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EXHIBIT 10.1
PURCHASING AND LICENSING AGREEMENT, DATED SEPTEMBER 9, 1997, BETWEEN ATOM
MEDICAL CORPORATION AND MASIMO CORPORATION.
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
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PURCHASING AND LICENSING AGREEMENT
BETWEEN
ATOM MEDICAL CORPORATION
AND
MASIMO CORPORATION
DATED SEPTEMBER 9, 1997
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EXHIBITS
Exhibit A. MASIMO SET(R) Definition
Exhibit B. Trademarks, Legend, Logos
Exhibit C. List of Patents and Patent Applications
Exhibit D. Price of Products
Exhibit E. Specifications for Products
Exhibit F. End-User License Agreement
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PURCHASING AND LICENSING AGREEMENT
THIS PURCHASING AND LICENSING AGREEMENT ("Agreement") is made and entered
into as of this 9th day of September, 1997, by and between ATOM Medical
Corporation, a Japanese corporation ("ATOM"), and MASIMO CORPORATION, a Delaware
corporation ("MASIMO"), with reference to the following:
R E C I T A L S:
A. MASIMO has developed a new technology known as Signal Extraction
Technology ("MASIMO SET" as defined in Exhibit A) MASIMO SET(R) incorporates
circuitry and software which, among other things, acquires and detects signals
generated by red and infrared LEDs, and which is designed to extract arterial
oxygen saturation and pulse rate values from such signals.
B. ATOM is a manufacturer of medical equipment and desires to incorporate
MASIMO SET for SpO(sub 2) into its medical equipment for distribution by ATOM
throughout the world.
C. MASIMO has acquired substantial Know-How (as defined below) in
extracting signals from signals contaminated by noise.
D. MASIMO has acquired and expects to continue to acquire a reputation
for excellence, and its Trademark has and will continue to acquire valuable
goodwill.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, ATOM and MASIMO hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms, whether
used in the singular or the plural shall have the following meaning:
1.1 Accessory means cables (including, but not limited to the
MASIMO PC08 and PC12, 8 ft. and 12 ft. patient cables) or any other
accessory manufactured by MASIMO and used with any of the SpO(sub 2)
Sensors or Licensed Devices.
1.2 Distributor means a party that markets Licensed Devices to
End-Users on behalf of ATOM or a customer of ATOM that buys Licensed
Devices from ATOM, private labels such devices, and markets such Licensed
Devices to End-Users.
1.3 End User is a direct user of Licensed Devices in a clinical
environment for medical diagnostic purposes on patients (OEM and medical
equipment manufacturers are specifically excluded).
1.4 Improvement means any invention, adaptation, modification or
change relating to MASIMO Technology.
1.5 Licensed Devices means ATOM's completed patient monitor
devices incorporating MASIMO SET whether made in circuit board, software
or integrated circuit form for SpO(sub 2) Measurements. Licensed Devices
shall not include any methods other than MASIMO SET for calculating
arterial blood oxygen saturation. Licensed Devices specifically excludes
all Fetal Oximetry applications and venous oxygen saturation
applications.
1.6 Licensed Trademarks means the MASIMO SET product designation
and word xxxx(s) set forth on Exhibit B.
1.7 MASIMO Confidential Information means information and
proprietary material of MASIMO disclosed to ATOM and includes, but is not
limited to, the following types of information and
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other information of a similar nature: ideas, concepts, materials,
techniques, models, data, designs, documentation, flow charts, budgets,
projections, forecasts, marketing and development plans, the Masimo
Technology, the Software, communication protocols, and testing
procedures.
1.8 MASIMO Technology means technical information, inventions,
concepts, techniques, products, components, concepts, trade secrets,
know-how, techniques, designs, processes, communications protocols, the
Software, whether patentable or not, patent applications, copyright
applications, the Patent Rights, and copyrights and all other
intellectual property rights relating to MASIMO SET alone or incorporated
in MS Boards, SpO(sub 2) Sensors, Improvements and related documentation
generated prior to or pursuant to this Agreement.
1.9 MS Boards means MASIMO's standard circuit board or chip set
which contains MASIMO SET and algorithms necessary to process the
information transmitted from the SpO(sub 2) Sensor and convert it into
SpO(sub 2) Measurements.
1.10 Party means ATOM or MASIMO; Parties means ATOM and MASIMO.
1.11 Patent Rights means all patents owned by MASIMO on technology
developed by MASIMO which cover SpO(sub 2) Measurement in Licensed
Devices. The present patent numbers and patent application are set forth
on Exhibit C to this Agreement.
1.12 Products are MS Boards, SpO(sub 2) Sensors and Accessories.
1.13 Purchase Orders has the meaning set forth in Section 4.1
("Purchase Orders").
1.14 Software means any and all computer/instrument software
and/or firmware developed by MASIMO that is used or useful in connection
with MASIMO Technology.
1.15 SpO(sub 2) Measurements means noninvasive measurement of
arterial oxygen saturation (accounting for Hb and HbO(sub 2) only) and/or
pulse rate from neonate, pediatric and adult subjects (excludes fetal
measurement and venous oxygen saturation).
1.16 SpO(sub 2) Sensor means reusable and disposable MASIMO
standard adult, pediatric or neonatal sensors for use with making SpO(sub
2) Measurements. Standard SpO(sub 2) Sensors currently manufactured by
MASIMO have the following model numbers:
LNOP(R) - Neo-Pt; Disposable Neonatal Sensor (Pre-Term)
LNOP(R) - Neo; Disposable Neonatal Sensor
LNOP(R) - Adt; Disposable Adult Sensor
LNOP(R) - Pdt Disposable Pediatric/Slender Digit Sensor
LNOP(R) - DC1; Reusable Adult/Pediatric Digit Clip Sensor
MASIMO intends to produce additional standard models of the
SpO(sub 2) Sensors. As MASIMO produces such additional models, the
Parties agree to negotiate in good faith their inclusion in this
agreement
1.17 ATOM Confidential Information means information and
proprietary material designated by ATOM as Confidential Information and
which MASIMO may obtain as a result of MASIMO's relationship with ATOM or
access to its premises. Confidential Information includes, but is not
limited to, the following types of information and other information of a
similar nature: ideas, concepts, materials, techniques, models, data,
designs, documentation, flow charts, budgets, projections, forecasts,
marketing and development plans, communication protocols and testing
procedures.
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1.18 Subsidiary means any majority owned or wholly owned
subsidiary, or any entity over which a Party has control.
2. LICENSES GRANTED
2.1 Licenses Granted to Licensee.
2.1.1 MASIMO grants to ATOM a personal, non-transferable,
and non-exclusive worldwide license to incorporate the MS Boards
into the Licensed Devices, to demonstrate Licensed Devices, and to
distribute Licensed Devices to (i) End User customers and (ii)
ATOM Distributors. This license includes the right to ATOM to have
the Licensed Devices manufactured by a third party for ATOM;
however, such Licensed Devices may only be supplied to the
marketplace with ATOM's or ATOM's and ATOM's Distributors' private
label and logo exclusively and distributed exclusively through
ATOM distribution channels. In addition, a third party making
Licensed Devices for ATOM may not also be a Distributor.
