Exhibit 10.1
PURCHASING AND LICENSING AGREEMENT
BETWEEN
ISLAND CRITICAL CARE CORPORATION
AND
MASIMO CORPORATION
DATED MAY 5, 1998
EXHIBITS
Exhibit A. MASIMO SET Definition
Exhibit B. Trademarks, Legend, Logos
Exhibit C. List of Patents and Patent Applications
Exhibit D. Price of Products
Exh1oit E. Specifications for Products
Exh1oit F. End-User License Agreement
PURCHASING AND LICENSING AGREEMENT
THIS PURCHASING AND LICENSING AGREEMENT ("Agreement") is made and entered into
as of this 5th day of May, 1998, by and between ISLAND CRITICAL CARE CORPORATION
a Canadian corporation ("ICC"), having a principal place of business at 100-10
Camelot Drive, Nepean, Ontario, Canada K2G 5X8 and MASIMO CORPORATION, a
Delaware corporation ("MASIMO"), having a principal place of business at 2852
Kelvin Avenue, Irvine, California 92614 with reference to the following:
RECITALS:
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A. MASIMO has developed a new technology known as Signal Extraction Technology
("MASIMO SET" as defined in EXHIBIT A) MASIMO SET 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. ICC is a manufacturer of medical equipment and desires to incorporate MASIMO
SET for SpO2 Measurement into its medical equipment for distribution by ICC
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, ICC and MASIMO hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms, whether used in
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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 SpO2 Sensors or Licensed Devices.
1.2 Distributor means a party that markets Licensed Devices to End-Users on
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behalf of ICC or a customer of ICC that buys Licensed Devices from ICC, 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
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medical diagnostic purposes on patients (OEMs and medical equipment
manufacturers are excluded).
1.4 Improvement means any invention, adaptation, modification or change relating
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to MASIMO Technology.
1.5 Licensed Devices means ICC's completed patient monitor devices incorporating
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MS Boards to provide one or more of the following results when combined with an
SpO2 Sensor:
(i) arterial blood oxygen saturation (using MS Boards to account for Hb and
HbO2 only); (ii) pulse rate and/or plethysgmographic waveforms. Licensed Devices
shall not include any methods or devices other than the MS Boards for accounting
for Hb and HbO2 in 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
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mark(s) set forth on Exhibit B.
1.7 MASIMO Confidential Informationmeans information and proprietary material of
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MASIMO disclosed to ICC and 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, the Masimo
Technology, the Software, communication protocols, and testing procedures.
1.8 MASIMO Technology means technical information, inventions, concepts,
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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, SpO2 Sensors, Improvements and related
documentation generated prior to or pursuant to this Agreement.
1.9 MS Board means MASIMO's standard circuit board or chip set which contains
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MASIMO SET and algorithms necessary to process the information transmitted from
the SpO2 Sensor and convert it into SpO2 Measurements.
1.10 Party means ICC or MASIMO; Parties means ICC and MASIMO.
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1.11 Patent Right means all patents owned by MASIMO on technology developed by
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MASIMO which cover SpO2 Measurement in Licensed Devices. The present patent
numbers and patent application are set forth on Exh1"bit C to this Agreement.
1.12 Products are MS Boards, SpO2 Sensors and Accessories.
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1.13 Purchase Orders has the meaning set forth in Section 4.1 ("Purchase
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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 MASTh.10
Technology.
1.15 SpO2 Measurements means noninvasive measurement of arterial oxygen
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saturation (in any embodiment that accounts for at least Hb and HbOz) and/or
pulse rate from neonate, pediatric and adult subjects (excludes fetal
measurement and venous oxygen saturation).
1.16 SpO2 Sensor means reusable and disposable MASIMO standard adult, pediatric
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or neonatal sensors for use with making SpO2 Measurements. Standard SpO2 Sensors
currently manufactured by MASIMO have the following model numbers:
LNOP .Neo-pt; Disposable Neonatal Sensor (pre- Term)
LNOP .Neo; Disposable Neonatal Sensor
LNOP .Adt; Disposable Adult Sensor
LNOP .Pdt Disposable Pediatric/Slender Digit Sensor
LNOP .DC1; Reusable Adult/Pediatric Digit Clip Sensor
MASIMO intends to produce additional standard models of the SpO2 Sensors. As
MASIMO produces such additional models, the Parties agree to negotiate in go,Dd
faith their inclusion in this agreement.
