Exhibit 10.1
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
 
(ASPECT LOGO) [b69699amb6969900.gif]
BISx INTERNATIONAL LICENSE AGREEMENT
THIS AGREEMENT is made and entered into as of March 21, 2008 (the “Effective
Date”), by and between ASPECT MEDICAL SYSTEMS, INC. (“Aspect”), a Delaware,
U.S.A. corporation having offices at One Upland Road, Norwood, Massachusetts
02062, U.S.A. and NIHON KOHDEN CORPORATION (“NK”), a Japanese company having
offices at 31-4 Nishiochiai, 1-chome, Shinjuku-ku, Tokyo 161 Japan.
     WHEREAS, Aspect possesses certain intellectual and industrial property
rights; and
     WHEREAS, Aspect is willing to grant, and NK desires to acquire,
non-exclusive worldwide rights to use such rights in accordance with the terms
and conditions hereinafter set forth.
     NOW, THEREFORE, in consideration of the premises and mutual promises, terms
and conditions hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Aspect and NK (the
“Parties”) do hereby agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the following definitions.

  1.1   Affiliates. “Affiliates” of a Party hereto shall mean companies which
are controlled by, control or under common control with such Party. A company
shall be considered an “Affiliate” for only so long as such control exists. For
the purposes of this definition, partnerships or similar entities where a
majority-in-interest of its partners or owners are a Party hereto and/or
Affiliates of such Party shall also be deemed to be Affiliates of such Party.  
  1.2   Agreement Term. “Agreement Term” shall mean the period beginning on the
Effective Date and ending on the date of termination or expiration of this
Agreement, as the case may be.     1.3   BIS. “BIS” shall mean the Bispectral
Index™ which is Aspect’s proprietary processed EEG parameter that directly
measures the hypnotic effects of anesthetic and sedative agents on the brain.  
  1.4   BIS Engine. “BIS Engine” shall mean Aspect’s processing unit for
deriving the BIS from the raw EEG signal.     1.5   BIS Ready System. “BIS Ready
System” shall mean that a BIS port is standard on all monitoring systems ready
to accept a BISx System, with BIS software installed on the host monitor. If a
dedicated BIS port is not utilized, then at least one multi-connector

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BISx INTERNATIONAL LICENSE AGREEMENT

      port must be available on a patient monitoring system in order for that
system to be identified as a “BIS Ready System”.     1.6   BIS Sensor. “BIS
Sensor” shall mean a single use disposable sensor manufactured by Aspect for use
with the BISx System in the OR, ICU and other sedation locations that is
required to generate Aspect’s Bispectral Index. These sensors include the BIS
Quatro Sensor, the BIS Extend Sensor and the BIS Pediatric Sensor.     1.7  
BISx. “BISx” shall mean a device that acquires up to two channels of EEG and
computes BIS and other EEG parameters, uniting the functionality of the existing
Aspect’s BIS Engine and DSC-XP.     1.8   BISx System. “BISx System” shall mean
the system comprised of a BISx with a Monitor Cable and a Patient Interface
Cable (“PIC”) designed for use with the NK Patient Monitor.     1.9   Business
Day. “Business Day” shall mean a day on which banks are open for business in
Norwood, Massachusetts, U.S.A and Tokyo, Japan.     1.10   Commencement Date.
“Commencement Date” shall mean the MHLW Approval Date of the Product.     1.11  
Contract Year. “Contract Year” shall mean the 12-month period commencing on the
Commencement Date, and then each 12-month period thereafter.     1.12   DSC-XP.
“DSC-XP” shall mean Aspect’s digital signal converter using XP technology. The
DSC-XP is a small box that is kept close to the patient that converts the analog
EEG signals to digital signals for processing the BIS value.     1.13   Licensed
Technology. “Licensed Technology” shall mean the Products and the Technical
Information.     1.14   License Term. “License Term” shall mean the period
beginning on the Effective Date and ending on the date of termination or
expiration of this Agreement, as the case may be.     1.15   Monitor Cable.
“Monitor Cable” is a cable that connects the BISx to the NK Patient Monitor. The
Monitor Cable connector will be supplied by Aspect using a standard Hypertronics
connector.     1.16   MHLW Approval Date. “MHLW Approval Date” shall mean the
date on which NK receives the approval of the Japanese Ministry of Health, Labor
and Welfare to market the Product in Japan.     1.17   NK Patient Monitor. “NK
Patient Monitor” shall mean all NK multiparameter patient monitors that include
a universal (MULTI) module connector including, but not limited to, the BSM
2000, 4000, 5000, 6000 and BSS 9800 series of patient monitors.     1.18  
Product. “Product” shall mean the BISx System.     1.19   Software “Software”
shall mean Aspect software programs that are designed for use

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      with the BISx Systems.     1.20   Technical Information. “Technical
Information” shall mean the trade secrets, know-how, computer programs
(including copyrights in said software), knowledge, technology, means, methods,
processes, practices, formulas, techniques, procedures, technical assistance,
designs, drawings, apparatus, written and oral rectifications of data,
specifications, assembly procedures, schematics and other valuable information
of whatever nature, whether confidential or not, and whether proprietary or not,
which is now in (or hereafter, during the Agreement Term, comes into) the
possession of Aspect and which is necessary for the integration, sale,
distribution, use, installation, servicing (for which NK is responsible under
this Agreement) or testing of the Product.     1.20   U.S. Dollars. “U.S.
Dollars” shall mean lawful money of the United States of America, in immediately
available funds.

2. LICENSES

  2.1   Licenses.

  (a)   For the term of this Agreement, subject to the terms and conditions of
this Agreement, Aspect agrees to sell and NK agrees to purchase and distribute
the Aspect Products listed in Exhibit A (Aspect Products and Purchase Prices)  
      The components of the BISx System purchased from Aspect under this
Agreement shall only be used as components in, incorporated into, or integrated
with, systems and products of NK which NK, its Affiliates, distributors or
sub-distributors sell or lease to third-party users in the regular course of
business. NK, its Affiliates, distributors or sub-distributors shall only sell
Aspect approved accessories including cables and sensors in connection with any
BISx System. Aspect agrees to provide NK with all information in its possession
that is necessary for the interfacing of the BISx System with NK patient
monitoring systems. Aspect agrees to provide NK with information that will allow
NK to provide BISx System specific service and support to the end-user.     (b)
  Aspect hereby grants NK, its Affiliates, distributors or sub-distributors a
non-exclusive and non-transferable world-wide license, without the right to
sublicense (except to purchasers of BISx Systems), during the term of this
Agreement to use the Software provided by Aspect solely in connection with the
operation of the components of the BISx System.     (c)   During the Agreement
Term, Aspect shall not grant, directly or indirectly, the right and license for
distribution of BISx within Japan to any other manufacturer; whose business
concerns primarily Patient Monitors and whose ultimate parent Affiliate has a
principal place of business in Japan (specifically Fukuda Denshi).     (d)  
Aspect, however, shall have the right to grant, directly or indirectly, the
right and license for distribution of BISx outside of Japan to any manufacturer
regardless of

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      principle place of business.     (e)   After the termination or expiration
of this Agreement, Aspect grants to NK, its Affiliates, distributors or
sub-distributors a right to use the Software used in conjunction with the BISx
System being sold by NK, its Affiliates, distributors or sub-distributors on the
date of termination with respect to service and support of installed BISx
Systems, and a right to distribute the Software as part of the BISx Systems in
its inventory following termination of this Agreement on grounds other than
non-payment without a valid reason by NK. All rights granted to NK’s, its
Affiliates’, distributors’ or sub-distributor’s customers to use the Software
with the BISx System shall survive any termination of the Agreement as long as
customers remain in compliance with the BISx license agreement supplied by
Aspect to NK for such BISx System.     (f)   NK shall not disclose, furnish,
transfer, distribute or otherwise make available the Software or any portion
thereof in any form to any third party (other than to purchaser of the BISx
System and to NK’s distributors, sub-distributors and Affiliates that are
distributing the BISx Systems) and shall not duplicate the Software or any part
thereof.     (g)   Title to and ownership of any and all proprietary rights in
or related to the Software thereof 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.     (h)   NK, its distributors, sub-distributors, its
Affiliates and purchasers of BISx Systems shall not disassemble, decompile or
otherwise reverse engineer the Software or any part thereof.