2.1.2 ATOM agrees that it will not reproduce or disclose to
any third party any portion of the Software and that it may
transfer copies of the Software in object code form only, and only
in conjunction with a transfer of a Licensed Device to End Users
and Distributors. ATOM agrees to include a copy of the End-User
License Agreement attached hereto as Exhibit F with all Licensed
Devices, and agrees that it will require all Distributors to
include a copy of the End-User License Agreement attached as
Exhibit F with the transfer of Licensed Devices to End Users. If
ATOM enters a signed agreement with the End User customer or
Distributor, ATOM also agrees to attach the End-User License
Agreement as an exhibit and include the following clause or a
substantially similar clause in the signed agreement:
The end-user agrees to comply with the terms of the
attached License Agreement. MASIMO is a beneficiary of this
agreement between ATOM and the end-user, and has a right to
enforce the provisions of the License Agreement.
2.1.3 MASIMO retains all rights, title, and interest in the
Masimo Technology and Improvements, including, without limitation,
all patents, copyright, trade secret, and any other intellectual
property and proprietary rights. Nothing in this Agreement should
be construed as a sale of the Software or any copy of the
Software.
2.1.4 ATOM agrees that the Masimo Technology contains trade
secrets and proprietary information belonging to MASIMO. ATOM
agrees to maintain the confidential nature of such trade secrets
and proprietary information and agrees not to use, print, copy,
provide, or otherwise make available, in whole or in part, any
portion of the Software or related materials except in accordance
with this Agreement. ATOM will not be provided access to source
code for MASIMO Technology. ATOM agrees not to attempt to
decipher, decompile, or modify the Software or develop source code
for the Software or allow others to do so.
2.2 Limitation of Licenses Granted
2.2.1 No license is granted under this Agreement with
respect to the MS Boards and Masimo Technology other than as
integrated parts of the Licensed Devices. ATOM shall not have the
right to manufacture MS Boards, SpO(sub 2) Sensors or Accessories
or any circuity or software that performs the functions of the MS
Boards for the Licensed Devices.
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2.2.2 Except for a transfer of Licensed Devices to end-user
customers and Distributors accompanied by the End-User License
Agreement, no right to grant sublicenses is granted under this
Agreement.
2.2.3 Nothing in this Agreement shall be construed to grant
any rights to ATOM in fetal oximetry, venous oximetry or any other
application of MASIMO SET other than the use of LICENSED Devices
to make SpO(sub 2) Measurements, and nothing in this Agreement
shall be construed to grant any rights to ATOM to distribute or
otherwise market MS Boards or MASIMO SET separate from Licensed
Devices.
2.3 Trademarks, Legends and Logos.
2.3.1 No Implied License. ATOM agrees to include the
following legend on the exterior of Licensed Devices:
NO IMPLIED LICENSE
Possession or purchase of this device does not convey any
express or implied license to use the device with
replacement parts which would, alone, or in combination
with this device, fall within the scope of one or more of
the patents relating to this device.
Initial quantities of labels containing this legend are available
from MASIMO upon request.
2.3.2 Grant by Masimo. MASIMO hereby grants to ATOM a
non-exclusive license to use the Licensed Trademarks with the
Licensed Devices for identification purpose and for publicity and
promotional purposes when it is advertising one of its Licensed
Devices.
2.3.3 Quality Control. In order for ATOM to maintain its
trademark license hereunder, ATOM agrees that the Licensed Devices
bearing the Licensed Trademark shall be of a high standard of
quality, at least as high as ATOM's historical products, so as to
protect and enhance the goodwill pertaining to the MS Boards and
SpO(sub 2) Sensors. MASIMO has the right to inspect the
manufacturing and distribution points of ATOM for the Licensed
Devices, at any reasonable time, to ensure the ongoing quality of
the Licensed Devices. Should MASIMO at any time determine that the
quality of any Licensed Device does not adhere to MASIMO's quality
standards, MASIMO will provide written notice to ATOM. ATOM shall
have three months from such notice to bring the quality of such
Licensed Device up to standard or to cease any further use of the
Licensed Trademark in connection with the promotion or sale of
such Licensed Device until MASIMO has indicated that it is
satisfied that the deficiencies in quality of the Licensed Device
have been corrected.
2.3.4 Trademark Marking. ATOM agrees that it shall use the
MASIMO Product Designation set forth in Exhibit B on all Licensed
Devices standing independently on the front or face of the unit in
a plainly visible site. Prior to any such use, ATOM shall obtain
consent from MASIMO as to the use and location of the Licensed
Trademark, which consent shall not unreasonably be withheld.
2.3.5 Advertising. All advertising for Licensed Devices
must include one or more of the Licensed Trademarks. Prior to any
use or publication, all advertising copy shall be forwarded to
MASIMO for its approval, which approval shall not be unreasonably
withheld.
2.3.6 The Licensed Trademarks may not be used on or in
reference to any products other than Licensed Devices.
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2.3.7 Except for the ATOM trademark and/or trade names, the
Licensed Trademarks may not be used in direct combination with
other trade names, trademarks or symbols. Moreover, the trade
names, trademarks, or symbols of one party may not be used in any
way which may suggest that one party is a division, affiliate, or
subsidiary of the other party.
2.3.8 ATOM acknowledges the validity and exclusive
ownership of the Licensed Trademarks by MASIMO. ATOM agrees not to
use the Licensed Trademarks in any way which might endanger
MASIMO's rights in and ownership of the Licensed Trademarks.
2.3.9 Patent Marking. ATOM agrees to xxxx each Licensed
Device manufactured or sold by it in accordance with the Statutes
of the United States relating to marking of patented articles.
MASIMO will, from time to time, update its patent numbers for ATOM
as patents issue. When MASIMO updates its patent numbers, ATOM's
obligation to update its product marking shall occur upon the
earlier of the exhaustion of labels for Licensed Devices bearing
the current patent numbers or one year from the update by MASIMO.
Initial Patent marking is shown in Exhibit B.
3. ATOM COMMITMENTS/LICENSE FEE
3.1 ATOM agrees to purchase all Products from MASIMO.
3.2 Best Efforts. ATOM agrees to use its best efforts to make
MASIMO SET its primary pulse oximetry technology, including, but not
limited to integrating MASIMO SET into its products for SpO(sub 2)
Measurement and by solely promoting the sale of such Licensed Devices
over devices for SpO(sub 2) Measurement which do not incorporate MASIMO
SET.
3.3 Integration Commitment. Except for ATOM products in which
Nellcor SpO(sub 2) technology is specifically requested by ATOM's
customers, ATOM will exclusively integrate Masimo SET into all of its
future instruments which require SpO(sub 2) Measurements. In no event
will the percentage of ATOM Instruments exclusively containing Masimo SET
fall below 80% of the total instruments containing SpO(sub 2)
Measurements from Atom.
3.4 Sensor Commitment. ATOM agrees that it will not sell or
otherwise market any products for SpO(sub 2) Measurement with License
Devices except SpO(sub 2) Sensors and Accessories purchased from MASIMO.
3.5 Stand-Alone Pulse Oximeter. Masimo agrees to use its best
efforts to provide ATOM a source to purchase a private labeled Masimo SET
stand-alone pulse oximeter thru its other OEM partners. When such a
stand-alone Licensed Device is available to ATOM, ATOM will cease all
shipments of non-Masimo SET stand-alone pulse oximetry instruments.
3.6 Product Lines. Prior to the launch of each Licensed Device,
ATOM agrees to inform MASIMO of a description and model number of the
product, and agrees to provide MASIMO with all customer product
literature and technical specifications on each Licensed Device.
3.7 Engineering Support. MASIMO will provide customary and
reasonable integration support without charge, at its discretion. At
ATOM's request and with MASIMO's approval, MASIMO shall provide
additional engineering support to ATOM for the integration of MASIMO SET
into Licensed Devices, at a cost of $150.00 per hour. Such support and
payment by ATOM shall be authorized in advance, in writing by ATOM. Such
services shall be provided at MASIMO's facility unless travel is
required, in which event ATOM shall additionally pay for necessary travel
expenses.
