend at its own expense, and will pay the
costs and damages (including attorneys fees, other
professional fees and other costs of litigation or settlement)
made in settlement or awarded as a result of, any action
brought against Aspect or any of Aspect's customers based on
an allegation of such infringement or misappropriation with
respect to any Dixtal Patient Monitor or any other
Dixtal-supplied component of the Dixtal BIS Module, provided
that the Indemnification Procedures set forth in Section 18.3
are followed. If an injunction is obtained against Aspect's or
its customers' use of a Dixtal Patient Monitor or any other
Dixtal-supplied component of the Dixtal BIS Module by reason
of an infringement or misappropriation described above, or if
in Dixtal's opinion a Dixtal Patient Monitor or any other
Dixtal-supplied component of the Dixtal BIS Module or any part
thereof is likely to become the subject of a claim of such
infringement or misappropriation, Dixtal will, at its option
and its own expense procure the right for Aspect and its
customers to continue using such Dixtal Patient Monitor or any
other Dixtal-supplied component of the Dixtal BIS Module, or
replace or modify such Dixtal Patient Monitor or any other
Dixtal-supplied component of the Dixtal BIS Module or any part
thereof so that it becomes non-infringing. Dixtal shall not
have any obligation to Aspect or its customers under any
provision of this Section 18.2 if the infringement or
misappropriation claim is based upon the use of Dixtal Patient
Monitors or any other Dixtal-supplied component of the Dixtal
BIS Modules in combination with any program or equipment, or
any part thereof, not furnished or recommended in writing by
Dixtal, or the use of such Dixtal Patient Monitors or any
other Dixtal-supplied component of the Dixtal BIS Modules in a
manner or environment, or for any purpose, for which Dixtal
did not design or
15
license them.
(c) In the event that any claim is brought against Aspect as a
result of personal injuries and/or property damages resulting
from the Dixtal BIS Module or the DSC-XP assembled by Dixtal,
and provided further that such claims do not arise as a result
of the defective design or operation of that portion of the
Dixtal BIS Module developed or manufactured by Aspect, Dixtal
agrees that it shall indemnify and hold Aspect and its
directors, officers, employees, representatives and agents
harmless from and against any damages, liabilities, costs and
expenses (including attorneys' and other professional fees and
other costs of litigation) arising out of such claim, provided
that the procedures set forth in Section 18.3 are followed.
18.3 Indemnification Procedures.
(a) In the event that any person intends to claim indemnification
pursuant to this Agreement, (an "Indemnitee"), it shall
promptly notify the indemnifying Party (the "Indemnitor") in
writing of such alleged liability, provided that the failure
to promptly notify the Indemnitor shall not relieve the
Indemnitor of any obligation under this Agreement except to
the extent such failure to provide prompt notice adversely
impairs the Indemnitor's ability to defend against the claim,
suit or proceeding.
(b) The Indemnitor shall have the sole right to control the
defense and settlement thereof, provided, that (i) the
Indemnitor may not consent to imposition of any obligation or
restriction on the Indemnitee in any settlement unless
mutually agreed among Aspect and Dixtal (ii) Indemnitor shall
keep Indemnitee fully informed and permit the Indemnitee to
participate (at Indemnitee's expense) as the Indemnitee may
reasonably request and (iii) Indemnitee may, without affecting
its right to indemnity hereunder, defend and settle any such
claim, suit or proceeding if Indemnitor declines to defend
against such claim, suit or proceeding or Files for
Bankruptcy. The Indemnitee shall cooperate with the Indemnitor
and its legal representatives in the investigation of any
action, claim or liability covered by this Agreement.
(c) The Indemnitee shall not, except at its own cost, voluntarily
make any payment or incur any expense with respect to any
claim or suit without the prior written consent of Indemnitor,
which Indemnitor shall not be required to give, provided that
the Indemnitee may, without affecting its right to indemnity
hereunder, defend and settle any such claim, suit or
proceeding if the Indemnitor declines to take responsibility
or Files for Bankruptcy.