1.17 ICC Confidential Information means information and proprietary material
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designated by ICC as Confidential Information and which MASIMO may obtain as a
result of MASIMO's relationship with ICC 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.
1.18 Subsidiary means any majority owned or wholly owned subsidiary, or any
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entity over which a Party has control.
2. Licenses Granted
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2.1 Licenses Granted to Licensee.
2.1.1 MASIMO grants to ICC 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 End-Users
and Distr1"butors. This license includes the right to ICC to have the Licensed
Devices manufactured by a third party for ICC; however, such Licensed Devices
may only be supplied to the marketplace with ICC's or ICC's Distributors'
private label and logo exclusively and distributed exclusively through ICC's or
its Distr1"butors' distribution channels. In addition, a third party making
Licensed Devices for ICC may not also be a Distributor.
2.1.2 ICC 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 Distr1"butors. ICC agrees to include a copy of the
End-User License Agreement attached hereto as Exh1"bit F with all Licensed
Devices, and agrees that it will require all Distr1"butors to include a copy of
the End-User License Agreement attached as Exh1"bit F with the transfer of
Licensed Devices to End Users. If ICC enters a signed agreement with an End User
or Distr1"butor, ICC 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 ICC 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 ICC agrees that the Masimo Technology contains trade secrets and
proprietary information belonging to MASIMO. ICC 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. ICC will not be provided access to source code for MASIMO
Technology. ICC 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
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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. ICC shall not have the right to manufacture MS Boards, SpO2 Sensors or
Accessories or any circuitry or software that performs the functions of the MS
Boards for the Licensed Devices.
2.2.2 Except for a transfer of Licensed Devices to End Users 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
ICC in fetal oximetry, venous oximetry or any other application of MASIMO SET
other than the use of Licensed Devices to make SpO2 Measurements, and nothing in
this Agreement shall be construed to grant any rights to ICC to distribute or
otherwise market MS Boards or MASIMO SET separate from Licensed Devices.
2.3 Trademarks, Legends and Logos.
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2.3.1 No Implied License ICC agrees to include the following legend on the
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exterior of Licensed Devices:
NO IMPLIED LICENSE
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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 ICC a non-exclusive license
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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 ICC to maintain its trademark license
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hereunder, ICC agrees that the Licensed Devices bearing the Licensed Trademark
shall be of a high standard of quality, at least as high as ICC's historical
products, so as to protect and enhance the goodwill pertaining to the MS Boards
and SpO2 Sensors. MASIMO has the right to inspect the manufacturing and
distribution points of ICC 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 ICC. ICC 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. ICC agrees that it shall use the MASIMO Product
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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, ICC 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.
2.3.7 Except for the ICC 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
patty 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 ICC acknowledges the validity and exclusive ownership of the Licensed
Trademarks by MASIMO. ICC 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. ICC agrees to mark each Licensed Device manufactured
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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 ICC as patents issue. When MASIMO updates its patent numbers, ICC'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. ICC COMMTTMENTS/LICENSE FEE
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3.1 ICC agrees to purchase all Products from MASIMO.
3.2 ICC agrees that it will not sell or otherwise market SpO2 Sensors or
Accessories to any person or entity who currently has or subsequently enters
into an agreement with MASIMO.
3.3 Best Efforts ICC agrees to use its best efforts to make MASIMO SET its
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primary pulse oximetry technology, including, but not limited to integrating
MASIMO SET into its products which include SpO2 Measurement and by promoting the
sale of such Licensed Devices over devices for SpO2 Measurement which do not
incorporate MASIM O SET.
3.4 Integration Commitment ICC agrees that Licensed Devices exclusively
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containing MASIMO SET for arterial oxygen saturation measurements will
constitute at least eighty percent (80%) of ICC's annual shipments of products
which provide arterial oxygen saturation measurements beginning in year three of
this Agreement and beyond. In addition, ICC; agrees to exclusively integrate
Masimo Technology in 100% of its future instruments which include SpO2
Measurement. The requirements of this paragraph are collectively referred to as
the "Integration Commitment".
3.5 Sensor Commitment ICC agrees that it will not sell or otherwise market
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any products for SpO2 Measurement with License Devices except SpO2 Sensors and
Accessories purchased from MASIMO. Furthermore, ICC agrees to use its best
efforts to sell SpO2 Sensors only into ICC Licensed Device installations and
only for use on instruments with ICC's label.