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3.8 Delivery of ATOM Systems to MASIMO. ATOM agrees to deliver
free of charge, one (1) complete system to MASIMO which demonstrates the
final integration of the MS Board into each Licensed Device, MASIMO may
test and make recommendations for improvements to the Licensed Devices
for compliance with the specifications of Exhibit E. MASIMO makes no
warranties or representations with respect to this testing. Such Licensed
Devices shall remain with MASIMO for further technical assistance and as
a demonstration unit. Title to such systems shall transfer to MASIMO.
3.9 License Fee. ATOM shall pay a license fee to MASIMO in the
amount of [*] payable upon execution of this Agreement.
3.10 Training. ATOM agrees to allow Masimo to support ATOM's sales
training on MASIMO SET, with appropriate prior notice and mutual
agreement of the Parties to the training agenda and time requirements.
3.11 Quarterly Accounting. ATOM agrees to provide MASIMO with a
Quarterly Accounting of total pulse oximetry product shipments, its
shipments containing MASIMO MS Boards exclusively and other shipments
containing other means of providing pulse oximetry.
3.12 Audit Rights. MASIMO shall have the right to verify, at its
expense, and not more frequently than once per year and upon not less
than ten (10) business days prior written notice to ATOM, the accuracy of
the accounting reports provided by ATOM hereunder, through inspection of
ATOM's pertinent records and books of accounts maintained in the ordinary
course of business. Such audit shall be conducted by a certified public
accountant (the "CPA") chosen by MASIMO in its reasonable discretion, and
which CPA is reasonably acceptable to ATOM. ATOM shall pay all costs,
expenses and fees of the CPA if (i) ATOM has overstated its Integration
Commitment to be eighty percent (80%) or greater, and (ii) audit shows
the Integration Commitment is less than eighty percent (80%) for the
entire annual period audited.
4. PURCHASE AND SALE
4.1 Purchase Orders. During the term of this Agreement and in
accordance with its provisions, the purchase and sale of Products between
the Parties shall be made by means of purchase orders placed by ATOM or
its designee to MASIMO ("Purchase Orders"). The minimum quantity of
Products that may be purchased on a Purchase Order is 50 units of a
cable-part number (e.g., PC08) or a reusable sensor (e.g., LNOP-DC1) or
MS Boards or 500 units of a disposable sensor (e.g., LNOP-Neo). Purchase
Orders and change orders may be placed by facsimile or mail. A Purchase
Order issued before normal expiration of this Agreement may provide for
delivery for a period of up to ninety (90) days following normal
expiration of this Agreement and all terms and conditions of this
Agreement shall govern. No Purchase Order must be accepted by MASIMO
after the expiration or the termination of this Agreement. Any Purchase
Order issued for any firm commitment or purchase hereunder shall be
non-cancelable, and ATOM shall be responsible for taking deliveries of
and paying for all Products set forth in such Purchase Order.
4.2 Confirmation. MASIMO will notify ATOM of receipt of Purchase
Orders within five (5) working days after receipt. Confirmation of
receipt and acceptance by MASIMO may be by facsimile or mail.
4.3 Contents. All Purchase Orders submitted by ATOM shall state
the following: (i) price, (ii) the quantities ordered, (iii) the
requested delivery dates, (iv) destination, (v) requested method of
shipment, and (vi) model number of the Products in accordance with the
terms and conditions hereof. Any language on the Purchase Order of ATOM
or acknowledging form of MASIMO which is inconsistent with any term or
provision hereof shall be void and without any force or effect.
* Confidential material redacted and filed separately with the Commission.
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4.4 Initial Commitment. The first Purchase Order submitted by
ATOM, will include firm quantities for the first six (6) months of
shipment which are contemplated to begin in April, 1998
4.5 Ongoing Purchase Orders. After the initial Purchase Order,
ATOM's Purchase Orders issued to MASIMO calling for delivery in ninety
(90) days or less are non-cancelable. Purchase Orders to MASIMO calling
for delivery in more than 90 days shall be alterable and cancelable by
ATOM up until ninety days prior to the shipment date, after which such
Purchase Orders become binding.
4.6 Emergency Orders. Purchase Orders placed by ATOM shall not
prevent ATOM from placing emergency orders for units of the Products for
delivery in less than ninety (90) days. MASIMO agrees to use reasonable
efforts to deliver such units of Products on the requested schedule.
MASIMO may require a price modification for emergency orders.
5. PRICES AND PAYMENT
5.1 Price. MASIMO's transfer prices for the Products delivered to
ATOM in accordance with the terms of this Agreement shall be as set forth
on Exhibit D attached hereto. All prices are F.O.B. MASIMO's shipping
dock. The transfer price for SpO(sub 2) Sensors and Accessories includes
packaging and labeling with ATOM-supplied artwork and logos complying
with MASIMO's Standard Packaging Guidelines. The transfer price does not
include custom packaging or labeling for SpO(sub 2) Sensors, Accessories
or MS Boards. If custom labeling for SpO(sub 2) Sensors or Accessories is
desired and feasible as determined by Masimo, all costs associated with
such labeling will be paid by ATOM. Payment by ATOM to MASIMO shall be
made thirty (30) days following receipt of invoice by ATOM.
5.2 Pricing Adjustments. MASIMO shall have the right to adjust
prices for the Products annually, provided that any annual price increase
shall be limited to the percentage increase in the prior year's U.S.
Consumer Price Index.
5.3 Currency Basis. Prices for the Products to ATOM shall be in
U.S. Dollars.
5.4 F.O.B. Point. Risk of loss for Products shall pass to ATOM,
F.O.B. MASIMO's manufacturing facility or distribution point, as selected
by MASIMO.
5.5 Taxes and Levies. All payments by ATOM to MASIMO under this
Agreement are exclusive of taxes and ATOM shall be responsible for paying
all taxes (except taxes based on MASIMO'S income), including but not
limited to, all sales, use, personal property, customs, duties,
assessments, levies and other governmental impositions of any nature.
5.6 Obsolete Packaging Inventory. Should ATOM request changes to
ATOM's current packaging materials for Products (including but not
limited to SPO(sub 2) Sensor pouches, boxes and directions for use), ATOM
will reimburse MASIMO for the direct cost of the obsoleted packaging
materials, up to a total of [*].
6. DELIVERY
6.1 Transportation. The method of transportation and carrier
selected shall be as specified by ATOM in its Purchase Orders. Unless
otherwise agreed, all transportation charges, including insurance, levies
and taxes, shall be paid by ATOM.
* Confidential material redacted and filed separately with the Commission.
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6.2 Packaging. MASIMO shall package the Products for shipment.
Each shipment shall include a packing list containing: (i) Purchase Order
number, (ii) model number of the Products, (iii) quantity, (iv) serial
number or lot code of shipped products, and (v) certificates of
compliance for the applicable quality assurance tests performed for the
Products being shipped.
6.3 Delivery. MASIMO shall use reasonable commercial efforts to
fill all Purchase Orders by delivery dates and in the quantities
specified by ATOM in its Purchase Orders. Notwithstanding the above,
MASIMO shall have no obligation to deliver in less than ninety (90) days
from confirmation. If a Purchase Order by ATOM calls for more than a 25%
increase as compared to the previous 3-month average of Products ordered,
on a product-by-product basis, MASIMO shall use reasonable commercial
efforts to deliver an amount at least equal to the previous three month
average within ninety (90) days, and shall use reasonable commercial
efforts to ship the remainder within 120 days of receipt of the Purchase
Order.
