exv10w5






Exhibit 10.5



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





Amendment 1

BISx Development, Purchase and License Agreement



This Amendment 1 to the BISx Development, Purchase and License Agreement dated the 28th
day of January, 2004 (the “Agreement”), by and between Aspect Medical Systems, Inc. (“Aspect”) and
Draeger Medical Systems, Inc. (“Draeger”) is made as of
this 26th day of August 2009 (“Amendment
Effective Date”).



WHEREAS, in accordance with Section 25.10 of the Agreement, the Parties desire to amend the
Agreement as set forth herein.



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





	 	1.	 	Exhibits
	 
	 	 	 	a) “Exhibit A: Aspect Products and Purchase Prices” is replaced by the attached “Exhibit
A: Aspect Products and Purchase Prices”.
	 
	 	 	 	b) “Exhibit B: Specifications: Aspect BISx Kit” is replaced by the attached “Exhibit B:
Specifications: Aspect BISx KIT”.
	 
	 	 	 	c) “Exhibit C Contact Persons/Addresses” is replaced by the attached “Exhibit C Contact
Persons/Addresses”
	 
	 	 	 	2. Section 2 of the Agreement will be replaced by the following:


“Aspect’s Bispectral Index” or “BIS” is Aspect’s proprietary processed EEG
parameter that may be used as an aid in monitoring the effects of certain anesthetic
agents.
	 
	 	 	 	“Draeger Patient Monitors” means systems currently installed that have had the
necessary software upgrades to be BIS compatible, as well as the Delta model monitors
currently in production. Draeger Patient Monitors may include future models of Draeger
monitors at Draeger’s choice and discretion.
	 
	 	 	 	“BISx” is the integrated solution of Aspect’s BIS Engine processing technology
and the DSC-XP which can process 2 channels of EEG.
	 
	 	 	 	“BISx4” is the integrated solution of Aspect’s BIS Engine processing
technology and the DSC-XP which can process either 2 or 4 channels of EEG.
	 
	 	 	 	“DSC-XP” is Aspect’s Digital Signal Converter using XP technology; a predecessor
technology to the BISx. 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.




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	 	 	 	“Aspect BISx Kit” is the Aspect components of the Draeger BISx System that are
developed and manufactured by or for Aspect and licensed/sold to Draeger under this
Agreement including the BISx and the Patient Interface Cable (“PIC”) or the BISx4 and the
Four Channel Patient Interface Cable (“PIC4”).
	 
	 	 	 	“Fixed Monitor Cable” is a cable that is semi-permanently attached to the BISx
and connects the BISx to the Draeger Patient Monitor. This cable will be primarily
designed by Aspect with assistance from Draeger and supplied as part of the Aspect BISx
Kit. It can be disconnected from the BISx only by a qualified service person.
	 
	 	 	 	“Detachable Monitor Cable” is a cable that connects the BISx to the Draeger Patient
Monitor. This cable will be primarily designed by Draeger, with assistance from Aspect and
supplied by Draeger or its manufacturer for final assembly with the Aspect BISx Kit.
	 
	 	 	 	“Pod-Com Interface” is a Draeger proprietary interface used to connect external
devices to the Draeger Patient Monitoring Systems.
	 
	 	 	 	“Pod-Com Connector” is the connector that will be integrated into the BISx system
that will allow the Detachable Monitor Cable to plug into the BISx unit.
	 
	 	 	 	“Draeger BISx System” is the combined Aspect BISx Kit and Monitor Cable.
	 
	 	 	 	“Aspect BIS Sensor” means a single use disposable sensor manufactured by Aspect for
use with the Aspect BISx Kit in the OR and ICU that is required to generate Aspect’s
Bispectral Index. These sensors include the BIS Quatro Sensor, the BIS Extend Sensor, the
BIS Bilateral Sensor and the BIS Pediatric Sensor.
	 
	 	 	 	“Aspect BIS Engine” is the predecessor processing unit of the BISx for deriving BIS
data from the raw EEG signal and consists of a PC board and connectors. This component is
used in OEM modules to provide the BIS index on modular patient monitoring systems.
	 
	 	 	 	“Aspect Products” means Aspect BISx Kit and any other product that can be ordered
by Draeger as listed in Exhibit A (Aspect Products and Purchase Prices).
	 
	 	 	 	“Software” means Aspect software programs in binary code form that are designed for
use with the Aspect BISx Kit.
	 
	 	 	 	“Documentation” means the BISx Serial Interface Specification.
	 
	 	 	 	“Party” or “Parties” shall mean Aspect and Draeger each individually or
jointly.
	 
