Exhibit 10.19


 


AMENDMENT D


 


This AMENDMENT D (the “Amendment
D”) is made and entered as of the 3rd day of May 2005, by and between
Baxter Healthcare Corporation, a Delaware corporation (“Baxter”), and
Physiometrix, Inc., a Delaware corporation (“Physiometrix”).


 


WHEREAS, Baxter and
Physiometrix entered into a Strategic Alliance and Distribution Agreement dated
May 2000 to form an alliance for the distribution and sale of certain
Products (the “Agreement”), and such Agreement was amended by Amendment A on October 17,
2000, by Amendment B on December 6, 2000, and by Amendment C on February 12,
2003.


 


WHEREAS, Baxter and
Physiometrix desire to further amend the Agreement.


 


NOW,
THEREFORE the parties hereby agree to amend the Agreement as follows:


 


1.                                       Amendment D Controlling. 
Baxter’s obligations in the marketing and sales of the Products shall be
governed by the provisions of this Amendment D, and to the extent this
Amendment D conflicts with any provision of the Agreement, including sections
2.1, 5, 7, 8, 9, 10, 13 and 15, as amended, this Amendment D shall control.
Additionally, sections 2.4, 16.2 and 43 are hereby omitted.


 


2.                                       Product Sales. 
Active sales efforts for the PSA 4000 by Baxter shall end on the earlier
of (i) December 31, 2005, or (ii) the exhaustion of all existing
Baxter inventory of PSA 4000 devices. 
Active sales efforts for the PSArrays for the installed base and new
device placements in 2005 shall continue through December 31, 2005.  Baxter will continue to sell PSArrays to
Baxter customers until December 31, 2007.


 


3.                                       PSA 4000 Pricing. 
Baxter, at its discretion, may issue Purchase Orders for additional PSA
4000 devices, at a cost of $1,000 per unit. 
Such Purchase Orders must specify a delivery date prior to December 31,
2005.


 


4.                                       PSArray Pricing. 
Baxter, at its discretion, may purchase, in a manner consistent with
past practices, PSArrays at a cost of $7.50 per unit.  Baxter shall have the exclusive right to sell
the PSArray for use with the PSA 4000 device through December 31, 2007.


 


5.                                       Physiometrix Support. 
Physiometrix will continue to support Baxter’s efforts to sell or lease
the PSA 4000 in the hospital setting with technical and in-hospital
consultative support provided by Physiometrix.


 


6.                                       PSA 5000 Sales. 
The sale or lease of the PSA 5000 device, or any other new PSA variant,
(“PSA 5000”) will be the sole responsibility of Physiometrix.  The sale of the PSA 5000 array or any new
array variant (the “New Array”) will be the sole responsibility of
Physiometrix.


 


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7.                                       Baxter Sales Leads for
PSA 5000.  Baxter representatives will accept and
forward sales leads for the PSA 5000 to Physiometrix through December 31,
2006.  Physiometrix agrees to pay to
Baxter a $200 placement fee for each sales lead resulting in a PSA 5000 sale or
lease.  Physiometrix also agrees to pay a
$200 placement fee for each sale or lease of a PSA 5000 into an Existing Baxter
Account.  An “Existing Baxter Account” is
defined as any healthcare facility that has purchased or leased any PSA 4000
device or PSArray on or after 1/1/03 or any facility where Baxter has conducted
a PSA 4000 evaluation, lasting at least one week, and conducted after January 1,
2003.


 


8.                                       New Arrays. 
If Physiometrix sells a New Array into an Existing Baxter Account
(whether for use with a PSA 4000 or a PSA 5000), Physiometrix will provide a “Baseline
Revenue Stream” to Baxter.  The Baseline
Revenue Stream will be calculated for each calendar quarter as follows:


 


(i)            The
total number of PSA 4000 and PSA 5000 devices installed at each Existing Baxter
Account as of the date of the first New Array sale at the facility;


(ii)           times an array usage rate of 13 arrays per month;


(iii)          times 3 months;


(iv)          minus the number of PSA 4000 arrays sold by Baxter for the
calendar quarter;


(v)           times $8.00 per array.


 


For Example, if an Existing Baxter Account has leased 10 PSA 4000
devices, has purchased 200 PSArrays from Baxter in January 2006 and elects
to purchase New Arrays from Physiometrix in February and March 2006,
the amount due to Baxter for the calendar quarter from Physiometrix is 10
monitors times 13 arrays per month times 3 months minus 200 arrays times $8.00
per array or $1520.


 


9.                                       Termination of Baseline Revenue Stream.  Physiometrix
will pay the Baseline Revenue Stream to Baxter on New Array sales at each
Existing Baxter Account through December 31, 2007.


 


10.                                 Convention Attendance.  Baxter will display the Product at its booth
at the following meetings:


 


2005 SCCM convention


2005 IARS convention


2005 AANA convention


2005 ASA convention


2005 PGA convention


 


Physiometrix
may have up to two employees present in the Baxter meeting booth to discuss the
benefits of the Product with meeting attendees.


 


11.                                 Marketing Responsibility.  As of the date of this Amendment D,
Physiometrix will be responsible for all marketing related to the PSA
technology.  This includes, but is


 


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not
limited to, print advertising, product brochures, sales detail aids, training
materials, and grants to clinical investigators.