7. COMPATIBILITY
7.1 Sensor Compatibility. ATOM agrees that its Licensed Devices
will not be configured to operate with oximetry sensors other than Masimo
SpO(sub 2) Sensors specifically authorized by MASIMO for use with
Licensed Devices of ATOM.
7.2 Instrument Compatibility. ATOM agrees that it will not market
oximetry instrument(s), or any other device(s) or accessory(ies), except
Licensed Devices, that operate with or are compatible with any MASIMO
SpO(sub 2) Sensors.
7.3 Entire Board. ATOM agrees that by incorporating the MS Board
and MASIMO SET into its Licensed Devices it will use the MS Board for its
full functionality of pulse oximetry and that it will not modify the
functionality of the MS Board. ATOM agrees that it will accept all future
upgrades or changes to products as long as the upgrades or changes remain
compatible with previous versions in connections and functionality and
the upgrades do not increase the transfer price.
7.4 MASIMO Probes. ATOM agrees that the MS Boards are designed to
be used with SpO(sub 2) Sensors only, and that if ATOM uses sensors by
other manufacturers the MS Board may yield different results.
Accordingly, MASIMO SET will be enabled for SpO(sub 2) Sensors only. ATOM
agrees to use its best efforts to provide that its customers not use
SpO(sub 2) Sensors with technology other than MS Boards in Licensed
Devices. ATOM agrees not to configure or to instruct others how to
configure any devices other than Licensed Devices to be used in
connection with SpO(sub 2) Sensors.
8. INSPECTION AND ACCEPTANCE
8.1 MASIMO Inspection. MASIMO shall provide and maintain an
inspection procedure and quality assurance program for the Products and
its production processes. Complete records of all inspection and quality
assurance work done by MASIMO shall be made available to ATOM upon its
request at reasonable times during the term of this Agreement.
8.2 ATOM Inspection
8.2.1 ATOM may inspect the Products upon receipt. Products
which fail (as defined only as a failure under statistical lot
sampling standard ANSI/ASQC Z1.4:1993 AQL 1.0, General Inspection
Level I). Any of the Products or lots of Products ("Lot") which
materially fail to meet the specifications set forth in Exhibit E
may be rejected by ATOM and returned to MASIMO for replacement.
Prior to returning any Products to MASIMO, ATOM shall notify
MASIMO by facsimile that ATOM has rejected the Products, inclusive
of the reason or basis of such rejection. Within five (5) working
days of the receipt of the notification, MASIMO will issue a
"Return to
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Vendor" ("RTV") number to ATOM by facsimile, which RTV number will
be ATOM's authorization to return the Products.
8.2.2 ATOM shall promptly notify MASIMO of any incoming Lot
failure. Products which do not conform to MASIMO's specifications
shall be returned by ATOM to MASIMO freight collect and insured
for full replacement value. Within twenty (20) days after the date
of receipt of the nonconforming Products by MASIMO, replacement
Product will be shipped to ATOM at MASIMO's expense. Should MASIMO
fail to replace rejected Products by shipping conforming Products
to ATOM within thirty (30) days of its receipt of the
nonconforming Products, ATOM shall have the option to cancel
without cost or liability the purchase of such Products and
receive, at ATOM's option, a credit or rebate if payment has been
made. ATOM shall pay freight charges, insurance and other
customary charges for transportation for improperly rejected
Products.
8.2.3 All costs to replace including transportation with
respect to the defective Products shall be the sole responsibility
of MASIMO.
8.2.4 If ATOM attempts to correct deficiencies to the
Products purchased under this Agreement without prior written
authorization from MASIMO, then MASIMO shall have no further
obligations with respect to such Products.
8.3 Nonconforming Acceptance. ATOM may choose to accept the
Products which fail to conform in a minor aspect to the specifications
established by this Agreement without prejudice to its right to reject
nonconforming items in the future. If ATOM so chooses, ATOM will notify
MASIMO of its intent to accept nonconforming items. However, MASIMO
accepts no responsibility for nonconforming items accepted by ATOM.
9. CONFIDENTIALITY
9.1 MASIMO's Confidential Information. ATOM shall not use MASIMO's
Confidential Information for any purpose other than performance of this
Agreement or the maintenance or repair of the Products in accordance with
this Agreement. ATOM shall not disclose MASIMO's Confidential Information
to any third party without the prior written consent of MASIMO.
9.2 ATOM's Confidential Information. Except as otherwise expressly
provided in this Agreement, MASIMO shall not use ATOM's Confidential
Information for any purpose other than performance of this Agreement,
without the prior written consent of ATOM. MASIMO shall not disclose
ATOM's Confidential Information to any third party without the prior
written consent of ATOM.
9.3 Confidentiality Exemptions. Neither party's obligations under
Section 9.1 or 9.2 shall apply to information that:
9.3.1 prior to the transmittal was of general public
knowledge;
9.3.2 becomes a matter of general public knowledge
otherwise than as a consequence of a breach under this Agreement;
9.3.3 is rightfully communicated to the Party free of any
obligation of confidence subsequent to the time of communication
thereof;
9.3.4 is made public by the Party claiming confidentiality
or
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9.3.5 is required to be disclosed by applicable law;
provided however, that the Party who may be required to disclose
such information shall notify the other Party in sufficient time
for the owner of such Confidential Information to file the
appropriate documents with the court to obtain a protective order
to enforce the confidentiality requirements of this Agreement;
9.3.6 information which the receiving Party can establish
by competent proof was in its possession at the time of disclosure
by the disclosing Party and was not acquired, directly or
indirectly, from the disclosing Party; or
9.3.7 information which is received from a third party;
provided, however, that the receiving Party has no reason to know
such information was obtained by said third party, directly or
indirectly, from the other Party under a nondisclosure agreement.
9.4 Injunctive Relief. The Parties acknowledge that (a) the
covenants set forth in this Article 9 ("CONFIDENTIALITY") are essential
elements of this Agreement and that, but for the agreement of the parties
to comply with such covenants, the Parties would not have entered
Agreement; (b) neither party will have any adequate remedy at law if the
other party violates the terms of this Article 9 ("CONFIDENTIALITY"); and
(c) each party shall have the right, in addition to any other rights it
may have, to obtain in any court of competent jurisdiction temporary,
preliminary and permanent injunctive relief to restrain any breach,
threatened breach, or otherwise to specifically enforce any of the
covenants in this Article 9 ("CONFIDENTIALITY") if the other party fails
to perform any of such covenants under this Article 9
("CONFIDENTIALITY").
9.5 Press Release. Within 15 days of the execution of this
Agreement, MASIMO and ATOM agree to issue a joint press release
announcing the existence and general content of the Agreement. Except for
the press release, neither Party shall, without the other's prior written
approval, disclose any terms of this Agreement. This provision shall not
be interpreted to bar either Party from making any disclosure required of
it by law, but if such disclosure includes the terms or provisions of
this Agreement, then the other Party shall be given the opportunity to
review the disclosure prior to its release.