19. TRADEMARKS.
16
19.1 Trademarks.
(a) Ownership. Dixtal acknowledges and agrees that Aspect is the
sole and exclusive owner of all right, title and interest in,
or has valid licenses to the trademarks (the "Aspect
Trademarks") identified on Exhibit D (Aspect Trademarks).
Aspect acknowledges and agrees that Dixtal is the sole and
exclusive owner of all right, title and interest in and to the
trademarks (the "Dixtal Trademarks") identified on Exhibit D
(collectively the "Aspect and Dixtal" Trademarks). Each Party
recognizes the value of the other Party's Trademarks and the
good will associated with the other Party's Trademarks. Dixtal
agrees that its use of the Aspect Trademarks and any good will
arising there from shall inure to the benefit of Aspect.
Aspect agrees that its use of the Dixtal Trademarks and any
good will arising therefrom shall inure to the benefit of
Dixtal. 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 Dixtal, or the Dixtal
Trademarks to Aspect, other than the grant of the licenses in
Section 19.1 (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 and its licensors,
and all other right, title and interest in and to the Dixtal
Trademarks is expressly reserved by Dixtal. Each Party shall
keep the other Party's Trademarks free from all liens,
mortgages or other encumbrances. Each Party agrees that it
shall not attack or otherwise challenge the title, validity or
any other rights of the other Party in or to its Trademarks.
(b) Notice. All Dixtal BIS Modules that use the Aspect Trademarks
shall be accompanied, where reasonable and appropriate, by a
proprietary notice consisting of the following elements:
(i) The statement "[insert trademark(s)] is a trademark(s) of
[or licensed to] Aspect Medical Systems, Inc."
(ii) Dixtal shall include the "(TM)" or "(R)" symbol, as
instructed by Aspect, after the first prominent use of
the Aspect Trademark in the Dixtal Patient Monitor and
related materials. Dixtal shall have a period of 60
days in which to begin to use the "(R)" symbol in
replacement of the "(TM)" symbol upon receiving
instructions to do so by Aspect for all new stock of such
materials. Dixtal may continue to deliver stocked
literature before the change becomes effective. Dixtal
shall reproduce copyright and trademark notices of Aspect
on the "splash screen" or in the same location where
Dixtal reproduces its own copyright and trademark
notices.
(c) License. Each Party hereby grants to the other a nonexclusive,
worldwide, royalty-free license (without the right to
sublicense) to use the other Party's Trademarks to designate
and promote Aspect Products in conjunction with Dixtal
17
BIS Modules. Neither Party shall have any other right to use,
display or utilize the other Party's Trademarks for any other
purpose or in any other manner.
(d) Quality Standards.
(i) Inspection. Upon reasonable notice and request, each
Party will furnish to the other samples of its applicable
advertising and promotional materials as necessary to
allow the requesting Party to monitor compliance with
this Agreement.
(ii) Compliance. Aspect acknowledges the high standards of
quality and excellence established by Dixtal with respect
to products bearing Dixtal's trademarks. Dixtal
acknowledges the high standards of quality and excellence
established by Aspect with respect to products bearing
the Aspect Trademarks. Each Party agrees that Dixtal BIS
Modules with which both parties' Trademarks are used
shall be of such quality so as to maintain such high
standards and to reflect well upon both Parties. Each
Party agrees to adhere to its own or the following
quality standards (whichever may be more rigorous) for
use of the other Party's Trademarks in connection with
the Dixtal BIS Module:
- In order to ensure that the Dixtal BIS
Module distributed under both parties' Trademarks
complies with the consistent quality standards of each
Party, all Dixtal BIS Modules distributed by or for
Dixtal which bear an Aspect Trademark shall conform to
those commercially reasonable standards which Aspect
provides to Dixtal in writing. Dixtal shall cause each
major new release of such Dixtal BIS Modules to comply
with such standards or remove the Aspect Trademark(s)
from any such new release, which does not comply with
such standards. Dixtal shall have a period of [**] days
in which to bring newly manufactured Dixtal BIS Modules
into compliance with any commercially reasonable
standard provided to it in writing by Aspect following
the date of receipt of such standard.