3.6 Product Lines Prior to the launch of each Licensed Device, ICC agrees
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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
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integration support without charge, at Masimo's discretion, for one attempt
through Masimo's validation testing, for each Licensed Device. If additional
engineering support is required to complete MASIMO'S validation testing, MASIMO,
at its discretion, may provide such engiJ1eering support to ICC for the
integration of MASIMO SET into Licensed Devices, at a cost of$150.00 per hour It
is contemplated that each additional attempt through Masimo's validation testing
costs approximately $10,000 in engineering support. All services shall be
provided at MASIMO's facility unless travel is required. in which event ICC
shall additionally pay for necessary travel expenses even during the first
attempt through MASIMO's validation testing.
3.8 Delivery of ICC systems to MASIMO ICC agrees to deliver free of charge,
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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. ICC shall pay a license fee to MASIMO in the amount of $25,000
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payable upon execution of this Agreement.
3.10 Training. ICC agrees to allow Masimo to support ICC's sales training on
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MASIMO SET, with appropriate prior notice and mutual agreement of the Parties to
the training agenda and time requirements.
3.11 Quarterly Accounting. ICC agrees to provide MASIMO with a Quarterly
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Accounting of total pulse oximetry product shipments, its shipments containing
MASIMO MS Boards exclusively and other shipments containing other means of
providing pulse oximetry, and its shipments of SpO2 Sensors.
4. PURCHASE AND SALE
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4.1 Purchase Order During the term of this Agreement and in accordance with
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its provisions, the purchase and sale of Products between the Parties shall be
made by means of purchase orders placed by ICC 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 ICC shall be responsible for
taking deliveries of and paying for all Products set forth in such Purchase
Order.
4.2 Confirmation. MASIMO will notify ICC of receipt of Purchase Orders
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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 ICC shall state the
following: (i) price, (ii) the quantities ordered, (iii) the requested delivery
dates, (iv) destination, (v) requested method of shipment, (vi) model number of
the Products and (vii) intended regional destination ordered SpO2 Sensors, in
accordance with the terms and conditions hereof. Any language on the Purchase
Order of ICC or acknowledging form of MASIMO which is inconsistent with any term
or provision hereof shall be void and without any force or effect.
4.4 Initial Commitment. The first Purchase Order submitted by ICC, will
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include firm quantities for the first six (6) months of shipment which are
contemplated to begin in October, 1998.
4.5 Ongoing Purchase Orders. After the initial Purchase Order, ICC's
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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 ICC up until ninety days prior
to the shipment date, after which such Purchase Orders become binding.
4.6 Emergency Orders. Purchase Orders placed by ICC shall not prevent ICC
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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
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5.1 Price. MASIMO's transfer prices for the Products delivered to ICC in
accordance with the terms of this Agreement shall be as set forth on Rxh1n;t n
attached hereto. All prices are F .O.B. MASIMO's manufacturing facility or
distribution point The transfer price for SpO2 Sensors and Accessories includes
packaging and labeling with ICC-supplied artwork and logos complying with
MASIMO's Standard Packaging Guidelines. The transfer price does not include
custom packaging or labeling for SpO2 Sensors, Accessories or MS Boards. If
custom labeling for SpO2 Sensors or Accessories is desired and feasible as
determined by Masimo, all costs associated with such labeling will be paid by
ICC. Payment by ICC to MASIMO shall be made thirty (30) days following receipt
of invoice by ICC.
5.2 Pricing Adjustment. MASIMO shall have the right to adjust prices for
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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 ICC shall be in U.S.
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Dollars.
5.4 F.O.B. Point. Risk of loss for Products shall pass to ICC, F.O.B.
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MASIMO's manufacturing facility or distribution point, as selected by MASIMO.
5.5 Taxes and Levies. All payments by ICC to MASIMO under this Agreement
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are exclusive of taxes and ICC shall be responsible for paying all taxes,
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 ICC request changes to ICC's
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current packaging materials for Products (including but not limited to SpO2
Sensor pouches, boxes and directions for use), ICC will reimburse MASIMO for the
direct cost of the obsolete packaging materials, up to $20,000, for each
occurrence.