	 	 	 	“Affiliate” shall mean, with respect to either Aspect or Draeger, any other
business entity which, directly or indirectly, controls, is controlled by, or is under
common control with Aspect or Draeger, respectively.






	 	3.	 	Section 4.3 of the Agreement is hereby replaced by the following:






	 	4.3	 	Distribution of Aspect BIS Sensors.
	 
	 	 	 	(a) Global Distribution




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	 	 	 	Draeger may sell [**] of Aspect BIS Sensors (either [**]) with each Draeger BISx
System sold to the customer purchasing the corresponding Draeger BISx System.
These sensors are solely for resale to end-users at the time of sale of the Draeger
BISx System.
	 
	 	 	 	Draeger can [**] beyond the effective date of this Addendum [**] with long term
contracts closed prior to [**] and Aspect agrees to honor Draeger sensor purchase
commitments for contracts executed prior to this date by selling directly to the
Draeger central procurement site currently located at Luebeck, Germany.
	 
	 	 	 	Draeger agrees to supply Aspect with a list of customers that have entered into
long-term BIS Sensor purchasing contracts which extend beyond [**] (“Pre-existing
Supply Obligation List”), along with anticipated [**] for the remainder of the
contract time.
	 
	 	 	 	If any dispute arises regarding the status of long-term sensor contracts, Aspect
will have the right to have an independent auditor review the sensor contracts. If
any sales are not aligned with the agreed upon list of pre-existing customers,
Draeger will cease sales to that account and Draeger will retroactively pay Aspect
an [**] for every sensor previously sold outside the Pre-existing Supply
Obligation List. Aspect will [**] current sensor pricing and quantities for
pre-existing supply obligations (per 2004 Agreement, using 2007 sales levels for
determining the appropriate price) in order for Draeger to supply sensors to such
customers until [**] or the end-user chooses to buy directly from Aspect. Draeger
agrees not to renew any long-term BIS Sensor supply contracts currently in place.
	 
	 	 	 	(b) Draeger may purchase Aspect BIS Sensors (Starter Kit of 5 BIS Quatro Sensors or
Starter Kit of 5 BIS Pediatric Sensors) for demonstration purposes. Aspect BIS
Sensors purchased for demonstration use may not be resold to customers.
	 
	 	 	 	(c) Prices


Prices for Aspect BIS Sensors purchased by Draeger hereunder shall be as set forth
in Exhibit A (Aspect Products and Purchase Prices).
	 
	 	 	 	(d) Draeger, or its Affiliates, may continue to sell Aspect BIS Sensors beyond the
date of this Amedment to customers in territories or regions where Aspect has
entered into, or may enter into, distribution agreements with Draeger or its
Affiliates to sell and market Aspect BIS Sensors.






	 	4.	 	Section 5.4 of the Agreement will be replaced by the following:






	 	5.4	 	Installed Base Reporting




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	 	 	 	On a [**] basis, Draeger will report the number of BISx Systems installed during
that [**], dates of installation and overall base of BISx Systems by hospital [**]
Draeger, Draeger will then report BISx Systems [**]. This
information will be
[**].






	 	5.	 	Section 6.1 of the Agreement is hereby replaced with the following






	 	6.1	 	Commissions on Sales of Aspect BIS Sensors.
	 
	 	 	 	For each Aspect BIS Sensor sold by Aspect to Draeger customers for use with Draeger
BISx Systems, Aspect shall pay Draeger a commission equal to [**] percent of the
net sales revenue (invoice price after discounts) billed by Aspect for such Aspect
BIS Sensors. Aspect shall pay such commissions to Draeger on a [**] basis. With
such [**] payments, Aspect shall provide to Draeger a list of Draeger customers to
which such sales were made, the number of sensors sold in that [**], and the net
revenue billed for the sale of the sensors by Aspect. This [**] payment shall be
provided to Draeger no later than [**] following the end of each [**]. In the event
that Aspect’s standalone BIS monitors and/or, the BIS modules and/or the BISx
Systems of other manufacturers have also been installed at such sites in addition
to Draeger BISx Systems, Draeger will be entitled to a [**] percent commission only
on BIS Sensor sales intended for use with Draeger BISx Systems. A pro rata
determination will be based on the total number of BIS units of different types
installed at such locations during the period according to Aspect’s installed base
records. To facilitate such calculations, Draeger will be responsible for providing
Aspect with the documentation required in Section 5.4, and Aspect shall be
responsible for providing Draeger with accurate information regarding the total
number of non-Draeger units which have been installed, and are in use, at such
sites. In such situations where information is not available at a hospital level,
it will be calculated at an aggregate regional level. For example, [**] Draeger
commission will be calculated [**]. The information [**].
	 