Each Party acknowledges that if Dixtal BIS Modules
bearing both Parties' Trademarks fail to satisfy the
quality standards set forth above, the substantial good
will which each Party has built and now possess in its
own products and Trademarks shall be impaired.
(e) Protection and Infringement. Each Party agrees to cooperate
with and assist the other Party in obtaining, maintaining,
protecting, enforcing and defending the other Party's
proprietary rights in and to its Trademarks. In the event that
either Party learns of any infringement, threatened
infringement or passing-off of the other Party's Trademarks,
or that any third party claims or alleges that the other
Party's Trademarks infringe the rights of the third party or
are otherwise liable to cause deception or confusion to the
public, the Party obtaining such information shall notify the
other Party giving the particulars thereof, and if such claims
or
18
allegations relate to this Agreement, the Dixtal BIS Module,
the Aspect BIS Kit or Aspect Products sold hereunder, shall
provide necessary information and assistance reasonably
requested by such other Party in the event that such other
Party decides that proceedings should be commenced.
(f) Termination. In addition to the termination rights set forth
in Section 21 hereof, in the event that either Party is in
material breach of any provision of this Section 19, the
non-breaching Party may, upon [**] days written notice,
terminate the license granted in Section 19.1 (c) if the
breaching Party does not cure such breach or default within
such [**] day period. In addition to the provisions of Section
21 hereof, upon termination of the license granted in Section
19.1 (c), or upon termination of this Agreement, for whatever
cause:
(i) Each Party shall immediately cease and desist from any
further use of the other Party's Trademarks and any
trademarks confusingly similar thereto, either directly
or indirectly;
(ii) All rights in the Aspect Trademarks granted to Dixtal
hereunder shall immediately revert to Aspect, and all
rights in the Dixtal Trademarks granted to Aspect
hereunder shall immediately revert to Dixtal;
(iii) In the event that this Agreement is terminated for any
reason other than a material breach or material default
by Dixtal, Dixtal shall thereafter to dispose of all of
the unsold Dixtal Patient Monitors bearing the Trademarks
and advertising and promotional materials relating
thereto which had been completed by it prior to such
termination, provided such Dixtal Patient Monitors and
materials were in the process of manufacture before such
termination.
(g) Promotional Claims. The general form of any promotional claims
by Dixtal regarding Aspect's Bispectral Index technology
and/or the integration of Aspect's Bispectral Index technology
in Dixtal Patient Monitors, and the specific form of the use
of Aspect's trade names and trademarks, and of intended use
claims regarding Aspect's Bispectral Index technology, in
promotional material, advertisement, and/or in written
technical literature shall be subject to review and approval
by Aspect prior to its publication or display. The general
form of any promotional claims by Aspect regarding Dixtal's
Patient Monitors or the integration of Aspect's Bispectral
Index technology in Dixtal Patient Modules, and the specific
form of the use of Dixtal's trade names and Trademarks, and of
intended use claims regarding the Dixtal BIS Modules, in
promotional material, advertisement, and/or in written
technical literature shall be subject to review and approval
by Dixtal prior to its publication or display.
19
20. EXPORT.
Dixtal shall not export, directly or indirectly, Aspect Products
(including when integrated into a Dixtal Patient Monitor) or other
products, information or materials provided by Aspect hereunder, to any
country for which the United States requires any export license or
other governmental approval at the time of export without first
obtaining such license or approval. It shall be Dixtal's responsibility
to comply with the latest United States export regulations, and Dixtal
shall defend and indemnify Aspect from and against any damages, fines,
penalties, assessments, liabilities, costs and expenses (including
reasonable attorneys' fees and court costs) arising out of any claim
that Dixtal Patient Monitors or other products, information or
materials provided by Aspect hereunder were exported or otherwise
shipped or transported in violation of applicable laws and regulations.