6. DELIVERY
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6.1 Transportation. The method of transportation and carrier selected shall
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be as specified by ICC in its Purchase Orders. Unless otherwise agreed, all
transportation charges, including insurance, levies and taxes, shall be paid by
ICC.
6.2 Packaging. MASIMO shall package the Products for shipment. Each
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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
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Purchase Orders by delivery dates and in the quantities specified by ICC 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 ICC 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
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7.1 Sensor Compatibility. ICC agrees that its Licensed Devices will not be
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configured to operate with oximetry sensors other than Masimo SpO2 Sensors
specifically authorized by MASIMO for use with Licensed Devices of ICC.
7.2 Instrument Compatibility. ICC agrees that it will not market oximetry
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instrument(s), or any other device(s) or accessory(ies), except Licensed
Devices, that operate with or are compatible with any MASIMO SpO2 Sensors.
7.3 Entire Board. ICC agrees that by incorporating the MS Board and MASIMO
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SET into its Licensed Devices that 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. ICC 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. ICC agrees that the MS Boards are designed to be used
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with SpO2 Sensors only, and that if ICC uses sensors by other manufactures that
the MS Board may yield different results. Accordingly, MASIMO SET will be
enabled for SpO2 Sensors only. ICC agrees to use its best efforts to provide
that its customers not use SpO2 Sensors with technology other than MS Boards in
Licensed Devices. ICC agrees not to configure or to instruct others how to
configure any devices other than Licensed Devices to be used in connection with
SpO2 Sensors.
8. INSPECTION AND ACCEPTANCE
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8.1 MASIMO Inspection. MASIMO shall provide and maintain an inspection
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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 ICC upon its request at reasonable times
during the term of this Agreement
8.2 TCC Inspection
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8.2.1 ICC may inspect the Products upon receipt Products which fail (as
defined only as a failure under statistical lot sampling standard ANSI/ASQC
Zl.4:1993 AQL 1.0, General Inspection Level 1). 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 ICC and returned to MASIMO for replacement Prior to
returning any Products to MASIMO, ICC shall notify MASIMO by facsimile that ICC
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 Vendor" ("RTV") number to ICC by facsimile, which RTV number
will be ICC's authorization to return the Products.
8.2.2 ICC shall promptly notify MASIMO of any incoming Lot failure.
Products which do not conform to MASIMO's specifications shall be returned by
ICC 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 ICC at MASIMO's expense. Should
MASIMO fail to replace rejected Products by shipping conforming Products to ICC
within thirty (30) days of its receipt of the nonconforming Products, ICC shall
have the option to cancel without cost or liability the purchase of such
Products and receive, at ICC's option, a credit or rebate if payment has been
made. ICC shall pay freight charges, insurance and other1customary 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 ICC 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. ICC may choose to accept the Products which
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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 ICC so chooses, ICC will notify MASIMO of its intent to accept
nonconforming items. However, MASIMO accepts no responsibility for nonconforming
items accepted by ICC.
9. CONFIDENTIALITY
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9.1 MASIMO's Confidential Information. ICC shall not use MASIMO's
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Confidential Information for any purpose other than performance of this
Agreement or the maintenance or repair of the Products in accordance with this
Agreement ICC shall not disclose MASIMO's Confidential Information to any third
party without the prior written consent of MASIMO.
9.2 ICC's Confidential Information. Except as otherwise expressly provided
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in this Agreement, MASIMO shall not use ICC's Confidential Information for any
purpose other than performance of this Agreement, without the prior written
consent of ICC. MASIMO shall not disclose ICC's Confidential Information to any
third party without the prior written consent of ICC.
9.3 Confidentiality Exemptions. Neither party's obligations under Section
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9.2 shall not 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
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 tem1S of this
Article 9 ("CONFIDEN11ALI1Y"); 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 ("CONFIDENTIALI1Y") if the other party fails to
perform any of such covenants under this Article 9 ("CONFillEN11ALITY").
9.5 Press Release. MASIMO and ICC agree to issue a joint press release
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announcing the existence and general content of the Agreement upon completion of
this 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 tem1S 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
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10.1 MASIMO Inventions and Improvements.Any Improvement made by ICC, made
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jointly by ICC 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 SpO2 Measurement, SpO2 Sensors or Accessories, and if ICC has, and continues
to meet the Integration Commitment and its obligations under Section 3.3 ("Best
Efforts"), MASIMO will grant ICC, 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 End Users and
Distributors.