10. PROPRIETARY RIGHTS
10.1 MASIMO Inventions and Improvements. Any Improvement made by
ATOM, made jointly by ATOM and MASIMO, or made solely by MASIMO shall be
the sole property of MASIMO, and MASIMO has the right to apply for
copyrights, patents (including utility and design patents), or other
protection for intellectual property rights anywhere in the world under
its own name and at its own expense. If such invention or Improvement is
owned by MASIMO and is applicable to the MS Boards for SpO(sub 2)
Measurement only, SpO(sub 2) Sensors or Accessories, and if ATOM has, and
continues to meet the Integration Commitment and its obligations under
Section 3.2 ("Best Efforts"), MASIMO will grant ATOM, without additional
compensation, a non-exclusive, non-transferable license to use such
Improvement to incorporate the MS Boards having the Improvement into the
Licensed Devices, to demonstrate Licensed Devices and to distribute
Licensed Devices to (i) End User customers and (ii) to ATOM Distributors.
10
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10.2 ATOM Inventions. Subject to the license rights granted to
ATOM herein, MASIMO retains all right, title and interest in and to
Masimo Technology and all Improvements. If ATOM makes any Improvement,
ATOM shall, and hereby does, transfer all right, title and interest in
and to all such Improvements, whether or not they have application to
MASIMO. ATOM agrees that it shall promptly notify MASIMO of any
Improvement and disclose such Improvement in detail. ATOM agrees that it
shall take all actions and execute all documents, at MASIMO's expense and
as MASIMO may reasonably request, to effectuate the acknowledgment of
MASIMO's ownership contained herein and the vesting in MASIMO of complete
and exclusive ownership of any Improvement. ATOM shall, at MASIMO's
expense, secure, maintain and defend for MASIMO's benefit all rights
therein, including the right to submit any patent, copyright or trademark
application or registration.
11. WARRANTY
11.1 MASIMO Warranty
11.1.1 MASIMO warrants the MS Boards supplied by MASIMO to
ATOM under normal use and care for a period of [*] following
receipt by ATOM to be free from defects in workmanship or material
and to be in material conformity with MASIMO's specifications.
Masimo bears all replacement costs if MASIMO reasonably determines
that the unit must be replaced under this Warranty. Units returned
to MASIMO for warranty repairs shall be shipped to MASIMO freight
collect according to MASIMO's instruction. Within thirty (30) days
of the receipt of MS Boards, MASIMO shall replace or repair such
units and shall ship them to ATOM's designated return destination
freight prepaid. The foregoing warranties extend to the MS Boards
returned by ATOM's customers.
11.1.2 MASIMO warrants that for a period of [*] following
receipt by ATOM, the re-usable probes LNOP-DCl, the PC08 and PC12
product cables supplied by MASIMO to ATOM will be, under normal use
and care, free to ATOM from any defect in workmanship or material
and to be in material conformity with MASIMO's specifications.
MASIMO bears all replacement costs under this warranty if MASIMO
reasonably determines that the unit must be replaced under this
Warranty. Units returned to MASIMO for warranty repairs shall be
shipped to MASIMO freight collect according to MASIMO's
instruction. Within thirty (30) days of the receipt of reusable
probes MASIMO shall replace or repair such units and shall ship
them to ATOM's designated return destination freight prepaid. The
foregoing warranties extend to the covered items returned by ATOM's
customers.
11.1.3 MASIMO warrants that for a period of [*] following
receipt by ATOM, and only on first use, the disposable probes
(e.g., LNOP-Neo, LNOP-NeoPt, LNOP-Pdt and LNOP-Adt) supplied by
MASIMO to ATOM hereunder will be, under normal use and care, and
only upon first use, free from any defect in workmanship or
material and to be in material conformity with MASIMO's
specifications therefor. Masimo bears all replacement costs under
this warranty if MASIMO reasonably determines that the unit must
be replaced under this Warranty. Units returned to MASIMO for
warranty repairs shall be shipped to MASIMO freight collect
according to MASIMO's instruction. Within thirty (30) days of the
receipt of disposable probes. MASIMO shall replace or repair such
units and shall ship them to ATOM's designated return destination
freight prepaid. The foregoing warranties extend to the covered
items returned by ATOM's customers.
11.1.4 This warranty does not extend to any unit that has
been subject to misuse, neglect or accident; that has been damaged
by causes external to the unit; that has been used in violation of
MASIMO's instructions; that has been affixed to any nonstandard
Accessory attachment; that has been modified, disassembled, or
reassembled by anyone other than MASIMO.
* Confidential material redacted and filed separately with the Commission.
11
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11.2 Limitation of Liability. EXCEPT FOR THE EXPRESS WARRANTIES
SET FORTH ABOVE, MASIMO GRANTS NO WARRANTIES, EITHER EXPRESS OR IMPLIED,
ON THE PRODUCTS, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, AND THE STATED EXPRESS WARRANTY IS IN
LIEU OF ALL LIABILITIES OR OBLIGATIONS OF MASIMO FOR DAMAGES, INCLUDING
BUT NOT LIMITED TO, CONSEQUENTIAL DAMAGES OCCURRING OUT OF OR IN
CONJUNCTION WITH THE USE OR PERFORMANCE OF SUCH UNIT OF PRODUCTS. IN NO
EVENT SHALL MASIMO BE RESPONSIBLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL
DAMAGES, LOSS OF PROFIT, OR EXPENSE SUFFERED BY THE OTHER PARTY IN
CONNECTION WITH THIS AGREEMENT.
12. INDEMNIFICATION
12.1 Notice. Recognizing the objectives of this Agreement, ATOM
agrees that if it knows of or becomes aware of any patents that may be
infringed by the manufacture and sale of the Products, it will promptly
disclose such information to MASIMO.
12.2 By Masimo--Bodily Injury. MASIMO will defend, indemnify and
hold ATOM harmless against any and all liability, loss, damages, costs or
expenses which ATOM may hereafter incur, as a result of any injury,
illness or death of any person which is caused by any Product, to the
extent that such injury, illness or death resulted from (i) MASIMO's
design or manufacture of the Masimo Products or (ii) failure of the
Masimo Products at the time of shipment to ATOM to materially comply with
the specification of Exhibit E. MASIMO shall have no liability or
responsibility of any kind to ATOM under this Section unless ATOM (a)
promptly notifies MASIMO of such claims, (b) gives MASIMO an adequate
opportunity to defend, including complete control of such defense, and
(c) provides reasonable assistance to MASIMO, at MASIMO's expense, in
connection with the defense and settlement of any such claim. MASIMO
shall have no liability for settlements made without MASIMO's express
written consent. Should ATOM desire to have its own counsel participate
in any such action, the cost of such counsel shall be exclusively ATOM's.
12.3 By Masimo--Infringement. MASIMO will defend, indemnify and
hold ATOM harmless against infringement or alleged infringement by
standard Products furnished under this Agreement, of any patent,
copyright, trademark, trade secret, or any other proprietary right of any
third party. MASIMO shall have no liability or responsibility of any kind
to ATOM under this Section unless ATOM (a) promptly notifies MASIMO of
such claim, (b) gives MASIMO an adequate opportunity to defend, including
complete control of such defense, and (c) provides reasonable assistance
to MASIMO, at MASIMO's expense, in connection with the defense and
settlement of any such claim including, but not limited to, where
practical, to modify the Products to make them noninfringing or, where
practical, to obtain licenses under such intellectual property rights.
MASIMO shall have no liability for settlements made without its express
written consent. Should ATOM desire to have its own counsel participate
in any such action, the cost of such counsel shall be exclusively ATOM's.
MASIMO may, at its sole discretion, modify the particular Product to make
it noninfringing, obtain a license to allow the continued use of the
Product, or discontinue shipment of the Product to ATOM.