21. TERM; DEFAULT AND TERMINATION.
21.1 Term and Renewal. The initial term of this Agreement shall
commence on the Effective Date and shall continue for a period
of three (3) years following introduction of the Dixtal BIS
Module. The term of this Agreement shall be renewed
automatically for successive twelve (12) month periods, unless
either Party provides written notice of termination to the
other Party at least sixty (60) days prior to expiration of
the Agreement.
21.2 TERMINATION FOR GOOD CAUSE.
(a) Termination by Aspect. The Agreement may be terminated by
Aspect giving thirty (30) days prior written notice to
Dixtal in the event Dixtal has not commercially
introduced a Dixtal BIS Module by [**].
(b) Termination by Dixtal. The Agreement may be terminated by
Dixtal giving 30 days prior written notice to Aspect if
Aspect has failed to provide an Aspect BIS Module Kit
consistent with the specifications outlined in Exhibit B
to Dixtal by [**].
21.3 Events of Default. The following shall constitute events of
default under this Agreement:
(i) if either Party assigns this Agreement or any of
its rights or obligations hereunder without the
prior written consent of the respective other
Party, except: (a) as specifically permitted under
this Agreement; or (b) in connection with the sale
or other transfer of such Party's business to which
this Agreement relates (the word "assign" to
include, without limiting the generality thereof, a
transfer of a majority interest in the Party) or
20
(ii) if either Party shall neglect or fail to perform or
observe any of its obligations to the other Party
hereunder, including, without limiting the
generality thereof, the timely payment of any sums
due, and such failure is not cured within [**] days
([**] days in the event of a default in the payment
of amounts owed the other Party) after written
notice thereof from the other Party; or
(iii) if there is (w) a dissolution, termination of
existence, liquidation, insolvency or business
failure of either Party, or the appointment of a
custodian or receiver of any part of either Party's
property, if such appointment is not terminated or
dismissed within thirty (30) days; (x) a
composition or an assignment or trust mortgage for
the benefit of creditors by either Party; (y) the
commencement by either Party of any bankruptcy
proceeding under the United States Bankruptcy Code
or any other federal or state bankruptcy,
reorganization, receivership, insolvency or other
similar law affecting the rights of creditors
generally; or (z) the commencement against either
Party of any proceeding under the United States
Bankruptcy Code or any other federal or state
bankruptcy, reorganization, receivership,
insolvency or other similar law affecting the
rights of creditors generally, which proceeding is
not dismissed within thirty (30) days ("File for
Bankruptcy").
21.4 Remedies. Upon any event of default, and in addition to any
other remedies either Party may have at law or in equity, the
non-defaulting Party may terminate the Agreement, cancel any
outstanding Order, refuse to make or take further Orders or
deliveries, cancel any discount given, and declare all
obligations immediately due and payable. Any such termination
or other action taken by the non-defaulting Party pursuant to
this Section 21.4 shall not relieve the defaulting Party of
its obligations hereunder and the non-defaulting Party shall
retain all legal and equitable remedies after such
termination.
22. INSURANCE.
Upon request, Aspect shall provide evidence of product liability,
general liability and property damage insurance against an insurable
claim or claims which might or could arise regarding Aspect products
purchased from Aspect. Such insurance shall contain a minimum limit of
liability for bodily injury and property damage of not less than [**]
US$.