	 	 	 	The commission amounts above will be reduced on a prorated basis to reflect
customers which continue to purchase from Draeger beyond the effective date of this
addendum with long term contracts closed prior to [**] as defined in Section
4.3(a). For example, if [**]% of Draeger customers continue to purchase from
Draeger through long-term contracts beyond [**], the overall commission will be
reduced by [**]%. As customers transition from Draeger to Aspect during the term
of the agreement, the commission will be increased accordingly. The commission
reduction calculation shall not include sales of Aspect BIS Sensors under, and in
compliance with, distribution agreements as described in Section 4.3(d).




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	 	 	 	The commissions described in this Section 6.1 shall be payable for a period of [**]
years after the initial installation of a Draeger BISx System with a Draeger
Patient Monitoring System at the relevant customer site.






	 	6.	 	Section 7.3 of the Agreement is eliminated.
	 
	 	7.	 	Section 22.1 of the Agreement is hereby replaced by the following:






	 	22.1	 	Term and Renewal 




The initial term of this Agreement shall commence on the Effective Date and continue through
December 31st, 2012, unless earlier terminated as provided herein. The term of this
Agreement shall thereafter be renewed automatically for successive twelve (12) month periods,
unless either Party provides written notice of termination to the other Party at least sixty (60)
days prior to expiration of the Agreement.





	 	8.	 	Capitalized terms used, but not defined, herein shall have the meaning ascribed to them in
the Agreement.






	 	9.	 	Except as amended by this Amendment 1, the Agreement shall remain in full force and effect.
After the Amendment Effective Date, every reference in the Agreement or this Amendment 1 to
the “Agreement” shall mean the Agreement as amended by this Amendment 1.




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Acceptance of this Amendment 1 is indicated by signatures below.




	 	 	 	 	 	 	 
	Aspect Medical Systems, Inc.	 	Draeger Medical Systems, Inc.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Neal Armstrong
	 	By:
	 	/s/ Bernd Nagel
	 

	 	 
	 	 	 	 
	



	 	Name: Neal Armstrong

Title: Chief Financial Officer
	 	


	 	Name: Bernd Nagel

Title: VP Strategic Sourcing







6/13











 





EXHIBIT A

REVISED ASPECT PRODUCTS AND PURCHASE PRICES





	A)	 	DRAEGER BISx SYSTEMS:





	 	 	 	 	 	 	 
	Aspect Part	 	 	 	Unit of	 	List
	Number	 	Product Description	 	Measure	 	Price
	186-0195-DM

	 	Draeger BISx System with BISx
	 	1 each
	 	[**]
	186-XXXX-DM

	 	Draeger BISx System with BISx4
	 	1 each
	 	[**]






	 	 	 	 	 
	Cumulative Annual	 	 	 	 
	Total Volume (in	 	Draeger BISx	 	Draeger BISx
	units)** (Calendar	 	Systems with BISx*	 	Systems with
	Year)	 	186-0195-DM	 	BISx4*
	[**]

	 	[**]
	 	[**]
	[**]

	 	[**]
	 	[**]
	[**]

	 	[**]
	 	[**]








 




			
	*	 	Pricing assumes the current cost of the Fixed Monitor Cable less $[**] as defined in
Section 7.4(a) of the Agreement.
	 
	**	 	Total calculation includes all Draeger BISx System types (as further described in
Section E below).





C) BIS DISPOSABLE SENSORS




	 	 	 	 	 	 	 	 	 
	Aspect Part	 	Draeger Part	 	 	 	Unit of	 	Draeger
	Number	 	Number	 	Product Description	 	Measure	 	Price
	186-0100*

	 	 	 	BIS Standard Sensor
	 	Box of 25
	 	[**]
	186-0106*

	 	 	 	BIS Quatro Sensor
	 	Box of 25
	 	[**]
	186-0200*

	 	 	 	BIS Pediatric Sensor
	 	Box of 25
	 	[**]
	 
	 	 	 	 	 	 	 	 
	186-0212*

	 	719-0018-00
	 	BIS Bilateral Sensor
	 	Box of 10
	 	[**]








 




			
	*	 	Limit one box of sensors sold upon initial installation of a Draeger BISx System.
	 
	*	 	For the purposes of One Time Tender Offers, Draeger will be allowed to purchase sensors at the
current published International list price (as of July 2, 2009 : [**]) minus a [**]% discount.
Draeger will provide Aspect notification of this occurrence along with Hospital information and
quantities sold.