  2.2   Use of Technical Information.

  (a)   Aspect grants to NK a non-exclusive worldwide right and license during
the Agreement Term to use the Technical Information in connection with NK’s
exercise of its rights and licenses granted in Section 2.1, and for no other
purpose.     (b)   As soon as practical after the Effective Date, Aspect shall
provide to NK, at no additional cost to NK, the Technical Information.

  2.3   Trademarks, Service Marks and Trade Names.

  (a)   NK shall be required to mark the Products with Aspect’s trademarks,
service marks and trade names listed in Exhibit E hereto (the “Trademarks”).
Aspect hereby grants NK the right to use the Trademarks on a non-exclusive basis
only for the License Term and solely for display or advertising purposes in
connection with the Products purchased from Aspect and sold in accordance with
this Agreement. During the License Term, NK may use, without Aspect’s prior
written consent, trademarks, service marks and trade names in connection with
the Products other than the Trademarks; provided, however that the Trademarks
are always used in a manner which makes them at least as large and at least as
prominent as any other such trademarks, service marks or trade names used in

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      connection with the Products including but not limited to any such
trademarks, service marks or trade names appearing on any such label, display or
advertisement. Any use by NK of the Trademarks shall be deemed to be a use of
the same by Aspect. NK shall not at any time do or permit any act to be done
(including without limitation registering any of the Trademarks in its own name
or the name of any entity other than Aspect) which may in any way impair the
rights of Aspect in the Trademarks. Except as provided above, NK has no rights
in the Trademarks or of any goodwill associated therewith and NK agrees that,
except as expressly provided in this Agreement, it shall not acquire any rights
in respect thereof and that all such rights and goodwill are, and shall remain,
vested in, and inure to the benefit of, Aspect.     (b)   NK shall be required
to mark all NK Patient Monitoring Systems that are BIS Ready with a label that
says “BIS Ready”. The label will be of a mutually agreeable size and will be
placed in a mutually agreeable location on the patient monitoring system.    
(c)   NK shall

  (i)   whenever it uses the Trademarks, include a statement that the Trademarks
are trademarks of Aspect;     (ii)   use the Trademarks in compliance with all
relevant laws and regulations;     (iii)   not modify any of the Trademarks in
any way and not use any of the Trademarks on or in connection with any goods or
services other than the Products.

  2.4   Right to Sublicense.         NK shall not have the right to sublicense
any of the rights or licenses granted hereunder without Aspect’s prior written
consent, which consent shall be withheld in Aspect’s absolute discretion;
provided, however it is understood that NK shall have the right to grant
sublicenses to NK’s Affiliates and distributors without Aspect’s prior written
consent. Sublicenses except for NK’s Affiliates and distributors shall not
become effective until the sublicensee confirms in writing to Aspect that it
agrees to be bound by all of the terms and conditions contained in this
Agreement.     2.5   No Rights by Implication.         No rights or licenses
with respect to Licensed Technology are granted or deemed granted hereunder or
in connection herewith, other than those rights or licenses expressly granted in
this Agreement.     2.6   Licensed Technology. NK shall not disclose, furnish,
transfer or otherwise make available in any form to any third party (other than
to purchasers of the Product, NK’s Affiliates and distributors which become
sublicensees pursuant to Section 2.4 above) and shall not duplicate the Licensed
Technology or any part thereof. Title to and ownership of and all proprietary
rights in or related to the Licensed Technology

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BISx INTERNATIONAL LICENSE AGREEMENT

      and all partial or complete copies thereof shall at all times remain with
Aspect or its licensor(s). This Agreement shall not be construed as a sale of
any rights in the Licensed Technology any copies thereof or any part thereof.
All references in this Agreement to sale, resale or purchase of the Products, or
references of like effect, shall, with respect to the Licensed Technology mean
licenses or sublicenses of the Licensed Technology pursuant to this Section 2.6.
NK shall not disassemble, decompile or reverse engineer the Licensed Technology
or any part thereof. NK shall retain and shall not alter or obscure any notices,
markings or other insignia which are affixed to the Licensed Technology or any
part thereof at the time of delivery of such Licensed Technology.     2.7  
Non-Competition.         NK confirms that it has not previously, directly or
indirectly, marketed or manufactured monitoring equipment, either as stand-alone
monitors, modules for monitors, or external devices that attach to a NK Patient
Monitor through a multi-connector which were designed to monitor the depth of
anesthesia or sedation other than that allowed under the International License
Agreement and International Distribution Agreement, both dated January 21, 1998,
by and between NK and Aspect (the “1998 Agreements”). NK confirms that it has
not previously, directly or indirectly, developed monitoring equipment, either
as stand-alone monitors, modules for monitors, or external devices that attach
to a NK Patient Monitor through a multi-connector which was designed to:
(i) monitor the depth or effects of anesthesia or sedation being administered to
patients; and (ii) indicate any index of the depth or effects of anesthesia or
sedation to assist anesthesiologists and other clinicians to evaluate the depth
or effects of anesthesia using EEG (electroencephalogram) except for those
allowed under the 1998 Agreements. Until the first (1st) anniversary of the
later of the termination or expiration of this Agreement and the 1998
Agreements, as the case may be, NK shall not, directly or indirectly, develop,
market or manufacture monitoring equipment, either as stand-alone monitors,
modules for monitors, or external devices that attach to a NK Patient Monitor
through a multi-connector which is designed to: (x) monitor the depth or effects
of anesthesia or sedation being administered to patients; and (y) indicate any
index of the depth or effects of anesthesia or sedation to assist
anesthesiologists and other clinicians to evaluate the depth or effects of
anesthesia; provided, however that: (I) NK shall be permitted, at any time, to
develop monitoring equipment designed to monitor the depth or effects of
anesthesia using physiological measures other than EEG; (II) NK shall be
permitted, at any time, to market and manufacture monitoring equipment designed
to monitor the depth or effects of anesthesia using physiological measures other
than EEG, so long as such equipment has been developed and manufactured by NK;
(III) NK shall be permitted after the expiration or termination of this
Agreement to manufacture and market monitoring equipment developed and
manufactured by NK or by any third party that is designed to monitor the depth
or effects of anesthesia using physiological measures other than EEG; and
(IV) NK shall be permitted to continue to market and improve its existing EEG
monitors and modules so long as

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      they are not designed to measure the depth of consciousness. Specifically,
it will not be considered a violation of this Section 2.7 for NK to market and
improve its existing EEG monitors or modules that display any of the following
parameters of brain function: EEG, EEG trends, CSA, DSA, EP, EMG, or NCV,
subject to the terms and conditions of this Section 2.7.     2.8   Changes to
Products.