23. DISPUTE RESOLUTION
23.1 General. Any dispute, controversy or claim arising out of or
relating to this Agreement or any related agreement or the
validity, interpretation, breach or termination thereof (a
"Dispute"), including claims seeking redress or asserting
rights under applicable law, shall be resolved in accordance
with the procedures set forth
21
herein. Until completion of such procedures, no Party may take
any action not contemplated herein to force a resolution of
the Dispute by any judicial or similar process, except to the
limited extent necessary to; (i) avoid expiration of a claim
that might eventually be permitted hereby; or (ii) obtain
interim relief, including injunctive relief, to preserve the
status quo or prevent irreparable harm.
23.2 Waiver. In connection with any Dispute, the parties expressly
waive and forego any right to (i) punitive, exemplary,
statutorily, enhanced or similar damages in excess of
compensatory damages and (ii) trial by jury.
23.3 Good Faith Negotiations. Any Dispute relating to this
Agreement (a "Dispute") will be resolved first through good
faith negotiations between appropriate management-level
representatives of each Party having responsibility for the
sale or use of products involved.
23.4 Mediation. If within sixty (60) days the parties are unable to
resolve the dispute through good faith negotiation, either
Party may submit a Dispute for resolution by mediation
pursuant to the Center for Public Resources Model Procedure
for Mediation of Business Disputes as then in effect. The
mediation shall be conducted in Boston, Massachusetts.
Mediation will continue for at least thirty (30) days unless
the mediator chooses to withdraw sooner. At the request of
either Party, the mediator will be asked to provide an
evaluation of the Dispute and the parties' relative positions.
Each Party shall bear its own costs of mediation effort.
23.5 Arbitration. After completion of any mediation effort, a Party
may submit the Dispute for resolution by arbitration pursuant
to the Non-Administered Arbitration Rules of the Center for
Public Resources as in effect on the date hereof, unless the
parties agree to adopt such rules as in effect at the time of
the arbitration. The arbitral tribunal shall be composed of
one arbitrator; and the arbitration shall be conducted in
Boston, Massachusetts. If the resolution of the Dispute is not
found within the terms of this Agreement, the arbitrator shall
determine the Dispute in accordance with the governing law of
the Agreement, without giving effect to any conflict of law
rules or other rules that might render such law inapplicable
or unavailable. The prevailing Party in any arbitration
conducted under this Section shall be entitled to recover from
the other Party (as part of the arbitral award or order) its
reasonable attorneys' fees and other costs of arbitration.
23.6 Applicable Law. The law applicable to the validity of this
arbitration provision, the conduct of the arbitration, the
challenge to or enforcement of any arbitral award or order or
any other question of arbitration law or procedure shall be
governed exclusively by the Federal Arbitration Act, 9 U.S.C.
sections 1-16; however, the award can be modified or vacated
on grounds cited in the Federal Arbitration Act or, if the
arbitrator's findings of facts are not supported by
substantial evidence or the conclusions of law are erroneous,
under the laws of the Commonwealth of Massachusetts. The place
of arbitration shall be in Boston, Massachusetts. The parties
agree that the federal and state courts located in the
Commonwealth of
22
Massachusetts shall have exclusive jurisdiction over any
action brought to enforce this arbitration provision, and each
Party irrevocably submits to the jurisdiction of said courts.
Notwithstanding the foregoing sentence, either Party may apply
to any court of competent jurisdiction, wherever situated, for
enforcement of any judgment on an arbitral award.
23.7 Time Limit. Except as time barred under any applicable statute
of limitation of lesser duration, any claim by either Party
shall be time-barred unless the asserting Party commences an
arbitration proceeding with respect to such claim within two
years after the cause of action has accrued.
23.8 Provisional or Interim Judicial Measures. Notwithstanding any
other provision of this Agreement, the parties expressly agree
that prior to the first meeting of the arbitrator either shall
have the right to apply to any state or federal court in the
Commonwealth of Massachusetts or any other court that would
otherwise have jurisdiction, for provisional or interim
measures.