7/13









 











	 	ii)	 	Demonstration Sensors:





	 	 	 	 	 	 	 	 	 
	Aspect Part	 	Draeger Part	 	 	 	Unit of	 	Draeger
	Number	 	Number	 	Product Description	 	Measure	 	Price
	186-0150

	 	 	 	BIS Quatro Starter Kit
	 	Box of 5
	 	[**]
	186-0206

	 	 	 	BIS Pediatric Starter Kit
	 	Box of 5
	 	[**]







	 	 	 	Demonstration Sensors cannot be resold by Draeger.






	E)	 	CALCULATION OF VOLUME DISCOUNT:
	 
	 	 	For the purpose of calculating the volume discount for a given calendar year, all Draeger BISx
Systems (excluding Aspect Products that are shipped free of charge) will be included in the
total volume discount calculation, e.g. Draeger BISx Systems including both BISx and BISx4
devices.
	 
	 	 	The initial pricing for a given calendar year is based on the total volume of Draeger BISx
Systems purchased in the prior calendar year. For example, if [**] Draeger BISx Systems were
purchased in year 1, the initial volume pricing level for year 2 will be the [**] unit price
level. The Parties agree that, for the period beginning on the Amendment Effective Date and
continuing through December 31, 2008, pricing will start at the [**] unit price level.
	 
	 	 	If a higher volume level of Draeger BISx Systems sales is achieved during a given calendar
year, the price on only those Draeger BISx Systems purchased after achieving the higher volume
level will reflect the price associated with the appropriate volume level achieved. All price
adjustments will apply on a going forward basis only. For example, if midway through year two,
[**] Draeger BISx Systems are purchased, the price on the [**] Draeger BISx System will reflect
the next volume break.
	 
	F)	 	CURRENCY
	 
	 	 	United States Dollars




8/13









 











EXHIBIT B

SPECIFICATIONS: ASPECT BISx KIT










	 	 	 	PRODUCT DESCRIPTION


The Aspect BISx Kit includes a PIC+, BISx Device, and a Host Monitor Cable. The Aspect
BISx kit will here forth be referred to as BISx. The BISx4 Kit includes a 4 channel PIC,
BISx4 Device, and a Host Monitor Cable. The BISx4 kit will here forth be referred to as
BISx4.
	 
	 	 	 	BISx is a device that acquires up to two channels of EEG and computes BIS and other EEG
parameters. BISx4 is a device that acquires up to four channels of EEG and computes BIS
and other EEG parameters. Both the BISx and BISx4 are designed to mate with Aspect’s XP
platform 1 or 2 channel sensors. The BISx4 is designed to additionally interface with
Aspect’s Bilateral sensor, which is required for acquisition of 4 channels of EEG. BISx
and BISx4 have no display or user interface. They plug into a host monitor system for
display of EEG and processed parameters. BISx and BISx4 are 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.
	 
	 	 	 	BISx and BISx4 interface to one or more of the following interfaces: standard RS-232
asynchronous interface, RS-232 type asynchronous interface but with TTL 3.3V signal levels,
or Universal Serial Bus (USB) interface. All interface versions also support USB
interfacing for software upgrade and download purposes. BISx and BISx4 can be connected
and disconnected to an already powered up host monitor. The host monitor should
automatically detect its presence and configure it accordingly.




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	 	 	 	The BISx connects to a sensor via the Aspect Patient Interface Cable (here forth referred
to as PIC+). The PIC+ is nominally 4.5 ft. long. The PIC+ connection is integral to the
enclosure (no pigtail), and can be detached from the BISx device for service or replacement
without the use of tools. The enclosure is sealed against liquid ingress even when the
PIC+ is detached.
	 
	 	 	 	The BISx4 connects to a sensor via the Aspect 4 channel Patient Interface Cable (here forth
referred to as CM PIC). The CM PIC is nominally 54 inches long. The CM PIC connection is
integral to the enclosure (no pigtail), and can be detached from the BISx4 device for
service or replacement without the use of tools. The enclosure is sealed against liquid
ingress even when the PIC+ is detached.
	 
	 	 	 	The BISx and BISx4 are attached to the host monitoring system via a nominal 9-foot monitor
cable. The host connector of the monitor cable is host system dependent and is the source
of future development with Draeger. The wire is narrow and highly flexible multi-conductor
cable used to supply power from the host monitor to the BISx/BISx4 as well as allow
communication between the devices. Additionally, the inability of the host monitor to
provide the BISx specified power requirements or communication requirements may be
addressed through the inclusion of a circuit which is integral to the host monitor cable.
	 