12.4 By ATOM. ATOM will defend, indemnify and hold MASIMO harmless
against any and all liability, loss, damages, costs or expenses which
MASIMO may hereafter incur, as a result of any injury, illness or death
of any person which is caused by any Licensed Device, or as a result of
infringement or claims of infringement related to the Licensed Devices of
any patent copyright, trademark, trade secret, or any other proprietary
right of any third party, to the extent that such injury, illness or
death or infringement results from (i) any portion of the Licensed
Devices which is supplied to ATOM by any person other than MASIMO, (ii)
any combination of the Product with items not furnished by MASIMO, (iii)
any inadequacy of the labeling or use-manuals for such Licensed Device or
SpO(sub 2) Sensors (unless such inadequacy consists of inaccurate
information supplied by MASIMO), (iv) any act or omission to act of ATOM
or any party other than MASIMO who designed or manufactured any portion
of the Licensed
12
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Devices, or (v) any modifications to the Products or MASIMO Technology
made by ATOM, by others or by MASIMO at ATOM's request. ATOM shall have
no liability or responsibility of any kind to MASIMO under this Section
unless MASIMO (a) promptly notifies ATOM of such claims, (b) gives ATOM
an adequate opportunity to defend, including complete control of such
defense and (c) provides reasonable assistance to ATOM, at ATOM's
expense, in connection with the defense and settlement of such claim.
ATOM shall have no liability for settlements made without its express
written consent. Should MASIMO desire to have its own counsel participate
in any such action, the cost of such counsel shall be exclusively
MASIMO's.
12.5 Notwithstanding the above, MASIMO shall not be liable for any
infringement of intellectual property rights of third parties or for any
liability, loss, damages, costs or expenses which ATOM may incur as a
result of any injury, illness or death resulting from (a) modifications
to Masimo Technology or the Products made by ATOM, by others, or by
MASIMO at ATOM's request, (b) electrical/electronics, software/firmware,
sensors, or product interface not furnished by MASIMO, (c) combination of
the Products with other apparatus not furnished by MASIMO, (d) use of
products or components not supplied by MASIMO, (e) use of MASIMO
technology and Products not permitted by the License granted herein, (f)
the combination of Masimo Technology with other technology not furnished
by MASIMO, or (g) for any claims not related directly to Masimo
Technology or the MASIMO Products, (h) any alterations or modifications
to the Products which are requested by ATOM.
12.6 Patent Defense. ATOM agrees that it shall notify MASIMO any
claim by a third party that such third party believes that MASIMO Patents
or Patent Rights are invalid. ATOM agrees to promptly notify MASIMO of
any such claim whether or not such claim is asserted in court by such
third party.
12.6.1 During and after the term of this Agreement, ATOM
agrees not to challenge the validity of any of the Patent Rights.
During the term of this Agreement, ATOM agrees to disclose to
MASIMO any prior art or any other information that is material to
the validity of any Licensed Patent or to the patentability of any
pending MASIMO patent application of which ATOM is aware.
13. REGULATORY COMPLIANCE
13.1 ATOM shall be solely responsible for identifying and
obtaining, at its sole cost and expense, all FDA and United States safety
agency approvals and any other agency or regulatory approvals which are
required for the development manufacture or sale of the ATOM Products.
MASIMO will reasonably cooperate with ATOM by providing at no charge to
ATOM any MASIMO data in its possession that is reasonably required to
obtain the regulatory approvals, including but not limited to 510(k)
application materials submitted by MASIMO for its own products that
incorporate MASIMO SET. Disclosure by ATOM of any such data shall be
subject to the confidentiality provisions of Article 9
("CONFIDENTIALITY").
13.2 ATOM shall be solely responsible, at its sole cost and
expenses, (i) for identifying and obtaining any necessary approvals or
certifications by any non-U.S. governmental, safety or regulatory entity,
including testing or other procedures, for the sale by ATOM of ATOM
Products, (ii) for identifying and complying with any safety precautions,
safety markings, labels or consumer notices required for ATOM Product
sales in any country other then the United States, and (iii) for
assessing the appropriateness of the ATOM Product for any particular
Customer application. MASIMO will cooperate with ATOM by providing any
data in its possession that is reasonably required to obtain such
approvals or certifications. Disclosure by ATOM of any such data to any
third party shall be subject to the confidentiality provisions of Article
9 ("CONFIDENTIALITY").
13
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13.3 In the event of any recall of any product incorporating
Products, the parties shall cooperate to the extent reasonably necessary
to conduct such recall in accordance with ATOM's policies and procedures.
13.4 Regardless of any disclosure to MASIMO by ATOM of an ultimate
destination of the Licensed Devices or the Software, ATOM shall not
transfer or re-export, whether directly or indirectly, the Software, the
Products or Licensed Devices containing the Software, the related
documentation, or other related proprietary information to anyone outside
the U.S. as to which export may be in violation of the United States
Export Laws or regulations without first obtaining the appropriate
license from the U.S. Department of Commerce and/or any agency or
department of the U.S. government, as required.
14. INCIDENT REPORTING
14.1 MASIMO Reporting. MASIMO represents and warrants that all
Products manufactured and sold to ATOM pursuant to this Agreement shall
be manufactured materially in conformance with all applicable
requirements of the FDA and in accordance with all United States federal,
state and local statutes, ordinances and regulations, including, but not
limited to, the Federal Food, Drug and Cosmetic Act (21 U.S.C. 301 at
seq.).
14.2 ATOM Reporting. ATOM represents that in addition to being
responsible for all regulatory approvals that should any incidents of
failure of the Products or injury be reported to ATOM that it will
promptly (i.e., within two (2) business days) notify MASIMO of any such
field performance problems or deficiencies.
14.3 Recall. If for any reason MASIMO determines that a recall of
Product(s) is (are) necessary, MASIMO shall notify ATOM of the
possibility of Product recall. If MASIMO notifies ATOM that the Product
must be recalled, ATOM agrees that it shall as expediently as possible
issue a recall notice to all its customers recalling the Products in
question. Provided that the Products meet the specifications specified in
Exhibit E, MASIMO's liability for a Product recall shall be the repair or
replacement of the part that causes the recall. If the Products fail to
meet MASIMO's specifications as set forth in Exhibit E, then MASIMO's
sole responsibility shall be the cost which it incurs for repairing
and/or replacing the Product in question and for the payment of all
freight or shipping charges involved with such recall.
15. TERM AND TERMINATION
15.1 Term. This Agreement shall become effective as of the
effective date first set forth above, and shall remain in effect for ten
(10) years. Thereafter, this Agreement is renewable for one-year periods
with mutual consent.
15.2 Termination for Breach. The default by one Party on a
material obligation of such Party under this Agreement shall entitle the
other Party to give the Party in default written notice describing such
default in detail (including all supporting documentation) and requiring
it to remedy such default. If such default is not fully remedied within
ninety (90) days after the date of such notice, the notifying Party shall
be entitled to, in addition to all other remedies available to such
party, terminate this Agreement by a written notice to the defaulting
Party.
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15.3 Termination on Insolvency. Either Party may terminate this
Agreement at any time upon or after the filing against the other Party by
any third party of a petition in bankruptcy or insolvency, or upon or
after any adjudication that the other Party is insolvent, or upon or
after the filing by the other Party of any petition or answer seeking
reorganization, readjustment or arrangement of the business of the other
Party under any law relating to bankruptcy or insolvency, or upon or
after the appointment of a receiver for all or substantially all of the
property of the other Parry of any assignment or attempted assignment for
the benefit of creditors, or upon or after the institution of any
proceedings for the liquidation or winding up of the other Party's
business.