 


12.                                 Repurchase of Baxter Inventory.  At Physiometrix’s option, Baxter will sell
all Existing Inventory of Products to Physiometrix.  “Existing Inventory” means all PSArrays, and
all PSA 4000 devices, owned by Baxter, and located in Baxter’s possession, in
customers’ facilities for evaluations, or in customers’ facilities under a
lease agreement.  Physiometrix may
exercise its option to purchase on December 15, 2005, June 15, 2006, December 15,
2006, or June 15, 2007, or at any time upon or following the consummation
of a Change of Control (as defined below) of Physiometrix (the “Repurchase
Option”).    For purposes hereof, a “Change
of Control” of Physiometrix shall mean the sale of all or substantially all of
Physiometrix’ assets or any stock purchase, merger, consolidation,  tender offer or other business combination
transaction after completion in respect of which the stockholders holding all
of Physiometrix’ outstanding voting securities immediately prior to the consummation
of such transaction own immediately after the consummation of such transaction
less than 50% of the outstanding voting or equity securities of
Physiometrix.   Physiometrix will notify
Baxter within two (2) business days of entering into a definitive
agreement pursuant to which a Change of Control of Physiometrix is
contemplated.


 


If Physiometrix exercises
its Repurchase Option, the parties shall be subject to the following
requirements:


 


(i)            Physiometrix
must purchase all Existing Inventory and cannot offer to purchase only a
portion of the Existing Inventory;


(ii)           Physiometrix
must provide at least 30 days advance notice to Baxter of its intent to
purchase the Existing Inventory, including upon exercise in connection with a
Change of Control of Physiometrix,   (it
being understood that such notice may be given in advance of and conditioned on
a prospective Change of Control);


(iii)          Baxter
will deliver all of the Existing Inventory in Baxter’s possession to
Physiometrix within 30 days after the notice referred to in (ii) above;


(iv)          Baxter
will deliver all Baxter Contracts (defined below) and any related material
correspondence to Physiometrix within 30 days after receiving notice as set
forth in (ii) above;


(v)           The
Existing Inventory will be sold “AS IS”;


(vi)          Physiometrix
will pay Baxter $1,000 per device and $15.00 per PSArray within 30 days of
delivery of the Existing Inventory;


(vii)         Physiometrix
will be responsible for shipping and handling to transfer the Existing
Inventory from Baxter’s warehouse to Physiometrix;


(viii)        Title
to the Existing Inventory will pass to Physiometrix upon receipt by Baxter of
payment; and


(ix)           All
rights and obligations of Baxter under any and all purchase agreements or
leases Baxter has with customers under which the Products are placed in
Existing Baxter Accounts (the “Baxter Contracts”) will automatically be
assigned, transferred and delivered from Baxter to Physiometrix.


 


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Notwithstanding the
foregoing, a Baxter Contract will not be assigned, transferred or delivered to
the extent the assignment or transfer thereof, without consent of the customer
thereto, would constitute a breach or violation under such Baxter Contract (a “Restricted
Baxter Contract”).  In such a case,
Baxter will use its reasonable commercial efforts to obtain the required
consents necessary to effectively transfer and assign the Restricted Baxter
Contracts from Baxter to Physiometrix. 
During the period between the exercise of the Repurchase Option and the
obtaining of the necessary consent of the Restricted Baxter Contract, (i) Baxter shall continue to keep the
Restricted Baxter Contract in effect in accordance with its terms and shall
cooperate in any reasonable arrangement to provide Physiometrix with the
benefits of such Restricted Baxter Contract and (ii) if Baxter provides
such benefits to Physiometrix, Physiometrix shall perform at its sole expense
the obligations of Baxter to be performed after the exercise of the Repurchase
Option under the Restricted Baxter Contract in question.  Once a consent for the assignment, transfer
and delivery of a Restricted Baxter Contract is obtained, Baxter shall promptly
assign, transfer and deliver such Restricted Baxter Contract to Physiometrix,
and Physiometrix shall assume the obligations under such Restricted Baxter
Contract that relate to the period from and after the date of assignment,
transfer and delivery of such Restricted Baxter Contract to Physiometrix.
Without limiting the foregoing, Baxter will reasonably cooperate in taking such
further action as may be necessary or advisable to accomplish the intent and
purposes of this clause (ix).


 


13.                                 Termination of Agreement.  Upon Physiometrix exercising its Repurchase
Option, the Agreement will terminate and all of Baxter’s rights set forth in
the Agreement as amended, including Baxter’s rights to the Baseline Revenue
Stream set forth in this Amendment D will terminate. Notwithstanding the
foregoing, the rights and obligations of the parties set forth in Sections
12 - 16 to this Amendment D shall survive termination.


 


14.                                 Other Terms Unchanged.  Except as specifically set
forth above, all other terms and conditions set forth in the Agreement shall
remain unchanged.


 


15.                                 Definitions.  Capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Agreement.


 


16.                                 Assignment.  The
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.


 


Exhibit E shall be
replaced in its entirety by:


 


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Exhibit E


 


Product
Pricing


 


The
transfer pricing for PSA 4000 monitors purchased from Physiometrix through 2007
will be $1,000 per monitor.


 


The
transfer pricing for PSArrays purchased from Physiometrix through 2007 will be
$7.50 per Frontal Array.


 


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EXECUTION


 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed,
in duplicate, by their duly authorized representatives as of the date set forth
above.


 


	
  Physiometrix Inc.

  	
  Baxter Healthcare
  Corporation

  
	
  (a Delaware
  Corporation)

  	
  (a Delaware
  Corporation)

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  	
   

  
	
   

  	
  John A. Williams

  	
   

  	
  Raul A. Trillo, Jr.,
  MD, MBA

  
	
   

  	
  President and CEO

  	
   

  	
  General Manager

  
					



 


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