  (a)   Aspect shall have the right, at any time and from time to time, to make
substitutions and modifications to Products, provided that such substitutions or
modifications shall not materially affect form, fit, function, functional
interchangeability or interface capability or materially negatively affect the
reliability, serviceability or performance of Products. In the event that any
proposed substitution or modification affects such form, fit, function,
reliability, serviceability, performance, functional interchangeability or
interface capability of an Product, Aspect shall give NK written notice of such
proposed substitution or modification at least six (6) months prior to its
taking effect and if such changes need a new or additional approval by the MHLW,
NK shall have the right to order Aspect Products without such substitution or
modification for delivery up to one year after the date of such notice or until
NK obtains such a new or additional approval by the MHLW, (whichever is less)
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 BISx System.     (b)   Notwithstanding anything contained in
this Agreement to the contrary, Aspect reserves the right from time to time
during the License Term to require NK, after consulting with NK, to modify or
improve the Product (including without limitation the software programs used in
connection with the Product) if the modification or improvement reasonably
relates to efficacy or patient safety. NK shall implement those changes to the
Products and associated NK Patient Monitors being manufactured or to be
manufactured and to modify and improve Products previously manufactured and
shipped to customers in order to incorporate such changes. In that event the
change or modification relates to patient safety, Aspect agrees to repair or
replace Products previously provided to NK, or collected by NK from its
customers, free of charge, whether or not such repair or replacement occurs
during the relevant Warranty Period, provided such repair or replacement is
necessary to implement the modification or improvement.     (c)   Aspect agrees
to notify NK in writing not less than twelve (12) months in advance of the
discontinuance of any Aspect Products. NK shall be able to place orders for at
least six (6) months after receipt of the written notice in any case.

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      In addition, NK shall be entitled to determine its lifetime-buy quantities
and place a corresponding last purchase order within the first six (6) months
after receipt of written notice. Aspect shall continue to provide NK with repair
service or service parts (or at Aspect’s sole discretion, comparable exchange
units for the Aspect Products) necessary for after-sales service for such
Products for eight (8) years after discontinuance.     (d)   Aspect shall
immediately provide NK with a written notice upon Aspect becoming aware of the
occurrence of any of the following events: (i) Aspect recalls any BISx System,
or ceases or suspends the sale of any BISx System due to any problem which
relates to such BISx System’s efficacy or patient safety in any country outside
Japan; (ii) any defect of any BISx System or the Licensed Technology, which
relates to such BISx System’s efficacy or patient safety, is published, reported
or made known to the public by any third party, or found by Aspect; or (iii) any
BISx System or the Licensed Technology contributed to or caused a death or
serious injury, or any BISx System or the Licensed Technology malfunctioned and
if that malfunction occurred again, it would be likely to contribute or cause a
death or serious injury.

  2.9   No Knowledge of Third Party Claims.         Aspect represents and
warrants to NK that Aspect knows of no claim by any third party of infringement
by Aspect on such party’s patent, trademark, copyright, trade secret or other
intellectual property rights.     2.10   Disclaimer of Liability.         ASPECT
MAKES NO EXPRESS OR IMPLIED WARRANTY, STATUTORY OR OTHERWISE, CONCERNING THE
LICENSED TECHNOLOGY OR ANY OTHER INFORMATION COMMUNICATED TO NK, INCLUDING
WITHOUT LIMITATION NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR NO
WARRANTIES AS TO QUALITY OR THE USEFULNESS OF THE LICENSED TECHNOLOGY FOR ITS
INTENDED PURPOSE; PROVIDED, HOWEVER IF ASPECT OR NK SHALL DISCOVER ANY ERRORS IN
THE LICENSED SOFTWARE DURING THE LICENSE TERM, ASPECT, AT ITS SOLE DISCRETION,
SHALL CORRECT SUCH ERRORS IN THE LICENSED SOFTWARE WITHOUT COST TO NK.        
IN NO EVENT, HOWEVER, SHALL ASPECT BE LIABLE TO NK FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, EXEMPLARY OR OTHER INDIRECT LOSSES OR DAMAGES
RESULTING FROM SUCH ERRORS IN THE LICENSED TECHNOLOGY.         ASPECT’S
OBLIGATIONS SET FORTH IN THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, SECTION
4.5 (LIMITED WARRANTY) AND SECTION 7 (INDEMNIFICATIONS), SHALL BE EXCLUED FROM
THIS SECTION 2.10

3. DEVELOPMENT OF BISx AND COMMUNICATION (HOST) SOFTWARE

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  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 videoconferences.     (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 listed in Exhibit C (Contact Persons / Addresses).

  3.2   Nihon Kohden Responsibilities.

  (a)   NK will develop the necessary software for the NK Patient Monitors to
communicate with the BISx System, allow the user to configure BIS parameters,
and display the BIS related information on the NK Patient Monitor display.    
(b)   NK shall integrate and test the integration of the components of the BISx
System with the NK Patient Monitors.     (c)   NK will report the number of BISx
Systems installed in the United States, dates of installation and overall
installed base of BISx Systems by hospital on a quarterly basis. Outside of the
United States, NK will report on a calendar quarter basis the total number of
BISx Systems installed, and overall installed base of NK BISx Systems by
country. NK will report these data within 20 business days after the end of each
quarter.

  3.3   Aspect Responsibilities.

  (a)   Aspect shall provide NK with the necessary Technical Information to
facilitate development of appropriate communications software to interface to
the NK Patient Monitors.     (b)   Aspect shall design, develop and test the
BISx System according to the mutually agreed upon specifications.     (c)   Upon
NK completing the integration of BIS into the NK Patient Monitoring Systems (or
any subsequent new NK Patient Monitoring System which is BIS Ready), Aspect will
“certify” this integration. This entails Aspect verifying the accurate display
on the NK Patient Monitor. Once successfully verified, Aspect will provide NK
with a Certification Letter so indicating. To facilitate the certification
process, NK will lend Aspect a NK Patient Monitor for testing purposes. Said NK
Patient Monitor (and any new NK BIS Ready Patient Monitor) will be provided to
Aspect, at NK’s cost and expense, within thirty (30) days after execution of
this Agreement, and it will be returned to NK, at Aspect’s cost and expense,

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      within thirty (30) days after the certification process is completed.

4. SALES BY ASPECT TO NK

4.1   Offer and Acceptance; Pricing.       Aspect shall sell and NK shall
purchase the Aspect Products during the calendar year at the prices set forth in
Exhibit A (Aspect Products and Purchase Prices), except as noted in 4.1(a). The
parties have agreed to initiate at least once a year discussions on market
conditions and trends as well as pricing of the Products. Additional pricing
programs will be discussed as new NK Patient Monitors are introduced into the
Japanese markets; no sooner than one year after the Commencement Date.

  (a)   Additional costs which have been agreed upon in writing (both NRE and
incremental unit cost) for customization of the product (mold color, labeling,
changes to or customization of the BISx Monitor Cable) will be borne by NK. NK
shall be responsible for any charges associated with scrap of inventory due to
any subsequent changes made to customized product.     (b)   For each proposed
purchase by NK from Aspect, NK shall present a purchase order to Aspect (a
“Purchase Order”). Each Purchase Order shall be deemed an offer to purchase and,
unless NK is notified in writing to the contrary within five (5) Business Days
after Aspect receives it, such Purchase Order shall be deemed accepted by
Aspect.     (c)   Aspect’s transfer prices shall be EXW (EXWORKS) Norwood,
Massachusetts, U.S.A. Starting with the second (2nd) Contract Year, Aspect may
change those transfer prices; provided, however that: (i) such change may be
made only once a year effective as of the first day of April with the prior
written notice to be given by Aspect no later than the last day of December of
the preceding year, after consulting with NK; (ii) the annual increase shall be
no more than [**] percent ([**]%) or actual cost increases, whichever is
greater; and (iii) no price change shall affect Purchase Orders offered by NK
and accepted by Aspect prior to the date such price change becomes effective. In
the event actual cost increases exceed 5%, Aspect shall provide documentation of
actual cost increases to NK.