15.4 Rights Upon Termination. In the event of any valid
termination of this Agreement under Section 15.2 hereof ("Termination"),
all of ATOM's rights under this Agreement shall be terminated. The
termination of ATOM's rights shall include the termination of any rights
of ATOM to continue to use MASIMO Technology, even though such technology
may have entered the public domain prior to or subsequent to termination.
This restraint is agreed to be reasonable as consideration for MASIMO's
disclosing know-how to ATOM prior to it entering the public domain. No
termination shall impact MASIMO's rights to collect for accrued royalties
and payment for ordered Product, or either Party's rights to pursue all
available remedies in addition to those stated herein.
16. DISPUTE
If any dispute or difference shall arise between the parties
concerning the construction of this Agreement or the rights or
obligations of either Party, the Parties shall strive to settle the same
amicably, but if they are unable to do so within ninety (90) days after
such dispute or difference has arisen and any claim or cause of action
shall be filed in any court in Orange County, California, U.S.A. MASIMO
and ATOM each consents to personal jurisdiction in any action brought in
the United States District Court for the Central District of California
and to service of process upon it in the manner set forth in Section 17.5
("Notice"). In the event that such action should be brought in a state
court, ATOM and MASIMO each consents to personal jurisdiction in any
action brought in Municipal Court or Superior Court of the State of
California in the County of Orange and to service of process upon it in
the manner set forth in Section 17.5 ("Notice") of this Agreement.
17. MISCELLANEOUS
17.1 Nonassignability. Except in connection with the sale of all
or substantially all of the assets or business of ATOM, ATOM may not
assign, transfer or sublicense any of the rights or obligations under
this Agreement, without the prior written consent of MASIMO. For any
successor or assign of ATOM that is in the pulse oximetry business, ATOM
shall promptly notify MASIMO of such successor and such successor shall
acquire ATOM'S interest in this Agreement, unless MASIMO objects to such
successor within 30 days of notice. MASIMO may freely assign this
Agreement. This Agreement will inure to the benefit of and bind each
Party's successors and assigns.
17.2 Failure to Enforce. The failure of either Party to enforce at
any time or for any period of time the provisions of this Agreement shall
not be construed to be a waiver of such provisions or of the right of
such Parry to enforce each and every such provision.
17.3 Governing Law. This Agreement shall be deemed to have been
made in the State of California, United States of America, and shall be
governed by and construed according to the laws of the State of
California.
17.4 Severability. In the event that any of the provisions of this
Agreement shall be held by a court or other tribunal of competent
jurisdiction to be unenforceable, such provisions shall be deleted from
this Agreement and the remaining portions of this Agreement shall remain
in full force and effect, except where economic equity of both parties
hereto is materially affected by such unenforceability.
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17.5 Notice. Except as either Party may hereafter notify the other
with respect to itself, the addresses of the Parties for all purposes of
this Agreement shall be:
MASIMO: MASIMO CORPORATION
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
ATOM: ATOM MEDICAL CORPORATION
3-18-15, Hongo, Bunkyo-Ku
Tokyo, Japan
Attention: Chief Executive Officer
All notices and communications pursuant to this Agreement shall be
addressed as set forth above and shall be delivered to the Party for whom
intended by hand or by postage prepaid, first class, registered or
certified mail, return receipt requested. Such notices and
recommendations shall be deemed to have been given and delivered as of
the date of receipt.
17.6 Force Majeure. Neither Party shall be liable to the other
Party hereto for any loss, injury, delay, damages or other casualties
suffered or incurred by such other Party due to strikes, riots, storms,
fires, acts of God, or war or any other cause beyond the reasonable
control of either Party.
17.7 Headings. Headings to paragraphs and sections of this
Agreement are to facilitate reference only, do not form a part of this
Agreement, and shall not in any way affect the interpretation hereof.
17.8 Survival From This Agreement. The rights and obligations of
the parties hereto under Articles 9-14 of this Agreement shall survive
and continue after any expiration or termination of this Agreement and
shall bind the Parties and their representatives, successors, heirs and
assignees.
17.9 Exhibits. All exhibits to which this Agreement refers are
hereby incorporated into and made a part of this Agreement.
17.10 Entire Agreement. This Agreement constitutes the entire
agreement between ATOM and MASIMO, and there are no other understandings,
agreements or representations, express or implied, written or oral, not
specified herein. This Agreement may only be amended by express written
agreement and signed by authorized representatives of both Parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
MASIMO CORPORATION ATOM MEDICAL CORPORATION
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXX XXXXXXXXX
---------------------- ----------------------------------
Xxxxxxx X. Xxxxxx Xxxxx Xxxxxxxxx, President and CEO
Vice President, Business Development
and Marketing
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EXHIBIT A
MASIMO SET(R) DEFINITION
For the purpose of this agreement, MASIMO SET(R) is defined to include all
MASIMO Technology including LNOP(R), AutoProCal(TM), ProCal(TM), DST(TM), and
FST(TM) Technology. MASIMO SET(R) is further described as follows:
Transducers (sensor/probe), cables and connectors, designed to reduce cost,
reduce noise and improve accuracy;
The technique of building a reference generator for calculating substantially a
noise or signal reference;
Use of noise reference or signal reference with or without an adaptive filter
or correlation canceller to minimize the effect of unwanted noise components
(e.g., motion artifacts) from the physiological waveforms (e.g.,
photo-plethysmographic waveforms);
Use of Saturation Transform: Mapping plethysmographic wave forms into
saturation space (e.g., saturation vs. power or probability and/or saturation
vs. pulse rate); and/or
Use of Pulse Rate Transform: Mapping plethysmographic wave forms into pulse
rate space (e.g., pulse rate versus saturation).
[*]
* Confidential material redacted and filed separately with the Commission.
21
EXHIBIT B
TRADEMARKS, LEGENDS, LOGOS
I. MASIMO SET(R) PRODUCT DESIGNATION:
[MASIMO SET(R) LOGO]
Panatone Red / PMS Black
185C MAT
II. LICENSED TRADEMARKS:
[MASIMO SET(R) LOGO]
[MASIMO SET(R) LOGO]
[MASIMO SET(R) LOGO]
(MASIMO WILL PROVIDE CAMERA READY ARTWORK UPON REQUEST)
III. PATENT MARKING:
[*]
* Confidential material redacted and filed separately with the Commission.
22
EXHIBIT D
PRICE OF PRODUCTS
Price for MS-1 Boards: MASIMO's transfer price to ATOM for the MS-1 Boards
(including the Masimo MS-3 Boards) delivered in accordance with this Agreement
will be [*] each.
Transfer Price for Sensors and Accessories: MASIMO's transfer prices to ATOM
for the SpO2 Sensors and Accessories delivered in accordance with this
Agreement are as follows:
Product Part # Price Each
------- ------ ----------
LNOP(R).Adt (Adult Disposable Probe) 1001 [*]
LNOP(R).Pdt (Pediatric Disposable Probe) 1025 [*]
LNOP(R).Neo (Neonatal Disposable Probe) 1002 [*]
LNOP(R).NeoPt (Pre-Term Neonatal Disposable Probe) 1003 [*]
LNOP(R).DC-1 (Adult Re-usable Probe) 1004 [*]
PC-08 (8 Ft. Patient Cable) 1005 [*]
PC-12 (12 Ft. Patient Cable) 1006 [*]
[*]
* Confidential material redacted and filed separately with the Commission.
23
EXHIBIT E
SPECIFICATIONS FOR PRODUCTS
MS-1 is a complete pulse oximeter, based on Masimo SET, on a circuit board. The
circuit board interfaces directly to LNOP sensors, driving the LEDs in the
sensor to acquire the patient signal, calculates SpO2 and Pulse Rate, and
communicate the information off board.