23.9 Consolidated Proceedings. Each Party hereby consents to a
single, consolidated arbitration proceeding of multiple
claims, or claims involving more than two parties. The
prevailing Party or parties in any arbitration conducted under
this paragraph shall be entitled to recover from the other
Party or parties (as part of the arbitral award or order) its
or their reasonable attorneys' fees and other reasonable costs
of arbitration.
24. GENERAL PROVISIONS.
24.1 Force Majeure. In the event that either Party is prevented
from performing, or is unable to perform, any of its
obligations under this Agreement due to any act of God, fire,
casualty, flood, war, strike, lock out, failure of public
utilities, injunction or any act, exercise, assertion or
requirement of governmental authority, epidemic, destruction
of production facilities, insurrection, inability to procure
materials, labor, equipment, transportation or energy
sufficient to meet manufacturing needs, or any other cause
beyond the reasonable control of the Party invoking this
provision, and if such Party shall have used its best efforts
to avoid such occurrence and minimize its duration and has
given prompt written notice to the other Party, then the
affected Party's performance shall be excused and the time for
performance shall be extended for the period of delay or
inability to perform due to such occurrence.
24.2 Publicity. Neither Party shall originate any publicity, news
release or other public announcement relating to this
Agreement or the existence of an arrangement between the
Parties without the prior written approval of the other Party,
except as otherwise required by law.
24.3 Waiver. The waiver by either Party of a breach or a default of
any provision of this Agreement by the other Party shall not
be construed as a waiver of any succeeding breach of the same
or any other provision, nor shall any delay or omission on the
part of either Party to exercise or avail itself of any right,
power or privilege that it has, or
23
may have hereunder, operate as a waiver of any right, power or
privilege by such Party.
24.4 No Agency. Nothing contained in this Agreement shall be deemed
to constitute either Party as the agent or representative of
the other Party, or both Parties as joint venturers or
partners for any purpose. Neither Party shall be responsible
for the acts or omissions of the other Party, and neither
Party shall have authority to speak for, represent or obligate
the other Party in any way without prior written authority
from the other Party.
24.5 Survival of Obligations. All obligations of either Party under
Sections 4.3 (but only insofar as it relates to the rights of
Dixtal customers to continue using Dixtal BIS Modules), 10
(Warranty), 11 (Service and Support), 13 (Regulatory Matters),
15 (Ownership and Protection of Results), 17
(Confidentiality), 18 (Indemnities), 19 (Trademarks), 23
(Dispute Resolution), and 24.6 (Limitation on Liability) shall
survive the expiration or termination of this Agreement and
continue to be enforceable.
24.6 LIMITATION ON LIABILITY. EXCEPT AS PROVIDED IN SECTION 18,
EACH PARTY'S LIABILITY ARISING OUT OF THE MANUFACTURE, SALE OR
SUPPLYING OF ASPECT PRODUCTS OR THEIR USE OR DISPOSITION,
WHETHER BASED UPON WARRANTY, CONTRACT, TORT OR OTHERWISE,
SHALL NOT EXCEED (ALL AMOUNTS PAID AND PAYABLE BY DIXTAL TO
ASPECT FOR SERVICE AND SUPPORT PURSUANT TO SECTION 11 OF THIS
AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR OTHER
INDIRECT DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF
PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES) ARISING OUT OF
THE MANUFACTURE, SALE OR SUPPLYING OF ASPECT PRODUCTS.
24.7 Severability. In the event that any provision of this
Agreement is held by a court of competent jurisdiction to be
unenforceable because it is invalid or in conflict with any
law of any relevant jurisdiction, the validity of the
remaining provisions shall not be affected and the rights and
obligations of the Parties shall be construed and enforced as
if the Agreement did not contain the particular provisions
held to be unenforceable.
24.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts, without reference to conflict of laws
principles, and shall not be governed by the U.N. Convention
on Contracts for the International Sale of Goods.