4.2   Delivery.       Unless NK requests otherwise, all BISx Systems ordered by
NK shall be packed for shipment and storage in accordance with Aspect’s standard
commercial practices. It is NK’s obligation to notify Aspect of any special
packaging requirements (which shall be at NK’s expense if such requirement is in
excess of the scope of normal and necessary packaging for export). Aspect shall
deliver BISx Systems into the possession of a common carrier designated by NK in
Norwood, Massachusetts, U.S.A. no later than the date that would be required to
meet the date specified for such delivery on the relevant Purchase Order. Risk
of loss and damage to a BISx System shall pass to NK upon the delivery

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    thereof to the common carrier designated by NK. If NK does not designate a
common carrier by the specified delivery date, then Aspect may do so on NK’s
behalf. All claims for non-conforming shipments must be made in writing to
Aspect within thirty (30) days of the passing of risk of loss and damage.

4.3   Forecast       NK shall furnish to Aspect a non-binding quarterly forecast
during the term of this Agreement with the number and type of Products for which
NK expects to submit orders for the following 12 months.

4.4   Method of Payment.

  (a)   All amounts due and payable with respect to BISx Systems delivered by
Aspect in accordance with this Section 4 shall be paid in full within 30 days
after the date of Aspect’s invoice. All such amounts shall be paid in U.S.
Dollars by wire transfer, to such bank or account as Aspect may from time to
time designate in writing. All costs incurred in connection with such wire
transfer shall be the responsibility of NK. Whenever any amount hereunder is due
on a day which is not a day on which banks in Norwood, Massachusetts, U.S.A. are
open for business (a “Business Day”), such amount shall be paid on the next such
Business Day. Amounts hereunder shall be considered to be paid as of the day on
which funds are received by Aspect’s bank. No part of any amount payable to
Aspect hereunder may be reduced due to any counterclaim, set-off, adjustment or
other right which NK might have or assert against Aspect, any other party or
otherwise.     (b)   All amounts due and owing to Aspect hereunder but not paid
by NK on the due date thereof shall bear interest (in U.S. Dollars) at the rate
18 per cent per annum. Such interest shall accrue on the balance of unpaid
amounts from time to time outstanding from the date on which portions of such
amounts become due and owing until payment thereof in full.     (c)   NK is
responsible to pay expenses incurred by Aspect in the event that Aspect hires a
third party collection agency in order to recover overdue debts owed to Aspect
by NK.

4.5   Limited Warranty.

  (a)   With respect to the BISx System, Aspect makes the warranties set forth
in Exhibit D attached hereto and made a part hereof. Under no circumstances
shall the warranties set forth in Exhibit D hereto apply to a BISx System which
has been customized, modified, damaged or misused by NK or any third party
without Aspect’s authorization. NK’s sole remedy for a non-conforming BISx
System is, at Aspect’s election, the repair or replacement thereof.     (b)  
THE PROVISIONS OF THE FOREGOING WARRANTIES ARE IN LIEU OF ANY OTHER WARRANTY,
WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL (INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT).

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  (c)   EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ASPECT’S LIABILITY
ARISING OUT OF THE MANUFACTURE, SALE OR SUPPLYING OF BISx SYSTEMS OR THEIR USE
OR DISPOSITION, WHETHER BASED UPON WARRANTY, CONTRACT, TORT OR OTHERWISE, SHALL
NOT EXCEED THE ACTUAL PURCHASE PRICE PAID BY NK FOR SUCH BISX SYSTEMS.     (d)  
After expiration of the Warranty Period, Aspect shall undertake repairs of BISx
Systems or shall provide parts for repairs by NK, at reasonable cost to NK. Both
parties shall agree on the charge for such repairs and parts.

4.6   Priority of Agreement.       In the event of any discrepancy between any
Purchase Order and this Agreement, the terms of this Agreement shall govern.

4.7   Distribution of Aspect BIS Sensors.

  4.7.1   Outside the United States         Distribution of BIS Sensors outside
the United States will be covered under a separate agreement between Aspect and
NK.     4.7.2   Within the United States.         NK is prohibited from selling
BIS Sensors to customers within the United States.

5. CONFIDENTIAL INFORMATION

  5.1   Agreement.         This Agreement and all documents, drawings, manuals
and other materials incidental thereto and transmitted between the Parties shall
be treated as confidential by the Parties and their employees and such
information shall not be disclosed to any third party.

  5.2   Confidentiality Obligations.         Each Party (the “disclosing Party”)
has a proprietary interest in information which it discloses to the other Party
(the “receiving Party”), whether in connection with this Agreement or otherwise,
which is (a) a trade secret, confidential or proprietary information, (b) not
publicly known, and (c) annotated by a legend, stamp or other written
identification as confidential or proprietary information, or if disclosed
orally, is identified as confidential or proprietary by a written instrument
within 30 days of such disclosure (hereinafter referred to as ‘Proprietary
Information”). The receiving Party shall disclose the Proprietary Information of
the disclosing Party only to those of its agents and employees to whom it is
necessary in order properly to carry out their duties as limited by the terms
and conditions hereof. Both during and after the Agreement Term, all disclosures
of Proprietary Information of the disclosing Party by the receiving Party to its
agents and employees shall be held in strict confidence by such agents and
employees. During and after the Agreement Term, the receiving Party, its agents
and employees shall not use the Proprietary Information of the disclosing Party
for any purpose other than in connection with discharging its duties

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      pursuant to this Agreement. The receiving Party shall, at its expense,
return to the disclosing Party the Proprietary Information of the disclosing
Party or destroy such Proprietary Information as soon as practicable after the
termination or expiration of this Agreement. During the Agreement Term and
thereafter, all such Proprietary Information of the disclosing Party shall
remain the exclusive property of the disclosing Party. This Section 5 shall also
apply to any consultants or subcontractors that the receiving Party may engage
in connection with its obligations under this Agreement.     5.3   Exceptions.  
      Notwithstanding anything contained in this Agreement to the contrary, the
receiving Party shall not be liable for a disclosure of the Proprietary
Information of the disclosing Party if the information so disclosed: (a) was in
the public domain at the time of disclosure without breach of this Agreement; or
(b) was known to or contained in the records of the receiving Party from a
source other than the disclosing Party at the time of disclosure by the
disclosing Party to the receiving Party and can be so demonstrated; or
(c) becomes known to the receiving Party from a source other than the disclosing
Party without breach of this Agreement by the receiving Party and can be so
demonstrated; or (d) was independently developed by the receiving Party without
reference to the Proprietary Information; (e) was disclosed pursuant to court
order or as otherwise compelled by law.

6. Quality Assurance / Regulatory Matters

  6.1   Certification Status.         Both parties agree to maintain, as
applicable, ISO900x or ISO13485, European directive 93/42/EEC Annex II (“MDD
AX-II”) certification status and compliance with the U.S. Food and Drug
Administration’s (“FDA”) Quality System Regulation (“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.     6.2   Regulatory Responsibility — Aspect.         In
particular, Aspect shall be responsible for generating its own Device Master
Record for the BISx System. The BISx shall be labeled as manufactured by Aspect.
    6.3   Regulatory Requirements — Nihon Kohden.         NK shall assume the
regulatory responsibility for the BISx System. Aspect shall provide commercially
reasonable support to NK as required in the process of obtaining regulatory
approvals by making available to NK any required information, data,
certificates, or technical files in the requested formats as requested by the
regulatory authorities.     6.4   Product Complaints and Incident Reporting.    
    NK and Aspect shall inform each other (in writing) quarterly of any and all
customer complaints that have come to their attention during the prior quarter
regarding the BISx System or BIS Sensors that