PERFORMANCE SPECIFICATION:
RANGE
Saturation (SpO2): 1-100%
Pulse Rate: 25-240 BPM (Beats Per Minute)
Signal Strength (SS): Transmission (dB)
greater than or equal to 0.2% greater than or equal to -50 dB
0.02 - 0.2% greater than or equal to -100.0-SS (%) - 30.0 dB
ACCURACY
Adults
SpO2 Range 70%-100% 0% to 69%
Accuracy (plus or minus 1 Std. Dev.)* plus or minus 2 digits Unspecified
Pulse Rate Range 25-240 BPM
Accuracy (plus or minus 1 Std. Dev.)* plus or minus 4 BPM
Neonates
SpO2 Range 70%-95% 0% to 69%
Accuracy (plus or minus 1 Std. Dev.)* plus or minus 3 digits Unspecified
Pulse Rate Range 25-240 BPM
Accuracy (plus or minus 1 Std. Dev.)* plus or minus 4 BPM
NOTE: The MS-1 pulse oximeter board is calibrated to read oxyhemoglobin
saturation (%SpO2) of functional hemoglobin as compared to a Nellcor N-200
pulse oximeter and/or a CO-Oximeter. Significant levels of dysfunctional
hemoglobin (e.g., methemoglobin, carboxyhemoglobin) may affect the accuracy of
the instrument. Indocynnine green, methylene blue, and other intra-vascular
dyes, depending upon their concentrations, may interfere with the accuracy of
the instrument. MS-1 performance will be compromised if there is no arterial
blood at the test site due to excessive patient motion (e.g., squeezing at a
pressure close to subject's diastolic blood pressure), ultra low perfusion,
excessive electrosurgical interference, or intense environmental illumination.
* Testing is based on healthy adult volunteers in induced hypoxia studies with
LNOP(R) Adt sensors; during no motion. Testing to verify saturation
specification is done against a Nellcor N-200 pulse oximeter and/or a
CO-Oximeter. Testing to verify pulse rate specification is done against a
Nellcor N-200 pulse oximeter and/or an ECG.
[**]
** Confidential material redacted and filed separately with the Commission.
24
MS-1 HARDWARE:
POWER CONSUMPTION less than or equal to 2.3 Xxxxx (typ)
= 2.5 Xxxxx (max)
STORAGE ENVIRONMENT
Temperature Range -50 - 100 degrees C
Relative Humidity 0 - 97% non-condensing
Atmospheric Pressure 50 - 113 kPa
OPERATING ENVIRONMENT
Temperature Range 0 - 70 degrees C
Relative Humidity 0 - 97% non-condensing
Atmospheric Pressure 68 - 113 kPa
MTBF 150,000 hours minimum
(Ground Benign)
FAILURE COVERAGE Single Fault Coverage
PLETHYSMOGRAPHIC WAVEFORM SPECS
WAVEFORM TYPE RANGE RESOLUTION DELAY
------------- ----- ---------- -----
Raw Signal 0 to 1 2(-7), 2(-15), 2(-31) less than or equal to 1 sec
Band Pass Signal -1 to 1 2(-7), 2(-15), 2(-31) less than or equal to 2.5 sec
Autoscaled Signal -1 to 1 2(-7), 2(-15), 2(-31) less than or equal to 3 sec
LNOP(R) SENSOR SPECIFICATIONS
TYPICAL HEAT
SENSOR DESCRIPTION DISSIPATION MAXIMUM SKIN TEMP AT SITE
------ ----------- ------------ -------------------------
LNOP(R) DC-1 Adult Reusable less than or equal to 50 mW less than or equal to 41 degrees C @ 37 degrees C Ambient
LNOP(R) Adt Adult Disposable less than or equal to 50 mW less than or equal to 41 degrees C @ 37 degrees C Ambient
LNOP(R) Neo Neonatal Disposable less than or equal to 50 mW less than or equal to 39 degrees C @ 37 degrees C Ambient
LNOP(R) NeoPt Neonatal Disposable
(Pre-Term) less than or equal to 50 mW less than or equal to 39 degrees C @ 37 degrees C Ambient
LNOP(R) Pdt Pediatric Disposable less than or equal to 50 mW less than or equal to 41 degrees C @ 37 degrees C Ambient
[*]
* Confidential material redacted and filed separately with the Commission.
25
EXHIBIT F
END USER LICENSE AGREEMENT
THIS DOCUMENT IS A LEGAL AGREEMENT BETWEEN YOU, THE "PURCHASER", AND ATOM. IF
YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, PROMPTLY RETURN THE ENTIRE
PACKAGE, INCLUDING ALL ACCESSORIES, IN THEIR ORIGINAL PACKAGE, WITH YOUR SALES
RECEIPT TO ATOM FOR A FULL REFUND.
1. Grant of License. In consideration of payment of the license fee, which
is part of the price paid for this product, ATOM grants to Purchaser a
nonexclusive, nontransferable license, without right to sublicense, to use the
copy of the incorporated software/firmware, and documentation in connection with
Purchaser's use of the Products for their labeled purpose. ATOM reserves all
rights not expressly granted to Purchaser.
2. Ownership of Software/Firmware. Title to, ownership of, and all rights
and interests in, any MASIMO software and/or firmware and the documentation, and
all copies thereof, remain at all times vested in MASIMO Corporation, licensor
to ATOM, and they do not pass to Purchaser.
3. Assignment. Purchaser shall not assign or transfer this License, in
whole or in part, by operation of law or otherwise, without ATOM's prior written
consent; any attempt without such consent, to assign any rights, duties or
obligations arising hereunder shall be void.
4. Copy Restrictions. The software/firmware and the accompanying written
materials are copyrighted. Unauthorized copying of the software, including
software that has been modified, merged, or included with other software, or
other written materials is expressly forbidden. You may be held legally
responsible for any copyright infringement that is cause or incurred by your
failure to abide by the terms of this license. Nothing in this license provides
any rights beyond those provided by 17 U.S.C. Section 117.
5. Use Restriction. As the Purchaser, you may physically transfer the
products from one location to another provided that the software/firmware is not
copied. You may not electronically transfer the software/firmware from the
products to any other device. You may not disclose, publish, translate, release
or distribute copies of the software/firmware or accompanying written materials
to others. You may not modify, adapt, translate, reverse engineer, decompile,
disassemble, or create derivative works based on the software/firmware. You may
not modify, adapt, translate, or create derivative works based on the written
materials without the prior written consent of ATOM.
6. Transfer Restrictions. The software/firmware is licensed to the
Purchaser, and may not be transferred to anyone, except other end-users, without
the prior written consent of ATOM. In no event may you transfer, assign, rent,
lease, sell, or otherwise dispose of the software/firmware or the products on a
temporary basis.
7. Beneficiary. Masimo Corporation is a Beneficiary of this Agreement and
has the right to enforce its provisions.
8. U.S. Government Rights. If you are acquiring software (including the
related documentation) on behalf of any part of the United States Government,
the following provisions apply: the software is deemed to be "commercial
software" and "commercial computer software documentation," respectively
pursuant to DFAR Section 227.7202 FAR 12.212, as applicable. Any use,
modification, reproduction, release, performance, display or disclosure of the
software (including the related documentation) by the U.S. Government or any of
its agencies shall be governed solely by the terms of this Agreement and shall
be prohibited except to the extent expressly permitted by the terms of this
agreement.