24.9 Notices. Any notice or communication with regard to the
termination of or changes to this Agreement from one Party to
the other shall be in writing and either personally delivered
or sent via certified mail, postage prepaid and return receipt
requested addressed, to such other Party at the address of
such Party specified in this Agreement
24
or such other address as either Party may from time to time
designate by notice hereunder.
24.10 Entire Agreement. This Agreement constitutes the entire
agreement between the Parties. No waiver, consent,
modification or change of terms of this Agreement shall bind
either Party unless in writing signed by both Parties, and
then such waiver, consent, modification or change shall be
effective only in the specific instance and for the specific
purpose given. There are no understandings, agreements,
representations or warranties, expressed or implied, not
specified herein regarding this Agreement or the Aspect
Products purchased and/or licensed hereunder. Only the terms
and conditions contained in this Agreement shall govern the
transactions contemplated hereunder, notwithstanding any
additional, different or conflicting terms which may be
contained in any Order or other document provided by one Party
to the other. Failure of Aspect to object to provisions
contained in any Order or other document provided by Dixtal
shall not be construed as a waiver of the terms and conditions
of this Agreement nor an acceptance of any such provision.
24.11 Headings. Captions and headings contained in this Agreement
have been included for ease of reference and convenience and
shall not be considered in interpreting or construing this
Agreement.
24.12 Exhibits: The following Exhibits shall be part of this
Agreement:
Exhibit A: Aspect Products and Purchase Prices
Exhibit B: Aspect's Standard BIS Module Kit
Exhibit C: Contact Persons/Addresses Prices
Exhibit D: Aspect and Dixtal Trademarks
24.13 Beneficiaries. Except for the provisions of Section 18
hereof, which are also for the benefit of the other Persons
indemnified, this Agreement is solely for the benefit of the
parties hereto and their respective affiliates, successors in
interest and permitted assigns and shall not confer upon any
other person any remedy, claim, liability, reimbursement or
other right in excess of those existing without reference to
this Agreement.
24.14 Assignment. Neither Party may assign or delegate this
Agreement or any rights or obligations under this Agreement
without the prior written consent of the other, which shall
not be unreasonably withheld; provided, however, that Dixtal
may, without the prior written consent of Aspect, assign and
delegate this Agreement and any or all of its rights and
obligations hereunder to any of its affiliates, and provided
that either party shall have the right to assign this
Agreement in connection with a sale of the
25
business of such party to which this Agreement relates.
IN WITNESS WHEREOF, this Agreement has been duly executed as a sealed instrument
as of the date specified above.
Dixtal Medical Systems, Inc. Dixtal Medical Systems, Inc.
By: /s/ illegible By: /s/ illegible
---------------------------- --------------------------
Title: Director Title: Commerical Director
Aspect Medical Systems, Inc.
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Title: CFO
26
EXHIBIT A
ASPECT PRODUCTS AND PURCHASE PRICES
A) ASPECT BIS MODULE KIT COMPONENT PRICES:
186-0138-DX BIS ENGINE, DIXTAL $ [**]
140-0037 DSC-XP PREAMP BOARD, TESTED $ [**]
140-0038 DSC-XP COMM BOARD, TESTED $ [**]
150-0027 SHLD, RFI, DSC $ [**]
150-0036 HOUSING, DSC $ [**]
175-0021 DSC-MON CBL W.LEMO OVMLD $ [**]
175-0045 PIGTAIL, DSC3/XP $ [**]
175-0046 PIC, SNSR+ $ [**]
194-0113 DSC-XP LOGO $ [**]
605-0022 SCRWMACH 4-40X250 $ [**]
605-0024 SCRWMACH 4-40X750 $ [**]
675-0004 CABTIE, 3.9" $ [**]
800-0007 CLIPS, BADGE, VINYL, LONG $ [**]
150-0026 GSKT, HSNG, DSC $ [**]
Yearly Module Kit Volume Expectations:
2003 [**]
2004 [**]
2005 [**]
B) ASPECT BIS SENSOR:
Transfer price to Dixtal for distribution solely to Dixtal customers in Brazil
and solely for use with Dixtal BIS Modules:
186-0106 QUATRO SENSOR $ [**]
27
EXHIBIT B
SPECIFICATIONS: ASPECT'S STANDARD 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 /
TTL) 3-wire interface and the necessary power connections.