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      were used in conjunction with a NK Patient Monitor and relating to Aspect
technology. Both parties will cooperate and use reasonable efforts to resolve
such customer complaints. Closure of any such customer complaints relating to
the BISx System or NK Patient Monitor will occur when the problem is resolved.
Closure of any such customer complaint relating solely to Products or BIS
Sensors will occur when the problem is resolved.         NK and Aspect shall
inform each other in writing of all known and/or reported incidents relating to
the Products, distributed by NK and/or used in conjunction with NK Patient
Monitors, within 2 business days of making a determination by NK or Aspect that
such event may require reporting under any applicable regulatory or other
governmental reporting requirements, including without limitation incidents
involving death or serious injury, malfunctions that, if recurrent, may cause or
contribute to death or serious injury or other material quality problems or
concerns; provided, however, for the purposes of clarity, if such reportable
event involves a third party product into which the BISx System or other Aspect
product has been incorporated, but the cause of reportable incident was some
other aspect or attribute of such third party product, then the notification
requirement in this paragraph shall not apply. Aspect will be responsible for
reporting such incidents to the appropriate regulatory authority for the BISx
System and BIS Sensors in the United States and NK will guide Aspect with any
reporting requirements in Japan. NK will be responsible for reporting such
incidents to the appropriate regulatory authority for the NK Patient Monitor.
Both parties shall fully cooperate with each other as may be necessary to comply
with any reporting obligations regarding such incidents or quality concerns. If
FDA or other authorities contact either party to inquire about or investigate
the Products sold to NK under this Agreement, the contacted party, unless
required to maintain confidentiality by such authorities, shall inform the other
party immediately thereof. The parties shall cooperate closely to clear any
regulatory issues or potential regulatory issues promptly.     6.5  
Traceability.         NK agrees to maintain traceability through Aspect serial
number and/or lot code for all Products shipped to NK.     6.6   Recall.        
In the event of any Product recall in Japan, both parties shall fully cooperate
on the recall. In principle, NK shall recall the Products in Japan and shall
return the recalled Products to Aspect. Aspect shall provide NK with substitute
products for the recalled Products. Aspect shall reimburse NK for reasonable
expenses incurred by NK to effect the recall.     6.7   Compliance with U.S.
Foreign Corrupt Practices Act     6.7.1   NK represents that it has not, and
agrees that it shall not, in connection with the transactions contemplated by
this Agreement, or in connection with any other business transactions involving
Aspect or product supplied under this Agreement,

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      make any payment or transfer anything of value, directly or indirectly:  
      (a.) to any governmental official or employee (including employees of a
government corporation or public international organization) or to any political
party or candidate for public office for the purpose of obtaining or retaining
business for or with, or directing business to, any person, or for the purpose
of securing any improper business advantage; or         (b.) to any other person
or entity if such payments or transfers would violate the laws of the country in
which made or the laws of the United States.     6.7.2   It is the intent of the
parties that no payments or transfers of value shall be made which have the
purpose or effect of public or commercial bribery, or acceptance of or
acquiescence in, extortion, kickbacks, or other unlawful or improper means of
obtaining business.

7. INDEMNIFICATIONS

  7.1   In Favor of Aspect.         NK hereby agrees to indemnify, defend and
hold harmless Aspect, its Affiliates and all officers, directors, employees and
agents thereof from all liabilities, claims, damages, losses, costs, expenses,
demands, suits and actions (including without limitation attorneys’ fees,
expenses and settlement costs) (collectively, “Damages”) arising out of:
(i) NK’s failure to comply with relevant laws and regulations; (ii) personal
injuries and/or property damages resulting from the software developed and
manufactured by NK or the failure of NK to follow the Technical Information
provided by Aspect hereunder in incorporating the Product for use with NK
Patient Monitors; or (iii) NK’s making representations or warranties with
respect to the BISx Systems which are not authorized by Aspect hereunder.    
7.2   In Favor of NK.         Notwithstanding anything to the contrary contained
herein, Aspect hereby agrees to indemnify, defend and hold harmless NK, its
Affiliates and all officers, directors, employees and agents thereof from all
Damages arising out of: (i) the Products infringing on the intellectual property
rights of third parties; (ii) use of the Trademarks in accordance with
Section 2.3(a) above which infringes on the trademark, service mark or trade
name rights of third parties; or (iii) personal injuries and/or property damages
resulting from the Product; provided, however that:

  (a)   Aspect shall have no obligation for any claim of infringement arising
from:

  (i)   any combination by NK of the BISx System with any other product not
supplied or approved in writing by Aspect where such infringement would not have
occurred but for such combination;     (ii)   the adaptation or modification of
the BISx System not performed or not

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      authorized by Aspect, where such infringement would not have occurred but
for such adaptation or modification;     (iii)   the misuse of the BISx System
or the use of the BISx System in an application for which it was not designed by
Aspect, where such infringement would not have occurred but for such use or
misuse; or     (iv)   a claim based on intellectual property rights owned by NK
or any of its Affiliates.

  (b)   In the event that the Products are held in a suit or proceeding to
infringe any intellectual property rights of a third party, and the use of the
BISx System is enjoined or Aspect reasonably believes that it is likely to be
found to infringe or likely to be enjoined, Aspect shall, at its sole cost and
expense, either (i) procure for NK the right to continue manufacturing, using
and selling the BISx System, or (ii) replace the BISx System with a
non-infringing BISx System of equivalent functionality. If neither (i) nor
(ii) are practicable, either Party may terminate this Agreement, effective
immediately, upon giving the other Party written notice.     (c)   This
Section 7.2 constitutes NK’s exclusive remedy in the event that the BISx System
and/or the Trademarks infringe on the intellectual property rights of third
parties.

  7.3   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, or the
admission of any wrongdoing on the part of, the Indemnitee in any settlement
unless mutually agreed among Aspect and NK (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 reasonably
cooperate with the Indemnitor and its legal representatives in the investigation
of any action, claim or liability covered by this Agreement, at the expense of
the Indemnitor.     (c)   The Indemnitee shall not, except at its own cost,
voluntarily make any payment

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BISx INTERNATIONAL LICENSE AGREEMENT

      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.

  7.4   Partial Indemnification.         In the event a claim is based partially
on an indemnified claim described in Sections 7.1 and/or 7.2 above and partially
on a non-indemnified claim, or is based partially on a claim described in
Section 7.1 above and partially on a claim described in Section 7.2 above, any
payments and reasonable attorney fees incurred in connection with such claims
are to be apportioned between the Parties in accordance with the degree of cause
attributable to each Party.

8. TERMINATION OR EXPIRATION

  8.1   Term and Renewal.         Unless it is terminated earlier pursuant to
this Section, the initial term of this Agreement shall commence on the Effective
Date and shall continue for a period of five (5) years following the
Commencement Date. 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 six (6) months prior to the
expiration of the Agreement or any renewal term.     8.2   Termination for
Cause.         Upon the occurrence of a material breach or default as to any
obligation hereunder by either Party and the failure of the breaching Party to
cure within thirty (30) days after receiving written notice thereof from the
non-breaching Party a such material breach or default, this Agreement may be
terminated by the non-breaching Party by giving written notice of termination to
the breaching Party after such thirty (30) day period, such termination being
immediately effective upon the giving of such notice of termination.     8.3  
After Termination or Expiration.         The Parties agree that, once this
Agreement is terminated or expires, NK shall immediately cease:

  (a)   any use or practice of the Licensed Technology; and     (b)   any use or
sale of the Product; provided, however that:

  (i)   NK shall have the right to sell Products (if payment has been made in
full by NK to Aspect) until NK’s stock of Products at the time of such
termination or expiration is depleted;     (ii)   Aspect or any third party
designated by Aspect shall sell to NK the parts necessary to repair the Products
sold by NK and shall grant to NK the

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      right to repair Products sold by NK, for a period reasonably deemed that
Products are used by the customers; and     (iii)   Aspect or any third party
designated by Aspect shall continue to supply end-users with BIS Sensors to use
with Products.

