Addendum 3, Effective 10/1/04, To The Oem

Exhibit 10.1


Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.


ADDENDUM 3
OEM Development and Purchase Agreement


Addendum 3 to the agreement dated the 6th day of August, 1999 (the "Agreement"), by and between Aspect Medical Systems, Inc. ("Aspect") and Philips Medizin Systeme Boeblingen GmbH ("Philips") (formerly Hewlett-Packard GmbH).


Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agree as follows:


1. Capitalized terms used herein and otherwise not defined have the
meanings ascribed to such terms in the Agreement.


2. The following definition is added to Section 2. Definitions:


"BIS Ready" means a BIS port standard on all systems ready to accept
a BISx System, with BIS software installed on host monitor. If a
dedicated BIS port is not utilized, then at least one
multi-connector port must be available on a system in order for that
system to qualify as "BIS Ready".


"BISx System" means the integrated product developed and
manufactured by Aspect and combining the functions of the former HP
BIS Engine and the DSC. The BISx System includes a patient interface
cable and a host monitor cable for Philips patient monitors.


3. Section 7 (a), Purchase Prices and 7 (b), Purchase Price Changes,
are replaced with the following:


"7. PRICES.


(a) Purchase Prices. The prices of Aspect Products purchased
by Philips 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), dated February 6, 2006, as attached to Addendum
3 to the Agreement."


(b) Purchase Price Changes. In consideration of the market
situation and after consultation with Philips, the
Purchase Prices set forth in Exhibit A (Aspect Products
and Purchase Prices) will be reviewed 12 months after
first delivery of production units and annually
thereafter. Aspect must give Philips written notice of
such increase not less than 90 days prior to the date
upon which the increased Purchase Price is to


PAGE 1/8 ADDENDUM 3, FEBRUARY 3, 2006


become effective. No Purchase Price increase shall apply
to Orders for Aspect Products accepted by Aspect prior
to or during such 90-day period which are to be
delivered within 90 days of the date of such notice.


Any price increase will be subject to the following:


(i) In the event that the materials cost for the Aspect
BIS Module Kit and/or BISx System increases by more than
[**]%, Aspect shall have the right no more than once a
year during the term of this Agreement to increase the
Purchase Price of the Aspect BIS Module Kit and/or BISx
System by an equivalent amount.


(ii) In the event that Philips introduces a directly
competitive product to the BISx System (i.e. any
parameter that Philips claims to be a measure of the
hypnotic effect of anesthesia, and other than through
interfacing a third party standalone device through an
interface port), Aspect shall have the right to increase
the Purchase Price of the BISx System to a level that is
no higher than the prices for similar systems at similar
quantities and based on similar terms and conditions
granted to any other party that has entered into a
similar agreement with Aspect ("Not-To-Exceed Purchase
Price"). If Aspect increases its prices pursuant to this
paragraph (ii) then Philips may cease to market its
patient monitors as BIS Ready.


4. For the purpose of calculating the volume discount for the BISx
System for a given calendar year, all new Aspect BIS Module Kits and
BISx Systems purchased and shipped during that calendar year will be
included in the total volume discount calculation.


The initial pricing for a given calendar year is based on the total
volume of new Aspect BIS Module Kits and BISx Systems purchased in
the prior calendar year (whether for new product sales or as spare
parts or as replacement parts). For example, if total number of new
Aspect BIS Module Kits and BISx Systems were purchased in year 1
equivalent to [**]% of total Philips monitoring systems, the initial
volume pricing level for year 2 will be the [**]% unit level.


If a higher volume level is achieved during a given calendar year,
the price on purchases made after achieving the higher volume level
will reflect the price associated with the appropriate volume level
achieved. All price adjustments are proactive and no credit will
apply retroactively to units purchased prior to achieving the volume
break point. For example, if midway through year 1, total number of
new BIS Module Kits and BISx


PAGE 2/8 ADDENDUM 3, FEBRUARY 3, 2006


Systems purchased exceeded 25% of total Philips monitoring systems
shipped, the price on subsequent units will reflect the next volume
break. Achieving this higher volume level, however, will define the
initial pricing for the following year.


5. For the purpose of calculating the volume discount for the
Disposable BIS Sensors for a given calendar year, all Disposable BIS
Sensors and Semi Reusable Sensors purchased and shipped during that
calendar year will be included in the total volume discount
calculation.


The initial pricing for a given calendar year is based on the total
volume of Disposable BIS Sensors and Semi Reusable Sensors purchased
in the prior calendar ...