The BIS Module Kit consists of a Digital Signal Converter (DSC-XP) that
is placed in proximity to the patient and a small circuit board that
resides in the OEM equipment. The DSC-XP 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-XP to the BIS engine circuit board via a 12
foot cable that is hard wired at the DSC-XP.
The small BIS Engine circuit board performs digital signal processing
on the digitized EEG signal and outputs the Bispectral Index to the OEM
system via the RS-232 / TTL 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 / TTL), power, and
DSC connections.
Detailed Technical Specifications:
Digital Output: [**]
[**]
Main Parameters: [**]
Electrical Safety: [**]
Power: [**]
[**]
[**]
Artifact Rejection: [**]
Bispectral Index: [**]
Digital Signal Converter (DSC-XP)
Description: [**]
Weight: [**]
Dimensions: [**]
[**]
Cable Length: [**]
BIS Engine PCB
Physical: [**]
Software Upgrades
28
The BIS engine software is stored in
reprogrammable FLASH memory. Software
upgrades can be accomplished on-site or
remotely via the serial interface.
Serial Identifier
Each BIS engine is given a unique serial identifier.
This allows for electronic identification/tracking of
every BIS Engine.
29
EXHIBIT C
CONTACT PERSONS/ADDRESSES
CONTACT PERSONS AND RESPONSIBILITIES AT ASPECT:
------------------------------------------------------------------------------------------------------
EMAIL
PHONE NUMBER
PERSON TITLE RESPONSIBILITY FAX NUMBER
======================================================================================================
Director of Marketing ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Operating Room, ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ OEM and Procedural Sedation Contract ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
Manager of OEM ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Engineering ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Project Manager ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
VP, Regulatory ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ Regulatory matters ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
Business ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Development Latin America ▇▇▇-▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ Manager Distribution ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
MAILING ADDRESS: Aspect Medical Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
CONTACT PERSONS AND RESPONSIBILITIES AT DIXTAL:
[To be provided by Dixtal with thirty (30) days of the date of this Agreement]
------------------------------------------------------------------------------------------------------
EMAIL
PHONE NUMBER
PERSON TITLE RESPONSIBILITY FAX NUMBER
======================================================================================================
▇▇▇▇@▇▇▇▇▇▇.▇▇▇.▇▇
55-11-5548-4155
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Commercial Director Contract ▇▇-▇▇-▇▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇.▇▇
Manager of 55-11-5548-4155
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Engineering Project Manager ▇▇-▇▇-▇▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
30
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇.▇▇
55-11-5548-4155
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Industrial Manager Regulatory matters ▇▇-▇▇-▇▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
▇▇▇▇@▇▇▇▇▇▇.▇▇▇.▇▇
55-11-5548-4155
▇▇▇▇▇▇▇ ▇▇▇▇ Purchasing Agent Ordering ▇▇-▇▇-▇▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------
MAILING ADDRESS:
DIXTAL BIOMEDICA IND E COM LTDA
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ - ▇▇
▇▇▇▇▇▇ 69077-000
31
EXHIBIT D
ASPECT AND DIXTAL TRADEMARKS
TRADEMARK REFERENCE
Aspect(R) Aspect is a trademark of Aspect Medical
Systems, Inc
A-2000(TM) A-2000 is a trademark of Aspect Medical
Systems, Inc.
Bispectral Index(R) Bispectral is a registered trademark of Aspect
Medical Systems, Inc.
BIS(R) BIS is a registered trademark of Aspect Medical
Systems, Inc.
[BIS(R) LOGO] BIS logo is a registered trademark of Aspect
Medical Systems, Inc.
32