  8.4   Payment Obligations Continue.         Upon termination or expiration of
this Agreement, nothing shall be construed to release NK from its obligations to
pay Aspect any and all amounts accrued but unpaid pursuant to Section 4 above
prior to the date of such termination or expiration.     8.5   No Damages for
Termination.         The Parties agree that if either Party terminates the other
Party pursuant to this Section 8, then the terminating Party shall not be liable
for damages or injuries suffered by the other Party as a result of that
termination, unless otherwise expressly provided herein.

9. MISCELLANEOUS

  9.1   No Indirect Damages.         EXCEPT AS OTHERWISE PROVIDED IN 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 OR LOSS OF USE DAMAGES) ARISING OUT OF THE
MANUFACTURE, USE, SALE OR SUPPLYING OF THE PRODUCT, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES.     9.2   Assignments.    
    This Agreement and the rights and obligations hereunder may not be assigned,
delegated or transferred by either Party without the prior written consent of
the other Party; provided, however that the other Party’s consent shall not be
required with respect to any assignment, delegation or transfer by a Party to
(i) an Affiliate of such Party; or (ii) the purchaser of all or substantially
all of the assets related to this Agreement or stock of such Party, through
merger, consolidation or otherwise. To the extent permitted by this Agreement,
this Agreement shall be binding upon and inure to the benefit of the permitted
successors and assigns of both Parties.     9.3   Governing Law.         This
Agreement shall be construed and governed according to, and any arbitration
shall be conducted in accordance with, the laws of the Commonwealth of
Massachusetts, U.S.A., excluding its conflicts of laws principles.     9.4  
Dispute Resolution.         Any dispute, controversy or claim arising out of or
relating to this Agreement or to a breach hereof, including its interpretation,
performance or termination, shall be finally resolved by arbitration. The
arbitration shall be conducted by three (3) arbitrators, one to be appointed by
Aspect, one to be appointed by NK and a third

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      being nominated by the two arbitrators so selected or, if they cannot
agree on a third arbitrator, by the President of the American Arbitration
Association. The arbitration shall be conducted in English and in accordance
with the commercial arbitration rules of the United Nations Commission on
International Trade Law. The arbitration, including the rendering of the award,
shall take place in Los Angeles, California, U.S.A. and shall be the exclusive
forum for resolving such dispute, controversy or claim. The decision of the
arbitrators shall be binding upon the parties hereto, and the expense of the
arbitration (including without limitation the award of attorneys’ fees to the
prevailing Party) shall be paid as the arbitrators determine. The decision of
the arbitrators shall be executory, and judgment thereon may be entered by any
court of competent jurisdiction. Notwithstanding anything contained in this
Section to the contrary, each Party shall have the right to institute judicial
proceedings against the other Party or anyone acting by, through or under such
other Party, in order to enforce the instituting Party’s rights hereunder
through reformation of contract, specific performance, injunction or similar
equitable relief.     9.5   Entire Agreement.         This Agreement supersedes
and cancels the “International License Agreement” between NK and Aspect dated
January 21st, 1998 and any previous agreements or understandings, whether oral,
written or implied, heretofore in effect, and sets forth the entire agreement
between Aspect and NK, with respect to the Products listed in Exhibit A.
However, this Agreement does not cancel the “International Distribution
Agreement” dated January 21st, 1998. No modification or change may be made in
this Agreement except by written instrument duly signed by a duly authorized
representative of each Party.     9.6   Notices.         All notices given under
this Agreement shall be in writing and shall be addressed to the Parties at
their respective addresses and telecopy numbers, and to the attention of the
individuals set forth in Exhibit C. Either Party may change its address,
telecopy number and contact person for purposes of this Agreement by giving the
other Party written notice of its new address, telecopy number or contact
person. Any such notice if given or made by registered or recorded delivery
international air mail letter shall be deemed to have been received on the date
actually received and if given or made by telecopy transmission shall be deemed
to have been received at the time of dispatch, unless such date of deemed
receipt is not a day on which banks in the receiving Party’s home city are open
for business, in which case the date of deemed receipt shall be the next day on
which banks in the receiving Party’s home city are open for business.     9.7  
Waivers.         None of the conditions or provisions of this Agreement shall be
held to have been waived by any act or knowledge on the part of either Party,
except by an instrument in writing signed by a duly authorized officer or
representative of such Party. Further, the waiver by either Party of any right
hereunder or the failure to enforce at any time any of the provisions of this

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      Agreement, or any rights with respect thereto, shall not be deemed to be a
waiver of any other rights hereunder or any breach or failure of performance of
the other Party.     9.8   Responsibility for Taxes.         Taxes now or
hereafter imposed with respect to the transactions contemplated hereunder (with
the exception of income taxes or other taxes imposed upon Aspect) shall be the
responsibility of NK, and if paid or required to be paid by Aspect, the amount
thereof shall be added to and become a part of the amounts payable by NK
hereunder.     9.9   Severability.         If any provision of this Agreement is
declared invalid or unenforceable by a court having competent jurisdiction, it
is mutually agreed that this Agreement shall endure except for the part declared
invalid or unenforceable by order of such court. The Parties shall consult and
use their best efforts to agree upon a valid and enforceable provision which
shall be a reasonable substitute for such invalid or unenforceable provision in
light of the intent of this Agreement.     9.10   Counterparts.         This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.     9.11   Relationship of the Parties.

  (a)   The relationship between Aspect and NK shall not be construed to be that
of employer and employee, or to constitute a partnership, joint venture or
agency of any kind. Neither Party shall have any right to enter into any
contracts or commitments in the name of, or on behalf of, the other Party, or to
bind the other Party in any respect whatsoever.     (b)   NK shall not obligate
or purport to obligate Aspect by issuing or making any affirmations,
representations, warranties or guarantees with respect to BISx Systems to any
third party, other than the warranties described in Exhibit D hereto.

  9.12   Language.         All written material, correspondence, Technical
Information, notices and oral assistance supplied by either Party hereunder
shall be in the English language.     9.13   Survival of Contents.        
Notwithstanding anything else in this Agreement to the contrary, the parties
agree that Sections 2.7 (for one year after the termination or expiration of
this Agreement), 2.10, 4.4 and 4.5 and Sections 5, 6, 7, 8 and 9 shall survive
the termination or expiration of this Agreement, as the case may be.     9.14  
Compliance With Laws.         NK covenants that all of its activities under or
pursuant to this Agreement shall comply with all applicable laws, rules and
regulations. NK shall be responsible for

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      obtaining all licenses, permits and approvals which are necessary or
advisable for sales of Products in all jurisdictions and for the performance of
its duties hereunder. In particular, but without limitation, NK shall be
responsible for all submissions to the MHLW which may be required to obtain
marketing approval of the Product. NK shall use its best efforts to obtain such
MHLW approvals as expeditiously as possible. NK shall promptly give Aspect
written notice of the MHLW Approval Date. Aspect shall: (i) fully comply with
any applicable law, regulation and rule of government of the United States and
agencies or instrumentalities thereof; and (ii) maintain all U.S. governmental
approvals and licenses necessary to produce and export the BISx System.     9.15
  Headings.         Any headings contained herein are for directory purposes
only, do not constitute a part of this Agreement, and shall not be employed in
interpreting this Agreement.

  9.16   Exhibits.         The following Exhibits shall be part of this
Agreement:

         
EXHIBIT A
  Aspect Products and Purchase Prices  
EXHIBIT B
  Specifications: BISx System  
EXHIBIT C
  Contact Persons / Addresses  
EXHIBIT D
  Warranty  
EXHIBIT E
  Aspect and Nihon Kohden Trademarks

     IN WITNESS WHEREOF, the parties hereto have signed this Agreement under
seal.

                  ASPECT MEDICAL SYSTEMS, INC.    
 