10.2 ICC Inventions. Subject to the license rights granted to ICC herein,
MASIMO retains all right, title and interest in and to Masimo Technology and all
Improvements. If ICC makes any Improvement, ICC shall, and hereby does,
transfer all right, title and interest in and to all such Improvements, whether
or not they have application to MASIMO. ICC agrees that it shall promptly
notify MASIMO of any Improvement and disclose such Improvement in detail. ICC
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. ICC 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 Warrant
---------------
11.1.1 MASIMO warrants the MS Boards supplied by MASIMO to ICC under normal
use and care for a period of twelve (12) months following receipt by ICC 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 ICC's designated return destination freight prepaid. The foregoing
warranties extend to the MS Boards returned by ICC's customers.
11.1.2 MASIMO warrants that for a period of six ( 6) months following
receipt by ICC, the re-usable probes LNOP.DC1, the PC08 and PC12 product cables
supplied by MASIMO to ICC will be, under normal use and care, free to ICC 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
MASI;MO 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 ICC's designated return destination freight prepaid. The
foregoing warranties extend to the covered items returned by ICC's customers.
11.1.3 MASIMO warrants that for a period of three (3) months following
receipt by ICC, and only on first use, the disposable probes (e.g., LNOP.Neo,
LNOP.NeoPt LNOP.Pdt and LNOP.Adt) supplied by MASIMO to ICC 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 therefore. 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 ICC's designated return destination freight
prepaid. The foregoing warranties extend to the covered items returned by ICC'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.
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, ICC 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 ICC
--------------------------
harmless against any and all liability, loss, damages, costs or expenses which
ICC 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 ICC to
materially comply with the specification of Exhibit E. MASIMO shall have no
liability or responsibility of any kind to ICC under this Section unless ICC (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
ICC desire to have its own counsel participate in any such action, the cost of
such counsel shall be exclusively ICC's.
12.3 By Masimo-Infringement. MASIMO will defend, indemnify and hold ICC
------------------------
harmless against infringement or alleged infringement directly resulting from a
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 ICC under this
Section unless ICC (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 ICC desire to have its own counsel participate in any such
action, the cost of such counsel shall be exclusively ICC'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 ICC.
12.4 By TCC. ICC 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 ICC 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 SpO2 Sensors (unless such inadequacy consists of inaccurate
information supplied by MASIMO), (iv) any act or omission to act of ICC or any
party other than MASIMO who designed or manufactured any portion of the Licensed
Devices, or (v) any modifications to the Products or MASIMO Technology made by
ICC, by others or by MASIMO at ICC's request. ICC shall have no liability or
responsibility of any kind to MASIMO under this Section unless MASIMO (a)
promptly notifies ICC of such claims, (b) gives ICC an adequate opportunity to
defend, including complete control of such defense and (c) provides reasonable
assistance to ICC, at ICC's expense, in connection with the defense and
settlement of such claim. ICC 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 ICC may incur as a result of
any injury, illness or death resulting from (a) modifications to Masimo
Technology or the Products made by ICC, by others, or by MASIMO at ICC'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 ICC.
12.6 Patent Defense. ICC 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. ICC 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, ICC agrees not to
challenge the validity of any of the Patent Rights. During the term of this
Agreement, ICC 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 ICC is aware.
13. REGULATORY COMPLIANCE
----------------------
13.1 ICC 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 ICC Products. MASIMO will reasonably cooperate with
ICC by providing at no charge to ICC any MASIMO data in its possession that is
reasonably required to obtain the regulatory approvals, including but not
limited to 51 O(k) application materials submitted by MASIMO for its own
products that incorporate MASIMO SET. Disclosure by ICC of any such data shall
be subject to the confidentiality provisions of Article 9 ("CONFIDENNALITY").
13.2 ICC 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 ICC of ICC Products, (ii) for identifying and
complying with any safety precautions, safety markings, labels or consumer
notices required for ICC Product sales in any country other then the United
States, and (iii) for assessing the appropriateness of the ICC product for any
particular Customer application. MASIMO will cooperate with ICC by providing
any data in its possession that is reasonably required to obtain such approvals
or certifications. Disclosure by ICC of any such data to any third party shall
be subject to the confidentiality provisions of Article 9 ("CONFIDENNALITY").
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 ICC's policies and procedures.
