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GE Marquette Medical Systems / Aspect Medical - OEM Development and Purchase Agreement
Aspect Medical Systems, Inc.
requests that the marked portions of this document be granted confidential
treatment pursuant to Rule 406 under the Securities Act of 1933.
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT AND WORK PRODUCT PRIVILEGES FOR GE MARQUETTE ONLY
ASPECT MEDICAL SYSTEMS, INC.
OEM DEVELOPMENT AND PURCHASE AGREEMENT
Agreement dated this 22nd day of December, 1999, by and between Aspect Medical Systems, Inc, a Delaware corporation with its principal offices located at Two Vision Drive, Natick, Massachusetts ("Aspect") and GE Marquette Medical Systems, Inc. ("Marquette"), a Wisconsin corporation with its principal offices located at 8200 W. Tower Ave., Milwaukee, Wisconsin for the purchase and/or license by Marquette 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 Marquette is a developer, manufacturer and distributor of
medical devices, equipment, related hardware, software and
related products and accessories, including multiparameter
patient monitors.
1.3 Marquette desires to integrate Aspect's BIS and EEG technology
into Marquette's multiparameter patient monitors.
1.4 Aspect agrees to sell and/or license to Marquette 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.
"ASPECT'S EEG PARAMETERS" or "EEG" are Aspect's processed EEG
parameters including Spectral Edge frequency, Median Frequency,
Suppression Ratio, EMG and SQI (Signal Quality Index).
"MARQUETTE PATIENT MONITOR" means any multi-parameter modular patient
monitoring systems manufactured by or for Marquette. When the BIS/EEG
Module Development
Project is complete, the Marquette BIS/EEG module will allow the
Marquette Patient Monitor to display BIS and certain EEG data
(waveforms, numerics, status info), and provide setup and operation
information (user interface), alarming, and network connectivity.
"MARQUETTE BIS/EEG MODULE" is the sum of all components involved in
integrating the BIS and EEG with Marquette Patient Monitors.
"DSC CABLE" is a cable used to connect the DSC-2 or DSC-4 to the
Marquette BIS/EEG Engine.
"MARQUETTE BIS/EEG ENGINE" is the processing unit for deriving the BIS
and EEG data from the raw EEG signal and consists of Aspect's "BIS
Engine" board modified for Marquette.
"DIGITAL SIGNAL CONVERTER-2" (or "DSC-2") is used to amplify the analog
EEG signals as acquired by the BIS sensors and convert it from analog
to digital signals. The DSC-2 is used by Marquette BIS/EEG Module
customers to obtain the BIS.
"DIGITAL SIGNAL CONVERTER-4" (or "DSC-4") is used to amplify the analog
EEG signals as acquired by the Zipprep electrodes and convert it from
analog to digital signals. The DSC-4 is used by Marquette BIS/EEG
Module customers to obtain 2 or 4-channel EEG data only.
"ASPECT BIS/EEG MODULE KIT" means the bundle of all components of the
Marquette BIS/EEG Module that are developed and manufactured by or for
Aspect and licensed/sold to Marquette under this Agreement: DSC-2,
DSC-4, DSC Cable, Marquette BIS/EEG Engine, and Module Cable.
"ASPECT BIS SENSOR" means a single use disposable sensor manufactured
by Aspect for use with the A2000 or with the Aspect BIS/EEG Module Kit
and that is required to generate Aspect's Bispectral Index.
"A2000" 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/EEG Module Kit and any other product
that can be ordered by Marquette as listed in Exhibit A (Aspect
Products and Purchase Prices).
"SOFTWARE" means Aspect software programs in binary code form which are
designed for use with the Aspect BIS/EEG Module Kit.
"DOCUMENTATION" means the BIS Engine Serial Interface Specification.
"TERRITORY" shall mean all countries in which Marquette is permitted
under this Agreement to distribute Aspect Products.
"PARTY" or "PARTIES" shall mean Aspect and Marquette each individually
or jointly.
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
3. BIS/EEG MODULE DEVELOPMENT PROJECT.
3.1 PROJECT TIMING. The overall project duration is expected to be
at least [**]. The product introduction is targeted for the
annual meeting of the [**], but if such target can not be
satisfied the product introduction shall be targeted for no
later than the annual meeting of [**]. A preliminary outline
of the development project is attached to this Agreement as
Exhibit C.
3.2 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 D (Contact
Persons/Addresses).
3.3 MARQUETTE RESPONSIBILITIES.
(a) Marquette shall develop the Marquette BIS/EEG Module
according to mutually agreed specifications at
Marquette's own cost.