           
 
  By
Name:   /s/ Michael Falvey
 
Michael Falvey    
 
  Title:   Chief Financial Officer    
 
                NIHON KOHDEN CORPORATION    
 
           
 
  By
Name:   /s/ Kazuo Ogino
 
Kazuo Ogino    
 
  Title:   President and Chief Executive Officer    

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BISx INTERNATIONAL LICENSE AGREEMENT
EXHIBIT A
ASPECT PRODUCTS AND PURCHASE PRICES
A) BISx SYSTEM:
List price for the BISx System: $ [**]. Volume discounts are available as
follows:

              As of Effective Date   As of Commencement Date Volume   Pricing  
Volume   Pricing 0 – 250   $[**]   0 – 1000   $[**] 251 – 500   $[**]   1001 –
2000   $[**] >500   $[**]   2001– 3500   $[**]         >3500   $[**] Demo Units
  $[**]                 Japanese Rental Units*   $[**] Three purchase
opportunities for demonstration units during introduction of BISx in Japan,
Europe and the United States.   Demo volumes to be agreed by Aspect and Nihon
Kohden

For the purpose of calculating the volume discount for a given calendar year,
all BISx Systems, shipped during that calendar year (excluding Products that are
provided free of charge) will be included in the total volume discount
calculation.
The initial pricing for a given calendar year is based on the total volume of
BISx Systems, purchased in the prior calendar year. Buyer will maintain the
previous year pricing as long as they purchase the volumes levels required for
that pricing. For example, if 1,200 BISx Systems were purchased in year 1, the
initial volume pricing level for year 2 will be the 1,001–2,000 unit level. If
in year 2, 1,001 BISx Systems were purchased, Buyer would again qualify for the
1,001 – 2,000 volume pricing level in year 3.
If a higher volume level of BISx Systems 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, 1,000 BISx Systems are purchased, the price on 1,001st Aspect
BISx System will reflect the next volume break. Achieving this higher volume
level will also reduce the initial pricing for the following year.
 
*Japanese Rental Units reflect BISx units which are placed at no charge to the
end-user by NK within the Japanese market. Aspect

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BISx INTERNATIONAL LICENSE AGREEMENT
   will have the right to request documentation from NK indicating the unit was
placed at no charge.
B) ASPECT BIS SENSORS

  •   Distribution of BIS Sensors outside the United States will be covered
under a separate agreement. Sensor sales by NK are prohibited in the United
States.

C) SERVICE PARTS:

              Part #   Description   Aspect List Price NK Price  
186-0195-NK
  BISx System (replacement)   $[**]     [**]
186-0126
  PIC+ Cable (replacement)   $[**]   $[**]
175-0061-DC
  Hypertronics Monitor Cable   $[**]   $[**]

 

**   Price shall be the same as the current BISx System price (Exhibit A,
Section A)

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EXHIBIT B
SPECIFICATIONS: BISx SYSTEM
(PICTURE) [b69699amb6969901.gif]
BISx is a device that acquires up to two channels of EEG and computes BIS and
other EEG parameters, uniting the functionality of the existing Aspect BIS
Engine and DSC-XP. BISx is designed to mate with Aspect’s XP platform 1 or 2
channel sensors. BISx has no display or user interface. It plugs into a host
monitor system for display of EEG and processed parameters. BISx is designed for
use wherever sedative drugs are administered, including but not limited to the
following environments: Operating rooms, Intensive Care Units, Procedural
Sedation, and Clinical Research areas.
The standard BISx acquires EEG via single channel or two channel referential XP
platform sensors and XP compatible sensors. The inputs are protected against
damage from electro-static discharge (ESD), a direct hit from an electrocautery
device, and defibrillation of the patient to which it is attached. The BISx
recovers from large signal saturation quickly. The BISx is resistant to
electro-surgical (ESU) interference.
The BISx is designed to be placed near the patient’s head. It is unobtrusive and
conveniently handled. It is sealed so as not to allow liquids to enter when
splashed. The enclosure is not painted, but rather is of materials that are a
solid color throughout. The BISx includes a convenient method for attaching and
de-attaching the enclosure to surgical draperies, sheets, or an IV pole.
The BISx is attached to the host monitoring system via a 9-foot monitor cable.
The wire is narrow and highly flexible. The monitor connection is integral to
the enclosure (no pigtail), and may require the use of tools for detachment from
the device for service or replacement. The enclosure is sealed against liquid
ingress only when the monitor cable is attached. The connector on the host
monitor end is a standard Hypertronics (or an equivalent brand as determined by

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BISx INTERNATIONAL LICENSE AGREEMENT
Aspect) connector. There are no adjustable parts inside the BISx. The cables may
be replaced without opening the enclosure.
The BISx connects to a sensor via the Aspect PIC Plus (Aspect part number
186-0107). The PIC Plus is approximately 48 inches long. The PIC Plus connection
is integral to the enclosure (no pigtail), and can be detached from the device
for service or replacement without the use of tools. The enclosure is sealed
against liquid ingress even when the PIC is detached.
Each BISx is given a unique serial identifier, allowing for electronic
identification and tracking of every device.
The BISx software is stored in reprogrammable FLASH memory. Software upgrades
and downloads can be accomplished on-site or remotely via the USB interface.
BISx can be connected and disconnected to an already powered up host monitor.
The host monitor should automatically detect its presence and configure it
accordingly.
The BISx is a High Power, USB Powered Device which adheres to the power
requirements of the USB 2.0 specification. The BISx requires 5 Vdc +/- 5% to
operate and may draw up to 500 mA.
PHYSICAL SPECIFICATIONS:
BISx
Size: 95.3 mm (3.75”) diameter x 63.5 mm (2.5”) height
Weight: 227g (8.0 oz) without cables
456g (1.0 lb) with cables (Estimated)
BISx Integral Cables
Monitor Cable: 2.74m (9ft)
Patient Interface Cable (PIC+): 1.4m (4.5 ft)
SAFETY SPECIFICATIONS:

•   The BISx complies with the essential requirements of the Medical Device
Directive 93/42/EEC, as well as IEC 60601-1 and IEC 60601-2-26.

•   It is a Type BF applied part. It has internal optical coupling and an
isolation transformer for patient isolation.

•   It is protected against damage from defibrillation as long as the sensor is
not located between the defibrillator pads and is resistant to artifact from
electrosurgery.

•   United States federal law restricts this device to sale by or on the order
of a physician.

•   BISx and cables are latex free.

ENVIRONMENTAL SPECIFICATIONS:
Liquid Ingress Rating

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BISx INTERNATIONAL LICENSE AGREEMENT
IEC 529 IPX4
Temperature Range
Operating: 0 to 40°C (32 to 104°F)
Storage: -40 to 70°C (-40 to 158°F)
Humidity
Operating: 10 to 95% RH at 40°C (104°F), non-condensing
Storage: 10 to 95% RH at 60°C (140°F), non-condensing
Altitude Range
Operating: Up to 6,130 m (20,000 ft)
Storage: Up to 15,300 m (50,000 ft)
PERFORMANCE SPECIFICATIONS:

     
Noise (EEG Waveform)
  < 0.3µVRMS (2.0µV peak-to-peak)
BIS Numeric Update Frequency
  Once per second
Bandwidth
  0.25 to 100 Hz (- 3dB)
Impedance Measurement Range
  0 to 999 kOhm
Input Impedance
  >50 Mohm
Patient Leakage
  <10µA
Measurement Ranges
   
Bispectral Index (BIS):
  0 to 100
Electromyographic Strength (EMG):
  25 to 100 dB, where 1µV2=40dB
Signal Quality Index (SQI):
  0 to 100%
Suppression Ratio (SR):
  0 to 100%
Spectral Edge Frequency (SEF):
  0.5 to 30.0 Hz
Total Power:
  40 to 100 dB, where 1µV RMS=40dB
Burst Count:
  0 to 30

INTERFACE SPECIFICATIONS:

     
Communication
   
USB Interface:
  Conforms to USB Rev. 1.1 Full-Speed protocol
Protocol:
  Aspect proprietary  
Power
  12 Vdc +/-25%, 400 mA maximum current draw
Connector
  3M Inc. 10120-6000E Connector, 20 position, .050” Mini D Ribbon (or
equivalent)

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BISx INTERNATIONAL LICENSE AGREEMENT
EXHIBIT C
CONTACT PERSONS/ADDRESSES
Contact Persons and responsibilities at Aspect:

                          Email             Phone Number Person   Title  
Responsibility   Fax Number
Eric Knudsen
  Sr. Director, OEM Partnerships   Contract and Marketing  
eknudsen@aspectms.com
 
           
Steve Mesrobian
  Director, OEM Engineering   Project Manager   smesrobian@aspectms.com
 
           
Christine Vozella
  Sr. Director, RA/QA   Quality and Regulatory Matters   cvozella@aspectms.com
 
           
Tom Tramontano
  Sr. Support Representative   Technical Service   ttramontano@aspectms. com
 
           
James Nilhand
  Sr. Revenue Analyst   IB Reporting   jniland@aspectms.com

Mailing Address:
Aspect Medical Systems Inc.
One Upland Road
Norwood, MA 02062-1546
USA
Contact Persons and responsibilities at Nihon Kohden:

                          Email             Phone Number Person   Title  
Responsibility   Fax Number Hiroshi Aida  
General Manager, Import Business Operations
  Contact   Hiroshi_Aida@mb3.nkc.co.jp    
 
        Yasushi Nagai  
Sr. Marketing Manager, OR/ICU Group, Marketing Business Group
  Project Manager   Yasushi_Nagai@mb3.nkc.co.jp

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BISx INTERNATIONAL LICENSE AGREEMENT

                          Email             Phone Number Person   Title  
Responsibility   Fax Number Masatoshi Tamagawa  
Sr. Manager, Quality Assurance Department
  Quality and Regulatory Matters   Masatoshi_Tamagawa@mb3.nkc. co.jp    
 
        Yoshikazu Midorikawa  
Sr. Manager, Product Engineering Department
  Technical Service   Yoshikazu_Midorikawa@mb1.nk c.co.jp

Mailing Address:
Nihon Kohden Corporation
31-4 Nishiochiai, 1-chome,
Shinjuku-ku, Tokyo 161
Japan

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BISx INTERNATIONAL LICENSE AGREEMENT
EXHIBIT D
WARRANTY
Aspect warrants to the initial Purchaser that the BISx System (“Warranted
Product”) will be free from defects in workmanship or materials, when given
normal, proper, and intended usage for a period of 18 months from the date of
its initial shipment to NK, or 12 months from the date of resale by the NK,
whichever period first expires. This warranty shall not apply to expendable
components and supply items, such as, but not limited to, cables (except for
failures occurring within 180 days of receipt of shipment to NK) or disposable
items such as a BIS Sensor after the expiration date marked on the BIS Sensor
packaging. Aspect’s obligations under this warranty are to repair or replace any
Warranted Product or part thereof that Aspect reasonably determines to be
covered by this warranty and to be defective in workmanship or materials
provided that the Warranted Product is returned to the factory with freight
prepaid. Repair or replacement of Products under this warranty does not extend
the Warranty Period.
To request repair or replacement under this warranty, NK should contact the
Aspect Technical Services contact as defined in Exhibit C. Aspect will authorize
NK to return the Warranted Product (or part thereof) to Aspect. Aspect shall
determine whether to repair or replace Products and parts covered by this
warranty and all Products or parts replaced shall become Aspect’s property. In
the course of warranty service, Aspect may, but shall not be required, to make
engineering improvements to the Warranted Product or part thereof. If Aspect
reasonably determines that a repair or replacement is covered by the warranty,
Aspect shall bear the costs of shipping the repaired or replacement Product to
the NK. All other shipping costs shall be paid by the NK. Risk of loss or damage
during shipments under this warranty shall be borne by the Party shipping the
Product. Products shipped by NK under this warranty shall be packaged in the
original shipping container or equivalent packaging to protect the Product. If
NK ships a Product to Aspect in unsuitable packaging, any physical damage
present in the Product upon receipt by Aspect (and not previously reported) will
be presumed to have occurred in transit and will be the responsibility of the
NK.
Unless authorized or instructed by Aspect in advance, this warranty does not
extend to any Warranted Products or part thereof: that have been subject to
misuse, neglect or accident; that have been damaged by causes external to the
Warranted Product, including but not limited to failure of or faulty electrical
power; that have been used in violation of Aspect’s instructions; that have been
affixed to any nonstandard accessory attachment; on which the serial number has
been removed or made illegible; that have been modified by anyone other than
Aspect; or that have been disassembled, serviced or reassembled by anyone other
than Aspect, unless authorized by Aspect. Aspect shall have no obligation to
make repairs, replacements, or corrections which result, in whole or in part,
from normal wear and tear. Aspect makes no warranty (a) with respect to any
products that are not Warranted Products, (b) with respect to any products
purchased from a person other than Aspect or an Aspect authorized distributor or
(c) with respect to any product sold under a brand name other than Aspect.

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BISx INTERNATIONAL LICENSE AGREEMENT
THIS WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY FOR ASPECT’S PRODUCTS, EXTENDS
ONLY TO THE NK AND IS EXPRESSLY IN LIEU OF ANY OTHER EXPRESS OR IMPLIED
WARRANTIES INCLUDING WITHOUT LIMITATION ANY WARRANTY AS TO MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. EXCEPT AS OTHERWISE
PROVIDED HEREIN, ASPECT’S MAXIMUM LIABILITY ARISING OUT OF THE SALE OF THE
PRODUCTS OR THEIR USE, WHETHER BASED ON WARRANTY, CONTRACT, TORT OR OTHERWISE,
SHALL NOT EXCEED THE ACTUAL PAYMENTS RECEIVED BY ASPECT IN CONNECTION THEREWITH.
EXCEPT FOR THE INDEMNIFICATION SET FORTH IN SECTION 7, ASPECT SHALL NOT BE
LIABLE FOR ANY INCINDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER INDIRECT LOSS,
DAMAGE OR EXPENSE (INCLUDING WITHOUT LIMITATION LOST PROFITS) DIRECTLY OR
INDIRECTLY ARISING FROM THE SALE, INABILITY TO SELL, USE OR LOSS OF USE OF ANY
PRODUCT. EXCEPT AS SET FORTH HEREIN, ALL PRODUCTS ARE SUPPLIED “AS IS” WITHOUT
WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED.

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BISx INTERNATIONAL LICENSE AGREEMENT
EXHIBIT E
ASPECT TRADEMARKS

      Aspect Trademarks   Reference
Aspect ®
  Aspect is a registered trademark of Aspect Medical Systems, Inc
 
   
A-2000 TM
  A-2000 is a trademark of Aspect Medical Systems, Inc.
 
   
Bispectral Index ®
  Bispectral is a registered trademark of Aspect Medical Systems, Inc.
 
   
BIS ®
  BIS is a registered trademark of Aspect Medical Systems, Inc.
 
   
(LOGO) [b69699amb6969902.gif]
  BIS logo is a registered trademark of Aspect Medical Systems, Inc.
 
   
BISx ™
  BISx is a trademark of Aspect Medical Systems, Inc.
 
   
BIS Ready™
  BIS Ready is a trademark of Aspect Medical Systems, Inc.
 
   
BIS VISTA ™
  BIS VISTA is a trademark of Aspect Medical Systems, Inc.
 
   
(LOGO) [b69699amb6969903.gif]
  BISx logo is a trademark of Aspect Medical Systems, Inc.
 
   
(LOGO) [b69699amb6969904.gif]
  BIS Ready logo is a registered trademark of Aspect Medical Systems, Inc.

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