13.4 Regardless of any disclosure to MASIMO by ICC of an ultimate
destination of the Licensed Devices or the Software, ICC 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 ICC 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 lin1ited to, the Federal Food, Drug and
Cosmetic Act (21 U.S.C. 301 at seq.).
14.2 ICC Reporting. ICC 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 ICC 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 ICC of the possibility of
Product recall. If MASIMO notifies ICC that the Product must be recalled, ICC
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 TERMTNATION
----------------------
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.
There;1fter, 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.
15.3 Termination on Insolvency. Either Party may terminate this Agreement
---------------------------
at any time upon or after the f11ing 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 party 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 for Breach"), all of ICC's
rights under this Agreement shall be terminated. The termination of ICC's rights
shall include the termination of any rights of ICC 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 ICC 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 ICC 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, ICC 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 Annual Review. The Parties agree to meet annually to review product
---------------
development, marketing plans and contract status. Meeting locations will
alternate between MASIMO'S and ICC's facilities.
17.2 Nonassignability. Except in connection with the sale ofa11 or
-----------------
substantially all of the assets or business of ICC, ICC 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 lCC that is in
the pulse oximetry business, ICC sbal1 promptly notify MASIMO of such successor
and such successor shall acquire ICC'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.
17.3 Failure to Enforce The failure of either Party to enforce at any time
------------------
or for any period of time the provisions of this Agreement sbal1 not be
construed to be a waiver of such provisions or of the right of such Party to
enforce each and every such provision.
17.4 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.
17.5 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 the economic equity of both parties hereto is materially affected
by such unenforceability.
17.6 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
2852 Kelvin Avenue
Irvine, CA 92614
Attention: Chief Executive Officer
ICC: ISLAND CRITICAL CARE CORPORATION
100-10 Camelot Drive
Nepean, Ontario, Canada K2G 5X8
Attention: President
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 band 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.
17.7 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.
17.8 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.
17.9 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.
17.10 Exhibits.All exh1oits to which this Agreement refers are hereby
-----------
incorporated into and made a part of this Agreement.
17.11 Entire Agreement This Agreement constitutes the entire agreement
-----------------
between ICC and MASI:MO, 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 ISLAND CRITICAL CARE CORPORATION
By: William H. Markle
-------------------
William H. Markle
Vice President, Business Dev. and Marketing
BY:
------------------------
EXHIBIT A
MASIMO SET DEFINATION
-----------------------
For the purpose of this agreement, MASIMO SET is defined to include all MASIMO
Technology including LNOP, AutoProCal TM, ProCal TM, DST TM, and FST TM
Technology. MASIMO SET 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 canceler 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).
EXHIBIT B
I. MASIMO SET PRODUCT DESIGNATION:
II. LICENSED TRADEMARKS:
(MASIMO WILL PROVIDE CAMERA READY ARTWORK UPON REQUEST)
III. PATENT MARKING;
EXHIBIT C
LIST OF PATENTS AND PATENT APPLICATIONS
--------------------------------------------
Patent/Serial Number Title
- --------------------- -----
1. U.S. patent number 5,482,036 "Signal Processing Apparatus and Method"
2. U.S. patent application "Signal Processing Apparatus and Method"
3. U.S. patent number 5,490,505 "Signal Processing Apparatus"
4. U.S. patent application "Signal Processing Apparatus"
5. U.S. patent number 5,632,272 "Signal Processing Apparatus"
6. U.S. patent application "Signal Processing Apparatus"
7. U.S. patent number 5,337,744 "Low Noise Finger Cot Probe"
8. U.S. patent number 5,452,714 "Finger Cot Probe"
9. U.S. patent number 5,638,818 "Improved Low Noise Optical Probe "
10. U.S. patent application "Improved Low Noise Optical Probe "
11. U.S. patent application "Manual and Automatic Probe Calibration"
12. U.S. patent application "Manual and Automatic Probe Calibration"
13. U.S. patent application "Low Noise Optical Probes"
14. U.S. patent application "Patient Cable Connector (Design)"
15. U .S. patent application "Patient Cable Connector"
16. U.S. patent application "Patient Cable Connector"
17. U .S. patent application "Improved Signal 'Processing Apparatus and
Method"
18. U.S. patent application "Modulation System"
EXHIBIT D
PRICE OF PROUDUCTS
--------------------
Price for MS-l Boards: MASIMO's transfer prices to ICC for the MS-1 Boards
(including the Masimo MS-3 Boards) delivered in accordance with this Agreement
are as follows:
Quantity Purchased per Year Unit Price
Less Than 1000 $375.00
1001-5000 $350.00
Greater than 5000 $325.00
In the first twelve month period following the first month after ICC places its
first Purchase Order for MASIMO Products, the price for MS-1 Boards shall be
fixed at $375.00 per unit. For subsequent years, MS-1 Board pricing shall be set
at the pricing for the quantity purchased by ICC during the entire preceding
year.