(b) Marquette shall develop, design and test the modular
integration of the components of the Aspect BIS/EEG
Module Kit with the Marquette Patient Monitors
3.4 ASPECT RESPONSIBILITIES.
(a) Aspect shall design, develop, and test the Aspect
BIS/EEG Module Kit according to the mutually agreed
specifications. The costs for Aspect to complete this
project, for which preliminary estimates are included
in Exhibit C, shall be borne by Marquette. [**] of
total estimated project costs shown on Exhibit C
shall be paid by Marquette within [**] days of the
date on which this Agreement is signed by both
parties; [**] of total estimated project costs, shown
on Exhibit C shall be paid [**] days thereafter, and
the final payment of the remaining actual project
costs (including labor at Aspect's standard labor
rates) shall be paid upon the project's completion.
Any [**] the [**] will be [**]; provided, however,
that Marquette shall not pay over [**] toward
non-recurring engineering ("NRE") and tooling to
4. PURCHASE AND SALE OBLIGATIONS; LICENSES.
4.1 GENERAL. Subject to the terms and conditions of this
Agreement, Aspect agrees to sell to Marquette the Aspect
Products listed on Exhibit A (Aspect Products and Purchase
Prices). The components of the Aspect BIS/EEG Module Kits
purchased from Aspect under this Agreement shall only be used
as components in, incorporated into, or integrated with,
systems and products which Marquette sells or leases to
third-party users in the regular course of business. The
components of the Aspect BIS/EEG Module Kits shall only be
resold, leased, rented, licensed or otherwise transferred to
third parties for use as a part of an Marquette BIS/EEG Module
or as replacement parts used in Marquette BIS/EEG Modules and
Marquette shall only sell Aspect approved accessories
including cables and sensor products in connection with any
Marquette BIS/EEG Module. During the term of this Agreement,
Marquette agrees that it may offer complementary but not
directly competitive products to the Marquette BIS/EEG Module.
Marquette products other than the Marquette BIS/EEG 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
Marquette a non-exclusive right to distribute Aspect BIS
Sensors solely to Marquette customers outside of North America
who have purchased Marquette BIS/EEG Modules. Prices for
Aspect BIS Sensors purchased by Marquette hereunder shall be
as set forth in Exhibit A (Aspect Products and Purchase
Prices).
4.3 ASPECT SOFTWARE LICENSE. Aspect hereby grants to Marquette a
non-exclusive and non-transferable worldwide license, without
the right to sublicense (except to purchasers of Marquette
BIS/EEG 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/EEG Module Kit in the Marquette BIS/EEG Module.
Thereafter, Aspect grants to Marquette a right to use the
Software and related Documentation used in conjunction with
the Marquette BIS/EEG Modules being sold by Marquette on the
date of termination with respect to service and support of
installed Marquette BIS/EEG Modules for a period of 10 years,
after termination of the Agreement. All rights granted to
Marquette customers to use the Marquette BIS/EEG Modules shall
survive any termination of this Agreement as long as such
customers remain in compliance with the terms of use for such
Marquette BIS/EEG Modules. Marquette 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 Marquette
BIS/EEG Modules and to Marquette's subdistributors) and shall
not duplicate the Software, the Documentation or any part
thereof (other than for Marquette'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
therefor 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
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Aspect BIS/EEG 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.
Marquette shall not disassemble, decompile or otherwise
reverse engineer the Software or any part thereof, except if
Aspect is required under applicable law to permit Marquette to
reverse engineer any Software. In such event, Marquette may
reverse engineer the Software but only to the extent Aspect is
required to permit such reverse engineering. Marquette 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
4.4 EXCLUSIVITY. Except to the extent Marquette and Aspect may
agree in the future to undertake co-marketing programs
pursuant to Section 22, nothing in this Agreement shall be
construed to grant Aspect any license to sell, distribute or
license to any third party the Marquette BIS/EEG Module, the
Marquette BIS/EEG Engine, or the Aspect BIS/EEG Module Kit. It
is understood, however, that Aspect sells, distributes, and
licenses to other third parties both generic and customized
Aspect BIS/EEG Engines and Aspect BIS/EEG Module Kits to meet
the needs of other OEM customers, and nothing in this
Agreement shall prohibit Aspect from continuing to sell,
distribute, or license these products or components thereof to
customers other than Marquette.
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 itself.
5. ROYALTIES AND COMMISSIONS.
5.1 ROYALTIES ON PURCHASES OF ASPECT MODULE KITS. For each Aspect
BIS/EEG Module Kit that Marquette purchases from Aspect,
Marquette shall pay a royalty fee and a price for all
components of the Aspect BIS/EEG Module Kit. Royalty fees and
component prices are specified in Exhibit A (Aspect Products
and Purchase Prices); provided that the prices specified in
Exhibit A sh