	 	 	 	The host monitor cable connection to the BISx/BISx4 device is integral to the enclosure (no
pigtail), and may require the use of tools for detachment from the BISx/BISx4 device
enclosure for the purposes of service or replacement. The enclosure is sealed against
liquid ingress only when the monitor cable is attached. There are no adjustable parts
inside the BISx. The cables may be replaced without opening the enclosure.
	 
	 	 	 	The BISx and BISx4 include software which is stored in reprogrammable FLASH memory.
Software upgrades can be accomplished via the serial / USB interface. Each BISx and BISx4
is given a unique serial identifier, allowing for electronic identification and tracking of
every BISx/BISx4.
	 
	 	 	 	
PRELIMINARY TECHNICAL SPECIFICATIONS

(Unless otherwise noted specifications apply to both the BISx and BISx4)
	 
	 	 	 	Physical Specifications





BISx Kit

Size: 95.3 mm (3.75”) diameter x 63.5 mm (2.5”) height

Weight:   approx 8.0 oz without cables

                approx 10.0 oz including PIC+




BISx Integral Cables

Host Monitor Cable: 2.74m (9ft)

Patient Interface Cable (PIC+): 1.4m (4.5 ft)




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BISx4 Kit


Size: 95.3 mm (3.75”) diameter x 63.5 mm (2.5”) height

Weight: 227g (8.0 oz) without cables




BISx4 Integral Cables


Host Monitor Cable: 2.74m (9ft)

Patient Interface Cable (CM PIC): 1.4m (4.5 ft)




Safety Specifications





	•	 	The BISx and BISx4 comply with the essential requirements of the Medical Device Directive
93/42/EEC, as well as IEC 60601-1 and IEC 60601-2-26.
	 
	•	 	They are both Type BF applied parts. Both the BISx and BISx4 have internal optical
coupling and an isolation transformer for patient isolation.
	 
	•	 	Both are 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 these devices to sale by or on the order of a
physician.
	 
	•	 	BISx, BISx4, and cables are latex free.





Environmental Specifications


Liquid Ingress: IEC 529 IPX4


Temperature





0 to 40 degrees C operating

-40 to 70 degrees C storage




Humidity






10% to 95% non-condensing operating

10% to 95% non-condensing storage




Pressure


480 to 1067 hPa operating (Approx -1250 to 20,000 feet)

116 to 1067 hPa storage (Approx -1250 to 50,000 feet)




Performance Specifications


Measurement Ranges

Bispectral Index (BIS): 0 to 100 unitless scale

Electromyographic Strength (EMG): 25 to 100 dB where 1 μV2=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 1 μV RMS=40dB

Burst Count: 0 to 30




Noise (EEG Waveform) < 0.3 μVRMS (2.0 μV peak-to-peak)

BIS Numeric Update Frequency Once per second

EEG Bandwidth 0.25 to 100 Hz (- 3dB)

Patient Leakage <10uA




11/13









 




12/13








 





EXHIBIT C

CONTACT PERSONS/ADDRESSES




Contact Persons and Responsibilities at Aspect:




	 	 	 	 	 	 	 
	Person	 	Title	 	Responsibility	 	Email
	Bob Cormier

	 	Director,

Sales Operations
	 	Contract
	 	rcormier@aspectms.com
	Ronda Kalis

	 	Product Manager, OEM
	 	Marketing
	 	rkalis@aspectms.com
	Steve Mesrobian

	 	Director, OEM

Engineering
	 	Project Manager
	 	smesrobian@aspectms.com
	Christine Vozella

	 	Senior Director,

RA/QA
	 	Quality and
Regulatory Matters
	 	cvozella@aspectms.com
	James Charest

	 	OEM Engineer
	 	Technical Design

Issues
	 	jcharest@aspectms.com






	 	 	 
	Mailing
Address:

	 	Aspect Medical Systems, Inc.
	 

	 	One Upland Road
	 

	 	Norwood, MA 02062






Contact Persons and Responsibilities at Draeger:




	 	 	 	 	 	 	 
	Person	 	Title	 	Responsibility	 	Email
	 

	 	 	 	Marketing	 	 
	 

	 	 	 	Engineering	 	 
	 

	 	 	 	Contracts	 	 
	 

	 	 	 	Project Management	 	 






	 	 	 
	Mailing
Address:

	 	Draeger Medical Systems, Inc.

6 Tech Drive

Andover, MA 08010







13/13