Transfer Price for Sensors and Accessories: MASIMO's transfer prices to ICC for
the SpO2 Sensors and Accessories delivered in accordance with this Agreement
will be as indicated, dependent on the geographical region the products are sold
to end-users:
North America
Product Part# Europe/ROW Japan
- ------- ----- ---------- -----
LNOP.Adt (Adult Disposable Probe) 1001 $8.00 $25.00
LNOP.Pdt (pediatric Disposable Probe) 1025 $9.00 $27.50
LNOP.Neo (Neonatal Disposable Probe) 1002 $11.00 $30.00
LNOP.NeoPt (pre-Term Neonatal
Disposable Probe) 1003 $12.00 $30.00
LNOP.DC-1 (Adult Re-usable Probe) 1004 $140.00 $190.00
PC-08 (8 Ft. Patient Cable) 1005 $85.00 $125.00
PC-12 (12 Ft. Patient Cable) 1006 $95.00 $150.00
Initial transfer pricing on all Sensors and Accessories will be at the North
American price indicated above with a reconciliation for Japanese shipments paid
to Masimo quarterly.
MASIMO CONFIDENTIAL
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)
>= 0.2% >= -50 dB
0.02-0.2% >= -100.0 SS (%)-30.0dB
Accuracy
Adults
------
SpO2 Range 70%-100% 0%to 69%
Accuracy (+= Std. Dev.)* += 2 digits Unspecified
Pulse Rate Range 25-240 BPM
Accuracy (+= 1 Std. Dev)* += 4 BPM
Neonates
SpO2 Range 70%-95% 0% to 69%
Accuracy (+= 1 Std. Dev.)* +=3 digits Unspecified
Pulse Rate Range 25-240 BPM
Accuracy (+= Std. Dev.)* += 4 BPM
Note The MS-1 pulse oximeter on meter 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. Indocyanine 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 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.
MASIMO CONFIDENTIAL
MS-1 Hardware:
Power Consumption > 2.3 Watts (typ)
------
= 2.5 Watts (max)
Storage Environment
Temperature Range -50-100C
Atmospheric Pressure 50-113 kPa
Operating Environment
Temperature Range 0-70 C
Relative humidity 0-97 % non-condensing
Atomospheric 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) <= 1 sec $2.5 sec <,3 sec
Band Pass Signal -1 to 1 2-7,2-15,2-31 <=2.5 sec
Autoscaled Signal -1 to 1 2-(7),2-15,2-31 <=3 sec
LNOP Sensor Specifications
Sensor Description Typical Heat Maximum Skin Temp at Site
Dissipation
- ---------- ------------------------------ ------------ --------------------------
LNOP DC-1 Adult Reusable <50mW <= 41 C @ 37 C Ambient
LNOP Adt Adult Disposable <50mW <=41 C@37 C Ambient
LNOP Neo Neonatal Disposable <50mW <=39 C@ 37 C Ambient
LNOP-NeoPt Neonatal Disposable (Pre-Term) <50mW <=39 C@ 37 C Ambient
LNOP Pdt <50mW <=41 C @ 37 C Ambient
Pediatric Disposable
MASIMO CONFIDENTIAL
EXHIBIT F
END USER LICENSE AGREEMENT
- -----------------------------
THIS DOCUMENT IS A LEGAL AGREEMENT BETWEEN YOU, THE "PURCHASER", AND ICC. 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
ICC 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, ICC 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. ICC 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 ICC, 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 ICC'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. 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 ICC.
6. Transfer Restrictions. The software/firmware is licensed to the
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Purchaser, and may not be transferred to anyone, except other end-users, without
the prior written consent of ICC. 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
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has the right to enforce its provisions.
8. U.S. Government Rights: If you are acquiring software (including the
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related documentation) on behalf of any part of the United State 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.