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EXHIBIT 10.11
AMENDMENT TO CROSS-LICENSING AGREEMENT
This is an Amendment to the Cross-Licensing Agreement between Masimo
Laboratories and Masimo Corporation, dated May 2, 1998 (The :Original
Agreement).
WHEREAS, Masimo Laboratories and Masimo Corporation desire to extend
the option period in the Original Agreement by two years.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the Parties, the Original Agreement is
amended as follows:
SECTION 4.2 IS AMENDED AS FOLLOWS: Option Fee. MASIMO agrees to fund
the research and development conducted by LABS related to, among other things,
noninvasive blood glucose measurement, for a period of up to four (4) years
following the effective date of this Agreement, and in an amount of two million,
five hundred thousand dollars ($2,500,000). LABS will request reimbursement for
such research costs no more often than monthly, and MASIMO shall reimburse LABS
for such research within 30 days following receipt of such request for
reimbursement. MASIMO understands that LABS has no proof of concept for glucose
and total hemoglobin measurements.
SECTION 4.3 IS AMENDED AS FOLLOWS: Exercise of the Option. Provided
MASIMO has paid the Option Fee set forth above, the option described herein
shall be exercisable upon delivery of written notice thereof to LABS within the
earlier of LABS providing reasonable proof of feasibility for noninvasive
glucose measurement or non-invasive hematocrit measurement or fifteen (15) days
after the four (4) year anniversary of the effective date of this Agreement.
After such time, the option irrevocably expires.
SECTION 4.4 IS AMENDED AS FOLLOWS: License Terms. Upon exercise of the
option, LABS shall grant to MASIMO the license to make, use and sell devices
incorporating LABS Technology for use in blood glucose measurement and total
hemoglobin measurement applications for distribution directly or through
distributors to hospitals, only for use in hospitals ("Hospital Glucose
Devices"). Such license shall be exclusive for the earlier of three (3) years
following the date that such devices are ready for sale in such market, or four
(4) years from the date that LABS makes the technology available to MASIMO.
Thereafter for 7 years, this license shall be nonexclusive. Such license shall
include the right to sell such devices on an OEM basis (excluding companies in
glucose monitoring business) to no more than two OEM companies at any one time.
At the initiation of the exclusive license, MASIMO agrees to pay LABS five
million dollars ($5,000,000) in monthly payments over a period of two years as a
license fee. Such license will require MASIMO to pay to LABS royalties in the
amount of ten percent (10%) of the Net Selling Price of products incorporating
the LABS Technology for use in blood glucose measurement and total hemoglobin
applications and ten percent (10%) of the Net Selling Price of sensors and
accessories incorporating the LABS Technology for use in blood glucose and total
hemoglobin measurement applications. The Parties understand that the exclusivity
in this license to MASIMO will in no way preclude LABS from conducting testing
and studies in hospitals relating to blood glucose and total hemoglobin
measurement. Upon exercise of the option, the provisions of Section 2.3, except
2.3.2 and 2.3.3, shall apply in reverse with respect to the LABS trademarks and
any LABS product designation, as required by LABS,
MASIMO CORPORATION MASIMO LABORATORIES
By: /s/ XXX X. XXXXX By: /s/ XXXX XXXXXXXX
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Xxx X. Xxxxx Xxxx Xxxxxxxx
President and CEO Executive Vice President and
Secretary
Dated: 3-20-00 Dated: 3-20-00
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